Overall, results of the survey imply optimism within the marketplace. More than 90 percent of survey respondents foresee their spending increasing or remaining the same in the second half of 2006, as compared to the first half of the year. Additionally, 71 percent of companies anticipate their 2006 revenue will be ahead of 2005.
Sales and operations planning Traditional S&OP Seen Failing to Improve Corporate Performance
Companies' sales and operations planning (S&OP) processes are failing to improve enterprise-wide performance, and few companies believe that their S&OP process is adequate, according to a new Aberdeen benchmark report of more than 140 companies. "Current S&OP processes are failing to deliver the financial results expected," said Nari Viswanathan, research director at Aberdeen and author of the report. "Our research shows that best-in-class companies are moving past traditional S&OP toward 'integrated business planning.' This is a technology-enabled process that supports profit optimization and includes all elements of demand, supply and financial analysis in relation to business goals and strategy."
According to the Aberdeen report, companies today have under-invested in supporting S&OP technology:
- More than 40 percent of respondents report they use spreadsheets for their S&OP processes;
- Only 16 percent of companies employ best-of-breed S&OP technology.
"One impact of poor technology is that three-quarters of companies say they don't have adequate executive-level reporting on the key performance indicators of their S&OP process," added Viswanathan.
Fortunately, Viswanathan said, companies with best-in-class order fill rates plan to spend more on S&OP technology than their peers (an average of $250,000), indicating that the best-in-class companies see S&OP technology as critical to improving on their already strong corporate performance.