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Few Companies Have S&OP Process Driven by Finance - Study
Only small number of companies make this strategic business link, Aberdeen reports
Wilmington, DE — August 7, 2009 — Very few companies have a sales and operations planning (S&OP) process driven by finance, while the majority of companies have failed to make this strategic business link, according to a new report from analyst firm Aberdeen Group.
In "Sales and Operations Planning: Integrate with Finance and Improve Revenue," Aberdeen highlights the result of 214 companies participating in a survey of sales and operations planning related initiatives. The goal of this study, co-sponsored by Supply Chain Consultants, was to compare and contrast the view points of supply chain and finance organizations relating to S&OP processes.
Aberdeen reports that just 4 percent of companies have an S&OP process that is driven by finance. While ideally the output of the S&OP process should be used to drive the income statement and balance sheet of a company, the Aberdeen study shows that only 24 percent of companies have an automated workflow between S&OP projections and the revenue projections.
"Many companies are facing pressures that better managing the S&OP process and integrating data with the finance function could help reduce," said Nari Viswanathan, vice president/principal analyst with Aberdeen.
The study also examines how best-in-class companies are able to use performance management tools to proactively monitor daily performance against S&OP metrics, express the S&OP plan in terms of revenues and margins, and provide high level reporting for executive management.
Viswanathan added, "The actions companies need to take to match those that are best in class include investment in S&OP training, implement the ability to express S&OP plans in terms of revenues and margins, and implement exception management processes that are people centric and supported by the best practices and the best tools available to accomplish this."
"The linkage between the S&OP process seems so natural that I am a bit surprised that more companies have not taken advantage of existing tools and processes to bring the two together," said Sujit Singh, Supply Chain Consultants' chief operating officer. "The Aberdeen report on S&OP and finance reflects what some of our most forward-looking customers are putting into place. Many of our current efforts are being invested in designing executive dashboards for fast and easy access to critical information."
Supply Chain Consultants develops software solutions for collaborative demand and production planning, inventory management, scheduling, and sales and operations planning.
The report is available (registration required) here.
In "Sales and Operations Planning: Integrate with Finance and Improve Revenue," Aberdeen highlights the result of 214 companies participating in a survey of sales and operations planning related initiatives. The goal of this study, co-sponsored by Supply Chain Consultants, was to compare and contrast the view points of supply chain and finance organizations relating to S&OP processes.
Aberdeen reports that just 4 percent of companies have an S&OP process that is driven by finance. While ideally the output of the S&OP process should be used to drive the income statement and balance sheet of a company, the Aberdeen study shows that only 24 percent of companies have an automated workflow between S&OP projections and the revenue projections.
"Many companies are facing pressures that better managing the S&OP process and integrating data with the finance function could help reduce," said Nari Viswanathan, vice president/principal analyst with Aberdeen.
The study also examines how best-in-class companies are able to use performance management tools to proactively monitor daily performance against S&OP metrics, express the S&OP plan in terms of revenues and margins, and provide high level reporting for executive management.
Viswanathan added, "The actions companies need to take to match those that are best in class include investment in S&OP training, implement the ability to express S&OP plans in terms of revenues and margins, and implement exception management processes that are people centric and supported by the best practices and the best tools available to accomplish this."
"The linkage between the S&OP process seems so natural that I am a bit surprised that more companies have not taken advantage of existing tools and processes to bring the two together," said Sujit Singh, Supply Chain Consultants' chief operating officer. "The Aberdeen report on S&OP and finance reflects what some of our most forward-looking customers are putting into place. Many of our current efforts are being invested in designing executive dashboards for fast and easy access to critical information."
Supply Chain Consultants develops software solutions for collaborative demand and production planning, inventory management, scheduling, and sales and operations planning.
The report is available (registration required) here.
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