In just 7 years, SAP Integrated Business Planning for Supply Chain has become a market leader in supply chain planning software and is one of our most successful home-grown cloud solutions.
Where we came from
It was the year 2013, cloud computing was picking up steam, cloud solutions by smaller supply chain vendors were popping up everywhere, and even among loyal customers whose entire supply chain was built on SAP there were voices challenging SAP to work on an end-to-end offering in the cloud. The market was looking for agility, transparency, real-time, end-to-end scenarios, and collaboration features. For some customers, SAP APO was too much of a black box. To make the right decisions, planners needed a better understanding of where their numbers come from. Hans Thalbauer reports:
Fast delivery, such as same day delivery, and speed in the supply chain triggered the need for more visibility and better decision making. (Hans Thalbauer, Senior Vice President, Industrial Transformation Initiatives at SAP)
Yet, at the same time, a lot of customers weren’t ready to move planning and production-relevant processes to the cloud.
A star was born
True innovation needs disruption and that’s why it wasn’t an option to simply rebuild SAP APO in the cloud. In June 2013, at a supply chain strategy meeting in Palo Alto, SAP management decided to rejuvenate SAP’s supply chain offering and start working on a cloud solution called Sales and Operations Planning (S&OP).
As there was a lot of buzz about “integrated planning” among analysts and supply chain experts at the time and improved integration was one of the main focus areas of S&OP, renaming the new solution ”SAP Integrated Business Planning” in 2014 was a logical step.
Co-innovation on a napkin
How can you better find out what the market really needs than by co-innovating with experienced customers? Jim Newkirk from Colgate remembers:
We agreed that the replacement could not just be APO with a new UI. It really had to be a full rewrite with advanced functionality like control tower, inventory optimization, demand sensing, etc. During the conversation Hans [Thalbauer] began drawing an architecture picture depicting how this new planning tool would integrate with all our current systems and would be cloud-based. He told me later that he kept that drawing and showed it to his team. (Jim Newkirk, Colgate Worldwide Director,GIT Supply Chain Applications & Americas)
From supplement offering to full-blown planning solution
The first release of the new solution comprised mainly S&OP features and was launched as a supplement offering to SAP APO. Then, with the acquisition of SmartOps, which was first offered as a separate solution but soon integrated, inventory optimization and demand sensing were added to the offering. Bit by bit, demand planning, supply chain control tower, response and supply features and in 2019 demand-driven replenishment completed the picture.
We started IBP with an idea to bring all the different applications together to build one product. (Franz Hero, Head of Development Digital Supply Chain, SAP)
By 2016 trust in the cloud was generally established and customer numbers started to increase rapidly. It wasn’t just the functional scope of the solution but also the UI and the ability to visualize analytics data in real-time that added value for the customer. Being able to work in Microsoft Excel, the tool that planners know and love, was and is a huge advantage for our users.
Listening to our customers and partners is one of the key drivers of our success:
We wanted to continue the partnership and importantly, to co-innovate and develop IBP. SAP really stepped up and invested the necessary resources and time to work with us to deliver what has become a best in class E2E planning tool that is adding value at Colgate. We continue to co-innovate with SAP on the IBP solution so that we can deliver additional advanced planning functionality (AI, ML, etc.) to Colgate. (Jim Newkirk, Colgate Worldwide Director, GIT Supply Chain Applications & Americas)
Thanks to the entire team for driving the constant success and to our valued customers for their trust and great collaboration!
7 facts about SAP IBP
Over 700 customers are very successfully running their supply chains with SAP IBP
Reduced implementation time to an average of 90 days
From a small S&OP team of around 20 people to over 350 people in 5 locations working on SAP IBP development
The 20th edition of Best Practices for SAP IBP will be available later this year providing great implementation support
Over 100 enhancements delivered that were submitted to the Customer Influence Portal
From 1 data center in which SAP is running SAP IBP to 10 SAP data centers worldwide and the plan to grow towards hyperscalers such as Google Cloud, Alibaba Cloud, and Microsoft Azure
~ 100 SAP IBP reference customers
The corona virus we’ve been experiencing over the last months is a painful example of how the world can be turned upside down within a few weeks and how important it is to react quickly to unforeseeable breaks in the supply chain.
The planned additions in the area of synchronized planning and intelligent visibility offer tight integration with production planning and insights into logistics and transportation data. Customers can immediately see the effects of disruptions in logistics and consider them in their planning.
In the future SAP IBP will serve as the digital twin of the supply chain providing ultimate transparency and visualizing the dependencies in your supply chain.