Article by Stéphane Harduin, Supply Chain Planning Director at Beelogix
I heard this question so many times that I finally decided to give some insights which I hope will help you to make your own opinion.
The question typically originates from existing SAP customers, that are considering a digital transformation through an S/4HANA deployment/migration, and that recognize the value of an integrated business planning system/process, such as SAP IBP. So now the questions are: can I do both at the same time? Are there any prerequisites? What are my options here?
Let’s try to answer this question from 3 different perspectives:
- Technically, is S/4HANA a prerequisite to SAP IBP?
IBP time-series applications (*) are 100% system agnostic. This means that you can plug almost any back-end system to IBP to run your mid- to long-term planning processes (even short term if we consider Demand Sensing). IBP comes with its own integration tool which can get and export data from and to almost any kind of system (you can find the check list here).
(*) IBP for Demand, IBP for Sales and Operation, IBP Supply Chain Control Tower, IBP Supply (Optimizer) and IBP for inventory
IBP comes also with an order-based model within Response & Supply which is more a short-term to mid-term planning tool aiming for instance at generating your distribution plan and running backorder processing. This component requires an SAP ERP system as a back-end system (similarly to SAP APO SNP), but this system does not have to be an S/4HANA system, it can be an SAP ECC system (EHP4 for SAP ERP 6.0 or higher). So, if you already have ECC 6, you can already consider to implement the IBP order-based model and already get the benefits out of it.
- In my transformation journey, do I have to synchronize my roll-outs of S/4HANA and SAP IBP?
Because SAP IBP is a cloud solution, because it is a scalable solution, because it does not need any huge effort to start with, it can be implemented in weeks, and already bringing most of the benefits. Even if implementing S4HANA using SAP Activate methodology has really shortened the project timelines, we are still talking about months before the full solution is implemented. As from a technical point there is no prerequisite of having S/4HANA in place for IBP, going live with your brand-new planning solution before having fully implementing your back-office processes should be an option to be considered.
The target system architecture including S/4HANA must be taken into consideration, but IBP can be deployed in small increments, adjusted when necessary (milestones of S/4HANA). Typically, interfaces from/to transactional systems need to be migrated as well, but the effort required is typically minor.
- Will I still get benefits if I am implementing IBP at an early stage?
We won’t discuss all the benefits of having IBP to support your planning processes here, because it has already been covered many times (If you are not already familiar with it, please visit our dedicated space on the subject https://beelogix.ca/sap-ibp/).
The real question here is: “Is it worth to implement IBP as I know I would have to rebuild interfaces once S/4 HANA is in place?”. There are many answers to that question, and here is a real-life example that can help answer it: we have recently implemented IBP for Sales and Operations for a customer who had (and still has) a heterogeneous IT landscape. IBP is connected to several back-end systems using different techniques (web services, flat files exchanges, direct tables access…) and it works seamlessly. This environment is in continuous mutation, and continues evolving as ERP systems are being upgraded, replaced and enhanced. And each time there is such a change (in the back-office landscape), the interfaces with IBP require only a few hours, maybe days, of effort to be adjusted. So back to my question: is it worth it? YES.
The graph below illustrates the early, gradual benefits of a multi-phased IBP deployment, decoupled from S/4 implementation, as opposed to a big-bang approach.
In conclusion, I believe that, in most cases, the decision to deploy SAP IBP should be independent from the S/4HANA transformation program. Now we need to keep in mind that every situation is different, and other decision factors also include: human bandwidth and capacity, process change and maturity, whether you’re a multi-national, multi-location enterprise or a single plant medium-sized business, …