Thru this article I wish proposing the reader a quick and instructive tour about SAP IBP, whereas comparison to APO will be taken to better understand “Why SAP IBP versus SAP APO?”. With regards to my company DOWAP-TeamWork status as a worldwide SAP IBP partner, this article is written as a witnessing report of 2 years reading and practicing IBP. No complacency, facts and expertise.
Whenever an actor sits in a leading position for long, competitors get animated with the only company systemic answer: “Close the Gap!”. At the same time the leader becomes an identified and logical benchmarking point, so that initial proposition is soon overtaken with nicer, faster, more modern proposition from concurrence.
This has been the case for SAP-APO software, starting in 1999 to become the reference APS in the mid-2000. By 2010 competition had closed all gaps so that APO was losing track.
With HANA taking off on one hand combined with an attempt to ward off the APO decline, SAP, in 2012, launched a brand new solution in APS Domain, which has become nowadays SAP IBP.
The IBP proposition from SAP
Before digging in the details, it is also important to capture the functional cover of IBP as of today (end 2016). What it is?
An acceptable definition of “IBP” solution, may be summarized, in Supply Chain management, as an Advanced Planning System solution capable to further extend planning concerns to financial domain, marketing and NPI, along with stakeholder’s collaboration as well as a tight integration to ERP system. IBP in 3 letters for “Integrated Business Planning”.
Question is: Is this the case for SAP IBP? Absolutely yes!
After an initial SAP miscommunication, explaining IBP would not overlap APO proposition, by being a supplement offer, it is now clear that IBP is definitely overlapping APO domains, and even more. No arms, APO customers can run it with maintenance until 2025. So the question is not IBP competing with APO! Question is for new customers and prospects to understand IBP as the current and sensible proposition nowadays for IBP processes from SAP.
Differences are quite concrete: with a different technology, using HANA a columned memory database from SAP, a different access to the solution, via the Cloud, a different user experience with WEB, and Excel being the data manipulation tool (but not only), a different idea of integration, with a user collaboration engine. Last but not least it is also different with regards to simulation, “whatif” and scenario planning.
In short, IBP is NOT another APO evolution V8.0, this is a NEW solution, fully re-written. This is a well design proposition to better face current competition like Anaplan, Steelwedge, Kinaxis, Dynasys (sorry if I miss the others here) etc…
In addition to the base IBP software proposition, SAP also proposes pre-defined setting, called RDS (Rapid Deployment Solution). They represent an initial customizing for each of the available modules of IBP. That is one of the good strengths of IBP as the solution added to those RDS can starts as quickly as 1-2 weeks.
What’s in it for you?
From the functional perspective IBP covers all planning concerns presented here below.
SAP IBP S&OP: This is the historical first module of IBP. It was delivered by SAP around 2012-13. S&OP defines the technical base structure, that is also used by the other module. In short IBP-S&OP likewise APO-DP, allows defining very easily anything required in an S&OP process, thru characteristics, key figures. Then on top of these APO like features, IBP proposes new concepts with planning level, calculation operators and intrinsic calculations.
In other words, S&OP can address:
– Any business dimension like product, family, geocode definition, resource, hierarchies etc… by means of characteristics. RDS provides already loads of those predefined characteristics, so that your requirements are likely already available
– Any information like sales, production, inventory and many others, being in quantities or values, in multi-currencies, multi-unit of measure etc…
– Any logical dimension-coupling like product and site dimension. E.g. SKU is a coupling of product and location. This is done by means master data and planning level definition. This is a big improvement compared to APO. Within the same design you are now able to combine several planning level together, whereas data may be used between these levels.
– Intrinsic calculations. That is also a major strength. It allows defining business rules between key figures that are computed in real-time, every time you use data in the application. This ensures a robust integrity. E.g. a production cost being a result of a production quantity and a product standard cost. No need to schedule any conversion job.
– Planning operators. These are predefined programs, delivered by SAP, that allow advance computation like heuristics, Statistics, Optimization.
Compared to APO, IBP covers the S&OP process, dealing with product, resource, location, customer dimensions without any orders (like in SNP), thru a very flexible keyfigure structure, calling for advanced agg-disagregation rules
SAP IBP DEMAND: This module was released last year. It covers the demand planning functions with statistical engines for mid-long term forecast, as well as a data sensing approach for the short term. The data sensing is a new approach of short term anticipation based on predictive analysis, which skills SAP has likely developped thru Lumira and Predictive Analysis components, in the recent past.
IBP-DEMAND is well-structured. It has been designed with a more user friendly thinking compared to APO-DP. No more planning book. No odd APO assignments anymore etc… It is fairly simple, concentrating on the true needs of a Demand Planning software. Data are really fully accessible by means of Excel IBP add-in, allowing nice and nite data management, as well as the possibility to complement data transformation with Excel function if required. Things like historical analysis become easy concern. At this stage SAP is working hard to deliver the last bit of classification and lifecycle management within the next weeks.
SAP IBP SUPPLY&RESPONSE: third in the sequence, it was released mid-2015. Honestly complete now, it covers any requirement around the supply process for production, transport and procurement planning. Comparable to APO-SNP. As a repetition the data repository is organized according to supply dimensions (product, location, resource, sourcing…) and key figures reflecting quantities and values. This module allows you calculating you plan in infinite capacity mode, like any planning system. It also allows you planning using an Optimization engine that considers many constraints and cost.
For those of you accustomed with APO, the IBP-RESPONSE part is something similar to the APO-CTM (Capable to match) proposition, with a priority based planning approach.
SAP IBP INVENTORY: Originated from SAP-SMARTOPS engine, INVENTORY covers the calculation of your safety stock, in mono-echelon (node by node like in APO-SNP) and multi-echelon (network and BOM are considered in a constrained propagation logic). This is the tool for the very advanced organizations in Supply Chain. No comparison possible with APO, this was an uncovered domain.
SAP IBP CONTROL TOWER: This is the pretty marketing name of the very easy to learn and operate reporting and analytics proposition. Self-explanatory, it comes with 3 main parts:
– The first focusing on analytics. Conversely to APO when you had to create your own reporting using BW, nowadays, IBP Analytics is so easy that anyone can create within 2 minutes any report or graphics out of any information available in the IBP HANA database. Things like drill down, sharing, map, networks, sensitive fields are usable within a snap of a finger. Reporting should not be the time and money killer it used to be in APO implementation.
– The second focuses on dashboarding. Anyone from Supply Chain knows to which extent dashboard are critical to a wealthy S&OP and planning process. Creating a dashboard is nothing complex anymore, allowing key users to set them up in 2’. Connectivity with workflow allows relating dashboard and user’s collaboration (see SAPJAM below). Setting up the reporting for a Pre-SOP step isn’t only possible but very flexible and agile.
– The third is all about alerting (see above). Already present in APO, it is now easy for the user to create business related alerts and subscribe to them quickly, getting alerted using pc or any mobile device. An alert is combined with metrics to provide a quick capture.
Because a reporting and analytic proposition is nothing without a proper setting, SAP, thru the RDS proposition, empowers IBP users with many relevant analytics and dashboard, ready to use.
From the technical perspective IBP means also:
SAP-HCI: As IBP is only available in the CLOUD, SAP proposes an integration module HCI (Hana Cloud Integration) that allows connectivity with any external system being APO, ECC, BW, CRM etc… as well as 3rd party solutions and flat file integration. HCI is not a dedicated component of IBP, it originates from HANA reporting and analytics. Nothing comparable with the former BW complexity in data staging. Bi-directional, it proposes to gather data into the “Hana Cloud Platform” HCP, that hosts the IBP database, and also to publish back data toward external systems like ECC and APO. Obviously this is consultant’s tool, nothing related to users.
SAP IBP Add-in & EPM: Any data interaction with the user, takes place in Microsoft Excel, topped with the IBP-Add-in. This Excel Add-in has been design on a SAP-EPM framework. EPM allows a performant and efficient data exchanges between the SAP Hana database and the Microsoft environment alongside with powerful additional Excel data management features. An IBP project often includes steps to design the user’s screens via template definition. This job requires Excel, EPM and IBP skills, nothing so easy, but so powerful in the end.
SAP JAM: Issued from SAP Successfactor company, SAP-JAM is the social media that has been packaged with IBP. Users can send and receive tasks, chat, video, agenda etc.. from the IBP components themselves as well as Excel. I may compare this IBP component to the glue, which links together People with the solution with the Process.
From the administration perspective IBP :
SAP CLOUD: Only available thru the SAP-CLOUD, IBP operation is relatively simple even if the release strategy is not anymore in customer’s hand. IBP and the CLOUD are kind of a new era, therefore the paradigm changes even on the BASIS side. This said, the major reluctances we denoted with prospects and customers so far, were related to the security of data exchanges. SAP do propose a high level security with encryption and restrictions. If you are still anxious with this, you may think of adding an anonymisation layer to your IBP implementation. Be prepared for some extra complexity, indeed.
What audience for IBP?
After a fairly confidential development period, IBP is available since 2015, to any customer, worldwide, all modules, for POC (proof of concept), prototyping and Productive implementation. IBP is only available on the SAP Cloud, no internal implementation, so called On Premise. Obviously IBP is still in an active design period, which means several updates per year, each one bringing more and more features. As of October 2016, the current available solution is SAP IBP 6.2. Next version will adopt the S4 numbering, to be V1608, available soon. Release strategy is driven by SAP, on the SAP-CLOUD, meaning you don’t need to bother with technical upgrade, SAP runs it for you. You however need to prepare for those upgrades.
As per usual, the acquisition price is something to liaise with SAP directly, no indirect selling thru partners. The price includes the renting of the license, the technical infrastructure and the operations. It behaves like a SAAS, relieving you from any technical skills, backup requirements, and the many things going along an IT scope.
From the size perspective, with regards to current installed base, the early adopters are fairly big companies, from CPG food, Chemistry, retail, manufacturing and aerospace.
Because IBP is a very followed concern, SAP proposes a renting model, dedicated to test&demo, which means anyone of you can access the solution in full, for a limited period of time https://www.sapstore.com/search?text=s%26op No system requirements, no technical installation. Really an easy topic even though the activation by SAP lasts 1-2 weeks and may be improved in the future.
As an expert company in APS domain since 2001, DOWAP-TeamWork has already taken-off with IBP since 2 years. I personally encourage those of you, curious and professional, to start the IBP journey !