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“Retro” Integrated Business Planning

One of the hot topics at Sapphire this year was rather retro, but with an updated consideration.  After the initial release over 2 years, SAP Integrated Business Planning (which now includes a full suite of applications) generated the most the most excitement, the most potential and the most clamor from the competition.  What is retro about SAP IBP?  The topic itself, integrated supply chain planning with Sales and Operations Planning, has been around for decades (not 50’s retro, but technology retro).  The chemicals industry has been leveraging S&OP as a business process for decades – dealing with how feed stocks may impact finish goods availability and pricing.

The clamor can be characterized by the fact that we (SAP) have a great supply chain suite today, still affectionately called APO by our long-time users (2000+ customers).  We recently optimized APO for our flagship HANA in memory technology, and even added in functionality for the Supply Chain Info Center.  Core support and additional development will continue for at least ANOTHER decade for the entire Business Suite (which includes APO), yet our competitors have somehow twisted this message to think that we have discontinued support. Considering that two of the largest chemical companies just went live on APO on HANA with great success, I understand why our competitors are nervous.   They see that our existing customers have moved forward with recent developments in our well-established application (APO), and then Gartner comes along and puts our new suite (SAP IBP) in the leader’s quadrant.  I’d be nervous too, if I were them.

The product demonstration of the cloud application SAP IBP highlights why Gartner put it in the leader’s quadrant.  First, the web front end is beautiful, collaborative, and simple.  My demo started with the General Manager operating in ONLY the web-front end, checking his/her safety stats by plant, and then focusing on a revenue shortfall.  He/She requested the Sales Manager to investigate why the forecast was off. The Sales Manager, using only the web-front end, was able to easily navigate and drill down to isolate a potential problem with a sales rep.  The sales rep, operating in SAP Cloud for Customer only (I never liked sales rep’s messing around with APO or any other supply chain application), gets all the mobile-enabled information he/she needs while in front of the customer to update the system of record.  At this point, the planning community (supply/demand planners) is then updated that a change has been made and need to determine if the change is feasible from a capacity/inventory perspective.  Guess what?  Planners use MS Excel, and we developed an EPM client directly in MS Excel with full capabilities.  Again, if I were a competitor I’d be nervous too.

SAP IBP is a cloud-based, HANA-enabled platform with 2 primary user interfaces – a simple web front end for the manager, and MS Excel for the planners.  The entire platform is integrated by leveraging SAP HCI (HANA Cloud Integration) – when I make a change to my demand, I immediately see the impact on inventory, capacity, revenue, etc.  I can make a change to a key feedstock price (ie I am predicting that the price of natural gas will rise due to a tough hurricane season and I want to see the impact on my margins for the next 6 months), I can simulate an extended plant shutdown, I can simulate, simulate, simulate ANY scenario and visual the impact in real time.  In the cloud, powered by SAP HANA.

SAP APO (SAP SCM) has over 2000 customers.  Let me be perfectly clear here – SAP APO is not going away and some supply chain functionality that is really important for the chemicals industry is only available in APO. For instance, shop-floor scheduling and tank planning (dealing with constraints) can only be done in APO PP/DS. We have APO customers who have started to deploy our latest technology footprint (SAP IBP) in conjunction with APO – core detailed planning is handled in APO (ie demand planning, capacity planning, plant scheduling) and then the strategic planning (1-5 year horizon), scenario planning and multi-echelon inventory optimization are managed thru IBP. Depending upon what pain point(s) you are trying to solve will dictate your supply chain footprint, which may include both APO and IBP, just IBP or just APO.  I have seen successful deployments in each scenario.

So, whether you are an existing APO customer (amongst the 2000+), or a ‘new’ IBP customer, you will get to leverage the SAP HANA in memory technology with a new user experience. See for yourself why the competition is really getting nervous!

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    • Huntsman was the very first SAP customer to go live on APO on HANA as announced internally:

      “This week we completed a big step forward in bringing our SCM solutions towards the HANA platform.

      With Huntsman Corporation, a chemical company, we celebrate

      • the first live customer for APO on HANA (with integrated liveCache)
      • the first live customer for Supply Chain Info Center
      • the first SCM deployment in the HANA Enterprise Cloud”.

      Others are works in progress and not announced yet.

    • We just need to keep fighting the fight and be true to our customers.  APO is not going away and IBP is not for everyone.

      • Ray, Just last week I said good bye to worlds largest petro chem that went ahead with a lesser known European APS product for DETAILED SCHEDULING and they already had a product from Honeywell for doing some sort of Annual Production Planning.. called SOP in their parlance. Yes you guessed the firm right.

        Why doesn’t someone from SAP write things clearly in so many words earlier ? YOUR people incl. hyperventilating SAP consultants have created enough confusing messages here and there everywhere

        • Confusion is everywhere Borat.  If you look up the latin root to the word ‘confusion’, it traces back to ‘marketing’. 

          • 🙂

            On the other hand you ALSO say that PPDS and GATP will be moved to ECC.

            So why does anyone need to buy APO then ?

            Your confusion will cost dear. As this time the customers will neither buy ECC nor APO nor IBP, demanding the things you have promised. Or they might substantially delay their buying decisions or move to some other company

            You have a brilliant software and a brilliant bunch of programmers. Don’t demoralize them. There are other ways of confusing the customers. I too do it in my own small way to promote what I want to promote.

            If you wish to know some experiences, reply to me personally and I will share the exact names of YOUR customers who have defected to other software. I consult them on SAP scheme of things though as such I have no incentive in doing so as I am not an appointed lord of SAP.



          • Let me add my 2 cents. I have written on this before.

            The way YOU PRODUCE ‘advanced’ planning consultants is quite flawed. I come across many APO ‘experts’ who say they don;t know MM, PP, SD. LE and they feel they are doing some rocket science by knowing ONLY APO. Moreover they are completely clueless of other products and technologies in the market. This is not only arrogance but a crime.

            Eventually YOU as a company also needs to think whether the consultants you produce directly or indirectly are useful in furthering YOUR interests. That is also marketing. So it would be prudent if you END this basic and advanced module business altogether and stop promoting this ‘trained by the module’ education.

            You are better off making your education and training more coherent. More holistic. Not a bunch of bug reporters on sdn. A consultant who claims to be a supply chain planing expert MUST know at least half a dozen options of realizing a solution using SAP products from within ECC, APO, CRM, SRM, TM, EM… IBP,..or whatever.

            Can someone know SOOOO much ? Possible. Provided you teach differently. NOT the bogus configuration oriented education. Sounds like for high school drop outs. You need to teach the design philosophy, boundaries and assumptions of the solution and some mind of the product development manager. Will it have to cost a bomb? Let it be. At least you are offering something in that direction. They then have some incentive to make an attempt to PROMOTE options from SAP. Ignorance and the compulsion to hire half a dozen experts even to evaluate the high level options is what make SAP unviable for many wannabes.

            My 2 cents based on my experience as a consultant.. in SAP among others.



          • Interesting.  I never said that PP/DS and gATP were moving to core.  Are you using the term ‘you’ collectively, as in ‘you SAP’?  How do I contact you privately if you continue to hide behind an alias?  Your views are not misguided, and are worth more than 2 cents!  Thanks for the feedback.

          • Thanks Ray for the reassurance.

            You can write to me at


            I will respond.

            You can sift through the tons of SAP’s marketing presentations on ‘Business Suite Innovations with HANA’ and you will find somewhere it is mentioned PPDS and GATP being moved to ERP. Actually a good idea. It is so ‘transactional’. Isn’t it ? Somewhere you were also offering part of APO in ERP menu. Not sure what the heck does it mean.

            I don’t much bother how the the stuff is ‘integrated’, deployed, licensed or sold or paid for but yes I have a tiny little mind. So do my clients. I  can’t read between the lines. So I take my OWN stance and make according statements. Its too much noise for me. So I presume its too much noise for end users (and consultants) as well who just need something new to get excited and write their own conjectures here and there to perpetrate the confusion.

            You as in SAP need to stop selling software the way you are selling. Start selling broad solutions based on whatever you have to offer incl. from other vendors.  If you give too many options, the customers will run away to something ‘simpler’. black boxes.


          • Hi

            it’s not like that , all what SAP said that you can access the component of APO through ERP , but still scm in separate installation

            Agree with you if sap offer a lot of options from sap scm , IBP , etc,  you will lose your customers , and I don’t believe that all thousands of function during over 20 years will be included in IBP , I tried to check the S&OP and can’t find something unique , and my questions why I can’t add this new function in apo directly and more innovation in the same roadmap without disturbing , Martin Barkman said before the most of all functionalities in new IBP will be added to apo and conversely from apo to IBP !!! why i do this ??


            Still believe that someone from SAP need to declare and give final statement


  • Yes, I was at the Gartner Conference and there were some of those rumors being floated.  I interpret these actions as concern — SAP is bridging a gap that competitors had found success in exploiting while digesting the SmartOps acquisition and gaining traction with HANA.

    With what we are seeing in the marketplace, company adoption of IBP will only continue to grow; and, there is more curiosity and hopefulness surrounding this product rather than trepidation and cynicism.  Ours and SAP’s messaging that APO will be around another 10+ years and so let’s look at our strategic path over that horizon resonates — ensuring our customers are confident in that path and following up with measured action will speak volumes that competitors cannot drown out.

    • Agreed.  I understand that we have had a strong customer response in terms of subscriptions, and many of those customers are in various stages of active projects.  We will continue to highlight this adoption with additional customer stories, and we will continue to encourage customers to highlight the value proposition.