Posted: 08 Dec. 2021 5 min.

‘Best-of-breed’ or ‘Best-of-suite’ for Supply Chain Transformation?

Topic: SAP

These days, many of our clients are transitioning from isolated supply chain tools to advanced and integrated planning. There are potentially huge benefits in the horizon.

“Which system should we choose?” That’s probably the most common question I get right now whenever I talk to companies about core solutions and, within that conversation, how new technology can support Digital Supply Chain Transformation towards creating increased transparency, build resilience, and allow for real-time scenario analysis to mitigate risk.

It’s not necessarily an easy question. Choosing between various technologies is a complex decision, often made from a large number of factors such as price, scope, performance, integration and ambitions within the organisation – as well as the overall strategic fit.

A strong business case
Taking a helicopter view on Nordic companies right now, it’s no surprise that supply chain continues to be on everyone’s lips following the hard-learned lessons of the pandemic. It’s only when supermarket shelves are empty or important consumer goods come with major delays that the general media show interest in these topics. But behind the scenes, many companies are fighting difficult battles to make sure that their supply chains are not disrupted, and that all vulnerabilities are handled in due time in order to return to a ‘normal’ level of risk.

In this business environment, it’s only natural to prepare for the next normal and to search for the technology that can support a new operating model. In particular, many companies are inquiring about four specific technologies right now: SAP IBP, Kinaxis, o9 and Blue Yonder – technologies that we are very familiar with at Deloitte:

  1. Starting with SAP, my home turf, SAP Integrated Business Planning (IBP) is now a vital part of many of the S/4HANA transformations that are taking place right now across the Nordics. Although still a product being refined, IBP is a strong cloud-based solution that combines sales and operations planning (S&OP), forecasting and demand, response and supply, demand-driven replenishment and inventory planning – all powered by SAP HANA in-memory technology. For those companies already running SAP as their core solution, IBP undoubtedly offers many opportunities for real-time analysis and strategic scenario planning, all in one system.
  2. Many companies also consider Kinaxis, a mature solution, which is suitable for both aggregated strategic planning and detailed, operational planning. Moreover, with a web-based front-end, Kinaxis can be accessed from any device, and the system will update instantly with any change happening anywhere in the supply chain, which makes it very fit for concurrent planning. 
  3. Another relevant candidate is o9, an upcoming system which has taken leaps over the last years due to the team’s strong ability to innovate. o9 is definitely a player to watch out for.
  4. And lastly, many companies are inquiring about Blue Yonder, which is also part of Gartner’s Magic Quadrant along with Kinaxis. Blue Yonder is somewhat a fusion of the former i2 and Manugistics as well as other systems that are now part of the Blue Yonder brand. The system offers a variety of options, especially in the retail space where it enables planning capability from the aggregated level all the way down to the individual store.

Many factors to consider
Deloitte have gained a significant additional capability in this area in Denmark with the acquisition of Syncronic earlier this year, who are market leaders in the supply chain space.  We are now approached by more and more companies that ask us to support them in their system selection, we are thrilled to see such high ambitions in the supply chain area coupled with an general willingness to use the current volatile business climate to make some fundamental changes to the operating model.

There are of course many ways for us to support this process. Evaluating the processes in scope is an obvious place to start. So is assessing performance, especially with large quantities of data, as well as assessing options for integration, which can be a major decision point, especially for companies that are already experienced with running for example SAP solutions. User experience is also an important feature, because some systems have a web interface, others run on Excel, just as the various systems have a very different look and feel.

But there are more things to consider: The ecosystem surrounding the solution is important because most companies need help installing and maintaining the system. Can you team up with partners locally, or do you need international resources, and if so, are there any red flags or constraints in that? Safety requirements for e.g. data centre locations are typically also part of the evaluation, although the large provides will all meet very high demands – if they didn’t, they wouldn’t be in the market. And of course, the majority of our clients expect 24/7 support with global coverage, which is also becoming the industry standard for all major systems. All these things have to be evaluated again the price and other commercial conditions.

And then there is the overall decision of choosing ‘best-of-breed’ based on specific challenges – or choosing ‘best-of-suite’ from a broad assessment of functionality and strategic fit. 

Well, in fact it doesn’t always have to be ‘either/or’. Many companies choose to combine systems to get the best of both worlds – and we know that this can work.

As always with technology, there is rarely a solution that can fulfil every desire on all levels and within all realms of supply chain; however, it’s also clear that digital technology on the whole has taken leaps over the last few years, offering companies many new paths towards greater transparency and control, especially within Digital Supply Chain Transformation.

For many of our clients the journey towards integrated business planning has already started – but for many others, the business case hasn’t emerged until recently, and there are still many decisions to be made on both the strategic and tactical level. It’s in no one’s interest to treat just symptoms, but instead addressing the actual root causes of the challenges that need to be solved, and from then design a business-driven, technology-enabled operating model that is fit for the digital future. 

If you missed our recent webinar on how advanced digital technologies can revolutionise traditional supply chains, click here to watch a recording.

Forfatter spotlight

David Colgan

David Colgan

Partner

Ask me about: SAP, S / 4 HANA, Digital transformation, IT strategy, Program management, Digital Finance function, Cloud David is a partner in Deloitte and the Nordic manager of our SAP business. David has worked with SAP since 1997 and thus has more than 20 years of experience with transformation programs, where the underlying theme is SAP and financial optimization. David helps and advises Danish as well as Nordic companies with digital transformations and implementation of SAP.