© 2012 Steelwedge Software, Inc. Confidential. 1Plan. Perform. Profit.

S&OP Strategy to Bridge the Agility Gap:Enabling Growth — 09/25/2012

Single Line of Sight: Plan, Perform, Profit

© 2012 Steelwedge Software, Inc. Confidential. 2Plan. Perform. Profit.

Business Context• In current economy, companies have started to refocus on

growth• S&OP traditionally still continues to be cost driven– Supply chain driven

• Great opportunity to create increased growth in organizations through S&OP/IBP– Sales– Product– Finance

© 2012 Steelwedge Software, Inc. Confidential. 3Plan. Perform. Profit.

The Agility GapHow good are you at responding to rapid change?

90%Agility is crucial to business

27%Are good at agility

*May 15 S&OP Agility Research, Supply Chain Insights

© 2012 Steelwedge Software, Inc. Confidential. 4Plan. Perform. Profit.

Sales & Operations Planning Drives Agility

• Cross enterprise collaboration• Single view of demand &

supply• Analysis of revenue, margin &

unit plans• “What if” scenario modeling• A platform for improved agility

© 2012 Steelwedge Software, Inc. Confidential. 5Plan. Perform. Profit.

Demand Plan(Unconstrained)

Performance Management

& Alerts

Performance

Current Plan

Waterfall

Collaboration

Finance

Demand Policy

Inventory

KPI Dashboard

RCCP Report

Executive S&OP Safety StockABC Analysis

S&OP OverviewS&OP SalesS&OP CollaborateS&OP Platform

Supply Plan(Constrained)

Finance Plan(Annual Operating)

Pre-meeting

Executive S&OP

Interfaces Planning Processes Reports

Steelwedge Inputs and Outputs

Actual Sales, Open Orders, Opportunities,

Budget &Master Data

Business Unit Supply Plans

Business Unit Finance Plans

Supply & Demand

Balancing

ExecutiveS&OP

Push or Ad Hoc Report

Generation

Nightly Transaction

Files

Consensus Demand

Forecasts

Supply Plans

Finance Plans

Balance Supply &

Demand Plan

ScenariosReview & Resolve Issues,

Plan Scenarios

Connect the Right People with the Right Process

© 2012 Steelwedge Software, Inc. Confidential. 6Plan. Perform. Profit.

3 Key S&OP Strategies for Enabling Growth

Create

financials at

every stage of

S&OP

Decide the products that matter

Engage the

Sales and

Marketing

organization

© 2012 Steelwedge Software, Inc. Confidential. 7Plan. Perform. Profit.

Engaging Sales and Marketing

• Sales is focused on opportunity conversion rather than build forecast

• BTS, CTO and ETO environments progressively more and more opportunity management focused

• Existing CRM systems do not focus on sales forecasting• Engagement from sales is crucial — simple push driven

process is required

© 2012 Steelwedge Software, Inc. Confidential. 8Plan. Perform. Profit.

IBP Needs to Start Upstream Before Order Capture

• Challenges Faced:• Sales & Marketing not engaged in

S&OP • Existing tools (CRM/ERP/DP) fall

short • Opportunity pipeline not integrated • CRM and ERP product master

mismatch• Long planning cycle time (up to10

weeks)

• Benefits Gained:• Improved forecast accuracy by 30%

OpportunityPipeline

Sales Forecast

Build Plan

Case study: $ 3 B semiconductorManufacturer

© 2012 Steelwedge Software, Inc. Confidential. 9Plan. Perform. Profit.

Enterprise Enabled Excel Increased User Adoption

Excel Spreadsheets

Advantages

Ease of use

Familiarity

Power

Flexibility

Disadvantages

Data integrity

Scalability

Double Click

Enterprise Software

Advantages

Architecture

Security

Scalability

Data integrity / timeliness

Double Click

Collaboration

Disadvantages

Complexity

Flexibility

SteelwedgeAdvantages

Ease of Use

Familiarity

Power

Flexibility

Architecture

Security

Enterprise Plan of Record

Scalability

Data integrity and timeliness

Drill Down to Details

Collaboration

© 2012 Steelwedge Software, Inc. Confidential. 10Plan. Perform. Profit.

3 Key S&OP Strategies for Enabling Growth

Create

financials at

every stage of

S&OP

Decide the products that matter

Engage the

Sales and

Marketing

organization

© 2012 Steelwedge Software, Inc. Confidential. 11Plan. Perform. Profit.

Product Catalog SegmentationFocus on What MattersUnderstand Complexity and Its Impacts

Volatility

Imp

act

Statistical Forecast with

Exception Monitoring

Collaboration with

Exception Monitoring

Stocking Strategy: Min/Max, Safety Stock, etc.with Exception Monitoring

© 2012 Steelwedge Software, Inc. Confidential. 12Plan. Perform. Profit.

Demand Planning Policy for ProductsProduct Catalog Segmentation

© 2012 Steelwedge Software, Inc. Confidential. 13Plan. Perform. Profit.

3 Key S&OP Strategies for Enabling Growth

Create

financials at

every stage of

S&OP

Decide the products that matter

Engage the

Sales and

Marketing

organization

© 2012 Steelwedge Software, Inc. Confidential. 14Plan. Perform. Profit.

Linking Financial Plan to Operational Plan

• Financial parameters should be ubiquitous

Time phased Average Selling Prices Cost modeling

Statistical BOM attach rates driving model pricing for configure to order environments Multi-currency

© 2012 Steelwedge Software, Inc. Confidential. 15Plan. Perform. Profit.

Integrating With the FP&A process

• Case Study: Global pharmaceutical and medical equipment manufacturer

• Integration with Large ERP System– Loads Annual Operating Plan at higher level and then allocate

revenue plan to detail based on mix– Backward integration into financial system of record to convert to

full P&L– On a month to month basis, the IBP plan is refined to drive

adherence to AOP

© 2012 Steelwedge Software, Inc. Confidential. 16Plan. Perform. Profit.

Key Takeaways• Growth Focus for companies versus Cost• S&OP evolving from cost to growth• Agility gap prevents companies to capitalize on opportunity• Three organizations to engage:– Sales– Product– Finance

© 2012 Steelwedge Software, Inc. Confidential. 17Plan. Perform. Profit.

Q&A

September 25, 2012

Steelwedge Software, Inc.nviswanathan@steelwedge.com

Nari Viswanathan