21 Apr 2013

Planning Software - Part 1: How important is Integration?

How Important is Integration ???

Continuing on this discussion on the important properties of a Planning Software application, I will discuss integration this week.

What is integration?  Why is it important?  How well should my planning tool integrate with the rest of the system landscape?

The word integration can be misused and misunderstood.  There are two different perspectives when it comes to integration.

  • The first and most common one is from an IT perspective – Does the tool integrate and work well with my overall system landscape.   Integration is generally supposed to allow an easier implementation.  Many components come in pre-built to plug this into the enterprise system, so the re-work necessary to make data talk from one system to the other is minimal.
  • The second one is from a business perspective – will the software allow me to integrate the business operations globally?  Does it allow the corporate management to see the aggregate or whole quickly every month to make decisions?  Does it also allow a global IBP process to drill down quickly into areas of specific issues and challenges and highlight them for potential future risks and opportunities?

For the business definition of integration, a distinction needs to be made between analytical work and reporting.  Most of the global decision-making process probably needs a good Business Intelligence (BI) platform that will allow reported numbers to bubble up to global management and allow for what-if queries and provide exception-based reporting.  I do not believe anyone is thinking about a super-integrated analytical platform where the CEO can question the Safety stock setting globally and make a change!!

Having ruled that out, then we focus on how the system can co-exist with other global ERP and Planning systems.  Do we want a different planning system in each country?  Or should everyone be using SAP and speaking German?

I have seen this question being answered by the corporate headquarters.  The main business unit picks a planning platform and then inspires or influences the other local business units to move that platform over a period.

In summary, we should think about the following aspects while considering a planning tool from an integration perspective:

1.  Can the planning tool work with the ERP backbone to get data in and out easily with minimal custom interfaces?  Data can be directly sourced through the ERP tables in some applications without going to the data mart or data warehouse.  However, in many practical instances, there may be customizations necessary to extract data even within the same ERP/planning software family.

2.  Does it fit with the overall system landscape in terms of the touch and feel?  This may be a criterion for the simple reason of user adoption.  The interface and familiarity of the user interface will make it more easily saleable and trainable to the user.

3. How does it relate to other planning applications used?  When the demand forecast is passed to the Supply planning system, do both systems interpret the forecast to mean the same thing – units, detail, horizon, expected forecast error, etc.

4. If it is a best-of-breed tool that is NOT from the ERP family, how easy or difficult is it to build the integration capabilities to the ERP system?

In summary, integration may be one of the important criteria.  But is this a critical criterion to the exclusion of others in choosing a planning software?

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