What if I told you that after pulling the plug on Software number 1 (read about it here: The painful saga of Sales and Operations Planning software: Part 1), we stumbled across the next S&OP software and it just so happened to be user-friendly, flexible, had an implementation time that was roughly a week, and cost a fraction of the previous software? Software number 2 sounds perfect right? This is where I should say the story ends and everyone lives happily ever after! But, I promised you a David and Goliath story surrounded by Investor politics.
I met Ara Surenian of DemandCaster, when he and another consultant by the name of Jeff Balkan, were working with my company to implement our S&OP process. When they were hired, Ara was told that he could not use DemandCaster because they had already purchased another platform. Ara agreed and never brought up DemandCaster at any time during the S&OP design and implementation process even when he was aware of our struggles with software number 1. When the decision to trash software 1 was finally made, he was approached to present DemandCaster and after a brief demo, the consensus was to implement.
As I noted above, the time to implement DemandCaster was fast. Within a week we were up and running and driving demand and supply planning. The secret sauce was the data integration process DemandCaster employed. While our company still had its data and process issues, DemandCaster’s flexible data management process allowed us to easily compensate for the issues by applying rules that would clean the data as it was loaded. In addition, its variety of planning settings allowed us to quickly correct lead times, safety stock logic, and source and destination relationships among other attributes as the issues were recognized. They even implemented a color coding system at our material planner’s request, to allow them to quickly see stock level risk. It was like having an olympian gymnast right inside the computer! Things were looking up, but unfortunately for us, S&OP needs more than just great software to run smoothly as you will come to learn.
Setting the Scene: Company Culture
The number 1 S&OP issue at my company was that it lacked strong leadership and executive support for the process (we went through 9 CEO’s in 4 years!). Departments functioned in silos, and with management always changing, we lacked accountability. Despite the great work that Jeff and Ara had done in launching the new S&OP process, which was acknowledged by all parties involved at the time, the constant change in leadership prevented any momentum from taking hold. To make matters worse, shortly after implementation, a second private equity firm invested in the company and with them came a new group of consultants. Within a few weeks, the majority of the executives in the company who had finally started to drive the S&OP process top down, were replaced with consultants. After listening to countless stories of the core issue being the lack of Executive Support, it was only a few weeks later when the consultants actions proved they did not truly believe this to be the core issue. The reality of this came to a head during the next S&OP cycle.
The week of the “Big Meeting”
The next S&OP cycle was in reality a presentation of the latest sales forecast to the new board. The “Big Meeting” as we called it, was the pre-meeting in advance of the board presentation. The whole week leading up to this “Big Meeting” was rough, since I did not have any support from the product managers, a majority of the sales team, and the always absent marketing team. Despite these issues I managed to finalize the next sales forecast. I presented the forecast to the head of sales for approval, and though he did approve it, I was not very confident that he paid close attention to the numbers. After all, I presented a new forecast with a fairly large variance to the annual plan ($130 MM annual plan, $91MM new forecast for the year as determined by DemandCaster). I was expecting some sort of reaction, but none came. On a side note, considering the lack of any non-statistical inputs, DemandCaster performed well with its forecast. We ended that year at $89MM. The morning of the meeting brought high anxiety. While I was confident on the side of doing my job correctly and having the sales executive approve the forecast, I knew a firestorm was brewing with such a high variance to the board's expectations. Just before walking into the meeting, I spoke with Ara and asked him to call in to the meeting since the forecast was essentially based solely on the statistical output of his software and it would likely get blamed for the variance. By that time, the S&OP process Ara and Jeff had implemented was put to the side in favor of a new process, or better stated, lack of process implemented by the new management team.
The “Big Meeting”
It only took three minutes for the proverbially “crap to hit the fan!” Once they heard the forecast to plan variance they were no longer interested in rational root cause analysis, but rather finger pointing. First the blame was pointed to the sales executive who immediately said “That’s not my forecast, that’s Jordan’s forecast.” This seemed to be the norm, the emails I had approving the forecast didn’t seem to matter much. I walked the team through the forecast and explained the key components that a good forecasting process should include, of which our company was no longer including. Instead of acknowledging their collective lack of involvement in preparing the forecast, the COO responded with “I just found out about this new software that’s the best in the world and will solve our problems. Jordan, I already have a call set up for you with them.” I immediately got defensive about wasting time on another software especially when there was nothing wrong with the current one. The management team didn’t seem to grasp the fact that software can only perform so much when there is a lack of process and accountable people. I asked Ara to step in and speak to his software and more so to the process issues that will hold back any software. The management team didn’t pay much attention to Ara, they felt they knew more than everyone else and the answer to the problem was “better” software. When the meeting finally ended, the COO came up to me and said he has really exciting news for me and would be by my office later to discuss.
"UGH!!!"
My experience may have been more extreme than most, but there is an underlying belief in many organizations that software is a silver bullet! It’s not. People and process are more important than software. If you have the people and process part down, a good software is simply an enabler to drive productivity, efficiency, and clarity in decision making. When it comes time to select a S&OP software, here are a few suggestions I can offer:
- Before agreeing on the software, try to find a way to test the company’s level of support that will be provided, since response time is a big deal, especially when you're stuck and there's a deadline. This may not always be possible but software number 1 had a response time that could take more than a day, DemandCaster always responded to my Support tickets in under an hour (human response not automated.)
- Though there are perceptions that Cloud-based platforms have security risks, our IT folks thoroughly vetted the data integration process DemandCaster used and found no concerns. What’s more, because it was cloud-based there was minimal to no risk since the upfront costs were only the integration which our team took care of. Thereafter the subscription kicked in and we got going. At the same time we also implemented Arena Solutions, a PLM software, with equal success. Cloud systems are clearly the future of enterprise software.
- From the first sales pitch through implementation, user training should be a strong focus of the software company. A clearly defined training program that provides structure is key. With software number 1, they just skipped around the system showing me random features which made it incredibly difficult to retain how to use these features in relation to the process being implemented. With DemandCaster, their training is structured with a unique focus on the company's process and they were available to answer questions by phone or email when needed.
- Client experience is a big deal to the software company. While the “Big Box Solutions” will always tell you that they are listening to you when developing and expanding upon new features, it is unlikely your voice will be heard. DemandCaster is continually evolving based on client feedback as our material planners experienced with the clean to build feature added at their request.
Based on the above, I think you can appreciate my frustration! What “exciting news?” Was he really going down the road of another software? The one thing that was working well, was he really going to replace it? Wow, let’s fix the one thing not broken!!! Keep a lookout for part 3 of “The painful saga of Sales and Operations Planning software” where I will share the curveballs and daily drama that is about to unfold as David and Goliath are ready for battle.
