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Should SAP users move from APO to IBP?

By James Kofalt

SAP's Integrated Business Planning product is now in the spotlight, with its Advanced Planning and Optimization tools taking a back seat. However, deciding whether to switch to Integrated Business Planning, more commonly known as IBP, can be a complicated process.

SAP users thinking about switching to IBP should consider whether they've moved to S/4HANA and if predictive analytics is important to them, among other factors.

Here are a few things to think about when considering moving to IBP.

A history of IBP

For years, SAP's mainstay for inventory and supply chain planning was its Advanced Planning and Optimization (APO) application. In 2014, the company launched the first version of Integrated Business Planning (IBP), which incorporates all aspects of operational planning, analytics and control into a single application that works with SAP's HANA database.

Since then, SAP users have faced a conundrum: Should they transition to IBP or stick with APO? A number of factors can affect that answer, including the overlap between APO, S&OP (SAP's legacy Sales and Operations Planning module), IBP and SAP's flagship S/4HANA ERP product.

In other words, migrating to IBP isn't simply about retiring APO and moving to a newer version of the same thing. Some of APO's functions are now available as part of S/4HANA, while others are embedded in IBP, which can operate as a standalone application that's integrated with non-SAP ERP products.

Should users switch to IBP?

Here are some of the key factors to consider when deciding whether to make the transition to IBP:

• Is management seeking a more holistic planning approach? Historically, supply chain managers have mostly used APO. By contrast, IBP provides a unified planning view that incorporates sales and management functions more fully and is tailored to each user's needs.
• Is collaborative planning with suppliers or customers a major company focus? IBP users are better able to extend their planning upstream to suppliers and downstream to customers and distributors.
• Is using predictive analytics a current or future goal? SAP designed IBP to take advantage of HANA's superior analytical performance, so IBP could open up new predictive analytics possibilities. It supports adaptive approaches to optimizing the supply chain with AI-driven recommendations.
• Are APO customizations currently in place? If a company previously required APO customizations, it will likely need IBP customizations as well. The two products' technology foundations are very different, so previous customization investments will not carry forward easily to IBP.
• Is S/4HANA already implemented? APO is on-premises software, with SAP GUI as the user interface. By contrast, IBP is SAP's planning software for the future -- it's built for the cloud and aligned with the company's S/4HANA roadmap. Some of the features missing from IBP, including Global Available-to-Promise, are included in S/4HANA instead and are an improvement over APO's legacy functionality.