Welcome!

Microservices Expo Authors: Elizabeth White, Liz McMillan, PagerDuty Blog, Yeshim Deniz, Pat Romanski

Related Topics: @CloudExpo, Java IoT, Microservices Expo, Containers Expo Blog, Agile Computing, Apache

@CloudExpo: Case Study

Case Study: Cloud-Based Sales & Operations Planning in the Cloud

How network provider Enterasys used cloud-based S&OP technology to drive growth and save millions per quarter

Cloud computing has changed the way we work. People and businesses can now access services, applications and infrastructure over the Internet, with lower costs, higher productivity and an enhanced user experience.

While cloud computing has revolutionized many aspects of business, its effects have been quite dramatic across supply and demand management. Cloud-based Sales & Operations Planning (S&OP) is particularly powerful, connecting disparate demand, supply and financial data from a wide swath of packaged and home-grown enterprise information systems as well as a forest of spreadsheets, harmonizing everything into a single, meaningful plan. Delivering this supply chain "Big Data," analytics and reporting in the cloud means that it can be deployed, scaled, and interconnected quickly, enabling truly collaborative supply and demand planning.

Cloud makes S&OP faster, more transparent and collaborative. It works, it's proven, and it can immediately adjust as needed based on changing business demands. Applications delivered via cloud not only makes it easier to connect disparate business processes and applications, it eliminates the traditional ‘forklift upgrade' process of traditional software vendors. Keeping up with the latest innovations is automatic, so enterprises can focus on their business instead of technology issues.

An Early Commitment to Cloud for Enterasys
For wired and wireless network infrastructure supplier Enterasys Networks, the cloud was not simply a path to IT value and cost savings, but rather it is considered a strategic weapon for competing against very large competitors. Enterasys has rolled out a broad range of cloud solutions company-wide, from gmail and Google Apps, in addition, to replacing Microsoft SharePoint, with Box for cloud-based content management and on-line collaboration. An avid advocate for cloud, Enterasys CIO Dan Petlon is a member of the customer advisory board for its cloud CRM solution, SalesForce.com.

One of its early business processes to benefit from cloud computing is S&OP, a journey which began in 2005. By harnessing the power of the cloud through S&OP vendor Steelwedge to better align its demand and supply plans internally as well as with suppliers and customers, Enterasys has achieved better demand predictability, reduced inventory and contributed to a 95% rate of global customer satisfaction.

The company's achievements have not gone unnoticed. Because of their innovative S&OP use of cloud computing, Enterasys has been recognized by Gartner as embodying advanced S&OP Maturity. The company's exceptional S&OP practices have resulted in three years of sequential growth during a period its peers were plagued with sluggish growth. With cloud-based S&OP technology, Enterasys identified $3 - $4 million in savings per quarter, and, in 2012, achieved the milestone of eleven consecutive quarters of improved year-over-year growth.

Creating a Demand-Driven Mindset
Enterasys' wired and wireless network infrastructure & security solutions help enterprises stay in front of changing connectivity and security needs. Back in 2004, the company realized that the impact of constantly evolving global business change on its supply chain meant that improving its ability to predict demand was paramount. The firm subsequently embarked on a CEO-driven mission to transform itself into a lean, responsive and much more demand-driven business.

According to Vice President of Operations Jack Lyon, "We needed to do a better job at predicting demand, so that we could reduce excess and obsolete inventory; you own it and have to write it off." Lyon's baseline assessment of supply chain challenges also included order delays, sluggish market response, short product life cycles and organization silos of information. Compounding the problem was a completely outsourced supply chain with contract manufacturers building all of its products.

Enterasys embarked on a mission to create a worldwide collaborative integrated process and methodology that supports and delivers a demand plan with one agreed set of numbers. The company set out to find an IT solution incorporating a S&OP software platform.

S&OP Year One: Anticipating the Market
Within a year of Lyon's assessment, the company improved its bottom line by applying new techniques and cloud-based technology to a proven S&OP process. With the cloud-based S&OP platform from Steelwedge, Enterasys connected its people and processes to better understand operational tradeoffs when changes in the business environment did not align with its business plan. The company selected Steelwedge's S&OP solution because it is built on a single, cloud-based Integrated Business Planning platform used by large, global manufacturers across multiple industries.

Enterasys uses Steelwedge to unite people, process and technology for an agile planning environment and growing business.

In 2005 the Enterasys S&OP process brought together a cross functional group of leaders from sales, marketing, product management, operations, finance and supply chain. At the same time, Steelwedge integrated and normalized the data from each of those groups that resided in their respective systems such as SAP and Salesforce.com --and eventually added in BigMachines as well. From there, Enterasys drove significant and immediate changes in its business starting with better demand predictability, which in turn, directly affected its ability to respond to change.

For example, within a year, the company could determine in near real-time when a product was not selling as well as expected and drive demand-shaping activities to stimulate sales. Alternatively, if products were selling better than forecast, Enterasys could look first at sales data to see if the growth was sustainable, then reach out to its contract manufacturers to ascertain their capacity to boost production short and mid- term.

The bottom line was clear as well: decreased excess and obsolescence accounted for a whopping $3 to $4 million in savings per quarter initially.

But better demand planning was just the beginning of the ongoing transformation that Enterasys continues to drive from cloud-enabled S&OP. Armed with cross-company data and insights, the S&OP team moved its discussions from having enough supply to fill a particular order, to strategizing on improving gross margins. It regularly uses S&OP to power "what if" scenario planning across many facets of its business to understand the impacts of potential changes on customer satisfaction, revenue, sales and production.

Seven Years Later: Collaborating and Orchestrating
Enterasys has taken a purposeful, incremental "win" approach to driving advancement and ROI from its S&OP. Seven years later, the company has a global, collaborative and integrated S&OP process and methodology, powered with the Steelwedge cloud-based S&OP Platform. Its demand and supply plans are aligned internally and externally with suppliers and customers. In turn, better balance is delivering better predictability, better cash spend and better customer success.

Among the results Enterasys achieved from its mature use of cloud-based S&OP:

  • Timely and accurate information through automation
  • Cross functional alignment through a collaborative planning approach
  • Higher customer satisfaction through better fulfillment
  • Sustained high global customer satisfaction (ATP): 95%
  • Customer fulfillment: over 97%
  • Reduced inventory: 21% year over year
  • Forecast error (MAPE): averaging 24%
  • Revenue impact less than 5% (of material overhead/excess inventory)

Most impressive though was that Enterasys has realized year over year growth for the past three years (2009-2012). Even in 2011, where its sector saw a 3% drop, Enterasys kept growing and outperforming all other networking companies. Critical to that business stability is Enterasys' cloud-based S&OP foundation.

Crawl, Walk, Run, Sprint: the Promise and Perils of Optimizing Business in a Volatile World
Under Lyon's leadership, S&OP has become a key strategic lever for the company's continued market growth and competitive advantage. But Lyon isn't resting on his laurels. He maintains that the ever shifting marketplace requires constant vigilance on agile business planning to maintain great customer success.

"We traded up our problems, by transforming from a manually intensive supply chain into a lean and responsive organization," says Lyon. "For us, success is all about strengthening the collaboration with customers, delivering on our promises and meeting their expectations. Therefore, our optimization work is never done."

In summary, the cloud-based S&OP transformation at Enterasys resulted in the following improvements and lessons learned:

Stronger collaboration within the organization: A demand plan with one agreed set of numbers fosters alignment and a "we're in it together" culture, eliminating finger-pointing.

Better inventory balance: S&OP helps model the optimal inventory balance. Keeping the lowest possible inventory is not always the right solution: balance needs to be struck between revenue growth and high customer satisfaction while protecting the balance sheet.

Automation powers valuable analysis: Integrated data and executive level reports from the S&OP platform facilitate a collaborative, global S&OP process, freeing resource time for analysis vs. data gathering and manipulation. This, in turn, powers continuous improvement and faster process maturity.

Enabling "bluebird" opportunism: Insights from accurate S&OP data and timely "what if" scenario testing supports "bluebird" demand opportunities that weren't in the forecast at all. With tighter contract manufacturer collaboration, this provides reliable answers to questions like: Can we support it? If not now, when? What other options do we have for supply if we don't have it?

Lyon sums up Enterasys' S&OP success by stating, "We've been successful with S&OP because we've taken an iterative, ‘Crawl, Walk, Run, Sprint' approach to implementation, testing, measurement and advancement. "It's a non-stop journey. The only constant in business is change, whether its market disruptions, economic volatility, a natural disaster...or you name it: they all have varying degrees of impact on the process. Achieving a ‘sprint', may only happen for a matter of seconds before continuous improvement kicks in and you re-evaluate. But we have an agile foundation in place to help us deliver better, more consistently-regardless of the circumstance."

More Stories By Jeri Donn

Jeri Donn is Vice President of Cloud Services at Steelwedge Software, responsible for building, deploying and maintaining the company’s cloud environment. Steelwedge commands the global market for cloud-based Integrated Business Planning and is trusted by Global 1000 companies including: Lenovo, Jaguar Land Rover, Sony, and Emerson. Steelwedge's cloud-based Sales & Operations Planning (S&OP) software connects people, process and technology to power a single view of a company's business, powering reliable "what if" scenario modelling that pinpoints the financial impact of supply-demand trade-off decisions. Visit www.steelwedge.com.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@MicroservicesExpo Stories
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
In his session at 20th Cloud Expo, Scott Davis, CTO of Embotics, will discuss how automation can provide the dynamic management required to cost-effectively deliver microservices and container solutions at scale. He will discuss how flexible automation is the key to effectively bridging and seamlessly coordinating both IT and developer needs for component orchestration across disparate clouds – an increasingly important requirement at today’s multi-cloud enterprise.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" ...
The essence of cloud computing is that all consumable IT resources are delivered as services. In his session at 15th Cloud Expo, Yung Chou, Technology Evangelist at Microsoft, demonstrated the concepts and implementations of two important cloud computing deliveries: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). He discussed from business and technical viewpoints what exactly they are, why we care, how they are different and in what ways, and the strategies for IT to transi...
Thanks to Docker and the DevOps revolution, microservices have emerged as the new way to build and deploy applications — and there are plenty of great reasons to embrace the microservices trend. If you are going to adopt microservices, you also have to understand that microservice architectures have many moving parts. When it comes to incident management, this presents an important difference between microservices and monolithic architectures. More moving parts mean more complexity to monitor an...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound e...
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
SYS-CON Events announced today that Auditwerx will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Auditwerx specializes in SOC 1, SOC 2, and SOC 3 attestation services throughout the U.S. and Canada. As a division of Carr, Riggs & Ingram (CRI), one of the top 20 largest CPA firms nationally, you can expect the resources, skills, and experience of a much larger firm combined with the accessibility and atten...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Everyone wants to use containers, but monitoring containers is hard. New ephemeral architecture introduces new challenges in how monitoring tools need to monitor and visualize containers, so your team can make sense of everything. In his session at @DevOpsSummit, David Gildeh, co-founder and CEO of Outlyer, will go through the challenges and show there is light at the end of the tunnel if you use the right tools and understand what you need to be monitoring to successfully use containers in your...
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that HTBase will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. HTBase (Gartner 2016 Cool Vendor) delivers a Composable IT infrastructure solution architected for agility and increased efficiency. It turns compute, storage, and fabric into fluid pools of resources that are easily composed and re-composed to meet each application’s needs. With HTBase, companies can quickly prov...
Lots of cloud technology predictions and analysis are still dealing with future spending and planning, but there are plenty of real-world cloud use cases and implementations happening now. One approach, taken by stalwart GE, is to use SaaS applications for non-differentiated uses. For them, that means moving functions like HR, finance, taxes and scheduling to SaaS, while spending their software development time and resources on the core apps that make GE better, such as inventory, planning and s...
By now, every company in the world is on the lookout for the digital disruption that will threaten their existence. In study after study, executives believe that technology has either already disrupted their industry, is in the process of disrupting it or will disrupt it in the near future. As a result, every organization is taking steps to prepare for or mitigate unforeseen disruptions. Yet in almost every industry, the disruption trend continues unabated.
Building custom add-ons does not need to be limited to the ideas you see on a marketplace. In his session at 20th Cloud Expo, Sukhbir Dhillon, CEO and founder of Addteq, will go over some adventures they faced in developing integrations using Atlassian SDK and other technologies/platforms and how it has enabled development teams to experiment with newer paradigms like Serverless and newer features of Atlassian SDKs. In this presentation, you will be taken on a journey of Add-On and Integration ...
The IT industry is undergoing a significant evolution to keep up with cloud application demand. We see this happening as a mindset shift, from traditional IT teams to more well-rounded, cloud-focused job roles. The IT industry has become so cloud-minded that Gartner predicts that by 2020, this cloud shift will impact more than $1 trillion of global IT spending. This shift, however, has left some IT professionals feeling a little anxious about what lies ahead. The good news is that cloud computin...
True Story. Over the past few years, Fannie Mae transformed the way in which they delivered software. Deploys increased from 1,200/month to 15,000/month. At the same time, productivity increased by 28% while reducing costs by 30%. But, how did they do it? During the All Day DevOps conference, over 13,500 practitioners from around the world to learn from their peers in the industry. Barry Snyder, Senior Manager of DevOps at Fannie Mae, was one of 57 practitioners who shared his real world journe...
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists l...