The Finance of Forecasting (S&OP is Only the Start)

We all know that S&OP requires the involvement of Finance but in many organizations this function can feel detached from the core S&OP functions of demand and supply. Make no mistake, though, the financial context of a company underpins the entire planning process and is key to keeping demand and supply planning aligned with financial constraints, company goals, and strategy. In this article, I invite planning professionals to walk a mile in Finance’s shoes, revealing the priorities and core responsibilities of this function, including how they must represent the voices of management, ownership and, if applicable, the bank, in the S&OP process. I also discuss how Finance can add value to the S&OP process (and the enterprise as whole) by revealing the impacts of planning activities on cash flow, margin, and P&L, and more.