Identifying Key Reasons for SAP IBP Implementation Failure

The transition from traditional planning tools, such as SAP APO, to the more advanced capabilities of SAP Integrated Business Planning (IBP) represents a significant leap in technological power for organizations. However, while SAP IBP offers a transformative, unified view of the supply chain, its implementation is filled with potential pitfalls. Many SAP IBP projects fail to deliver their expected value because of a mismatch between the full scope of the tool and an organization’s operational readiness.

In an interview with SAPinsider, Keerthi Gundapaneni, Director of Supply Chain in the SupplyChainPaths practice at CloudPaths, noted that one of the primary drivers of failure is an overly ambitious project scope, often born from the initial enthusiasm for the platform’s extensive features. “Decision-makers see the potential in all the new bells and whistles of the upgraded system and, in their excitement, push for a comprehensive rollout that incorporates every possible function. This is a critical, yet common, misstep,” Gundapaneni explained.

“They get excited about it, and they try to see what is usable for them, rather than what is required and what they are ready for,” he noted. “Organizations try to bite off more than they can chew, and they end up in a situation where they ask for a whole bunch of customizations, adopting features that the business is, quite frankly, not ready for yet.”

Critical Points of Failure

The evolving role of the supply chain planner compounds this issue. According to Gundapaneni, many planning teams still operate in a reactive, firefighter mode, spending their days manually adjusting forecasts and responding to immediate crises. Handing them a highly sophisticated strategic tool without addressing these underlying process issues creates an operational disconnect.

He characterized this common scenario succinctly: “Organizations end up giving the business a Bentley when they are looking for a Toyota.” This predictably results in low user adoption, planners reverting to familiar legacy systems, the tool’s advanced functionality remaining underutilized, and a severely compromised project ROI.

A second, equally critical failure point is poor data governance. “The principle of garbage in, garbage out is absolute in SAP IBP,” Gundapaneni stated. He added that organizations often make one of two mistakes. Either they drastically underestimate the time and effort required to cleanse and consolidate their data, or they incorrectly assume their existing data is clean.

“When the project begins, the reality surfaces, leading to scope creep, extended timelines, and a rush to patch data issues that should have been addressed upfront,” Gundapaneni said. “This creates a trust deficit from day one, as users and leadership immediately question the validity of the system’s output.”

What This Means for SAPinsiders

• Learn from real-world diagnostic scenarios. The Bentley versus Toyota analogy that Gundapaneni gives is an apt one for SAPinsiders seeking to adopt SAP IBP as a diagnostic tool. It highlights a failure to align technology with process maturity. In such cases, companies like CloudPaths and their SupplyChainPaths practice assist by focusing the migration’s approach on the initial assessment, ensuring the implementation phase aligns with the organization’s current operational reality. This prevents the deployment of an overly complex solution and instead builds a foundation for future growth, ensuring a higher return on investment.
• Distinguish between usable and required features before implementing a project. The primary implementation trap is pursuing all usable features instead of focusing on what is truly needed and what the business can realistically adopt. This excitement-driven scope creep leads to unnecessary complexity, over-customization, and a solution that overwhelms its users. As Gundapaneni points out, this ultimately hinders adoption and the realization of value.
• Recognize that data quality dictates trust. Poor data quality doesn’t just lead to inaccurate results; it fundamentally erodes confidence in the entire SAP IBP system. According to Gundapaneni, when planners encounter outputs that don’t reflect reality, they often revert to using spreadsheets. When leaders see dashboards they can’t validate, they lose confidence. He emphasized that companies often misjudge their data readiness, leading to a system that fails to become the single source of truth it was intended to be.

Stay tuned for the second part of this interview, where Gundapaneni explains why organizations must have a strategic framework in place before they embark on their journey with SAP IBP, to ensure disciplined and phased user adoption and a relentless focus on data governance.