B2B Challenges following Divestiture
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This presentation highlights some of the key B2B related challenges facing companies who may have been through a period of divestiture. It helps to highlight some of the issues relating to the ongoing management of B2B infrastructures and trading partner communities following divestiture. The presentation then goes on to discuss how B2B Managed Services can help maintain business continuity during a period of restructuring. Updated May 2014
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B2B Challenges following Divestiture
- 1. OpenText™ Managed Services – Managing B2B Following Divestiture
- 2. OpenText Confidential. ©2014 All Rights Reserved. 2 Introduction The global economy continues to go through an unprecedented period of change Companies in all industry sectors are restructuring and streamlining their operations Divesting operations allows companies to rethink their corporate strategies Divestitures provide the ideal opportunity for companies to re-evaluate IT and B2B strategies and re-focus on core competencies
- 3. Divesting an Operation can be Complex It will impact all areas of a business... Divested Operation OpenText Confidential. ©2014 All Rights Reserved. 3 Global Office Locations IT and B2B Infrastructure Manufacturing Plants Distribution Network Retail Network ERP CRM ERP CRM
- 4. Which B2B Direction Do You Take? OpenText Confidential. ©2014 All Rights Reserved. 4 Following divestiture of a company or business unit, there are three possible directions a company could take for managing their future B2B requirements: Continue to use existing B2B platform Implement and manage a brand new B2B platform Outsource the management of the entire B2B platform to a trusted partner
- 5. Typical B2B Activities Following Divestiture OpenText Confidential. ©2014 All Rights Reserved. 5 Document Mapping – potentially hundreds of document maps will need to be transferred from the parent company to the newly divested operation ERP Integration – ERP integrations from the parent company will have to be re-established in the new operation Legacy Platform Upgrade – could provide the ideal opportunity to introduce new B2B technologies to the divested operation Trading Partner Management – trading partners will need to be managed during and after the divestiture has taken place Global B2B Support – Loss of support from a parent organisation means that global B2B support services will have to be provided to maintain global trading capabilities
- 6. OpenText Confidential. ©2014 All Rights Reserved. 6 Document Mapping Following divestiture, companies have one of three options with respect to document maps Transfer Existing – To migrate the existing maps from the parent company into the divested operation ‘as is’ Transfer & Modify – To migrate the existing maps from the parent company and modify maps as required to suit the divested operation’s new business processes Develop New Maps – The divested operation may decide to take the opportunity to start from a clean sheet and develop totally new maps. This provides an opportunity to consolidate and streamline B2B processes These options will mean significant disruption for the divested operation
- 7. OpenText Confidential. ©2014 All Rights Reserved. 7 ERP Integration ERP platforms can be difficult to integrate to a divested B2B platform Personnel with ERP related skills may reside with the parent company The divested operation may need support to manage global instances of an ERP platform Separation from the parent company seen as an opportunity to develop a fully integrated ERP/ B2B platform for the first time
- 8. Technology / Legacy Upgrade OpenText Confidential. ©2014 All Rights Reserved. 8 Following a divestiture, companies may see this as an ideal opportunity to upgrade from legacy B2B platforms and technologies Upgrading to new technologies allows the divested operation to develop a flexible B2B platform that can grow as the company grows Provides opportunity to develop a more robust B2B platform with increased availability/reliability
- 9. OpenText Confidential. ©2014 All Rights Reserved. 9 Trading Partner Management Following divestiture it is important to maintain continuity of trading partner relationships The divested operation will need to work out a strategy for managing trading partners in different locations around the world Trading partners will require ongoing training, development and support with the divested operation’s new B2B platform
- 10. OpenText Confidential. ©2014 All Rights Reserved. 10 Global B2B Support Providing global B2B support for all users across an extended enterprise can often be the most difficult area to manage following divestiture For global operations, 24x7 multi-lingual support will be required across multiple time zones The divested operation will need to manage regional document, connectivity and industry specific B2B standards around the world
- 11. OpenText™ Managed Services Over Two Decades of B2B Innovation & Global Experience OpenText Confidential. ©2014 All Rights Reserved. 11 Recognized #1 global integration provider Pioneer, change agent & visionary leader Largest base of 800+ Managed Services customers worldwide Most extensive industry experience Retail, CPG, Manufacturing, Automotive, Hi-Tech, Telecom, Financial Services Unique service competencies Global, B2B integration cloud Broad mapping/translation services for any document type B2B Enterprise Community Management—Active Community B2B Expert Operations working for your success
- 12. OpenText™ Managed Services OpenText Confidential. ©2014 All Rights Reserved. 12
- 13. Divestiture Requirements OpenText Solution Value Business Value to Customer • Provides extensive ‘any to any’ mapping skills and allows consolidation/seamless creation of new maps to suit the divested operation OpenText Confidential. ©2014 All Rights Reserved. 13 Document Mapping • Expertise in wide variety of cross industry and regional standards • Network based translation using OpenText award winning translator technology • Extensive experience with ERP integrations, over 100 projects to date • Managed Services platform is fully certified for SAP Netweaver integration • Multi-lingual 24/7 ‘follow the sun’ helpdesk support • Proactive event monitoring and tailored escalation processes Provision of Global Support • Users across the extended enterprise can be supported and newly created B2B processes to support divested operation can be effectively monitored Management of Trading Partner Relationships • Trading partners, in any region of the world, can be managed effectively both during the transition phase and after the operation has been fully divested • Full education, communication and testing of trading partners • Local on-boarding in 30 countries with 20 languages Technology / Legacy Upgrade • Adoption of latest B2B technologies provides a flexible platform for growth, ie as company grows, B2B platform can grow effortlessly with it • Flexibility to integrate a diverse range of trading partners • Provision of a reliable and highly available B2B trading platform Integration to ERP Systems • Allows the divested operation to have full integration between their B2B and ERP platforms, thus providing a common view of enterprise information OpenText Differentiation
- 14. European Automotive OEM Customer Case Study – OpenText™ Managed Services Managed Services was deployed to allow this company to outsource the management of its entire B2B environment OpenText managed on-boarding of 1000 EDI suppliers in North America and Europe, provided mediation between global standards Platform has been extended to support a new engine plant OpenText Confidential. ©2014 All Rights Reserved. 14 Business Issues This company was divested from their parent company in early 2008 They had a requirement to establish their own B2B infrastructure Following divestiture they needed to maintain continuity of operations and on going management of their global suppliers Solution Deployed Business Benefits Obtained Chose OpenText for its future proof B2B solutions, global capabilities and many EDI suppliers were already connected to OpenText™ Trading Grid™ Provides a flexible and scalable solution to allow for future growth B2B environment can be integrated to an ERP system at a later date Company Overview This company is one of the world’s leading manufacturers of luxury, sports and off road vehicles. They manufacture their vehicles at multiple sites across the UK and have plants in India and a joint venture operation in China. They have revenues of nearly $16billion and have 25,000 employees around the world.
- 15. Chinese Television Manufacturer Customer Case Study – OpenText™ Managed Services Managed Services to provide support for nearly 350 maps. One third were transitioned from the former company, another third were moved and modified and the final third were completely re-written Provided implementation support for the roll out across 11 countries and supported their RosettaNet based transaction requirements OpenText Confidential. ©2014 All Rights Reserved. 15 Business Issues Following divestiture from their parent company they were given a six month transition period to establish their own B2B environment They had to find a way of establishing the new B2B environment without impacting their business Solution Deployed Business Benefits Obtained New maps were implemented in a relatively short time period which minimised any disruption to their business and associated trading partner community New B2B environment was delivered within the agreed transition period and more importantly to budget Company Overview This company was formally part of a large electronics manufacturer, they were divested in 2005. The divested operation went on to form a joint venture with a Chinese television manufacturer. Headquartered in Guangdong, China, this company had $11.2billion in 2012 and has 50,000 employees.
- 16. European Chocolate Manufacturer Customer Case Study – OpenText™ Managed Services Managed Services was deployed to help consolidate 150 maps down to Their new B2B environment provided support for 100 trading partners across 80 countries around the world OpenText Confidential. ©2014 All Rights Reserved. 16 Business Issues This company was divested in 2007 for $850 million and is now owned by one of Turkey’s largest consumer products goods manufacturers Shared their former owner’s B2B systems for a period of time, however financial penalties were imposed after an agreed date Solution Deployed 55 new maps Business Benefits Obtained Map consolidation project helped to significantly reduce the complexity of their global B2B environment Managed Services enables this company to provide much better support to their global network of trading partners Improved support for global B2B standards allows this company to work with customers anywhere in the world Company Overview This company has grown to become one of the world’s leading producers of quality Belgium chocolates. Their chocolates are distributed in over 80 countries around the world, with over 600 boutiques in North America alone. This company has annual revenues of around $600 million a year.
- 17. Mark Morley | mmorley@opentext.com Copyright © OpenText Corporation. All rights reserved. twitter.com/opentext facebook.com/opentext linkedin.com/company/opentext W www.opentext.com
Editor's Notes
- The global economy is going through an unprecedented period of change. The turmoil in the housing markets, the banking industry and now the automotive industry is leading various governments to step in and provide financial aid to companies in these industries to help them through the recession.Many of these companies are being forced to sell off parts of their business and in some cases entire companies in order to raise much needed capital to see them through the period of downturn. In many cases governments are insisting that companies restructure in order to receive the bail out funds being offered to them.Under previous ownership by the parent company, the divested operation may not of had the management support or financial backing to make any structural changes to their operation. Divesting operations allows companies to rethink their corporate strategies and position themselves for future growth once the economy starts to pick up again.Divestitures provide the ideal opportunity for companies to re-evaluate IT and B2B strategies and re-focus on core competencies
- Divesting an operation can be complex, especially if the proposed divested operation is fully integrated to the parent company’s business processes, B2B and IT infrastructures. The divested operation will not only have to look at how they will seamlessly remove offices, manufacturing plants and perhaps distribution / retail networks but they will have to work out how to extract core business and IT systems such as ERP, CRM and B2B systems. Quite often the parent company will allow the divested operation to take a copy of IT systems, often referred to as clone and go but they will stipulate that the divested operation will have to be self sufficient within a 6 to 12 month time frame. In some cases the divested operation could face penalties if they are not off of the parent company’s systems within the so called transition period. So there is an incentive here for the divested operation to be up and running as soon as possible.
- Following the divestiture of a company, there are three possible directions a company could take for managing their future B2B requirements:They could continue to use existing B2B platform – for many divested operations this would probably be the easiest option for them to go for. However the complex nature of extracting the B2B platform from the parent company and continuing to manage trading partner relationships etc, all within a fixed transition period of possibly 12 months can make this a difficult option to follow.They could introduce a brand new platform or adopt platform from new owner – the divested operation could decide to adopt the B2B platform from their new owner or they could go ahead and implement a totally new B2B platform by themselves. Either of these options will mean severe disruption to the divested operation’s business processes and trading partner relationships.They could outsource the management of the entire B2B platform to a trusted partner – during a divestiture, a company should be focussing on core competencies and ensuring that business processes are operating smoothly during the transition period. Outsourcing the management of a B2B infrastructure, including the ongoing management of trading partner relationships should be seriously considered by the divested operation.
- This slide highlights the main B2B activities that will have to be managed during a divestiture. This list was compiled through reviewing a number of divestiture related Managed Services deals that GXS has won over the past few years. Even though each of these is equally as important to many companies, document mapping is often the most common area that companies look to outsource, mainly due to the fact that B2B or mapping skills will likely remain within the parent company following a divestiture process. Document Mapping – potentially hundreds of document maps will need to be transferred from the parent company to the newly divested operation ERP Integration – ERP integrations from the parent company will have to be re-established in the new operation Trading Partner Management – trading partners will need to be managed during and after the divestiture has taken place Global B2B Support – Loss of support from a parent organisation means that global B2B support services will have to be provided to maintain global trading capabilities Legacy Platform Upgrade – could provide the ideal opportunity to introduce new B2B technologies to the divested operation
- Following divestiture, companies have one of three options with respect to document maps and as explained on the previous slide, it is highly probable that mapping skills will remain within the parent company rather than the divested operation. Transfer Existing Maps – To migrate the existing maps from the parent company into the divested operation ‘as is’ Transfer & Modify Maps – To migrate the existing maps from the parent company and modify maps as required to suit the divested operation’s new business processes Develop New Maps – The divested operation may decide to take the opportunity to start from a clean sheet and develop totally new maps. This provides an opportunity to consolidate and streamline B2B processes Either option will mean significant disruption for the divested operation
- ERP platforms can be difficult to manage and integrate to a divested operation’s B2B platform. Once again, personnel with ERP related skills may remain within the parent company’s IT group The divested operation may need support to manage the integration of global ERP instances to their B2B platform The divested operation may see separation from the parent company as an opportunity to develop a fully integrated ERP/ B2B platform for the first time
- Following a divestiture, companies may see this as an ideal opportunity to upgrade from legacy B2B platforms and technologies Upgrading to new technologies allows the divested operation to develop a flexible B2B platform that can grow as the company grows It provides an opportunity to develop a more robust B2B platform with increased availability and reliability Divested operations will be looking to introduce new B2B technologies to realise significant operational efficiencies across the extended enterprise
- Following divestiture it is important to maintain continuity with trading partner relationships. Suppliers will want to be re-assured that support and relationships will be maintained during a divestment process The divested operation will need to work out a strategy for managing trading partners in different locations around the world If the divested operation introduces a new B2B strategy then this will have to be communicated to the trading partner community. Trading partners may need to use new communication protocols or document standards as part of the new B2B infrastructure. Trading partners will require ongoing training, development and support with the divested operation’s new B2B platform
- Providing global B2B support for all users across an extended enterprise can often be the most difficult area to manage following divestiture For global operations, 24x7 multi-lingual support will be required across multiple time zones The divested operation will need to manage regional document, connectivity and industry specific B2B standards around the world Providing support for new B2B processes or EDI document types needs to be managed effectively to avoid disruptions across the extended enterprise
- This slide highlights the key features of the GXS Managed Services platform. In the case of Michelin’s Managed Services platform, GXS manages everything to the right of the red dashed line, ie all external connectivity to trading partners and all document translation requirements.GXS’s B2B Managed Services is a strategic partnership that empowers your business with the most comprehensive technology to automate and streamline your B2B e-commerce transactions, combined with the best people and processes for managing your B2B programs and connecting with your entire trading community—no matter the location, size or B2B technical capabilities of your business partners. B2B Managed Services include: Global Systems Management—GXS performs all day-to-day management of the B2B infrastructure, including systems health monitoring, data backups, network management, systems administration, database management and application support. Visibility and Alerting—Gain enhanced visibility into your B2B transactions utilizing a comprehensive suite of Software as a Service (SaaS) products that provide better visibility and collaboration between customers, suppliers and business partners. Services consist of business activity monitoring for error alerting and reporting, usage reporting, document and acknowledgement tracking, problem detection and resolution, and root cause analysis. ERP Integration—GXS provides a range of services for enterprise integration from complex document mapping, such as SAP IDoc format, to managing business partner relationships and monitoring data quality. We offer B2B and ERP integration to any of the following ERP systems: SAP, Oracle, Microsoft Dynamics AX, Infor and Epicor. Data and Process Intelligence—Drive data quality and business process integrity by automatically monitoring in-flight data and identifying errors within individual transactions and across long running business processes, such as order to cash. This rule driven service uses compliance guide and business rule modeling to capture business impacting exceptions and track key performance indicators (KPI’s). The service includes validation, exception management, and analytics and reporting to deliver a heightened level of visibility.Mapping and Translation—B2B mapping specialists manage all data-mapping and translation tasks, perform change management and issue resolution and process critical production map changes on-demand to ensure map quality. GXS performs mapping of data structures from the format of internal applications such as Microsoft Dynamics, SAP or Oracle ERP to the formats required by external business partners such as EDI (ANSI X12, Tradacoms, EDIFACT), XML and RosettaNet.Partner On-Boarding—GXS provides the ideal combination of experienced implementation professionals and robust tools to rapidly onboard all your business partners on your behalf to ensure full participation in your company’s e-commerce programs, including data synchronization, AS2/Internet EDI, VAN migrations, EDI and supply chain visibility. Program Management— Experienced B2B Service Delivery Managers work with you to ensure implementation success and will also provide day-to-day project management activities ranging from oversight of all production activities including status reports and resource orchestration to help manage change request activity and production incidents. 24X7 Monitoring and Resolution Support— GXS provides you with a dedicated Production Services team to proactively monitor all processes and business transactions that flow through your production system. 24X7 support includes translation monitoring, exception management and incident management, in addition to monitoring system availability, capacity, performance and utilization, file latency and conducting server, application and interface health checks.In short, GXS provides Michelin with a flexible and scalable B2B platform that is able to support their business operations anywhere in the world.
- With regards document mapping, our mapping centre of excellence has experience of a wide variety of cross industry and regional standards in document translations. We are able to provide extensive any to any mapping skills. This allows consolidation of existing maps or the creation of entirely new maps to suit business processes in the divested operation.For integrating with ERP systems, GXS has worked with 20 companies to manage their SAP and B2B integration needs. Seamless integration between ERP and B2B platforms allows the divested operation to have a common view of enterprise wide informationManaging trading partner relationships is a key activity that the divested operation will want to manage carefully, having local on-boarding in 30 countries in 20 languages allows trading partners to be effectively managed both during and after the divestiture process.Provision of truly global support through multi-lingual, 24/7 helpdesks and proactive monitoring allows the newly divested operation to manage all their users across the extended enterprise, no matter where they may be locatedFinally, the ability to provide support for legacy technologies or provide an upgrade path to the latest B2B solutions and services allows the divested operation to build flexibility and reliability into the divested operation. This flexibility in the B2B infrastructure will ultimately allow the B2B platform to grow as the company grows.