Forrester Research Paul Hamerman Ray Wang


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Forrester Research Paul Hamerman Ray Wang

  1. 1. July 14, 2005. Call in at 10:55 am Eastern Time Forrester Research Paul Hamerman Ray Wang Vice President Senior Analyst The Future of ERP Applications
  2. 2. Agenda <ul><li>ERP challenges and deployment trends </li></ul><ul><li>The evolving ERP software market </li></ul><ul><li>The next generation: SOA </li></ul><ul><li>Strategies of the major vendors </li></ul><ul><li>Summary and recommendations </li></ul><ul><li>Questions </li></ul>
  3. 3. Theme Optimize your ERP investments for lower operating costs and long-term business value
  4. 4. ERP challenges and deployment trends
  5. 5. Definition: ERP <ul><li>ERP — means “enterprise resource planning” </li></ul><ul><li>A set of applications for core business operations and back-office management </li></ul><ul><li>Originally developed for manufacturing </li></ul><ul><ul><li>Now applies to a wide variety of businesses and government </li></ul></ul>
  6. 6. ERP functional footprint Source: June 9, 2005, Market Overview “ERP Applications — The Technology And Industry Battle Heats Up”
  7. 7. ERP Challenges <ul><li>Functional gaps, supplemented by bolt-ons </li></ul><ul><li>Customization to address real and perceived gaps </li></ul><ul><li>ERP environments are costly to maintain </li></ul><ul><li>Multiple vendors, multiple installations </li></ul><ul><li>Complex systems integration </li></ul>
  8. 8. Trends in ERP deployment <ul><li>Single ERP vendor versus multiple vendors </li></ul><ul><li>Fewer instances or single instance </li></ul><ul><li>Less customization </li></ul><ul><li>More frequent upgrades </li></ul><ul><li>Using integrated modules instead of bolt-ons </li></ul><ul><li>Hosting and outsourced support </li></ul><ul><li>Integration using Web services </li></ul>
  9. 9. Applications top 2005 IT investment priorities Source: December 15, 2004, Data Overview “2005 Enterprise IT Outlook”
  10. 10. Overview of the ERP software market
  11. 11. Top 10 ERP vendors by total Revenues ($ millions) Source: June 9, 2005, Market Overview “ERP Applications — The Technology And Industry Battle Heats Up”
  12. 12. Market segment definitions SAP Business One, Sage/Best, MBS Navision, NetSuite, Intuit Under $50 million SMB MBS Great Plains & Solomon, Epicor, Exact $50 million to $250 million Lower midmarket SAP, Oracle, Lawson/Intentia, SSA Global, IFS, MBS Axapta $250 million to $1 billion Upper midmarket SAP, Oracle $1 billion + Large company Representative suppliers Size range Market segment
  13. 13. ERP market forecast Source: June 9, 2005, Market Overview “ERP Applications — The Technology And Industry Battle Heats Up”
  14. 14. Market trends <ul><li>Continuing vendor consolidation </li></ul><ul><li>Fewer large new deals, more sales to existing customers </li></ul><ul><li>Emphasis on recurring revenue </li></ul><ul><ul><li>Maintenance, hosting, subscription licensing </li></ul></ul><ul><li>Focus on midmarket and industries </li></ul><ul><li>Growing importance of SOA platforms in technology buying decisions </li></ul><ul><li>Simplicity and usability (UI, tools, reporting) </li></ul>
  15. 15. Recent consolidations <ul><li>Oracle-PeopleSoft </li></ul><ul><li>Lawson-Intentia (pending) </li></ul><ul><li>SSA Global-Baan </li></ul><ul><li>Infor-Mapics </li></ul><ul><li>Epicor-Scala </li></ul>
  16. 16. The future: SOAs will transform the market
  17. 17. SOA stages for ERP <ul><li>Integration of heterogeneous applications across multiple platforms </li></ul><ul><ul><li>Time frame: Now </li></ul></ul><ul><li>Modular components within suites </li></ul><ul><ul><li>Time frame: Two to three years </li></ul></ul><ul><li>Market transformation to standards-based architectures </li></ul><ul><ul><li>Time frame: End of decade </li></ul></ul>
  18. 18. Smaller components add more flexibility Human Resources Customer relationship management Service-based integration Component arbitration Component arbitration Process integration Process integration Product life-cycle management Supply chain management Business Analytics GL AP AR CN Human resources Business analytics
  19. 19. SOA for ERP — What it means to you <ul><li>Message-based integration — easier connections using standards </li></ul><ul><ul><li>Lowers maintenance and integration costs </li></ul></ul><ul><li>Components — more flexibility </li></ul><ul><ul><li>Assembly of industry-specific and process-oriented solutions (e.g., order-to-cash) </li></ul></ul><ul><ul><li>Fewer vendor choices but more deployment options </li></ul></ul><ul><li>Architecture transformation — major upgrades may be required by the major vendors within five to eight years </li></ul>
  20. 20. The next generation: Strategies of major apps vendors
  21. 21. Next generation timelines <ul><li>Next-generation delivery dates are a moving target </li></ul>2004 2005 2006 2007 2008 2009 2010 SAP ESA Oracle Fusion MBS Green Lawson Landmark
  22. 22. Technology platform direction Source: June 9, 2005, Market Overview “ERP Applications — The Technology And Industry Battle Heats Up”
  23. 23. SAP <ul><li>SAP is the furthest along of the major apps vendors in moving to SOA </li></ul><ul><li>Enterprise Services Architecture (ESA) represents the service-enablement of the application suite </li></ul><ul><li>NetWeaver is the middleware platform </li></ul><ul><li>Business process platform is the unifying marketing umbrella </li></ul><ul><li>Timetable for completion is 2007 </li></ul><ul><ul><li>Core ABAP code will be retained — not a total rewrite </li></ul></ul>
  24. 24. SAP: The move from monolith to components
  25. 25. SAP’s vision is a process-driven architecture
  26. 26. Microsoft business solutions project green <ul><li>Well-publicized next-generation application strategy announced in 2002 </li></ul><ul><ul><li>Features .NET-based SOA and process-centric design </li></ul></ul><ul><ul><li>Promises greater flexibility and openness </li></ul></ul><ul><ul><li>Will converge five product lines into new code base </li></ul></ul><ul><li>Transitional strategy based on: </li></ul><ul><ul><li>User interface alignment within existing products </li></ul></ul><ul><ul><li>Technology infrastructure alignment </li></ul></ul><ul><ul><li>Conversion to .NET based processes </li></ul></ul><ul><li>Meanwhile, existing products are being enhanced and supported at least through 2013 </li></ul>
  27. 27. MBS Project Green Roadmap Source: Microsoft Business Solutions Today: Axapta CRM Great Plains Navision Solomon Future “ Best of” solution 2005-7 2008+ <ul><li>Wave 2: </li></ul><ul><li>Modular process configuration </li></ul><ul><li>Enhanced Visual Studio .NET </li></ul><ul><li>Enhanced UX </li></ul><ul><li>“ Best of” process library </li></ul><ul><li>Wave 1: </li></ul><ul><li>Role-based user experience </li></ul><ul><li>Sharepoint-based portal and workflow </li></ul><ul><li>SQL-based conceptual BI </li></ul><ul><li>Web services-based composition and integration </li></ul>
  28. 28. Oracle’s application strategy <ul><li>Project Fusion announced in January 2005 </li></ul><ul><li>Fusion features: </li></ul><ul><ul><li>A J2EE-based SOA </li></ul></ul><ul><ul><li>Components and data hubs </li></ul></ul><ul><ul><li>Platform independent, but leverages Oracle middleware, and database technologies </li></ul></ul><ul><li>Transition to Fusion middleware in next releases of current products </li></ul>
  29. 29. Oracle’s product convergence is similar to MBS PeopleSoft Enterprise 8.9 9 JD Edwards EnterpriseOne 8.11 8.12 Oracle E-Business Suite 11 i .10 12 Current Release Next Release Project Fusion Source: Oracle
  30. 30. Lawson/Intentia: Path to technology convergence <ul><li>Lawson and Intentia announced merger two weeks ago </li></ul><ul><li>Both have proprietary architectures: </li></ul><ul><ul><li>Lawson 4GL generates COBOL and RPG </li></ul></ul><ul><ul><li>Intentia introduced Java version in 1999, but it is not J2EE compliant </li></ul></ul><ul><li>Common direction is WebSphere and J2EE code </li></ul><ul><li>Landmark project will produce a blueprinting language that generates J2EE code, UI, and schemas </li></ul><ul><ul><li>Promises dramatic code reduction and higher quality </li></ul></ul>
  31. 31. Lawson’s Landmark strategy Construction architecture Execution platform Lawson application design technology tooling built on Eclipse J2EE, SOA Program model Lawson brand Signature features Source: Lawson Software
  32. 32. Recommendations <ul><li>Stay current on releases to keep migration options open </li></ul><ul><ul><li>Consider alternatives if on older, customized products </li></ul></ul><ul><li>Consolidate disparate ERP applications </li></ul><ul><ul><li>Improve reporting capabilities </li></ul></ul><ul><li>Negotiate to reduce maintenance costs </li></ul><ul><li>Use Web services for integration, but wait for proof points on business flexibility </li></ul>
  33. 33. Thank you Paul Hamerman [email_address] Ray Wang Entire contents © 2005 Forrester Research, Inc. All rights reserved.