The Return of Enterprise Solutions

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The Return of Enterprise Solutions

  1. 1. The Return of Enterprise Solutions Accenture Survey
  2. 2. Targeted Benefits <ul><li>Better management decision making (63) </li></ul><ul><li>Improved financial management (70) </li></ul><ul><li>Improved customer service and retention (47) </li></ul><ul><li>Ease of expansion/growth and increased flexibility (55) </li></ul><ul><li>Faster more accurate transactions (69) </li></ul>
  3. 3. Targeted Benefits <ul><li>Headcount reduction (40) </li></ul><ul><li>Cycle time reduction (53) </li></ul><ul><li>Improved inventory and asset management (60) </li></ul><ul><li>Fewer physical resources and improved logistics (54) </li></ul><ul><li>Increase revenue (36) </li></ul>
  4. 4. Large and Small Organizations <ul><li>Large organizations motivated more by strategic goals whereas small companies are motivated by tactical goals </li></ul><ul><li>Smaller firms are more likely to define clear desired outcomes for the system </li></ul>
  5. 5. Benefits Achieved
  6. 6. Time to Achieve Benefits
  7. 7. Approaches to Implementing Enterprise Systems <ul><li>Enterprise Application Integration (EAI) </li></ul><ul><ul><li>Build or buy systems optimized for each process and integrate them using custom built interfaces or middleware </li></ul></ul><ul><ul><li>“ Best of Breed” applications </li></ul></ul><ul><ul><ul><li>Purchase the “best” ERP modules or “bolt-ons” from different vendors </li></ul></ul></ul><ul><ul><ul><li>e.g. SAP’s material management and PeopleSoft’s Human Resources </li></ul></ul></ul>
  8. 8. Approaches to Implementing Enterprise Systems <ul><li>Customize </li></ul><ul><ul><li>Implement a single vendor’s product but customize it to fit the organization’s processes </li></ul></ul><ul><ul><li>Customization involves writing new procedures or screens or even modifying underlying system code </li></ul></ul><ul><li>“ Best Practices” </li></ul><ul><ul><li>Implement the ERP with minimum customization </li></ul></ul><ul><li>Outsourced </li></ul><ul><ul><li>Entire non-core competency process outsourced </li></ul></ul><ul><ul><li>Hosted service via Application Service Provider (ASP) </li></ul></ul>
  9. 9. Enterprise Application Integration <ul><li>Optimal performance within each system though often not across processes </li></ul><ul><li>Interfaces increase complexity and maintenance costs as well as reducing performance </li></ul><ul><li>Interfaces may require work if system is upgraded </li></ul><ul><li>Newer technologies such as SAP’s NetWeaver are designed to simplify application integration using XI </li></ul>
  10. 10. Customize <ul><li>Method that results in systems that most closely match the enterprise’s processes </li></ul><ul><ul><li>Often necessary if the organization gains competitive advantage through it’s processes </li></ul></ul><ul><ul><li>Large organizations are more likely to customize </li></ul></ul><ul><li>Modifications may be made by: </li></ul><ul><ul><li>Internal staff, although modifications to system code may void support contracts with the vendor </li></ul></ul><ul><ul><li>Third-party consultants with the same issues as above and now the organization has no one on staff intimately familiar with the mods </li></ul></ul><ul><ul><li>A large organization may be able to get the vendor to make the modifications </li></ul></ul><ul><ul><ul><li>ERP vendors are less likely to agree to do this than they have been in the past </li></ul></ul></ul>
  11. 11. “Best Practices” <ul><li>Preferred method from the ERP vendor’s point-of-view </li></ul><ul><li>Less likely to fit the system to the businesses’ existing processes </li></ul><ul><li>Simplifies installation and upgrades considerably </li></ul><ul><li>More likely to be used by small organizations </li></ul>
  12. 12. Outsourcing <ul><li>40% of firms are outsourcing enterprise solutions to some extent </li></ul><ul><li>Organizations can choose to outsource only the application or can choose to outsource the process as well </li></ul>
  13. 13. Keys to Realizing Benefits <ul><li>Integrate </li></ul><ul><li>Optimize </li></ul><ul><li>Informate </li></ul>
  14. 14. Integrate <ul><li>Unify and harmonize enterprise solutions, data and processes with an organization’s unique existing environment, and use the systems to better connect organizational units and processes as well as customers and suppliers </li></ul>
  15. 15. Number of Enterprise System Instances
  16. 16. Integration Achieved
  17. 17. External Integration
  18. 18. Integration <ul><li>Consolidate enterprise instances </li></ul><ul><li>Adopt shared services </li></ul><ul><ul><li>Reduce number of data centers, hardware platforms, software solutions and share resources across, or even beyond, the enterprise </li></ul></ul><ul><ul><li>Shared Service Centers (SSC) offer services in an internal client-vendor relationship </li></ul></ul><ul><li>Enterprise application integration </li></ul><ul><li>Integrate process and data definitions </li></ul>
  19. 19. Optimize <ul><li>Standardize most processes using best practices embodied in enterprise software, mold and shape processes to fit the unique or strategic needs of the business, and ensure that processes flow and fit with the systems themselves </li></ul>
  20. 20. Optimization of Business Processes
  21. 21. Degree of Customization
  22. 22. Optimization <ul><li>Try to get 75% of process optimization accomplished during implementation </li></ul><ul><li>Formalize processes to continuously examine and improve processes </li></ul><ul><li>Use of extensive customization in an effort to realize optimization risks reducing integration </li></ul><ul><ul><li>Extensive customization should only be used in instances where the process provides competitive differentiation </li></ul></ul>
  23. 23. Informate <ul><li>Use information to transform work. In the context of enterprise solutions, organizations informate by transforming enterprise solutions data into context rich information and knowledge that supports the unique business analysis and decision-making needs of multiple work forces </li></ul>
  24. 24. End User Access to Data
  25. 25. Informating <ul><li>Organizations and users require experience with a new enterprise system to understand what data is available and to learn what they can do with it </li></ul><ul><li>Often requires adding bolt-ons that provide analytic or DSS capabilities (e.g. Business warehouse or CRM) </li></ul><ul><li>Information portals are often a key component of systems that give users access to data and analytical tools </li></ul>
  26. 26. Informating
  27. 27. Future Directions
  28. 28. Recommendations <ul><li>Invest the effort required to get a critical mass of implementation </li></ul><ul><li>Integrate, optimize and informate in parallel </li></ul><ul><li>Manage enterprise solutions as an ongoing program </li></ul><ul><li>Prioritize benefits and create an action plan to achieve them </li></ul>

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