What Comes after ERP?

Cloud Breakout Session:
What Comes After ERP?

China Martens, Analyst
Forrester Research

April 12, 2012 4:45 p.m.

2009

Agenda

Introduction

ERP: Yesterday, today, and tomorrow

Challenges companies battle in their supply chain

The appeal of the cloud and collaborative commerce

User case studies

Q&A


What do we mean by “cloud”?

Cloud = Forrester defines cloud computing as: “a standardized IT
capability (services, software, or infrastructure) delivered by Internet
standard technologies in a pay-per-use, self-service way.”

There are three classes of cloud services – software you rent (software-
as-a-service -- finished apps); app services and platforms (platform-as-a-
service -- middleware for developers to build cloud apps); and
infrastructure services and platforms (infrastructure-as-a-service -- places
to deploy cloud apps – on-demand virtual hosting).


What do we mean by “network” and “collaborative
commerce”?

Network = a platform to connect companies with their trading partners
and to facilitate collaboration between all parties. The network supports a
wide variety of functionality including partner discovery, e-procurement,
and e-invoicing.

Collaborative commerce = a combination of cloud software, services,
and community to enable organizations and their current and potential
trading partners -- suppliers and buyers -- to negotiate and work closer
together for their mutual financial benefit.


The processes powering ePurchasing

Emerging category:
Supplier risk and
2. Supplier performance
assessment management
1. Spend
analysis 3. Supplier
identification

8. Electronic
invoice Supplier
network 4. Sourcing
processing and
presentment services

7. Order
5. Contract
fulfillment
life-cycle
(services
management
procurement)
6. Procurement

Potential agenda

Introduction




User case studies

Q&A


Seven trends are reshaping ERP, other business apps
Flexibility drives higher value and business involvement


A closer look at three of those trends:
SaaS, mobile, and collaboration

 Cloud deployment models change app economics

- SaaS is also impacting look-and-feel of apps

- Creating cloud apps ecosystems.

 Mobile technology accelerates business processes

– Rethinking apps for mobile impacts user interfaces

– Tablets extend user experience

 Social collaboration tools come to apps

– Much of the initial focus is on internal collaboration

– Creates linkages across a firm's business apps


But much of ERP's focus remains inward looking

 ERP as a transactional system
– Centered on individual company‟s needs
– Some vertical focus
– On-premises deployment

 ERP as transactional and enablement system
– Centered on individual company‟s needs
– More vertical focus
– Variety of deployment options, including SaaS


Four forces are reshaping ePurchasing

Vertical
Cloud industry
computing focus

E-purchasing
Smart
computing software

Supplier
networks


Four drivers for ePurchasing customers

 SaaS is becoming more attractive – sometimes, epurchasing software is
only available as a SaaS deployment, e.g., supplier networks.
 The rise of „smart computing‟ – the addition of analytics and collaboration
to apps.

 A stronger focus on the needs of specific industries – to meet the different
buying processes of verticals including government.
 Supplier networks are the place for buyer-supplier engagements –
exchanges of purchase orders, invoices, documents, etc. More recognition
among buyers of the value of such networks.


Most enterprises still have a buyer-centric approach
to ePurchasing


We‟re now seeing the emergence of global
communities of buyers and sellers

Cloud
Computing

•Scale and reach to be effective
•Unstructured collaboration, not merely transactions
•Sharing information with your peers

Three tiers of B2B supplier networks

EDI-based GXS, IBM Sterling, EDI standards, direct
Crossgate, SPS between buyers and
Commerce, Covisint, suppliers, any documents
Covisint, Liaison, EasyLink, through pipe, charge
Seeburger, NuBridge suppliers more than buyers

PO and/or Ariba, ADP P2P (DO2), XML standards, standard
invoice based Basware, Hubwoo, security and reliability, POs
Quadrem, OB10, Perfect, and/or invoices and related
Emergence of Capgemini Procurement, documents, charge buyers
Relationship-based
GHX, TradeCard, Elemica, or suppliers more heavily
Exostar, Agentrics,
networks
SciQuest, OFS Portal,
JPMorgan Chase P2P
General Itella (Finland), Stralfors Basic security and reliability,
electronic (Norway), Evenex any documents, low fees
documents (Denmark) equally for buyers and
suppliers


Emerging tier of B2B supplier networks:
Transaction and relationship-based network

Enables advanced collaboration

 In addition to exchanging PO/invoice data, companies are also:
– Reaching out during the sourcing process to discover new suppliers, or, if
suppliers, finding potential new customers.
– Proposing and evaluating services, e.g., temporary labor candidates, with the
aim of discovering the best value.
– Negotiating spot buys.


Potential agenda

Introduction




User case studies

Q&A


Challenges companies are trying to deal with across
their global supply chains

 How to more proactively respond to change – economic, environmental,
industry – and manage risk
 How to improve connections between their ERP apps and the many
disparate apps being used by trading partners to minimize process
inefficiencies, errors, and costs

 How to cut back on manual processes and move to more automation,
freeing up staff from data entry, support desk, and “firefighting” roles
 How to better co-innovate with suppliers in both good economic times and
bad
 How to gain more visibility into order, invoice, and payment status

 How to gain more control over spend


Challenges companies face with managing their
supply chains – looking outward as well as inward

 How to continue making internal processes more efficient and
streamlined, both to cut costs and to grow profitability.
 How to boost interorganizational productivity by forging tighter bonds with
all their partners and the transactions they‟re engaged in.

 How to achieve a deeper level of collaboration with partners and
customers and a more effective two-way flow of information.
 How to realize more benefit from buyer and supplier networks – both in
terms of expanding additional relationships and identifying potential new
opportunities and partners.
 How to work with partners so they and the company function as a
community, a combined organization for the better benefit of all – re
resolving issues faster, negotiating discounts, etc.


Customers are keen to open up their supply chain
beyond the four walls of their organization


Potential agenda

Introduction




User case studies

Q&A


Why companies are choosing SaaS apps
 Don‟t want to be in the “IT business” of supporting on-premises software
 Seeking cheaper alternative to on-premises software and associated
maintenance

 Keen to cut costs of IT infrastructure, servers, etc.
 Speed of SaaS implementation and deployment
 Gain features or functionality not available in traditional licensed product
 Comfortable with SaaS model, want to try it elsewhere in the organization
 Want to focus internal IT resources on other projects
 Have a SaaS-first IT strategy for apps

 Mismatch between existing on-premises apps and business needs is
widening


What are your firm‟s concerns about using SaaS?

Percentages represent the percentage of respondents who selected “4” or “5” on a scale of 1 to 5
where 1= not at all concerned and 5= very concerned.

Base: 556 North American and European software decision-makers in enterprise organizations
Source: Forrsights Software Survey, Q4 2011

Companies worry about SaaS security, but that
concern is being gradually allayed

 Enterprise use of SaaS means enterprises have
carried out and continue to carry out their own
assessments of SaaS vendors‟ infrastructure
 Some organizations view SaaS as potentially more
secure and less risky than their own aging, on-
premises environments

 SaaS vendors continue to build out data center
infrastructure around the globe
 Increased confidence in SaaS vendors‟ security
policies and their service level agreements
 More interest/confidence in third-party certification
of SaaS security


Benefits of collaborative commerce

 Technology that non-invasively hooks existing ERP into supply chain
community to access a broader wide range of spend and collaborative
business processes
 Access to a large community of suppliers and buyers beyond the trading
partners firms already engage with

 A single point for all suppliers to collaborate
 Better positioned to manage supplier relationships, more easily onboard
new suppliers, etc.
 Can be more proactive to change, speed invoice process

 Can better communicate real-time invoice and payment status to suppliers
 Can realize savings when more transactions are automated


Recent cloud moves from ERP and supply chain
vendors

 Ariba – Commerce Cloud – combines SaaS spend management, finance
management, and sales generation apps with Discovery services
 Basware – B2B Cloud - Alustra multi-tenant cloud-based platform for B2B
transaction collaboration – focus on wide range of company sizes.

 IBM – Smart Commerce – combines recently acquired (DemandTec,
Emptoris, Sterling Commerce) and in-house technologies
 Oracle – Fusion Procurement
 SAP – SAP Supplier Infonet – cloud-based data collection service collects
information from customers‟ ERP systems and presents to suppliers as
KPI graphs and alerts


Vendors expanding scope via M&A
 2011:*
 Ariba buys Quadrem (supply network provider, SaaS supply
management)

 Emptoris buys Rivermine (telecom expense management)
 Emptoris buys Xcitec (German supplier management vendor)
 Ariba buys b-process (French e-invoicing service provider)

 SAP buys Crossgate (B2B integration provider)
 2012:
 Basware buys First Businesspost (German e-invoicing network
operator)

 IBM buys DemandTec (SaaS price, promotion, merchandising
analytics)
 IBM buys Emptoris (supply and contract management vendor)


Potential agenda

Introduction




User case studies

Q&A


User case study - Nalco


User case study - Alcoa


User case study – Rio Tinto


Potential agenda

Introduction




User case studies

Q&A


Q&A

2009

Thank you

China Martens
+1 617.613.6548
cmartens@forrester.com
Twitter: @chinamartens

www.forrester.com

© 2009 Forrester Research, Inc. Reproduction Prohibited

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Editor's Notes