Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture. New Growth From

Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture.

New Growth From Enterprise SystemsAchieving High Performance through Distinctive Capabilities

Jeanne G. HarrisDirector of [email protected]

3Copyright © 2006 Accenture All Rights Reserved.

Enterprise Systems and Value Creation

• Enterprise systems are the second most important technology of the last decade (after the Internet)

• Immense investment (time, money and attention) by businesses

• Previous Accenture Institute research (2002): How do companies maximize the value of their investment in enterprise solutions?

–Implementing an enterprise system results in sustained value creation

–Some organizations realize far more benefits than their less successful counterparts

3


The 2005/2006 Accenture ES Study

• What’s changed since 2002 with firms that have adopted enterprise systems?

• Are the factors that drove value then still driving it today?

• Are enterprise systems enhancing competitiveness and distinctive capabilities?

• How important are business analytics to achieving value?

450 executives from 370+ organizations in 35 countries and 19 industries surveyed to find out:

Key Questions


Nineteen executives from five countries responded to the survey from Latin America. This represents 5% of the sample.

Countries represented:• Argentina• Brazil• Mexico• Puerto Rico• Venezuela

Latin American Participation


Key Findings

• Investing resources (time, money, skilled people and technology) to implement their enterprise system is merely a first step and does not guarantee results.

• There are clear winners and losers – some companies get considerably more value from their enterprise systems than others – and there is more opportunity for everyone.

• While some view enterprise systems as a commodity, more than half view their ES as a significant contributor to their distinctive capability.

• Better decision making remains the most-sought benefit and also the one most likely to have been realized.

• Organizations that get more value from their systems and use them for competitive distinction have superior financial performance.

• Analytical technologies and capabilities are particularly important to achieving value and high performance.


Top Performing Companies …

1. Realize much more value from their systems and use them in distinctly different ways.

2. Likely to seek and measure tangible benefits, such as reduced cost and increased revenue.

3. Emphasis on integrating, optimizing and using analytics to drive improved business performance.

4. Extend systems throughout their organization and implement across a range of functions.

5. Integrate the organization and external systems of customers and suppliers.

6. Aggressively use information and analytics to improve decision making.

7. Use strategically for competitive differentiation.

8. Tailor systems to sustain competitive advantage and standardize other areas.

9. More likely to implement industry modules.

10. Twice as likely to take advantage of SOA.


The Value Model Still Holds

Invest in enterprise systems

Implement extensively

Experience using enterprise systems

Integrate

Optimize

Analyze

Benefits realized

Prerequisites Value Drivers


The Same Benefits Are Still Being Sought

…but just half of organizations have achieved most or all of these benefits

Better management decision making

Improved financial management

Faster, more accurate transactions

Cost reductionImproved inventory and asset management

Ease of expansion/growth and increased flexibility

Cycle time reduction

Headcount reduction

Improved customer service and retentionCompetitive advantage through distinctive capabilitiesFewer physical resources and improved logistics

Increased revenue 4%

7%

12%

17%

17%

22%

24%

24%

33%

41%

53%

46%


Companies Are Integrating More Internally

Piloted in a single business unit but not rolled out

Implemented in a single business unit only

Implemented in about half of the organization

Implemented in most functions and business units

Implemented throughout entire organization

1%

7%

12%

30%

50%


Companies Are Integrating More With Customers and Suppliers

Customer Linkages Supplier Linkages

2002

200617%

24%

12%

15%


Companies Are Optimizing Processes and Customizing Systems More

Optimizing Processes Customizing Systems

20022006

75%

85%

45%

55%


Use of Analytics Is Up Too

12%

4%

33%

22%

27%

36%

19%

33%

9%

5%

2002

2006

Very little access to data and no analytic capabilities

Data warehouse ad-hoc report writers, query and end-user access tools

Some analytic functionality in addition to data warehouse

Significant decision support or analytic functionality, supported by extensive and integrated management information

Extensive use of real-time analytics, sophisticated automated decision making to supplement human decision making


The Ability to Analyze ES Data Is a Key Differentiator

15% of top performers versus 3% of low performers indicated that analytical capabilities are a key element of their strategy.

2002

2006

No analytical capability

Minimal analytical capability

Some analytical capability

Above average analytical capability

Analytic capability is a key element of

strategy

12%

0%

33%

8%

27%

37%

19%

47%

9%10%


High Performers Use Analytics

65 % have significant decision-support/analytical capabilities 23 %

36 value analytical insights to a very large extent 8

77 have above average analytical capability within industry 33

77 have Business Intell/Data Warehouse modules installed 62

73 make decisions based on ES data and analysis 51

40 use analytics across their entire organization 23

High LowPerformers Performers

Top performers have a greater analytical orientation than low performers.


The Word Is Out!

• Each of the factors that drive value from an enterprise system is up over the last three years– Integration–Optimization–Analysis

• Not surprisingly, the level of value achieved is also up

• But there are still substantial opportunities for improvement


ESs Don’t Have to Be a Commodity!

Question: To what degree does your enterprise system contribute to your organization’s distinctive capabilities?

Not at all Slightly Somewhat Substantially To a very large extent

1%

8%

38%

42%

11%


Many Companies Have Distinctive ESs

Not distinctive Only slight differences

versus other companies in the industry

Moderately different from the rest of the

industry

Somewhat distinctive—

capabilities or functionality not used elsewhere

in industry

Very distinctive—significant

capabilities or functionality not used elsewhere

in industry

4%

13%

29%

39%

15%


What’s Distinctive Today?

Integrated critical processes

Accurate planning

Analytics for decision making

Monitoring and measuring progress against aggressive or stretch goalsInvesting resources in alignment with strategic objectives

Enabling flexibility to adapt change

Using IT as a strategic asset

Understanding how the organization creates value

Insight into customers

Disciplined project management

Creating new products or services

Not at all Slightly Somewhat Substantially To a very large extent

3% 7% 23% 36%

5% 12% 37% 33% 14%

2% 10% 29% 44% 15%

9% 17% 34% 27% 12%

10% 24% 34% 21% 11%

6% 20% 31% 28% 14%

6% 17% 28% 30% 19%

13% 16% 40% 24% 8%

13% 16% 40% 24% 8%

14% 22% 32% 24% 8%

16% 24% 33% 5%22%

Numbers do not equal 100% due to rounding

30%


What’s Coming That’s Distinctive?

By optimizing business processes and fit with enterprise systems

Through new technology such as Web services, mobile services, etc.

By adding more enterprise systems applications

By integrating best of breed applications

By customizing existing applications

No plans to add distinctive capabilities

60%

57%

44%

30%

22%

5%


What’s Coming in New ES Capability?

CRM BI/DW SRM HR PLM

29% 29%

21%

15%

Percent planning in two years

36%


What Technologies Are Being Used Today?

0

10

20

30

40

50

60

70

EAI WS MDW SOA Comp.

% currently usingtechnology


Future plans: Technologies to Augment ES in Next Year

14%

28 %

26 %

14%

30 %

34 %

40 %

27 %

13 %

33 %

Service-orientedarchitecture (SOA)

Web service

Integration technologies(e.g., EAI, EDI)

Other

None of the above

Low Performers

High Performers


Lessons from Current Practice

•Companies are constantly changing their overall ES environments, and still squeezing more value from them

•For more value, work on: –Integration and consolidation–Optimization of the fit between your ES and your processes

–Analytics and fact-based decision-making•Pursue the technologies that make those goals possible

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Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture. New Growth From