Upload
brian-sutton
View
214
Download
0
Tags:
Embed Size (px)
Citation preview
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
Beyond the Edge: Definitions & Clarifications
“The Edge”• The Business Process and IT intersection between
an enterprise and the outside world.
• Includes the management of access to interaction
between the enterprise and its customers,
suppliers, or complementary business partners.
Hosted by
Beyond the Edge: The Opportunity
Reduce Inventories $117 - $293 billion
Increase Sales $83 - $166 billion
How?• Connecting, collaborating, and synchronizing with
the extended supply chain
Hosted by
Beyond the Edge: Who’s Cares? (Enterprises)
Hosted by
Beyond the Edge: Who’s Cares? (Vendors)
Hosted by
Beyond the Edge: Application Characteristics
Edge applications • Automate business processes that require human
or machine input from external partners
• Integrate data and information from multiple
heterogeneous systems inside and outside the four
walls of an enterprise
SAP Netweaver and xApps as examples
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
IT Spending Shifts:Away from Operational Backbones
75% Increase at the Edges!
Hosted by
IT Spending Shifts:…Beyond the Edge
HR
Finance
Engineering
Procurement
Mfg/Ops
Planning
Logistics
Customer Service
Marketing & Sales
Operational Backbone
Customers
Suppliers Outbound Logistics
Financial Services
Inbound Logistics
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
Edge of the Enterprise Research: Research Sources
Interviewed more than 110 B2B decision makers in the past 12 months• Billions in revenue and technology spending
Surveyed 78 North American ERP users to• Validate the Edge budget shift
• Identify key Edge business drivers
• Inquire about ERP strengths and weaknesses
Finishing a Q3 Edge of the Enterprise survey of 300 end-users
Hosted by
Edge of the Enterprise Research: Phone Interviews
Results from 78 ERP decision makers at Global 2000 organizations
Interviews conducted in Q1-Q2 2003
Conducted by experienced enterprise application analysts
Interviews averaged 45 minutes
Gathered detailed IT budget data, 2003 project data, vendor preference information
Hosted by
Edge of the Enterprise Research: Interviewee Demographics
Large Global 2000 organizations
Averaged $2.4 billion in revenue
Averaged 7,000 employees
Utility, telecom, manufacturing, wholesale, and transportation services were interviewed• 76% of respondents were manufacturers
• Even split between process and discrete manufacturing
• Concentration in high-tech and consumer goods manufacturing
Hosted by
Edge of the Enterprise Research: Interviewee Demographics
61% of respondents run SAP R/3• Majority of respondents on version 4.6
• Several running version 3.1
• None running SAP Enterprise 4.7 or Netweaver
Hosted by
Edge of the Enterprise Research: IT Budget Impact
Overall IT Budget• 64% increased IT budget from 2002 to 2003
• Average budget increase was 3.7%
• Budget growth ranged from –6% to 23%
Edge Investments and Budgets• 95% increased investment in systems that require/enable
browser- or machine-based partner input
• Edge budget growth ranged from –3% to 300%
• Average Edge budget increased 75%!
• Average 2003 Edge budget totals $5.8 million
• 2003 Edge budgets ranged from $440,000 to $66 million
Hosted by
Edge of the Enterprise Research: Budget Growth
3.7%
75.3%
0.0%
20.0%
40.0%
60.0%
80.0%
Total Edge
IT Budget Growth
IT Budget Growth
Hosted by
Edge of the Enterprise Research: Average Edge Budgets
$3.31
$5.81
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2002 2003
Average Edge Budget
Average Edge Budget
Hosted by
Edge of the Enterprise Research: Budget Drivers
Budget shift is driven by prioritization,
not capital expenditure• Do more with less
• Extend existing systems
• Develop in-house
• ROI in months not years
Hosted by
Edge of the Enterprise Research: Budget Analysis
71%
20%9%
0%
20%
40%
60%
80%
100%
Percentage of Respondents That Increased Edge Spending in 2003
Don't know
No
Yes
Hosted by
Edge of the Enterprise Research: Budget Analysis
Most interviewees expect edge investment to
increase substantially with economic
improvement
Most edge investment is dedicated to customer
facing systems
Among interviewees, suppler facing systems
were secondary investment priorities
300 end-user survey…
Hosted by
Edge of the Enterprise Research: Projects
Primary, secondary, and tertiary edge projects were captured and classified
Primary edge projects included• Web-based sales content delivery, order entry, pricing,
order status
• Machine-based order management
• Collaborative forecasting
• Collaborative logistics
• Electronic catalogue
• VMI
Hosted by
Edge of the Enterprise Research: Project Categories
0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%
Percent of Respondents
Electronic Catalogue
Customer Portal
Electronic Pricing
BtoBi
Procurement Management
Collaborative Forecasting
Distributed Order Management
Other
Edge Projects
Hosted by
Edge of the Enterprise Research: Objectives
Collaboration and Coordination
• Cost reduction through collaborative planning and
distributed order management and fulfillment
Sales and marketing content delivery
Inventory visibility and supply tracking
Common theme across objectives:
• Strengthen relationship, integration and coordination with
customers to improve service and reduce costs
Hosted by
Edge of the Enterprise Research: Vendor Preference / ERP Abilities
Interviewees were asked to rate incumbent ERP
vendor’s ability to meet primary edge technology
need (1 to 5 scale, 5=very high ability and 1=not
at all capable)
• 62% of respondents did not consider their ERP vendor as a
solution to an Edge of the Enterprise technology need
• Among respondents that rated their ERP vendor, average
rating was 2.3
• SAP users rated SAP 2.4 for its ability to meet edge
technology needs
Hosted by
Edge of the Enterprise Research: SAP Customer Example 1
Company: Multi-billion dollar global consumer
packaged goods company
Goal: Reduce logistics cost through collaboration
Solution: SAP + RedPrairie + Nistevo
Finding: SAP unable to meet edge requirements –
Collaborative Logistics
Hosted by
Edge of the Enterprise Research: SAP Customer Example 2
Company: Multi-billion dollar global beverage
manufacturer
Goal: Collaborate with downstream distributors
(forecasts, marketing & promotions, etc.)
Solution: SAP + Manugistics + Vignette
Finding: SAP unable to meet edge requirements –
CPFR and Content Management
Hosted by
Edge of the Enterprise Research: SAP Customer Example 3
Company: Multi-billion dollar global high tech
manufacturer
Goal: Synchronize supply and fulfillment across
the extended supply chain network
Solution: SAP + Synchronization Hub
Finding: SAP unable to meet edge requirements –
Distributed Order Management
Hosted by
Edge of the Enterprise Research: SAP Customer Example 4
Company: Multi-billion dollar global consumer
products manufacturer
Goal: Collaborative Customer Business Planning
Solution: SAP+custom application+best-of-breed
Finding: SAP unable to meet edge requirements –
Customer level sales, marketing and
merchandise planning
Hosted by
Edge of the Enterprise Research: SAP Customer Example 5
Company: Multi-billion dollar North American
electric utility
Goal: B2B Procurement Exchange
Solution: SAP + SAP B2B Procurement Products
Finding: SAP able to meet edge requirements –
SAP able to address transaction oriented supply-
side applications where the SAP customer has
significant power or influence
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
Technology Drivers:Enabling Edge Initiatives
Plummeting hardware costs
Pervasive Internet access
Java
XML
Interoperability
Hosted by
Technology Drivers:Methodologies, Standards & TCO
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
SAP’s Response
Experiences with Commerce One
Acquisition of TopTier
SAP xApps
SAP Web application server
SAP Enterprise Edition – Core versus Extensions
SAP Netweaver
SAP Adaptive Business Networks
SAP Licensing Strategies
Hosted by
Agenda
Beyond the Edge
IT Spending Shifts
Edge of the Enterprise Research
Technology Drivers
SAP’s Response
Conclusions and Recommendations
Hosted by
Conclusions
Demand is shifting from the core to the edge
• 75% growth in edge applications and technologies
Integration and customization costs are falling
Edge projects are primarily customer-facing
• Sales effectiveness and distributed order management
Most SAP customers have not been successful
extending SAP beyond the edges of the
enterprise
Hosted by
Recommendations
Establish a flexible architecture to support edge
applications and initiatives but…
• Balance integration costs carefully
Edge initiatives require a mix of internal and external
integration involving people, process, and data
• Validate interoperability claims
Ensure edge platforms and applications comply with
Java, XML and Web services standards
Perform interoperability tests
• Example: Test best-of-breed on Netweaver
Hosted by
Recommendations
Follow the collaboration continuum• Integrate Optimize Collaborate and Network
Leverage edge (composite) applications rather than building from scratch• Development, implementation, and support costs are too
high to justify custom applications
Be skeptical when core vendors claim expertise beyond the edges of the enterprise• Managing network oriented business processes in
fundamentally different than controlling internal activities
Hosted by
Break sponsored by
Hosted by
Are you shift IT dollars and initiatives from internal technologies to the edges of the enterprise?
Audience Response
Hosted by