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Seminar
“ERP on SaaS: Impact in Firm Performance
and Trends”
NOVA IMS
Lisbon, 29/April, 2016
Jorge Carrola [email protected]
my background
Coordinator, postgraduation
“Marketing Management”
PhD researcher in Information Management
Lecturer “Information Systems” + “Enterprise Information Systems”
Coordinator, postgraduation “Digital Enterprise Management”
Benchmarking
Portugal representative
National Benchmarking
consultant
Board member
How does the usage of business
applications in SaaS impact the Value and
firm performance in SMEs
distribution
oferta
Internet basedPhysical
distribution
Produto
digital
Produto
fisico
Financial
servs.
technology
steel
healthtelecom
Entertnaiment
steel
Publishing
Automobile
printing
automobileFuncionalidades SW
Vendas Online
healthEMR, registos médicos
eletrónicos
Saúde em Casa
printing
Tablets
Compras Internet
telecom
publishing
entertainment
technology
Financial
servsBanca online/trading
Trading assistido por SW
SaaS / Cloudstreaming
VoIP
E-Books
“self publishing”
BEFORE
baseado nas Fig 1.1, 1.2, “B4B – How Technology and Big Data Are Reinventing the Customer-Supplier Relationship”, J.B. Wood, Todd Hewlin, Thomas Lah, TSIA Books
“... Software is changing the World !” *
* Marc Andreessen, WSJ editorial “Why Software is Eating the World”, 20.08.2011
distribution Internet basedPhysical
distribution
XaaS = “anything as a Service ”
“Shared Economy”
“Blue Ocean”
“SERVITIZATION ”
Fonte:
How important are business applications today
2013 » the beginning of
the decline in new
licencing revenue of sw
on-premise
Maybe not sustainable at this rate
2012 e 2013: SAP
acquired Ariba,
SuccessFactors and
Hybris. Oracle acq. Taleo
“Fees” new licences
“Fees” maintenance
Revenue ERP suppliers in Cloud/SaaS
Total estimate market of SaaS
Fonte: Gartner, SEC, Strategy & analysis
“Beyond ERP, New Technology, new options”,PwC, 2014
Projected
...how is the SW sector transforming
Research problem and relevanceIntro
• There is an increasing trend in the adoption of business solutions in Software as a Service (SaaS) model, instead of “on-premise”.
IDC analysts predict that by 2018, 27.8 % of the worldwide enterprise applications market will be SaaS based. “Demand for SaaS enterprise applications is accelerating and exceeding the demand for on-premises applications by five times … Generally, wherever new enterprise application software is required, the expectation is that SaaS applications are preferred, particularly for customer relationship management and enterprise resource management applications.” (Dover, IDC, 2014)
The research problem
• firm performance and business value impact derived from the usage of SaaS business applications is still very limited as most of the research work to date is still mostly focused in the aspects of adoption and usage
however...
• information systems (in general) return on investment and impact is a major concern from the industry and market…
• most of the research to date on this subject focus mainly in large organizations, where one of the most common variables related with firm performance is “stock market valuation” (Dewan, Ren, 2011);
• there has been little research to explain how and when business value is created (Kohli, R., and V. Grover, 2008; Nevo, S., and M. R. Wade, 2010) and less about the impact from IT in firm performance in a sample of SMEs (Rivard, S., L. Raymond, and D. Verreault, 2006)
Q: “ERP em SaaS – is it really only advantages ?”
Relevance
• For the purpose of this research we are targeting mainly SMEs [ according to the EU definition ], which means companies with 10-249 employees and up to 50 M€ of annual turnover (*) In Portugal, these represent 3.7 % of the total companies, 33.5 % of total workforce and 40 % of total annual business
value (**)
• EU (European Union) has a strong emphasis in programmes to develop innovation, productivity and competitiveness of SMEs and also to accelerate digital transformation to be ahead or at least in the same level of other Continents (eg. North America, China and Asia) (***)
• In this scenario, it is important to understand how the usage of business applications in SaaS , in SMEs, is impactful in business value and firm performance to achieve the aforementioned objectives (eg. increased competitiveness and productivity).
* IAPMEI, 2016
** INE, Empresas em Portugal, 2011
*** EU, Strategic Policy Forum on Digital Entrepreneurship, 2016
Research problem and relevance
Research questions
which is the impact in SMEs
firm performancefrom usage ofSaaS business applications
Major research question
2. Which indicators can best define firm performance
in SMEs ?
3. Which is the influence from the competitive
strategy chosen in the performance resulting from
SaaS business applications usage ?
1. What is the business value to be obtained from the
usage of SaaS business applications ?
Secondary research questions
Objectives of the Research
Understand in business applications SaaS context …
i. impact of the Competitive Strategy and business Value in the competitiveness of an organization [assessed by KPIs], and
ii. if Competitive Strategy moderates the importance of SaaS business applications in business Value
Contribute to …the development of a framework which can be widely used to access impact in firm performance and business value obtained from SaaS business applications
Q: how do you measure Performance in your organization ?
Competitive Balanced Scorecard
Financials
61%
Sales,
Marketing &
Innovation
20%
Processes &
Quality
35%
HR &
Know-How
60%
How YOUR Company compares
against +100.000 WW
Empiric method
Theoretical Models to explain Performance
- undisclosed -
How to “certify” theoretical models: Survey
Background and
Different points of view
Background and
Different points of view
Business applications “out of premises”:
From ASP to SaaS
Tabela 1. Baseada em “Adoption Reasons for Enterprise Systems as a Service - A Recap of Provider Perspectives”, Björn
Johansson, Pedro Ruivo, Jorge Rodrigues, 2015, pg 4
Razões reportadas para adopção de ASP Razões reportadas para não-adopção de ASP
Controle de Custos Preocupações com Segurança
Estratégia global Preocupações com controlo dos dados
Forma de financiamento Receio de perder o controle
adopt an ERP in SaaS:
“Supplier” point of view
Case-Studies with companies which have implement SaaS ERP since 2007
adopt an ERP in SaaS:
Customers point of view !
Article: “Factors for adopting ERP in SaaS amongst SMEs: the Customers vs Vendor point of view”, Jorge Rodrigues, Pedro Ruivo, Björn Johansson, Tiago Oliveira, Jan 2015
Approved for publication at “Information Resources Management Journal“ (IRMJ)
Costs and Financials are still 1st motivation
Security is NOT a problem ! (( ... Surprising...))
... TRUST = Supplier and Integrator (partner) ! (( this a major outcome !))
Trends:
Hibrid models
During CeBIT - Interviews with
• 53 CXOs
• from 15 countries
• 44% (companies 10 – 100 Emp)
• 30% (100-250 Emp)
• 26% (+ de 250 Emps)
• Several industries
Which are the predominant models
In 5 to 10 years ?
Hibrid models: example
“core ERP on-premise”
Vertical / specialized components in SaaS
CRM
SCM
HRM
2025:
Hibrid models will be predominant
Trend confirmed by several other Authors and Analysts
2025:
Hibrid models will be predominant
But several constraints are slowing this Digital transformation !
Core ERP
on
premise
CRM
SaaS
RH
SaaS
RFID
SaaS
internationalization
Vertical components / AddOns in SaaS
SMEs changing ERP
Start-Ups, “Incubators”
Meanwhile.... Start exploring new Opportunities ...
with SaaS business applications
Evaluate business models with new Value Propositions
