Easy IT Cloud Computing, SaaS

Transcription

1 Easy IT Cloud Computing, SaaS Ralph Rio Research Director ARC Advisory Group This presentation is copyrighted by ARC Advisory Group (ARC). The information is proprietary to ARC and it may be not be reproduced without prior permission from ARC.

2 Before IT Ford s River Rouge Plant in 1927 Big and Vertically Integrated 75,000 employees and 53,000 machine tools on 2,000 acres 27 miles of conveyors and 90 miles of railroad tracks Inflexible 1+ year to convert from Model T to Model A GM grew to #1 while Ford fell to #2 This presentation may be not be reproduced without prior permission from ARC. 2

3 Increasing need for IT More: Products & SKUs Lots or Batches Change Regulation Less: Time Dynamic Products and options Production lot or order size Quantity of lots and orders Product Lifecycle Time for New Prod. Intro. Dynamic global market Schedule changes Government Regulations Cost control pressures Make to Order Trend Increasing Smaller Increasing Shorter Shorter Increasing Increasing Increasing Increasing Increasing More / Less Time = Faster Speed of Business This presentation may be not be reproduced without prior permission from ARC. 3

4 Stovepipes Sales Logistics Marketing Manufacturing Finance Product Development IT Increasing need for IT Business Processes Stovepipes manage similar skills & resources Major Business Processes are cross-functional This presentation may be not be reproduced without prior permission from ARC. 4

5 Best Practices: IT Does Help How are Business Processes Managed? (routing, procedures, setup, etc.) Leaders Followers IT Systems 86% IT Systems 16% Written Documents 59% Written Documents 41% Institutional Knowledge 32% Institutional Knowledge 53% Verbal Instruction 23% Verbal Instruction 28% Ad Hoc 9% Ad Hoc 16% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% 106 survey respondents from manufacturing companies Leaders Use IT Systems for BPM This presentation may be not be reproduced without prior permission from ARC. 5

6 Distributed Manufacturing Manufacturing Plant Collaboration Contract Manufacturers Logistics Providers Manufacturing Plant Customers Logistics Providers Collaborative Manufacturing Manufacturing Plant Distributors Retailers This presentation may be not be reproduced without prior permission from ARC. 6

7 Dilemma: Systems Have Not Kept Pace Source: ARC Advisory Group Older Applications and IT Infrastructure Limit Performance This presentation may be not be reproduced without prior permission from ARC. 7

8 How do we accelerate? Easy IT: Cloud & SaaS Distribution Users Suppliers Cloud Hosted: Users Access via Internet Contract Mfg. Hosting Plant Virtualization: Multiple instances per server Economies of Scale Users Logistics Users Plant Software as a Service: Improved Pricing Model This presentation may be not be reproduced without prior permission from ARC. 8

9 SaaS Costs $ License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage Traditional License: Large up-front license and implementation Maintenance fee Cloud and SaaS: Small set-up charge Periodic service fee Variable usage cost Time Periods This presentation may be not be reproduced without prior permission from ARC. 9

10 SaaS Hosting Benefits: Less Technical Risk $ License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage IT Infrastructure Support Patch management Application configuration Server optimization Network management Security Back-up & recovery 24x7 availability Scalability for demand Time Periods Shorter implementation Obtain new applications with limited IT resources This presentation may be not be reproduced without prior permission from ARC. 10

11 SaaS Financial Benefits: Less $ Risk License + Implementation High Initial Cost with Fixed Maintenance Fee Conserve cash Expense rather than capital for tax benefits $ SaaS Variable Based on Usage Time Periods Lower Risk Cost varies with business activity Financially easier to switch if wrong application High incentive for support from service provider This presentation may be not be reproduced without prior permission from ARC. 11

12 Further Consideration $ License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage Time Periods Application Integration and Managing Upgrades Supplier owns upgrades Integration to applications on-premises via internet Who Owns the Data? Data with provider Extortion when switching Consider SaaS when benefits are risky May need to ask for SaaS Sales commission plan This presentation may be not be reproduced without prior permission from ARC. 12

13 SaaS Supplier $ License + Implementation High Initial Cost with Fixed Maintenance Fee SaaS Variable Based on Usage Time Periods AT&T Services AT&T Hosting and Application Management Oracle SAP More AT&T Synaptic Hosting A Pay-As-You-Go Utility-Based Use-cases during today s lunch This presentation may be not be reproduced without prior permission from ARC. 13

14 Easy IT Cloud Computing, SaaS Business Benefits Drive Rapid Adoption This presentation may be not be reproduced without prior permission from ARC. 14

15 Acronyms Used in This Presentation BPA BPM CMM IT SaaS SKU Business Process Automation Business Process Management Collaborative Management Model Information Technology Software as a Service Stocking Unit A complete list is available on ARC s website: ARCweb.com This presentation may be not be reproduced without prior permission from ARC. 15