From ERP to a comprehensive business infrastructure. Enrico Negroni

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1 From ERP to a comprehensive business infrastructure Enrico Negroni 1

2 Speaker Profile Enrico Negroni With more than 30 years experience in Enterprise Business Software market, Enrico Negroni developed his career at SAP where, once consolidated the italian subsidiary from startup to absolute market leader, he got EMEA responsibility. In particular Enrico put the basis of the great Partner network still characterizing SAP in Italy. After leaving SAP he got experiences within System Integrators and Service Providers, making his background full comprehensive. Graduated in Electronic Engineering at Pavia University, born in 1955, he is a passionate fan of motorism and still loves driving fast and powerful motorbikes. Active blogger, Enrico is also the author of La scrivania obliqua, his first book just published in April

3 From MRP to ERP and far beyond Enrico Negroni 3

4 The first functional Systems in mid 70 s up to early 90 s Reporting The anecdote of SAP genesys Acct CNTL MRP PP&C Supp. Sales Functional Silos (Operation) Patchwork of heterogenous systems, totally not integrated, based on different operating systems too with significant manual steps required and more than a scarce reporting. 4

5 Technological Evolution 5

6 Functional Evolution Sistemi ERP Process Oriented Full Integration Extended ERP CRM SCM SRM BI SOA As ERP integrated Middleware MRP Systems Just Functional, No Integration No Process Focus

7 From multiple players to oligarchic scenario SAP, Oracle, MS Small ISV s SAP, Oracle, P-Soft, JDE, Baan, Intl ISV s (10+) Local ISV s (100+) SAP, Oracle, MS P-Soft, Siebel, I2, BOJ IBM, Sperry, HP Intl. ISV s (20+) Local ISV s (500+) COPICS, Mapics / Bipcs, GL Millenium, UNIS, MM/3000, Tolas

8 The SAP Example over almost 40 years mysap Business Suite mysap PLM mysap PLM R/2 R/3 mysap mysap mysap SRM SRM SRM mysap ERP mysap ERP mysap SCM mysap SCM NetWeaver SCM mysap CRM mysap mysap CRM CRM SAP NetWeaver Market Trends & Customer Needs Standardization Consolidation Mainframe real time technologies Client-Server BPR Industry consolidation Internet Collaborative business Open Integration Globalization Cost Control & Consolidation New Opportunities (BPO, RFID,...) New Regulatory standards Adaptive Computing Data standards (Rosetta Net, ) Need for Transparency Enterprise Service Architecture Solution Standard Business Processes Integrated Real-Time Multiple languages, currencies, legal standards 3-Tier Client-Server ERP Integrated component-based ERP Industry specific extensions Collaborative Processes SAP NetWeaver Integration platform Flexible Component Architecture SAP NetWeaver Integration Platform Transparent Analytics & Governance People-Centric Computing Extendibility & Scalability Adaptive Computing Infrastructure 8

9 ERP evolution to Extended ERP, moving to composite applications: the SAP example On-line Distributed Companies,Flexible and adattable ESA/SOA) Extended Company CAF,Xapps SRM, CRM, PLM, BI SCM SAP NetWeaver mysap ERP, CRM,SRM, SCM, PLM BW 3.X, SAP EP SAP XI, SAP WAS Custom systems, EAI Technology Edge Integrated Company ( ERP ) SAP R/3 BW 2.X Custom system, EAI

10 Service-oriented architectures (SOA) led to a complete paradigm shift in ERP (1/3) Applications getting composite Specific components available as services that fulfill specific tasks Web services are managed by the SOA middleware and are transparent to the endusers Process and Application are de-coupled by SOA layer The SOA layer will support end-to-end processes 10

11 Service-oriented architectures (SOA) led to a complete paradigm shift in ERP(2/3) 11

12 Service-oriented architectures (SOA) led to a complete paradigm shift in ERP(3/3) 12

13 Process Oriented integration approach Business Processes Corp Funct. Portfolio Management Fin. Productivity Events HR Mfg. Product Innovation Order Processing Proc. Serv. Functional Silos (Operation) Sales Supp. This as the Functional & Operational blueprint yet to be implemented Which differences before and after SOA??? 13

14 Before E-SOA, from Application to Process Application Process 14

15 Before SOA, traditional ERP systems were characterized by strict coupling of process and application Process Application Integrations with Human Workflow Intra-Process Printouts Steps» Sometimes processes flow completely within one, single, application with a complete automatism and complete process support» but larger processes, involving more steps, users and departments, managed by different applications, imply sequential steps and application access» Users need to perform continuous human workflow between applications» the result Welcome to the Excel Dome 15

16 After SOA: paradigm shift, from Process to Applications Applications getting Composite Process Application Application Application Application Using just specific Web Services as part of the Application 16

17 In SOA environment, processes can flow fully integrated and supported in end-to-end mode by specific web services SOA Middleware SAP NetWeaver Services Exposure External ADOBE ERP CRM Legacy REPORTING BI Systems 17

18 The goal: a new abstraction level From ERP model to a comprehensive business infrastructure 18

19 The barrier to a extensive ERP successful deployment ERP is significantly affecting and touching enterprises organization Users (= Human beings) habits are touched Users positive acceptance would facilitate better and faster implementation and deployment BUT in most cases ERP operativeness is not so easy and user-friendly Significant user training is required Users reluctancy is forcing severe customizations Standard user front-end, based on Graphical User Interface (GUI), are far to be nice and sexy 19

20 The GUI : looking easy??? Frequent interaction with Tables popup Several screens to perform one transaction 20

21 The solution empowered by SOA Focus on Front-End interaction Distinguish cases : for ones fully covered by application, use the standard as much as possible for those cumbersome move to front-end redesigning (Web-tools or Adobe Flex) Put some logic in the front-end to simplify user interaction New professionals and analysts needed to design and implement the new user interaction 21

22 Need to move to itunes experience Reduce user interaction complexity Decrease effort for user training Improve system consensus and acceptance Decrease need for customizations 22

23 Case Study 1 Case Study based on a effective one implemented on SAP (case related to a Major Enterprise in CPG) The issue: remote users, not trained at all, having to enter invoices even as a normal SAP standard txn small volumes of entered transactions and geography made user training expensive The solution was based on complete redesign of transaction front-end developing a specific Web app (Web Dynpro) Effort needed few days also not introducing any customization 23

24 Comparing STEP 1 Welcome page SAP ERP 24

25 Comparing STEP 1 Welcome page Web Dynpro 25

26 STEP 2 Header Data entry & system messages SAP ERP 26

27 STEP 2 Data entry and system messages Web Dynpro The warning to Reference item is highlighted in advance 27

28 Comparing STEP 3 Item Add new Item SAPgui Obviously for a document Type KC, you have to enter 31 here 28

29 STEP 3 Item Add new Item Web Dynpro Web Dynpro knows that the 1 item of a KC document is related to a Vendor Accounting type is auto-determined and proposed by the Web customizing (Vendor/Customer/GL/Asset) 29

30 STEP 4 Item VAT and Bank management SAPGui Check for auto tax calculation 30

31 STEP 4 Item VAT and Bank management Web Dynpro Payment Terms and Banks will appear after entering the vendor code 31

32 STEP 4 Item VAT and Bank management Web Dynpro (cont.) 32

33 STEP 5 Document overview - SAPGui 33

34 STEP 5 Document overview Web Dynpro 34

35 Case Study 2 Case Study based on Major US company leader in Automotive Spare Parts The Company has many brands as results of many acquisitions At the time systems consolidation was just starting so the company had several systems in place The requirement: implement ONE Company Parts Catalog, merging all the different ones in place give the new Catalog tool accessable also to dealers SAP MDM (Master Data Management) was the adopted solution but SAP MDM standard interface was so nice to be used by dealers 35

36 Example of Catalogue Publication (by SAP MDM) Layout page Publication in Adobe InDesign, Quark Xpress. Catalogue structure (partitioning) 36 36

37 Welcome John Smith News Menu 1 Menu 2 Catalog Menu 3 Menu 4 a itunes Experience with Adobe Flex integrated, based on Portal to SAP MDM Messages Try our new fantastic web site! Contacts Segnalaci un problema o proponi una miglioria

38 Welcome John Smith Our Brands Browse Catalogue Spider GTV Giulietta Product Group Items 38

39 Recap The new architectural scenario User Interaction EP Web Dynpro Enterprise Portal Portal Processes PE Business Process Modelling tools Process Engine / / BPM Integration ESB Enterprise Service Bus (e.g. SAP PI, Tibco ) Enterprise Service Repository Mediation Operations BI SCM ES CRM Legacy Systems 3rd Parties Systems Service, TCO, Runtime, Transactions 39

40 Major issue to overcome : SOA or sòla??? SOA disappointed expectations not having being clearly positioned / explained in other words, SOA was burnt by hypes and IT people SOA is anyway a fundamental architecture and a MUST for specific evolutionary steps Unfortunately many System Integrators are still not exploiting all the SOA potential using traditional approach SOA is still an opportunity but IT people have to improve their communication skills! Customers have also to improve their selection criteria, so far too much focused just on pure cost reduction and prices squeezing 40

41 Beyond efficiency and effectiveness: Agility as the new paradigm in business Effectiveness (Top line) Reduction of any Information Asymmetry and Transaction Cost Efficiency (Bottom line) Results: standardization interoperability internationalization HOW? With an individual and incremental Roadmap With continuous improvement based on balancing governance and innovation Maximizing Re-Usability 41

42 Future evolution 2012 and beyond All In Memory Database as the new frontier already Reality : SAP HANA Oracle Exadata New scenarios still to be designed the actual financial crisis status as limit to design effective Innovation 42

43 The italian IT and Extended ERP market: figures and features Enrico Negroni 43

44 Italy ICT market trend ( E) 15% 13% 11% 9% 7% 5% 3% 1% -1% -3% -5% -7% -9% 04% 06% 02% 15% 03% 04% 02% 03% 01% 11% 06% 09% 02% 01% 11% 02% Anno 2000 Torri Gemelle 15% 11% 13% 04% 13% 02% 09% 08% 02% 02% 03% 02% 02% 00% 01% 02% 02% 01% 02% 00% 00% -02% -03% Shift verso i Paesi emergenti Re-industrializzazione USA Rigore vs crescita Discontinuità tecnologica (Apps, Tablets, Cloud) Budget IT (cost saving vs sviluppo) Timida ripresa Effetto downpricing Politiche di cost saving 00% 00% 00% -01% 02% 00% 01% 00% -02% -02% -03% -03% -02% -05% -03% -02% -04% -08% PIL TLC IT Source: Assinform / NetConsulting, 2012 IT PIL TLC 44

45 Italy IT market ( ) Values in Mil. Euro and in % -1.4% -4.1% % -2.6% -0.9% -1.0% -4.9% -5.6% +2.8% -9.0% Source: Assinform / NetConsulting,

46 ERP Solutions market in Italy ( ) Valori in Milioni di Euro e in % % -4.4% % -5.3% -2.2% -2.6% Source: Assinform / NetConsulting,

47 CRM market in Italy ( ) Valori in Milioni di Euro e in % -2.4% -3.0% % -4.1% -0.5% -1.0% Source: Assinform / NetConsulting,

48 SCM solutions market in Italy ( ) Valori in Milioni di Euro e in % -1.2% -2.1% % -3.2% -0.7% Fonte: Assinform / NetConsulting,

49 BI solutions market in Italy ( ) Valori in Milioni di Euro e in % % -0.4% -0.3% -1.0% +1.3% +0.7% Source: Assinform / NetConsulting,

50 Local market main features DEMAND Limited amont of Major Enterprises High volume of Small / Medium Enterprises IT culture was not well implemented: IT still seen much more as a cost CIO s community having less empowerment than Purchasing Dept Buying criteria getting more and more barbaric SUPPLY Very fragmented market with too many small operators ( cantinari ) Late effective changeover to standard solutions (Make vs Buy ) Different layers in Supply (e.g. Consulting Firms vs System Integrators) caused significant inconsistency NO effective value in italian big System Integrators 50

51 From ERP to a comprehensive business infrastructure Enrico Negroni 51

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