We are entering a third era of enterprise IT

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2 We are entering a third era of enterprise IT We are here IT Craftsmanship IT Industrialization Digitalization Focus Technology Processes Business Models Capabilities Programming, system management IT management, service management Digital leadership Engagement Isolated, disengaged internally and externally Treat colleagues as customers, unengaged with external customers Treat colleagues as partners, engage external customers Outputs & outcomes Sporadic automation and innovation, frequent issues Services & solutions, efficiency & effectiveness Digital business innovation, new types of value

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4 Classicism 1980s to early 1990s Classic best of breed applications Driven by market and user immaturity Happy users but integration and analytics nightmare

5 Modernism Mid 1990s to mid 2000s Megasuites rule, ERP takeover, centralised IT Driven by vendors, users increasingly frustrated Integration trumps agility and fit to requirements

6 Postmodernism Late 2000s to today and beyond Suite deconstructed, postmodern ERP emerges, megavendors not in control Driven by the Nexus and user disillusionment, users taking back control New integration, analytics and support challenges

7 Yesterday: ERP was supposed to solve all our problems and create value!! Rationalise IT applications One company Simplicity Cost saving

8 Today: Monolithic ERP spiraling to irrelevance? Go live party! Can we get functional changes? Wait for the next upgrade. We need you to support a new business initiative FAST! You do realize this is complex? Why is it so difficult just to create a basic requisition? I want an app store app! Can I connect via my mobile device? That's going to be difficult. We've just released a new business release. Our ERP is falling into dis-use, I am buying Saas! It isn't difficult. You got training. We need budget for an upgrade. Why is our ERP system so expensive to run, can we switch to something else?

9 Who is disillusioned with ERP? Business leaders & process owners Business-driven innovation Information users Fact-based business Casual users User experience simplification Traditional power users Process excellence Most ERP implementations focus on the needs of transactional power users

10 The Nexus of forces impacts ERP, especially disillusioned users Information Mobile Cloud Social

11 SAP in the cloud: no longer a single product suite Social people to people collaboration Managed cloud Public cloud applications Cloud suite SAP Hana SAP Business suite on HEC BW on HEC From SAP or partners $ People Customer Money Supplier Business Partner / ISV Apps Hana Cloud Services Database Infrastructure Platform Hana marketplace Business network business to business collaboration

12 Oracle in the cloud: no longer a single product suite APPLICATIONS CLOUD CX cloud ERP cloud HCW cloud

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14 Current technology trends represent two complementary goals Ranking based on how many CIOS cited each as a top-three new spending priority for 2014 Renovate the core SA Global Bi / Analytics 1 1 Infrastructure & data center 4 2 Mobile 5 3 ERP 2 4 Cloud 3 5 Networking, voice and data comms 6 6 Security 7 7 Digitalisation / Digital marketing 8 8 Industry specific applications 10 9 Customer relationship management Legacy modernisation 9 11 Collaboration - 12 Innovation & growth 12 - Exploit the new

15 The future looks increasingly cloudy When will more than half of your business run on public* cloud infrastructure + SaaS? % of 2011 survey respondents In 2011 and 2014, 23% said never" % of 2014 survey respondents

16 Postmodern ERP: it s no longer one size fits all Manufacturing Comms. & Services Govt. & Edcn. Fin. Services Other 0% 100% Already done so Within 3 years 3 to 5 years 5 to 10 years > 10 years Keep core ERP on premises Don't know

17 Public cloud is being deployed to plug the agility gap SA: 80% SaaS 72% 25% SA: 20% SA: 50% IaaS 47% Have made significant cloud investments SA: 60% PaaS 43% SA: 10% BPaaS 17% Main reason Other 12% Quality 10% Innovation 13% Cost 14% Agility 50% Payback 22 MONTHS

18 The changing of the guard the mega-vendors will no longer dominate Which technology company has been the most influential over the past 10 years? Which will be in the next 10 years? Other

19 What does this all mean? Within 5 years, hybrid ERP environments will be the norm? Next generation information capabilities Postmodern ERP/Apps Hybrid Cloud More diverse partnerships

20 Postmodern ERP scenarios: the HOOF model Maverick Outsourced everything (5 to 10 years) Flip model (5 to 15 years, or never) Tactical Strategic On-premises monolith (dominant state today) Hybrid reality (now, next 5 years big shift) Conventional

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22 Firstly... is a company not a strategy

23 Key postmodern ERP strategy drivers Start

24 Monday morning Inventory any user-driven SaaS applications that cross the ERP boundary Discuss the impact of postmodern ERP with your ERP leaders, application strategists and enterprise architects

25 Next 90 days Agree your target HOOF model scenario Review your ERP vendor s roadmap and identify how it is being impacted by postmodern ERP

26 Next 12 months Update your ERP strategy to accommodate postmodern ERP Revise roles and responsibilities in ERP CoE to take account of postmodern ERP

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28 Recommended Gartner research Develop a Strategic Road Map for Postmodern ERP in 2013 and Beyond A Drobik, N Rayner (G ) Predicts 2014: The Rise of the Postmodern ERP and Enterprise Applications World D Ganly et al (G ) How to Develop an ERP Strategy D Ganly, N Rayner, C Hardcastle (G ) Best Practices for Managing Integration in a Hybrid Cloud and On-Premises ERP World N Rayner(G ) Survey Analysis: Adoption of Cloud ERP, 2013 Through 2023 N Rayner (G ) For more information, stop by Gartner Research Zone.

29 "IT sourcing strategies must be structured to enhance IT agility and address the needs of digital businesses. Organisations that don't adapt their strategies, and the competencies required to execute them effectively, will fail to achieve the value opportunities presented by a highly digitalised future.

30 "The reality is that you do have to operate at two speeds, and some of that you do by creating dedicated teams for each. Focusing on the big systems, making them run smooth, while at the same time having disrupters to innovate, together with marketing and the customer, exploiting digital." Willem Eelman, global CIO, Unilever

31 Build capacity - bimodal IT offers a way to get unstuck Legacy ERP Postmodern ERP - When speed & innovation is needed, or there is a high degree of uncertainty Waterfall development Known vendors Strong governance Minimised risk Technology teams Stuck in the middle fit for no one" Agile dev. Small/ innovative partners Lightweight "Just good enough" governance Managed risk Multi-disciplinary teams Traditional mode Postmodern mode