Multi-ERP: Challenges and Opportunities for Global Corporations

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1 Multi-ERP: Challenges and Opportunities for Global Corporations

2 page 2 Content Content 01 Why should you read this white paper?.... P Challenges of working with several third-party systems.... P Risks of using multi-erp-systems.... P Aggregating Spend the conventional path.... P The JAGGAER solution.... P What makes JAGGAER unique?.... P Example: Interaction of third-party systems with JAGGAER modules.... P Added value from consolidated data.... P How to convince your internal stakeholders.... P Why choose JAGGAER?.... P Contact.... P. 21

3 Why should you read this white paper?

4 page 4 MULTI-ERP: Challenges and Opportunities for Global Corporations Why should you read this white paper? Global companies, corporations and business organizations almost always work with different ERP-systems at their various international locations. Working with clean master data allows your Procurement team to plan strategically and implement global strategies to generate maximum savings. This white paper will answer all your basic questions and will help you overcome the many challenges of third-party systems within your company or company network. It also includes information about: the risks of multi-erp systems possible approaches and THEIR GOALS ARE: planning category and supplier strategies based on clean and solid data transparency for their data communicating strategies consistently throughout the company the added value you can gain with JAGGAER With the right information, you can continue to develop and improve your purchasing organization and procurement strategies for the future. Our white paper includes many helpful and practical tips, as well as compelling arguments to help you reach your goals in Purchasing.

5 Challenges of Working with Several Third- Party Systems

6 page 6 Challenges of Working with Several Third-Party Systems Challenges of Working with Several Third-Party Systems Many enterprises and business organizations have been growing organically over the years and are now dealing with many heterogeneous processes, IT-landscapes, and systems. One reason for this is that corporations or different company locations often each manufacture very specialized products, and therefore need to use different procedures and different SAP systems. Purchasing organizations operate in a similarly complex environment because they often operate independently from each other. This is a result of the different types of specific products, different materials, and individual supplier development strategies within these organizations. All of these factors combined are what makes collaboration between individual locations, departments, and suppliers so complex. The lack of standardized companywide processes results in more tedious, manual tasks for buyers, who need to enter the same data into multiple IT systems, and it also causes a general lack of transparency in supplier management. The system landscapes are highly complex as well. In most cases, mul- tiple ERP systems are in use and are operating without consolidated master data. Essentially, this means that each third-party system has a different database. In some cases, supplier data is only partially filled out or has been completed using placeholder data. The master data in the different systems is not always up-to-date, and there are often multiple entries for the same suppliers in separate back end systems. Implementing homogeneous processes for supplier management, or a global category manager concept across multiple purchasing organizations, is challenging in such a heterogeneous company environment. Though it may seem like an overwhelming task, there is no getting around it: the first step has to be setting up a consolidated and homogeneous database across all the company s locations and systems. A reliable and up-to-date master database is an absolute must in order to guarantee efficient processes within an international purchasing organization, and supplier management should be the main source of important information for important decisions.

7 page 7 Challenges of Working with Several Third-Party Systems What should you look out for? A company should first ask itself the following questions: Has the supplier data been added correctly and completely? Is the master data up-to-date? Are there any duplicate entries in the supplier data? Incorrect or obsolete supplier data can be risky: Suppliers may not receive orders because the contact information is out of date. Out-of-date account information may lead to failed payments or payment errors problems which take time and resources to fix. The spend cannot be interpreted correctly because of duplicate entries. These are all unintended consequences of relying on incorrect, missing, or inconsistent master data. It is also important to note that a resulting lack of transparency and controls also make the company vulnerable to possible fraud and scams.

8 Risks of Using Multi-ERP-Systems

9 page 9 Risks of Using Multi-ERP-Systems Risks of Using Multi-ERP-Systems Using multiple third-party systems poses several risks to companies. Are you aware of them? Knowing what the risks are can help you take steps to manage and minimize them. Having a clean and consolidated supplier database that is homogenous across all systems, opens up possibilities for targeted analysis. Outdated master data Changes made to master data in a third-party system does not automatically lead to changes in other systems. Missing compliance standards Every country has different corporate guidelines and there is no consistency or overview available Increased purchase prices Lacking an overview of global quantities and prices in different production locations can lead to additional costs Performance loss Creating multiple calls for bids for the same products in different countries means more work and higher costs

10 Aggregating Spend the conventional path

11 page 11 Aggregating Spend the conventional path Aggregating Spend the conventional path It s not easy to achieve transparency and a good overview of procurement data. Many companies choose the painstaking path of consolidating spend data to at least get a general overview for reporting. This does not solve the problem of chaotic master data, however, and the data is only consolidated for the report. Without JAGGAER Data is only aggregated in reporting. Spend analysis

12 The JAGGAER solution

13 page 13 The JAGGAER solution The JAGGAER solution JAGGAER offers a different solution. All of the data from various back end systems are mapped out and consolidated in the intelligent procurement platform. How do you benefit? With JAGGAER: All master data is checked and consolidated. You can finally achieve complete data transparency. Master data from third-party systems Consolitation Use in JAGGAER Distribution to third-party systems Results from business processes 360 Supplierview contracts purchase orders spend analysis

14 page 14 What makes JAGGAER unique? What makes JAGGAER unique? Master data from thirdparty systems 1. JAGGAER collects data from all connected third-party systems and generates a golden record with a unique identification number for every master data entry. 2. Master data is aggregated using mapping tables and is clearly marked in JAGGAER. Identical data entries are merged during a duplicate check. 3. Workflows are created for changing master data. Members of the organization can be added in the workflow for approvals or information exchange. This method is not only limited to spend data. All master data, such as purchasing organizations, categories, payment conditions, contracts, and supplier ratings are consolidated. JAGGAER modules Working with clean and homogeneous master data has multiple advantages for all areas and business processes in Purchasing, particularly in category management, calls for bids, processing purchase orders, quality assurance, supplier ratings, and spend and savings analysis. Transferring data to source systems 1. JAGGAER can be used as a central master data management system, where the data is updated centrally. Changes made to (supplier) master data (e.g. supplier contact details, account number, payment conditions and supplier strategy) can be changed in JAGGAER and are then updated automatically in all connected systems. The edited and up-to-date information flows back into the ERP-systems. 2. Information collected from separate business processes in JAGGAER can be transferred to connected ERP-systems. Efficient follow-up processes are based on this information, which also ensures better decision making based on valid data. Side Note: Supplier registration JAGGAER also offers a standardized form for registering new suppliers. Suppliers can enter and immediately categorize information themselves using special supplier registration processes based on customizable questionnaire and flexible approval processes. If suppliers need to make changes, they can also easily update their information.

15 Example: Interaction of third party systems with JAGGAER modules

16 page 16 Example: Interaction of third party systems with JAGGAER modules Example: Interaction of third party systems with JAGGAER modules With JAGGAER, you can consolidate data from all of your different systems and create an integrated process that covers all of the steps from submitting calls for bids, to payment, and follow-up reporting. This example shows how JAGGAER would interact with your various systems. Having a clean database makes communication between the different systems easy and seamless. ERP JAGGAER Supplier master data Sourcing RFQ Source list Delivery/ Goods receipt booking Purchase Order (transfer to suppliers) AP-booking and payment Invoice (including 2 to 3 orders) Reporting

17 Added Value from Consolidated Data

18 page 18 Added Value from Consolidated Data Added Value from Consolidated Data Managing master data centrally has multiple advantages, not least of which are financial savings. It can also increase performance and minimizes risks within the entire organization: Added Value Overview of all suppliers for each category/plant/purchasing organization at once Up-to-date master data in all connected (ERP-) systems Clean data thanks to intelligent duplicate checks, including phonetic matching Quickly access to all information throughout the entire company Standardized and consistent adherence to compliance regulations Develop a global category and supplier strategy Pre-defined approval processes for editing master data Improved performance due to consolidated call for bids, use of standard suppliers and reducing the doubled work load (orders sent to the wrong location, payment issues, ) Consolidated supplier performance from all plants, divisions, etc. Easily distribute information from business processes (such as purchase orders, supplier ratings, pricing, ) to the back end systems Fully automated transfer of call for bid responses into all relevant ERP-systems Direct integration of risk and sustainability factors into business processes Communication and global implementation of consistent strategies for each category Save by bundling orders of items for multiple locations

19 page 19 How to Convince Your Internal Stakeholders How to Convince Your Internal Stakeholders A project can only be implemented successfully if everyone is on board. Individual stakeholders have different goals and perspectives, and to gain their support, these must be taken into consideration. Sourcing Simple category strategies because defined standard suppliers automatically receive calls for bids for their specified category; supplier data is directly sourced from the supplier master database IT ONE central master data management system Compliance Ensuring that all compliance guidelines are consistently followed Finance Automated entry of invoices through 2- or 3-step assessment, consistent reporting

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