Unlocking Innovation Mark Frear Business Development Director, SAP NetWeaver SAP Australia and New Zealand
Agenda Give you some context and research findings around innovation Describe how SAP is innovating itself to meet customer needs Look at some case studies Conclude
Innovation: From the Latin, innovare, meaning to renew The process of making changes to something established by introducing something new. Inertia: From the Latin, iners, meaning idleness - In physics, the resistance of a body to any alteration in its state of motion
Innovation leads to brand recognition, cash and profit
INNOVATION HAPPENS EVERYWHERE MAKE IT STRATEGIC TO DELIVER PROFITABLE, SUSTAINABLE GROWTH.
Innovation helps us fight the challenges we all face from Globalization Industry Consolidation New Process Models! Right sourcing! Out-tasking! Eco-system control! International M&A! More regulations! New process standards! Shared-services! Virtual teaming! Collaboration
Firms ability to evolve business models will become a key source of competitive advantage. 46% New products & services 54% 53% 47% 53% 47% 44% Total US Europe Asia Business in 2010 Study New business models 56% What is the greater source of Competitive Advantage in 2010 82% of executives in all sectors expect business to be demand rather than supply-driven 54% of executives see adapting models as more critical than new product / service development Source: Economist Intelligence Unit Survey 4000 questioned Senior Executives
Innovation is the Next Big Challenge Market Trends 1 I.T. is Coming of Age 1 Business Model Innovation Matters 2 External Collaboration is Indispensable 2 Innovation Requires Orchestration from the Top 2 Source: 1 Bain & Company: Management Tools & Trends, 2005 Trend Analysis Highlights Source: 2 IBM GBS: Expanding the Innovation Horizon: The Global CEO Study 2006
The next frontier: reducing time to change Years Months Business Process Change Weeks Days Product Lifecycle Hours Minutes Process execution time 1900s 1920s 1940s 1960s 1980s 1990s 2000s Source: Gartner
The flow of continuous innovation is a process itself Handoff Handoff Deployment Zone Invention Zone Optimization Zone
IT should support innovation in different ways Processes which deliver competitive advantage Focus for IT is to create differentiation Flexibility and agility Scalability Visibility CORE Other processes needed because you are in business Focus for IT to deliver productivity or efficiency in the business: Consistency Standardised Efficient Best practices CONTEXT Courtesy to G. Moore s Living on the fault line
SAP: A CASE STUDY IT-POWERED BUSINESS INNOVATION
SAP s Process knowledge is extensive in any dimension INDUSTRIES FUNCTIONAL AREA Discrete 16% SAP #1 FI 21% SAP #1 Process 27% SAP #1 HR 22% SAP #1 CP / Retail 19% SAP #1 SCM 16% SAP #1 Services 20% SAP #1 CRM 19% SAP #1 Fin. Services 20% SAP #1 SRM 23% SAP #1 Public 19% SAP #1 PLM 13% SAP #1 Market share data 2004 based on license revenues /preliminary Sources: SAP Analysis 2005, based on preliminary data
SAP is transforming to the next generation I.T. provider
Industrialization of the software industry ERP SCM CRM All-in-One New Solutions 69% of the parts are the same >50% of the processes are the same Speed: Shorter time to volume Efficiency: Systematic re-use across solutions Quality: Unprecedented level of quality and scalability
A decade ago, SAP improved the way businesses operate. Now the company wants to change the entire software industry. We could have sat back & waited for the storm to pass, but it never will, says Shai Agassi. Instead, we decided to lead it. Business Week, July 11, 2005
SAP s mission statement We will define and establish undisputed leadership in the emerging market for business process platform solutions, accelerate business innovation powered by IT for firms and industries worldwide and thus contribute to economic development on a grand scale. Executing on SAP s Enterprise SOA strategy will change SAP and shape our industry This is not (just) about winning market share, it is about accelerating innovation and energizing industry growth worldwide
Two aspects to deliver IT powered innovation.. Deliver IT-Powered Business Innovation for Customers Differentiate from competition through business innovation Boost productivity through best industry practices Ensure business integrity and compliance Platform Business Process Platform Enterprise SOA Enterprise services Composite applications Co-Opetition Trusted Ecosystem of Partners Alliance of leading vendors Many ISVs Collaborative innovation
We are moving from older technologies to Enterprise SOA SAP R/3 Standardized business processes Client-Server Distributed Processing Evolution Business Suite Extendibility through SAP NetWeaver Adaptive, end to end, streamlined processes ERP II CRM ERP SRM Evolution Business Process Platform SOA platform Composition framework Common business services Governance R/3 SAP Basis SAP NetWeaver Application and Integration Platform 1992. 2003 Business Process Platform Application, Integration and Composition Platform Enterprise Services 2004 2005 2006
SERVICE PROVIDER INTEGRATION Process flexibility in today s value networks FLEXIBILITY COLLABORATION CONTINUOUS IMPROVEMENT EVENT-DRIVEN CONFIGURABILITY EXTERNAL INFO INTEGRATION Source Source Supplier Ident. Manufacture Assemble Sell Invoice i Deliver OUT-TASKING
Flexible innovation on top of a stable platform i Flexibility and extensibility Model-driven solution building and adaptation Business Process Platform Enterprise Service Repository Other Apps Other Platforms CRM ERP SCM Application Components Other Businesses Industry Standards Reliable execution Controlled process execution High Scalability High Quality Maintain Integrity of data Breadth of functionality Flexibly deployable Centralized maintenance
mysap ERP 2005 The 1st services-enabled ERP Portal Rendering Devices Office RFID mysap 2005 SAP Partner Custom xapps xapps xapps Business Process Platform Enterprise Service Repository CRM ERP SCM Application Components 300+ Enterprise Services Stored in 1 unified repository Other Apps Other Platforms Other Businesses Industry Standards
Bringing innovation to all sizes of companies ~20,000 firms mysap ERP ~64,000 firms 1.2 million firms mysap All-in-One 55.4 million firms SAP Business One Source: IDC Customer Segmentation Analysis; SAP Analysis
CUSTOMER CASE STUDIES IT-POWERED BUSINESS INNOVATION
Finance, sales, purchasing upgraded in 45 days Fischer Advanced Composites upgraded to mysap ERP in forty five days. It could have not be accomplished without support from SAP. Michael Dolejsi, Project Manager, FACC FACC is a privately held company with 922 employees $ Technical upgrade from SAP R/3 4.6C to mysap ERP 2005 in 45 days Full scope sales, purchasing, corporate services, financials Consolidated server environment - reduced cost of IT
mysap ERP delivers a solid business platform
Bringing Innovation to all sizes of companies ~20,000 firms mysap ERP ~64,000 firms 1.2 million firms mysap All-in-One 55.4 million firms SAP Business One Source: IDC Customer Segmentation Analysis; SAP Analysis
Qualified mysap All-in-One is at the core of the portfolio
Edelweiss implemented mysap ERP in 40 Days from scratch Edelweiss needed a system aided facilities management and ERP solution in order to meet legal and operational requirements following a spinoff from UBS. Edelweiss is a subsidiary of UBS Swiss Bank that specializes in professional facilities management. That established itself as a legal entity on January 1, 2006 $ New customer needed ERP solution in 40 days Full scope ERP financials, human capital management, real estate, business intelligence Needed integration to mobile asset management and CRM 450 Users, 380 Mobile Users for Service Management
Using best practices speeds up implementation by 30%
SAP Best Practices in New Zealand
SAP Best Practices in New Zealand
SAP Safe Passage program allows anyone to move forward PeopleSoft JD Edwards Siebel might not always be supported Migrate to a viable, long-term vendor with the SAP Safe Passage program: SAP solutions Maintenance services at reduced cost Investment protection Clear road map for implementation and migration. License mysap, and and receive credit on on existing PeopleSoft, JD JD Edwards or or Siebel investments.
IT can address all processes with one platform Processes which deliver competitive advantage Focus for IT is to create differentiation Flexibility and agility Scalability Visibility CORE Other processes needed because you are in business Focus for IT to deliver productivity or efficiency in the business: Consistency Standardised Efficient Best practices CONTEXT Courtesy to G. Moore s Living on the fault line
Composing new processes from lego blocks In the past 40% Build Custom Code Home Grown CRM 60% Buy Packaged Application ERP 10% Build 30% Compose 60% Buy Services from SAP and ISVs Today ERP CRM Home Grown
Enterprise Services are defined at the business level. IT can decide how to supply the need ie "strategic decoupling" Business strategy Business Level Create order Enterprise Check Shipping Services Billing inventory Accounting IT Implementation Create Order record Send a confirmation to the customer Add the order to the production plan Web Services IT strategy (optimize)
Enterprise Services are defined with consensus from customers, partners, ISVs and SAP Business strategy Business Level ES described by customers, SAP and Create Check Shipping Billing order ecosystem inventory Open approach Accounting IT Implementation Web Services delivered by SAP, ISVs and custom development Open approach Delete Order record Send a confirmation to the customer Remove the order from production plan IT strategy (optimize)
1,300+ ISV Products Powered by NetWeaver 5 Industry Value Networks are kicked off SAP has remade itself as the industry's honest broker. Rather than locking customers into its own products, SAP offers tools that tie competing packages into a seamless whole. January 10th, 2005 1 18 Industry Titans are Enterprise Services Ready Enterprise Services Repository 10,000+in ANZ 500,000 SDN Members WW
CONCLUSION
Conclusion Talked about the context of innovation Responding to challenges It needs systematic focus and execution Case studies SAP is transforming the way IT will be delivered Adoption is much quicker than you think The IT ecosystem is at the heart of this