The multitude of enterprise software options available in the market today overwhelms most organizations. They often realize they need to go back to the drawing board and define an IT strategy so they can narrow down their choices.
Not only do organizations need to decide between ERP vendors, but they need to weigh the costs and benefits of different deployment options, integration strategies and digital technologies, like IoT and artificial intelligence.
Do you already have an IT strategy? It doesn’t hurt to reevaluate it to determine if it’s really meeting your organization’s needs, both now and in the future. Here are five signs you need to redefine your IT strategy:
1. Your enterprise technology hasn’t been updated in the last decade. Most organizations replace their ERP systems every ten years – at minimum. If you’re not replacing your enterprise technology every decade or so, you’re falling behind your competition. While it’s wise to make the most out of your current IT investments, you should also be able to discern when systems become outdated.
2. Your IT strategy isn’t aligned with your overall business strategy. When CIOs decide to implement new ERP software, they have good intentions, but sometimes, those intentions aren’t aligned with the organization’s overall strategy. For example, an organization may want to reduce capital costs, but the CIO wants to implement a SaaS solution instead of an on-premise solution. Before selecting ERP software, you should first define your strategic objectives, and then define specific IT objectives that support those overarching business goals.
3. You haven’t considered all the strategic options. You may think an IT strategy entails a full-scale ERP implementation. However, ERP software is just one of many technology solutions that can improve your operations. Digital technology such as IoT, artificial intelligence and business intelligence are also viable options.
4. You don’t have an actionable plan for replacing your enterprise technology. You may have completed steps 1 through 3, but your IT strategy is useless without an actionable, strategic plan. This plan should include a multi-year roadmap for how you’ll achieve your organizational vision.
5. Your IT strategy doesn’t meet your organization’s ROI thresholds. Your IT strategy should fit the cost, benefit and risk tolerances defined by your organization. For example, let’s say you’re a risk-adverse organization in a mature industry with very low margins. Do you really want to implement a high-risk, high-cost solution?
How to Develop an IT Strategy
1. Define your company’s overall strategy. If you don’t currently have a well-defined company strategy, you should define and document a vision for where the organization is headed in terms of growth and transformation. This should influence how you move forward with your IT strategy.
2. Define IT’s role and purpose in your organization. Does your organization view IT as a commodity or as a competitive differentiator that provides unique value to your customers? The answer to this question will lead to one of two decisions: outsourcing IT functions or building IT competencies in house. This will also determine the types of technology you consider – cloud, SaaS, on-premise, best-of-breed, etc.
3. Assess your IT department’s competencies. If your IT department is sophisticated, your organization may be equipped to handle a best-of-breed, on-premise ERP system. A less sophisticated IT department may want to implement a SaaS ERP system instead. When assessing your competencies, be sure to consider your overall physical infrastructure.
4. Consider all your digital transformation options. The enterprise technology industry has evolved from just a few large ERP vendors to several vendors offering a variety of point solutions. Instead of implementing a single ERP system, you can now choose from industry-specific solutions and point solutions focused on certain functions. Aside from technology, you can transform your organization by reengineering your business processes or reimagining your business model.
5. Develop a long-term strategy. Some organizations rush into a short-term technology decision without considering the long-term impacts. For example, if you implement a CRM system without considering how it fits into your long-term strategy, you may find it doesn’t integrate well with certain ERP systems. This limits your options when you decide to implement other technologies. Be sure to have a long-term view even when embarking on short-term initiatives.
6. Consider the non-technical aspects of your digital strategy. Many organizations focus on the technical aspects of their IT strategies without considering the people and process aspects. Your IT strategy should address business process reengineering and organizational change management – both of which will help you realize the full benefits of digital transformation.
Every Organization Needs an IT Strategy
Defining an IT strategy before selecting an ERP system ensures your technology is aligned with your organizational vision. While this may sound like an expensive ordeal, you don’t have to be a large, billion-dollar organization to afford the luxury of an IT strategy – you just need to find the right consulting partner.
Schedule a Free 30-minute Consultation With an ERP Systems Expert!
I understand the situation you’re in: your ERP software and other enterprise technologies are dated, your employees aren’t as efficient as they could be, and you want to fix the problem ASAP.
Even though you might want to rush to select and implement a new technology, you need to build the foundation for your digital transformation initiative first. This means having a solid strategy, plan, and tactics that align with your overall business strategy. Answering these ten questions before you start, will help ensure that your project is headed in the right direction.
1. What is your overarching business strategy?
Many of our clients start off their projects by saying that they have no choice but to change their technology, but this alone isn’t a good enough reason. You should define what your higher-level business strategy is, so you can define how enterprise technology and business process improvements will support it.
2. How will your IT strategy support your business strategy?
Assuming you have a clearly defined business strategy, you will want to define a three- to five-year IT strategy and roadmap to ensure that your technology initiatives are aligned with the company. You may not yet know which specific technologies will be required – or how much time or money they will consume – but you should define high-level estimates based on experience and benchmarks. (See our 2017 ERP Report for examples of such benchmarks).
3. How ready is your organization for change?
Although it may sound like a premature and rhetorical question to ask, it is an important one. Organizational change management – arguably the most important part of any digital transformation initiative – should begin during the evaluation and selection stage of your project. The first step is to conduct an organizational readiness assessment to answer this important question.
4. Which business processes provide your competitive advantage?
Not all business processes are created equal, so it is important to manage improvements accordingly. Focus your time and effort on preserving those that are unique to you, and don’t let any software decisions water down these core competencies. Similarly, ensure that you focus more time on these areas during your software evaluation process.
5. How willing are you to change your business processes?
Or, to rephrase: how willing is your entire company to change its business processes? You and the project team may be more than willing, but this doesn’t matter if the rest of the organization resists changing or somehow reverts to old, less efficient processes. Ensure that you have a realistic read on this potential organizational change challenge.
6. How much software customization are you willing to tolerate?
Many executives I speak with, are convinced that they will implement zero customization. However, this is unrealistic at best. Most organizations (91% to be exact) customize their software during implementation simply because they want to preserve their competitive advantage (see point #4 above). But, since too much customization can be a bad thing, ensure that you have an aggressive – yet realistic – stance on how you will address potential software customizations.
7. Are you looking for a single ERP system or a best of breed solution?
A one-size-fits-all ERP software isn’t the best solution for everyone, nor is a best of breed solution. Different companies have different solutions appropriate for their needs. Ensure that your IT strategy defines which direction you’re leaning so that your software evaluation process is focused and doesn’t veer off track.
8. Who will be on the project team?
If you haven’t already, you should define who will fill the various roles on your team. This includes your internal project manager, project core team, subject matter experts, and executive steering committee, as well as your outside consulting resources. Ideally, this team will remain intact from the evaluation stage of the project through implementation.
9. What will be your communications strategy?
It may be obvious to you and those close to you why this initiative is so important to the success of your organization and how it will impact people’s jobs. However, this isn’t true for most of your employees. Your communication plan should be defined early on to ensure that you are communicating early and often. As I always tell our clients: it’s never too early to begin defining and implementing your organizational change strategy.
10. What will be your project governance strategy?
Digital transformations are chocked full of hairy decisions that won’t always garner unanimous agreement. However, someone needs to ultimately make these tough decisions, so make sure you have clearly defined your project governance strategy early in your project.
You may not have all the answers to these questions, but you should take the time to define them as part of your overall IT strategy. Contact us to learn how we can help.
Digital transformations are complex undertakings – even more so than your average, run of the mill ERP implementation.
As Panorama grows and continues to work with more large, sophisticated, and global clients, we see more comprehensive digital transformations beyond more traditional ERP implementations. Along with these projects, we also see several pitfalls and traps that CIOs commonly run into.
One of the biggest challenges is failing to recognize and address everything that needs to be addressed as part of an effective and comprehensive digital strategy. Here are five things that CIOs commonly overlook:
1. Defining an IT organizational strategy. When done right, digital transformations entail significant changes to your IT organization. Your future state skill sets, people, roles and responsibilities, and reporting relationships should look quite different after your initiative compared to before. Failing to define how you will address the people side of the equation will completely undermine your efforts and increase the odds of failure.
2. Opportunities to bust down organizational silos. While redefining your IT organization, you have an opportunity to break down silos, consolidate, and standardize where appropriate. For example, if you are a larger, multi-business unit company with multiple IT groups and departments, you have a real opportunity to use your digital transformation as an opportunity to migrate to more of a shared services model. Digital transformations need corresponding organizational structures to support them, so be sure not to overlook this important component.
3. Developing an organizational change and workforce migration strategy. A well-defined and well-executed plan to migrate your employees to the future state organizational design is a key component of effective digital transformations. Without it, the impact of your digital transformation efforts will be limited to a nice-looking PowerPoint presentation or report. You will need to define a comprehensive and effective plan to migrate your workforce to the future state organization, skill sets, and reporting relationships that you define. This includes organizational change management, organizational design, training, communications and other tactics to keep workers informed and on board.
4. Improved business processes to drive the technology transformation – not the other way around. Just as you don’t want to attempt a digital transformation without changing the IT organization, you also don’t want to skip attempts to improve your business processes. If anything, your business processes should drive the technologies you select, how you implement and how you realize business benefits from those initiatives. Operational improvements should ultimately drive the technological side of the equation. Doing the opposite by using technology as the starting point will inevitably lead to failure.
5. It doesn’t pay to be distracted by emerging technologies. Many of our CIO clients love to talk about cool, emerging technologies. While we enjoy the conversations as much as they do, this can often be a distraction from the more important aspects of your transformation (such as points #1 through 4 above). Which type of technology you adopt is much less important than how you adopt it, how you redefine your business processes, and – most importantly – how it all ties into your overarching business strategy. Don’t get sidetracked or overly enamored by technology along the way and you’ll be one step ahead of many of your peers.
Exclusive Midmarket Focus Has Propelled Epicor’s Growth, Cementing its Place as One of the Industry’s Largest Enterprise Resource Planning Vendors
Epicor Software Corporation, a global provider of industry-specific enterprise software to promote business growth, today announced that President and Chief Executive Officer Joe Cowan has been named a Top Midmarket IT Executive by The Channel Company. The annual awards program honors influential vendor and solution provider executives who have demonstrated an exceptionally strong commitment to the midmarket.
The Top Midmarket IT Executives honorees were recognized at the 2016 Midsize Enterprise Summit West, at the JW Marriot Hotel in Austin, Texas, this past Sept. 18-20.
Epicor has a long history of serving the midmarket with vertical solutions that meet an organization’s industry-specific needs and which are easy to use and implement and which reduce business complexity.
Cowan has served as Epicor president and CEO since 2013. Under Cowan’s leadership, the company was recently acquired by global private equity firm KKR. In recent years, Cowan has been a driving force in Epicor’s transition to a cloud company, building out the company’s infrastructure to support its cloud business, along with the necessary redundancy, resiliency and data security. Epicor has seen a 71 percent year-over-year increase in total cloud users, buoyed by its laser focus on the midmarket, a segment ripe for transformation as new cloud-based and mobile technologies are leveling the playing field, making ERP much more affordable and quickly deployable.
“I am honored to receive this recognition from The Channel Company and to be included in such an esteemed class of executives who are dedicated to serving the needs of midmarket businesses,” said Cowan. “Since its inception, Epicor has been focused on meeting the needs of the midmarket, continuing to innovate and deliver technologies that help businesses gain and maintain competitive advantage and fuel growth.”
“The Channel Company and Midsize Enterprise Summit are proud to recognize these individuals and the companies they represent for their remarkable efforts to meet the unique IT needs of this fast-growing segment,” said Robert C. DeMarzo, senior vice president of Event Content and Strategy, The Channel Company. “The winners were honored at this year’s Midsize Enterprise Summit West event this month in Austin, Texas, the nation’s largest gathering of midmarket senior IT executives and the ideal venue in which to honor these deserving leaders. We congratulate each of the honorees and look forward to their continued success.”
Many IT departments and CIOs fail to employ an IT strategy that is right for their organization. However, when these strategies are well-defined, aligned and executed, they can be very powerful.
Here are five signs that your IT strategy may not be working:
Your current technologies haven’t been updated in the last decade. Our average client replaces their ERP systems every ten years. For some, even that is a few years too long. As a good rule of thumb, if you’re not replacing your major enterprise systems every decade or so, you’re falling behind your competition, and failing to leverage the exponential improvements in technology over time. It’s one thing to take a low-cost, low-risk, incremental approach by keeping your IT investments for as long as possible, but it can be a slippery slope of falling too far behind on technology.
Your IT strategy isn’t aligned with your overall business strategy. Too often, CIOs and IT departments have good intentions that aren’t aligned with a bigger picture business strategy. For example, a company that wants to reduce capital costs, but implements a SaaS solution instead of an on-premise technology, will have conflicting priorities. During IT strategy engagements, we typically start by defining the company’s top five to seven strategic objectives, then define specific IT objectives that will support those overarching business strategies. This enables the recommended IT strategy to align with bigger picture and longer-term organizational strategies. Below is an example of a strategy articulation map that we often use to define this alignment:
You haven’t considered all of your technology options. Some think that an IT strategy needs to include a big, complicated and costly ERP implementation. However, ERP software is just one potential technology solution for your organization. Digital transformation, mobile, business intelligence, CRM systems and eCommerce are just a few potential technology alternatives. In addition, business process reengineering and organizational change management are two potential options that don’t involve technology. Whatever paths you explore, it’s important to objectively consider all of your options to develop the strategy that makes the most sense for you.
You don’t have an actionable plan to begin upgrading your enterprise technology. You may have already completed steps 1 through 3, but your IT strategy is meaningless without an actionable and realistic plan to implement. Once you’ve defined your general strategy and direction, it is important to outline a multi-year roadmap for how you’ll realize your overarching vision.
Your IT strategy doesn’t meet your organization’s ROI thresholds. Successful IT strategies should ultimately meet the minimum ROI thresholds defined by the organization. Strategies that fail often do so because they don’t meet these simple criteria. Your IT strategy should fit the cost, benefit and risk tolerances that have proven to work well within your organization. For example, we recently began a project with a very risk-adverse organization in a mature industry with very low margins. Based on these economic realities, we know that we won’t be recommending a high-risk or high-cost solution that compromises those already thin margins and risk intolerance. Ensuring that the cost-benefit of your strategy fits with your needs is an important aspect of a successful IT strategy.
If you haven’t thought about your IT strategy lately, it may be time to take a look. When the backbone of your organization isn’t adding value, your organizational goals become harder to attain.
If you’re an executive, CIO or project manager, it’s easy to feel hamstrung by a lack of internal interest in and commitment to implementing new ERP software.
We’ve noticed in the market lately that a decent number of companies are hesitant to bite off on large ERP software implementations. Perhaps it’s because of a relatively weak economy, perhaps the upcoming U.S. election or because companies are being cautious before embarking on an initiative that has burned so many companies in the past.
Regardless of the reason, some of our current and prospective clients face limited capital budgets and/or lack of internal buy-in to support a new enterprise software initiative. The good news is that there are a few steps one can take to overcome these obstacles:
Define an enterprise and digital transformation strategy. Some see single ERP software as a foregone conclusion. However, this is just one of many options available to CIOs and executives as part of their overall digital transformation and enterprise IT strategy. Because of this, organizations should spend time defining these strategies. It’s important to carefully consider everything from enterprise-wide technology deployments to lower capital cost options such as simpler technology upgrades and business process enhancements. When considering specific technologies, it is also important to take an objective and technology-agnostic look at the various options available, including ERP, CRM software, HCM software, mobile solutions, eCommerce and other potential alternatives.
Consider non-technology options. Now may not be the right time for new technology. Whether it’s because the ROI isn’t there, the risk is too high or employees are simply too resistant to change, it may be that other non-technology options are better suited for your current situation. For example, we sometimes recommend business process reengineering, organizational change management or upgrading technology already in place as potential alternatives to more massive technology migrations. ERP vendors and sales reps may strongly push the need for you to implement a solution (their solution now), but that’s not always the right thing. It’s important to have an objective, outside view of what’s right for your needs – and this should be someone without a vested interest in seeing you invest in their software.
Whatever you do, consider both the long-term and short-term implications of your decisions. Short-term constraints may drive short-term decision making to some degree, but it’s also important to make these decisions in the context of a longer-term and overarching IT and digital transformation strategy, which is why step #1 is so important. For example, we are working with with a mid-size manufacturer that decided that they would not be in a position – financially or organizationally – to implement a new ERP system for at least 1-2 years. However, they also know that their current situation is not sustainable to support growth and earnings expectations. Because of this, they opted to have our team overhaul their business processes, look for options to upgrade current technology and evaluate potential new enterprise technologies that could act as further enablers of the process changes that we are implementing. They are working within short-term realities, but within the parameters of their longer-term technology and organizational vision.
While you may think of this transformation to be heavy on the wallet, there are so many options to consider that could help your organization skyrocket in efficiency among everything else.
In today’s uncertain global environment, organizations and their executives need a clear path to a positive return on investment before taking on the cost, risk and heartburn associated with implementing new enterprise software.
ERP systems and other enterprise technologies can achieve a ROI by preserving, enhancing or creating a competitive edge for the implementing organization. Unfortunately, few organizations get to this state of utopia and instead struggle to realize the expected business benefits of their investments. Our 2016 ERP Report reveals that only 35-percent of organizations realize at least half of the expected business benefits of their investments in enterprise software.
Some companies do in fact realize business benefits, but they are more effective, strategic and deliberate in how they plan and executive their enterprise initiatives. Here are three ways that we see companies leverage technology to maintain their competitive edge:
1. First and foremost, manage your project as a business transformation initiative. The most successful clients we work with treat their projects as business transformations rather than simple technology refreshes. Your chances of failure and/or underwhelming results increase dramatically when you start with the technology and expect everything to fall into place accordingly. The more successful companies, on the other hand, begin with strategy (see point #2 below), people and processes, then allow technology to fall into place from there.
For example, our team is currently working with a large distribution company that is looking to grow from $250M in annual revenue this year to $1B by 2020. This is no small undertaking, and technology alone won’t get them there. But they will get there by effectively aligning their IT strategy, business process reengineering, organizational change, and ERP systems initiatives.
2. Begin with your strategic goals first, followed by how you will leverage technology to get there. Alignment of your various business transformation initiatives is made possible by a clear definition of your overarching strategic goals. When embarking on enterprise and IT strategy initiatives with clients, we typically begin by constructing a strategy articulation map, which defines how bigger-picture strategic goals translate into more specific enterprise, technology, people and process initiatives that will ultimately enable those goals.
When defining this strategy, it is important to not get too prematurely caught up in specific technologies or trends, such as single ERP, best of breed, SaaS or cloud solutions. Instead, start with your strategy and use that as a framework to narrow the playing field and define your overall direction. This also helps avoid the “analysis paralysis” trap.
3. Take the time to reengineer critical business processes. Not all business processes are created equally, so not all business processes should be reengineered equally. Instead, business process reengineering efforts should focus on those workflows that are most critical to your business success and are a source of your competitive advantage.
We recently met with a mid-size, engineer-to-order manufacturing and distribution client that views customer service and product lifecycle management as the keys to their success. With that in mind, they asked us to reengineer those business processes, but focus on more incremental improvements in other functional areas. This allows us to focus our efforts, cost and value on areas that will have the biggest impact – and deliver the largest sources of competitive advantage.
In this ever-evolving technological world, it is vital to leverage your enterprise system to help keep your competitive advantage. If you don’t keep up, you’re going to be left behind.
[vc_single_image image=”65606″ img_size=”full” alignment=”center”]“Employees have a lot on their plates right now.” “Some of the executives are taking vacations this summer.” “We don’t know if we can get the budget approved.” “Now’s just a bad time.” “Let’s wait to see what happens with the economy.”
Sound familiar? These are many of the reasons we hear when organizations say they can’t start their ERP implementations right now.
Unfortunately, there is never a good time to start an enterprise software initiative, but it’s something that most organizations need to further their businesses, scale for growth, increase revenue and improve delivery to their customers. In other words, it’s a necessary evil – and one that’s not easy to successfully pull off, either.
But there are a million reasons why starting your ERP project now makes more sense than waiting. Here are four considerations to help you determine if now is the right time:
1. Weigh the costs versus the benefits of starting your ERP software initiative now. There are certainly costs associated with starting your project now. Money, time, resources and heartburn are some of the things you can expect to invest in your initiative. However, in most cases, the benefits of a new system far outweigh these costs. In particular, be sure to look at how new technology might help you increase revenue, reduce costs, increase efficiency and make employees’ lives easier. Also, be sure to consider how much it’s costing you to not fix these problems – it is likely more than you think, especially when you consider the opportunity costs of waiting.
2. Develop an IT and ERP strategy roadmap. The proliferation of enterprise software options available today can be overwhelming, leading many to analysis paralysis. However, it doesn’t have to be that difficult. Create a technology-agnostic strategic roadmap for the various technology options that might suit your needs. Be sure to consider all options: SaaS vs. on-premise, single ERP vs. best of breed, standardized vs. decentralized systems, etc. Once you define some of these strategic variables and narrow the field, your decision will become much clearer.[vc_cta h2=”Podcast: How to Develop a Smart IT Strategy” h2_font_container=”font_size:18″ h2_google_fonts=”font_family:Bitter%3Aregular%2Citalic%2C700|font_style:400%20regular%3A400%3Anormal” txt_align=”center” add_button=”bottom” btn_title=”Listen Now” btn_color=”vista-blue” btn_align=”center” use_custom_fonts_h2=”true” btn_link=”url:http%3A%2F%2Fpanorama-consulting.com%2Fresource-center%2Ferp-podcasts%2F|||”]3. Consider your alternatives to ERP. It may be that it really isn’t the right time to be biting off a big new ERP system for your entire organization. Perhaps an upgrade of your current system will deliver more low-hanging fruit at a lower cost. Or perhaps reengineering your business processes will do the trick. Whatever you do, don’t feel as though you necessarily have to implement a brand new system to improve your business. Consider your alternatives and weigh the costs and benefits of each.
4. Don’t confuse the need to wait with organizational resistance. Oftentimes, delayed ERP decisions are related to organizational resistance rather than a legitimate business reason. Organizational change management shouldn’t be a reason to postpone an initiative that will deliver tangible business benefits to your organization. Your organization should conduct an organizational readiness assessment to determine sources of resistance and identify how those barriers can be removed. This assessment should form the basis for your organizational change management strategy and plan.[vc_video link=”https://www.youtube.com/watch?v=wjmZXBUAfTI” el_width=”60″ align=”center”]Instead of finding reasons why now isn’t a good time, perhaps you should start thinking about business benefits in the long-term.
Dependent upon the size and growth of an organization, opinions on the importance of IT strategy can vary. A current audit of your organization’s infrastructure, staff and budget can give you a baseline to benchmark against during organizational and IT changes.
Gathering quantitative and qualitative data regarding IT can be overwhelming if it is done ad-hoc. When developing an IT strategy, your organization should consider alignment with current business processes and total cost of ownership. Defining an IT strategy with current and future business needs in mind makes decision making a lot easier.
The general perception is that selecting the right ERP software is the main factor in gaining competitive advantage. However, true realized benefits are derived from having integrated technology across the organization that facilitates a swift IT and business strategy. Once these benefits are understood and noted, a technology roadmap can be developed for further investigation.
Technology roadmaps are a great tool to provide insight for planning and coordination purposes. Prioritizing needs over “nice-to-haves” is the first step in the process. Critical system requirements drive the framework that assists in weeding out unknown functionality of a particular ERP system. Whether it’s ERP software or new hardware, the cost of the product must be taken into consideration. Total cost of ownership (TCO) analysis takes many variables into account and provides criteria for comparing multiple ERP systems. Organizations should compare apples to apples when it comes to licensing, maintenance and training.
The importance of IT strategy is inarguable – organizational goals must be taken into account before making as significant of a purchase as ERP software.
ERP systems don’t mean much without the right strategic framework. In fact, enterprise software can actually hurt more than help if you haven’t properly defined your overall IT and ERP strategy.
In our experience, organizations jump into purchasing new enterprise software without first ensuring that their decisions are aligned with the overall strategic direction of the company. For example, a company that views IT as a source of competitive advantage for their complex and flexible global operations shouldn’t be seriously considering SaaS ERP systems. Even though on-premise solutions are more likely to be a good fit for these organizations, they often make the misaligned decision to implement a SaaS solution instead. This is a good example of misalignment between corporate strategy and IT initiatives.
Most ERP consultants and vendors know a lot about the specific software that they specialize in, but they are not equipped to provide an objective and technology-agnostic assessment of how an enterprise solution(s) would best support their company’s overall strategy – not the ERP vendors’ strategy. This causes the entire ERP strategy exercise to lead to a challenging, biased, incomplete and misaligned result.
Here are four steps to define your ERP strategy and convert it into action:
1. Define your corporate strategy. First, you need to define the overall strategy to help your team navigate the multitude of enterprise software options. These can range from purchasing a new single system, adopting a best of breed approach or maybe even doing nothing but improve your current processes. You won’t land on the correct result without the right strategy and general direction. Our team at Panorama often uses a strategy articulation map to visually sketch out how corporate goals and objectives translate into specific IT initiatives and decisions.
2. Define your ERP and IT strategy. Once the overall corporate strategy has been clearly defined and documented, you must further define how specific IT initiatives can support that strategy. For example, a few variables that you’ll need to consider include:
SaaS vs. cloud vs. on premise
Standardization vs. localization
Customization of software vs. customization of your business processes
Centralized vs. decentralized roles and responsibilities
Single ERP system vs. best of breed
Of course these variables must be defined in the context of your broader corporate strategy. Step #1 must be complete before moving to this stage of the project.
3. Evaluate potential alternatives and options. Once your team has a general sense of the direction to go, it is time to define the most feasible alternatives. Generally, we’ll explore no more than three primary options for our clients. Within each of these alternatives, you’ll want to consider the following:
The pros and cons of each, since each alternative will have tradeoffs to be considered
The high-level strategy for implementing those options
Total cost of ownership and cost-benefit analysis for each
Analysis of how well the alternative supports broader corporate objectives – or not
At this stage, your team must develop an objective and unbiased view of alternatives. It is important not to rely on consultants, vendors or system integrators with a vested interest in seeing you choose one option over another based on what product(s) they specialize in, as that will only bias your analysis.
4. Define the 3- to 5-year roadmap to implement your IT and ERP strategy. As you complete your analysis, you’ll want to define your team’s recommended plan of attack and implementation roadmap. In our experience, the three alternatives are quickly whittled down to one with the aid of objective and experienced outside support. In addition to the general justification for the recommendation, you’ll also want to lay out how exactly the 3- to 5-year roadmap will look, how much it will cost and what the benefits to the organization will be.
You wouldn’t build a house before having a blueprint. Why would you do that for your ERP project? You must have a plan of attack to ensure a successful ERP implementation.
It goes without saying that the best foot should always be forward when it comes to your customers. Products and services provided to customers are generally the most polished aspect of an enterprise as they represent the organization in the eyes of past, present and future clients. Now consider the inner workings of the organization. Do the internal mechanics need to be hidden? What would your customers think if your internal processes were laid bare? Would you show your customers your ERP system?
While your customers may never see your ERP system, it’s a useful scenario to imagine when evaluating the effectiveness of your current IT landscape. If one or more of the following items are true, you may want to take extreme measures to ensure that your customers never see your ERP system – as an alternative, you could simply re-examine your IT strategy:
1. Your customer data is managed in spreadsheets. As security and privacy continue to be at the forefront of consumer’s minds, the last thing your customer wants to hear is that their personal and professional information is stored in spreadsheets without any kind of system-driven security protocols. If the crashing of a network or a single computer is all that is required to disrupt your customer relationship, you are due for a thorough examination of your system and infrastructure. Data security is the cornerstone of a successful IT strategy and should be a guarantee for your customers.
2. Your internal processes do not have the same level of quality that your service offerings do. You pride yourself on your product or service, but what does the process behind your “storefront” say about your organization? If your client-base were to have a glimpse of your redundant data entry and manual workarounds, would your product or service still be viewed as the paragon of quality that your organization hoped to convey? IT strategy is, at its core, about freeing your business of the constraints that hold it back and giving you the tools to meet your strategic goals. While your organization may shine in terms of your service offerings, imagine what you could accomplish without the weight of non-value-added activity and inefficient processes slowing down your staff.
3. Your business is run on a mish-mash of systems. Is your output limited by the aging canvas of your current set of systems? Do you have several third-party systems cobbled together with modifications? Your legacy systems may have brought you to your current level of success, but when considering the future, scalability is vital to your organization’s success. Sustainable growth should be one of your primary objectives if you intend to provide the same, if not higher, level of service that your customers expect while simultaneously expanding your customer base.
No organization is perfect, especially on the inside. Many organizations achieve success without streamlined processes and systems – but only to a point. As organizational size and complexity grows, so does the need for efficiency in processes and systems. Before your organization contemplates its future and strives toward strategic goals, be sure to consider the old adage, true beauty is on the inside.
Too often, companies jump right into selecting new ERP software without first understanding their overarching enterprise and IT strategy. It’s an easy mistake to make when your current systems seem so dated compared to newer options in the industry, but it typically leads to disappointment.
A disconnect between the strategic direction of your overall company and your selected and implemented ERP system can lead to trouble, so here are some tips to develop an enterprise IT strategy that aligns with your overall company strategy:
Define your company’s overall strategy. Some organizations have well-defined strategies, while others don’t. In either case, it is important to either define and document your strategy if it doesn’t already exist, or leverage your existing strategy to complete the additional steps below. This entails ensuring that you have a clear vision for where the organization is headed in terms of growth prospects, future markets or customer bases that you plan to pursue, potential M&A activity and other key strategic criteria that should ultimately influence how you move forward with your IT strategy.
Define IT’s role and purpose in your organization. Ask yourself a key question: does your organization view IT as a commodity or support role in the company, or is it viewed as a competitive differentiator that can help provide unique value to your customers? The answer to that question will likely lead you down one of two paths – one that leads to outsourcing IT functions and applications, or another that leads to building those competencies in house. This will also determine the types of enterprise solutions you might pursue in the future, such as cloud, SaaS, on premise, best of breed, etc. The graphic below shows a basic framework that can be used to drive some of those decisions.
Assess your internal IT group’s competencies. Based on your answer to #2, you also need to look at how sophisticated your group is (or isn’t). A more sophisticated group, for example, may be better suited to handle a best of breed on premise environment, whereas a less robust IT department may be better suited to manage a SaaS ERP system. When assessing your competencies, be sure to take into account the breadth of your team’s skills, as well as your overall physical infrastructure.
Priority of short-term benefits versus long-term benefits. Certain companies move faster than others. Some are more patient in realizing benefits, while others may not be. It is essential to understand how important it is for your team to implement solutions quickly and inexpensively versus focusing on maximizing longer-term business benefits. Those two paths can lead to very different IT strategies. Either way, it is important to look for low-hanging fruit to realize some benefits early to help build momentum.
Other considerations. There are a host of other considerations to keep in mind when building your enterprise IT strategy. For example, how open are your employees to change? How unique is your business compared to peers in your industry? How much are you looking to standardize your business operations across multiple locations or business units? Which areas of your business are the “real” competitive differentiators that you want to focus more resources on? All of these and other questions will help determine the appropriate enterprise IT strategy for your organization.
These five areas will help define an enterprise IT strategy that is aligned with your company vision and strategy. That alignment is more likely to lead to enterprise software success than your industry peers and counterparts.
Rapidly evolving technology trends and their associated organizational and operational impacts can be overwhelming. It is nearly impossible to constantly keep up to date with this ever-changing landscape–making the job of today’s CIO so difficult. Proving why leveraging outside expertise can be so beneficial.
With that in mind, here are four challenges in particular that you won’t want to face alone.
Creating an IT strategy and roadmap that fits your business. The proliferation of enterprise software and other business technology options is mostly positive for organizations – especially those in the small and mid-markets that historically couldn’t afford many enterprise solutions. But the number of these options can be dizzying to navigate. For this reason, it’s critical to work with an outside expert who can help in developing a technology-agnostic ERP strategy and roadmap to define the best path forward based on your organization’s overall direction. Your roadmap should include a three to five year plan along with more immediate low-hanging fruit that you can begin implementing right away.
Organizational adoption of new systems. Whatever you decide to execute within your IT strategy and roadmap is sure to lead to relatively significant organizational changes. Even seemingly simple technological implementations typically result in direct and indirect changes to employee’s jobs, roles, responsibilities and the communication between departments. Because of this, it is important to never underestimate the need for organizational change management. Many IT-types focus on the more techie aspects of IT initiatives. This explains why so many struggle in this area. The good news is that there are organizational change consultants that can help you navigate this vital pain point of any IT initiative.
Alignment between new technology and your current business processes. Technology itself doesn’t mean much if it isn’t aligned with your business processes. Even before selecting which technology to implement within your organization, it is important to define how you envision your business processes looking into the future. Beware of simply documenting how things are done today instead focusing on pain points, opportunities for improvement and “to be” business processes that will best support your organization going forward. Look for ERP consultants who are also experts in Six Sigma and manufacturing (or your specific industry vertical) to help facilitate this process for you and your team.
Realizing the ROI of enterprise technology investments. One of the biggest shortcomings of enterprise IT initiatives is failing to deliver a solid return on investment (ROI). In fact, according to our 2015 ERP Report, most ERP systems and IT initiatives fail to deliver expected business benefits. New technology may sound good in theory, but if it doesn’t deliver tangible business benefits, then it isn’t helping your organization.
Go beyond developing a business case for your initiative and instead develop a more robust benefits realization plan if you expect to truly realize meaningful benefits. Regardless of how technology evolves in coming years, these commonalities will be relevant to your job. It doesn’t matter if you are struggling with the implementation of a new ERP system, rolling out technology to automate your shop floor, applying a new CRM system and mobile devices to your sales team or pursuing any other enterprise software initiative –mastering these challenges will help you succeed well into the future.
The biggest problem with ERP implementations is that they often lack a strategic framework. According to our 2015 ERP Report, ERP implementations often take longer than expected, cost more than expected and fail to deliver expected business benefits. So what are you really paying for?
During our 10 years in business, we have found that most of these organizations lacked a strategy when they began their project. Although it can be difficult to define an IT strategy, there are several steps you can take to make sure you are not throwing your money at a failure.
An audit of your organization’s infrastructure, staff and budget can give you a benchmark to compare your organization against others. You have to set a strategic direction for the years to come. Once you have made that decision there are a few more considerations. These can include the following:
Are we more interested in a single system or a best-of-breed system?
Would a Tier I or Tier II ERP system work better for us?
Would we prefer the software to fit our business, the business to fit our software or a combination of both?
How much will we standardize business operations across our locations and business units?
These are just a few of the questions that must be considered before beginning an ERP implementation. It’s all too easy to jump into an ERP project and start making decisions that you will later discover do not fit with your IT strategy.
Here are a few things to consider as you and your team begin making key strategic decisions and defining your IT strategy:
Assess your current IT landscape. The first step in any effective IT strategy is to assess the strengths, weaknesses and opportunities related to your current environment. Benchmark your current IT situation to other organizations and best practices to prioritize the various opportunities for improvement. You have to know what you’re starting with to know where you want to be in the future.
Look at all potential strategic scenarios. Once you have analyzed all of your organization’s longer-term objectives you must identify potential strategic scenarios to support the overall vision for the company. You must cover all bases. Make sure to evaluate several potential (and diverse) options. This can include anything from outsourcing your IT department, upgrading and better integrating current systems, replacing current systems, and standardizing operations across global locations. Include strengths, weaknesses and tradeoffs for each. In order to define feasible scenarios, it helps to look at what is happening in the industry and what tactics other organizations like yours are deploying.
Business case and ROI analysis.Ultimately, the strategic scenario your team chooses will be heavily influenced by the potential costs, benefits and return on investment of each. It can be easy to make an emotionally-charged decision – such as, “Our current systems don’t work correctly, so let’s go get a new ERP system” – but these potential scenarios should be evaluated in a rational, quantitatively-focused way to ensure that emotions don’t dictate the chosen approach. These quantitative comparisons of various scenarios should also consider long-term hidden costs, such as the technical and organizational costs of maintaining the particular solution. At the end of the day, your executive team and board will want to see how the costs, benefits and ROI stack up for each potential scenario you are considering.
The three- to five-year strategic roadmap.As much as we would all like to transform and improve our businesses overnight, successful initiatives are typically more of a multi-year process. Your final output from the strategic process should be a three- to five-year roadmap outlining the implementation strategy and key milestones critical to the success of the overall transformation. It is important to remember to include the following key components in your roadmap: what types of solutions will be deployed, how the organization will need to change, expected business benefits, business process reengineering strategy and the organizational change management plan.
That’s what brings us to our question: Are you paying for a potential ERP failure? These and other key strategic topics are covered as part of our proprietary PERFECT Plan™ IT Strategy Methodology, which we recommend and deliver for our clients.
Have you ever considered that your enterprise software strategy may be hurting your business more than it is helping? Most of us focus on the potential business benefits of leveraging enterprise systems, but few consider that we may be undermining our more noble intentions.
With all the industry hype around various types of ERP and CRM systems in the market, perhaps this isn’t such an odd question after all. CIOs and CFOs are often lured into making large software purchases without having a clear direction or reason for doing so. A compelling quarter-end financial incentive from a software sales rep – coupled with one or two irrational reasons for making the purchase in the first place – can be enough to entice an executive team into a poorly-thought-out decision.
The Cost of Not Having a Well-defined Enterprise Software Strategy
One of the challenges with enterprise software is that these systems are all encompassing. In other words, organizations are rarely able to implement the full functionality and benefits of their enterprise solution within a reasonable timeframe. With that said, project teams often do not consider their plan for systems outside of the phase being considered – even if they know that they will someday need or want that extended functionality.
For example, let’s say that your organization has multiple broken systems and processes, but your CRM software is the low-hanging fruit that you will tackle within the next 12 months. How will you address the other systems outside of CRM? How will the systems integrate with one another? When will you address those other areas? While you may not implement anything outside of CRM anytime soon, you will still want to know how the various systems will be addressed over time. Otherwise, you will lose quite a bit in terms of a cohesive set of systems.
Flawed or Incomplete Enterprise Strategies can Back you Into a Corner
Similarly, another common pitfall is choosing and implementing an ERP system that not only fails to consider an overall enterprise strategy, but also threatens to limit your options in the future.
Sticking with the CRM example above, let’s say your organization opts to select and implement Salesforce as its CRM software of choice. While this is typically considered the gold standard of standalone CRM systems, we have seen many companies limit their abilities by implementing the software in a vacuum because they didn’t consider how other systems would be addressed.
Salesforce is a SaaS-based system, which doesn’t always integrate well with other systems – especially some of your older legacy solutions. Decisions like this can actually limit your options going forward so it is important to align your short-term tactics with your longer-term strategies.
Enterprise Software Strategies Should Include People and Processes as Well
An enterprise software strategy without a focus on people and processes isn’t an effective strategy. Organizations need a well-defined plan to translate their defined strategy into reality, so it is vital to define your strategies and tactics for addressing the organizational change management and business process reengineering aspects of your enterprise software strategy. Without this angle, you will be setting yourself up to heavily invest in new technologies without the benefits and ROI of actual improved business results.
Your enterprise software strategy should define how you plan to tackle opportunities for business process improvements as well as which key organizational change tactics you will leverage to enable the system and process enhancements resulting from your overarching strategy. It may seem more intuitive to myopically focus on the technical aspects of your strategy, but the people and process aspects of your strategy is where the rubber meets the road.
Your goal should be twofold. First, you should make sure that your strategy isn’t so incomplete or ineffective that it actually hurts your bottom line. More importantly, you should define and execute your enterprise software strategy in a way that enables measurable business results and bottom line improvements.
There is a belief that a new ERP system by itself will turn around a struggling business or make a thriving business more successful. As exciting as a new ERP system can be, servers, software and hardware are expensive. Organizations need to conduct due diligence to find the correct IT strategy for their needs instead of solely focusing on their budget. An outside set of eyes can be very helpful as they are not blinded by department loyalties or corporate fiefdoms and can see the current environment for what it is. An outside agent also has ample lessons learned from other IT strategies and your company can save money and heartaches by listening to their advice.
Following are four steps for developing a winning IT strategy:
1.Find the right fit: There are a lot of IT solutions out there, and finding the correct one for your business is critical for continued growth. Cost is usually the primary metric that most companies adhere to, but there is much more to consider before pulling out the corporate credit card. Is it appropriate to host your activities in the cloud? Would you rather have your IT infrastructure on-premise? Do your employees need connectivity on the road? How long are you going to live with the IT upgrade? Are you allowing employees to bring their own devices and hook them up to your network? Do you have enough bandwidth? How big and competent is your IT staff? All of these must be considered in addition to cost.
2. Identify the benefits: A baseline of the current business processes is necessary. The IT strategy should start with the overall business strategy and how technology can make your organization efficient, increase production, reduce management costs and improve collaboration. There needs to be a clear roadmap between the current state, the IT strategy and the future state. Timing also needs to be factored into the vision of success. Typical IT upgrades are planned to last for three to five years, but this is highly dependent upon the client and their specific needs. Since IT is a rapidly changing field, the implementation should be started as soon as the IT system is agreed upon.
3. Prepare the employees: An IT strategy cannot be a lightning bolt from the executive suite without consideration for the various departments and end-users. There needs to be a deliberate change management strategy that includes, informs and provides realistic expectations. All departments must be included in the change management strategy and shown how the new IT strategy relates to company goals, how it will make end-users’ jobs easier and how and when they will be trained. Whenever Panorama proposes a new IT strategy, the end-users worry that the new IT program will be paid for by employee cuts and reduced benefits. While some jobs may be made redundant, it is important to have a theory of victory for the employees. Some jobs may be cut, but there will be new work opportunities and jobs will be created because of the new IT capability.
4. Manage the risk: Risk management – particularly with impacts to current business processes and employee expectations – need to be identified and either overcome or mitigated. It is important to have a no-nonsense look at the company and detail how the firm can handle the IT changes. An inventory of the current IT infrastructure as well as a detailed look at its strengths and drawbacks are critical as this creates connectivity within and outside of the company. One of the biggest risks is training, but if the company has created a sound IT strategy, married it to the business processes and set the stage for success with the employees, training should go swimmingly. There will always be friction to change and a sound change management plan will help ease friction and outright resistance to the training and the new IT system.
You don’t have to walk in the tall cotton alone in determining your IT strategy. Find a capable partner to help you navigate the rough patches during an IT strategy and implementation. Panorama can help you by providing critical insights on business processes, change management, risk reduction, and of course, help you determine the best IT infrastructure for your specific needs.
The global design of an ERP system needs to consider standardization, business benefits and the integration of political cultural differences within an organization.
From an IT perspective, before engaging an organization in global design, it is important to define a framework of how IT plans to drive change with the new ERP system and how the system will be supported. In essence, align IT before beginning an ERP implementation. This will often entail hiring additional resources and adjusting the existing IT structure.
Organizations and IT departments often walk into global design without agreeing on a framework for the alignment of the key components. This often results in time delays, cost overruns and frustration.
The items that should be addressed prior to the software implementer’s arrival include:
1. Establish a balance. With a goal of standardization, take the first step to balance your organization’s landscape. Different departments will have different levels of complexity; therefore, it is best to group departments by complexity to assist in the implementation rollout plan.
2. Obtain senior management buy-in. Senior management should have buy-in to the following reporting structures:
Sales reporting by product lines and customer types
Inventory reporting by product lines and customer types (if applicable)
COA for consolidation and the level of structure required by head office with a balance of autonomy at the local level
Ensure that these reporting structures are signed off by senior management to avoid rehashing the discussions during implementation.
3. Address the key operational components of forecasting and inventory management that drive the flow of inventory. This will increase alignment regarding the following questions:
How will sales and inventory forecasts be determined and by whom?
How will DRP and MRP run between facilities?
What will the facility and warehouse structure be?
4. Ensure accurate data management. Data management is the last core item that will integrate the entire organization. Many organizations have a smorgasbord of data due to acquisitions, mergers and quirky historical management decisions. Data management should involve definition of the following:
Who owns the data?
How will the data be cleansed?
What are the IT and business user roles?
Reporting requirements and data management will provide your foundation for data warehousing. From a cultural perspective, data management will encourage teams to work together and help your organization address issues before the software implementers arrive. By addressing these items before the software implementers arrive, your team can have a clear vision for implementation instead of hashing out your vision in front of the software implementers.
Some organizations jump right into ERP selection and implementation initiatives without first fully considering the strategic alternatives available to them. However, some best-in-class organizations are first defining a strategic roadmap before embarking on ERP, CRM, SCM, HCM, or other enterprise software engagements. By taking a more deliberate and measured approach, these organizations are setting themselves up for success without taking on unnecessary costs or risks.
In this clip, a part of a 60-minute recorded webinar, Eric Kimberling will discuss an overview of IT strategy options.
To watch the rest of this recorded webinar, you can register to view it on Panorama’s on-demand webinar page.
ERP implementations often lack a strategic framework, and according to our 2014 ERP Report, take longer than expected, cost more than expected and fail to deliver expected business benefits. We’ve found in our years of implementation experience that the term “strategy” is too often missing from the vernacular of CIOs and CFOs about to embark on their ERP implementation strategies.
Although not many organizations are particularly good at defining their IT strategies, this is an important step in the process of identifying the best path forward with new ERP software. Below are some of the key questions that need to be defined:
Are we more interested in a single system or best-of-breed?
Do Tier I or Tier II ERP systems make the most sense?
What type of deployment option is best for us?
What do we want to outsource vs. insource?
What is our phasing strategy?
What organizational change management strategy should we develop?
How much will we standardize business operations across our various locations and business units?
Do we want to change the software to fit our business, change our business to fit the software or a combination of both?
These are just a few of the many important strategic decisions that need to be made prior to an ERP implementation. It is far too easy to jump into an ERP project and start making decisions that are not necessarily aligned with a sound, longer-term IT strategy. Answering these and other important strategic questions can be difficult without the right expertise and mindset.
To get started, below are a few things to consider and as you and your team begin making key strategic decisions and navigating your potential IT strategy for the future:
Assessment of your current IT landscape. The first step in any effective IT strategy is to assess the strengths, weaknesses and opportunities related to your current environment. You will want to benchmark your current IT situation to other organizations and best practices to prioritize the various opportunities for improvement. For example, this assessment should evaluate your current enterprise systems, physical infrastructure, data, skills and competencies among your IT staff, and a host of other considerations. Only by knowing where you are starting from can your team define the best path to where you want to be.
Alignment of IT with your current corporate strategy. Though CIOs and IT team members are important in helping the organization accomplish its long-term objectives, too many CIOs are disconnected from their organization’s overall strategy. For example, we have seen ERP project teams deploy decentralized and customized implementation strategies across their various businesses when the organization’s stated strategic objective is to standardize and centralize the business operations. Decisions regarding your ERP implementation should always be made in the context of overall company objectives and be supported by those longer-term goals. Without that alignment, your ERP implementation is more likely to be a troubled project that fails to deliver expected business benefits.
Potential strategic scenarios. Once your current IT landscape is analyzed in the context of your organization’s longer-term objectives, it is then appropriate to identify potential strategic scenarios to support the overall vision for the company. We recently worked with a multi-billion dollar organization that evaluated several potential (and diverse) options, including outsourcing their IT department, upgrading and better integrating their current systems, replacing their current systems, and standardizing operations across their global locations. Each was a potential means to achieve their overall strategy – including strengths, weaknesses and tradeoffs for each. In order to define feasible scenarios, it helps to look at what is happening in the industry and what tactics other organizations like yours are deploying.
Business case and ROI analysis. Ultimately, the strategic scenario your team chooses will be heavily influenced by the potential costs, benefits and return on investment of each. It can be easy to make an emotionally-charged decision – such as, “Our current systems don’t work correctly, so let’s go get a new ERP system” – but these potential scenarios should be evaluated in a rational, quantitatively-focused way to ensure that emotions don’t dictate the chosen approach. These quantitative comparisons of various scenarios should also consider long-term hidden costs, such as the technical and organizational costs of maintaining the particular solution. At the end of the day, your executive team and board will want to see how the costs, benefits and ROI stack up for each potential scenario you are considering.
The three- to five-year strategic roadmap. As much as we would all like to transform and improve our businesses overnight, successful initiatives are typically more of a multi-year process. Your final output from the strategic process should be a three- to five-year roadmap outlining the implementation strategy and key milestones critical to the success of the overall transformation. It is important to remember to include the following key components in your roadmap: what types of solutions will be deployed, how the organization will need to change, expected business benefits, business process reengineering strategy and the organizational change management plan.
These and other key strategic topics are covered as part of our proprietary PERFECT Plan™ IT Strategy Methodology, which we recommend and deliver for our clients that are a bit more focused on the long-term success of their various ERP initiatives. While some organizations can certainly succeed without this important step, the odds of success are much greater with the above items in mind.
To empower customers to innovate, simplify and move toward a software-defined data center architecture, SAP AG and VMware today announced that the SAP HANA platform on VMware vSphere® 5.5 for production use has been released to customers. By combining the power of SAP HANA with VMware vSphere 5.5, a foundational component of VMware vCloud® Suite, customers can innovate and simplify their data centers by achieving faster time-to-value, higher service levels and lower total cost of ownership (TCO).
“SAP HANA has led the market as the real-time enterprise platform by driving IT simplicity and by enabling breakthrough innovations for business,” said Bernd Leukert, member of the Executive Board of SAP AG. “Together with VMware, we are enabling customers to operate their SAP HANA-based mission-critical applications in virtual environments with confidence and to accelerate their journey to software-defined data centers and ultimately to the cloud.”
“Our customers are evolving their IT infrastructures from physical environments to a software-defined data center architecture and they are looking for solutions that provide agility, high availability, elasticity, efficiency and control for their most mission-critical and demanding in-production enterprise environments,” said Pat Gelsinger, CEO, VMware. “The SAP and VMware partnership is truly transformative. We are delighted to further extend that partnership and answer those customer needs by certifying SAP HANA for production use on VMware vSphere 5.5.”
“AMG-Mercedes is now live in production with SAP HANA and VMware vSphere 5.5 with a 1TB memory configuration, accelerating our move to a software-defined data center,” said Reinhard Breyer, CIO, AMG. “We believe virtualized SAP HANA with VMware vSphere could be the key to our future, as we move to cut operational costs and simplify our data center operations.”
“SAP HANA on VMware vSphere is in production at EMC to run our next-generation SAP ERP system, and it is delivering tremendous value to our company,” said Bill Reid, senior director, IT, EMC. “We have increased capacity of SAP HANA five times without growing headcount, are experiencing 99.9 percent uptime, can deploy new SAP HANA instances in minutes and are realizing significant OPEX and CAPEX reductions.”
SAP HANA support of VMware vSphere 5.5’s virtualized environment will help further simplify and streamline data center operation for customers implementing a data center virtualization strategy. It will also accelerate provisioning of new SAP HANA instances for production use. SAP HANA customers can benefit from increased infrastructure utilization, agility and productivity with the combined solution.
SAP HANA on vSphere has been released to customers on certified SAP HANA appliances or on SAP HANA tailored data center integration application-verified hardware.
Up to 1TB and 32 physical cores (64 virtual cores) per VMware vSphere instance are supported
SAP HANA supports VMware vSphere capabilities for management of customer system landscape, including vMotion®, Distributed Resource Scheduler™ (DRS) and VMware High Availability (HA)
Additional deployment best-practices and consideration are available via the SAP Notes tool andwww.saphana.com.
SAP and VMware intend to continue their strong collaboration and deliver more advanced capabilities of SAP HANA on virtualized environments providing more deployment options to SAP HANA customers.
“By extending Capgemini and VMware’s next-generation enterprise cloud orchestration and management platform to support SAP solutions, we plan to be able to help our clients improve their TCO, accelerate the adoption of SAP HANA and ultimately optimize the business value of migrating to a new platform,” said Olivier Sévillia, CEO Application Services, Continental Europe,and member of the Group Management Board of Capgemini. “Capgemini’s industry solutions from SAP are available on the SAP HANA platform, and can now be hosted on a highly available virtualized VMware vSphere infrastructure.”