maximising your return on erp & b2b integration · maximising your return on erp & b2b...
TRANSCRIPT
Maximising Your Return on ERP & B2B IntegrationMark Morley, Industry Marketing Director
Slide 2 | © 2011 GXS, Inc.
Today’s Agenda
• Introduction
• AMR Research ERP Study
• How Cloud & B2B Outsourcing help ERP/B2B Integration Projects
– Introduction to cloud based infrastructures
– B2B Outsourcing, a GXS perspective
– Implementing an ‘ERP Firewall’
• Real World Case Studies
• Questions
Slide 3 | © 2011 GXS, Inc.
Introduction
• Managing the integration of ERP and B2B
systems is complex
• ERP and B2B projects are implemented
across internal and external users
• Integrated ERP and B2B systems
introduce significant operational
efficiencies
• ERP B2B integration provides improved
visibility into cross enterprise business
processes
Slide 4 | © 2011 GXS, Inc.
ERP Systems Need to Support Global Operations
Companies must manage a global network of manufacturing, sales, marketing, engineering and finance centres
Manufacturing
Back Office
Sales
GlobalHQ
RegionalMarketing &
Finance
EngineeringR&D
Manufacturing
Sales
Sales
Manufacturing
RegionalMarketing &
Finance
Back Office
Manufacturing
Sales
EngineeringR&D
EngineeringR&D
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AMR Research ERP Study
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Third Party Research Institutions Validate the Value of B2B Outsourcing
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The Need for ERP to B2B Integration
• There are a number of key drivers for integrating ERP and B2B systems
– Significant amounts of ERP data is sourced from outside a company
– Poor data quality can compromise the value on an ERP implementation
– Poor B2B integration limits visibility into key business processes
– High availability of external B2B communications is critical
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Key Findings
• 48 percent of respondents said they had lost B2B connectivity
• 34 percent of respondents said B2B integration staff were supporting ERP related projects
• 34 percent of the data feeding ERP systems is generated externally
• 29 percent of respondents said that they had to prematurely terminate B2B testing programs relating to external trading partners
• 79 percent of respondents have exceptions or problems on more than one percent of inbound B2B transactions
• 80 percent of respondents plan to move to highly consolidated ERP environments
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Companies Undertake Many Different Types of ERP Related Projects
Retire Legacy Mainframes
Rapid Company Growth
New Installations
Consolidations
Upgrades Extensions
Merger & Acquisitions
Shared Services for Back Office
Vendor End of Life Support
Expanded Feature Set
Supply Chain Planning
Treasury or Bank Relationship Management
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ERP Deployment
44%
24%
22%
10%
2 to 4 regional systems
Single global instance
Multiple instances across business
units and subsidiaries
One global instance per line of
business
28%
38%
20%
14%
Today In 3 Years
Q. Which of the following best describes your current ERP deployment?Q. Which of the following best describes what your ERP deployment will look like in 3 years?
N =121 Respondents
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Percent of B2B Staff Supporting ERP Related ProjectsQ. On average, what percentage of your B2B integration staff is supporting initiatives or projects related to ERP?
3%
15%
30%
19%
15%
19%
1% to 9%
10% to 20%
21% to 30%
31% to 40%
41% to 50%
Greater than 50%
Average % of B2B integration staff supporting ERP projects:
34%
N =121 Respondents
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• ERP uses information from various
external sources - eg customers,
logistics providers, financial
service institutions
• Information derived from different
global standards is difficult to
manage
• Integrating trading partners to
remote offices & plants is complex
Externally Sourced ERP Data
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ERP Data Originates Outside the EnterpriseBut is External Data High Quality & Conforming to Corporate Standards?
Sales Financials ServiceSupply ChainManufacturing
Customers
Distributors
ContractManufacturers
DirectSuppliers
FreightForwarders
OceanCarriers
FinancialInstitutions
CommercialInsurers
3rd PartyLogistics
ForecastPoint of SaleSales Order
Inbound MaterialsInventory
Work In Progress
Shipment StatusProof of DeliveryProduct Catalogs
Bank StatementsRemittance Advice
Trade Confirmations
Repair OrderWork Order Status
Warranty Claim
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Data Feeding ERP Systems
66%
34%
Generated internally
Generated externally
Customers/ distributors
43%
Supplier/ contract manufacturers
31%
3PLs17%
Other9%
Data feeding ERP systems* External data feeding ERP system
* No statistical differences by segment
Q. What percent of the data feeding your ERP system is generated internally vs. externally?
Q. What are your plans for technologies to support workforce management and procedures in the next 2 years?
N =121 Respondents
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Data Quality Compromises ERP Value
• Externally sourced data is rarely
checked before it enters ERP’s
• Once the information is in an ERP,
quickly spreads across the
enterprise and beyond
• Inaccurate data affects downstream
business processes
• Inaccurate data leads to incorrect
electronic documents
Slide 16 | © 2011 GXS, Inc.
External Transactions Requiring Exception Handling or Rework
21%
33%
26%
20%
Less than 1%
1-2%
3-4%
More than 5%
79% of respondents said that more than 1% of transactions needs reworking
If a company processes 1 Million transactions per year this represents 10,000 transactions that will need reworking
Q. What percentage of the transactions originating from external trading partners which are processed directly into your ERP system require exception handling or error processing?
Extensive Rework
N =121 Respondents
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Policy Changes with Trading Partners Resulting From Changes to ERP System
69%
47%
38%
11%
1%
Enforcing higher levels of data quality from trading partners
Implementing new transaction types with trading partners
Measuring new KPIs and issuing penalties to supplies for non-compliance
No changes to scope of B2B are planned for current ERP projects
Other
Q. As a result of changes to your ERP system, which of the following changes is your company making to policies with trading partners?
N =121 Respondents
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High Availability in B2B is Critical
• Ensuring B2B information is
available 24/7 is crucial to the ERP
environment
• B2B platforms ensure that externally
sourced information can be used by
internal business applications
• Lack of B2B information leads to
production line stoppages
• Business critical decisions need to
be made in real-time
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Loss of B2B Connectivity
No52%
Yes48%
79% of Automotive companies have experienced loss of B2B connectivity
Loss of B2B connectivity
Q. Has your company every experienced a loss of B2B connectivity that has impacted your manufacturing operations?
Q. How important/effective is your company’s contingency plan for mitigating risk of losing B2B connectivity to manufacturing operations?
73%
48%
Importance
Effectiveness
Importance/Effectiveness of Contingency Plan
Gap = 25% !
Significant Differences
N =121 Respondents
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Policy for no Scheduled ERP Downtime
No26%
Yes74%
Q. Does your company currently have a policy for no scheduled ERP downtime for the end of quarter sales periods?
63%74%77%82%
38%26%23%18%
Food & Beverage (n=32)
High Tech (n=39)CPG (n=32)Auto (n=28)
No
Yes
Industry
N =121 Respondents
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Programme Management
• Integrating ERP and B2B requires
constant monitoring to ensure
problems are resolved efficiently
• Changes made to an ERP system
may need to be incorporated into
the B2B platform as well, or vice
versa
• Need to ensure that ERP/B2B
integration platforms are tested
and deployed correctly
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35%
48%
17%
Basic testing of most obvious, common tasks
Robust testing of common and obscure, less-used functions
Testing efforts were terminated prematurely to meet externally
imposed go-live deadlines
Testing Approach on ERP Projects with B2B Integration
Q. During the course of your ERP projects that included significant B2B integration, which of the following best describes the testing approach performed with internal participants and external trading partners?
36%
35%
29%
Internal Participants External Trading Partners
N =121 Respondents
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Changes to B2B Integration Strategy as a Result of Changes to ERP System
59%
35%
25%
12%
11%
Consolidating multiple, disparate B2B gateways onto a common platform
Standardising B2B technology enterprise wide on a single vendor
Changing the primary vendor used for B2B integration
Oursourcing B2B integration to a third party organization
None
Q. As a result of changes to your ERP system, which of the following changes has your company also made to your B2B integration strategy?
Significant Differences
29% of Automotive companies said outsourcing B2B integration to a 3rd party
N =121 Respondents
Slide 24 | © 2011 GXS, Inc.
Severity of Delays in ERP Projects Caused by B2B Integration Issues
26%
58%
12%
3%
Major issues were encountered which caused significant delays
Minor issues were encountered which caused small delays
Minor issues were encountered, but caused no delays
No issues were encountered
Companies with major issues/ significant delays (n=32)•34% Automotive•28% Food & Beverage•28% High Tech•9% CPG
Q. Which of the following best describes the issues you may have encountered with B2B integration which caused a delay to ERP projects currently underway or previously performed?
N =121 Respondents
Delays in both B2B planning and integration can potentially cost companies in excess of
$45K a day or $1Million per month…..
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How Cloud & B2B Outsourcing Help ERP/B2B Integration Projects
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B2B is Moving to the Cloud...
Business Applications
ApplicationInfrastructure
Compute & Storage
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By 2015, cloud-based solutions will be growing at a faster rate than on-
premises solutions.
By 2015, most enterprises will have part of their run-
the-business software functionally executing in
the cloud, using PaaS.
By 2015, most enterprises using PaaS services or technologies will have a hybrid environment in
which internal and external services are combined.
Source: Gartner, January 2011
According to Gartner, a New Continent is Emerging.....
Slide 28 | © 2011 GXS, Inc.
How the Cloud Simplifies B2B Complexity
Slide 29 | © 2011 GXS, Inc.
Business Context•Ability to Introspect and Breakdown
Messages in to Structured Objects•Pre-defined document standards•Business user interfaces
Process Orchestration•Manages end-to-end information
flow with conditions and visibility, and coordinates access to shared services
•Tailored Visibility
Data Enrichment•Compute services for transformation•Operational Business Rules and Data Quality
•Extensive libraries
Identity and Control•Pre-wired integration pairs•Global B2B semantics repository
The Cloud Provides IT with Rapid Access to Built-In Expertise and Capabilities
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B2B Outsourcing Experience
Areas of Expertise• Infrastructure• Operations
• Implementation• Support
• Number One Transaction Outsourcing Vendor
• Over 500 customers utilising GXS’ B2B outsourcing services today
• Extensive Transformation Capabilities• Capacity to develop 10,000 maps
annually• Over 30,000 maps and 200 document
types currently in production
• Areas of Expertise:• Programme management• Global network infrastructure• E-Commerce operations management• 24x7 support, visibility and alerts
Slide 31 | © 2011 GXS, Inc.
B2B Outsourcing Environment
Slide 32 | © 2011 GXS, Inc.
ERPApps
SplitOrders
ConsolidateInvoices
ConfirmRequired
Fields
Translate Customer
Data
ConfirmValid Data
Split by Payment
Types
AggregateAccountBalances
Units ofMeasure
TransformCarrierCodes
Out ofSequence
Documents
Conforms toBusiness
Rules
Check within
Tolerances
ConfirmRequired
Fields
ConfirmValid Data
Customers and Distributors
Direct & Indirect Material Suppliers
Logistics ProvidersFi
nanc
ial I
nstit
utio
ns
Link Invoice
to Payment
B2B Helps to Establish an ‘ERP Firewall’
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Data Quality & Compliance Visibility and Operational Intelligence to Ensure Data Quality
Monitors B2B transactions for validation, exception management, analytics and reporting, and score carding. Real-time visibility
─ Proactively track “in-flight" transactions based on a configurable set of rules or criteria to resolve errors before impact to business
Quarantine exceptions─ Reliable infrastructure permits or denies electronic data
interchanges between an enterprise’s applications and external business partners
Community portal ─ Configurable role-based access enables both internal and
external users to view data and take action online Back-office integration
─ GXS Trading Grid provides a consolidated view of transactional data from all back-office systems
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Data Quality & ComplianceProtecting Mission Critical Transaction Data
IDENTIFYRejectable Document
REAL-TIME ERRORHold in Exception Queue
WARNINGPass through and Log
FIXCorrect then Retransmit
1 2
34
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SAP Integration Expertise
Over 100 Managed Services customers with direct integration to SAP
SAP Labs testing and extensive experience with SAP integration
─ Financials─ Supply Chain Management─ Advanced Planning and Optimisation
Direct connections to hundreds SAP production instances
Connectivity options - FTP over VPN,SAP ALE
IDOC status messaging – provides immediate verification or error status
SHPMNT03INVOIC01PEXR2001PEXR2002FINSTA01
DELVRY01ORDERS01PROACT01PRICAT01TRXSTA01
Example SAP IDOCs Supported
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Over 25 Managed Services customers with direct integration to Oracle ERP
Extensive experience with Oracle e-Business Suite ─ Financials─ Transportation Management─ Warehouse
Experienced with integration to PeopleSoft, JD Edwards and Retek
Best practices for change management after patches, testing lifecycles, internationalisation
Experienced with Oracle e-Commerce Gateway and Transaction Interface files
Oracle Integration Expertise
Example Oracle TIFs SupportedPOI
POCIPOAO
INISBNIASNI
ADVOPYOCATI
Slide 37 | © 2011 GXS, Inc.
Benefits of Using B2B Outsourcing for ERP B2B Integration Projects
• Ensures projects remain on time and under budget with
scalable resourcing and ERP best practices
• Achieves faster ROI from new modules and transaction
types with rapid on-boarding of trading partners
• Less risk of connectivity loss impacting manufacturing
operations with high availability architecture
• Improves data quality for 1/3 of externally originated
information via ERP firewall
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Provides a Highly Available Platform
• High, 99.95% available, B2B infrastructure with at
least two data centres providing built in redundancy,
disaster recovery and fail-over capabilities
ERP systems need to be
able to receive information
from external trading
partners on a 24/7 basis....
Slide 39 | © 2011 GXS, Inc.
Implementing Document Maps
• Extensive any-to-any mapping services and support
for many different types of SAP IDOCs for example
ERP/B2B integration projects
require numerous document
maps to be created and
maintained on an ongoing
basis....
Slide 40 | © 2011 GXS, Inc.
Trading Partner Connectivity
• Mediate between any communications standard and
provide direct connectivity via SAP ALE and SAP PI for
example
ERP systems need to be
connected to numerous
trading partners using many
different global connectivity
standards.....
Slide 41 | © 2011 GXS, Inc.
Managing Trading Partner Communities
• Comprehensive community on-boarding service to
allow trading partners of any size or technical
capability to connect to a B2B Platform
ERP/B2B integration
projects require fast on-
boarding of trading partners,
anywhere in the world.....
Slide 42 | © 2011 GXS, Inc.
Proactively Monitoring Data Quality
• Proactive monitoring of all transactions so that if a
problem is detected it can be resolved before the
customer or supplier is impacted
All external data needs to be
checked for accuracy and
conformance before
entering an ERP system.....
Slide 43 | © 2011 GXS, Inc.
Programme Management
• Dedicated programme managers to monitor the
progress of ERP/B2B projects to address integration
issues as they arise
The complex nature of
ERP/B2B integration projects
requires skilled resources to
keep these projects on
schedule.....
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Provide Global Support
• 24/7 multi-lingual support to address problems as
quickly as possible, anywhere in the world
Today’s ERP environments
cover multiple plants located
in many different regions of
the world.....
Slide 45 | © 2011 GXS, Inc.
Real World Case Studies
Slide 46 | © 2011 GXS, Inc.
Automotive SupplierCustomer Case Study
Company Overview
Tier 1 Automotive supplier, one of the largest in the industry, supplying all major OEMs, with 3000 trading partners around the world
After being divested they had to establish their own B2B environment as soon as possible
Solution Deployed
Business Issues
• GXS Managed Services, including 600 maps and
connectivity to 3000 trading partners
• Full integration with SAP to allow publication of IDOCs
• Programme Managers to co-ordinate 150 change requests
per quarter
• Flexible B2B platform to allow for growth of 30% year on
year
• Difficult economic environment, strong competitive
pressures so needed to reduce operational costs globally
• Needed to fully integrate B2B platform to a new e-payments
solution and ERP system being implemented across their
global manufacturing plants
Slide 47 | © 2011 GXS, Inc.
Computer Server OEMCustomer Case Study
Company Overview
One of the world’s leading providers of computer servers and storage devices
Supply computer equipment to some of the world’s largest data centres. A leading advocate and developer of open source based software solutions
Solution Deployed
Business Issues
• Consolidation of multiple VAN’s onto GXS Trading Grid,
highly available integration platform
• B2B integration to their upgraded Oracle 11i ERP
• Provision of tailored maps to communicate between
proprietary UBL formats to EDI and XML document formats
• Customised business logic to support business activities
with Japanese customers
• Needed to consolidate all B2B traffic across multiple VAN
providers on to one global B2B platform
• Wanted to make the company easier to do business with
their many high profile customers & distributors
• Required full integration to their Oracle ERP system
Slide 48 | © 2011 GXS, Inc.
Clothing ManufacturerCustomer Case Study
Company Overview
One of the world’s leading apparel manufacturers. They design, source and manufacture a range of leading clothing brands
Company consists of six major divisions with products distributed and sold via a network of over 200 leading retailers around the world
Solution Deployed
Business Issues
• Managed the B2B integration with SAP ERP across six units
• Created 280 maps and converted numerous EDI documents
into SAP IDOC format
• Implemented AS2 connectivity with major customers and
managed the migration of EDI transactions from incumbent
VAN provider
• Limited resources to implement a new global SAP
environment while managing their existing B2B platform
• Working with a diverse range of leading global retailers so
wanted to improve the integration and efficiency of their
global supply chain
Slide 49 | © 2011 GXS, Inc.
For Further Information
www.b2bforsap.co.uk
www.gxsinsights.eu
Slide 50 | © 2011 GXS, Inc.
Questions?
Mark MorleyIndustry Marketing Director• Email: [email protected]
• Phone: +44 (0)1932 776040
Slide 51 | © 2011 GXS, Inc.
Thank You for Your Participation!For More Information…
Contact GXS• Web: www.gxs.eu• Email: [email protected]• Phone: +44 (0)1932 776047