We are entering a third era of enterprise IT

IT Craftsmanship IT Industrialization Digitalization

Focus Technology Processes Business Models

Capabilities Programming, systemmanagement

IT management, servicemanagement Digital leadership

Engagement Isolated, disengagedinternally and externally

Treat colleagues ascustomers, unengaged

with external customers

Treat colleagues aspartners, engage external

customers

Outputs & outcomes Sporadic automation andinnovation, frequent issues

Services & solutions,efficiency & effectiveness

Digital business innovation,new types of value

We are here

Classicism• 1980s to early 1990s• Classic “best of breed”

applications• Driven by market and

user immaturity• Happy users but

integration and analyticsnightmare

Modernism• Mid 1990s to mid 2000s• Megasuites rule, ERP takeover,

centralised IT• Driven by vendors, users

increasingly frustrated• Integration trumps

agility and fit torequirements

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

support challenges

Simplicity

Costsaving

Onecompany

Rationalise ITapplications

Yesterday: ERP was supposed to solve all our problems…and create value!!

Today: Monolithic ERP spiraling to irrelevance?

Go liveparty!

Can we getfunctional changes?

Wait for the next upgrade.

Can I connect viamy mobile device?

That's going to be difficult.

We need you to supporta new business initiative — FAST!

You do realizethis is complex?

Why is it so difficult just to create abasic

requisition? I want an app storeapp!

It isn't difficult. You got training.

We need budget for an upgrade.

Why is our ERP system soexpensive to run, can we

switch to something else?

Our ERP is falling into dis-use,

I am buying Saas!

We've just released anew business release.

Business leaders &process owners

Business-driveninnovation

Casualusers

User experiencesimplification

Informationusers

Fact-basedbusiness

Traditionalpower users

Processexcellence

Who is disillusioned with ERP?

Most ERP implementations focus on the needs of transactional power users

Traditionalpower users

Processexcellence

Informationusers

Fact-basedbusiness

Casualusers

User experiencesimplification

Business leaders &process owners

Business-driveninnovation

The Nexus of forces impacts ERP,especially disillusioned users

Social

Mobile Cloud

Information

SAP in the cloud:no longer a single product suite

Social people to people collaboration

Business network business to business collaboration

Managed cloud

SAP Businesssuite on HEC

BW onHEC

From SAP or partnersPeople Customer Money

$¥ €

Supplier Business

Cloud suitePublic cloud applications SAP Hana

Partner / ISVApps

Hana CloudServices

• Database• Infrastructure• Platform

Hana marketplace

Oracle in the cloud:no longer a single product suite

APPLICATIONSCLOUD

ERPcloud

CXcloud

HCWcloud

Current technology trends representtwo complementary goals

Bi / Analytics 1 1

Infrastructure & data center 4 2

Mobile 5 3

ERP 2 4

Cloud 3 5

Networking, voice and data comms 6 6

Security 7 7

Digitalisation / Digital marketing 8 8

Industry specific applications 10 9

Customer relationship management 11 10

Legacy modernisation 9 11

Collaboration - 12

Innovation & growth 12 -

Ranking based on how many CIOS cited each as a top-three new spending priority for 2014

Renovatethe core

Exploitthe new

SA Global

The future looks increasingly cloudy

% of 2011 surveyrespondents

% of 2014 surveyrespondents

In 2011 and 2014, 23%said ”never"

When will more than half of your business run on public* cloudinfrastructure + SaaS?

Postmodern ERP:it’s no longer “one size fits all”

Other

Fin. Services

Govt. & Edcn.

Comms. & Services

Manufacturing

Already done so Within 3 years 3 to 5 years 5 to 10 years > 10 years Keep core ERP on premises Don't know

100%0%

Public cloud is being deployed to plug the agility gap

Payback

Agility

50%

Cost14%

Innovation13%

Quality10%

Other12%

Main reason

22MONTHSSaaS

72%

IaaS47% PaaS

43%BPaaS17%

SA: 80%

25%Have madesignificant cloudinvestments

SA: 50%SA: 60%

SA: 10%

SA: 20%

The changing of the guardthe mega-vendors will no longer dominate

Oth

er

Which technology company has been the mostinfluential over the past 10 years?Which will be in the next 10 years?

Nextgenerationinformationcapabilities

What does this all mean?Within 5 years, hybrid ERP environments will be the norm?

PostmodernERP/Apps

Morediverse

partnerships

Hybrid Cloud

Postmodern ERP scenarios:the “HOOF” model

Conventional

Maverick

Tactical Strategic

Flip model(5 to 15 years, or never)

Hybrid reality(now, next 5 years big shift)

On-premises monolith(dominant state today)

Outsourced everything(5 to 10 years)

Firstly . . .

is a company… not a strategy

Key postmodern ERP strategy drivers

Start

Monday morning• Inventory any user-driven SaaS applications

that cross the ERP boundary• Discuss the impact of postmodern ERP with

your ERP leaders, application strategists andenterprise architects

Next 90 days• Agree your target “HOOF” model

scenario• Review your ERP vendor’s roadmap and

identify how it is being impacted bypostmodern ERP

Next 12 months• Update your ERP strategy to accommodate

postmodern ERP• Revise roles and responsibilities in

ERP CoE to take account ofpostmodern ERP

Questions

Recommended Gartner research

Develop a Strategic Road Map for Postmodern ERP in 2013 and BeyondA Drobik, N Rayner (G00252735)

Predicts 2014: The Rise of the Postmodern ERP and Enterprise ApplicationsWorldD Ganly et al (G00259076)

How to Develop an ERP StrategyD Ganly, N Rayner, C Hardcastle (G00259897)

Best Practices for Managing Integration in a Hybrid Cloud and On-Premises ERPWorldN Rayner(G00251013)

Survey Analysis: Adoption of Cloud ERP, 2013 Through 2023N Rayner (G00261104)

For more information, stop by Gartner Research Zone.

"IT sourcing strategies must be structured to enhance ITagility and address the needs of digital businesses.

Organisations that don't adapt their strategies, and thecompetencies required to execute them effectively,

will fail to achieve the value opportunities presentedby a highly digitalised future.”

"The reality is that you do have to operate at two speeds, andsome of that you do by creating dedicated teams for each.

Focusing on the big systems, making them run smooth, while atthe same time having disrupters to innovate, together with

marketing and the customer, exploiting digital."Willem Eelman, global CIO, Unilever

Build capacity - bimodal IT offers a way to get unstuck

Waterfalldevelopment

Known vendorsStrong governance

Minimised riskTechnology teams

Traditional mode Postmodern mode

Stuck in the middle”fit for no one"

Agile dev.Small/

innovative partnersLightweight"Just good

enough" governanceManaged risk

Multi-disciplinary teams

Postmodern ERP - When speed & innovation isneeded, or there is a high degree of uncertainty

Legacy ERP