Reinventing the ERP engine

I recently had the opportunity to attend a conference of a major ERP (Enterprise Resource Planning) vendor to learn about technology advances on the horizon and meet with top executives from across the globe, both those just exploring the capabilities of ERP systems, and those with multiple implementations under their belts. While I’m always interested in new technical capabilities, what really captured my attention was hearing how technology leaders are taking advantage of the reinvented ERP engine. 

Let’s face it. Those three letters – ERP – can be very scary to the uninitiated and downright frightening to anyone who’s been through a failed implementation. Historically, ERP implementations have been expensive and time consuming, and are seen as rather pedestrian when compared to newer technologies like social, mobile, and cloud. Often, technology leaders new to the world of ERP want to know what they can minimally get by on, so they can move on to focus the latest and greatest tools to hit the market and appeal to their business users. Seasoned veterans want to know how they can improve their systems and keep up with new technology without starting the process from scratch. Technology leaders find themselves in a crunch between either maintaining traditional ERP systems, and sustaining business operations, or offering their business users the latest technologies to gain competitive advantage. The reinvented ERP engine puts these polar viewpoints to rest, and delivers far more than in the past.

More ubiquitous, more responsive, and more flexible than ever before, the engine of ERP is the force behind many newer technologies. Reinvented to handle an event driven rather than process driven world, the ERP engine now readily responds to changes in conditions, surges of information, and explosions of service interactions. Bolt on peripherals have been assumed within the ERP engine; connections have been made to smartphones, your inbox, and social channels; and core workloads run on less gear, more quickly. And, you don’t have to scrap your entire system to achieve the benefits of the new engine- make technical upgrades to overhaul the core function and drive efficiencies, then add on leading-edge solutions that offer competitive advantage and reshape or reimagine how the business can run.

So, how are businesses taking advantage of this shift? One mobile service carrier was able to meet their marketing goal of increasing the number of customers upgrading to smartphone data plans. Understanding if customers responded to service offers had been taking up to a week. By implementing a scalable analytics solution to provide customer insights in near real-time, taking advantage of in-memory technology that now supports data processing and analysis within seconds, the company significantly shortened the time needed to analyze customer data, allowing the marketing team to make more timely decisions on offers.

The reinvented ERP engine is more ubiquitous, more responsive, and more flexible than ever before. What will your business do differently now?

For more information on this topic download the Tech Trends 2013 chapter, Reinventing the ERP engine, or watch the video.

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Bill Allison is the Global Consulting Technology Leader, responsible for the delivery of full lifecycle technology services to member firm clients around the world.  A principal with Deloitte Consulting LLP since 1999, Bill has more than 25 years' experience in the analysis, design, and implementation of information systems, systems strategy, and business process improvement and has worked with some of the largest, most complex technology clients in the world. Currently, he acts in a risk and advisory role on many of Deloitte LLP's most significant engagements.

From strategy to execution - Helping clients solve their most critical challenges

In virtually every conversation we have with our clients, we hear about the same core challenge: Organizations are facing near-constant change, and the time they have to react and make decisions is getting shorter.

Whether the challenge is rooted in the global economy, new regulations, emerging technology or something else, companies must gather as much information as possible, conduct vigorous analysis, and decide whether to shift strategy, all with increased outside scrutiny. Every decision is analyzed in real-time, so the room for error is getting smaller and every mistake is magnified.

That’s why we are so excited to welcome the Monitor team to Deloitte. This transaction combines the strengths of both our networks – including thought leadership, talent, resources, and global reach -- to further solidify Deloitte as a worldwide leader in strategy consulting.

Eyes on the sky: How cloud computing is shaping society

Next week global leaders from DTTL and Deloitte member firms are meeting in Davos at the 2012 World Economic Forum to discuss the important issues of the day. While we can’t all attend, I have the real privilege to participate in a local Davos event in New York for clients of the U.S. firms. I’ll be speaking about cloud computing, and how it is not just a technology phenomenon, but is shaping society itself.

As someone who has been working with leading innovators for many years, my sense is that cloud computing represents a once-in-a-generation convergence of technologies: high-speed broadband, large-scale data centers, and flexible virtualization software. Working together as “cloud computing,” these forces are driving one of the most important global technology transformations impacting on many types of business, political, and social structures.

Out with the old, in with the old

In his first-ever blog to start the new year, Simon Holland, Global Head of Strategic Change and Organizational Transformation, argues that it’s time for a radical review of leadership development programs

Most leadership development programs do little more than maintain the status quo. Long-term organizational change depends on behavioral change—and that depends on in-depth understanding of individuals and what motivates them

Happy 2012. Given up giving up smoking/chocolate/drinking yet? Don’t worry. You’re not alone. According to research by British psychologist Richard Wiseman, often quoted at this time of year, more than four-fifths—88 percent to be exact—of all New Year’s resolutions end in failure. At this rate, the only resolution worth making is not to make a resolution.

Why is change so difficult for us? Why can’t we stick at things—even when we know they’re good for us?

I’ve been thinking about these kinds of questions a lot lately as colleagues get to grips with the problem of leadership development—and how it can be solved. Didn’t think leadership development needed fixing? Think again. Research by LEAD—Leadership Excellence at Deloitte—finds that only a puny 4.3 percent of leaders rate their organization’s leadership development as “very effective.” Most corporate efforts to make us better at our jobs fail to make a difference in the long term—much like those resolutions. Back at the office, lessons learned during a development program disappear faster than needles from the Christmas tree.

When the consultant met Claus

The Bush House Telegraph
News and views from the Deloitte Center for Strategic Leadership, Bush House, London

 

In its final blog for 2011, the Deloitte Center for Strategic Leadership marks the festive season with something a little different: an exclusive interview with the busiest boss in the world.

Working for the world’s biggest professional services firm can be tough. The hours. The globe-trotting. The expenses forms…

But it has its privileges.

Last week, a member of the Deloitte Center for Strategic Leadership team was lucky enough to meet one of the best-loved leaders in the world. A consummate strategist who has, for generations, controlled one of the biggest distribution networks in the West, using only the most basic technology and leaving minimal carbon footprint on earth, he shared his leadership secrets in a rare interview. And, as our gift to you this Christmas, we have pleasure in reproducing a transcript below.

Happy holidays!

Mobilizing healthcare resources – TUNAJALI “We Care” program

The TUNAJALI "We Care" program is an initiative supported by the U.S. President’s Emergency Plan for AIDS Relief, through USAID, to assist the Government of Tanzania. Deloitte Tanzania implements the TUNAJALI HIV/AIDS Care and Treatment Program in collaboration with Family Health International and Cardno Emerging Markets, and this was  one of several client case studies recently highlighted in the Deloitte 2011 Annual Review.

It has been scientifically proven that the virus that causes AIDS, HIV, continuously mutates. Full adherence to HIV treatment is key to suppressing the spread of HIV. Poor adherence to HIV treatment has the dangerous potential of generating drug-resistant HIV viral strains, which could subsequently be transmitted.

People living with HIV/AIDS (PLIV) on anti-retroviral therapies (ART) must take medication daily for the rest of their lives. The TUNAJALI program experience shows that these patients are highly motivated to take medication initially, but that that changes over time. After nearly three years of treatment, some supported Care and Treatment Clinics (CTC) started experiencing notable losses of patients on ART. Some of the high volume (over 5,000 patients) at CTC sites were reporting Lost-to-Follow-up (LTF) patients between 30- to 40 percent of their enrolled PLHIV. A patient is considered LTF after two to three attempts to contact them within a three-month time period have failed. This raised serious concerns about long-term patient adherence to medication. It was clear efforts had to be made to identify the “lost” patients and to take reasonable steps to prevent “losses” of patients in the future.

The shock of the old

The Bush House Telegraph
News and views from the Deloitte Center for Strategic Leadership, Bush House, London

Forget innovation and originality, in the work of the consultant the old leadership lessons matter most.

A colleague recently complained to me that we don’t do anything new at Deloitte, just “re-visit old truths.”

“Would you prefer it if we re-visited old lies?” I replied—in an authoritative, yet avuncular way.

“Hmmm…” she murmured and returned, flat-footed, to her desk.

Had she been in the mood—and had I more time—I’d probably have treated her to a few “old truths” about consultants. But her loss, dear reader, is your gain.

The fact is we seldom trade in new things. Scientists offer discoveries and breakthroughs; consultants, generally, experience and insight.

In my field, leadership, a subject anatomized for thousands of years—think of the Tao Te Ching and The Republic—there’s little we can come up with that hasn’t been thought of before. Our job is not to re-invent the wheel but to add new value to those old truths—and help clients apply the lessons of leadership in ways that will benefit their organizations. We’re about practical solutions for old problems—transformations, possibly; revolutions, no.

Why do old problems keep recurring? Why can’t leadership lessons just be learned once?

To SKU or not to SKU: Is that the question?

Today’s expanding global marketplace brings opportunity. For a business’s supply chain function, it can also bring on an ugly side: complexity. For customers, flexibility and quick response are not appreciated — they’re expected. That requires a supply chain that can withstand the impact of economic trends (i.e., recessions), government policy (i.e., taxes and tariffs), and the unexpected (i.e., product recalls). Factors like these can disrupt supply/demand patterns or ruin a well-earned reputation, leading to considerable damage to shareholder value.

Looking at cost, quality, cycle time and customer service metrics from our recent global study on supply chain performance, Deloitte’s Global Benchmarking Center gathered insights across the three drivers of shareholder value: revenue growth, operating margin and asset efficiency. Supply chain activities play a major role in shaping these drivers, but even the best supply chains can’t have it all. 

For example, our research suggests that new products – also known as SKUs or stock-keeping units—are required to maintain and grow revenue levels, but that can also lead to greater global supply chain complexity. We’ve found that SKU proliferation, the practice of creating “new and improved” versions of products, drives both indirect supply chain costs and staffing levels. These are costs associated with activities that are unrelated to production, such as maintenance, operations, sales, etc.

In other words, as the number of active SKUs increases, indirect supply chain costs and staffing levels increase as well. True, more active SKUs can contribute to a higher share of revenue.  But the added complexity can diminish returns. In addition to the higher staffing levels needed to support new SKU introduction and ramp to volume, the trade-off for a higher number of new SKUs can also lead to reduction in forecast accuracy, which then ripples through the supply chain to impact inventory levels and perfect order delivery rates; that is, how often items are shipped complete, on time, in perfect condition and with perfect documentation.

Is there good news? Of course. It’s all about the overall global business strategy. Structure your supply chain around the drivers that make the best sense for your business’s goals and objectives. Supporting strong revenue growth may mean some sacrifices in asset efficiency; but that may suit the business strategy just fine. Understanding the trade-offs is key to making the most effective decisions for your organization.

Looking for additional discussion? A recent Deloitte Debate offers a point/counterpoint perspective on the merits of supply chain performance benchmarking and its affect on shareholder value.

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Rick Roth is a principal in the Strategy and Operations (S&O) Practice in Atlanta, and the U.S. Leader for the firm’s Global Benchmarking Center (GBC).

As used in this post, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP.  Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

The never-ending cost squeeze: Benchmarking vs. gut reactions

Yes, the economy is showing signs of life, but we’re seeing executives worldwide still searching for ways to close cost gaps. “It seems like I’ve cut costs as much as I possibly can, but am I missing something?” “What are my competitors doing that I’m not?” “Is there any more excess I can squeeze out that won’t hurt our ability to rebound fast?”

These concerns are especially understandable in the high-tech industry. The global downturn hit high-tech executives hard, and on top of that, we’re seeing a fundamental shift from businesses to consumers as drivers of new growth and competition. More users, more client devices and an expanded cloud infrastructure to serve them are leading to an increased focus on communications and mobile products.

This shift is changing the global high-tech landscape and creating operational challenges—market expansion, higher volumes, faster product introductions, etc.—that directly affect finance organizations.  As the high-tech industry comes out of the downturn, we believe cost containment remains the most important factor for improving margins.

Using our latest benchmarking data on finance function performance – specific to global high-tech companies – Deloitte’s Global Benchmarking Center identified performance gaps and areas that show the most promise for cost improvement.

According to our study, we identified $8.8 million per billion in revenue in potential cost-improvement opportunities, with much of the savings possibilities in process costs—labor and outsourcing. Examining those process costs further, the study shows a cost gap of $7.9 million per billion in revenue, with 33 percent of this opportunity in labor and outsourcing costs in the transaction processing function.  Download our executive summary for additional insights.  

OK, so now what? Gaps like these point to significant potential for cost reductions, not only for short-term relief during this economic downturn, but also for the long-term process efficiencies needed to jump start growth upon recovery. By comparing their organization’s performance against industry-specific measures like these, executives worldwide can get the help they need to make fast, effective decisions based on relevant, objective information—not anecdotal experience or gut reactions. The answer isn’t always to be best in class; rather, the goal should be to find the position that makes the most sense for the organization’s overall business strategy.

A good first step? Download our 2010 Finance Book of Metrics for Technology. Then think about where your opportunities could be hiding.

Feel free to share your insights on benchmarking. Have you ever participated in a study? If so, did you get the insights you expected?

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Rick Roth is a principal in the Strategy and Operations (S&O) Practice in Atlanta, and the U.S. Leader for the firm’s Global Benchmarking Center (GBC).

As used in this post, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP.  Please see about Deloitte for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.