Cloud ERP Accenture-Unleashing-Exponential-Evolution PDF
Cloud ERP Accenture-Unleashing-Exponential-Evolution PDF
Cloud ERP Accenture-Unleashing-Exponential-Evolution PDF
Based on the UK ERP Trends Survey by the Accenture SAP Business Group
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INTRODUCTION
HOW TO UNLEASH THE POTENTIAL
OF YOUR DIGITAL INITIATIVES WITH
INTELLIGENT ERP
Technology continues to evolve at an astonishing rate. Companies
are struggling to keep pace with this digital revolution with enterprise
technologies that are inflexible and increasingly obsolete, while
customers are increasingly demanding improved quality, speed of
service and personalisation.
Our recent ERP survey of CIOs across the UK reveals a clear consensus:
they refuse to let core inflexibility impede holistic digital transformation.
They empower their organisation to be future-aligned and core-nimble to
chase business ambitions.
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UNLEASHING
The key to a boundaryless transformation strategy is a relentless focus on
Enterprise Resource Planning (ERP) systems – the systems that run mission-
EXPONENTIAL
critical processes such as financials, planning, HR, supply chain and logistics.
EVOLUTION
When your organisation’s core systems are capable of driving innovation and
agility, then you can sprint ahead of the pack. Rather than being shackled by
out-dated systems that hinder rather than empower, you can make sweeping
changes boldly and be ambitious in your targets.
Chances are, your organisation is already on the path to digital
transformation – focussed on leveraging new technologies in order to cater Overwhelmingly, across industries, ‘digital’ initiatives zone in on customer
to changing customer demands. In the pursuit of a digital experience, though, – facing functions such as marketing, sales, and user-experience, both in
are you also evolving your core systems – the key transactional systems that mindshare and in investments and, since organisations are continually being
your business depends on? If not, you may be limiting the potential of your pushed to improve their engagement with customers, this is not surprising.
digital transformation.
Enterprise IT is, however, a team sport – not a disjointed collection of star
A BOUNDARYLESS DIGITAL TRANSFORMATION players. Forrester, a leading analyst firm, finds an alarming digital divide within
This is how some CXOs are putting the ‘heart’ back into their digital many companies. Marketers develop nimble software to give customers an
transformation – by ensuring that they evolve their core systems in engaging, personalised experience, while IT departments remain harnessed
tandem with their customer-facing systems and – in the process – to legacy infrastructure. In these cases, the front and back ends don’t work
eliminating boundaries. together, and this often results in appealing websites and apps that don’t
quite deliver.2
Consider Sky1 – a leading entertainment company serving 22.9 million
subscribers across Europe. Following the merger of Sky UK with Sky Italia and
Sky Deutschland, Sky’s Group Procurement team, under the leadership of
Fabio Francalancia, Chief Procurement Officer, set out a bold vision: to create
a next generation commercial purchasing function, building on a robust and
digital focussed capability, by providing leading class tools and processes.
They adopted a three-stage transformation that helped the company transform
from the core to the edges. In the first phase, SAP Ariba Sourcing and Supplier
Management was implemented for all three countries to create a single
European platform for strategic sourcing. In the second phase, SAP Ariba
Contracts was deployed for all three countries, extending the already deployed
strategic sourcing capabilities. SAP Ariba Buying and Guided Buying were also
integrated with Sky’s existing ERP solutions in Germany and Italy. The third
phase saw the integration of SAP Ariba applications with Sky’s new SAP ERP on
HANA backend system for a streamlined end-to-end Procure to Pay solution.
Today, Sky is benefitting from a completely transformed experience that brings
together its Procurement and Sourcing functions in a single European solution
that facilitates a simple, smart and elegant buying experience, increases user
engagement and drives process, contract and policy compliance.
1. Accenture Case Study: Sky: Taking Sky’s Procurement Capability into the Cloud (https://www.accenture.com/
t00010101T000000Z__w__/gb-en/_acnmedia/PDF-88/Accenture-Taking-Sky-Procurement-Capability-Into-The-Cloud.pdf#zoom=50) 2. CIOs and the Future of IT, Forrester 2018 (https://go.forrester.com/wp-content/uploads/CIOs_future_of_IT.pdf)
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Digitally pragmatic CIOs and CEOs understand that digitising customer-facing Accenture’s 2019 Trends Analysis has identified five key actions that we believe
systems and processes without revamping or remodelling the underlying core will be crucial in future ERP evolutions. In combination or alone each has the
systems lead to a two-fold disadvantage: unlocking only a percentage of the ability significantly to transform your business models.
company’s potential while sowing the seeds for a ‘legacy of the future’. They
Understanding them may help you to direct your digital transformation
know that a common digital fabric underpins their ability to enable holistic
more effectively, and with fewer constraints.
transformation that can surface data/intelligence from the core right out to
the edges of their organisation.
Vinci Energies, a 10-billion-euro company with more than 830 legal entities,
agrees. Vinci Energies is a division of the largest construction company in
the world (Vinci SA), providing the engineering that connects the United
ERP TRENDS
Kingdom and Republic of Ireland’s electrical, communication and industrial TREAT CLOUD AS THE GATEWAY
networks. The company chose to embrace a holistic business transformation
– and its journey began with the implementation of a new ERP system. More
1 TO MODERNISATION
Develop a nuanced cloud strategy that suits your business
than three years on from its first steps, the company is already close to ambitions. Engineer cloud as part of a larger strategy
completing 70% of its global SAP platform rollout. This SAP Platform is their
around digital transformation, cost savings and new
business models.
digital core: it strengthens their acquisition strategy, it provides agility to
build new services such as cloud for service and internet of things (IoT) and
it delivers stronger business value to end-customers.
MAKE YOUR CORE INTELLIGENT
A boundaryless transformation strategy is the very opposite of ripping-and-
replacing core systems every few years. Instead, it empowers organisations
2 AND EXTENDED
Invest in intelligence and automation – powered by AI,
machine-learning, and analytics: not as an add-on but as
to evolve and refresh systematically, enabling the flexibility to incorporate
a core part of your ERP platform. Enable your business to
rapid technology changes as they arrive. An agile core is key to surviving extend at scale and in real-time.
and thriving in an era of rapid innovation, allowing for continuous
modernisation and the ability to leverage progressive improvements in
next-generation ERP technology. PARTNER WITH CLOUD CAPTAINS,
Our CIO survey reveals a clear consensus: they refuse to let core inflexibility
get in the way of holistic digital transformation. Being future-aligned and
3 NOT TRADITIONAL SERVICES FIRMS
Find co-creation partners that differentiate by
reimagining services delivery models, being technology
core-nimble is empowering. agnostic, and specialising in your business.
Core-nimble organisations can chase ambitious business models or
restructure existing businesses entirely, like Assala Energy3, which acquired
PERSONALISE
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and integrated diverse assets previously owned by Shell and which had
Make user experience (UX) seamless across channels
been running for some 40 years. Their solution was to evolve to a new SAP
and platforms and personalise relentlessly.
S/4HANA Oil & Gas solution on SAP HANA Enterprise Cloud and to adopt SAP
SuccessFactors solutions. The company’s new platform now underpins payroll
and 40 other core applications while removing excess overheads and freeing
AMPLIFY INSIGHTS BY CONVERGING DATA
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up time for employees to devote to core business activities.
Treat data as an asset. Free up the data in your ERP
systems and converge different data sources for deeper
intelligence.
These five trends are fundamentally important. Together they can enable
you to bring about change both in your technology and your business.
Enterprises should thus assess their relative position against each trend,
evaluating how they currently fare and forming a plan for a journey from
“as-is” to “north star”. Each organisation’s path to creating flexibility at the
heart of the business may differ, and that’s fine.
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Cloud is the future of most business applications, including ERP. Our CIO
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survey finds 78% of UK CIOs believe that cloud is critical to their IT strategy
and corporate strategy, and 50% say they are already running a hybrid cloud
ERP and reaping its rewards of Total Cost of Ownership (TCO) reduction and
increased agility.
TREAT CLOUD AS
or affordable. The focus is then on ambitious evolution. Cloud is the future,
but everyone moves at their own pace - ensuring that all enhancements
THE GATEWAY
are compatible with and beneficial for core ERP processes.
THERE IS NO “ONE-SIZE-FITS-ALL”
TO MODERNISATION Every organisation needs to move at a pace they are comfortable with,
balancing the change required with the benefit and reward that can be
achieved. Migrating an ERP - the backbone of an enterprise - to the cloud
is arguably more involved than migrating an edge system such as customer
relationship management, which deals only with one aspect of how an
enterprise functions.
100% NONE 6%
CLOUD
LESS 12% 4%
THAN 25%
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Subsea 74, a world-leading engineering contractor to the offshore A nuanced cloud strategy will be key. Just 4% of ERP systems are fully cloud-
energy industry, chose cloud for all SAP applications and associated data. native today, according to the results of our UK CIO survey, while almost half
The company wanted to leverage greater efficiencies within their business run on-premise platforms and use application programming interfaces (APIs)
and make cost savings from the current SAP-based ERP system. For them, to extend on to the cloud. The move to the cloud must accommodate these
a complete cloud environment delivers lower total cost of ownership, differences and be carefully engineered as part of a larger strategy around
increased agility and flexibility, faster access to IT resources to manage digital transformation, cost savings and new business models. Cloud ERP
workload changes and easyvuse of built-in regulatory compliance and needs to be the cornerstone of that strategy, a gateway to building an agile,
security services. responsive enterprise that can pivot quickly.
Not all clouds are (or need to be) public. Many organisations will need
JUST 4% OF ERP SYSTEMS ARE FULLY CLOUD-NATIVE
private cloud deployments, either to retain greater control or due to
regulatory/compliance directives. Indeed, 51% of UK CIOs in our survey Q14. Which; if any, of the following statements best describes how your
said that they preferred private cloud. 35% preferred on-premises while current ERP systems align with your Cloud and modernisation initiatives?
10% favoured hybrid solutions.
Industries will move at different speeds, and company size will matter.
The vast majority of SaaS ERP adoptions to date have occurred in small to
midsize companies and subsidiaries of larger enterprises, but enterprise SaaS
ERP is beginning to gain traction. Larger enterprises ($5 billion + revenues)
remain cautious about migrating from on-premises to SaaS ERP, but Forrester
expects migration to accelerate as software vendors demonstrate more
product maturity and are able to demonstrate examples of success at the
scale the client needs.
4. Accenture press release - Subsea 7 Collaborates with Accenture and Avanade for Public Cloud Transformation of SAP
Enterprise Resource System (https://newsroom.accenture.com/news/subsea-7-collaborates-with-accenture-and-avanade-for-
public-cloud-transformation-of-sap-enterprise-resource-system.htm)
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INTELLIGENT ERP: AUGMENTED HUMAN CAPABILITIES
2
Today’s systems of record are fast being replaced by new systems of
intelligence. These new systems of intelligence retain the core “systems
of record” capabilities while layering in new automation and predictive
intelligence capabilities. This transformation is occurring at the platform
tier across the spectrum of core software applications, including marketing,
However, very few ERPs currently have a native intelligent core and only 4%
AND EXTENDED of UK CIOs say that intelligent technology is a core part of their current ERP
set-up. The appetite exists, however: 53% said that their current ERP system
is inflexible and that they want to extend it, using intelligent technology.
In the future, all ERPs will be intelligent at the core. Meanwhile, CIOs can
begin today by infusing intelligent capabilities into their core systems.
Q15. Which; if any, of the following statements best describes how your
current ERP systems use intelligent technologies to improve productivity
and empower employees in decision making?
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Intelligent ERPs will manifest themselves in two key areas:
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1. Improving existing processes with intelligent automation.
For example, the SAP Cash Application software learns matching criteria from
a company’s historical financial clearing data to automatically pair invoices
with incoming payments.6
PARTNER WITH
2. Enabling and executing new ideas not possible before. The SAP Fiori apps
for contract consumption predict contract expiration or goods consumption
ahead of time, which enables more effective supplier negotiations and
CLOUD CAPTAINS,
relationships. Customers can now forecast contract consumption, update
using their own data, and retrain easily.7
To enable this at scale, modern ERPs can leverage both hybrid transactional/
analytical processing and in-memory computing to enable embedded
reporting and complex analytics, with response times as close to real time
as possible. These can be nested into the application architecture, allowing
users to perform tasks such as simulation, planning, modelling and forecasting
without the need for standalone analytic applications. Over half of ERP
systems discussed in our UK CIO survey included analytical architecture in
some capacity - however more than two thirds did not leverage any smart
architecture to boost performance or benefit from real-time reporting/analysis.
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As ERP systems adapt to the digital world, IT service providers will need Delivering ‘more/better for less’ via automation will also be a key part of
to transition from their legacy operating models and work as part of an the cloud captain’s role. Instead of resisting automation, successful services
ecosystem. Successful system integrators (SIs) will actively co-create and providers will need to look inwards, focusing on streamlining service delivery
partner with global cloud ecosystems, delivering valuable managed services to clients by using automation within their own teams. This may be difficult
to customers and managing clients’ business across multiple clouds. initially; many outsourcing providers have traditionally grown revenue by
increasing headcount at client-sites. In the cloud world however, bloated
DIFFERENTIATE AND FUTURE-PROOF ME, ENTERPRISES delivery teams are likely to be at a disadvantage – struggling to be agile or
TELL IT SERVICES PROVIDERS competitively-priced.
Q17. When working with an IT Services Provider, which of the following
Accenture has been at the forefront of using agile methods to transform
attributes do you consider to be most important? TOP 3
delivery to its clients. It has embraced automation and DevOps that will save
nearly 10,000 engineering days per year and enable an 80% reduction in
Jenkins maintenance for itself. The ultimate beneficiary? Accenture’s clients,
Understands my Preferences for services providers
business, creates 53% that adapt service delivery model who share a business-critical requirement: the need continuously and rapidly
competitive to reimagine traditional work to roll out innovative software applications to increase competitiveness and
differentiation advance business objectives.8
60%
Creates sustainable & Before embarking on a new services project, customers should ask their
future-proof solutions 48%
services providers for credentials around automation in services delivery.
Firms which have improved their solutioning to include automation, drastically
changing the model on which they will operate compared to that of five years
Is technology agnostic,
creates killer use cases 41% ago, should be prioritised. Internal use of smarter working methods, such as
DevOps, and of analytics and data to drive outcomes should also be preferred.
29%
8. Accenture CloudBees case study (https://www.cloudbees.com/sites/default/files/case-study-accentureuk.pdf)
Adapts service delivery
model to reimagine 41%
traditional work
Understands my
industry & has 37%
credentials/examples
SAP NON-SAP
Key traditional IT services skills will still be needed: The talent to run and build
solutions, to help customers with business transformations, and to simplify
technology integration. But as the cloud providers increasingly automate
technology management functions, some of these – such as workload
and container management – may become utility services. Consequently,
traditional IT services providers will need to differentiate by re-imagining their
services-delivery models, being technology agnostic, and specialising in their
clients’ business instead of merely maintaining and enhancing legacy.
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The reputation of legacy ERPs is of being reliable, but difficult to use –
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and this is not surprising. Enterprises have seldom invested in ERP user
experience (UX), and many CIOs believe that intuitive, consumer-grade
experiences are not mission-critical for back-office applications.
PERSONALISE
web designs in enterprise software. Enterprises have also woken up to the
intangible costs of ignoring UX such as disenfranchising employees, adding
to the workload, creating process fatigue and encouraging ungoverned
‘shadow IT’.
Q18. Which; if any, of the following statements best describes how your
current ERP systems allow the personalisation of user experience and
modern UX innovation?
No personalisation/ 14%
modern UX possible
No personalisation, so we 41%
extend with a UI overlay
In the future, the ERP market will need to transition to assistive and
conversational user experiences (including chatbots, automation and human–
machine interaction). ERPs will be capable of processing, analysing, and
acting on vast volumes of usage data in real time, using in-memory computing
technologies. By learning about user-preferences, they will be able to adapt
business processes iteratively - increasing user engagement and satisfaction.
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A major European energy supplier realised how much the digital interaction
5
between customers and their utilities was changing, particularly within the
connected home space. A voice-enabled smart home service would allow
customers to engage with the supplier without having to reach for their
phone, or switch on their laptop. They took the bold step of rolling out an
Amazon Echo/Alexa connected home solution culminating in a new customer
self-serve channel which would help deflect call centre costs. Customers
could now carry out a host of activities: submit meter readings, request
account balances and next payment dates. Customers rated the service AMPLIFY INSIGHTS
BY CONVERGING DATA
4.2 out of 5 stars in the first few months – truly bringing the supplier’s digital
strategy of “making energy easy” to life and setting a new standard for
customer service and engagement in the utility industry.
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CONCLUSION:
Lastly, but perhaps most importantly, the ERP trend today is to transition
from ‘data traps’ to being ‘data progressive’. Companies who appreciate the
transformative power of data intelligence realise that the ability to converge
different data sources is essential in order to produce well-rounded insights. MAKE ERP THE PIVOT
However, a major challenge to the achievement of a unified data view is that OF YOUR EXPONENTIAL EVOLUTION
large parts of enterprise data is either “dark” (unstructured, not readily usable),
Accenture’s five ERP trends point to a new normal, where ERP is the driver
disparate (hard to combine) or of poor quality / incomplete. Disparate legacy
for agile and responsive organisations, not just at the edges but at the core.
ERP systems, arcane business processes driving data management, and the
lack of data governance all create data traps. Our survey results show that Imagine what you could achieve if your core systems were agile enough to
92% of current ERP systems represent a bottleneck for CIOs, often requiring imbibe the benefits of technological waves. If your ERP systems were not just
manual/programmatic intervention to enable data sharing. record-keepers, but the ingredients for business intelligence - leading to swift
new product launches, improved services and processes, and the execution of
Q19. Which; if any, of the following statements best describes how your
new strategies, at scale, and at speed. In this new normal,
current ERP systems share data with other enterprise applications and
what could your business achieve?
leverage data from them? (Source: Accenture 2019 UK CIO Survey)
Trapped data, if freed and converged with other data sources to become
a single combined source of higher quality data, can deliver a competitive
advantage. Companies that are able to harness this data and to use it in
conjunction with new data sources - weather and devices data or from the
Internet of Things (IoT) - will be better able to hold retain and serve customers,
and to react faster, guiding their business through improved insights to be
more competitive, and to develop new business models.
Loblaw Companies Limited9, Canada’s food and pharmacy leader and the
nation’s largest retailer, is using an SAP ERP solution to improve operational
efficiencies to unlock business data. The solution enables the company better
to utilise the entirety of the data available out of the ERP. The end results?
Excessive inventories are no longer a problem and the company is better
informed about which products to promote, with an improved view
of requirements for each individual store.
9. Accenture Case Study: Loblaw Companies Limited: Unlocking value with Accenture and SAP
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NOTES NOTES
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CONTACTS ACKNOWLEDGEMENTS
This report, and the research on which it is based, would not have been
JOHN ERIK ELLINGSEN
possible without the participation of Daniel Shropshall, Agata Dowbor, and
Managing Director,
SAP Business Group Lead UK and Ireland Dominic King.
[email protected]
The views and opinions expressed in this document are meant to stimulate
thought and discussion. As each business is unique requirements and
SURYA MUKHERJEE objectives, these ideas should not be viewed as professional advice with
Technology Research Lead, respect to your business. Unless otherwise specified herein, the views
Accenture Research UK and Ireland
and/or findings expressed herein are Accenture’s own. This document makes
[email protected]
reference to names and trademarks that may be owned by others. The use of
such names and trademarks herein is not an assertion of ownership of such
names and trademarks by Accenture and is not intended to represent or imply
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