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EPITA IT Markets Basic Finance and Marketing. Lecture #3 Oct 25th 2006 Jean-Noël GORGE. Previous week V.I.P. (Very Important Points). 25,0. 20,0. 15,0. +6 à +8% (e). 10,0. 5,0. +3,5%. +1,8%. 0,0. 1988. 1989. 1990. 1991. 1992. 1993. 1994. 1995. 1996. 1997. 1998. 1999. 2000.
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EPITAIT MarketsBasic Finance and Marketing Lecture #3 Oct 25th 2006 Jean-Noël GORGE
25,0 20,0 15,0 +6 à +8% (e) 10,0 5,0 +3,5% +1,8% 0,0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2004 -5,0 PIB L&S Investissement -10,0
Cycle phase HW Mature Techno. Emerging techno. Users 60's 70's 80's 90's 2000's
Towards integration Micros( Client/Server, ERP) Minis & department's IT (VAR Digital, HP, DG) MainframesCobol 370CICS etc Assembler & Co 70's 60's 80's 90's 2000's Each layer comes on top, previous layers never disappear !!!(See millenium bug)
Digital Times Digital Era Industrial Era Napoléon III Railways Chirac Internet Networked Organizations Pulled flows « On demand » Fast and lean Information Immaterial Mass production, « Pushed » flows Raw Materials Heavy « tangible » investments Taylorism/Marxism
Industrial times IT challenges Design/Engineering Design/Engineering Solution = "re-foundation"= ERP Manufacturing Problem = Integration Logistics Purchasing Sales Mktg-Comm Finance
Digital times IT systems Need for external integration Company B xxNet Conception Fabrication Logistique Achats Ventes Mktg-Comm Finance Company A Design/Engineering Design/Engineering Needfor Internal Integration Manufacturing Logistics Purchasing Sales Mktg-Comm Finance
Towards integration Components Hours+Hourly Rates+ TimeSheets 60's
Software services business basics • Fondement du « business model » dit « un homme, une heure, un euro », ou (1xn) (1xt) (1xp) = Revenues (CA) • N = effectif • T = taux d’activité, rapport entre jours (heures) facturés et jours (heures) facturables, bref le « tace » • P = prix, tarif, tjm
Towards integration Components Componentsintegration Components+Fixedquotes(Specs, Prices,planning Hours+Hourly Rates+ TimeSheets 60's 70's
Towards integration Components Componentsintegration System Integration Components+Fixedquotes(Specs, Prices,planning CI+1/3rd partiesSystems (minis) Hours+Hourly Rates+ TimeSheets 60's 70's 80's
Towards integration Components Componentsintegration System Integration Services Integration Components+Fixedquotes(Specs, Prices,planning CI+1/3rd partiesSystems (minis) Hours+Hourly Rates+ TimeSheets Consulting + Build+ "Run" 60's 70's 80's 90's
Towards integration Components Componentsintegration System Integration Services Integration Business Integration Components+Fixedquotes(Specs, Prices,planning CI+1/3rd partiesSystems (minis) Hours+Hourly Rates+ TimeSheets Consulting + Build+ "Run" S I +Long term Deals + Embedment 60's 70's 80's 90's 2000's
« SSII » : a short story Components Componentsintegration System Integration Services Integration Business Integration Components+Fixedquotes(Specs, Prices,planning CI+1/3rd partiesSystems (minis) Hours+Hourly Rates+ TimeSheets Consulting + Build+ "Run" S I +Long term Deals + Embedment 60's 70's 80's 90's 2000's Mainframes 370's Minis CS Internet
Towards integration Components Componentsintegration System Integration Services Integration Business Integration Projects / Deals size (M€) > 50 25 10 2
Towards integration Components Componentsintegration System Integration Services Integration Business Integration Share of prime contractor in project /deal value (%) 100 >80 >50? >30? ?
Integration : Competition Components Componentsintegration System Integration Services Integration Business Integration Ernst & Young Cap Gemini…………. Bossard ….. EDS + AT Kearney Andersen Consulting …. Accenture IBM
Competitive fight DifficultiesDilemma Components Componentsintegration System Integration Services Integration Business Integration Cost / Prices Free Lances / TempsRemote selling«Commodity»Closeness Added Value Customer’s Core Business
Strategies’ convergence Editors Outsourcing MicrosoftOracle SAP EDS ADP First DataATOS Cap GeminiAccenture IBM Bull HP SSII B I Manufacturers Each group builds on its own components, but all seam to move towards BI
Business Integration Components Components Integration System Integration Services Integration Business Integration Services Share (CBR)permanent Actions 365/7/24Sharing risks& gains In the « digital World »If we stop, our clients stop => 70's 80's 90's 2000's 60's
SSII in the 2000’s • Business Integration : • 1° What is our (monthly, quarterly...) share of each customer expenditure in C+B+R ? How do we get maximum coverage ? • 2° Which strategic functions or information are outsourced to us by each customer ? • 3° How do we control (defend) and expand our services share for each customer ? • 4° How do we manage not to be substituted in our core offerings ? • 5° Offering every possible service, not producing all of them • 6° What is our position in each customer’s Galaxy ?
C B R Services portfolio CHANGE Enterprise Effectiveness Enterprise Program Management BUILD(projets) Business Break through (M&A, Spin Off, ...) Components Integration Architecture Evolution Users Support & Training Package Upgrades New Modules, New Functions Roll Out First Build RUN Entreprise Applications Management System-Management , Entreprise infrastructures User Support (Call Center / level 1)
Profit sources 60's Programmers 70's AP Cobol 80's Graduates 90's Consultants 2000’s « Informationworkers » HR and Critical factors Strategic skills & know how • Recruiting, retaining • Project management • Tools, alliances (VAR…) • Methodology, global vision • CRM, KM
Another look at Services Segmentation in IT consulting Strategy Technologies Processes H R
In the following slides, companies names may be erroneous M&A, LBOs, Names Changes etc.
From Strategy to Operations What to do ? = Strategy How to do it ? = Consulting We will make it for you != Services Integration We will run it for you != Business Integration Strategy Technologies Processes H R
Anglo-Saxons Strategists : McKinsey, Bain, BCG, AT KearneyBooz Allen, Braxton Mercer Management Consulting Group (or family) 1 Strategy French Strategists : Mars & Co, OC& C, Statorg, Telesis... Technologies Processes H R
French generalists :Eurogroup, Quadran, AlgoeCegos, l'ex Eurequip, SolvingOrgaconseil, SV & GM ... Former accountants or auditorsPWC Developpements,Ernst & Young Entrepren. Ineum PMO, KPMG Fidorga Group (or family) 2 Strategy Technologies Processes H R
Group (or family) 3 IT integrators: Accenture, CSC IBM Consulting, EDS Cap Gemini : (Skill conseils + Bossard + Gemini + Ernst)CSC + KPMGAtos Consultants Steria consultants Sopra Consultants- Mega Unilog Consultants Oracle ConsultingSAP Consulting Microsoft Consulting Services Strategy Technologies Processes H R
Group (or family)4 HR specialistsPA Consulting, William M. Mercer,Hay Management, DDI, Bernard Juilhet, Bernard Brunhes, Cemis, Francis Vidal, HGC, IDRH, Insep, Atefo, Quaternaire Herbemont César, Altedia Stratégie Technologies Processes R H
Technology breaktroughs and «waves» Globalisation Privatisations M&A Competition Cost cutting (Re) Organisation ProceduresCoaching Growth factors Steady growth Strategy Regular, « soft » growth Processes Technologies H R