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Clarity in the New Reality. Sajjad Syed Head SAP Pakistan. November 12, 2009. Pre 2008 Reasons for IT Enabled Systems. Holistic (Integrated) view of business Cost Control Specially in Inventory and Supply Chain Adoption of Industry Best Practices
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Clarity in the New Reality Sajjad Syed Head SAP Pakistan November 12, 2009
Pre 2008 Reasons for IT Enabled Systems • Holistic (Integrated) view of business • Cost Control Specially in Inventory and Supply Chain • Adoption of Industry Best Practices • Managing growth and geographically dispersed entities. • Top management to focus on strategy rather than implementing controls.
Then • Reality Changed • as • we faced the biggest global Economic downturn in the history of mankind
Today’s New Reality & Challenges The context in which businesses operate today Business Network Transformation Economic Volatility Sustainability Rising Consumer Power Proliferation of Global Regulation
How do you lead through challenging times?You need clarity and transparency to act decisively 38% 38% 74% 74% CUT BACK CUT BACK Will reduce capitalinvestments 60% 60% Will reduce operating costs Had layoffs in 2008, >50% plan layoffs in 2009 Sources: McKinsey Economic Conditions Snapshot, Feb. 2009 Source: CFO magazine global CFO survey Feb 2009
How do you lead through challenging times?You need clarity and transparency to act decisively 45% 40% 45% 40% 37% 36% 37% 36% INNOVATE INNOVATE Will change theirenterprise model to be more collaborative Will increase productivity Source: IBM global CEO study‘the enterprise of the future’ 2008 Will introduce new Products/services To gain market share Will restructure Sources: McKinsey Economic Conditions Snapshot, Feb. 2009
New ways to build value – even in a downturnAlign strategy and execution to enable long term growth Focusyour business network on the end customer Reducecosts andrisk, differentiatebrand It’s important to innovate through a recessionto sustain new brands and products and offer the customer a little more value. A.G. Lafley Chairman, Procter & Gamble “
Become “Clear” to Drive SuccessInstill accountability, agility, and customer centricity into your organization Transparent and accountable Lean and agile Collaborative & customer-centric
Demand clear answersChoose vendors that can support your business How can your company help us to develop effective business strategies? Chief Financial Officer How can your company help us to navigate through economic challenges? Line of Business Manager How does your company enable us to support the quickly changing needs of the business? Chief Information Officer
Today’s challenges require strategic agilityEnable insight, efficiency, and flexibility How can your company help us to develop effective business strategies? INSIGHT INSIGHT How can your company help us to navigate through economic challenges? EFFICIENCY EFFICIENCY How does your company enable us to support the quickly changing needs of the business? FLEXIBILITY FLEXIBILITY
Business strategies evolve …but silos create a gap between strategy and execution STRATEGY EXECUTION Business Users Sales Call Center Shipping Functional silos and non-integrated systems reduce agility and undermine growth
The Economic Uncertainty Affects Businesses of All Sizes Slowing demand (spending cut-back, customers postponing purchases) Rising costs (inflation, energy/commodity prices, healthcare costs…) Reduced credit (tougher lending standards, declining loan/line of credits) Current Economic Environment Translating into… Measurable Impact on Your Business • Lack of access to funds • Higher cost of capital • Reduced cash flow • Rising inflation risks • High market volatility • Wave of consolidations • Government re-regulation • Declining consumer optimism Revenue, Income COGS, Margins Cash flow, Liquidity Source: • NFIB Small Business Economic Trends, October 2008 • The Conference Board Mid-Market CEO Challenge, 2007 • Collateral Damage, The Boston Consulting Group, Oct 2008
Technology Can Be A Strategic Tool To Help Weather the Economy Technology Can Help Your Customers Now Business Measures to Take • Make decisions based on hard facts • Make smarter fact-based decisions using business intelligence, reduce guesstimates and risky blunders • Streamline processes, cut operating costs • Improve efficiency and profitability by using an integrated system that eliminates errors & duplications • Get accurate, precise control on cash flow • Keep receivables in check, inventory low and cash flowing • Proactively respond to customer needs faster • Identify emerging trends / customer needs, focus on your most profitable customers, turn dissatisfied customers around • Be best positioned for the rebound • With careful IT investments, you can position your company for recovery and achieve sustainable growth. Slash operating expenses Improve cash flow & liquidity Optimize working capital & debt Act now on efficiency initiatives Focus on customer retention Diversify product portfolio Go after less-affected markets Increase smart marketing Invest in employee development Engage in selective M&A
SIX PRIORITIES FOR TODAY’SECONOMIC CLIMATE Manage Cash Run Lean Operations Drive Compliance Activities Get Closer to Your Best Customers Retain Your Top Talent Protect and Nurture Your Brand .
Companies that have Benefited from Best Practices Trading Industries Consumer Industries Financial Services 85% of the Forbes 500 run SAP BP Process Manufacturing Services PublicServices DiscreteManufacturing
Agility, Effectiveness & Insight…Pakistani Corporations partnering with SAP Consumer Products FSI/ Processed Industry Manufacturing Oil & Gas Life Science / Public Sector
Path to ClaritySteps towards becoming a clear enterprise • 1. Choose the IT Product that can truly support your business strategies. • 2. Develop a plan to build strategic value. • 3. Start small but think big. • 4. Engage key partners in your business network. to build stronger business networks. • 5. Close the strategy-to-execution gap and measure the benefits.