Presentation Transcript

1. NASACT Annual Conference:The Future of ERP for State and Local GovernmentBill Kilmartin and Dave AndrewsAugust 14, 2012

2. Agenda Market Assessment Comparison of “Traditional” ERP to “Pure” Cloud/SaaS ERP Software Provider’s Approach to SaaS Oracle’s Strategy SAP’s Strategy Workday’s Strategy Accenture’s Point of View Closing Comments and Reflections
3. Market Assessment The ERP market is at another inflection point… Mainframe Client Server Web-based Cloud/SaaS Early 1990’s Early 2000’s Now
4. Market Assessment At the same time government interests have changed… Governments are strapped with funds Governments appetite for upfront capital investment and ability to own and operate the system is decreasing Governments don’t like maintenance fees and the costs of upgrades Governments struggle to keep accounting and IT talent – they can’t pay the salaries Governments struggle to support ERP systems in production – the systems are hard to maintain
5. Market Assessment And now you are asking for these types of changes in your RFPs… California FI$Cal – Managed services for 5 years West Virginia ERP – Managed services for 8 years Colorado Financials – Equal payments over 8 years Arizona Financials – Platform as a Service for 5 years Maryland HR – Software as a Service
6. The ERP Market is at an Inflection Point “Traditional” Licensed-based pricing model On-premise solution (with managed service option) Single tenant Client supported (with vendor supported option) “Pure” Cloud/Software as a Service Subscription-based pricing Delivered through the cloud Multi-tenant Vendor supported Governments are comparing the pros and cons of traditional ERP vs. SaaS ERP
7. Transition between Traditional ERP and SaaS ERP Traditional ERP is proven and the right solution for many clients. It still has a long life span. Traditional ERP is in transition by adopting some but not all of the SaaS characteristics. (e.g. managed service for hosting and application support) ERP vendors are providing migration paths to their SaaS offerings SaaS in the government space is new and has inherent risks, and therefore not appropriate for all clients. Governments should get educated on Cloud/SaaS solutions to make sure they are making the appropriate decision for their specific needs
8. Agenda Market Assessment Comparison of “Traditional” ERP to “Pure” Cloud/SaaSERP Software Provider’s Approach to SaaS Oracle’s Strategy SAP’s Strategy Workday’s Strategy Accenture’s Point of View Closing Comments and Reflections
9. Comparison of Traditional ERP to Cloud/SaaS ERP Less sharing More sharing
10. Comparing the Cost Models Traditional ERP cost profile SaaS cost profile Implementation Effort Time Go-Live Our experience is that it takes 20-30% less effortto implement and operate SaaS ERP with equal TCO after 7-9 years
11. Support– Reduces the need for governments to have the skills to support the ERP application and infrastructure Shifts CAPEX to OPEX– fixed per year, priced by user, no big upgrades User experience– impressive user interface, easy to use Reporting– built in reporting and analytics; no third party products required New technology– code runs in memory, real-time updates, one database Versions– updates released every 4 months; no major upgrades costs Cross-jurisdiction– SaaS model supports collaboration between multiple government entities SaaS Model Characteristics
12. Factors when considering ERP SaaS Complexity of your business Stability of your business model and processes Level of integration required with third-party enterprise software applications Sophistication of your internal IT skills and infrastructure Your need or want to control your IT systems in-house Different vendors may have different approaches to SaaS and the cloud SaaS is great for basic standardization: removing inconsistencies and duplication across the enterprise to tackle fragmentation in systems and processes. SaaS Shared Multi-Tenant SaaS is not so great for highly specialized businesses and related processes that need a lot of customization.
13. Agenda Market Assessment Comparison of “Traditional” ERP to “Pure” Cloud/SaaS ERP Software Provider’s Approach to SaaS Oracle’s Strategy SAP’s Strategy Workday’s Strategy Accenture’s Point of View Closing Comments and Reflections
14. Software Providers Approach to SaaS 3. SOFTWARE AS A SERVICE 1. ON PREMISE ERP 2. HOSTED (SaaS Pricing) Oracle Fusion All major ERP Vendors have developed ERP SaaS solutions or hosted their solutions off-premise with SaaS like pricing. These vendors are now competing with existing SaaS ERP tools.
15. Oracle/PeopleSoft Strategy PeopleSoft will continue to be supported through Applications Unlimited program New versions will be released every 3 years. Version 9.2 is scheduled for late 2012. Feature packs, which include off cycle enhancements, will be released every year between new versions. New PeopleTools releases will be released annually Simplicity, Productivity, and Lower TCO are the core of Oracle’s planned releases
16. Oracle Fusion Applications for PeopleSoft Customers Continue with PeopleSoft Co-exist Fusion with PeopleSoft Migrate to Fusion Adopt Fusion Technology Oracle plans to provide both a traditional ERP solution and a Cloud/SaaS model with Fusion
17. SAP Strategy Tier 1 – SAP Business Suite Support for complex business scenarios Maximize process efficiency through customization Requirements to meet compliance standards Complex external integration Established Agency C Tier 2 – Business ByDesign Drive to standards adoption / best practices Low cost to deploy & maintain Fast time to implement & ease of use Minimal IT involvement Agency B Agency A Two Tier Approach: Segmenting a Large Enterprise
18. SAP ByDesign Partner Add-ons Customer Add-ons Analytics and Data Single Cloud Architecture Powered by SAP HANA Fast and Easy Development Open, Standards based Consistent data and process models e.g. Public Solution Model of Core platform Integrated Life Cycle Management Solutions can consume all platform services Solutions SaaS Development Environments Shared Platform Services Integration Identity Mgmt Lifecycle Mgmt Mobility … Shared Platform Services Integration Identity Mgmt Lifecycle Mgmt Mobility … CORE Platform EDGE Platform Transactions & Processes Collaboration, Social & Light Weight Java Platform Services Business Object Models & Foundation Integrated Development Environment Integrated Development Environment Platform PaaS ABAP Platform Services Platform PaaS HANA Services HANA Services “River” Spring Java EE Business Foundation Business Object Models … (e.g. Data Management, Repository, Scheduler, Connectivity …) HANA App Services (e.g. Text Analysis, Authorizations, Semantics …) Java Runtime ABAP Runtime SAP HANA DB HANA DB Function Libraries (Business/Analytical/Statistical …) Infrastructure & Operations Infrastructure IaaS
19. Workday Strategy Workday's mission is to build the next generation of enterprise business services—Human Resource Management, Financial Management, and Payroll—and deliver the solutions on a Pure Cloud/Software as a Service (SaaS) model The Workday HCM product has matured and is in use in the private sector. It is becoming more and more accepted in Higher Education, and is being implemented at the State of Nebraska. Workday Financials is available now and rapidly improving, but may not provide the depth of functionality required for larger more complex public sector organizations. Additional functionality is expected to be released in the next 12 months.
20. Workday Solution Overview COMPLIANCE Workday Integration Cloud Workday Natural Workspace WEB SERVICES IN-MEMORY Unified Business Solutions GLOBAL ANALYTICS MOBILE WORKFLOW SPEND MANAGEMENT PAYROLL INITIATIVES OBJECTS Real Multi Tenant SaaS 1 CONFIGURABLE PROCESSES HUMANCAPITAL MANAGEMENT FINANCIAL MANAGEMENT INNOVATION & ADOPTION EFFICIENCY Adaptive Foundation CONSUMER UI SECURITY Contemporary Technology Inherent Application Services
21. Agenda Market Assessment Comparison of “Traditional” ERP to “Pure” Cloud/SaaS ERP Software Provider’s Approach to SaaS Oracle’s Strategy SAP’s Strategy Workday’s Strategy Accenture’s Point of View Closing Comments and Reflections
22. Accenture Point of View Traditional ERP is the right answer for many governments Don’t want to be the first Want to implement Financials first Want to keep infrastructure in house Concerned about data security Want the ability to do customizations (e.g. union or legislative requirements) Have extensive integration needs
23. Accenture Point of View Cloud/SaaS ERP may be the right answer for many govt’s Want to implement HR/payroll first Can wait for additional functionality Ready to accept standard business processes Don’t want the hassle of supporting the application and infrastructure Don’t want to upgrade current systems Looking for the least expensive option You need to understand your options and what your organization is willing to adopt
24. Agenda Market Assessment Comparison of “Traditional” ERP to “Pure” Cloud/SaaS ERP Software Provider’s Approach to SaaS Oracle’s Strategy SAP’s Strategy Workday’s Strategy Accenture’s Point of View Closing Comments and Reflections
25. 6 Key Issues and Questions for a SaaS/Cloud Model Why Cloud/SaaS ERP? Faster implementation, easier to deploy and use Lower TCO (30-50%) Less dependency on IT staff and on premise hardware Stable and predictable costs for budgeting Is Cloud/SaaS ERP really ready? Not a question of “if” but “when” Trigger point for change when doing an upgrade or new system Vendors are maturing solutions with rapid release and major R&D investments Risk/reward decision for early adopters
26. 6 Key Issues and Questions for a SaaS/Cloud Model (continued) Can I customize Cloud/SaaS ERP for my business? No, must be done through configuration Requires up front business process and organizational design Standardization is both a feature and a challenge Governance is very important Does switching to Cloud/SaaS mean losing my investment? No, software vendors are providing migration paths SAP provides the hub (SAP for central processing) and spoke (Business byDesign for subsidiary organizations) model Oracle provides building block approach to gradually implement Fusion modules over time
27. 6 Key Issues and Questions for a SaaS/Cloud Model (continued) What are the risks? Effective governance, i.e. imposing standardization Data security and privacy Integrations Vendor lock-in Ability to respond to law changes What is the future? Industry at an important inflection point More choices More collaboration between software publishers and service providers
28. Reflections Marty Benison State Comptroller Commonwealth of Massachusetts John Reidhead State Comptroller State of Utah