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Engaging for Value Leverage

Engaging for Value Leverage. Anton Chilton Vice President Global Strategic Account 23 rd March 2009. ERP Functionality Available. 28%. Functionality Used. Discussion. Under Leveraged ERP What does that mean & what is the problem? What are the issues and causes? Leveraging QAD

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Engaging for Value Leverage

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  1. Engaging for Value Leverage Anton Chilton Vice President Global Strategic Account 23rd March 2009

  2. ERP Functionality Available 28% Functionality Used

  3. Discussion • Under Leveraged ERP • What does that mean & what is the problem? • What are the issues and causes? • Leveraging QAD • How can I get more value out of my investment in QAD? • How can I assess the value release potential?

  4. Aberdeen Group Study

  5. Global PMI for Manufacturing

  6. Same Challenges – Greater Emphasis Increase Service Continuous Improvement effectiveness efficiency innovation Reduce Costs

  7. IT in Business - The Imperatives Solution evolution Plan Business Improvement = Accelerate ROI Investment leverage Design + Implement Service effectiveness Execution = Lower TCO Manage Cost efficiency

  8. The Compromise 20-40% Solution evolution Investment leverage How much time & resource do you spend in each area? Service effectiveness Cost efficiency 60-80%

  9. The Underleveraged ERP Effect Sub-optimal ROI 28% Execution Business Improvement Sub-optimal TCO • Supporting bolt on systems • Additional interfacing support • Managing more complex environments • Sub-optimal support for business processes • Missing automation opportunities • Missing waste elimination opportunities

  10. ERP Benefit Erosion $ Benefit Cost Time

  11. Benefit Erosion – Symptoms Deviation from standards • Bolt on solutions Manual work-arounds Revert to old methods

  12. Benefit Erosion – Causes Turnover - Reductions • Knowledge of System Insufficient Training Older Versions

  13. Problem Summary • Unprecedented economic pressure • Increased expectation in terms of • Level of service • Support for the business & performance improvement • Efficiency of resources • Budget reductions • Unleveraged ERP only exacerbates the issue

  14. Value Potential Optimize ROI Optimize TCO • Reduce support costs • Simplify apps landscape • Remove interfaces • Eliminate customizations • Automate processes • Reduce cycle times • Improve process effectiveness • Increase process efficiencies • Promote innovation

  15. Unlocking the Value

  16. ERP Benefit Maintenance $ Benefit Cost Time

  17. Making it Happen Continuous Improvement • Process Assessments Role Based Training Explore New Functionality

  18. Leveraging QAD • Evolving from traditional role • Shifting focus from implementation to life cycle • Driving continuous value generation

  19. Investing in Customer Success Pragmatic Approach Understand Develop Deliver Evolve • Business Operation • Desired Outcomes • Expectations • Priorities • Agreed outcomes • Continuous Customer Engagement • Outcome focus • Solution Strategy • Process • Information • Approach Effective Relationship

  20. Focus on Value & Outcomes 1 Rapid value assessment Map QAD potential solutions to business goals, strategies, tactics & processes 2 3 Deeper ROI Potential Analysis 4 Recommendation

  21. Value Focus Areas *This determines how the benefit is recognized in an ROI, NPV, etc. calculation – i.e. all benefits must be normalized to impact on profit – some are incremental 1 time, others are on-going

  22. Lion Nathan Breweries • $1.5bn Sales – Australian premium alcoholic beverages company • >10 Years with QAD • Value assessment and opportunity analysis • 3 people, 2-3weeks • Recommendation made to Ops Council

  23. Value Assessment Results • Adoption of MRP in some areas • Opportunities for Kanban • Training and system refresher courses • Demand Management system & integration • Place at the IT Steering Group

  24. Flexsys Rubber Chemicals • Manufacturer of chemicals for the rubber industry • Value assessment & opportunity analysis • Identified issues in company move from “Make to Stock” to “Make to Order”

  25. Value Assessment Results • Recommendations around asset management • Implemented Enterprise Asset Management • Production scheduling efficiency at 95 percent • Maintenance related down time less than 5 percent • Maintenance budget reduced 12 percent • Reactionary repairs reduced from 90 percent to 11 percent • MRO inventory turns doubled

  26. Results • Deeper level of understanding & engagement • Closer alignment • Relevant and business focused solutions • Increased benefits

  27. ERP Functionality Available Functionality Used Tomorrow Functionality Used Today

  28. Thank You

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