ERP Projects and B2B E-Commerce Session

ERP Projects and B2B E-Commerce
Session B06 – April 19th 4:00PM

Steve Keifer
Vice President
Product & Industry Marketing
GXS

WELCOME to the FORUM

ERP – Running
the Business

2

Types of ERP
Projects
3

Categories of ERP Changes
Most Projects are Hybrid Combinations

Retire Legacy Merger &
Mainframes Acquisitions
Rapid Company New Installs Consolidations Shared Services
Growth for Back Office

Vendor End of Supply Chain
Life Support Upgrades Extensions Planning

Expanded Treasury or Bank
Feature Set Relationship
Management


Multi-National Example
Before Consolidating Regional ERP Instances

Europe
3 x SAP 4.5
PeopleSoft 9
Dynamics AX
North America
4 x SAP 4.6
China Oracle 10.7i
SAP 6.0 Japan
2 x JD Edwards
In-House

India Middle East
Oracle 10.7i SAP 6.0

Southeast Asia Mexico
SAP 4.6 SAP 4.6 Brazil
In-House
Australia & NZ
Oracle 10.7i

South America South Africa
SAP 4.6 JD Edwards

5

Why Consolidate?
Six Key Drivers for ERP Consolidation

Mergers & Centralization –
Acquisitions Global vs Local

Shared Services Visibility to
Model Foreign Operations

Consistency Supply Chain
With Customers Coordination

6

Oracle’s Acquisitions

7
WELCOME to the FORUM Source: Wall Street Journal – February 2009
http://www.oracle.com/us/corporate/acquisitions/index.htm

Why Upgrade ERP?
Six Drivers for ERP Upgrade & Extension

End of Leverage Latest
Maintenance Technology

Functional Standardize or
Requirements Consolidate

Improve Legal
Usability Compliance

8

Why Extend ERP?
Example: SAP’s Supply Chain Management Modules

Extended
Advanced Planner & Warehouse
Optimizer Management

Master Data Transportation
Management Management

SAP Supply
Sales & Operations Chain Supply Network
Planning
Management Collaboration

Modules
Service Parts Global Trade
Planning Services

RFID & Sensory Retail Supply Chain
Network Support Planning

9
WELCOME to the FORUM Source: http://www.sap.com/solutions/business-suite/scm/index.epx

ERP & B2B
e-Commerce

10

What is B2B e-Commerce?
Customer

ERP
Applications Web
Portal
Purchase Orders
Advanced Ship Notices Supplier
Invoices

B2B
e-Commerce
Gateway Internet
Translator Bank
Integration Broker

Payment Instructions
Point of Sales
Inventory Positions
Value
Added
Logistics
Network

11

ERP Data Sources
1/3 of Data from B2B Interfaces

Origin of ERP Data

43% of External Data
External 34% from Customers &
Distributors

31% of External Data
Internal 66% from Suppliers &
Contract
Manufacturers

0 20 40 60

WELCOME to the FORUM Source: AMR Research – ERP and B2B Integration Study 2009

External Data into ERP
Customers, Suppliers, 3PLs & Financial Institutions

Sales Manufacturing Supply Chain Financials Service

Forecast Inbound Materials Shipment Status Bank Statements Repair Order
Point of Sale Inventory Proof of Delivery Remittance Advice Work Order Status
Sales Order Work In Progress Product Catalogs Trade Confirmations Warranty Claim

Direct Ocean Commercial
Distributors
Suppliers Carriers Insurers

Contract Freight Financial 3rd Party
Customers
Manufacturers Forwarders Institutions Logistics


ERP Projects and B2B
Sales & A/P Customer
Web Portal
Staff
ERP –
Europe
Instance Mapping of Data
to Multiple
Formats Supplier
1
Fixing Bad Data
from Trading
Partners ERP –
5 Testing of B2B Direct
China
Functions with Connection
Instance ERP Upgrades
2 Distributor

On-Boarding of
ERP – New Trading
6 Bank
North Partners
Managing America 3
Exceptions from Instance
Trading Partners
High Availability &
Real Time Data
ERP – Transfer Logistics
Asia 3rd Party
4
Instance Networks &
B2B/IT Marketplaces
Team


AMR Research Study
Relationship between ERP and B2B

Survey of 120 Discrete Manufacturing Companies

15

AMR Survey Demographics
Vertical Industry
Food & Primary ERP Vendor
High Beverage
Tech OEM & – 26%
Supplier – SAP 42%
32% Oracle 24%
Microsoft 13%
Consumer Infor
Automotive Packaged
OEM & Goods – 23% Lawson
Suppliers –
23% Deltek

Exact
Size of Company Epicor
Less than
$1B – 9% CDC Software

$20B+ Glovia
35%
$1B to Other
$5B -
29%
0 10 20 30 40 50

Other
$10B to
$5B to $10B - • 62% IT and 38% Line of Business
$20B - 15%
12% • 12% Based outside of US
Source: AMR Research – ERP and B2B Integration Study 2009

ERP Project
Delays

17

ERP Project Time Frames
Duration of ERP Upgrade Projects
20000
Average ERP
Effort in Person Days

15000 Project for
10,000 Users
is 63 Weeks
10000

5000

0
1-100 101-1,000 1,001-10,000 Over 10,000
No Solutions With Industry Solutions
18
WELCOME to the FORUM Source: Panaya – 2009 SAP Upgrade Benchmark Survey (www.panayainc.com)

IT Cost of ERP Delays
USD
Thousands
$80K

$70K Cost of Delay is
$45K per Day
IT Cost per Day

$60K for $1M per
month project
$50K

$40K

$30K

$20K

$10K

$250K $500K $750K $1.00M $1.25M $1.50M

Monthly ERP Budget
Source: GXS – Hypothetical Analysis

Launch Windows for ERP
Small Delays Can Lead to Multi-Month Extensions

Peak End of End of
Holiday Quarter New Quarter
Order Period Product Period
Processing Begins Launch Begins
Upgrade
Period
Possible

October November December January February March

Upgrade
New System Possible
Product Lockdown
Launch for Holiday
Preferred
Period
Risk
Lock Down

Source: GXS – Hypothetical Analysis

Unforeseen B2B Delays
B2B Issues Encountered

Major Issues & Significant Delays

Minor Issues & Short Delays

Minor Issues & No Delays
84% - Delays
Experienced

No Issues & No Delays

0 10 20 30 40 50 60


Mapping Changes
3PLs & US/Canada European Large Mapping is
Carriers Accounts Accounts Suppliers required to
multiple external
Customized Customized e-commerce
850 856
850
856
210
310
852
850
832
820
PRODAT
ORDERS
PRICAT
PAYMUL 860 810 standards
214 315 856 810 DESADV INVOIC 824 820

New or
consolidated ERP
B2B Integration Platform applications will
require new
POS Transactions

Proof of Delivery

Freight Invoice
Sales Forecast

Order Change
Confirmation
Sales Order

Credit Note

Remittance
Ship Notice

mapping to
Inventory

Invoice
external formats

Upgrades will
Supply Order Transport Accounts impact data fields
Chain Manage Manage Receivable
ment
and potential
Planning ment
business process
flows

On-Boarding New Suppliers

Trading Partner Policy Changes from ERP Projects

Higher Levels of
Data Quality 69%

New Transaction
47%
Types & TPs

New KPIs & Penalties for 38%
Non- Compliance Most ERP Projects
Extend B2B
No Scope Functionality
11%
Changes Planned

0 20 40 60


New Transaction Types
Financial Customers &
Institution Distributors

ERP
Applications
Purchase Order
ACH Payment Ship Notice
Wire Transfer Invoice
Bank Statement Remittance Advice

FX Confirmation PO Change
Intra-Day Statement

PO Change
Shipment Status Invoice

Freight Tender Purchase Order
Freight Invoice Ship Notice
Remittance Advice

Logistics & Suppliers &
Carriers Contract
Manufacturer 24

Testing Approach

Testing with External Partners

Testing ended Robust
prematurely for testing, less
go-live used functions
(35%) (35%)

Only 1 in 3
Test
Basic testing, most Adequately
used functions
(36%)


ERP & B2B
Technology
Strategies

26

Modernization of B2B Platform

Modern B2B Platform
Mainframe Based
Translator & Mailboxing
IP Comms
Gateway with Service Oriented
Architecture

Biz Process SOA Integration Platform Managed File
Management On Blade Servers Transfer

DASD Storage Web Portal

Biz Activity
Monitoring

Mainframe-Based
Legacy B2B e- Biz Intelligence Storage Area Network Web Forms

Commerce Platform


When to Upgrade B2B?
ERP Upgrade B2B Gateway Upgrade

Trading Partners Trading Partners

New TPs Test Migrate Rewrite
& Transactions Interfaces TPs Maps

B2B e-Commerce Gateway B2B e-Commerce Gateway

Rewrite Test Test Rewrite
Maps Interfaces Interfaces Maps

ERP Applications ERP Applications

Functional Physical Map Regression Deployment & Change
Specifications Development Testing Production Management

28

Data Quality is a Top Problem

Trading Partner Policy Changes from ERP Projects

Higher Levels
of Data Quality 69%

New Transaction
Types & TPs 47%

New KPIs & Penalties for
Non- Compliance 38%
Data Quality is a
Significant
No Scope Changes Challenge
Planned 11%

0 20 40 60


Data Quality Challenges
– Out of date SKU/GTIN
Purchase
– Inaccurate price
Order – Requires split to feed multiple ERP systems

– Ship to multiple delivery addresses in one ASN
Ship – Multiple POs consolidated into one ASN
Notice – Shipment +/- 5% of quantity ordered

– Weight missing unit of measure
Shipment – Back-dated shipment
Status – Invalid carrier code

Supplier – No remit to address
– No general ledger code
Invoice – Invoice, receipt, PO do not match

– Split into different files for check, ACH, wire
Payment
– Bank specific data required for processing
Instructions – Missing International Bank Account Number (IBAN)


ERP Firewall
Blocks Bad Data from Internal Systems

WELCOME to the FORUM Source: GXS

Examples of Time Critical B2B
From Batch to Real Time

Point of Sale
Daily replenishment of
Sales vendor managed
Results inventory determined
Physical Shipment by nightly retail POS
feed

Ship Notice
Receipt of goods at
Customer manufacturing plant
only allowed if
Logistics advanced ship notice
Physical Shipment
has been received

Purchase Order Receipt of last-
Financial minute, end-of-
Reporting quarter orders from
Order Acknowledgement distributors


ERP and B2B Connectivity

Experienced Manufacturing No ERP Downtime Policy
Impact due to Loss in B2B for End of Quarter Sales
Connectivity

No – 26%

Yes 57%

No 43%

Yes – 74%
0 20 40 60

WELCOME to the FORUM Source: AMR Research – ERP and B2B Integration Study 2009 – Line of Business
Executives – 45 responses. Overall responses – 48% experienced impact

Closing Remarks

34

More than Technology
People & Process Required for ERP Project Success

• ERP Platform
Connectivity Adapters
• Exception Management
• Business Process
Technology Management

ERP • Scale Resources Up
and Down Quickly
• Trading Partner
Project People Willingness to Test
• Experience with ERP
Success Testing & Upgrades

• Regression Test
Under Budget Planning & Execution
On Schedule
Process • Change Management
with Trading Partners
No Interruptions

35

For More Information

Download the full study results at:
http://www.gxs.com/resources/insights/

Steve Keifer
Vice President
Industry & Product Marketing
GXS
E-Mail: steve.keifer@gxs.com
Follow me on Twitter: @smkeifer
EDInomics Blog: http://blogs.gxs.com/keifers

36

ERP Projects and B2B E-Commerce Session

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