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With the increase in global trading volume and complexity, firms look to their incumbent service providers to assist them in their quest for global adaptability. But their success hinges on the emergence of a new global trading market structure called Adaptive Trading Networks (ATNs). Firms will be able to anchor their supply chains in this interconnected global trading ecosystem with assistance from global trade orchestrators (GTOs) -- a new breed of provider that can optimize trade flows across multiple supply networks.
A confluence of forces, including process-centric standardizations like shared services, regulatory requirements like Sarbanes-Oxley and Basel II, and cost-cutting initiatives like consolidating IT spending drive enterprises toward the goal of single-instance ERP. Single instance is not for everyone. The advantages of cost reductions, standardized business processes, and analytical insight must be weighed against challenges to business unit independence, process standardization, and existing data model rigidity.
Technical architecture and standards do not just happen. Forrester Research recently interviewed members of its Enterprise Architecture Council, reviewed available documentation, and worked in depth with a large, multinational organization on the processes in place to establish and maintain technical and product standards. Although each organization was unique, all successful processes followed a similar pattern that included a well-defined evaluation process, a published product classification system, a documented review and exception process, and the cross-linkage between all major IT governance processes and programs.
Rapid user adoption of CRM technologies is crucial to achieve productivity gains from customer-facing investments. The Bank of New York used a "high user involvement" strategy to encourage 1,650 users to adopt a unified sales process in 32 countries. Its keys to success: getting users involved early, using an efficient implementation approach, and maintaining a tight focus on delivering benefits for users, not just management.
Lawson completed a triple play recently with the announcement of its next-generation strategy -- Project Landmark, a significant middleware partnership with IBM, and now a merger agreement with Intentia. With 2004 revenues of $770 million, the transaction moves the combined company past several vendors into fourth place in a rapidly consolidating ERP applications market.
Oracle's merger with PeopleSoft creates a strong No. 2 enterprise apps vendor -- and an alternative for companies that want to maintain negotiating leverage with SAP and others. With more resources, more revenue, and a new management team, Oracle has a chance to deliver changes that companies want and progress toward its newfound application vision. Oracle's support and enhancement policy allows PeopleSoft customers to look before they leap, maintaining support on current implementations through 2013.
If Oracle's four-headed application strategy -- new releases in the next two years for each of its four application product lines -- calmed customer concerns about their dead-end PeopleSoft investments, it did little to address Oracle's long-term application future. Oracle's No. 2 application status is only relevant in the broader market if Oracle can establish clear differentiation -- and market growth -- versus applications giant SAP.
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From The Editor
Things are definitely heating up in the Enterprise Applications coverage area. Since our Q1 First Look, we've extensively covered the Oracle-PeopleSoft acquisition as Oracle's plans start to unfold, in addition to the Lawson-Intentia merger, and we continue to cover the most popular topics as requested by our clients. We've published a Forrester Big Idea focusing on the future of the supply chain, which is featured in this First Look. We've expanded our team, adding CRM strategy analyst William Band, ERP/order management analyst R "Ray" Wang, and call center/service desk analyst Chip Gliedman. We've completed three Forrester Waves™, comprehensive research projects containing extensive amounts of product evaluation data. These reports can help our clients choose a vendor for eService, hosted sales force automation, and Sarbanes-Oxley compliance software packages. Our next First Look will feature enterprise CRM, service desk, and sales force automation Waves.
Please feel free to send any comments to me at johnragsdale@forrester.com.
John Ragsdale
Vice President, Research Director
johnragsdale@forrester.com
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The Forrester Wave™: Hosted Sales Force Automation, Q1 2005
Hosted apps are changing the way firms think about software, providing a lower-risk, lower-upfront-cost alternative to on-premise apps. Software-as-a-service probably won't bring an end to the days of multimillion-dollar, big-bang app deployments, but it's stealing market share from licensed vendors, particularly in the midmarket. Sales force automation (SFA) is one of the areas taking off most quickly, as sales executives demand easy-to-use, flexible solutions that don't require IT support. Firms looking for hosted SFA should find the solution whose strengths best align with business processes and user needs by using the attached tool.
The Forrester Wave™: eService, Q1 2005
Continued customer adoption of nonphone channels and a new focus by many consumer-facing companies on improving the customer experience are changing the requirements for eService projects. No longer seen as just a way to deflect live calls, eService vendors are expanding their appeal to address a larger array of issues and information requests and are targeting new industries and new titles (particularly marketing and customer experience executives). Picking the right product involves prioritizing a growing number of functional requirements, identifying the source of customer- and agent-facing content, and deciding whether and how deeply to integrate eService with existing CRM software. With CRM vendors upping the ante by developing their own eService suites, niche eService vendors are constantly redefining best-of-breed, making this designation a moving target.
The Forrester Wave™: Sarbanes-Oxley Compliance Software, Q1 2005
Sarbanes-Oxley (SOX) compliance is a rapidly maturing software category that combines enterprise content management, analytics, and enterprise applications. Three criteria provide significant differentiation among the SOX offerings evaluated: integration, collaboration, and reporting and monitoring. The user interfaces also vary widely in capability and ease of use. OpenPages emerged as the leading vendor, with IBM, Paisley Consulting, HandySoft, and Oracle close behind. Enterprises seeking a single platform for enterprise risk management should give preference to IBM, OpenPages, and Paisley Consulting because they provide a broader focus beyond SOX that encompasses additional compliance categories, including integrated enterprise risk management.
The Next Point-Of-Sale Solution
Half of European and North American retailers plan to migrate to a new point-of-sale (POS) solution by 2008. For some, this is an opportunity to manage their POS applications centrally and serve them up to stores and terminals over broadband. But while these firms are keen to benefit from unbundling POS hardware and software -- taking the opportunity to reduce stockouts and improve customer service by integrating point-of-sale apps with other enterprise apps like supply chain and customer loyalty -- they remain cautious. Their main concerns during the migration to the next generation of POS solutions will be: 1) securing their ongoing business and 2) ensuring easier and faster future POS apps upgrades to increase their flexibility and responsiveness. IBM and NCR are the most popular candidates to provide solutions, reflecting their presence in the POS solution market. Challengers like Fujitsu, Retalix, Siemens, and Wincor Nixdorf will also be on many retailers' shortlists.
Microsoft Wraps PLM Market With Its Software Innovation Network
Microsoft is a latecomer to the product life-cycle management (PLM) market. However, instead of cracking this emerging market by relying exclusively on internal R&D capabilities, fast-follower Microsoft is assembling a more powerful arsenal: a Software Innovation Network (SIN), made up of PLM ISVs, lead users, and systems integrators. Rival PLM platform vendors IBM, Oracle, and SAP won't be able to ward off Redmond unless they ditch their not-invented-here R&D models and learn to externally source their PLM innovation capabilities.
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Best Practices For CRM Deployment: Lessons From 21 Global Companies
June 22, 2005, 11:00 a.m.-12:00 p.m. Eastern time
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