CIO’s must change their thinking according to SAP

Facing the threat of being outsourced, corporate CIOs must remake themselves, more thoroughly understand their businesses, eliminate waste and innovate their company’s IT processes.
That was the message from Shai Agassi, SAP AG’s president of product technology, who delivered a keynote address here yesterday at the software maker’s TechEd ’05 conference.

One of the issues Agassi raised was that of IT outsourcing, and he bluntly asked the audience, "Do you matter?" Agassi argued that the industry is headed for another wave of change that will make some IT jobs obsolete unless workers can start thinking strategically and executing "with urgency."

He urged the creation of metrics that show what a company’s IT department is doing to improve business processes, and said that ultimately, a CIO is no longer head of information, but instead becomes a chief process innovation officer. In that role, he becomes the "honest broker" in a company, making decisions about various processes throughout the enterprise and transforming IT into what Agassi called "strategic technology."

Making that transformation requires spending time with business managers, finding out about their processes and then reshaping the IT department accordingly, while cutting waste and helping employees gain new skills, Agassi said.

He told the audience to look at consolidating systems where possible in an enterprise and breaking down silos. Agassi acknowledged that doing so can be tricky, since those who run the systems are going to be defensive. "No one likes to take themselves out of a job," he said. But "don’t protect the past, move to protect the future."

That message hit home with a couple of attendees.

A company must press for innovation in its processes, although "you need to keep the lights on for the existing systems," said Mike Longmore, development manager at Advanced Energy Industries Inc. The Fort Collins, Colo., manufacturer of power supplies and flow controls runs mySAP ERP and the SAP Business Warehouse, among other SAP applications.

Longmore said he feels SAP is on the cutting edge of innovation. And while he said his company isn’t a large ERP user by SAP’s standards, Longmore added that no other ERP provider comes close to providing SAP’s flexibility.

On a different note, SAP also announced yesterday that it had launched an Enterprise Services Community Process. This will allow SAP customers and partners such as independent software vendors and integrators to collaborate in a public forum to improve on SAP’s Enterprise Service Architecture (ESA).

ESA is a Web services-based set of technologies bundled into SAP’s own NetWeaver middleware and integration stack that provides the backbone for a company’s business applications. Among the partners who have signed on to the community process are Adobe and EMC Corp., SAP said. Those companies that incorporate ESA technology into their products will receive an "Enterprise Services-Ready" designation.

ERP systems info from computerworld

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ERP or BoB

The debate over whether to opt for enterprise resource planning (ERP) or best-of-breed (BoB) specialists for supply chain management (SCM) software has been raging for a while, but the issue is at the forefront of supply chain conversations now more than ever. In the past two years, ERP providers have made increasingly aggressive efforts to boost their presence in the SCM software applications market, traditionally dominated by the best of breed providers. This has left many users with a headache from trying to discern which approach is the better option. One reason for this confusion is the sheer volume of management issues that companies face: the continued misalignment of IT and business functions around the ERP vs. BoB issue; the difficulties of estimating the true costs of integration for both ERP and BoB alternatives; the lack of connection that often exists between corporate executives and supply chain leaders on the importance of logistics and SCM; a frequently poor and frustrating software evaluation and selection processes. Business functions such as transportation, distribution and inventory management, are becoming more important as market forces such as shorter cycle times and customer requirements for real-time information come together. This has led many companies to upgrade their technology support in areas like warehouse or transportation management systems, supply chain visibility and other related SCM software applications. BoB providers have traditionally led the SCM market. In recent years, vendors have developed broader suites that provide integrated support across supply chain processes, such as linking inventory replenishment and transportation management. However, the software buying landscape is changing and there is greater competition between ERP and BoB vendors.

ERP info from Line56

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