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For more information on SAP products and services, visit: For more information on SAP products and services, visit:

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For more information on SAP products and services, visit: - PPT Presentation

wwwsapcombusinessinnovation For more information and for IDC research visit wwwidccom Realizing Business Benets with a CloudCentric Organization An IDC InfoBrief sponsored by SAP pg 18 Key T ID: 457399

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For more information on SAP products and services, visit: www.sap.com/businessinnovation For more information and for IDC research, visit www.idc.com Realizing Business Benets with a Cloud-Centric Organization An IDC InfoBrief, sponsored by SAP pg 18 Key Takeaways Organizations that are mature in their approach to a balanced use of cloud – the best mix of external sourcing and internal transformation – also have business units (e.g., marketing, sales) with more direct control over sourcing the IT solutions that best t their business needs. Many companies are naïve about how mature they really are. IDC research shows they typically believe they are at least 1-2 stages beyond where they actually are. A key reason is signicant shortage in required IT skills and business-process change to get to the next level. Businesses will trust their incumbent providers to take them to cloud solutions, rationalize their portfolios, provide orchestration between line-of-business and IT organizations, and move up the maturity scale. They will also trust companies that can provide a more complete set of end-to-end workows of mission-critical applications. Realizing Business Benets with a Cloud-Centric Organization An IDC InfoBrief, sponsored by SAP Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home pg 9 How Are Mature Organizations Beneting from Cloud? Cloud users are realizing benets in ways that impact the line of business directly via agility, simplicity, collaboration and innovation The three most important expected benets of cloud among optimized organizations Simplify and standardize IT infrastructure and applications platforms 89% of IT users (and 83% of LOB users, average of 85% among all respondents) stated that cloud should enable them to give their business units more direct control over sourcing (and managing, conguring) their own IT solutions. 86% of IT users (and 80% of LOB users, average of 83% among all respondents) stated that cloud should enable IT orgs to improve their internal service delivery levels, and business agility. Give business units (eg, sales, marketing, corporate communications, customer support) more direct control over sourcing their own IT solutions Improve our internal service delivery levels and business agility 81% 84% 83% Simplify IT Give BUs More Direct Control Improve Internal Processes Cloud-Centric Businesses Think Differently Realizing Business Benets with a Cloud-Centric Organization An IDC InfoBrief, sponsored by SAP Benets » 80% of deals that began by monitoring and directing social conversations closed. » $8 million in revenue was driven from 14,000 leads found on social media. » Set a new record – closed a sale that was initiated in response to a customer tweet in 2 minutes. Enabling Business Benets with a Cloud-Centric Organization pg 10 An IDC InfoBrief, sponsored by SAP Deployed SAP Cloud for Social Engagement, SAP Cloud for Service, SAP HANA, and analytics. SAP Customer Story A global ooring company, with operations in North America, Europe, Asia, and Australia, needed to simplify its business processes. SAP Cloud for Social has enabled the company to easily monitor and engage with their customers to drive sales. Home Home Home pg 8 Cloud Maturity Improves Key Business Outcomes The greater the maturity, the more signicant the benets Source: 370 responses from 15 IDC Business Value Research Studies, December 2014 Cumulative KPI Benet of Moving Up Levels of Cloud Adoption Revenue growth IT cost reduction Strategic allocation of IT budget Time to provision Meeting SLAs 4 to 5 10.4% 77% 200% 99% 72% 1 to 2 0.1% 13% 16% 27% 43% 2 to 3 1.4% 29% 56% 47% 63% 3 to 4 4.0% 48% 100% 76% 69% pg 5 Businesses Need a Game Changer Business demand for IT services Opportunity for transformation IT budget IT service supply Cost structure Search for new revenue Big data Social Mobility Sustainable innovation Business demand drivers » Unsustainable gap Business looks outside of IT structure for answers Private cloud Public cloud Demand for shorter cycle times New normal Complexity slows productivity RECESSION Business demand for IT services 2005 – 2010 2008 – 2011 2012 – 2016 IT budget IT service supply IT has always struggled to keep pace with the new initiatives business leaders want and need, and data analytics, social solutions, and the search for sustainable innovation have all pushed hard on IT organizations to build even faster. Cloud – both public cloud applications and IT developer and operations services, as well as private cloud methodologies – are growing to ll the IT service supply gap. Capabilities of the IT organization are once again expanding, driving greater business value. pg 4 The Cloud is Rising Nearly 80% of organizations interested in cloud computing, with almost 40% already having implemented. Interested in cloud computing 79% Currently using the cloud Using the Cloud for more than 1 or 2 small applications/workloads Private Cloud, but no interest in Public Cloud Using the Cloud, but only for 1 or 2 small applications/workloads Firm plans to implement within 12 months Evaluating for a specic service, but no rm plans to implement Generally learning about the cloud model Don’t know, or have no interest in cloud computing at this time 38% 18% 19% 2% 14% 17% 8% 21% No interest in cloud computing 21% Not currently using the cloud 62% pg 3 Businesses need a game changer. Organizations are challenged to keep up with the pace of development and innovation required for businesses to earn money and be successful. A signicant gap has opened where the IT budget is at, and mobile, social, big data, and the need for new sources of sustainable revenue, are forcing a change. Maturity in cloud produces signicant benets – in allowing organizations to focus on strategy versus day-to-day operations, in faster time to provision new services, in reduced IT costs, and perhaps most importantly – in the ability to make more revenue. Organizations that are mature in their approach to a balanced use of cloud – the best mix of external sourcing and internal transformation – also have business units (e.g., marketing, sales) with more direct control over sourcing the IT solutions that best t their business needs. Setting the Stage pg 2 This report uses data from IDC’s CloudView Survey , and IDC’s Business Value Practice. » CloudView 2014 surveyed for cloud adoption and maturity among 19,080 worldwide IT and LOB respondents and attitudes towards cloud among 3,463 qualied respondents, in December 2014. » IDC’s Business Value Practice data is derived from interviews with 370 user organizations in 2013 and 2014. Key questions addressed in this InfoBrief » What key IT decisions and challenges are companies facing today? » Why is maturity important? What are the benets of a mature cloud strategy? » What is the roadmap to achieve benets of a mature cloud strategy? » What are organizations doing today to advance from one stage to the next? » Where are these companies struggling, where do they need help? » Where do orgs get help for their cloud strategies? » What does success look like for companies which have an “optimized” cloud strategy? Study Overview An IDC InfoBrief, sponsored by SAP | June 2015 The Cloud-Centric Organization How organizations realize business benets with a mature approach to Cloud pg 7 Source: 370 responses from 15 IDC Business Value Research Studies, December 2014 Cloud Maturity Improves Key Business Outcomes Starting at stage #1 (Ad Hoc), operations, and time to provision improved on average nearly 80% for every “stage change”. Those organizations which move from stage 1 to stage 5 ar�e 10x (1,084%) better than those at stage 1 in allocating IT staff resources to strategic tasks vs. “keeping the lights on” tasks. Making a step change higher requires progressively more planning, expertise and investment. 800% 400% 200% 100% Strategic vs. operations Cumulative improvement % Time to provision Reduction in IT costs % of SLA’s met Increased revenue Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized pg 6 Maturing Cloud-Centric Organizations See Real Business Benets Learn Focused primarily on pilot projects driven by needs of individual decision makers and teams. LOB requirements met month to month. BUSINESS OUTCOME Develop a high-level knowledge of the business value of cloud computing for immediate, tactical needs Change Scale up access to standardized IT resources via cloud, at lower costs or increasing speed. Focusing on app virtualization. BUSINESS OUTCOME Promoting buy-in to cloud resources and need for a company-wide approach, experimenting with short- term improvements, in access to IT resources via cloud. Gathering input to eliminate redundancies. Rene Instrument employee- facing IT processes. Enable agile access to IT resources through aggressive standardization & measurement. Create pervasive automation. BUSINESS OUTCOME Understand cost and business value of technology options (across spectrum of cloud and non-cloud); instantiate notion of internal self-service mechanisms. Formalize IT/business coordination structure for external sourcing. Mainstream Incorporate structure and quantitative performance management and measurement. Publish rate cards, self-service sourcing/ chargeback. IT as a service center. BUSINESS OUTCOME Create business unit opportunities by using internal and external cloud assets, associating risks/costs with rewards. Expanding a consistent, enterprise-wide best practices approach to cloud, speeding iterative cycles to increase value to the business unit. Attack Achieve level of excellence including feedback loops for continuous improvement. Internal or provider-based sourcing structure driven by clear value to the business. BUSINESS OUTCOME Enable managed risk-taking to deliver innovative IT-enabled products and services sourced from best of breed internal or external providers. Participate in standards development. Drive business innovation through seamless access to enabling IT capability, based on value to business, and transparent cost measures. LoB and IT are harmonized, and use cloud to drive innovation. Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized Ad Hoc Opportunistic Repeatable Managed Optimized We’re building… 38% We’ve transformed… 16% We’re moving… 46% Source: IDC Cloud MaturityScape - Cloud Usage by Organizational Size: Benchmarking IT Buyers, #249227, June, 2014 IDC identies 5 categories of cloud maturity, each with a set of IT tasks and milestones supporting LOB, and each with signicant business outcomes. Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home Home pg 17 Source: IDC CloudView Survey, December, 2014, n=1223 worldwide respondents. Top four answers. But Customers are Ready to Work with Cloud Vendors How will your organization get help in developing your cloud strategies? It is important to carry forward our major incumbent provider into the cloud We expect to have a single major cloud provider We expect to have 2 or more major cloud providers It is important that our SaaS provider provide a “complete” workow Strongly Agree Strongly Agree Strongly Agree Strongly Agree 20% 8% 6% 12% Agree Agree Agree Agree 78% 40% 38% 60% Larger software incumbent vendors, especially those oering complete workows in the cloud, are important partners for cloud maturity. pg 16 Nearly 90% of respondents have a “strong desire” for building a hybrid cloud organization in the next 2 years. But given where they are on a path to getting the most critical skills, IDC calculated a 50% skills gap for most organizations to achieve their goals. Specically: Customers Have Huge IT Skills and Business Process Gaps cannot foresee when they will have consistent service-level monitoring across hybrid clouds have implemented a unied service catalog have user self- service provisioning have IT staff skills to use cloud automation 35% 38% 32% 34% 18% have adequate knowledge of cloud best practices Getting there will require help and investment. pg 15 The dierence of where organizations rated themselves on IDC’s maturity scale, versus where IDC’s calculations placed them on the maturity scale, is more than 17%. This represents over 1 full stage of maturity that companies over-estimated how far along they are. Not as Mature as They Think When asked to self-rate their progress in maturity, 46.3% of qualied respondents (cloud users) believed to be managed or optimized IDC’s maturity modeling identied 31.2% as managed or optimized Managed cloud strategy Optimized cloud strategy Self reported Self reported 17 3 Calculated Calculated 46 31 Organizations need help to grow along the maturity spectrum and get the most business benet. Enabling Business Benets with a Cloud-Centric Organization pg 14 An IDC InfoBrief, sponsored by SAP A large vertically integrated sugar rener had a very complex sales process involving several leading brands. SAP has helped the company be more efcient by eliminating work and providing real-time information sharing that enables the company to engage with its customers and solve issues much more rapidly. Deployed SAP Cloud for Sales and SAP HANA Enterprise Cloud. SAP Customer Story Benets Simplication allows the sugar rener to get to market faster, with better processes that drive consistency across the organization and improve its overall customer experience. Home Home Home pg 13 Involving line of business leaders in developing KPIs and making decisions is step #1 in a consistent enterprise-wide approach to IT. Using cloud as the foundation for business innovation is a cornerstone for IT strategies of mature IT organizations, and it’s critical that the LOB is deeply involved in both implementation and operations. » When the IT organization does less cloud purchasing and budgeting, and LOB does more, the percentage of optimization goes up. What Makes a Cloud Strategy “Mature”? Percent optimized Percent optimized Today In 2 Years 0.40% 0.14% 0.37% Cloud purchasing decisions and budgeting come from IT Cloud purchasing decisions and budgeting come from IT 0.33% pg 12 Many of the most important cloud-related skills that “optimized” organizations do better than less-mature organizations, relate to having a consistent approach to IT sourcing and management across the organization, and focusing on enabling the line of business. How Are Organizations Achieving a Mature Strategy? Which of the following tasks related to cloud has your organization already implemented? 40% 39% 41% 36% 51% 49% 52% 48% Ability to use cloud to drive business innovation, agility and competitive advantage Processes to share and reuse templates and best practices across internal cloud projects Optimized respondents All respondents Consistent processes to identify which applications can best benet from cloud Collaborative business and IT governance to dene cloud management policies and SLAs pg 11 Source: IDC CloudView Survey, December, 2014, n=3463 worldwide respondents Business Groups Expected to Benet Most from Cloud Maturity Which groups do you expect to benet most signicantly from your organization’s cloud strategy during the next three years? All respondents LOB respondents LOB respondents in specic eld IT respondents 60% 50% 40% 30% 20% 10% 0% Supply chain and logistics Distribution channel management Financial/ accounting HR Legal/ corporate affairs Engineering R&D Sales Marketing IT operatiions Customer support Application development Senior executive team Program management Operations Most survey respondents evaluated the benets of cloud apps according to their specic needs, but the IT organization has the only view of the entire company. It’s telling that in areas like supply chain, and engineering, among traditional lines of business, IT respondents felt that “maturity” in cloud would benet IT further; these are areas which have far fewer SaaS applications than areas like Sales Automation and Human Capital Management, and thus have much more IT involvement.