1. Copyright © 2006 Accenture All Rights Reserved. Accenture, its logo, and Accenture High Performance Delivered are trademarks of Accenture. New Growth From Enterprise Systems Achieving High Performance through Distinctive Capabilities Jeanne G. Harris Director of Research jeanne.g.harris@accenture.com

2. 2 Copyright © 2006 Accenture All Rights Reserved. NOTE: DO NOT INCLUDE: Here are Key findings – Latin America pulled from report. They are in the speakers notes, but I included them all together here for your reference only. Benefits: –Latin America executives indicate significantly more focus on growth and flexibility. –Other primary benefits realized were improved financial management and better decision making. –Are more likely to be realizing increased revenue through enterprise systems implementations vs. North American companies and comparable to the rest of the world. Latin American organizations are implementing a full range of enterprise systems applications including human resource management and are planning many more as 37 percent of implementations occurred in the last two years. Customer relationship management, supplier relationship management, and business intelligence/data warehouse lead all planned implementations, particularly for organizations in Latin America Latin American organizations appear to be lagging in undertaking significant ongoing optimization efforts. 55 percent of Latin American organizations indicate a substantial contribution to their distinctive capabilities, the highest of any region services-oriented architecture (SOA) is less likely to be used in Latin America. Latin America, executives are more likely to plan to implement enterprise system applications and to integrate best-of-breed applications Latin American companies reported significantly more data exchange with suppliers than other regions. Latin American companies reported and much less process optimization. Fifty-five percent of Latin American organizations indicate that their enterprise systems contribute to their distinctive capabilities. In 45 percent of organizations, some analytic capability is available in addition to a data warehouse.

3. 3 Copyright © 2006 Accenture All Rights Reserved. Enterprise Systems and Value Creation Enterprise systems are the second most important technology of the last decade (after the Internet) Immense investment (time, money and attention) by businesses Previous Accenture Institute research (2002): How do companies maximize the value of their investment in enterprise solutions? –Implementing an enterprise system results in sustained value creation –Some organizations realize far more benefits than their less successful counterparts 3

4. 4 Copyright © 2006 Accenture All Rights Reserved. The 2005/2006 Accenture ES Study What’s changed since 2002 with firms that have adopted enterprise systems? Are the factors that drove value then still driving it today? Are enterprise systems enhancing competitiveness and distinctive capabilities? How important are business analytics to achieving value? 450 executives from 370+ organizations in 35 countries and 19 industries surveyed to find out: Key Questions

5. 5 Copyright © 2006 Accenture All Rights Reserved. Nineteen executives from five countries responded to the survey from Latin America. This represents 5% of the sample. Countries represented: Argentina Brazil Mexico Puerto Rico Venezuela Latin American Participation

6. 6 Copyright © 2006 Accenture All Rights Reserved. Key Findings Investing resources (time, money, skilled people and technology) to implement their enterprise system is merely a first step and does not guarantee results. There are clear winners and losers – some companies get considerably more value from their enterprise systems than others – and there is more opportunity for everyone. While some view enterprise systems as a commodity, more than half view their ES as a significant contributor to their distinctive capability. Better decision making remains the most-sought benefit and also the one most likely to have been realized. Organizations that get more value from their systems and use them for competitive distinction have superior financial performance. Analytical technologies and capabilities are particularly important to achieving value and high performance.

7. 7 Copyright © 2006 Accenture All Rights Reserved. Top Performing Companies … 1. Realize much more value from their systems and use them in distinctly different ways. 2. Likely to seek and measure tangible benefits, such as reduced cost and increased revenue. 3. Emphasis on integrating, optimizing and using analytics to drive improved business performance. 4. Extend systems throughout their organization and implement across a range of functions. 5. Integrate the organization and external systems of customers and suppliers. 6. Aggressively use information and analytics to improve decision making. 7. Use strategically for competitive differentiation. 8. Tailor systems to sustain competitive advantage and standardize other areas. 9. More likely to implement industry modules. 10. Twice as likely to take advantage of SOA.

8. 8 Copyright © 2006 Accenture All Rights Reserved. The Value Model Still Holds Invest in enterprise systems Implement extensively Experience using enterprise systems Integrate Optimize Analyze Benefits realized PrerequisitesValue Drivers

9. 9 Copyright © 2006 Accenture All Rights Reserved. The Same Benefits Are Still Being Sought …but just half of organizations have achieved most or all of these benefits Better management decision making Improved financial management Faster, more accurate transactions Cost reduction Improved inventory and asset management Ease of expansion/growth and increased flexibility Cycle time reduction Headcount reduction Improved customer service and retention Competitive advantage through distinctive capabilities Fewer physical resources and improved logistics Increased revenue 4% 7% 12% 17% 22% 24% 33% 41% 53% 46%

10. 10 Copyright © 2006 Accenture All Rights Reserved. Companies Are Integrating More Internally Piloted in a single business unit but not rolled out Implemented in a single business unit only Implemented in about half of the organization Implemented in most functions and business units Implemented throughout entire organization 1% 7% 12% 30% 50%

11. 11 Copyright © 2006 Accenture All Rights Reserved. Companies Are Integrating More With Customers and Suppliers 17% 24% 12% 15%

12. 12 Copyright © 2006 Accenture All Rights Reserved. Companies Are Optimizing Processes and Customizing Systems More 75% 85% 45% 55%

13. 13 Copyright © 2006 Accenture All Rights Reserved. Use of Analytics Is Up Too Very little access to data and no analytic capabilities Data warehouse ad-hoc report writers, query and end-user access tools Some analytic functionality in addition to data warehouse Significant decision support or analytic functionality, supported by extensive and integrated management information Extensive use of real-time analytics, sophisticated automated decision making to supplement human decision making

14. 14 Copyright © 2006 Accenture All Rights Reserved. The Ability to Analyze ES Data Is a Key Differentiator 15% of top performers versus 3% of low performers indicated that analytical capabilities are a key element of their strategy. No analytical capability Minimal analytical capability Some analytical capability Above average analytical capability Analytic capability is a key element of strategy 12% 0% 33% 8% 27% 37% 19% 47% 9% 10%

15. 15 Copyright © 2006 Accenture All Rights Reserved. High Performers Use Analytics 65 % have significant decision-support/analytical capabilities 23 % 36 value analytical insights to a very large extent 8 77 have above average analytical capability within industry 33 77 have Business Intell/Data Warehouse modules installed 62 73 make decisions based on ES data and analysis 51 40 use analytics across their entire organization 23 HighLow Performers Top performers have a greater analytical orientation than low performers.

16. 16 Copyright © 2006 Accenture All Rights Reserved. The Word Is Out! Each of the factors that drive value from an enterprise system is up over the last three years –Integration –Optimization –Analysis Not surprisingly, the level of value achieved is also up But there are still substantial opportunities for improvement

17. 17 Copyright © 2006 Accenture All Rights Reserved. ESs Don’t Have to Be a Commodity! Question: To what degree does your enterprise system contribute to your organization’s distinctive capabilities? Not at allSlightlySomewhatSubstantiallyTo a very large extent 1% 8% 38% 42% 11%

18. 18 Copyright © 2006 Accenture All Rights Reserved. Many Companies Have Distinctive ESs Not distinctiveOnly slight differences versus other companies in the industry Moderately different from the rest of the industry Somewhat distinctive— capabilities or functionality not used elsewhere in industry Very distinctive— significant capabilities or functionality not used elsewhere in industry 4% 13% 29% 39% 15%

19. 19 Copyright © 2006 Accenture All Rights Reserved. What’s Distinctive Today? Integrated critical processes Accurate planning Analytics for decision making Monitoring and measuring progress against aggressive or stretch goals Investing resources in alignment with strategic objectives Enabling flexibility to adapt change Using IT as a strategic asset Understanding how the organization creates value Insight into customers Disciplined project management Creating new products or services Not at allSlightlySomewhatSubstantially To a very large extent 3%7%23%36% 5%12%37%33%14% 2%10%29%44%15% 9%17%34%27%12% 10%24%34%21%11% 6%20%31%28%14% 6%17%28%30%19% 13%16%40%24%8% 13%16%40%24%8% 14%22%32%24%8% 16%24%33%5%22% Numbers do not equal 100% due to rounding 30%

20. 20 Copyright © 2006 Accenture All Rights Reserved. What’s Coming That’s Distinctive? By optimizing business processes and fit with enterprise systems Through new technology such as Web services, mobile services, etc. By adding more enterprise systems applications By integrating best of breed applications By customizing existing applications No plans to add distinctive capabilities 60% 57% 44% 30% 22% 5%

21. 21 Copyright © 2006 Accenture All Rights Reserved. What’s Coming in New ES Capability? CRMBI/DWSRMHRPLM 29% 21% 15% Percent planning in two years 36%

22. 22 Copyright © 2006 Accenture All Rights Reserved. What Technologies Are Being Used Today?

23. 23 Copyright © 2006 Accenture All Rights Reserved. Future plans: Technologies to Augment ES in Next Year 14% 28 % 26 % 14% 30 % 34 % 40 % 27 % 13 % 33 % Service-oriented architecture (SOA) Web service Integration technologies (e.g., EAI, EDI) Other None of the above Low Performers High Performers

24. 24 Copyright © 2006 Accenture All Rights Reserved. Lessons from Current Practice Companies are constantly changing their overall ES environments, and still squeezing more value from them For more value, work on: –Integration and consolidation –Optimization of the fit between your ES and your processes –Analytics and fact-based decision-making Pursue the technologies that make those goals possible