In just a few months, the volume knob on Artificial Intelligence was cranked up to 11. But for all that deafening noise, most CIOs are finding AI doesn’t yet live up to the hype. If you’re assessing AI for ERP, here’s guidance on how best to look before you leap.

AI is all the talk right now, but as with any breakout technology for enterprise applications such as ERP, it takes time to understand the potential benefits and challenges, infuse the new tech or capability into existing code and processes, and/or deploy new ones that leverage the capability while reducing the new risks it creates.

As Pat Brans stated in a recent CIO article, “Most CIOs have begun exploring generative AI to make sure they stay relevant. But many are finding that the technology on the market doesn’t yet live up to the hype.”

Expect AI to be transformational but it’s early days for ERP

We spoke with several Rimini Street clients and prospects regarding how they use generative AI for ERP. What we found aligns with Mr. Brans’ thinking. There is a lot of enthusiasm but also a lot of “tire kicking”. While there appears to be tremendous interest in AI, it’s difficult to find ERP-specific use cases that are operational, much less proven.

Virtually everyone we spoke with expected AI to be a game changer for their organization, but they were still in the planning or analysis phase for where and how AI could improve enterprise application outcomes. McKinsey estimates that, “…generative AI could add the equivalent of $2.6 trillion to $4.4 trillion annually…this would increase the impact of all artificial intelligence by 15 to 40 percent.”

What we didn’t find was any ERP leaders who were sitting on the sidelines waiting for the technology to mature. This is in direct contrast to other big ERP changes like the SaaS ERP model, or like moving from the mainframe to a client/server model, where it took years for most organizations to embrace the new technology.

For ERP, generative AI initiatives are occurring at the edges of the core system

For enterprise applications like ERP, the code has matured to a point where it’s generally a good fit for conducting back-office operations. The mechanics of recording business transactions (e.g., purchases, payments, tracking inventories) have been optimized. Conversely, customer experience and knowledge handling are key areas where early adopters are seeing results that improve business outcomes. Analytics is another one, and all happen at the edge of core ERP.

It will take a while for the ERP vendors to catch up

More than any breakout information technology since ERP’s inception, AI has the potential to change how business works. Additionally, it appears to be doing so more rapidly than previous technologies given the avid interest organizations are showing. Changing the fundamentals of doing business will eventually force enterprise software vendors to rewrite their core ERP code rather than providing tools to build features around the edges as they are initially doing with generative AI. For now, however, most ERP customers are safe to keep running their deployed ERP systems while they innovate at the edges.

Although ERP vendors like SAP and Oracle are introducing AI development tools, it might take some time for them to figure out how to package and price and leverage AI in their software products. Early adopters of interim offerings run the risk of getting caught in the quagmire of rapidly evolving pricing models and availability as AI offerings mature. For example, SAP S/4 on premises and private cloud customers risk being left behind. According to IT Jungle, “All new ERP capabilities, sustainability and carbon accounting solutions, and new AI innovations, ‘will only be available in the cloud and delivered via RISE and GROW with SAP.’ (quoting SAP CEO Christian Klein from the company’s Q2 2023 earnings call).”

Two big challenges stand out for ERP vendors and customers

1. ERP vendors risk losing the initiative as they attempt to infuse common AI functionality into their flagship products.

As generative AI use cases evolve for ERP and users become savvy about using AI development tools to create new code that improves how business works, a spaghetti soup of AI apps that individualize ERP deployments will result. Vendors will need to rethink their definition of standard functionality and core code (an enormous and time-consuming task). Brian Sommer states in a recent Diginomica article, “…vendors don’t have any firm ideas yet on what they will develop (using generative AI), when it will ship, what privacy issues they’ll expose your firm (and its data) to, how they’ll sell and price it, etc.”

It’s reminiscent of the best-of-breed quagmire that ERP was introduced to correct, only worse since the AI code will be unique to each organization. The rapid adoption of AI will put ERP vendors at risk of losing the ability to control the definition of the next generation of ERP.

2. Replacing customers’ unique, fit-for-purpose AI solutions with the enterprise software vendor’s AI offerings could become too pricey and complex.

For ERP customers, generative AI tools allow for creating the ultimate in rapidly deployed custom code that surrounds their ERP system. This will exacerbate the customization factor. It will be hard to build a solid business case to eliminate the custom code and replace it with an upgrade to their ERP vendors’ next generation code set, particularly when the functionality offered by the vendors will have been designed with a one-to-many solution rather than the one-to-one of custom AI built by each organization.

AI can be a good fit for ERP but beware the risks

As with any emerging technology, generative AI carries some significant risks, some of which, according to PwC’s Managing the Risks of Generative AI, include:

• Risks to privacy
• Cybersecurity vulnerabilities
• Regulatory compliance over data used and AI-generated outcomes
• Third-party relationships – who owns support and maintenance, error resolution, testing, etc.
• Legal obligations for data and solutions
• Intellectual property rights

The path to success with AI is still being paved and the unknown could be costly or disruptive in a bad way.

Recommendations:

• Take the time to develop a risk assessment and risk mitigation plan for each AI initiative. Establish conditions for when to pull the plug or accelerate further.
• As you take the AI journey, assess how adding AI components into your ERP portfolio will impact your ability to provide cohesive, effective support and services.
• Use a unified approach to make running and supporting the portfolio simpler and more scalable by reducing the number of vendors, products, and support service layers involved. To add to the value proposition, outsource the unified support and services but plan this move carefully.

You may also like:

• Read: Are You Digitally Ready for AI-Enhanced ERP?
• Watch: Unified Support Services Explained – A Tale of Two CIOs
• Solution: End-to-End Enterprise Software Support, Products, and Services

The post Generative AI Headlines Outpace ERP Adoption appeared first on Rimini Street.

With multi-dimensional complexity, strategic depth, and the need for foresight, the sourcing and procurement of enterprise software is often compared to a game of chess—in three dimensions. So how do you become a Grand Master? Chief Procurement Officer expert Brad Veech joined Judy Stubbington, VP, finance and operations at Rimini Street, and shared all the right moves. Checkmate.

From scouting, to selection, to sealing the deal, most IT leaders know that the enterprise software procurement decisions they make today will have outsized impact tomorrow. But not every IT leader knows the secrets to ensure organizational success, as the role of technology sourcing in driving business success has never been more critical. That’s why I was pleased to recently join a Q&A with author and software procurement expert Brad Veech.

In my nearly three decades in finance, I’ve consistently focused on delivering solid results, and that entails staying current with and executing best practices. And when it comes to enterprise software sourcing and procurement, I can think of no better person to elicit best practices from than Brad.

As Head of Technology Procurement at Discover Financial, Brad brings nearly three decades of IT sourcing experience across diverse industries, and has a track record of improved business outcomes through the use of effective negotiations, supplier development, and partnerships. Veech is the author of “Software: The Silent Killer of Your Company’s Budget” and is a frequent keynote speaker at sourcing and procurement events. If you’re a CPO or involved in software sourcing and procurement in any way, Brad shares some great lessons in our Q&A.

CPO past, present, future

Judy: You’ve been a leader in procurement for more than 25 years. What changes have you seen and what do you expect to see for the CPO role? What was the approach in the past, what are the best practices today, and how must CPOs adapt and evolve to be successful in the future?

Brad: The CPO of the future will need to come from a technology sourcing background. Of course, there are other significant categories in the CPO’s typical portfolio to oversee, but none are growing as fast and can expose the level of risk that the technology category can.

It becomes a real challenge when the suppliers utilize an executive, especially a CPO, as a contact point for escalation, and their lack of technology contacting creates benefit to the supplier’s deal. CPOs and their executive leaders need to be trained on the sales tactics used by the suppliers; they keep changing the rules of engagement. What got the leader into their role, has changed drastically since they attained executive status.

Procurement: High-stakes art & science

Judy: What does successful technology sourcing entail? What are the risks to organizations lacking procurement expertise, what’s at stake, when should procurement get involved with projects, what types of projects, etc.?

Brad: The category of technology procurement is growing, and becoming the largest teams in indirect spend, which probably makes sense. Find a project that doesn’t have technology embedded in it. Subject matter expertise in the tech sourcing area is critical. IT procurement has the most complicated contracts, sold by the highest trained salespeople, so, obviously procurement should be brought in as early as possible. Unfortunately, the salespeople are trained to keep that from happening.

From good to great

Judy: What does a great CPO know that sets them apart? What do they know and how do they know it (skills, curriculum, background, etc.) If you were hiring a CPO, what would you look for and why?

Brad: Great CPOs are leaders that understand their categories and teams. Building teams with a bunch of the same styles and personalities does not create a great team, it is diverse thought processes and questions that grow and mature a team. They need to understand their leadership style and allow others to help them succeed. No CPO is going to understand everything in their span of control. They need to hire true SME’s and trust them. I have seen too many Procurement leaders focus on trying to be the smartest person on their team, and that never works. They need to hire people who are smarter than they are, but that takes a relationship-focused leader to have the confidence to lead experts.

Measure to manage

Judy: How should procurement performance be measured? Is it more than just cutting costs & driving ruthless deals?

Brad: Obviously, savings is a critical part of the measurement for any procurement group. But the lack of a clear “savings” definition has typically created many problems and internal disagreements. The CPO needs to be the champion for this effort, so the rules are clearly defined and don’t change mid-year, or even every year.

Think about the scenario where a new finance leader gets appointed and does not agree with the definition currently being used (if there is one) of savings, and decides to change that halfway through the year. The CPO needs to stop that and be a negotiator of situations like this.

My opinion is, and has been for years, that while savings are an important measurement, cost avoidance is more important. Deals that create good cost avoidance are protecting the long-term value of your company’s agreements. If the company only cares about savings, they are creating a situation where the procurement team will do deals that front load the cost exposure to meet their goals. It creates opportunities for bad behavior.

The other metric procurement leaders need to pay attention to is that the savings and avoidance goals are team goals. The savings opportunities are based on what deals any given individual gets to negotiate. So, you could have one person in the team that only does a few deals a year, but they are all large and have greater savings opportunities than another person who does several deals a month that are smaller but no real opportunity for savings. Make your goals team goals, no individual goals to create a stronger team who supports one another.

Renewal pitfalls and peril

Judy: Among many “gotchas” in software procurement, are any as fraught with peril as renewals? Especially in an inflationary environment?

Brad: The first step in any renewal process is to review the contract. This is the only way to vet and validate the key data points at the crux of any renewal. Performing a contract analysis helps you with the critical knowledge to enable action when opportunities are identified.

Then there is the renewal date. Unfortunately most companies pay attention to their contract renewal date, which is a good data point, but the notification period from the renewal date is far more important.  Once you miss the notification period, you have lost a lot of leverage and are at the mercy of the supplier.

I am seeing lots of “inflationary” first quotes coming in, but typically we are holding renewals flat and up to a 3% increase. These companies pocketed so much money during covid, with no travel, there is no valid reason for them to be trying to get crazy renewal rate hikes. They are using the media as a way to make more margin on their revenue. Tell them to stop spending so much on sales and marketing and they could reduce their rates.

Most common mistakes

Judy: What are the typical/most common mistakes you see in procurement, and how best to avoid them? What about software support?

Brad: The two biggest mistakes I see made frequently are sort of related. First is not engaging the stakeholder about what success looks like for their project. I see far too many procurement people that get a deal to go work, and they have done so many deals that are similar, they assume they know what the end result should be. Without understanding exactly what the company needs this project to do, to extract value out of the deal, you have to know what success looks like for the project.

The second most common problem I see is communication. I know, it is the biggest problem period in corporations everywhere, but procurement people are the connecting point to stakeholders and several other groups. You have to be a great communicator to your stakeholder, IT, finance, legal, risk/compliance, onboarding, etc.

Several times I see the procurement person go heads-down on a project, and doing all the right things, except communicating what is going on with the project. The most common escalation I get is someone calling/emailing me and telling me their project went into a black hole. They have no idea what is going on or if it will be done on time. That is why I created the Daily Procurement Planner, it helps procurement people stay focused on what is important to work on, and communicate, communicate, communicate.

From a CPO perspective, The most common problem I see is a lack of understanding the complexities that go with technology sourcing. Most of the CPO’s have not had exposure to technology sourcing, as it takes many years to achieve their success, and tech sourcing is relatively new, so the complicated agreement and licensing models are foreign to them. They then tend to rely on supplier relationships to help with the deals, and that does not work as well as it does with more commoditized categories.

I don’t think we are too far away from having a TPO (Technology Procurement Officer), or CTPO, if HR wants to put “Chief” in front of it.

Let there be light

Judy: Finally, let’s talk about the CPO’s role in “illuminating” shadow IT. There’s plenty of risk in the shadows—security, budgetary, compliance, licensing, privacy, etc. How do successful CPOs assist bringing this to order? Any tactics/strategies you’d recommend when it comes to shadow IT?

Brad: Shadow IT, or rogue spend is in every organization. The turnover in any organization makes it a hard fight to win. Mandates to use procurement work, but that has to come from the Procurement leader and be supported by their peers. If the other leaders do not support everything needs to go through procurement, it will never happen.

The budget concerns and risk concerns are real in shadow IT. I hear about application rationalization projects every week from companies around the country. Tech sprawl happens so easily because of  the way suppliers allow for the initial engagement. For example, click to download or zero cost proof of concept projects. The CPO needs to work with their counterparts to make it hard for people to implement new solutions into the environment. They should shut off credit cards for certain categories of spend, don’t allow downloading of applications onto company equipment, etc.

The risk involved by allowing solutions into our environment without being vetted from a security or compliance perspective is crazy in this day and age. Procurement leaders should have control of the asset management team, or build one if it does not exist, and use that as an opportunity to expose the rogue solutions, duplicate functionality and shelfware that is in the company. This will go a long way in building the trust for procurement to be considered a partner to the business, and not just a tactical process.

Learn more: Discover how to drive IT cost efficiency and procurement ROI with Rimini Street’s strategic enterprise support for IT procurement and sourcing.

Read more: Get valuable advice on how to negotiate your new software agreements and those annual renewals in Brad’s book, “Software: The Silent Killer of Your Company’s Budget.”

The post CPO Secrets to Enterprise Software Sourcing and Procurement Success appeared first on Rimini Street.

What lessons can CFOs learn from a billionaire singer-songwriter? While the five we’ve collected encompass fundamentals every experienced CFO should already know, her savvy serves them as smart reminders on the road to success.

When you have a young daughter like I do, it’s almost impossible to avoid getting swept up into the Taylor Swift fan frenzy. After attending one of her concerts recently with my family, I came away impressed by her talent and even more so with her entrepreneurial mindset, brand management, and resilience.

In my nearly three decades of financial management and capital markets experience, I’ve learned many lessons and fundamental truths. And as I thought more carefully about the business aspects of her success, I realized there are five essential insights that every enterprise CFO can benefit from by applying to their financial leadership of large enterprise.

And there’s even more to learn: Harvard University now offers a course on her, and similarly inspired courses are sweeping colleges nationwide. The five lessons I’ve curated here are ones most CFOs are probably already aware of, yet the stellar examples set forth by her as useful reminders to spark renewed energy, in a creative way, toward action.

1. Diversification of Revenue Streams

According to The Washington Post, her, “…record-shattering Eras Tour is set to be the most lucrative concert run in American history.”  CNBC stated that, “the Eras Tour concert film has shattered records and helped the theater industry weather a light release calendar.”

She has not limited herself to just album sales and concert tours, she has also very smartly diversified her income streams through merchandise sales, brand partnerships, and streaming platforms that in total have helped to propel her into the billionaire’s club, according to Forbes. Her savvy is a good reminder for enterprise CFOs on the importance of diversifying revenue sources to reduce risk and ensure stability.

2. Data-Driven Decision-Making

She has been known to use data analytics extensively in her career. “Working with her team, the pop star adds a personable human touch to the marketing mix: through using data-driven trend-based insights to create musical arrangements, video content, and engaging social media campaigns that appeal to a wealth of audience segments,” according to a Digital Marketing Institute article focused on 4 lessons digital marketers can take from her  marketing genius.

Successful enterprise CFOs apply this lesson daily by leveraging data analytics to make informed financial decisions, optimize processes, and identify growth opportunities within their organizations.

3. Strategic Negotiation

Her negotiations with music labels and streaming platforms, such as her decision to re-record her music, demonstrate her strategic negotiation skills. In 2015, she went head-to-head against Apple, prompting the technology to drop its plan not to pay artists royalties during the trial period of its new streaming service.

Successful CFOs know that in the dynamic world of finance, strong negotiation skills are of pivotal importance to managing risk, driving growth, and accelerating profitability. And, as she has demonstrated, negotiation isn’t just about striking deals—it’s about aligning interests, identifying allies for mutually beneficial outcomes, and building solid relationships.

4. Brand Management

She has carefully managed her brand, crafting a strong and authentic image that resonates with her audience. According to Forbes Australia, she, “…has mastered the art of storytelling, using her music and public image to create a narrative that fans can relate to.” After master recordings of her first six albums were sold to Ithaca Holdings in 2019, she moved to regain ownership of her legacy by re-recording the songs from the albums.

CFOs can learn from her brand management strategy and how it can impact financial performance, customer loyalty, and market positioning. By leveraging financial data and insights, CFOs can contribute to the success of their brand by helping to define profitable positioning, recognize high-value customer touchpoints, and balance resource priorities for market segments.  Moreover, with the insight gathered, the CFO can guide the organization to be calculated and assess the proper ROI when protecting one’s hard earned intellectual property, which is a very costly, but sometimes necessary, endeavor.

5. Adaptability and Resilience

She has adapted to changes in the music industry and overcome challenges throughout her career.

Successful CFOs are continually learning, and are adaptable and resilient, especially in the face of economic fluctuations, regulatory changes, and unexpected events, ensuring their organizations remain financially stable in turbulent times. And as economic uncertainty shows no sign of abating, CFOs will continue to be integral leaders in demonstrating adaptability and resilience to ensure long-term success for their organizations.

Creative inspiration

While the entertainment industry and the corporate world are different in many ways, these five lessons from her successful career—diversification of revenue streams; data-driven decision making; strategic negotiation; brand management; adaptability and resilience—can help serve to remind and inspire CFOs to think creatively while adapting to changing circumstances and making strategic decisions.

Learn more: CFO and finance leaders, discover how more than 5,300 clients have saved an estimated total of over $8B to date on enterprise software maintenance costs with Rimini Street.

The post 5 Lessons Every CFO Can Learn From a Billionaire Singer-Songwriter appeared first on Rimini Street.

While the ecosystems formed by ERP and database vendors, systems integrators, and other partners can create value, there can be downsides as well. Sebastian Grady, president, strategic initiatives at Rimini Street, shares five things you need to know about ERP vendors.

Over the decades, large ERP and database vendors, system integrators, and other partners have formed an ecosystem to help customers deploy and maintain systems that are essential for managing large businesses. While these ecosystems can create tremendous value, they can also create constraints and significant risk, often restricting alternatives through rigid pricing and licensing terms, and costly upgrades or implementations that can destroy a budget while ultimately failing—just witness past major international enterprises such as MillerCoors, Revlon, and Lidl’s well-documented ERP disappointments.

So, when I was asked to participate in a Transformation Ground Control podcast provocatively titled, “Inside the ERP Cartel,” I was eager to share my thoughts with podcast host Eric Kimberling, founder and CEO of Third Stage Consulting and a recognized and respected independent ERP systems expert

“We’re going to try and pull back the curtain a bit on how the industry works and what some of your alternatives are in terms of how to navigate some of the biases and cartel-esque sorts of behaviors that are prominent here in the ERP software industry,” Kimberling said.

I didn’t need much prompting! Over my career, I’ve seen companies that essentially owned their markets to the point that they were able to coerce customers into onerous support relationships and product roadmaps that often diverged from the customer’s best interests.

Five things you need to know about ERP vendors

As a guest on the podcast, I shared a reality check on some ERP ecosystem business practices, summing up five key things you need to know about your vendors:

1. They want to steer you to new cloud-based versions and subscription-pricing that allows them to confidently project annual recurring revenue.

• Systems integrators and other partners are eager to help this effort because big company ERP migration efforts are massive, often creating significant, ongoing revenue streams.
• These practices may satisfy the demands of Wall Street investors. But many customers end up questioning the ROI because the value proposition typically doesn’t justify the cost of ownership, and the costs for switching can be exceedingly high due to these massively complex and customized products that have taken years to implement.

2. SAP ECC 6 might be the most complex application software ever written, with 400 million lines of code, and scores of industry solutions.

• The promise of cloud software is that it can be plug and play, but the idea that you can just snap in software that will meet the needs of different multi-billion-dollar manufacturers, for example a chemical manufacturer vs a discrete manufacturer, is simply not realistic today. If it were, we’d be first in line to help those companies migrate their older code bases to new platforms.
• That may help explain why, according to a Gartner reportin October 2023 that at the end of Q2 2023, approximately 33% of SAP ECC customers had bought or subscribed to licenses to start their transition to S/4HANA. Approximately 48% of S/4HANA sales were to net new customers, and 82% of those signing up for RISE with SAP are companies with annual revenue less than $5 billion.
• This might also explain why Rimini Street SAP billings improved by over 60% in Q3 2023.

3. Software upgrades aren’t mandatory imperatives.

My view is you should never, ever do a software upgrade unless you have a business case detailing one or more of these outcomes:

• It will enable an increase in your revenue.
• It will cut your costs.
• It will take market share from your competitors

4. A ‘rip and replace’ migration of large enterprise application or database software can be a massive project that may cost millions of dollars, on top of subscription or licensing costs.

• Besides complexity and cost, these projects also entail substantial risk in replacing software on which your company has depended on for decades.
• As a company offering third-party support for SAP, as well as Oracle, we’ve seen a lot of companies trying to upgrade to S/4HANA public cloud who ended up cancelling those projects. There are a combination of reasons including  their project team failed, their systems integrators failed, or they  determined the software was not going to work for them because it didn’t accommodate their customizations. It doesn’t matter who’s fault it is – the point is the risk is high so make sure you know exactly what you are doing before undertaking such a massive endeavor.

5. Even if you insist on remaining on your current ERP version, full support will typically only be available for five years from the date of general availability (GA), so many customers may feel forced to undertake upgrades at great cost just to stay fully supported.

Heads they win, tails you lose

It’s no surprise that vendors are pursuing strategies to foster their future growth. The problem is when they write the rules in a way such that they can’t lose, and you can’t win.

For example, SAP is pushing customers to go to the private cloud or the public cloud version through their RISE or GROW model, saying that is the only way to ensure access to new features and functionality, such as generative AI. So even companies that followed SAP roadmaps and migrated from SAP ECC to S/4HANA now face a massive rip and replace upgrade again, just to get the new features. Rimini Street guarantees 15 years of support from the date you sign with us—regardless of the GA date of your software—and at half the annual support costs you’re paying SAP.

While business practices in the ERP ecosystem may not meet the legal definition of a cartel, as Eric Kimberling pointed out during our interview, they are “cartel-esque” in some respects.

Watch the entire interview, Inside the ERP Cartel.

You may also like:

• Read: What to do About SAP’s “My Way or the Highway” Cloud Push
• Watch: Your Future Options with SAP
• Learn: Services and support for SAP

The post Do ERP Ecosystems Act Like Cartels? appeared first on Rimini Street.

What do seasoned financial executives from Johnson & Johnson, Pfizer, and TESCO have in common? Recently, they each shared candid insights from ERP transformation and integration projects during a panel discussion. Fellow panelist Michael Perica, executive vice president & chief financial officer at Rimini Street, shares their hard-won lessons.

When corporate financial executives gather to candidly discuss ERP transformation and integration, hard-won lessons emerge. These valuable insights can help guide your own path through organizational, cultural, and budgetary challenges inherent in tinkering with your organization’s most critical systems.

That was certainly the case during a recent panel discussion at SSON’s 2023 Finance Transformation Digital Summit sponsored by Rimini Street. Our panel was aptly titled, “Weathering the Storm of ERP Transformation & Integration,” and I encourage you to watch it, but first would like to share some thoughts.

As CFO and executive vice president with Rimini Street and with nearly three decades  of financial management and capital markets experience, I was excited to join the other well-experienced panelists, including:

• Vandana Khanna — Johnson & Johnson Senior Director, Global Finance Transformation
• Conor Kellett — Pfizer Finance Transformation & Operations Lead
• András Kohl – TESCO Head of Finance Business Services – CE

Eye-opening CFO experiences

Bringing our more than 80 years of collective experience to bear on the issues of ERP transformation and integration turned out to be just as eye opening as you’d expect.

In fact, as I told participants, eye opening is how I describe my experience when I was first thrust into a CFO role for an organization that was undertaking transformation of a complicated ERP environment.

The key difficulty with ERP transformations? Historically, they’re costly and time-consuming; see 12 famous ERP disasters, dustups and disappointments” (and those are just for starters). By the time these transformations are completed, business strategies have often shifted, resulting in either an ERP that doesn’t hold up to expectations, or a constant rejiggering of requirements (and budgets) along the way.

Few organizations would have the discipline and forethought evident in Conor Kellett’s tale of a 10-year transformation project amidst constant business change at Pfizer. “We kept an agile mindset around the whole thing and from a resources perspective we put the right people on the team,” Kellett said. “So rather than just getting pure consultants on board, we got the SMEs, the actual people who do the process and brought them onto the project…so that kept us flexible and when it came to change, we were able to right size as the need arose.”

Vandana Khanna is heading up a global SAP rollout for Kenvue, a $15 billion spinoff previously known as J&J Consumer Health, and previously she held key roles with Unilever and Verizon, among others. She urged viewers not to rush into ERP transformation, but first to focus on the business case rather than how the effort will transform or change technology. “Why are you doing it? What value are you going to get out of it?” asked Khanna.

Ways financial leaders keep IT on the right track

Transformations go awry when organizations don’t do the necessary advance planning and don’t involve the right people early on. “If you don’t do all these things and plan ahead, it’ll be very tough,” Khanna said. “You can do it, absolutely do it, because this has been a tried and trusted technology, but if you follow a process along the way, then you reap the benefits faster.” Moreover, she added, “you don’t have to transform and change everything, but you should definitely put your forces behind transformation where it is absolutely critical and needed.”

Success hinges on strategy, but also on operational performance, said TESCO’s András Kohl. Noting that large, global enterprises avoided off-the-shelf solutions in favor of highly customized ERP solutions because their enterprise structures are so complex, he said they can end up with, “a legacy burden because they don’t have the time and the energy and the focus to keep it up.”

Data migration is crucial, Kohl added.” Make sure you understand the data integration issues, as moving to a new platform often means different rules, different validation, and data sets,” he advised.

These are just a few of the many insights you can gain from this panel discussion. Watch the full video:

You may also like:

• Read: Is an Integrated ERP Suite or a Composable ERP Strategy Right for You?
• Watch: Cure Your ERP Headaches Through Consolidation and Third-Party Support
• Solution: Future Proof ERP Investments

The post How Finance Executives Weather ERP Transformation Storms appeared first on Rimini Street.

Ingo Paas is the CIO of Green Cargo, a sustainable logistics partner serving 270 locations across Scandinavia, transporting some 22 million tons of freight annually. Recently, my colleague Luiz Mariotto and I had the privilege of hosting Ingo and a roundtable of IT leaders. Afterward, Ingo shared a deeper dive on his bold strategies that helped to modernize Green Cargo’s systems, skills, and technology infrastructure; these bold strategies led IDG to award Ingo Sweden’s 2022 CIO of the Year.

During this deeper dive, Ingo discussed some of the more salient issues he faced that are common among his peers—mature core ERP applications, a legacy mainframe, challenging partnerships, and a backlog of innovation and transformation projects—and we’ve curated a few excerpts to share with you.

Faster, better, lower cost

Ingo and his team now develop more resilient applications faster, better, and at a lower cost. And Rimini Street’s support of Green Cargo’s SAP ECC system has been a pillar of his strategy right from the start. I’m impressed by Ingo’s leadership and balance of boldness and humility, and I think you’ll be impressed, too. Just take a look at the videos below.

ERP Roadmap Options – Rip and replace? Migrate? Extend your current system? How do you evaluate the risks of each path?

Inaction was a huge risk to the business and digital transformation was the answer but accepting the inherent risks of migrating to S/4HANA was a non-starter.

Innovate around your core ERP – Are you focusing your innovation efforts in the right areas?

A build over buy decision for a new customer put Green Cargo’s development team to the test. Their success was in building from their existing core systems outward.

Transformation – How do engagement, expertise, and cost savings accelerate business transformation?

Using Rimini Street was essential to reducing risks or supporting and managing the existing SAP platform and completing 23 improvements to it.

Platform, principles, and people – How do you recruit and train staff on Agile and low-code development?

Autonomy, accountability, and trust accelerates success. New ideas and feedback are equally welcome.

Want to discover more about Green Cargo’s journey and success? Read the client success story, Eco-Friendly Transportation Leader on Track to Sustainability with Independent IT Support and learn more about Ingo’s approach, strategies, and tactics in his book Digital Composable Enterprises – An Evolutionary Approach to Innovative Organizations from the Core of the Business.

The post ERP Strategy Lessons from Sweden’s 2022 CIO of the Year appeared first on Rimini Street.

Contrary to what SAP may want you to think, S/4HANA migration isn’t mandatory for your enterprise. In fact, independent support can extend your current ERP investment beyond SAP’s projected end of mainstream maintenance for ECC in 2027. I sat down with three of our SAP ERP experts to discuss the options businesses have. Let’s dive in and see what our experts have to say.

ROI-based roadmap for your SAP roadmap

In this video, I visited with Abhik Paul, vice president of professional services roadmaps at Rimini Street, who asserts that pressure to migrate to S/4HANA is unnecessary. Case in point: Even though SAP is sunsetting mainstream maintenance for ECC in 2027, Gartner has reported that at the end of Q223, some 67% of ECC business clients have yet to make the switch to S/4HANA.

If you’re developing an ROI analysis of moving to S/4HANA, there are nine elements to consider:

• S/4HANA hosting options. Exhaust all options for hosting your ERP system, including on-premises, public cloud, and private cloud.
• Migration strategy. Consider whether you are looking for a brownfield approach (simply a technical upgrade) or a greenfield approach (where there is a functional transformation from scratch).
• Customization carryforward strategy. Determine if you are currently using all your current ERP customizations and whether you must carry them from ECC to S/4HANA.
• Opportunity object list. This is getting into the nitty gritty, but take the time to list all processes from your old system that you are looking to either enhance, migrate, utilize new functionality from S/4HANA, or even renovate.
• Innovative solutions. Rather than choosing to just upgrade to S/4HANA, enterprises should look at optimizing their current ECC system or even adopting a composable ERP strategy.
• Time-based approach. To better understand the timeline of mainstream maintenance cessation, organizations should work backward from the 2027 date or the 2030 date when SAP will end ECC support for those on the extended support plan.
• Benefit-driven business case. Prepare the business case for your decision, whether it is to remain on ECC or migrate to S/4HANA based on cost-benefit analysis, ROI, and payback. This can be done over a seven- or 10-year horizon, depending on what’s comfortable for the company.
• ROI-driven decision matrix. If there is a positive ROI for the move, go ahead and make the decision! But if the ROI is negative, look to alternatives.
• Migration strategy for the ecology of SAP solution suite. Consider the entire solution suite—everything from Solution Manager, GRC, and Enterprise portal.

Although preparing an ROI-based roadmap can be challenging, there’s good news: Rimini Street is a vendor-neutral partner that can help you determine the benefits of staying on ECC or moving to S/4HANA. If you decide to stick with ECC, know that you can receive industry-leading, independent support for your ERP system for up to 15 years from the time of the contract.

Three options to explore prior to moving to SAP RISE

In another video, I sat down with Luiz Mariotto, group vice president and principal product manager at Rimini Street, to discuss SAP RISE, which is a bundled offering of S/4HANA software, hosting infrastructure, managed services, and cloud products.

Offering these solutions under one vendor may seem optimal today, but it could cause issues down the line. What happens if you find another vendor that provides more robust and cheaper hardware? What if there is a better software option that addresses a specific business or department need? The integrated SAP RISE solution runs counter to a composable ERP strategy, which can provide cost savings and agility in the long run.

Mariotto cautions SAP ECC customers to consider one thing before they answer the RISE adoption question: Should they migrate to S/4HANA? If so, why? Enterprises running ECC cannot take advantage of the RISE solution. For those companies looking to extend the life of their ECC platform with independent support, RISE is not an option. With this in mind, let’s look at three alternatives an organization should explore prior to adopting SAP RISE.

1. Continue running ECC or S/4HANA and innovate at the edges. Rather than adopting RISE, organizations can maximize the value of their current ERP systems. To address any deficiencies, the enterprise can innovate by folding in cloud platforms, low-code tools, and other applications to reap the benefits of a composable ERP strategy.
2. Move IT workloads to the cloud. Rather than hosting their ERP in a traditional, on-premises environment, organizations can lift-and-shift their system to take advantage of the hyperscale nature of the cloud. This provides not only scalability and flexibility for the application but also access to modern cloud platform technologies like artificial intelligence, robotic process automation, and big data analytics. Again, with this option, the enterprise can continue running its current ERP system with the license they have already purchased.
3. Have an S/4HANA subscription agreement but retain control of hardware/managed services. This option is for organizations that have already shifted their ERP systems away from a single, one-time license payment and are making monthly subscription payments for an ongoing S/4HANA licensing structure. In this case, the organization may choose to retain control over where to host the software along with who will support the ERP system. This can empower enterprises to retain control of their IT roadmap and options for the future.

Three smart ways to innovate, not migrate

In the third video, I interviewed Eric Helmer, senior vice president and chief technology officer at Rimini Street, as we took a closer look at the tenets and benefits of a vendor-agnostic composable ERP strategy.

We discussed three ways in which SAP customers pursue innovation without migration, including:

1. Delineate current technology and future projects as either systems of record, differentiation, or innovation
2. Calculate the ROI of core ERP re-platforming (hint: it might be negative)
3. Self-fund innovation by massively reducing the cost of support and maintenance for existing systems and redirect those funds to innovation.

You control the migration clock

Whether you choose to continue using your current ECC stack or migrate to the S/4HANA platform, your organization can benefit from independent support from Rimini Street. We are committed to providing support for ECC for 15 years from the time of the contract. Ready to learn more? Discover Rimini Street Services and Support for SAP.

The post Rethinking the SAP ECC to S/4HANA Migration Mandate appeared first on Rimini Street.

November 2022 may ultimately be bookmarked as the beginning of the next era of IT. That is when OpenAI announced open access to its ChatGPT, a natural language model that promises to revolutionize customer relationship management (CRM), software coding, and productivity across many industries.

“We’ve trained a model called ChatGPT which interacts in a conversational way,” OpenAI explained in introducing their groundbreaking generative AI tool. “The dialogue format makes it possible for ChatGPT to answer followup questions, admit its mistakes, challenge incorrect premises, and reject inappropriate requests.”

The implications for enterprises are significant. “In business, generative AI has the potential to transform the way companies interact with customers and drive business growth,” according to the

Dreamforce: AI event of the year

Earlier this year, both Salesforce and Microsoft announced their -powered CRM solutions. More recently, Salesforce upped the ante, calling its annual Dreamforce conference the AI event of the year, and announcing that it’s ”powering the next generation of all Salesforce CRM applications with Einstein Copilot – a conversational AI assistant, safely grounded in business and customer data.”

Additionally, Salesforce announced that it is:

• Providing connectors to bring in data from any source, across the Salesforce platform
• Leveraging its acquired MuleSoft integration platform to connect legacy systems and data to its AI capabilities
• Putting Trusted AI at the heart of its marketing strategy

Harmonization in the cloud

Imagine if you could unify all your customer data, across any channel and system, into a single source of truth to truly understand all customer behaviors in real time. That’s the promise of Salesforce Data Cloud, which harmonizes and stores customer data at a massive scale, and transforms it into a single, dynamic source of truth.

MuleSoft (an integration and automation platform Salesforce acquired in 2018) is now, ”loaded with new generative AI capabilities to make integration faster than ever before. Connect to any data or system, wherever it resides, with security and governance built in,” according to Salesforce.

“The MuleSoft Accelerator for Data Cloud can help you unlock and connect to critical industry systems quickly and securely. Once unlocked, your teams can finally harmonize with existing data sources through the power of Salesforce Data Cloud. This enables you to get a unified view of every customer so that you can deliver the right experiences at the right time every time.”

Data harmonization provides enterprises with the capability to create a unified data set from multiple sources, simplifying the effort of aligning data from multiple systems and eliminating inconsistencies. In the future, AI solutions will leverage trustworthy data for unified identities necessary to accurately automate processes and provide deeply advanced insights; Data Cloud and MuleSoft are the bridge to that future.

Fast-evolving risks and rewards

Dreamforce was a breathtaking illustration of the speed with which AI has leapt to the forefront of strategic IT decision-making. No enterprise can afford to ignore the potential of AI, nor should they fail to recognize the risks inherent in investing in such a fast-evolving area of technology while government, society, and business is struggling to

Rimini Street clients investing in customer data frameworks like Salesforce Data Cloud are setting themselves up for AI success and should begin to plan their AI roadmap and budgets accordingly. But as Salesforce CEO Marc Benioff himself declared, “No one is ready for AI.”

Clear and trustworthy

Enterprises must recognize that the computer industry as a whole is still struggling with the propensity of AI models to “hallucinate,” or essentially make up answers that they present as fact-based. Organizations must also develop clear and transparent policies that will earn the trust of customers and consumers in the use of AI. And they must calculate the risk and reward of investments that could prove game-changing, or ultimately be judged poor bets.

Learn more: With a global team of CRM experts, we’re eager to work with clients to implement well-founded AI-based solutions. And as your trusted Salesforce partner, Rimini Street delivers a flexible suite of services aimed at reducing complexity and controlling costs of Salesforce implementations.

The post How Salesforce Data Harmonization and AI Impact Your Enterprise appeared first on Rimini Street.

For other IT systems, modernization means conversion, rewriting or porting the system to a new application or platform or architecture. In some scenarios, currently deployed IT systems will struggle to support future developments and may need to be replaced. For all, modernization is continuous as market forces and technological developments emerge.

Follow the money to uncover low-value IT spend

How much do you think your organization wastes on low value tasks for management or maintenance of older IT systems? According to a survey of 300 ANZ IT and business leaders, the answer is an average of 144 hours per week, or the equivalent of 3.6 full-time equivalent (FTE) staff.

That’s one of the top questions every IT and business leader needs to ask to justify a smart path to systems modernization that will better fulfill your digital transformation strategy, address security challenges, and target profitability.

Get control of your digital transformation planning horizon

Another tough question is whether your digital transformation (DX) strategy and digital business plans are focused on just what’s happened over the past 5 years, or are they tailored to deliver now but also drive the next wave of change. If you’re on a second, third, or fourth DX program, you may be at risk of “DX fatigue” eroding support for your transformation efforts.

Based on the Tech Research Asia (TRA) survey of ANZ respondents, Rimini Street has developed a report that may help your efforts to justify, and fund needed modernization efforts. That’s what 88% of survey participants say is their top IT management focus, but in 2-out-of-3 cases is over time and over budget.

Balance investments across growth and cost optimization objectives

Growth remains the clear business priority for 2023, according to TRA research, but now it is tied not just to revenue but especially to profit margins. That’s why the top IT management priority is modernizing core systems to create better performance, efficiencies, and lower costs. The second priority is keeping current IT running, so the organization can deliver for today while modernizing for tomorrow.

Success with digital business depends on core and operational IT system modernization

Is modernization an on-going part of your IT strategy? Be wary of cutting modernization efforts when budgets are tight. Cutting investments could lower your ability to respond to emerging market forces and technological developments.

It’s important to be able to answer tough questions with information and data that will convince budget decision-makers that your organization has the right transformation strategy and merits the modernization investments you are recommending.

Do you have a data-driven profitability plan that truly understands the costs and value of operational and core systems and how to optimize their management and performance? To get there, you need to follow these practical steps:

• Assess current IT systems
• Develop a profitability plan
• Establish metrics and KPIs
• Implement cost-saving measures
• Continuously monitor and optimize IT systems
• Take a unified approach to enterprise software support and services

Do you think you can get more value out of your current core and operational systems vendor? Identify gaps that can be filled with – and areas that can be improved with your current vendors in addition to looking for new solutions that could better meet your needs.

To learn more about this important report and its modernization insights that you can’t afford to miss, read the full report now.

You may also like:

Read: Is an Integrated ERP Suite or a Composable ERP Strategy Right for You?
Watch: How Hybrid Should You Go? Strategies to Build Your Hybrid IT Solutions
Solution: End-to-End IT Outsourcing Solutions

The post Answer 10 Tough Questions to Justify IT Modernization appeared first on Rimini Street.