Digital disruption brings new competitors, new products, new services, and new types of customer relationships into focus. As firms adapt their product market channel strategies to new threats and opportunities, they look to transform their operating models: centralizing, decentralizing, and federating treasury, procurement, finance, IT, and even product development and customer relationships. App development and delivery pros challenged with supporting new operating models often ask Forrester whether they can share the same enterprise apps between group business units, and if they can share, what the benefits might be.
This research looked at large firms that have a federated or centralized IT model to understand what they chose to standardize and what they allowed to vary in their ERP. Figures 2 and 3 of the report look at the models and the typical drivers in terms of common customers, suppliers, bills of materials, and routings. Typical drivers for such enterprise apps strategies include harvesting the economies of standardized terms with suppliers and customers. In practice, the big prize is not actually “cost” — such as bulk purchase terms with group suppliers — but squeezing out excess working capital by applying common credit and settlement terms with group-level customers and suppliers, common comparable cycle times to drive out inventory and work in progress, and common cash forecasting and treasury to make cash and credit work more effectively at the group level.