here is a link to the research on managing an application portfolio for value

http://www.forrester.com/Optimize+LongTerm+Application+Effectiveness+And...

 

 

The self assessment based on your assessment of "what good looks like" wil lbe added shortly.

 

 

Thanks for your help in participating in the survey.

Benchmark Your Applications Portfolio

Do you ever wonder how your business applications portfolio stacks up against your peers?

We conducted a series of interviews to understand how firms measure applications portfolio coverage of their business units and business models, end-user use of applications, and business value. We’re inviting application leaders to take a 10 to 15 minute survey anonymously to give their feedback on the metrics and their own estimate of their scores. We plan to aggregate the data then slice and dice by size or SIC or other “firmographics,” so that you can compare yourself with similar firms.

Dozens of your peers have already completed the survey and we want to write the report next week. But it's not too late. You can still join the fun here :

 https://forrester.az1.qualtrics.com/SE/?SID=SV_3rWh3knhUv6w4h7

News from NRF

Application development and delivery (AD&D) professionals in retail must contend with established categories of packaged apps for store operations, eCommerce, supply chain, and loyalty.

But most packages hail from the pre-digital disruption era of mono-channel retail — store or eCommerce. 

AD&D pros must chart an application upgrade and integration course that delivers omni-channel consumer experiences despite the incompatibility of the package data models with new use cases such as click-and-collect or buy online, return in store. 

I've had a preview of the new FUJITSU Retail Solution Market Place and I'm excited because it helps retailers to orchestrate the applications and data they already have to meet consumers' cross-channel expectations.

Application Portfolio Strategy And Portfolio Transformation

I’ve just been shopping for furniture. 

On the one hand, I saw highly prescriptive, standardized, catalog-type collections that fit well together but which are rather boring and maybe don’t make the best of my ramshackle old house. On the other hand, I visited a lot of junk shops with interesting but incompatible pieces, ranging from a Victorian birdcage (really!) to an Art Deco lampshade. It made me think about the challenges that application development and delivery professionals face in formulating application portfolio strategies.

When should they single-source and when should they choose a best-of-breed strategy? For which applications should they consider SaaS solutions? What is the best way to use systems integrators to help reach a target portfolio at the lowest opportunity cost?

Join us at Forrester’s Forum for Application Development and Delivery Professionals on October 17 and 18 in Indianapolis, where my colleagues Paul Hamerman, Liz Herbert,and Jost Hoppermann will be discussing their research into application portfolio strategy. and answering questions about applications portfolio transformation such as:

  • What’s the difference between application upgrade and transformation?
  • Where do you find the help you need for applications portfolio transformation?
  • If technologies like mobile, social, and in-memory analytics are so important, why don’t we deploy them ourselves? Why are we waiting for vendors to bundle it with their releases?
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What Is The Role Of Enterprise Apps AD&D Professionals In Operating Model Transformation?

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.

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Retail IT budgets

I was intrigued to read in StorefrontBacktalk about Target’s plans to reduce its spending on IT. Apparently, investors warmed to the message, but most of our readers tell us that it’s not how much you spend, but how well you spend it that really determines whether investors see a good return on IT investment. In this research, we asked retailers which IT investments yield a quick financial return and which have the most potential to drive superior returns.

We found that pricing and promotion technologies can have a quick impact on financial performance and forecasting and that allocation and assortment optimization applications have the most potential to drive inventory turn and margin to generate favorable returns. Years ago, I heard of the brilliant success of retail entrepreneur Mike Ashley, which was attributed to his attention to assortment planning. However well you execute, you can’t make money in retail without a plan that ensures that the right merchandise is available in the right location at the right time and price.

We are re-running the survey to see how retailers’ views have changed. Please complete the survey to add your voice to our research (please be patient; it takes a little while).

 

Update/Correction: Target has told Forrester that, far from reducing IT spending, it actually plans to increase its IT initiatives in 2014. All the more reason to consider your own IT investment priorities!

Red Prairie Acquires JDA

New Mountain Capital, the owner of Red Prairie, the demand sensing and supply chain execution software vendor, announced last week that it would fully acquire supply chain planning vendor JDA. The merger will result in a supply-chain planning and execution solution provider with more than $1 billion in revenue with 87 of the world’s top 100 consumer goods manufacturers and 82 of the world’s top 100 retailers running either Red Prairie or JDA applications.

For some time Red Prairie has been buying assets to extend supply chain into the store, a strategy it calls “commerce in motion.” The idea is to extend beyond mere inventory visibility to better predict where inventory should be held. Red Prairie’s demand sensing and eCommerce solutions as well as its warehouse management and store execution capabilities can complement JDA’s collaborative planning to provide a platform for collaborative new product introduction and promotion investments.

This looks like an extension of the idea that applications and processes will become interenterprise or value-chain centered rather than enterprise focused and will ultimately move to the cloud to capitalize on collaboration opportunities with a whole network of value chain partners. JDA 8.0 is already delivered (together with multichannel assortment planning) as a cloud solution.

It seems to me the opportunity to think beyond "four walls" and plan demand, in the case of retailers all the way back up to sourcing, or in the case of manufacturers to plan and execute down to the shelf or the fulfilment of e-commerce orders, offers a really intriguing opportunity to deliver more effectively on private-label and branded merchandise assortments to demanding consumers browsing and buying across channels.

Infor Challenges ERP Duopoly

Some of my readers know that I worked in my career before Forrester in product management and business development at MSA, SSA, and Mapics, all now part of Infor. When people ask if I “follow Infor,” I’m inclined to reply that Infor follows me. I attended an “Infor on the road” event last week to listen to the briefing from CEO Charles Phillips and President Duncan Angove. I learned that Infor’s strategy for disrupting the SAP Oracle duopoly depends on choices that Infor has made about:

1) Architecture: Infor’s clients have a wide choice of application portfolio elements and choices about when to upgrade each element thanks to its loose coupling strategy and its maturing of the ION platform that I described here:

http://www.forrester.com/The+Digital+Drop+IT+Opportunities+In+The+Oil+And+Gas+Industry/quickscan/-/E-RES56698#/Its+Time+To+Tame+The+ERP+Integration+Beast/fulltext/-/E-RES56797

This is attractive to firms that can no longer force all their functions and divisions to upgrade simultaneously to a lowest common denominator set of functionality.

Message-based interoperability also enables Infor’s apps to Tweet to interested users about changes in status of accounts, documents, people, or objects as previously described by my colleague China Martens here:

http://www.forrester.com/home#/Emerging+Trends+Social+Collaboration+Is+Poised+To+Accelerate+ERP+Business+Processes/quickscan/-/E-RES60626

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So, Are Accounting Systems Non-Differentiating?

Do you ever wonder which IT investments really drive competitiveness or comparative advantage for your firm and which are there simply to support mundane processes that are identical to those of all your competitors? Do you ever wonder if it might make sense to standardize on "best practices" for non-differentiating processes and supporting application implementation?

Received wisdom is that accounting processes are not differentiating and so it makes the most sense to support them with packaged apps or maybe with software-as-a-service solutions. Larger firms often implement shared services for financial management across all their business units or even outsource altogether apparently dull processes such as invoice settlement or collections.

But does that really stand up to scrutiny?

One retailer, with which Forrester worked, confessed to having 17 definitions of margin depending on which types of supplier rebates and volume discounts were included. We asked how they calculate markdown and they grinned.

The more I thought about it, the more this fact disturbed me. In some types of specialty retail, inspired opportunity buying is the key to competing with the bulk buying muscle and supply chain scale economies of global discount retail chains.

Many retailers import merchandise and have to calculate "landed cost" based on customs and freight invoices that arrive long after the goods in question have been sold. What price weighted average actual cost accounting, or margin calculation, in such a scenario?

Where is the scope for creative dealmaking in standardized accounting applications that deliver lowest common denominator functionality across verticals as diverse as local government, with its focus on fund or commitment accounting,  engineer to order manufacturing with a focus on multi-period project costs and retail with a focus on margin measurement and management?

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Meeting The Challenges Of The Empowered Consumer

Retail is experiencing substantial change because consumers are now empowered by the web with information about price, availability, and merchandise features.

The retail industry is still served by solutions that are too fragmented to adequately balance the asymmetry introduced by radical price transparency. There are solutions for transactions, web site, stores, and so on but little to empower the cross-channel retailer to really meet the consumer’s needs.

I’ve recently been looking at IBM’s Smarter Commerce initiative and its portfolio that integrates:

1)    Store applications. IBM has well-established high-volume store apps appropriate to high-volume, low-touch retailing but correctly identifies these as inappropriate for fast-growing specialty retail with low-volume “high touch.” This is why it acquired the “asset” of Open Genius.

2)    Web metrics. IBM acquired Coremetrics in order to bring the discipline of measuring traffic, conversion, and average order to cross-channel retailing. It’s only by monitoring such metrics that retail can understand which marketing strategies are really successful and which market segments are most receptive.

3)    Direct-to-consumer initiatives. IBM acquired Unica as a platform for integrating automated direct-to-consumer marketing with its cross-channel offering.

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