Tech Trends for Consumer Products 2013 Elements of postdigital

Preface

Welcome to Deloitte’s annual report examining trends in technology put to business use. Once again, we’ve selected ten topics that have the potential to impact businesses over the next 18 to 24 months.

Developing the list of trends is an ongoing process of primary and secondary research. The process includes:• Feedbackfromclientexecutivesoncurrentandfuturepriorities• InputfromDeloitteindustryandpracticeleaders• Perspectivesfromindustryandacademicluminaries• Researchfromalliancepartners,industryanalysts,andcompetitorpositioning• Crowd-sourcedideasandexamplesfromourglobalnetworkofpractitioners

This year’s theme, Elements of postdigital, examines the convergence and controlled collision of five forces – Analytics, Mobile,Social,Cloud,andCyber–asbusinessesmoveclosertoachievingthepossibilitiesofthePostdigitalEnterpriseTM,whereallfiveforcesaremature,implemented,integrated,andbaked-ininsteadofbolted-on.Thesefiveforcesofferanewsetoftoolsforbusiness,openingthedoortoanewsetofrulesforoperations,performance,andcompetition.ITcandeliver engagement and empowerment to business customers, both innovating and industrializing.

ThePostdigitalera,likethepost-industrialera,reflectsa“newnormal”forbusinessandanewbasisforcompetition.Inpost-industrialtimes,wedidn’tforegoindustrialization,weembracedit.ThePostdigitaleraissimilar,butwithdigitaliza-tion as its core.

It’sanuncommontimetohavefiveforces–allnewlyemerged,allevolving,alltechnology-centric–alreadyimpactingbusinesssostrongly.ItisanopportunityforITtodeliverextraordinaryvalueviamodestinvestmentsontopofastronglegacy technology footprint.

Our 2013 report shares ten trends grouped into two categories. Disruptors are opportunities that can create sustainable positivedisruptioninITcapabilities,businessoperations,andsometimesevenbusinessmodels.Enablers are technologies inwhichmanyCIOshavealreadyinvestedtimeandeffort,butwhichwarrantanotherlookbecauseofnewdevelopmentsoropportunities.Enablersmaybemoreevolutionarythanrevolutionary,butthepotentialisoftentherenonethelesstoelevate the business game.

For2013wehavealsoattemptedtopersonalizeourgeneralTechTrendsarticletoincludetopicsandexamplesspecificallyrelevanttotheConsumerProductindustry.Whilewehavemaintainedmuchoftherichcontentcontainedintheoriginalversionofthisarticle,we’vespecificallyincludedexamplesfromleadingConsumerProductscompaniessuchasSchwan’s(Mobile Only and Beyond) and OfficeMax (Design as a Discipline), and have also featured our collaboration on Big Data with the Grocery Manufacturers Association (GMA).

Eachtopicalsoincludesanexternalpoint-of-viewintheMy Take. This year, you’ll also find a new section called Flying Car Future,whichtakesaprovocativeviewintowherethetrendmaybeheadedinHorizon3–andbeyond.Lastbutnotleast,wherewedeemapplicable,we’veincludedourConsumerProductsperspectivetoshareourindustryinsightontheimplications of the respective trend.

Eachofthe2013trendsisrelevanttoday.Eachhassignificantmomentumandpotentialtomakeanimpact.Andeachwarrantstimelyconsideration.Forward-thinkingConsumerProductsorganizationsshouldconsiderdevelopinganexplicitstrategyineacharea–evenifthatstrategyistowaitandsee.Butwhateveryoudo,stepup.Provokeandharvest disruption. Don’t get caught unaware or unprepared.

Thankyouforyourinterestinthisyear’sreport.Wewelcomeyourfeedbackandquestions.TothemanyexecutiveswhohaveprovidedinputintoTechTrendsforConsumerProducts2013,thankyouforyourtimeandinsight.WelookforwardtohavingmoreoftheessentialdialogbetweenbusinessandIT.

2013 Technology Trends

AlanLanghalsPrincipalDeloitteConsultingLLP

SuketuGandhiPrincipalDeloitteConsultingLLP

MattLawPrincipalDeloitteConsultingLLP

Darwin DeanoSenior ManagerDeloitteConsultingLLP

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At a Glance

CIO as the Postdigital CatalystCatalyzing value from the elements of mobile, social, analytics, cloud and cyber CIOscanleadthemovetotomorrow–reshapingbusinessasusual,anddrivinginnovation.They are faced with unprecedented opportunity for innovation such as the potential to enable CustomerIntimacyatscaleforConsumerProductsOrganizations.Howshouldbusiness respond?WhenCIOsharnesstheconvergenceofthefivepostdigitalforces,theycanchange the conversation from systems to capabilities and from technical issues to business impact. Planbig,startsmall,failfast,scaleappropriately.

Mobile Only (and beyond) The enterprise potential of mobile is greater than today’s smartphone and tablet apps Mobileshouldbetopofmindfororganizations.Butdon’tlimityourideastoMobileFirst. ThinkMobile Only, imagining an untethered, connected enterprise. The next wave of mobile mayfundamentallyreshapeoperations,businessesandmarketplaces–deliveringinformation and services to where decisions are made and transactions occur. The very definition of mobile ischanging–asevidencedbyourfeaturedConsumerProductsorganizationthatalreadyimprovedcustomerserviceefficiencyandqualitythroughtheMobileOnlyparadigm.

Social Reengineering by DesignHow work gets done is no longer constrained by 19th century platforms Businesses are no longer building technologies just to enable interaction – they are now engineering social platforms for specific context – platforms that can relieve rather than serve traditionalorganizationalconstraintssuchasdeephierarchies,command-and-controlcultures,physical proximity and resource concentration. Social reengineering can fundamentally transformhowworkgetsdone,butitisn’tjusta“project.”It’sastrategy.It’stimetouncovertheopportunitiesforConsumerProductorganizationstoharnessthepowerofthecrowdtoaugment business operations through external communities.

Design as a DisciplineInherent, pervasive and persistent design opens the path to enterprise value Drivenbyconsumerexperience,intuitivenessandsimplicityaremovingfromITaspirationstoenterprisemandates.Designisnotaphase;it’sawayofthinking.Beyondlookandfeel,beyonduserinterfaces.Isolatedinsilosofuserexperience(UX),marketingandproductdevelopment,individual design functions may be reaching their limits. What’s needed is a collaborative, immersiveenvironmenttoworktogether.Designisnotjustan“ITthing”ora“marketingthing”ora“productengineeringthing.”It’sanenterprisethingasevidencedbyourfeaturedConsumerProductsorganizationthatdramaticallyimproveduserproductivityandcustomerexperience.

IPv6 (and this time we mean it)Ubiquitous connected computing is straining the underlying foundation of the InternetInternetProtocolisthefoundationofnetworking,butwe’verunoutofaddressablespace for addressable items. The more important it is for your business to connect with the outside world,themoreimportantIPv6isforyourfuture–andthemoreurgentthisissueisforyoutoday.IPaddressesarewovendeepintoapplicationsandinfrastructure,andmigrationcan bringchallenges.Whilethere’snodropdeaddateforIPv6,thefinalIPv4addressblockshavealreadybeenallocated.Carefulandproperadoptionwilltaketimeforplanning,execution and verification. The time to start is now.

DisruptorsOpportunitiesthatcancreatesustainablepositivedisruptioninITcapabilities,businessoperations, and sometimes even business models.

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Finding the Face of Your Data Fuse people and technology to discover new answers in data – and new questions, too Humansdosomethingsreallywell,whilecomputersarebetteratotherthings.Itisthisparticular combination that enables the identification of new patterns and relationships across dimensions of data – structured and unstructured, internal or external, big or otherwise.Bycombininghumaninsightandintuitionwithmachinenumber-crunchingandvisualization,companiescananswerquestionsthey’veneveransweredbefore.ForConsumerProductsorganizations,Deloitte’scollaborationwiththeGroceryManufacturer’sAssociation is raising awareness of the business value of data visualization.

Gamification Goes to Work Driving engagement by embedding gaming in day-to-day business processes Gamification can encourage engagement and change employee, customer and supplier behavior, creating new ways to meet business objectives. The goal is to recognize and encouragebehaviorsthatdriveperformance–sometimesinunlikelyplaces.Thistrendhas moved beyond hype and is already demonstrating business value. More specifically, Deloitte’s collaboration with the Grocery Manufacturer’s Association is exposing the significantpotentialforconsumer-targetedapplications(suchasin-storegamification).

Reinventing the ERP Engine Revving up data, hardware, deployment and business model architectures at the core IfyoucouldreallygetERPcheaperandfaster,whatwouldyoudodifferently?Runmaterialsrequirementplanning(MRP)manytimeseachday?Closethebooksinamatterofminutes?Optimizedeliveryrouteson-the-flyinresponsetoneworders,trafficorcustomerpreferences?Whatwoulditmeanforbusinessagility,capabilityandcompetitiveness?Ifapproachedwithafocusonreinventingbusinesscapabilities,theevolutionoftheERPengine can yield significant competitive edge.

No Such Thing as Hacker-proof If you build it, they will hack it. How do you deal with that? You’veeitherbeenbreached–oryousoonwillbe.Yourbossknowsit,yourbusinessknowsit,yourboardknowsit,yourcustomersknowit,andhackersknowit.It’syourjobtodealwithit.Thatmeanschangingthewayyouthinkaboutdefendingyourself.Bemoreproactive about the threat – and react more rapidly when breaches do occur. Detect them quickly,respond,cleanupandadjustyourtactics.Beoutward-facing,preparedandreadyin advance. Anticipate and prevent when possible, but be ready to isolate and encapsulate intrusionstominimizeimpact.It’sbettertoloseafingerthantoloseanarm.

The Business of ITAfter reengineering the rest of the business, IT’s children deserve some shoes FragmentedprocessesandsystemscanpreventITfromeffectivelydeliveringonthechangingdemandsofthebusiness.ITmayneedtotransformitsownmanagementsystemstokeepup.IsthisERPforIT?Maybesomeday.Today,CIOsarecraftingsolutionsfromindustry-leadingproductsandtestingbusinesscasesateachstep.Andthepotentialbenefits are worth the investment – not only in driving down costs and better managing risks,butinpositioningITasthebusinesspartnerinprovokingandharvestingdisruption inthePostdigitalera.

Enablers TechnologiesinwhichmanyCIOshavealreadyinvestedtimeandeffort,butwhichwarrantanotherlookbecauseofnewdevelopmentsoropportunities.

Contents

CIO as the Postdigital Catalyst ...............................................................1

Finding the Face of Your Data .............................................................46

Mobile Only (and beyond) ...................................................................10

Gamification Goes to Work .................................................................55

Social Reengineering by Design ........................................................... 19

Reinventing the ERP Engine .................................................................64

Design as a Discipline ..........................................................................29

No Such Thing as Hacker-proof ...........................................................72

The Business of IT................................................................................80

IPv6 (and this time we mean it) ...........................................................38

Conclusion ...........................................................................................85

Contributors ........................................................................................86

En Enablers

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Reinventing the ERP Engine8

With a super-charged engine, businesses can drive new performanceERPisnostrangertoreinvention,overhaulingitselftimeand again to remain relevant through disruptive waves ofclient/serverandtheWeb.Itsformulaforsuccess?ExpandingtheverydefinitionofEnterpriseResourcePlanning(ERP)fromfinancialstomanufacturingtosupplychainmanagementtoCRMtoHRandmore.Beyondnewfunctional capabilities, it has also expanded into information – business intelligence, reporting, and analytics allow organizations to build predictive models. Forawhile,thefocuswasextensibilitythroughintegrationplatforms, application servers, and orchestration suites. Today’smomentumisaroundubiquity.Organizationsare strivingtomakeERPaccessibleinmanyways–onyourmobile device, in your collaboration suite, or in your social streams.

This manifest destiny of the service catalog has been an importantpartofERP’sstrategy,andwilllikelycontinue.But that’s not our trend this year. Something else has been happening,withrootsclosertoMoore’sLawthanto Porter’sFiveForces.TheengineofERPisbeingreinvented.

TheunderlyingdrivetrainofERPhadremainedconstantthroughoutitspastevolution–on-premise,licensed,single-tenantedsoftwarestacksbuiltontransactional relationaldatabases,runningonenterprise-classmachinesin dedicated data centers. This time, though, that drivetrainisbeingchanged,withtorque-richupdatesatthe infrastructure, data, and application layers.

In-memory,column-baseddatabasesallowsub-secondresponsetimeforthemanycomplicatedqueries. Distributedcomputing,virtualization,andcloud-basedinfrastructurearedrivingtotalcostofownership(TCO)reduction, a shift from physical to logical, and from fixed to variable expense. Appliances and engineered systems have led to impressive levels of integration across the hardware andsoftwarestack–makingthelandscapenotonly potentially easier to manage, but yielding higher price/

performanceefficiencies.Multi-coreandmassivelyparallelCPUs,adventofcellCPUs,incorporationofadvancedGPUs,durableandaffordablesolid-statestorage,more efficientnetworkinfrastructure,andhybridmemory architecturesallowreal-timeprocessingoftorrentsof bothstructuredandunstructureddata,andreal-time mobileenablementofcomplexback-officetransactions.Eventhecrownjewelsarenotexempt.Someenterprise applications themselves are being rewritten with columnardata,multi-tenant,subscription-basedservices.ThesearchitecturalshiftsreflectthechangingroleofERPfromaprocess-driventoanevent-drivenmindset.

Thetraditionalindustrial-gradeengineofERPmadesensein the days of rigid, automated, highly standardized businessprocesses.Processesareasequenceofactivities–planned,predictable,repeatable,andofteninflexible.They should have a big, powerful engine to drive scale and efficienciesonwell-definedtracks.

Thenewevent-drivenworldstillusesprocesses,buttheyhavebecomeflexible,agile,andconfigurablebasedontheevent that just occurred – within the core, or at the edge. The old engines could not process billions of events at near real-timespeedsandallowthismaneuverability.Thusthereinventedengine–anecessaryconditionforreal-timeprocessing of disparate data at competitive price points.

But that doesn’t mean every part of the business should be reimagined – or that the upgraded foundational layer doesn’t have benefits in the old way of doing things. Many organizations may find themselves with a mix of the new andtheoldengines–takingadvantageofpointtechnicalupgradesfor“locomotives”tohelpdriveefficiencies,andmakingstrategicbetsonagile“sportscars”toreshapebusinessasusual.Unprecedentedspeedandflexibility–coupledwithERP’songoingfunctionalexpansionintoinformationdomainsandubiquitousmobileaccess–aretogetherleadingtotheendgameofhyper-productivity. Ineithercase,thereinventedERPengineisattheheartofthe investment – and revitalizing one of the business’ most strategic (and expensive) assets: the enterprise application suite.

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History repeating itself? TheevolutionofERPhasbeenfeaturedasatechnologytrendinpreviousyears,sowhyistheretoolingoftheengineheadline-worthynews?Andhowisitdifferentthanpreviousreincarnations?

ReinventingtheERPEngine

What were the challenges? What’s different in 2013?

Best-of-breed enterprise applications1

• Extensibilitywasabouteasingintegrationinto/outofthecoreERP–andaccommodating distinctotherservicestofulfillanend-to-endprocess.Itwasasensibleapproach–especiallywith innovative edge offerings emerging in the cloud.Butitisessentiallya“surroundstrategy”forthecoreERPoffering–providingneitherefficiency nor cost gains for the core, nor offering avenues for innovation of how business transacts those core processes.

• Theleadingapproachpromotesanincreasinglyheterogeneous footprint – featuring a host of operating systems, hardware configurations, databases, application servers, and software packages.Theefficienciesofintegrated, engineered systems were nearly impossible to realize.

• Aggressiveacquisitionshavesimplifiedthe vendor landscape, though new players are emerging intargeteddomains.Consolidationprovidestheopportunity for disparate services from different modules to share the same operating environment andtakeadvantageoftheengine’sreinvention.

• Heterogeneityisnotgoingaway,withmost organizationslandingonahyper-hybridcloudmodel2–amixofon-premiselicensebasedsoftwareand cloud services. But opportunities to improve cost performance of the core remain – as do chances to introduce some significant changes to how thebusinessoperatesbytakingadvantageofthegeometricimprovementsintheengine“powertoweight”ratio.

End of the “Death of ERP”3

• Thepredictionthatlarge,global,complex organizationswouldlikelyretainexisting on-premise,license-basedtraditionalERP software for the core of their business has demonstrated itself to be true. But while the processesareservedbythetraditionalERPmodel, they do not have to remain stagnant on the traditional engine. Opportunities for new efficienciesandimprovedTCOmayhavebeenignored in the philosophy of preserving the predictability and stability of the core.

• Engineeredsystems,in-memorycomputing,andabroader shift to cloud infrastructure and platform enablementofpartsofthecoreERPlandscapehavethe potential to improve cost and performance characteristics of the preserved core.

• Ad hoc and de jure standards adoption of conceptssuchasMapReducereflecttheshiftto address not just the application tier but also the data tier, both integrated with and parallel to the in-suitecapabilities.

• Importantly,thereareopportunitiestointroducethenewlyoverhauledenginewithoutopen-heart surgery of existing core processes – either by focusing on adjacencies to the transactional layer (e.g., big data or analytics extensions to core financials, manufacturing, supply chain) or by driving adoptioninthenon-productionpartsofthesolutionlandscape (stage/test/development environments, or potentially even phasing the new engine into disaster recovery instances).

• 10xoreven20xperformanceimprovementsatthedata, transactional, or analytics tier can be translated toinverselevelsofcostsavingsforagivenworkload.ThismayallowERPnodestobedeployedinmoregranular and agile fashion around the globe.

• Theblackboxnatureofengineeredsystemsmaysignal a return to the days of the AS/400 systems administration being an extra duty for the payroll supervisororshopfloormanager.

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ReinventingtheERPEngine

Technology implicationsInaworldofstandardizedrigidbusinessprocesses,ERPengineswerebuilttobeindustrial-grade:hightransactionalscale;poolsofdedicatedprocessingresourcestodealwithsporadiclarge,long-runningbatchcycles;racksofspinningdiscstomanageproductionvolumes(andsilosoftapetohousedataarchives);expensiveactive-activeredundantsystemlandscapes at multiple locations for fault tolerance and disaster recovery; infrastructure procured to handle edge cases of volume,concurrency,andgrowth.Allpulledefficientlybythebiglocomotiveenginealongsetrails.Thenewworldlooks

differentateachlayerofthestack,withimplicationstotherestofyourITportfolio.

Topic Description

Virtualization Virtualizationplaysanimportantroleatthecompute,storage,operatingsystem,platform,terminal,andapplicationlevels.Manyvendors’reinventedERPenginesallowformoreadvancedvirtualizationapproaches than organizations may have previously encountered, moving above the infrastructure and OSlayersintotheplatformandapplicationspace,andpromotingcross-hypervisorportabilityof workloads.Monitoringandmanagementtoolsshouldbeupdatedforvisibilityandcontroloverthenew footprint. Orchestration is the next frontier, and governance is important to guide adoption, preempt instance sprawl, and enforce policy infringements discovered via monitoring and environment maintenance.

In-memory solutions ConventionalERPsolutions(transactionalandinformational)havebeendependentonphysicaldisc,throttledbyinput/outputcallsandseparateresource-intensivecyclesfordataretrieval,synthesis,andanalysis.In-memorysolutionsshiftthedatafromphysicalbitsonspinningdisctologicalunitslivinginrapid-accessmemory(RAM).Withthedatauniverseincache,querying,aggregation,andprocessingcanbedramaticallyimproved–bothinresponsetimesfortraditionalrequests,andintheabilitytoprocessmorecomplicatedqueriesacrossamuchwiderdatadomain.Todayin-memoryisoftenusedforanalytics,butseveralvendorsarelookingtoextendtheirreachtotransactionalprocesses.Ashift toincludecolumn-orienteddatabaseenginessupportstheanalyticsqueryimprovementsandoffers interestingnewpotentialfordesignofthetransactionprocessing.NewERParchitecturesare leveraging large memory segments to store and retrieve large portions of the core database, thus reducingtheI/Orequiredtoretrievedatafromdisk.

Integrated infrastructure systems

Appliance-likesolutionsprovidingintegratedsolutionsacrossthecompute,storage,networking,andmanagementstacks.Advantagesincludecertifiedinteroperability,consolidatingmonitoringandmaintenancesolutions,apotentialdecreaseinrequiredbenchmarkingandtesting,and–forsomevendors–theabilitytotakeadvantageofnewtechnologiesfortimely,secure,low-latencyconnectivitybetweenthelayersoftheinfrastructurestackandcommunicationsbackplane.

Unstructured data Sometimeslumpedundertheheaderof“notonlySQL”(NoSQL),thenewERPbackbonecanreconciletheneedforschema-basedrelationaldatabasesfortransactionalrecordswiththeever-growingimportanceofsemi-structuredandunstructureddata.Datadisciplinesneedtoadapttoaninevitablemix of structured and unstructured data – affecting data architecture (including semantic relationships, correlation,andcontext),datastewardship(cleansing,upkeep,andarchiving),anddatagovernance(metrics, ownership, and oversight).

Integration Beyond the growing functional heterogeneity of business processes being fulfilled by a collection of leading products and solutions, there is also potential for foundational heterogeneity as organizations findthemselvesmigratingtheirERPenginesovertime.Thiscreatesanevengreatersenseofurgencyfor integration capabilities to orchestrate the interaction of services and data, inside and outside of the organization, across a changing collection of subscribers and providers.

672013TechnologyTrends–Enablers

Lessons from the frontlinesERP at light speedA global glass and ceramic manufacturer wanted to consolidatemultipleERPapplicationstocentralizetheirglobal operations and create a more reliable infrastructure to support their global manufacturing.

Inthepast,thiskindofERPinfrastructurewasbuiltbyacquiringhardwarecomponents,oftenfrommultiple vendors, and spending months integrating them to operateasasinglecohesiveunit.Forthismanufacturer,apre-integrated,engineeredsolutionwasadoptedinstead.RapiddeploymentoftheinfrastructurehelpedacceleratetheimplementationoftheunderlyingERPapplicationaswell,shorteningtheschedulefrommonthstoweeksincomparison to typical systems implementations. Once the hardwarearrivedatthedatacenter’sloadingdock,thesystem was up and running in two days, greatly reducing installation time of the system.

With the single integrated system, the company has reduced maintenance needs and lowered the total cost of ownership. And with performance improved by a factor of 15 times over the legacy system, they are able to process orders in a more timely manner, execute demand planning reports more efficiently, and alter their supplychainprocessesinrealtime.Insteadoffocusingtheir technology and experience on managing complex ITsystems,theycanfocusontheinnovationthatdefinesperformance in their operations – and respond more effectivelytomeetchangingmarketneeds.

A roadmap for improved performance4

Garmin, a leader in navigation and communication products, wanted to reduce the cost and increase the performanceofitsbusiness-criticalsystems.Oneofthecompany’s specific goals was to reduce the cost of ownership of supply chain and demand management systemsthatwereprocessing13millionqueriesand30,000 batch jobs and reports each month. Management alsowantedtofixreliabilityissueswithGarminConnect,which supports the company’s fitness segment, processing 40millionqueriesperweek.Inaddition,Garminwanted tobuildafoundationtosupportaggressiveyear-over- year data growth, reduce unplanned system outages, and provide timely system and data recovery should an outage occur.

To realize these objectives, Garmin deployed two massive-memorydatabasemachines.Consolidatingfourproductiondatabasesand20non-productiondatabasesled to maintenance and energy cost savings, with database performanceincreasingupto50%.EvenasGarmin Connect’scustomertrafficgrewby400%–witha subsequentdataexpansionfromthreeto12terabytes– planned and unplanned database outages were also reduced.Storageareanetworkbackuptimeswerecutinhalf,andthetimerequiredtoduplicateGarmin’slargestdatabasewasreducedfrom8daysto10hours.In addition, Garmin was able to more accurately forecast demand, efficiently process orders, and effectively support just-in-timemanufacturing.

Answering the big data call Thewirelesscarriermarketisafast-movingindustrywithcustomer churn a concern of providers. To stay competitive, one wireless carrier wanted to gain a greater understanding of their customers to improve their marketingeffortsandretaintheircurrentcustomerbase.However,thecompanyfacedchallengeswiththeabilitytoprovide timely, actionable information and analytics with their existing technology systems.

The company decided to implement a scalable, analytics solutiontoprovidecustomerinsightsinnearreal-time.In-memorytechnologysupportsdataprocessingandanalysiswithinseconds–takingadvantageoftheengineofnextgenerationERPsystems.Oneofthecarrier’smarketinggoalswastoincreasethenumberofcustomersupgrading to smartphone data plans. But understanding if customersrespondedtoserviceofferstookuptooneweek.Thecarrier’snewplatformshortenedthetimeto15minutes,allowingthecompanytomakemoretimelydecisionsonmarketingoffers.Generatingotherreportswentfrom10-15minutesto10-15seconds.Themarketingteamisnowabletorunon-demandsearchesallowingthem to interact with the data to discover new insights. The new system can also run analytics over 24 months of historical data, versus the previous system’s three month window.Thisallowsthemarketingteamtoimprovetheaccuracy of their predictions.

Theresultsinthemarketingdepartmenthave encouraged the company to explore other areas for potentialimplementationofin-memorycomputingandanalytics efforts – including mobile offerings to allow executives to access information on the road. By reimagining the capabilities of modern enterprise systems, this wireless carrier can deliver greater value to its customers and shareholders.

ReinventingtheERPEngine

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ReinventingtheERPEngine

This trend brings out the technologist in me and takesmebacktomysystemprogrammingdays.But it’s really the business implications that are important to me today – a better/faster/cheaper ERPengineallowingthebusinessaccessto more and perhaps different capabilities. The underlying technology aspects – appliances, engineeredsystems,in-memoryarchitectures,etc.–shouldbekept“underlying.”Iftechnologyinnovations(thenewenginestuff)makemy primary job delivering business value easier and moreresponsive,I’lltakethetimetoassessandinvest.Otherwise?Justkeepthehoodclosed.

Havingsaidthat,Idoappreciateanytrendthatcan enable me to spend less time and energy on thequestion,“Whatisthenextserverweshouldbuy?”or,“Howdowemakeallofthesepiecesperformtogether?”and,instead,tospendmoretimeanswering,“Howdowefulfillthenew businessrequirementthatgeneratesrevenueat alowcost?”

AtEnPro,eachofourbusinessdivisionsoperatesinawaytoeffectivelyservetheircustomers.Eachhas its own set of products, customers, and suppliers.Itdoesn’tmakesenseforallsixdivisionstooperateasingleERPsolution,aseachoneneedsdifferentthingsfromERP.Partofour growthstrategyinvolvestargetedacquisitions,which presents additional opportunities.

We’veorganizedITtorespondtothat.Oneteamconcentrates on commodity technologies, and the other focuses on business solutions. The businesssolutionsteamisnotdistractedbygeekyarchitecture stuff, is primarily business analysts versus programmers, and concentrates on the importance of external experience and resources todeliverleading-edgesolutions.

Larry FreyChiefInformationOfficerEnProIndustries

My take

Inaddition,weprioritizeourinvestmentfirstinto“orthodox”capabilities,whichenablecoreoperationsof the company. My first goal is to deliver and maintain the orthodox solutions so that our company continues tooperatelikeawell-oiledmachine.Goingbeyondorthodoxisnotoftenrequiredtoachieveoperationalexcellence. Then, on top of our orthodox capabilities, we may gain further competitive advantage by investingin“unorthodox”capabilities–thoseadvancedor emerging technologies that allow us to deliver more tothebusinessusingtargeted,leading-edgesolutions.It’simportanttonotethatit’snotonlyaboutfasterorcheaper; it’s also about better and easier.

Appliancesandengineeredsolutionskeepmefromhavingtoreinventthewheeleverytime.Theytakeadvantageofwhatwecallthe“powerofplenty”– anexternallyfueledmarketplaceofexperienceandinnovation on which we can call. While it may be a little “backtothefuture”intermsofone-stopshopping,attheendofdayIwanttowriteonecheckforasolutionthatshouldworkandperform.

Myadvice?Makesureyoucandeliverthetablestakesbeforedivingintothelatestinnovation.Focusontheneeds of your business and bring in external experience whenyouneedit.Takeadvantageoftheemergingtechnologies that are able to enhance performance. Don’tmakeadecisionbasedon“cool”in-memory,engineered systems, or other technology factors alone. And,importantly,dowhateverittakestodelivervalueto your organization by delivering game changers – giving your business a competitive advantage.

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692013TechnologyTrends–Enablers

Flying car futureERP’srecenthistoryhintsatwheretheindustrywilllikelystandinfiveyears.Pushesintheareasofusabilityandubiquityarelikelyinevitable.Enterprisedataand transactionswilllikelybeavailableinmanyareas–withpresence,butalsowithcontext.Theformerwilllikelybecomewell-traveledground,focusedonaccesstoERPfunctions from mobile, social, and collaboration channels. Thelatter,context-awareness,iswherethereinventedERPengine becomes critical.

Advances in data compression, storage and memory costs,anddistributedcomputingwilllikelyallowreal-timeprocessing and analysis of internal and external data feeds –allowingactiontobetakenonintelligentsignalsgleanedout of torrents of noise. The cost of not monitoring physical operations is beginning to eclipse the cost of introducing sensors and actuators across assets – from facilitiesandequipment,tosuppliesandfinishedgoods.Locationawareness,digitalidentities,andthegrowingautomationofbusinessoperationsallowfine-grainedknowledgeofwho’sdoingwhat,where.Andsocial business’ growth across the enterprise shines a light on whoknowswhatandwhoknowswhom.Thenexusoftheseforcesprovidescontexttoinformeachactiontaken,eachqueryanswered,andeachanalyticalmodel.

ERP’ssupportinginfrastructurewilllikelyallowfor multi-tenantpubliccloud,cloud-baseddedicated appliances(virtualprivate),andon-premiseappliances for solutions in their catalog – as well as options for in-memoryversusdisc-basedsolutions.Vendor consolidationwilllikelycontinue,butahandfulof players may remain, touting competing platforms for owning the new world of broad enterprise enablement.

Perhapsthemostsignificantchange?ERPisshiftingfromstrict process automation based on scale and repeatability, totheorchestrationframeworkforanagile,adaptablesetofoften-changingevents.Piecesofthebusinesswilllikelyrelyonhighlyautomated,autonomous,predictive,andprescriptiveanalyticalmodels.Otherswilllikelyrelyon human insight and intervention, where tools are there tohelpknowledgeworkersvisualizeandexplorecomplexor sensitive data. This presents a much different scale problem – where advanced intelligence potentially should be deployed against feeds, and is accessible by employees. Today’sbackboneswouldlikelyeithercrumbleunderthevolume, or be financially untenable if conventional horizontal and vertical growth strategies were followed. Hencetheneedforafundamentallydifferentengine–builtforoutside-inintegration,expectingunpredictableand intermittent growth, and capable of handling the exploding volumes of data and service interactions.

ReinventingtheERPEngine

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ReinventingtheERPEngine

Where do you start? ERPcanbeasensitivetopicinmanyorganizations.Andforgood reason. Significant financial and political capital has been spent in getting to today’s current state, with personal careersmade(andlost)basedontheoutcome.ItislikelythebiggestsinglepartoftheITlandscape–influencing abigpercentageofITspend,andinvolvedinaneven biggerpercentageofthebusiness’operations.ReinventinganypartofERPshouldcausepause,andwilllikely draw scrutiny.

Butthatdoesn’tmeanitshouldn’tbebroached.Vendorsalready positioning for the next potentially disruptive wave –onewhereTCOistransparentandhyper-competitiveandubiquityisexpected.Marketsarebeingdisplacedbycompanies where old problems are getting solved in new ways,newquestionsaregettingaskedandanswered,andnewbusinessesarebeingexplored.Here’swhatyoucandoto prepare:

• Experimentattheedge.ExploreopportunitiestoadoptrevampedERPenginesinareasthatsurroundyourcoretransactional layer – business intelligence, analytics, ornon-productionlandscapes.Additionally,usetheadoption of the revamped engine to introduce new disciplinesthatmayhaveimmediatebusinessimpact,likecreating new capabilities around unstructured big data to improve customer sentiment or sales force effectiveness.

• Experimentatthecore.Exploreopportunitiesfor runningcoreworkloadsonmuchlessgear,makinghot/hotanddistributedself-healingarchitecturesmore practically affordable. Similarly, performance leaps in runtimesofferopportunitiestorethinktraditional limitationsonbatchwindows,runbooksequencing, andevenbusinesscycles.Ifforecasting,close-the-books,orMRPrunsare10xor20xfaster,howmightyou rethinkyourbusinessprocessestocreateadvantage?

• Versionhygiene.Ifyouhavehedgedagainsttechnicalupgrades and are generations behind the latest versions, now’s the time to get compliant ahead of a business agendathatmayrequirethenewenginetofulfillthevision.Pureplumbingupgradesarepossible.Youcanalsotakeadvantageoftheneedtotouchthecoretoreachnewfeaturesandpotential–speed,ubiquity,andflexibility.

• Evangelize.Becomethechangeagentofthe“sowhat”byaskingwhatthebusinesscandodifferentlyandhowthe organization’s mission can be better served. Understandtheimplicationsofthe“what”and“how” so you don’t oversimplify the migration effort or overpromisetheexpectedoutcomes.Vendorsand partnerscanprovidescenariosandbenchmarksofpotential business impact because of the foundational changes.Competitorandcross-industryexamplesaregood, but rarely does something compare to a handful of impactful use cases from your own business.

• Cometotermswithcompetingviewpoints.Today’s leading vendors are placing nuanced but different bets. SAPonextensibilityandubiquity.Oracleonconvergenceand integration. The various cloud players on edge disruptionbleedingintothecore.Eachisvalid,and likelytoachievegoalsinthemid-term–andmarketconditionsareunlikelytosettlethedebateand force anyone’s hand. Which leaves the onus on the organization to gain visibility into vendor roadmaps, articulate their own business’ vision into similar terms, investwherealignmentsareclear,andmakeintelligentbets where there is uncertainty.

Consumer Products Perspective – Reinventing the Capability Engine

OneofthebiggestpitfallsthatmaypreventtheadoptionofthenewERPengineinConsumerProductsorganizationsistheoversimplificationthatthisisjustaboutpeople,processandtechnology.Infact,anydiscussionof“ERPengine”mayevenbeviewedasapuretechnologytopicthatisisolatedfromthebusiness.Theconversationshouldbemoregranular–thenewERPengineprovidestheopportunitytoreinvent targeted business capabilities that include the following dimensions.

• Businessobjectivesandgoals

• Scopeandscale

• Managementandmetrics

• Businessprocess,policiesandcontrols

• OrganizationandTalent

• Technology

LookingatanyofthesesixdimensionsinisolationorthroughsomepartialcombinationwillalmostcertainlyguaranteebelowaveragereturnfromthenewERPengine.Allfacetsarerequiredtoachievethe necessary change in behavior and metrics, as well as the realignment of the organization to operate effectively to leverage the new technology.

Therefore,evenbeforewebegintotalkaboutreinventingtheERPengine,weneedtoaddresssomeveryfundamentalquestions:DoIhavea“businesscapabilityperspective”whenIassessanypotentialchangeintechnology?AmIabletoreadilyidentifytheimplicationstoallthebusinesscapabilitydimensions?DoIhavetheChangeGovernanceinfrastructuretoassess,prototype,implementandrefinetechnologychanges in the context of a business capability?

Capability

Scope &Scale

Management &Metrics

Objectives &Goals

Organization &Talent

TechnologyProcess&Controls

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Bottom lineERP’s reinvented engine improves the process-driven ways of old, and enables the event-driven possibilities of tomorrow. Overhauled technologies allow cheaper and timely passage along the well-worn tracks of your existing automated processes. But technological breakthroughs suddenly mean industrial-grade performance can be coupled with maneuverability. This gives you more than efficiency and cost gains; it allows the underlying business problems to be approached in new ways. It allows access to data more efficiently,leadingend-userstoaskadditionalquestionsandexplorenewwaystoexploittheirERP’s data – and unlock the potential of their information.

Ofcourseyoucanrationalizeyourinfrastructureandapplicationfootprint.Buttherealquestionsare more strategic. What would you do differently if you could close your books in seven seconds instead of seven days? How would your sales strategy change if thousands of store managers could be individually executing daily sales forecasts5? What could you learn from real-time monitoring of the social-sphere interactionsaroundyourindustry?ThenewERPenginesgiveyouthetoolstoanswerthesequestions and more.

ReinventingtheERPEngine

AuthorsBill Allison Principal,DeloitteConsultingLLP wallison@deloitte.comBillAllisonservesastheConsultingGlobalTechnologyServicesleader,responsibleforthedeliveryoffulllifecycletechnologyservicestoclients.Hehasmorethan25yearsof experience in the analysis, design, and implementation of information systems, systems strategy, and business process improvement.

Richard Kupcunas Director,DeloitteConsultingLLP rkupcunas@deloitte.comRickKupcunasisaDirectorinDeloitteConsultingLLP’sTechnology/Oraclepractice.He isrecognizedasatechnologyandknowledgeleaderwithrespecttoOracledatabase, infrastructure, integration, and application server technologies.

2013TechnologyTrends–Enablers

Endnotes1 AdditionalinformationisavailableinDeloitteConsultingLLP(2010),“DepthPerception:AdozentechnologytrendsshapingbusinessandITin2010”,http://www.deloitte.com/us/2010technologytrends,Chapter4.

2 AdditionalinformationisavailableinDeloitteConsultingLLP(2012),“TechTrends2012:ElevateITfordigitalbusiness”,http://www.deloitte.com/us/techtrends2012,Chapter5.

3 AdditionalinformationisavailableinDeloitteConsultingLLP(2011),“TechTrends2011:ThenaturalconvergenceofbusinessandIT”,http://www.deloitte.com/us/2011techtrends,Chapter5.

4 Casestudy:“GarminInternationalInc.ImprovesDatabasePerformanceupto50%byConsolidatingontoHardwareandSoftwareThat’sEngineeredtoWorkTogether”,http://www.oracle.com/us/corporate/customers/customersearch/garmin-international-1-exadata-ss-1561598.html

5 ChrisKanaracus,SAP unveils HANA-powered performance management apps in the cloud,http://www.pcworld.com/article/262062/sap_unveils_hanapowered_performance_management_apps_in_the_cloud.html(September10,2012).

892013 Technology Trends

ConclusionFaithfulreadersofourTechTrendsreportswillfindsome familiar topics in these pages. The postdigital forces have seen extraordinary attention in the past four years – and each is still in the early stages of adoption.Thebookonhoweachcanfundamentallyreshape business is still being written.

Although the topics are familiar, the underlying trends continuetoevolveatanastoundingpace.Takemobile,forexample.In2010thestorywasaboutubiquitousconnectivityanddevice(i.e.,smartphone)advances.In2011,thefocuswasonthe“app”–andtheadventofthetablet.In2012,wecoveredenterpriseimplicationsfor prioritization of opportunities, as well as the operational realities of governing, managing, and delivering mobile solutions. And now in 2013, we consider mobile’s place as an utmost strategic priority. The very notionof“devices”isexplodingintonear-ubiquitousconnectivity of many physical objects. The fundamental element of mobile still applies – the innovative idea of removing limitations based on physical location, and of a truly untethered enterprise. But the supporting nuanceanddetailsaremovingatarapidclip,makingitparamountforITexecutivestokeeppacewithchange.

Postdigital’spotentialcanspurbothoffensiveanddefensive responses. On one side lies opportunity for innovation. On the other, the existential threat ofdisruption.Everyindustrymaybeaffectedbytheunderlyingdigitalforces.Everymarketmaybe reshaped by their controlled collision.

Whowillleadthecharge?ThereportsofIT’sdemisemay be exaggerated, but there is often truth behind therhetoric.HowwillCIOsreimaginetheirrolesinbusinessstrategy?WhatwillthecorrespondingITdepartmentlooklike?Onethingisforcertain:theelements of postdigital will play a foundational role.

Weclosethisyear’sreportwiththefamiliarquotefromfuturistWilliamGibson:“Thefutureisalreadyhere…itisjustnotevenlydistributed.”Ourhopeisthat the Tech Trends reports will help you discover the elements of postdigital in your enterprise.

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JeffAnderson,RajeswariChandrasekaran,IanClasbey,GregComline,TeresaDannemiller,AlexDea,LeeDittmar,RafeDyer,ChrisGaribaldi,MichelleHernandez,JonHoehler,DanHousman,KristiLamar,NicoleLeung,AndrewLuedke,ChrisMartin,TaimurMohammad,BlairNicodemus,IzzyPark,AaronPatton,AaronReabow,FarhanSaeed,GordonSandford,TerryStuart,TammySwartz,VikashTiwari,EmadToukan.

Research Leads:ChrisChang,JustinFranks,TomGleason,NickJohnson,AbhishekMishra,JoseMunoz,ParidhiNadarajan,SamSoneja,JeremyYoung.

Team Members: JacobArtz,FelixChang,JennaChen,JosiahDavis,PhilipDavis,KevinDowns,JeffEiden,JasonFebery,AndrewFisher,RamyaGaneshan,DwijGarg,LeksiGawor,AnilGopala,TaylorHedberg,SamJamison,CoreyKe,KanishaKhaitan,RebeccaKim,AdrianKosciak,KarthikKumar,JoyLi,RyanMalone,SimyMatharu,EstefiMedina,SeanMullins,HollyMusemeche,AbhishekNarula,AudreyNguyen,DanNieves,Chinyelu Offodile,AkshaiPrakash,NathanRabold,AdamRe,TalalRojas,BradShivley,DilysSun, YairTon,JennyZheng.

Consumer Products ContributorsAlLanghals,SuketuGandhi,MarcusShingles,MattLaw,KarlRupilius,DarwinDeano,OliverPage,JarrodPhipps,MaratSurenovichMamedov,DavidTobin,AprilAsico.

Special ThanksHeidiBoyer,CyndiSwitzer,andStuartFano–theveteranheartandsoulofourTechnologyTrendsteam.Youcontinuetoamazewithboundlessenergy,selflessteamspirit,and pushingustoconstantlyraisethebar(andhitdeadlines).MariahnaMoore,JillGramolini,andKellyGanis–formakingahugeimpactinyourfirstyearTechTrending.Thisyear’sreport would not have been possible without your drive, enthusiasm, and willingness to takeon(anddeliver)meatycontent.

Contributors

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Authors

2013 Technology Trends

CIO as the Postdigital CatalystSuketuGandhi Principal,DeloitteConsultingLLP sugandhi@deloitte.com

Bill Briggs Director,DeloitteConsultingLLP wbriggs@deloitte.com

Mobile Only (and beyond)Shehryar Khan Principal,DeloitteConsultingLLP khans@deloitte.com

MikeBrinker Principal,DeloitteConsultingLLP mbrinker@deloitte.com

Social Reengineering by Design

StephenRedwood Principal,DeloitteConsultingLLP sredwood@deloitte.com

ChrisHeuer SpecialistLeader,DeloitteConsultingLLP cheuer@deloitte.com

Design as a DisciplineJRReagan Principal,Deloitte&ToucheLLP jreagan@deloitte.com

NelsonKunkel Director,DeloitteConsultingLLP nkunkel@deloitte.com

IPv6 (and this time we mean it)Bruce Short Director,DeloitteConsultingLLP bshort@deloitte.com

EdwardReddick Director,DeloitteConsultingLLP ereddick@deloitte.com

Finding the Face of Your DataDavid Steier Director,DeloitteConsultingLLP dsteier@deloitte.com

VikramMahidhar Director,DeloitteLLP vmahidhar@deloitte.com

Gamification Goes to WorkAndreHugo Director,DeloitteDigitalRSA anhugo@deloitte.co.za

DougPalmer Principal,DeloitteConsultingLLP dpalmer@deloitte.com

Reinventing the ERP EngineBill Allison Principal,DeloitteConsultingLLP wallison@deloitte.com

RickKupcunas Director,DeloitteConsultingLLP rkupcunas@deloitte.com

No Such Thing as Hacker-proofKelly Bissell Principal,Deloitte&ToucheLLP kbissell@deloitte.com

Kieran Norton Principal,Deloitte&ToucheLLP kinorton@deloitte.com

The Business of ITPeterVanderslice Principal,DeloitteConsultingLLP pvanderslice@deloitte.com

BryanFunkhouser Principal,DeloitteConsultingLLP bfunkhouser@deloitte.com

MarkWhiteChiefTechnologyOfficerPrincipal,DeloitteConsultingLLPmawhite@deloitte.com

Bill BriggsDeputyCTODirector,DeloitteConsultingLLPwbriggs@deloitte.com

Disruptors Enablers

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