Transcript Bank One Check Imaging Solution

Winning IT Strategies in
the Chemical Industry
A discussion document on trends and
directions in the Chemical Industry and
their implications on IT Strategy
The Chemical Sector Perspective
Specialty Chemical Stock Index
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Global Competition
New, low-cost capacity
Cyclical business
Volatile feedstock prices
Environmental compliance
Economic slowdown
Commodity Chemical Stock Index
Source BigCharts.com
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There are a number of forces shaping the current and
future business direction of the Chemical Industry
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These forces are driving Chemical companies to focus on
five primary business themes
•Operational Efficiencies and Cost Reductions
•Globalization of Markets and Competition
•Improvements in Customer Service
•Product and Services Innovation
•Growth Strategies
Each of these business focal areas has significant
implications for the IT organization
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Operational Efficiencies and Cost Reductions
Business Focal Area
IT Implications
• Integrated supply chain solutions for demand
planning/forecasting, production scheduling,
distribution resource planning, and
warehouse management
• Consolidate plants and implement
new cost saving production methods
• Optimize logistics and distribution
while reducing working capital in the
supply chain
• e-Procurement solutions and e-Marketplace
enablement for buy/sell transactions
• Improve purchasing efficiencies via
reduced transaction processing costs, • Vendor managed inventory (VMI)
fewer suppliers, and better supplier
• B2E (business to employee) Intranets for
management practices
self-service HR, e-learning, etc..
• Standardization operations and
• Data Warehouse/BI solutions for self-service
infrastructure
access to critical business analysis and
reporting
• Reduced overhead expenses and
economies of scale from shared
• Web based sales/marketing solutions and
services for HR, finance, etc..
channels for low volume/potentially new
customers
• Improvements and cost reductions
for customer service and
• Outsourcing for managed ops, application
sales/marketing
management, help desk, web hosting, etc..
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Globalization of Markets and Competition
Business Focal Area
IT Implications
• ERP systems deployment on a global scale
• Expanding industry presence
in world markets
• Globally integrated supply chain
management systems for ATP, demand
planning/forecasting, scheduling, etc..
• Making sound, rational, fact-based
business decisions that are relevant
to world regions/geographies
• e-Marketplace participation and enablement
for global visibility of products
• Meeting or exceeding customer
service level expectations anywhere
in the world
• Global networks and applications for
communication and collaboration worldwide
• Exploiting the potential efficiencies
of global-scale operations
• Customer care and sales force automation
solutions to facilitate global account mgmt.
• Capturing and leveraging the
collective learning acquired from
global operations
• Market and competitive intelligence systems
that operate on a global basis
• Anticipating market and competitive
trends on a global basis
• Access to information from anywhere at
anytime
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Improvements in Customer Service
Business Focal Area
IT Implications
• Match services with customer
• General Web based service channels for
requirements and expectations so that low-volume customers and dynamic, secure
the company does not over deliver or
web portals for high-volume customers
under deliver
• e-Collaboration solutions for joint product
• Retain desirable/profitable customers
development/innovation with customers
and attract additional customers of the
same type
• Integrated Web and call center solutions
• Reduce the costs for expediting,
rebilling, and deferring which are
typically associated with misdelivery
of services
• Customer data warehouse/mining solutions
• Sales force automation/productivity solutions
• Wireless and pervasive computing support
• Develop a level of customer intimacy
and collaboration that helps fuel the
product offering innovation engine
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Product and Services Innovation
Business Focal Area
IT Implications
• Increase the success rate for new
“blockbuster” type products
• e-Collaboration solutions for joint product
development/innovation with customers,
suppliers, and/or business partners
• Increase the frequency of new product
introductions
• Knowledge Management solutions for faster
and better leverage from corporate knowledge
• More aggressive and efficient product assets
life cycle management (PLM)
• Web based research and data gathering tools
• Augmenting products with value-add
for competitive intelligence gathering
services - leverage corporate
knowledge assets to enhance the
• Product Life Cycle Management solutions
value proposition associated with
the product
• Molecular modeling and computational
chemistry solutions for product research
• Continuous monitoring and intimate
awareness of competitive threats
• Genomics and bioinformatics solutions for
from other companies, industries,
agricultural, microbial, and industrial biology
and/or products
product research
• Identify and exploit product and/or
service “white space” opportunities
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Growth Strategies
Business Focal Area
IT Implications
• Strategy and integration plan for merging
acquired entities into the existing IT
infrastructure
• Gain market share through improved
service and better price/performance
to existing customers or through
acquisitions
• Molecular modeling and computational
chemistry solutions for product research
• Gain market share by expanding the
current product set to new markets
and/or regions
• Genomics and bioinformatics solutions for
agricultural, microbial, and industrial biology
product research
• Develop or acquire new products and
services to sell to existing customers
• Enhanced customer care/service solutions
• Develop or acquire new products and
services to sell to new customers
• e-Commerce and e-Collaboration solutions
• Integrating acquisitions (ie. people,
applications, technology, etc..) into an
existing IT infrastructure
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Near term trends for Chemical Companies support the
concept of an integrated business and technology model
• System-to-System integration (e.g. ERP-to-ERP)
• B2B e-Commerce Portals
• Supply Chain Management (SCM)
• Customer Relationship Management (CRM)
• Consortia driven e-Marketplaces
• e-Collaboration and Knowledge Management
• Increased interest in ASP offerings/options
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Premier firms are moving to a model of integrated
business and technology (e-business) in order to better
address these IT implications and dependencies
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This level of integration will provide significant operational and
monetary benefits to the Chemical company, suppliers, and
customers up and down the supply chain
• Companies with best-in-class SCM usually have a 7% cost advantage
over median performers
• Leading companies continue to have a 40%-65% advantage in cash-tocash cycle time over average companies
• Top companies hold 50%-80% less inventory than their competitors
• Companies implementing supply chain planning solutions can expect to
realize multidimensional performance improvements
• Realized cost savings
– Reducing inventory levels by 10%-50%
– Reducing price concessions and rework by 40%-50%
– Utilizing resources 10%-20% more efficiently
• Improved customer service
– Improving delivery reliability to 95%-99.9%
– Reducing product outages to 0%-5%
– Reducing cycle times by 10%-20%
• Achieved business growth
– Increased market share and customer retention resulting in a 3%-7% increase in sales
– Achieving flexibility to adapt to business change
– Accelerating speed to market
Source : Pittiglio Rabin Todd & McGrath Study
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Successful business models for Chemical companies in the next
10 years will leverage internet technology extensively in the
SCM and CRM domains
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How should the IT organization position itself for maximum
effectiveness given these Chemical Industry trends and directions ?
It starts with Strategy
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 Clearly understanding IT
enabling opportunities to
enhance or transform business
processes
 Understanding how to leverage
IT to fulfill requests
Setting a clear direction
Aligning the IT portfolio with business direction
Establishing the models and architectures
Efficiently managing assets and TCO
Effectively structuring the organization and sourcing
options
IT Strategy, Planning & Leadership
IT Management
Identify
Solutions
Architect
& Define
 Using consistent technologies and
standards to define and design systems
 Applying appropriate processes,
methodologies and resources to deliver
solutions
 Structuring build efforts properly for
reducing execution issues
Build &
Maintain
Operate
Support
 Operating under a clear set of defined
processes and policies
 Maintaining availability and service levels
 Efficiently allocating resources and utilizing
the most appropriate sourcing options
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Effectively addressing strategic issues improves the
positioning, delivery, and effectiveness of IT
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IT creates an understanding of the IT spend, initiatives, and value
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Improved integration of IT into the business planning process
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IT contributions to the business direction are more direct
Additional areas of value which IT can provide are more easily identified
There becomes a joint involvement in bringing IT and the business forward
Foundation for better downstream IT planning
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Used for clearer justification of IT budgets
Basis for collaborating with the business to determine where best to make IT
investments
Providing the guidance necessary for efforts that provide additional structure for IT
delivery – e.g. Technology Architectures
Sets a direction that the IT delivery group can drive towards and that the business
understands
Sets the foundation for more efficiently providing IT products and services
Ensure value is sustained and managed
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Providing the proper oversight and involvement in making IT investment choices
Clear understanding of governing roles and responsibilities helps ensure the right
decisions IT decisions are made
Ultimately, it must lead to improving revenue growth through effective solutions
and reducing costs by more efficiently enabling and managing the business process
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IBM and AspenTech together provide leadership and end-to-end
delivery capability with complementary strengths
Strategy &
Business
Processes
Organization
Application
Design
Configuration
& Change
Solution
Integration
Project
Management
Implementation
& Operations
Support
Work Stream
Leadership
Work Stream
Scope
Work Stream
Deliverables
•Business strategy
•Critical processes
•Readiness for change
•IT portfolio
•Future requirements
•Current vs. future gaps
• Project charter
• Strategic fit
• Customer success
criteria
Readiness assess
Business case
AVP summary
Critical issues
•Change management
•Organization design
•Current processes
•Best practices
• Requirements matrix
• Process mapping
• Process best practices
• Future org scope and
requirements
• Detailed gap analysis
• Change readiness
assessment
• Transition mgmt plan
•Package design
•Infrastructure fit
•Infrastructure mods
•Baseline & final
configurations
•Integration testing
•Deployment planning
•End-user training
•Project governance
•Project structure
•Documentation
• Macro/micro design
• Business rules
• EAS strategy
• Migration maps
• Proof Of concept
• Testing strategy
• Acceptance test plan
• Release plan
• Implementation plan
• QA test plan
• Phase transition package
• IT services strategy
• IT tech imp plan
• Training plan
• Iterative application
releases
• Project scope
• Project management
framework
• Delivery control
• Project schedule
• Milestone list
• Cost schedule
• Detailed work
breakdown structure
The IBM/AspenTech relationship offers differential advantage:
Our team has seasoned industry expertise
IBM middleware technology is an integral part of AEP
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• Solution deployment
• Org. change
implementation
• Bus. transformation
management
• Exceptions mgmt.
• Help desk
• Outsourcing hand-off
• User support
• Action log
• Post-project audit
• Benefit analysis
• Documented process
review
• Maintenance change
orders
• Delivery control
documentation
IBM Global Services
• IBM is the world’s largest and most prolific e-business
• IBM Global Services is the world’s largest system integrator
• Alliances and partnerships with key ISV’s
• AspenTech, i2, Ariba SAP, JD Edwards, PeopleSoft, Siebel,
Interwoven, Vignette, Plumtree, Documentum
• Others in strategy, technology, content delivery, digital branding, etc...
• IBM “practices what it preaches”
• Sharing IBM’s e-business knowledge and experiences with clients
• Evolving methods and techniques based upon engagement experiences
• Watson Research
• 20,000+ e-business engagements across many industry segments
• e-business strategy and governance development services
• Application design and development services
• Systems integration and network services
• Strategic outsourcing, web hosting, and support services
• Distance learning services
• End-to-End e-business delivery capabilities - HW, SW, and services
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