One would expect globalization efforts to be largely driven either by the desire to exploit new markets or the need to lower manufacturing costs. Which is the dominant business driver? The answer is ' both. A majority of companies (79%) view global markets as a growth opportunity, but of those companies half are also feeling pressures to reduce costs. Of those seeking to reduce costs either directly or by providing the necessary flexibility to ship from more cost effective locations, 74% are also seeking growth opportunities. We therefore conclude that profitable growth is the key consideration in globalization.
Key Business Value Findings
Globalization presents both business and technology challenges. Companies find there is no silver bullet when responding to the increased complexity of the supply chain resulting from globalization. Options range from balancing supply chain velocity with landed costs to relocating manufacturing operations. Enterprise Resource Planning (ERP) is a mission-critical component of any globalization strategy. The information made available through ERP is key to providing visibility to Key Performance Indicators (KPIs) and meeting corporate objectives. Yet this is often overlooked because companies focus only on supply chain issues. The lack of standardized world-wide ERP implementations plagues more than half of global manufacturers.
Implications & Analysis
Those companies that automate and streamline workflows across multiple sites including suppliers, partners, and manufacturing sites produced 66% more improvement in reducing total time from order to delivery. Yet, few companies take advantage of the technology available today that would support and sustain these collaborative efforts, leading Aberdeen to believe there is a huge opportunity for cost and productivity improvements.
Those that coordinate and collaborate between multiple sites, operating as a vertically integrated organization, have achieved more than a 10% gain in global market share. While global ERP may not be the panacea for market penetration, without a technologically sound architecture that supports global visibility and transactional interoperability a company's growth can be seriously stunted. Aberdeen research shows that integration technologies and Service Oriented Architectures (SOA) are often overlooked as software selection criteria, yet enterprises can't focus on gaining a competitive advantage if they struggle to integrate their own international operations. Internal operations must be integrated before inter-operability can be achieved on a global scale. The more seamless the integration, the easier it is to manage governance, risk and compliance.
Recommendations for Action
* Carefully evaluate the use of shared services both from a business process standpoint as well as a technologically. A "shared service" might be an accounting or administrative function such as purchasing or accounts payable, or a piece of technology shared across multiple enterprise applications.
* Automate and streamline workflows between suppliers, customers, and manufacturing sites.
* Standardize ERP implementations across the global enterprise.
Key Business Value Findings
Globalization presents both business and technology challenges. Companies find there is no silver bullet when responding to the increased complexity of the supply chain resulting from globalization. Options range from balancing supply chain velocity with landed costs to relocating manufacturing operations. Enterprise Resource Planning (ERP) is a mission-critical component of any globalization strategy. The information made available through ERP is key to providing visibility to Key Performance Indicators (KPIs) and meeting corporate objectives. Yet this is often overlooked because companies focus only on supply chain issues. The lack of standardized world-wide ERP implementations plagues more than half of global manufacturers.
Implications & Analysis
Those companies that automate and streamline workflows across multiple sites including suppliers, partners, and manufacturing sites produced 66% more improvement in reducing total time from order to delivery. Yet, few companies take advantage of the technology available today that would support and sustain these collaborative efforts, leading Aberdeen to believe there is a huge opportunity for cost and productivity improvements.
Those that coordinate and collaborate between multiple sites, operating as a vertically integrated organization, have achieved more than a 10% gain in global market share. While global ERP may not be the panacea for market penetration, without a technologically sound architecture that supports global visibility and transactional interoperability a company's growth can be seriously stunted. Aberdeen research shows that integration technologies and Service Oriented Architectures (SOA) are often overlooked as software selection criteria, yet enterprises can't focus on gaining a competitive advantage if they struggle to integrate their own international operations. Internal operations must be integrated before inter-operability can be achieved on a global scale. The more seamless the integration, the easier it is to manage governance, risk and compliance.
Recommendations for Action
* Carefully evaluate the use of shared services both from a business process standpoint as well as a technologically. A "shared service" might be an accounting or administrative function such as purchasing or accounts payable, or a piece of technology shared across multiple enterprise applications.
* Automate and streamline workflows between suppliers, customers, and manufacturing sites.
* Standardize ERP implementations across the global enterprise.
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