Business Consulting Services
Global Healthcare Trends
Presentation to IBM Public Sector
Leadership Forum
Friday, February 7, 2003
Presenter: Neil Stuart, IBM BCS Canada
© Copyright IBM Corporation 2002
Business Consulting Services
Overview of Presentation
Purpose of presentation: to provoke thinking about the future needs of our
clients/customers and opportunities for IBM





2
The big trends
Some potential surprises
Implications for our customers/clients
Developments in the market
Opportunities for IBM
© Copyright IBM Corporation 2002
Business Consulting Services
Thought Leadership – Lots Done, More to Come
 Futures analysis
-
PricewaterhouseCoopers’ HealthCast 2010, and HealthCast Tactics
E-Health Transformation – PWC Europe
IBM’s Healthcare 2012
 More in the works
-
3
Multi-client study on payor operations/performance in U.S.
Canadian POV – Health on demand
© Copyright IBM Corporation 2002
Business Consulting Services
The Big Trends








4
More demanding, better informed consumers
Genomics
E-world
Demographic change
Financial sustainability of healthcare coverage
Human resources concerns
Evidence based-practice
Patient safety
© Copyright IBM Corporation 2002
Business Consulting Services
Consumers will be a Continuing Story
 Consumers are and will be transformed by
-
-
-
New attitudes – demanding and aging boomers, paying for a bigger part of their
care
New expectations – a voice, choice, personalized care, partnerships with providers
New tools – report cards, patient charters, personal electronic health records
The Internet - information, new knowledge, much greater health literacy and new
models of accessing services
Genetic foresight – knowledge of their own genetic futures
 Demand driven healthcare
 Consumer-inclusive solutions
 Health organizations that do not get it will fall behind
5
© Copyright IBM Corporation 2002
Business Consulting Services
Genomics, a Sleeping Giant
 Accessible genetic testing
-
Individual awareness of our genetic futures
Longer disease life cycles and greater demand/costs
Demand for new kinds of preemptive services
 Gene specific, designer drugs
-




6
Much more effective drug therapy
Huge cost escalation
Consumers anxious about their genetic futures
Greatly increased clinical precision and clinical complexity
Much greater density of clinical information
Costs pressures
© Copyright IBM Corporation 2002
Business Consulting Services
E-world - Larger Markets, Extended reach for Healthcare
 E-delivery of services
-
Remote diagnostics, specialist consultations, even remote surgery!
Remote monitoring of chronic conditions
Teletriage
E-mail primary care consults
Information, appointments, test results, prescriptions, referrals
 Electronic health records
 E-markets and e-purchasing




7
Increasing the reach of providers
Globalization and blurring of old health jurisdictions
Patient access to EHRs giving consumers one more lever to increase control
Scale challenges for suppliers
© Copyright IBM Corporation 2002
Business Consulting Services
The Sustainability Question
 Multiple pressures on the the cost and affordability of healthcare
-
Demanding consumers
Demographics – aging population
Expensive drugs that work even better
Costs of new technologies - IT, Dx, Rx
Costs of updating old infrastructure/facilities
 Healthcare consuming ever larger part of government spend – ‘the healthcare
monster’
 Opportunities for new players and the private sector
 Increasing health inequities
 Focusing resources on interventions that produce outcomes
 Pressures in the U.S. for a national health plan
8
© Copyright IBM Corporation 2002
Business Consulting Services
The “Healthcare Monster” – a headache for
governments and payors that will not go away
“The rising cost of healthcare has brought on a fiscal
crisis in many (U.S.) states. Their combined budget
deficit is estimated to worsen to $60 - $85B in 2004,
which is equivalent to 13 – 18% of their total
expenditure.”
-- Kaiser Family Foundation, January 2003
9
© Copyright IBM Corporation 2002
Business Consulting Services
Potential Surprises
 Prolonged war in the Middle East leading to an economic downturn
-
Taking money from health budgets, particularly capital budgets
 Massive bio-terrorism offensive against major ‘Western’ cities
-
Diversion of health resources
 Globalization of infectious disease continues – West Nile, Mad Cow, etc.
-
Global health surveillance and collaboration
 Increasing numbers/prevalence of drug resistant disease strains
-
Return of long inpatient stays, isolation care
 Sooner than expected breakthroughs on gene therapy
-
New ball game
 Surprises always reveal new needs/gaps (think of HIV, anthrax)
 Look ahead, spot the customer need, respond smartly and quickly
10
© Copyright IBM Corporation 2002
Business Consulting Services
Four BIG PICTURE business directions for our
customers/clients
1.
2.
3.
4.
11
Managing demand for services
Measuring, managing and paying for performance
Providing ready access to health information
Making health care organizations employers of choice
© Copyright IBM Corporation 2002
Business Consulting Services
1. Managing demand for services
 Consumerism is changing the way clinical/service decisions are made –
decisions no longer just with providers
 Concerns about sustainability and overwhelming growth in demand
 Strategies to manage demand and channel consumerism
- Partnerships with patients/users
- Matching providers and patients and team based care
- Informing and educating patients
- Tools for self-monitoring, self-care, self-service
- Devices that offer/require choice, e.g. defined contribution plans, MSAs
- Taking advantage of of opportunities for e-service
- Disease management – focusing on chronic diseases (cancer, diabetes,
asthma, cardiac, etc)
12
© Copyright IBM Corporation 2002
Business Consulting Services
For U.S. health plans, the need to address costs and
consumer demands will fundamentally alter their role
TODAY






FUTURE
Employer-driven
Insulated consumer
Defined benefit/limited choices
No decision making tools
Full service health plans
Antiquated business infrastructure
 Member-driven, with member more
financially accountable
 Movement toward defined contribution
 Emergence of assisted decision making
 More specialized health plan focus
 Flexible technology infrastructure
 Emergence of non-traditional competitors
Employer
Employer
$
Benefits Consultant/Broker
$
Employee
Banks/
Financial
Institutions
Employee
Health Advisor/Broker
Health
Plan A
Health
Plan B
Health
Plan C
Health Benefit
Package
Insuranc
e
Networ
k
TPA
Other
13
Care
Mgmt
© Copyright IBM Corporation 2002
Business Consulting Services
1. Managing demand for services
 Some relevant IBM offerings
-
14
CRM
Payor systems, including outsourced services (Empire-Blue Cross-U.S.)
Consumer surveys (HealthInsider-Canada)
© Copyright IBM Corporation 2002
Business Consulting Services
2. Measuring, managing and paying for performance
 To date there has been little financial reward for quality and service excellence
 Escalating costs and concerns about sustainability highlight the importance of
focusing resources for maximum impact
 Research on preventable errors is underlining concern re patient safety
 Some actions that will shift more attention to performance include:
-
15
Developing and implementing patient safety and quality indicators
Measuring and rewarding for patient satisfaction
Giving quality incentives to service providers
Informing stakeholders on what works and what is excellent
Transparent resource allocation
Payor concerns with efficiencies
Paying attention to system performance too
© Copyright IBM Corporation 2002
Business Consulting Services
2. Measuring, managing and paying for performance
 Some relevant IBM offerings
-
16
Data warehousing
Many BCS assignments on report cards (Canadian Institute for Health Information)
Program evaluation
Consumer surveys – e.g. IBM HealthInsider
Addressing payor performance
© Copyright IBM Corporation 2002
Business Consulting Services
3. Providing ready access to information
 Access to health information to support the patient care process is slow and
fragmented
 Inadequate access to information has been an impediment to evidence-based
practices and linked to patient safety issues
 Strategies to support ready access to useful information include:
-
-
17
Point-of-care computing
Ensuring privacy and security
Setting realistic timetables
Developing open, flexible architectures
Investing in data warehouses and performance monitoring metrics
Providing ongoing training
Patient access to and even control over their EMR
Consumer access to system/provider performance information
© Copyright IBM Corporation 2002
Business Consulting Services
3. Providing ready access to information
 IBM’s offerings
-
18
HIPAA work in U.S.
Vendor alliances e.g. Cerner
Healthcare integration e.g. Alberta we//net
© Copyright IBM Corporation 2002
Business Consulting Services
4. Making health care organizations employers of choice
 Health care organization used to be a prized place to work - - security, helping
people, status
 New entrants to the job market are looking for other features to their work - flexibility, team-based, learning/development opportunities, state-of-the-art
technology
 Some strategies to make health care organizations a work place of choice
-
-
19
Flatter organizations – pushing decision making down the hierarchy
Career options/development/training
Team environments
B2E/employee portals
Flexible pay and benefits
Linking employee and patient satisfaction
Above all, respect for employees
© Copyright IBM Corporation 2002
Business Consulting Services
4. Making health care organizations employers of choice
 IBM’s offerings
-
-
20
BCS’s Human Capital Solutions, including Learning Solutions
Examples of assignments completed (hospitals as employers of choice, HR
retention)
B2E portals
© Copyright IBM Corporation 2002
Business Consulting Services
Some nearer-term market trends





Consumer driven health plans
Wireless/mobile solutions (mainly from established vendors) get traction
Growing use of web in healthcare supply chain
Convergence of electronic physician order entry and e-procurement
Outsourcing takes off – offered by vendors – an answer for customers’ lack of
capital
 Healthcare spending on outside IT services surpassing internal IT spend
 Healthcare IT spend will have to a show strong business case
 IT will be seen more as answer for human resource shortages
21
© Copyright IBM Corporation 2002
Business Consulting Services
IT Opportunities for IBM*
 Consumerism and demand management drive CRM
-
CRM opportunity will grow 25% from 2003 to 2006
 E-world drives SCM opportunity, e-markets and e-procurement
-
20% plus growth rates projected in SCM and e-markets for IBM
 Services are the biggest IT opportunity
-
Services are the largest and generally fastest growing segment of opportunity by
geography and solution market
* Source of projections: IBM Market Intelligence – Sales & Distribution
22
© Copyright IBM Corporation 2002
Business Consulting Services
IT Opportunities for IBM (more…..)
 Mobile computing
-
Implementation – application vendor alliances
Security issues
Hardware – product to compete with Compaq/HP, Microsoft, Palm?
 Outsourcing
-
Payer systems, claims management, back office, PC/network support
 Privacy and security
-
US market being driven by HIPAA, parallel interest in other jurisdictions
 Healthcare integration
-
E-business integration, portals, B2E, B2B, B2C
 Business on Demand, Information on Demand, Healthcare on Demand
23
© Copyright IBM Corporation 2002
Business Consulting Services
Questions and Discussion
24
© Copyright IBM Corporation 2002
Business Consulting Services
Healthcare Solutions by Geo and Solution: CRM and ERP are
Largest Opportunities
Healthcare WW Solutions Oppty
2003 -- Large Enterprises (1000+)
Source : 2H02 Solution M ark e t Vie w
Millions of dollars
$2,500
$2,220
$2,137
$2,000
$1,485
$1,500
$1,000
$635
$500
$301
$0
CRM
25
e-Procurement
E-markets
ERP
SCM
© Copyright IBM Corporation 2002
Business Consulting Services
Healthcare Solutions by Geo and Solution: CRM and ERP are
Largest Opportunities
Healthcare WW Total Sols Oppty by Geo
2003 -- Large Enterprises (1000+)
Source : 2H02 Solution
M ark e t Vie w
AP
EMEA
$1,299
$262
3.9%
19.2%
Americas
$5,217
77.0%
Millions of dollars
26
© Copyright IBM Corporation 2002
Business Consulting Services
Total WW Healthcare Sols Opportunity 2003 (Large
Enterprises) $6.8B
Healthcare Americas Solutions Oppty
2003 -- Large Enterprises (1000+)
Millions of dollars
$2,000
Source : 2H02 Solution M ark e t Vie w
$1,829
$1,717
$1,500
$904
$1,000
$525
$500
$242
$0
CRM
27
e-Procurement
E-markets
ERP
SCM
© Copyright IBM Corporation 2002
Business Consulting Services
Total WW Healthcare Sols Opportunity 2003 (Large
Enterprises) $6.8B
Healthcare EMEA Solutions Oppty
2003 -- Large Enterprises (1000+)
Millions of dollars
$500
$400
Sour ce : 2H02 Solution M ark e t Vie w
$456
$390
$354
$300
$200
$100
$59
$40
$0
CRM
28
e-Procurement
ERP
E-markets
SCM
© Copyright IBM Corporation 2002
Business Consulting Services
Total WW Healthcare Sols Opportunity 2003 (Large
Enterprises) $6.8B
Healthcare AP Solutions Oppty
2003 -- Large Enterprises (1000+)
Millions of dollars
$150
Sour ce : 2H02 Solution M ark e t Vie w
$125
$100
$50
$51
$30
$37
$19
$0
CRM
29
e-Procurement
E-markets
ERP
SCM
© Copyright IBM Corporation 2002
Business Consulting Services
CRM Has Highest Growth Rates in Geos,
While ERP Has Lowest Growth
Americas Healthcare Solutions Growth Rates (Large Enterprises)
2005
2006
2,749
779
3,280
991
03-06
CAGR %
24.1%
23.6%
292
341
400
18.2%
4.6%
17.4%
1,841
1,081
1,772
1,292
1,892
1,572
1.1%
20.2%
15.3%
6,110
6,933
8,135
16.0%
Solutions
2002
2003
CRM
e-Markets
1,369
435
1,717
525
203
242
19.2%
ERP
SCM
1,748
770
1,829
904
Total
4,525
5,217
E-Procurement
30
Source: 2H02 SMV
02-03 %
2004
$M
Change
25.5%
2,226
20.1%
670
$M
$M
$M
$M
© Copyright IBM Corporation 2002
Business Consulting Services
CRM Has Highest Growth Rates in Geos,
While ERP Has Lowest Growth
EMEA Healthcare Solutions Growth Rates (Large Enterprises)
31
Source: 2H02 SMV
02-03 %
2004
$M
Change
12.7%
514
31.1%
73
2005
2006
600
86
735
106
03-06
CAGR %
23.5%
21.6%
46
53
60
14.5%
12.0%
19.7%
342
540
354
652
372
789
1.7%
20.1%
15.9%
1,515
1,745
2,062
16.7%
Solutions
2002
2003
CRM
e-Markets
346
45
390
59
E-Procurement
33
40
21.2%
ERP
SCM
316
381
354
456
Total
1,121
1,299
$M
$M
$M
$M
© Copyright IBM Corporation 2002
Business Consulting Services
CRM Has Highest Growth Rates in Geos,
While ERP Has Lowest Growth
AP Healthcare Solutions Growth Rates (Large Enterprises)
32
Source: 2H02 SMV
02-03 %
2004
$M
Change
36.4%
39
27.5%
63
2005
2006
49
80
60
97
03-06
CAGR %
26.0%
23.9%
22
28
31
17.7%
19.4%
30.2%
45
158
54
190
62
223
18.8%
21.3%
27.2%
327
401
473
21.8%
Solutions
2002
2003
CRM
e-Markets
22
40
30
51
E-Procurement
17
19
11.8%
ERP
SCM
31
96
37
125
Total
206
262
$M
$M
$M
$M
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Largest Solutions Opportunity in Americas for
CRM, ERP and SCM
2003 Americas CRM Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
Technology
Source: 2H02 SMV
$34
2.0%
App SW
SI
$291
$351
17.0%
20.5%
Bus Consult
Servers
$171
$55
10.0%
3.2%
Clients
$52
Other Svcs
3.0%
$673
IT Consulting
39.3%
$59
3.4%
33
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Largest Solutions Opportunity in Americas for
CRM, ERP and SCM
2003 Americas SCM Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
Source: 2H02 SMV
App SW
$137
15.2%
Technology
$34
3.8%
SI
$364
40.5%
Servers
$33
3.7%
34
Bus Consult
$82
9.1%
Clients
$6
0.7%
IT Consulting
$46
5.1%
MW
$28
3.1%
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Largest Solutions Opportunity in Americas for
CRM, ERP and SCM
2003 Americas ERP Oppty By P/S
Healthcare
-- Large Enter. ($ Millions)
Technology
Source: 2H02 SMV
$37
App SW
2.0%
$330
18.1%
SI
$311
Bus Consult
17.0%
$132
7.2%
Servers
$80
Clients
4.4%
$41
2.2%
Other Svcs
$662
36.3%
IT Consulting
$161
8.8%
MW
$71
3.9%
35
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Largest Solutions Opportunity in Americas for
CRM, ERP and SCM
 Services (SI, IT Consulting, Bus. Consulting, Other Services) total 73.2% of
Americas CRM oppty, 69.3% of ERP oppty, and 73.5% of SCM oppty
 HW (Servers, Clients, Technology) is a relatively small portion of Americas
solutions oppty (8.2% for CRM, 16.8% for ERP, 8.2% for SCM)
 CRM, ERP and SCM Apps SW are relatively small portions of total Americas
solutions oppty (15.2% to 18.1%), but will drag many Services purchases
 SI is the largest segment of Americas SCM oppty (40.5%), more than double
the percentage for CRM and ERP
36
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in EMEA
2003 EMEA CRM Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
App SW
Source: 2H02 SMV
Technology
$51
$8
13.1%
2.1%
Bus Consult
SI
$27
$94
7.0%
24.2%
Clients
Servers
$33
$14
8.5%
3.6%
IT Consulting
$7
Other Svcs
1.8%
$150
Total 2003 CRM
oppty: $390M
37
38.7%
MW
$4
1.0%
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in EMEA
2003 EMEA ERP Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
Source: 2H02
SMV
Technology
$10
2.8%
SI
$57
16.2%
Servers
$24
6.8%
Other Svcs
$106
30.1%
Total 2003 ERP
oppty: $354M
38
App SW
$74
21.0%
Bus Consult
$32
9.1%
Clients
$21
6.0%
IT Consulting
$14
4.0%
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in EMEA
6.0%
SW
Clients
by P/S
Oppty
2003 EMEAAppSCM
$40
8.8%
Technology
$12
2.7%
SI
$230
50.9%
Total 2003 SCM
oppty: $456M
39
$3
0.7%
IT Consulting
$14
3.1%
MW
$8
1.8%
Other Svcs
$105
23.2%
Servers
$13
2.9%
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in EMEA
 Services (Bus. Consulting, IT Consulting, Other Services, SI) is largest part of
all 3 EMEA solutions opportunities: 72% of CRM, 59% of ERP, 83% of SCM
 HW is a small part of CRM, ERP, and SCM opportunities in EMEA: 14% of
CRM, 16% of ERP, 6% of SCM
 SI is much larger part of EMEA SCM oppty (50.9%) than for CRM (24.2%) and
ERP (16.2%)
 Application SW is a relatively small part of EMEA solutions opportunities
(13.1% of CRM, 21% of ERP, 8.8% of SCM), but drags through many services
dollars
40
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in AP
2003 AP CRM Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
Source: 2H02 SMV
Technology
$1
1.7%
SI
$9
31.3%
Servers
$1
3.5%
Other Svcs
$7
Total 2003 CRM
oppty: $30M
24.3%
App SW
$3
10.4%
Bus Consult
$5
17.4%
Clients
$2
6.9%
IT Consulting
$1
3.5%
MW
41
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in AP
2003 AP ERP Oppty By P/S
Healthcare -- Large Enter. ($ Millions)
Source: 2H02 SMV
App SW
$7
Technology
18.9%
$1
2.7%
SI
$11
29.7%
Servers
$2
5.4%
Other Svcs
$9
Total 2003 ERP
24.3%
oppty: $37M
42
Bus Consult
$2
5.4%
Clients
$2
5.4%
IT Consulting
$1
2.7%
MW
$2
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in AP
2003 AP SCM Oppty by P/S
App SW
Source: 2H02 SMV
Healthcare -- Large Enter. ($ Millions)
Technology
$10
8.0%
Bus Consult
$11
8.8%
Clients
$3
2.4%
SI
$46
36.8%
Total 2003 SCM
oppty: $125M
$17
13.6%
Servers
$12
9.6%
IT Consulting
$6
4.8%
MW
$4
3.2%
Other Svcs
43
© Copyright IBM Corporation 2002
Business Consulting Services
Services is Top Opportunity for CRM, ERP, SCM in AP
 SCM is largest solutions oppty in AP ($125M in 03), and SI is largest single
segment of the AP SCM oppty (36.8%)
 Services (Bus. Consulting, IT Consulting, Other Services, SI) are largest oppty
for solutions in AP: 76.5% of CRM, 62.1% of ERP, 63.2% of SCM)
 HW (Clients, Servers, Technology) is relatively small segment of AP solutions
oppty: 12.1% of CRM, 13.5% of ERP, 20% of SCM
 Applications SW is relatively small part of AP solutions oppty (10.4% of CRM,
18.9% of ERP, and 13.6% of SCM), but drags other IT dollars
44
© Copyright IBM Corporation 2002
Business Consulting Services
Solutions Definitions:
Customer Relationship Management (CRM)
 Customer Business Goal:
-
-
Increase customer loyalty
Increase profitability
Increase productivity
Gain competitive edge through access in new sales, service and marketing channels
 Business problems/functions addressed: Improve the analysis and understanding of the customer
preference & purchasing behavior across the CRM value chain including the marketing, sales and
service functions aimed at providing direct personalized customer sales, service and marketing
activities through multiple channels or "touchpoints"
 High level definition: CRM encompasses the business processes an enterprise performs to identify ,
select , acquire , develop and retain its customers through multiple communication channels.
I/T functions involved:
 * Focused Definition: Sales Force Automation, Customer Service & Support (including eService and
contact center), Marketing automation (including analytical and content mgmt capabilities), Voice
Interaction, Text Interaction and Multimedia Interaction
 Exclusions: *Generic business intelligence *Telephony based hardware *Billing and payments
*ATMs and ATM networks, * Reservation and ticketing systems *Internal help desks * Store
operations
 Inclusions: * Market information retrieval * Sales transaction initiation
 Examples in products and players: Siebel, PeopleSoft, Oracle, SAP, Onyx, Pivotal, Nortel, Avaya,
Accenture, PWC, CGE&G, Deloitte, KPMG, eLoyalty etc.
45
© Copyright IBM Corporation 2002
Business Consulting Services
Supply Chain Management (SCM)
 Customer Business Goal: The Supply Chain Management solutions allow customers to improve
responsiveness, lower cost, reduce cycle time by optimizing internal logistics and by linking suppliers and
trading partners to deliver the right products at the right time and price to the right place.
 Business problems/functions addressed: Sourcing, distribution, warehousing and transportation,
Production logistics, Customer order fulfillment and services, Forecast and demand planning
High level definition:
A. Focused definition -- Linking two or more I/T applications and functions supporting the supply and production of goods.
B. General definition -- I/T applications and functions supporting the supply and production of goods.
I/T functions involved:
A. Supply Chain Planning: 1) Forecast and Demand Planning, 2) Distribution and Warehouse Planning, 3) Manufacturing
Planning, 4) Transportation Planning, 5) Advanced Scheduling, 6) Order Promising, 7) Data Integration
B. Supply Chain Execution: 1) Order Management, 2) Order Promising, 3) Inventory Management, 4) International Trade
Logistics, 5) Transportation Management, 6) Warehouse Management
Exclusions: Shop floor operations, Retail store operations, Retail electronic media distribution, Retail electronic order
Inclusions: Supply Chain Automation (SCA), Electronic internal distribution, Content of Utilities (phone, water, electricity)
Examples in products and competitors:
A. ERP Vendors: SAP (Scope), Baan, Oracle, PeopleSoft
B. Supply Chain Planning Vendors: i2, Manugistics, ILOG SA, Logility, Adexa
C. Supply Chain Execution Vendors: IBS, EXE Technologies, IMI, Manhattan
Associates, McHugh Software International
D. Processware Vendors: CrossRoute, CrossWorlds.
E. Consulting and System Integrators: Andersen Consulting, Arthur Andersen, E&Y
46
© Copyright IBM Corporation 2002
Business Consulting Services
Definition: B2B-eProcurement
 Customer Business Goal: B2B eProcurement enables ·buy-side, sell-side, and content management
solutions allowing an entity to obtain information, create a request that can be routed for approval,
issue a purchase order to a supplier, and fulfill the request with a receipt, receive notification of
delivery or order status, together with electronic means to settle the payment. In addition
eProcurement allows automation of the process of connecting to business buyers, and·the
automation of the presentation layers of B2B sites, especially for displaying commerce-oriented
information.
 Business problems/functions addressed: Sourcing, distribution, warehousing and transportation,
Production logistics, Customer order fulfillment and services, Forecast and demand planning
High level definition:
 eProcurement is the element of B2B functions that handles policy control, business workflow and rule
compliance, B2B content management, and catalog conversion in buy-side and sell-side electronic
purchases between businesses, their suppliers, and customers over the Internet.
 I/T functions involved:
-
-
Policy control,
Business workflow and rule compliance,
B2B content management,
Catalogue conversion in buy-side and sell-side electronic purchases between businesses and their suppliers over
the Internet
 Exclusions:
 Inclusions:
Examples in products and competitors:
47
Ariba, Commerce One, Oracle, i2, Broadvision, SAP, Vignette, MRO Software, PurchasePro, WebMethods
© Copyright IBM Corporation 2002
Business Consulting Services
B2B - eMarkets
 Customer Business Goal: B2B are the business process solutions that enterprises use to identify, select,
acquire, develop, interact, and retain its business customers through multiple communication channels.
These business process solutions can be further defined by the solution areas, Supply Chain
Management (SCM), e-Procurement, Partner Relationship Management, and Business Intelligence (BI),
etc. These solutions can be implemented as inter-enterprise solutions, or as a part of a broader eMarketplace in either Private or Public forms, allowing for one-to-one, one-to-many or many-to-many
connections.
 Business problems/functions addressed: Solutions that allow the creation of Web-based eMarketplaces,
public and private, allowing for one-to-one, one-to-many, or many-to-many connections..
High level definition:
 B2B eMarketplace solutions automate the creation of Web-based trading communities, public and private through specific
attributes such as registration and authentication, auction, reverse auction, request for proposal (RFP) and request for
quotation (RFQ) posting, dynamic matching of buyers and sellers, strategic sourcing, supplier selection, contract
negotiation, compliance and management, demand planning and aggregation, and integration into legacy environments.
I/T functions involved:
 Sourcing & Procurement, Logistics, Finance & Accounting, Integration & Security, eHR
 Exclusions: Electronic data interchange (EDI) services,
 Inclusions:
Examples in products and competitors:
 eMarketplaces: Commerce One, Ariba, i2, Oracle, SAP, Broadvision, PurchasePro, WebMethods, Websphere commerce
suite Marketplace; eMarketplace Services: IGS, PriceWaterhouseCoopers, Accenture, Cap Gemini Ernst & Young, CSC,
Deloitte, KPMG, EDS, Oracle, C1; Collaboration: Agile Software, Exterprise (purchased by C1), PTC, MatrixOne,
Tecnomatix Technologies, SDRC, Alventive, E3 Corp. and Agilera.
48
© Copyright IBM Corporation 2002
Business Consulting Services
Core ERP Solution Definition
 Customer Business Goal: Management of business processes to lower cost and improve operational
efficiency
 Business problems/functions addressed: Human resource, accounting, finance, manufacturing, logistics,
procurement, customer service, internal manufacturing and logistics management, Business Intelligence,
and e-Commerce
 High level definition: An integrated set of applications that automates finance and human resources
departments as well as handles jobs such as order processing, financial operations, corporate services,
manufacturing and logistics management organized by industry verticals.
I/T functions involved:
 Core ERP
 Financial Operations (Financing, Customer Payment, and Settlement (AR), Collaborative Financial Processing, Vendor
Invoice Verification and Processing (AP),Bank processes and Relationship Management, Allocation of Shared Services),
Accounting(Financial statements, General Ledger and Subledger, Revenue and Cost Accounting, Job and Product
Accounting, Product and Service Costing ), Corporate Services (Real estate management, Travel management (TEAs),
Treasury and finance management ) Human Resource Management (HR Strategy and Planning, Recruitment, Payroll,
Compensation and Total Benefits, Employee Development ), Manufacturing and Logistics (Production planning, materials
management, inventory management, order entry and processing, warehouse mgmt, transportation mgmt, project mgmt,
plant maintenance, customer service mgmt)
 Exclusions: point solutions that will not be considered as a function in the ERP solution
 Inclusions: All software applications developed and/or sold by traditional ERP vendors. This includes Cash mgmt, payroll
processing (e.g. ADP), piece part of traditional ERP, and industry unique applications (e.g. retail banking, airline reservation),
payment mgmt, and manufacturing and logistics management
 Examples in products and competitors: SAP, Oracle Apps, PeopleSoft, JD Edward, Baan, SSA, JBA, Intentia,
QAD, Lawson, Symix, SCT.
49
© Copyright IBM Corporation 2002