1. Accelerating Business Change
Through Next-Generation ERP
— Call to Action for the High
Tech Sector

2. © IDC Manufacturing Insights Page 2
Our Worldwide Study of the High
Tech Manufacturing Sector
The research objective:
– Understand the IT role — ERP in
particular — in respect to the
dramatic increase in complexity in
the industry.
Global survey across multiple
regions and countries:
– Automotive, aerospace, industrial
machinery, and high tech
– Western Europe, the U.S., BRICs,
Australia, Japan, and the Middle
East
– Company size ranging from 100 to
5,000+

3. © IDC Manufacturing Insights Page 3
Industry Performance
Source: IDC Manufacturing Insights, GPI index, 2012
-2
-1
0
1
2
3
4
5
6
7
80
90
100
110
120
130
140
1Q02 1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09 1Q10 1Q11
(%)
Index(1Q02=100)
High Tech GPI Index, 1Q02–3Q11
Revenue Net profits

4. © IDC Manufacturing Insights Page 4
Source: IDC Manufacturing Insights, 2012, n = 378
Most Critical Areas of Business Focus
2
3
4
Total Industrial
Machinery &
Equipment
High Tech Aerospace Automotive
Q. What is your most critical area of business focus today?
Sustain growth Control cost

5. © IDC Manufacturing Insights Page 5
1.4%
49.3%
40.6%
8.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q. How do you expect the level of
complexity in operations to be in 3 years
from now?
Significantly
more
complex
More
complex
About the
same
Less
complex
Source: IDC Manufacturing Insights, 2012, n = 69
Complexity Keeps on Going
14.5%
20.3%
33.3%
44.9%
46.4%
60.9%
79.7%
0% 20% 40% 60% 80%
Business process
complexity
Organizational complexity
Product complexity
Supply chain complexity
IT complexity
Operational complexity
Market complexity
Q. What area of your business do you
feel will grow in complexity?

6. © IDC Manufacturing Insights Page 6
5.8%
5.8%
13.0%
13.0%
36.2%
40.6%
43.5%
43.5%
49.3%
49.3%
0% 10% 20% 30% 40% 50%
Improve bid and project profitability
Increase the ability to comply with new
Streamline new product design and
Reduce company environmental footprint
Improve manufacturing productivity
Implement lean/six sigma or other continuous
Improve demand planning and forecasting
Improve customer fullfillment
Increase sourcing from lower cost countries
Better align IT with the business
Q. What are the business initiatives your company will undertake
over the next three years?
Leading Business Initiatives
Source: IDC Manufacturing Insights, 2012, n = 69

7. © IDC Manufacturing Insights Page 7
Manufacturers can beat
complexity only if they
are able to:
– Streamline business
processes and rapidly
adapt them to business
changes
– Break organizational
silos, fostering more
collaboration
– Speed up their
decision-making
capability
52.2%
55.1%
58.0%
63.8%
63.8%
0% 20% 40% 60% 80%
No data visibility and
intelligence tools available in
the market
No or inadequate integration
to partners
Our current ERP and BI are
transactional systems that
don’t allow real time visibility
and intelligence
Information is stored in too
many different IT systems
that aren’t properly
integrated
Organizational and
information silos exists that
hamper data sharing
Lack or inaccurate data
Q. What are the main barriers to
creating an effective real-time
decision-making environment?
Speed Up Decision Making
Source: IDC Manufacturing Insights, 2012, n = 69

8. © IDC Manufacturing Insights Page 8
9.4%
21.9%
32.8%
32.8%
46.9%
46.9%
48.4%
60.9%
0% 10% 20% 30% 40% 50% 60% 70%
Does not include industry
specific capabilities available
Too complicated and expensive
to upgrade
The system is transactional and
doesn’t offer event-driven,
It's primarily a financial ERP and
its operational capabilities are
Too complex to customize to fit
our specific needs
Too complex to integrate
seamlessly with other existing
Doesn't offer collaborative or
social networking-style
Doesn't support fast decision
making capabilities
Q. What do you think are the major limitations or weaknesses of your current ERP
system?
Traditional ERP Limitations
Source: IDC Manufacturing Insights, 2012, n = 64

9. © IDC Manufacturing Insights Page 9
The ERP System of the Future Defined
17.2%
42.2%
43.8%
46.9%
71.9%
78.1%
0% 20% 40% 60% 80%
Get new products to market faster
Improve collaboration
Keep costs under control
Provide more detailed insights
into my business
Streamline process and achieve
operational excellence
React faster to the changes the
business needs
Q. Over the next three years, what do you need
your ERP system to enable you to achieve?
Source: IDC Manufacturing Insights, 2012, n = 64

10. © IDC Manufacturing Insights Page 10
Business
Alignment
IT Efficiency
Legacy
Systems
Best-of-Breed
Applications
Financial
ERP
Operational
ERP
Operational ERP

11. © IDC Manufacturing Insights Page 11
Companies are moving to single ERPs
21.9% 20.6%
9.4% 7.0%
57.8% 63.0%
10.9% 9.4%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Today 3 years from now
Q. What is your current and future approach to ERP?
Two-tier ERP
approach
Best-of-breed
federation
Single ERP
Multiple-tier ERP
Bespoke system
Source: IDC Manufacturing Insights, 2012, n = 64

12. © IDC Manufacturing Insights Page 12
Technology: Defining the Way
We Work in the Future
5.8%
52.2%
42.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Q. Do you think modern technology —
e.g. mobility, social networking or cloud
computing — is going to change the
way you work in the near future?
Will completely
change the way
business is
managed
Will partially
change the way
we work
Not at all
Source: IDC Manufacturing Insights, 2012, n = 69

13. © IDC Manufacturing Insights Page 13
Essential Guidance
Modernize traditional IT and take advantage of the
"four IT forces"
Create an integrated decision-making environment
Combine the rigor of current ERP with the flexibility
offered by social technologies and mobility
Undertake an operational ERP strategy

14. © IDC Manufacturing Insights Page 14
Pierfrancesco Manenti
Head of IDC Manufacturing Insights,
EMEA
pmanenti@idc.com
Thank You! Questions?