© PAC Software is a Core Competence for Manufacturing in Germany 14.05.2013 – Merge World Tour 2013 2013
Jan 13, 2015
© PAC
Software is a Core Competence for Manufacturing in Germany 14.05.2013 – Merge World Tour 2013
2013
© PAC
PAC’s Portfolio Framework
CORPORATE PLANNING Strategy Definition
Scenario Planning
Business Planning
MERGERS & ACQUISITIONS M&A Support
M&A Preparation
PORTFOLIO MANAGEMENT Portfolio Activation
Portfolio Redesign
MARKETING & COMMUNICATION Marketing Positioning
Speaker Engagements
Influencing Communication Services
BUSINESS PARTNER SERVICES Partner Ecosystem Management
Sourcing Advisory
Creating & Expanding a Partner Ecosystem
SALES SUPPORT SERVICES Analysis of Customer Attractiveness
Deal Support
Sales Battle Cards & Share of Wallet Analysis
ICT MARKET KPIS & BENCHMARKING Market Sizing & Market Attractiveness Index (MAI)
Price Model Assessment & Rates Analysis
CUSTOMIZED MARKET ANALYSIS & CONSULTING SITSI® Extensions
Consulting, Analysis & Evaluation
MARKET ANALYSIS
VENDOR ANALYSIS
CONSULTING & SERVICES The PAC service catalog
SITSI® RESEARCH PLATFORM The centralized knowledge pool of all PAC standard analyses
SUBSCRIPTIONS ON DEMAND
ANALYST ACCESS OUTTASKING PROJECTS
Market Perception Analysis
Vendor Positionings
Vendor Rankings
PAC RADAR Vendor Profiles
Portfolio Analysis
Market Figures & Contract Database
Market Views & Market Insights
Research Notes
Market InBriefs
For the ICT Industry
For Public Institutions
For Financial Institutions &
Investors
For ICT Users
BY GEOGRAPHY! BY INDUSTRY SECTOR! BY SOFTWARE & IT SERVICES! BY HORIZONTAL TOPIC!
For the Management
For Market
Intelligence
For Marketing & Sales
For IT Sourcing
STRATEGY DEFINITION STRATEGY IMPLEMENTATION OPERATIONAL EXECUTION
Software in the manufacturing industry in Germany 2013 2 2013
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Local Insight on a Global Basis PAC's expertise today encompasses more than 30 countries – covering 93 percent of worldwide IT spending. Our close partnerships enable PAC’s presence on all continents.
3 Software in the manufacturing industry in Germany 2013 2013
© PAC
The IT Market in Germany
© PAC
SITS Market – Germany Segmentation 2012
5 Software in the manufacturing industry in Germany 2013
3.3%
4.4%
Global Germany
44.7%
3.0%
45.4%
3.7%
16.9%
3.1%
21.2%
3.4%
26.7%
7.4%
23.1%
6.0%
11.7%
2.6%
10.3%
3.4%
13.7%
15.5%
13.4%
13.2%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Germany
Global
Ger
man
y G
loba
l
SITS Expenditure Hardware Personnel Misc.
Software IT Services
IT Expenditure and SITS Market, Shares of Segments IT Expenditure in Percent of GDP
2013
System Infrastructure Software
Tools
Application Software Products
Hardware Maintenance
Project Services
Outsourcing
Lege
nd
© PAC
SITS Market – Germany CAGR 2012/16
6 Software in the manufacturing industry in Germany 2013
3.4%
4.5%
2.3%
5.3%
5.1%
4.1%
Software Products
IT Services
IT Expenditure
1.1%
4.5%
3.7%
-3.1%
4.4%
5.8%
1.3%
-0.6%
4.1%
1.2%
SIS
Tools
Application Software Products
Hardware Maintenance
Project Services
Outsourcing
Personnel
Hardware Expenditure
SITS Expenditure
Miscellaneous
Compound Annual Growth Rates 2012/16 by Segments - in Germany and compared to World
3.4%
4.5%
2.3%
5.3%
5.1%
4.1%
Software Products
IT Services
IT Expenditure
1.1%
4.5%
3.7%
-3.1%
4.4%
5.8%
1.3%
-0.6%
4.1%
1.2%
SIS
Tools
Application Software Products
Hardware Maintenance
Project Services
Outsourcing
Personnel
Hardware Expenditure
SITS Expenditure
Miscellaneous
3.4%
4.5%
2.3%
5.3%
5.1%
4.1%
Software Products
IT Services
IT Expenditure
1.1%
4.5%
3.7%
-3.1%
4.4%
5.8%
1.3%
-0.6%
4.1%
1.2%
SIS
Tools
Application Software Products
Hardware Maintenance
Project Services
Outsourcing
Personnel
Hardware Expenditure
SITS Expenditure
Miscellaneous
3.4%
4.5%
2.3%
5.3%
5.1%
4.1%
Software Products
IT Services
IT Expenditure
1.1%
4.5%
3.7%
-3.1%
4.4%
5.8%
1.3%
-0.6%
4.1%
1.2%
SIS
Tools
Application Software Products
Hardware Maintenance
Project Services
Outsourcing
Personnel
Hardware Expenditure
SITS Expenditure
Miscellaneous
2013
© PAC
IT Maturity
7
Definitions: Maturity of IT • Share of IT spending in GDP • IT spending per employee Maturity of IT-driven processes: Share of business software-related services in total software-related services
Maturity of IT-driven processes Maturity of IT
Software in the manufacturing industry in Germany 2013
World
Austria
Germany
Switzerland
2013
© PAC
Major Business Trends & Challenges
• Currently strong innovation phase in IT • Driven by mobility, big data, cloud computing and social media • Driven by the need to become more agile and flexible regarding market conditions
• High, and increasing, level of standardization • Standards and best practices are applied whenever possible • Lower operational IT costs, deliver better value to lines of business
• Increasing influence of business units on IT decisions • New role of CIO • Considering alternative sourcing options such as cloud computing
• Comprehensive standardization & industrialization • Lack of resources on both sides, IT users and IT suppliers • Global delivery networks
• High price pressure on standard software products and IT services • Process consulting is one of the very few areas with less pressure • Niche expertise is a high-value service
• Increase value-add of IT • Increase IT efficiency • More cost flexibility (CAPEX to OPEX)
Innovation
IT strategy
Decision-making
IT delivery
Prices
CIO agenda
2013 8 Software in the manufacturing industry in Germany 2013
© PAC
Today 2016 Influencing factors
Cloud/ Software as a Service
Time to value, less complex, CAPEX/OPEX security, maturity of offerings
Enterprise Mobility
Consumerization of IT, productivity gains, new user experience for business IT, new processes, merging of web, communications & collaboration
Enterprise Social Media
Collaboration, inter-/intra-company, integration into business process context
Big Data Structured data, unstructured data, growing data volumes, formats & structures, “fast data” – real-time processing
Security
Mobility of personal data, new business models, IT relevance in economic processes, global business
Internet of Things
Ubiquitous intelligence, software as key to new business scenarios, new supplier landscapes
very weak weak
average
strong
very strong
Relevance of IT Trends
9 Software in the manufacturing industry in Germany 2013 2013
© PAC
IT Trends in the Manufacturing Industry
© PAC
Global Mega Trends
Business ecosystems!
New work environments"
Climate change & environmental pollution"
Convergence of technologies"
Cul
tura
l div
ersi
ty"
Digital life"
Demographic change"
Globalization 2.0"
Knowledge society"
Healthcare boom"
Lear
n fr
om n
atur
e"
New consumption patterns"
New
mob
ility
pat
tern
s"
New degree of individualization"New political world order"
Modern energy & resources management"
Global (cyber) security risks"
Ubiquitous intelligence"
Urbanization"
Internet of Things
Debt crisis
11 Software in the manufacturing industry in Germany 2013 2013
© PAC
Impact of Mega Trends on IT
Cloud computing!
Collaboration!Mobile devices"
Enterprise app stores"M
obile
ope
ratin
g sy
stem
s an
d pl
atfo
rms"
Enterprise social media"
Mobile applications!
Uni
fied
mes
sagi
ng"
Virtualization!
Glo
bal I
T in
fras
truc
ture
s"
Personal information management"Machine-2-machine communication"
Communication-enabled business processes!
Device and security management"
Software as a Service"
Infrastructure as a Service"
Smartphones"
Communication as a Service"
On
dem
and"
Enterprise 2.0"
Business Process as a Service"
Public - Private"
Ubiquitous intelligence"
Embedded systems"
Software in the manufacturing industry in Germany 2013 12 2013
© PAC
Major IT Topics in Manufacturing
After-sales services!
Business intelligence!CRM"
Product lifecycle management"ERP consolidation"
SAP C&SI!
MR
P"
Inte
grat
ion
tech
nica
l/adm
inis
trat
ive
IT"
Multi-channel integration"
Machine-2-machine communication"
Small and medium-sized businesses"
MRO"
SCM"
Industry 4.0"
Manufacturing execution systems"
App
licat
ion
cons
olid
atio
n"
Plant management"
Integration wholesale/retailers"
PDM"
Industry-specific regulation"
Embedded systems"
Software in the manufacturing industry in Germany 2013 13 2013
© PAC
Major IT Topics in Manufacturing
After-sales services!
Business intelligence!CRM"
Product lifecycle management"ERP consolidation"
SAP C&SI!
MR
P"
Inte
grat
ion
tech
nica
l/adm
inis
trat
ive
IT"
Multi-channel integration"
Machine-2-machine communication"
Small and medium-sized businesses"
MRO"
SCM"
Industry 4.0"
Manufacturing execution systems"
App
licat
ion
cons
olid
atio
n"
Plant management"
Integration wholesale/retailers"
PDM"
Industry-specific regulation"
Embedded systems"
Software in the manufacturing industry in Germany 2013 14 2013
© PAC
Major IT Topics in Manufacturing
Software in the manufacturing industry in Germany 2013 15 2013
After-sales services!
Business intelligence!CRM"
Product lifecycle management"ERP consolidation"
SAP C&SI!
MR
P"
Inte
grat
ion
tech
nica
l/adm
inis
trat
ive
IT"
Multi-channel integration"
Machine-2-machine communication"
Small and medium-sized businesses"
MRO"
SCM"
Industry 4.0"
Manufacturing execution systems"
App
licat
ion
cons
olid
atio
n"
Plant management"
Integration wholesale/retailers"
PDM"
Industry-specific regulation"
Embedded systems"
© PAC
Major IT Topics in Manufacturing
Software in the manufacturing industry in Germany 2013 16 2013
After-sales services!
Business intelligence!CRM"
Product lifecycle management"ERP consolidation"
SAP C&SI!
MR
P"
Inte
grat
ion
tech
nica
l/adm
inis
trat
ive
IT"
Multi-channel integration"
Machine-2-machine communication"
Small and medium-sized businesses"
MRO"
SCM"
Industry 4.0"
Manufacturing execution systems"
App
licat
ion
cons
olid
atio
n"
Plant management"
Integration wholesale/retailers"
PDM"
Industry-specific regulation"
Embedded systems"
© PAC
Importance of Embedded Software
© PAC
Impact of Mega Trends on IT
Cloud computing!
Collaboration!Mobile devices"
Enterprise app stores"M
obile
ope
ratin
g sy
stem
s an
d pl
atfo
rms"
Enterprise social media"
Mobile applications!
Uni
fied
mes
sagi
ng"
Virtualization!
Glo
bal I
T in
fras
truc
ture
s"
Personal information management"Machine-2-machine communication"
Communication-enabled business processes!
Device and security management"
Software as a Service"
Infrastructure as a a Service"
Smartphones"
Communication as a Service"
On
dem
and"
Enterprise 2.0"
Business Process as a Service"
Public - Private"
Ubiquitous intelligence"
Embedded systems"
Software in the manufacturing industry in Germany 2013 18 2013
© PAC
Ubiquitous Intelligence
high low average
Maturity of topic!
high low average
Willingness to invest externally!
WAIT!
CHECK!
GO!
Major Industries!
Software in the manufacturing industry in Germany 2013 19
high low average
Business impact!
Diversified Homogeneous average
Supplier landscape!
high low average
Macro-economic significance!
high low average
Software relevance!
2013
© PAC
Cyber-Physical Systems
Smart Grid Illustration; Source: http://powertown.no/?page_id=10 Industry 4.0 Illustration; Source: http://www.plmportal.org/nachrichten-details/items/kommentar-zu-industrie-40-strategieempfehlung-der-forschungsunion-greift-zu-kurz.html
2013 Software in the manufacturing industry in Germany 2013 20
© PAC
Machine-to-Machine
Healthcare M2M; Source: http://www.vitaphone.de/telemedizin/
Automotive M2M; Source: http://www.car-it.com/projekt-simtd-der-fahrer-lenkt-das-auto-denkt/id-0033741
2013 Software in the manufacturing industry in Germany 2013 21
© PAC
Security
Security in the Internet of Things; Source: http://www.opinno.com/the-internet-of-things/
2013 Software in the manufacturing industry in Germany 2013 22
© PAC
Real-time Analytics in Production
Predictive Maintenance; Source: http://www.bosch-si.com/media/bosch_software_innovations/stage_3/internet_of_things/Industry-of-the-Future_w734.jpg
2013 Software in the manufacturing industry in Germany 2013 23
© PAC
Mobility
Mobile Workforce; Source: http://siliconangle.com/blog/2012/01/27/byod-mobile-workers-and-virtual-offices-cause-headaches/mobile-at-work/
Mobile Collaboration; Source: https://www.languagestudio.com/solutions.aspx
2013 Software in the manufacturing industry in Germany 2013 24
© PAC
Conclusion
© PAC
Conclusion
I. IT-driven processes have reached a very high level of maturity in Germany. II. CIOs are entering a new role with the need to increase the value-add of IT as
well as IT efficiency on their agendas. III. Process consulting is one of the very few areas where price pressure is not as
intense as in other service domains. IV. Business intelligence, ERP consolidation and the integration of technical and
administrative IT are on top of the IT agendas in the manufacturing industry. V. Ubiquitous intelligence represents the big-picture scenario that drives the
development and sales of embedded software. VI. Cyber-physical systems are the next evolutionary step in the development of
embedded systems and pave the way for efficient machine-to-machine (M2M) communication.
VII. The supplier landscape in embedded software development is highly diversified, from small engineering offices to large, international software vendors and service providers.
VIII. Ubiquitous intelligence carries a large macro-economic significance that can already be seen in topics such as smart grids, smart cities, industry 4.0, or tele-health.
2013 Software in the manufacturing industry in Germany 2013 26