Artificial Intelligence

B2B Integration is the Backbone of a Digital-First, Resilient Supply Chain

OpenText commissioned survey reports that B2B integration helps to improve the cost, efficiency, and visibility of supply chain operations

A new IDC White Paper, sponsored by OpenText ™ (NASDAQ: OTEX), (TSX: OTEX), unveils that one of the biggest gaps in supply chain efficiency is the adoption of modern, digital technologies. As the study suggests, those companies more progressed in their business-to-business (B2B) digital transformation journey outperform those less progressed in revenue, profit, customer satisfaction, and responsiveness rate.

OpenText logo (PRNewsfoto/Open Text Corporation) (PRNewsfoto/Open Text Corporation)

Survey highlights

With the current levels of supply chain complexity, global reach and partner/supplier diversity, it has become clear that the 'old' ways of doing things do not work in today's modern supply chain. This study demonstrates the resiliency of digital transformation in the supply chain, with over 78% of respondents reporting that B2B integration has improved the overall performance of their supply chains 1 .

"B2B integration represents the backbone of a digital-first, resilient supply chain and should be a top priority for those companies that remain encumbered by manual paper-based processes," said Simon Ellis , Program Vice President at IDC 2 .

B2B integration is necessary for a resilient supply chain

Although supply chain resiliency is critical in today's disruptive environment, companies have often found it difficult to detail the business case fully, justify return on investment, and build the necessary internal capabilities. In fact, while 71% of organizations have increased investments within their supply chain, only 6% of respondents reported being at the highest level of digital supply chain resiliency maturity 3 , indicating that there is still significant progress to be made and value to be realized by utilizing modern processes and digital technologies.

"Connecting, accessing, and analyzing the data produced by today's digital supply chains to manage your business better is crucial for most organizations today," said Sandy Ono , Executive Vice President and Chief Marketing Officer at OpenText. "The latest findings from IDC confirm that the future of the supply chain is to bring information and automation together, and OpenText is proudly leading organizations through these critical business transformations."

Supply chain integration as a competitive advantage

Advanced supply chain integration capabilities can help support more efficient and effective current approaches as well as new models that translate directly to business performance. When asked about the level of improvement of their supply chain by automating a range of different kinds of collaboration documents, 80% of survey respondents cite levels of improvement, including the cost of handling and sharing information, staffing efficiencies, and improvements in Key Performance Indicators (KPIs) 4 . B2B integration capabilities and processing align with top business priorities of reducing operational and logistical costs, faster time to market, improving data quality/accuracy and progressing visibility.

Recognizing the need for a seamless B2B integration and a future-proof supply chain, OpenText offers a portfolio of end-to-end solutions through the OpenText Business Network Cloud . This network provides users with the ability to automate business processes and facilitate efficient, secure, and compliant collaboration between people, systems, and things – providing a true foundation for establishing an advanced digital backbone to help support business growth and transformation initiatives. By connecting to OpenText's powerful suite of cloud applications via our secure, scalable and highly reliable OpenText Trading Grid platform, users can allow internal and external stakeholders to collaborate seamlessly across this single and central network to exchange transactions such as purchase orders, shipment notices and payment instructions.

"Ease, speed, quality and choice is at the heart of our approach and OpenText Trading Grid has helped to streamline key supply chain processes, reducing administrative burden and improving our ability to more quickly bring new suppliers into our network," said Paul Wilkins , Head of Source to Pay, at Co-op Group. "Additionally, the ability of suppliers to electronically share information on inbound deliveries via an Advanced Shipping Notification allows our distribution centre teams to plan and allocate resources more efficiently, eliminate paper-based communication and ensure improved inventory accuracy – helping to deliver what our customers want, when and where they need it, conveniently."

AI and advanced analytics are essential for B2B integration

The study also highlighted the significant role of artificial intelligence and advanced analytics in the maturity of B2B integration. 44% of companies reported that they are currently using Artificial Intelligence (AI)/Machine Learning (ML) to generate more predictive insights from across their supply chain operations. On the other hand, 17% of respondents reported that they only use basic analytics 5 . Whether B2B information sharing specifically or supply chains more broadly, the ability to leverage all available data is rapidly becoming imperative and a source of competitive disadvantage for companies that fall behind.

For more information on IDC's latest study and how OpenText is working to help digitize the global supply chain, click here: https://www.opentext.com/digitize-supply-chains

Methodology

The survey, sponsored by OpenText, was conducted by IDC in the third quarter of 2022, and included 811 respondents from manufacturing, life sciences, and retail across ten countries within North America , Western Europe , and APAC.

About OpenText

OpenText, The Information Company™, enables organizations to gain insight through market leading information management solutions, powered by OpenText Cloud Editions. For more information about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com .

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Certain statements in this press release may contain words considered forward-looking statements or information under applicable securities laws. These statements are based on OpenText's current expectations, estimates, forecasts and projections about the operating environment, economies, and markets in which the company operates. These statements are subject to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materially different. OpenText's assumptions, although considered reasonable by the company at the date of this press release, may prove to be inaccurate and consequently its actual results could differ materially from the expectations set out herein. For additional information with respect to risks and other factors which could occur, see OpenText's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the SEC and other securities regulators. Unless otherwise required by applicable securities laws, OpenText disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Copyright © 2023 OpenText. All Rights Reserved. Trademarks owned by OpenText. One or more patents may cover this product(s). For more information, please visit https://www.opentext.com/patents .

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1 IDC White Paper, sponsored by OpenText Corporation, Next-Generation B2B Integration Enables a Digital First Resilient Supply Chain , doc # CA49778622, January 2023, Pg. 3.

2 IDC White Paper, sponsored by OpenText Corporation, Next-Generation B2B Integration Enables a Digital First Resilient Supply Chain , doc # CA49778622, January 2023, Pg. 17.

3 IDC White Paper, sponsored by OpenText Corporation, Next-Generation B2B Integration Enables a Digital First Resilient Supply Chain , doc # CA49778622, January 2023, Pg. 6.

4 IDC White Paper, sponsored by OpenText Corporation, Next-Generation B2B Integration Enables a Digital First Resilient Supply Chain , doc # CA49778622, January 2023, Pg. 7.

5 IDC White Paper, sponsored by OpenText Corporation, Next-Generation B2B Integration Enables a Digital First Resilient Supply Chain , doc # CA49778622, January 2023, Pg. 13.


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SOURCE Open Text Corporation

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OTEX:CA

OpenText Buys Micro Focus

OpenText™ (NASDAQ: OTEX), (TSX: OTEX) announced today that it has closed the previously announced acquisition (the "Acquisition") of Micro Focus International plc ("Micro Focus"), a leading provider of mission-critical software technology and services that help customers accelerate digital transformation.

OpenText logo (PRNewsfoto/Open Text Corporation) (PRNewsfoto/Open Text Corporation)

"I would like to welcome Micro Focus customers, partners and employees to OpenText," said OpenText CEO & CTO Mark J. Barrenechea . "Digital life is life, and with Micro Focus' great products and talent, we will help organizations of all sizes accelerate their digital transformation."

Barrenechea further added, "With this acquisition, OpenText's corporate mission expands to help enterprise professionals secure their operations, gain more insight into their information, and better manage an increasingly hybrid and complex digital fabric with a new generation of tools that include Cybersecurity, Digital Operations Management, Applications Modernization & Delivery and AI & Analytics. This new generation of Information Management software will help organizations accelerate their digital transformation and drive growth while reducing costs."

Preliminary Financial Overview

Further information on our financial performance, as well as updated models, will be provided when OpenText reports its second quarter Fiscal 2023 financial & business results on February 2, 2023 .

Closing Terms of the Acquisition

  • Total purchase price of approximately $5.8 billion , inclusive of Micro Focus' cash and debt, subject to final adjustments
  • Total purchase price is 2.3x Micro Focus' TTM revenues (1)
  • Total purchase price is 6.7x Micro Focus' TTM adjusted EBITDA (2)
  • Immediately accretive to F'23 adjusted EBITDA dollars
  • Expected to be on the OpenText operating model within 6 full quarters or sooner
  • Net leverage (3) expected to be less than 3x within 8 full quarters or sooner
  • Consistent with previously announced cost synergies of $400 million , expect to balance the combined company through an approximate 8% workforce reduction due to the acquisition of Micro Focus

"We have a structured and disciplined approach to M&A. The last six months of planning has led us to a defined integration plan to deliver on our committed outcomes. We are ready and excited about winning the Information Management market, strong customer outcomes, and company growth and expanded cash flows," concluded Barrenechea.

About OpenText

OpenText, The Information Company™, enables organizations to gain insight through market leading information management solutions, powered by OpenText Cloud Editions. For more information about OpenText (NASDAQ: OTEX, TSX: OTEX) visit opentext.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release, including statements about the focus of Open Text Corporation ("OpenText" or "the Company") in our fiscal year ending June 30, 2023 (Fiscal 2023) on growth, future cloud growth and market share gains, future organic growth initiatives and deployment of capital, the associated benefits of the Acquisition, including the Acquisition being immediately accretive to adjusted EBITDA dollars, the expectation to be on the OpenText operating model and net leverage reduction, new platform and product offerings and associated benefits to customers, scaling OpenText, expected cost synergies, and other matters, which may contain words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "could", "would", "might", "will" and variations of these words or similar expressions are considered forward-looking statements or information under applicable securities laws. In addition, any information or statements that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking, and based on our current expectations, forecasts and projections about the operating environment, economies and markets in which we operate. Forward-looking statements reflect our current estimates, beliefs and assumptions, which are based on management's perception of historic trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances, such as certain assumptions about the economy, as well as market, financial and operational assumptions. Management's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events and, as such, are subject to change. We can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Such forward-looking statements involve known and unknown risks and uncertainties such as those relating to: all statements regarding the expected future financial position, results of operations, cash flows, dividends, financing plans, business strategy, budgets, capital expenditures, competitive positions, growth opportunities, plans and objectives of management, including any anticipated synergy benefits; our ability to integrate successfully Micro Focus' operations and programs, including incurring unanticipated costs, delays or difficulties;  duration and severity of the COVID-19 pandemic, including any new strains or resurgence; and our ability to develop, protect and maintain our intellectual property and proprietary technology and to operate without infringing on the proprietary rights of others. For additional information with respect to risks and other factors which could occur, see the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other securities filings with the Securities and Exchange Commission (SEC) and other securities regulators. Readers are cautioned not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Financial Measures

This press release include certain "non-GAAP measures." Please refer to the Company's "Reconciliation of selected GAAP-based measures to Non-GAAP-based measures" included within the Company's current and historical filings on Forms 10-Q, 10-K and 8-K for more information on the use of non-GAAP measures by the Company.

Copyright © 2023 OpenText. All Rights Reserved. Trademarks owned by OpenText. One or more patents may cover this product(s). For more information, please visit https://www.opentext.com/patents .

Note: All dollar amounts in this press release are in US dollars unless otherwise indicated.

(1)

TTM revenue represents Micro Focus' unaudited revenue for the twelve months ended October 31, 2022, excluding Digital Safe revenue, based on IFRS standards.

(2)

TTM adjusted EBITDA is a non-IFRS financial measure and represents Micro Focus' unaudited adjusted EBITDA for the twelve months ended October 31, 2022, excluding Digital Safe.

(3)

Consolidated Net Leverage Ratio (pro forma) is calculated using bank covenant methodology.


OTEX-MNA

Cision View original content to download multimedia: https://www.prnewswire.com/news-releases/opentext-buys-micro-focus-301734613.html

SOURCE Open Text Corporation

News Provided by PR Newswire via QuoteMedia

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