Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

IDC: ERP systems not keeping up with change

by
16th Dec 2009
Save content
Have you found this content useful? Use the button above to save it to your profile.

Underperforming software is leading to lost opportunities worth up to £300m, says IDC.

Many mid-to-large sized companies are losing up to £300 million in lost opportunities, thanks to inflexible enterprise resource planning (ERP) systems.

Respondents to a survey carried out by IDC Group on behalf of business software developer, Agresso, said that not being able to modify their ERP systems slowed decision-making and caused them to delay product launches and acquisitions. 

This lack of agility is estimated to cost companies taking part in the survey between £6m and £300m in lost opportunities.

“Change to ERP paralyses the entire organisation in moving forward in other areas that can bring more value,” said one survey respondent.  Another added: “Capital expenditure priorities are shifted into IT from other high payback projects” just to keep the ERP system in line with business.

According to the research, underperforming ERP systems feed through to the bottom line, with average stock prices experiencing a 20.9% decline, average lost revenues of 14.3% resulting from delays and a 16.6% decline in customer satisfaction. 

“The wrong ERP choice in a high-change industry spells disaster,” said Ton Dobbe, VP of Product Marketing for Unit4Agresso.  “Companies operating in industries that are highly regulated, consolidating via M&A activity, frequently replacing leaders or making other important changes, need to adjust their ERP selection criteria appropriately when choosing new systems.”

The survey’s results also indicate the pace of change in the current business environment forces organisations to modify their systems. Nearly 17% of the survey participants make monthly changes to their systems, with 43% making changes “as needed”. Only 2.8% of the organsiations questioned had not made changes to their ERP systems.

The main danger for ERP buyers in such high-change environments lies in failing to appreciate the potential costs and business impacts of trying to modify their software system. The IDC white paper concluded:  “Architectural agility to support ongoing change may be the single most important buying criterion to minimise change-related revenue loss, business disruption, stock price declines and the lost business opportunities.”

The High Cost of Business Disruption is available as a free download from the Agresso website.

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.