Consolidating enterprise applications can deliver up to
30% savings on costs, the independent business advisory, Hackett
Group reported this week.
Its latest research,
“Optimizing a Return on Business Complexity: Performance Metrics
and Practices of World-Class Companies” has found that companies
can cut the cost of finance operations by 23%, if they replace
disparate IT systems with a single Enterprise Resource Planning
application.
Philip Carnelly, senior research advisor at Hackett Group said, “IT
plays a large role in determining [the level of] complexity in
large businesses.” The more complex the IT environment in terms of
middleware, legacy system IT integration, the costlier it is to
run.
The research found that by avoiding customisation of standard
applications a user can reduce operational costs significantly.
According to Hackett's research, companies that fail to reduce the
complexity of IT spend 30% more on finance operations and 18% more
on HR per employee than companies that succeed in this area.
Michael Campbell, vice president of Hackett in Europe, said
businesses that have invested in common HR systems require 35%
fewer HR staff and the cost of running HR is 27% cheaper, than
those with mixed systems.
Campbell said substantial savings can be made in procurement
operations by deploying self-service systems such as online
catalogues listing common suppliers. He said, “Every reduction of
2,000 suppliers can generate 5% savings on procurement cost. With
fewer [companies to deal with], businesses can get more closely
aligned with suppliers.”
