ERP systems under-utilised and unexplored

Few companies are making full use of their enterprise resource planning (ERP) systems, despite the high cost of the software and the length of time an implementation can take, according to research.

Few companies are making full use of their enterprise resource planning (ERP) systems, despite the high cost of the software and the length of time an implementation can take, according to research.

In an in-depth survey of 100 global or pan-European companies by PMP Research, just 5% of those polled said they were using their existing ERP software to its full extent.

A third of the sample said that large portions of their enterprise software were not used at all, while 41% said that only a small portion of the software’s functionality was left unexplored.

Cliff Mills, senior analyst at PMP Research, said, “It is both surprising and alarming that so many companies think that their ERP system is not being used at all. This can be down to the sheer timescale that it takes to implement ERP systems – it can take a number of years to implement if you’re a large company, and a lot of companies underestimate this. We’re talking about multi-site, pan-European or global roll-outs.”

The findings of the survey echo criticisms that have dogged ERP systems for many years, causing suppliers to work on modularising their platforms and shortening implementation cycles.

“The likes of SAP are helping to reduce the implementation cycle by pre-packaging applications, and working with channel partners to make implementation easier," said Mills. "Easier to implement Sage-type applications are coming up-market to address the mid-sized companies.”

Companies also indicated having difficulty getting ERP systems to perform as required. The majority customise the software, with only 12% installing ERP packages straight out of the box. Over half the respondents said it was hard to make changes to installed ERP software in order to meet any changes in business processes or requirements.

The survey also found out that over half the companies surveyed did not measure their return on investment from business applications, despite 18% recently having had to trim their IT budgets and 12% having seen a reallocation of IT budget between projects.

This was last published in January 2006

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