Choice of ERP package irrelevant to success, says study

A forthcoming study says ERP packages offer few advantages for companies wanting to optimise their financial operations.

A forthcoming study says ERP packages offer few advantages for companies wanting to optimise their financial operations.

The Hackett Group, Answerthink's business advisory firm which specialises in benchmarking company performance and in offering best practices solutions, will publish a report next week entitled "Financial Application Choice Is Irrelevant In Achieving World-Class Performance".

In the report, group states that of the 150 major companies included in its analysis, the top 10% designated as world class were using six different ERP packages from enterprise suppliers Baan, JD Edwards, Lawson Software, Oracle, PeopleSoft and SAP.

"Ninety-six per cent of companies that implement one of the top three ERP finance packages (Oracle, PeopleSoft, SAP) are not world class," said Greg Pleasants, senior business adviser for application ROI business advisory services.

"When we looked at the distribution of what ERP packages companies were using, there was little difference between world-class companies and non-world class companies," Pleasants added.

Hackett used 150 companies from its customer database to analyse the results.

According to company spokesman Gary Baker, the fact that The Hackett Group sells best practice advice does not take away from the value of its findings.

"Virtually 80% of the Fortune 100 and 93% of the Dow Jones industrials turn to us for an evaluation of how to improve the quality of finance, IT, HR, and other back-office operations," said Baker.

The research was designed for companies looking to improve the value of their ERP packages, said Baker. To that end, Hackett benchmarked hundreds of responses broken down by organisational, functional, and technical processes.

The report gives a number of "do's" and "don'ts" for CFOs looking to improve their financial processes. The action items on the plus side include ensuring that organisational structure can incorporate best practices, that an ERP solution fits within the existing IT environment, and that if a best-of-breed approach is taken, a company must ensure that new components can be integrated into the current architecture.

On the "don'ts" side of the ledger, the report advises not to spend time or budget on new upgrades as a way to solve a problem and not to delve too much into the minutiae of comparing speeds and feeds of one product versus another. Unless a supplier offers a feature or function that is not available from its competitors and is of mission-critical importance to the company, the report said most ERP solutions are a commodity with few real differences.

However, while Hackett found most features within ERP applications similar, ERP suppliers appear to be aware of the problem and are now more likely to tout their integration platforms, for example NetWeaver from SAP and the Customer Data Hub from Oracle, as a product differentiator rather than fighting a features war with competitors.

Fred Studer, vice president of ERP marketing at Oracle, disagreed with the Hackett findings.

"Not all ERP systems are made the same," he said. "Once we go through standardisation, automation, and integration [using the same stack] then a customer has a great abundance of quality information."

The study will be made public on 18 May.

Ephraim Schwartz writes for InfoWorld

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