Firms failing to fully exploit ERP systems

Few companies are making full use of their enterprise resource planning systems, despite the high cost of the software and the length of time an implementation can take, research has revealed.

Few companies are making full use of their enterprise resource planning systems, despite the high cost of the software and the length of time an implementation can take, research has revealed.

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

Thirty two per cent of respondents said large portions of their enterprise software was not used at all, and 41% said that a small portion of the software's functionality was left unexplored.

Cliff Mills, senior analyst at PMP Research, said the findings were both surprising and alarming. "This can be down to the time that it takes to implement ERP systems - it can take a number of years to implement if you are a large company, and a lot of companies underestimate this. We are talking about multisite, pan-European or global roll-outs," he said.

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. Easier-to-implement Sage-type applications are coming up-market to address the needs of medium-sized companies," said Mills.

The companies surveyed also reported difficulty in getting ERP systems to perform as required. Most users customise the software, with only 12% installing ERP packages "out of the box". Once installed, more than 50% of companies said it was hard to make changes to ERP software in order to meet any changes in business processes or requirements.

The survey also found that more than 50% of the companies surveyed did not measure their return on investment from business applications, despite 18% having had to trim their IT budgets and 12% experiencing a reallocation of budget between projects.

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