Johannesburg, 28 Sep 2009
A survey conducted by ITWeb, in collaboration with Softline Accpac, shows ERP software is necessary and provides tangible business benefits.
The research found ERP spending is increasing year on year, primarily as the result of replacements and upgrades, with respondents citing newer technology and added functionality as the major reasons for investment.
Jeremy Waterman, MD of Softline Accpac, says the findings make sense as integrated CRM, workflow, BI and document management have become increasingly important - features often lacking in older ERP systems.
“The survey indicates that mobility, collaboration, CRM integration, workflow and BI are major drivers of ERP purchases or upgrades, and these are areas where we have been focusing for some time now as a result of these trends,” he says. “The survey also highlights the fact that fully-integrated ERP systems are the most popular flavour of the software, with 39% of respondents stating they prefer such a system from a single vendor.”
Waterman adds that a key finding is that consultants are used to make the purchasing decision only 20% of the time. “Most times the vendor is engaged directly, which provides an added incentive for vendors such as ourselves to make sure we are meeting customer needs and providing them with best of breed solutions.”
With 80% of ERP systems being replaced in less than 10 years and 30% every five years, the pressure is on the vendors to keep ahead of trends and customer needs. Total cost of ownership always remains top of mind, though, so vendors have to endure cutting-edge ERP systems remain competitively priced. Surprisingly, though, the software purchasing decision rests with CIOs and CEOs rather than financial directors.
“The survey covers small, medium and large companies, and the results were correspondent across the spectrum,” says Waterman. “ERP is equally relevant for businesses of all sizes, and it's approached in a similar way by most companies.”
The main drivers for ERP adoption are streamlined business processes and cutting costs, with the most important criterion for assessing the success of an ERP implementation being increased productivity and efficiency. “That's what ERP is all about,” says Waterman.
An effective ERP system improves the co-ordination of a company's processes into one streamlined process, where everything can be accessed through one company-wide information network. “What this means in reality is that information can be accessed in real-time, so research, decision-making and managerial control become easier, faster and less expensive,” he adds.
ERP is a lesson in evolution, progressing from the basic co-ordination of manufacturing processes to the integration of enterprise-wide back-end processes, he explains. The increased spending on ERP in this recessionary climate underscores the old adage “you have to spend money to save money”.
“ERP systems have become the biggest survival need of today's organisations,” Waterman says. “But it's easy to forget that successful ERP implementations don't end after the system goes live. If anything, it's the effective use of the system that makes it a success.”
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