The majority of leaders in most organisations are aligned to an enterprise resource planning (ERP) strategy.
This was one of the key findings from the ITWeb/EOH ERP Survey, which ran for 14 days and attracted 178 responses.
The survey discovered that over half of the organisations (58.08%) have an ERP strategy, while about a quarter (25.29%) do not, with the remainder unsure.
It also emerged that leadership in the majority of organisations (49.43%) are aligned to the ERP strategy. Only 6.9% are not.
Commenting on these findings, Ebrahim Laher, MD for EOH SAP Services, says most organisations are realising that ERP adoption is the most suitable method for consolidating various systems across the organisation. He adds that a single ERP system enables company-wide real-time capturing and reporting, as well as improved efficiencies.
“ERP also allows for on-demand, on-device reporting, and leaders are beginning to realise that having information at their fingertips is a powerful tool,” Laher adds.
ERP upgrades
Some 21% of respondents are planning to upgrade their ERP systems within the next year, it emerged. According to the survey, 42.55% are not planning to upgrade their systems, while the remainder are unsure.
The life cycle of ERP systems in the majority of organisations (34.75%) ranges from five to 10 years, the survey also determined; while 21.99% revealed that their ERP systems have life cycles of more than 10 years; and 17.2% of less than five years.
Laher believes ERP life cycles depend on vendor upgrades. Often, he explains, ERP vendors, such as SAP and Oracle, incorporate needed requirements into the solution and make improvements that lead to better efficiencies.
“These improvements are released into the market as either patch upgrades or full upgrades. Companies wishing to take advantage of new functionality that addresses new industry environments need to constantly upgrade their ERP systems.”
Asked about their preferred ERP solution approach, most respondents (25.29%) said they use a combination of solutions. On the other hand, 19.54% have a fully integrated ERP solution from a single vendor, while 9.20% have a customised solution, 8.62% have an in-house-developed solution, and 7.47% have a best-of-breed solution.
Laher believes that combining different solutions may seem to solve immediate problems, but the interface upgrades needed with every new version upgrade or individual system replacements are always more complex than running a single ERP solution.
He also points out that having multiple vendors means there have to be SLAs in place to govern the relationships between vendors and to manage inter-project relationships.
“It is also significantly more difficult for the client to manage multiple vendors each with their own SLAs and unique administrative requirements. Having a single vendor drastically improves project management, as a single vendor project is responsible and accountable for all deliverables.”
Ad hoc outsourcing
In regard to outsourcing, most organisations (33.33%) use external ERP consultants on an ad hoc basis, the survey also established. On the other hand, 27.66% do not outsource any ERP functions, while 17.73% outsource support functions.
Says Laher: “Organisations that make use of external ERP consultants for singular improvements usually do not have an ERP roadmap or strategy. It is pleasing to note that this is not a trend, as it shows that corporate executives are realising that an ERP strategy is vital in managing the most crucial resource in the organisation - the information resource.”
Asked how their organisations' investment in ERP has been affected by the advent of cloud computing, the majority (34.04%) said it hasn't been effected, as they do not use cloud computing.
On this note, Laher says cloud computing is still in its infancy globally. “A low adoption in SA now does not mean that there is no future for cloud computing. Cloud computing offers many advantages over traditional systems and it is only a matter of time before organisations begin to adopt this as a way of doing business.”
SAP is the most prominent ERP system within many organisations, as chosen by 34.04% of respondents, the survey also discovered. Oracle came next, at 21.99%, followed by Microsoft Dynamics (14.89%) and Syspro (3.55%), among others.
The study also found that most companies (41.84%) use advanced ERP functionalities, while 34.04% use basic functionalities.
On a scale of one to five, with one being 'very unhappy' and five 'very happy', the survey asked respondents to rate their overall satisfaction with their organisation's ERP system's performance or functionality. The majority (43.26%) gave it a three, followed by 27.66% who gave it a four, with an equal percentage (11.35%) giving it either a two or a five.
The top five key drivers to change organisations' ERP systems are: need to improve business processes and/or workflow (56.74%); consolidation of all line-of-business operations (43.26%); CRM integration (43.97%); and need to allow for mobility (36.88%).
Productivity or efficiency (48.23%) is the most important criteria when assessing the success of an ERP implementation.
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