ERP Investment Remains On Track

May, 2014

While many areas of IT investment are restrained, investment in Enterprise Resource Planning systems appears to be holding up well in relative terms. Our research shows that businesses are continuing to spend money on upgrading and enhancing their ERP systems. Other strong areas of investment such as business analytics and mobile applications ultimately arrive back at the ERP platform, which has become a key piece of the software infrastructure that is enabling innovation and process re-engineering.

Our ERP adoption and customer experience profile in Figure 1 from our study, ERP Adoption Trends and Customer Experience, shows that ERP adoption and investment rates are very high and, in fact, are the highest of any technology in our annual survey. In short, ERP is a mature technology that is continuing to expand its footprint in the enterprise.

ERP Trends Fig 1 - ERP Investment Remains On Track

The customer experience is decidedly less positive. We classify ERP as offering a low ROI success rate and low TCO success rate. The percentage of organizations at least breaking even on their investments within a two-year period is within the bottom one-third of the range when compared with other technologies. The low TCO success rating reflects the fact that more than one-third of adopters are underestimating the total cost of implementing and maintaining these complex systems.

The full ERP study helps IT executives understand how aggressively their peers are investing in ERP and the risks and rewards presented by those investments. We report adoption and investment rates by sector, organization size, and geography. We also measure customer experience in terms of the success rates for return on investment (ROI) and total cost of ownership (TCO). Finally, we assess ERP investment levels for new implementations and improvements to existing systems and customer satisfaction with support programs of major vendors. We wrap up with our recommendations for improving the ROI of ERP.

ERP systems have become the platform for integration of data, information, and applications in the well-managed enterprise today. While not yet ubiquitous, nearly two-thirds of all organizations have ERP systems. Moreover, ERP is the single most important area of investment across most sectors, as it is the transactional backbone for many organizations’ systems of record. While risks remain high, rewards are rising as ERP becomes a necessary foundation, enabling innovations such as bringing analytics and mobility to enterprise data.   

This Research Byte is a brief overview of our management advisory on this subject, ERP Adoption Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).