ERP Satisfaction Strong Despite Poor Economics

Respondents to our annual technology trends survey are surprisingly happy with and continue to invest in ERP systems at a decent rate, despite persistent disappointment with cost overruns and low return on investment associated with ERP implementations.

Figure 1 from our full report, ERP Adoption Trends and Customer Experience, shows that ERP adoption is high. In fact, the adoption rate is the highest of any technology in the survey, while the investment rate is moderate. The high adoption rate is not surprising as ERP is a mature technology. Moreover, the solid investment rate shows that these systems are continuing to expand their footprint in the enterprise. Enterprise resource planning vendors continue to expand their offerings, and cloud solutions are making ERP easier to implement and maintain than it has been in the past.

The ERP profile ratings are based on comparisons with 11 other technologies in our Technology Trends 2017 study. The comparisons are on a relative scale, and each technology is categorized as having low, moderate, or high rates relative to other technologies in the study.

“It is likely that IT organizations aren’t so much thrilled with ERP systems as they are forgiving of the technology,” said David Wagner, vice president for research at Irvine, Calif.-based Computer Economics. “ERP is the backbone of any organization’s systems. They require complicated deployments. Most IT leaders are aware of the difficulty of complex IT deployments and are likely judging ERP not on the implementation effort, but on final capabilities. New ERP systems are expanding capabilities, and companies are taking advantage of them, even if they have difficulty implementing these systems on the proposed budget.”

ERP systems have become the platform for integration of data, applications, and business processes across the entire organization. While not yet ubiquitous, around 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 for enabling innovations such as bringing analytics and mobility to enterprise data. It is an area of ongoing investment and focus for every organization that intends to remain competitive.

The full report helps IT executives understand how aggressively their peers are investing in ERP and the risks and rewards presented by those investments. We report worldwide 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 what functions organizations are using ERP systems for today. We wrap up with our recommendations for improving the ROI of ERP.

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).