ERP Shows Strong Adoption and Investment Trends

November, 2011

While IT organizations are investing in ERP systems at a higher frequency than almost any other technology, the adoption rate has increased only slightly over the past three years.

Our study, ERP Adoption and Customer Experience, finds the market for new installations is relatively mature: 64% of IT organizations, across all industry sectors, had ERP systems in place in 2011, which is about the same as the 62% in 2009 and the 65% in 2010, as shown in Figure 2.

RB ERP Fig1 - ERP Shows Strong Adoption and Investment Trends

The percentage of organizations investing in ERP technology is more variable. Organizations are upgrading, expanding, or modifying the functionality in their existing ERP platforms at a relatively high rate compared to other technologies, but that rate dropped significantly year over year, from 49% in 2010 to 39% in 2011.

The 2011 investment rate is a return to the 2009 rate. Still, investment in mission-critical ERP systems is one area that held up relatively well during the downturn. Our research shows that businesses are continuing to spend money on upgrading and enhancing their ERP systems and, in relative terms, more organizations are investing in their ERP systems than in almost any other technology area.

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. In short, it is difficult to address ERP as a single, discrete business application. It is an area of ongoing investment and focus for every organization that intends to remain competitive.

The full study helps IT executives understand how aggressively their peers are investing in ERP and the risks and rewards presented by those investments. We show the three-year trend in the percentage of organizations that have adopted ERP systems and are currently investing in them. 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 ERP investment levels for new implementations and improvements to existing systems. We wrap up with our recommendations for improving the ROI of ERP.

This Research Byte is a brief overview of our report on this subject, ERP Adoption 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).