Ventana Research today published its latest benchmark research, Next-Generation Enterprise Resource Planning. The enterprise resource planning (ERP) system is a pillar of nearly every company’s record-keeping and management of business processes. It is essential to the smooth functioning of a business’s accounting and finance functions. In manufacturing and distribution, ERP also can manage inventory and logistics. Some companies use it to handle human resources functions like tracking employees, payroll, and related costs. Thus, ERP systems are inherently complex. A small majority (54%) said that their system is easy enough to work with but probably could be improved. This response suggests stoicism in “making do” with what one has as well as hope for something better.
As part of our analysis, we compared the new benchmark research with the results of a study conducted in 2006. Naturally, we find changes, but some reflect the slow development of this software category. For example, only one in five (19%) participants in this research said that their primary ERP system works very well, somewhat more than the 12 percent who said that a decade ago. Just 19 percent said working with it is as easy as one could expect, essentially unchanged from the 20 percent recorded 10 years ago.
Further analysis finds some significant functions in which current ERP systems fall short. Automating processes from end to end, for example, can ensure data quality, speed transactions that result in payments or discounts and enable people to work on other tasks who otherwise would be tied up. Yet the majority of organizations don’t use ERP to facilitate automation of such processes: Only 30 percent fully automate their order-to-cash cycle in some or all of the company, and just 23 percent fully automate the procure-to-pay cycle through their ERP system.
"Our research found that companies are more positive about the ability of their ERP system to improve their performance," remarked Robert Kugel, Senior Vice President and Research Director at Ventana Research. "Compared to a decade ago, many more of them say that it has enhanced their internal controls, improved their operational efficiency and raised their employees' productivity. Yet many challenges remain. For example, only one in five said that their ERP system works very well or said working with it is as easy as one could expect."
"We conducted this research because after more than a decade of steady developments, ERP systems have begun to change fundamentally, facilitated by the growing availability of new technologies including cloud computing, database design, collaboration, mobility, analytics, and planning, which together have the potential to address shortcomings and the most common complaints in today’s systems.”
Those interested in learning more about this benchmark research can download the executive summary at www.ventanaresearch.com/benchmarks/next-generation-erp/executive-summary. This research was sponsored by FinancialForce and Syspro. Ventana Research, a leading business technology research and advisory services firm, provides qualified research participants with an incentive and complementary report, which includes both key insights and best practices from the benchmark research. Those interested in learning how to apply this benchmark in their business can see a full listing of services available at www.ventanaresearch.com/services. Ventana Research advisory clients have premium access to insights and education on benchmark research.
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