ERP Systems Fall Short of Meeting Business Needs

Strategic Insights -

Despite the widespread adoption of enterprise resource planning (ERP) systems, they are failing to meet the strategic needs of businesses, with companies turning to "best of breed" solutions from different vendors to supplement their existing systems. A survey of 164 ERP users in 62 US Fortune 500 companies found that ERP-enabled enterprises are now using a variety of bolt-ons and other complementary technologies to support their business processes.

Key Takeaways:

  • The reality is that ERP systems are only a backbone for businesses, and companies have a need for more advanced information and management tools, as well as legacy components.
  • 70% of CIN members surveyed said their ERP systems would be extended to provide access to real-time information, while 64% said they would incorporate electronic commerce and 56% would be linked to suppliers.
  • The need for real-time links between enterprises is growing, with 44% of CIN members saying they would be linked to customers and 44% integrated to decision support systems.
  • Companies are looking for a real-time commitment from manufacturers on when products can be made, at what price, and when they will be delivered.
  • Manufacturers will need to be able to confer in real-time with suppliers to agree on supply times, pricing, and other factors to bid for business.
  • A new market is emerging for enterprise application integration products that sit above traditional middleware, enabling real-time interapplication links.

Statistics:

  • 2,600 senior IT executives are part of the electronic club of Cambridge Information Network (CIN).
  • 70% of CIN members surveyed said their ERP systems would be extended to provide access to real-time information.
  • 64% of CIN members said they would incorporate electronic commerce into their ERP systems.
  • 56% of CIN members said their ERP systems would be linked to suppliers.
  • 44% of CIN members said they would be linked to customers.
  • 44% of CIN members said their ERP systems would be integrated to decision support systems.
  • $20m of orders a day are processed through the web-based ordering system run by Cisco Systems.

Sources:

  • "Survey of ERP Users" by Deloitte Consulting.
  • "Extended Enterprise Planning" by Cambridge Information Network (CIN).
  • Interview with Steve Weller, industry marketing director of i2 Technologies.
  • Interview with Tony Kelly, director of ERP business development at Cap Gemini.
  • " ERP (Extended Enterprise Planning) - A Comprehensive Web Service Solution" by Cisco Systems.