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79 per cent of IT and financial decision makers in the UK are dissatisfied with their business' ERP roll-out

79 per cent of IT and financial decision makers in the UK are dissatisfied with their  ERP roll-outs

Enterprise resource planning tools provided by major vendors like SAP, Microsoft and Oracle are at the heart of many medium and large enterprises’ critical systems. But research published today by integrated systems provider K3 FDS suggests UK businesses are struggling with ERP implementation projects due to unnecessary over-complexity and cost, with nearly four in five IT and financial decision makers claiming dissatisfaction with their ERP roll-outs.

According to the company 93 per cent of research participants claim ERP platforms are critical to their business. But 79 per cent of those surveyed were not satisfied with the roll-out of their ERP platforms, citing a combination of over-complexity and cost. The research, commissioned by K3 FDS and carried out by Vanson Bourne in September 2013 includes survey responses from 190 senior IT and financial decision makers.

Just eight per cent of participants deemed their platforms easy to use while 48 per cent find current market offerings confusing, and over half (56 per cent) say they would prefer a more standardised ERP platform.

About a fifth of those surveyed said their projects exceeded their original budgets. The average over-spend for UK medium-sized businesses is a whopping £76,000.

“A company’s ability to see a return on an ERP project often depends on how quickly it can deploy the new system, and whether it’s in line with what was promised at the outset. Given ERP is one of the biggest IT investments businesses make, particularly for mid-size organisations, any delay or overspends can have a massive impact,” said Andrew Fox, managing director at K3 FDS, adding that solution providers need to be more transparent with total project costs.

“It seems the industry still has a long, long way to go in delivering the transparency customers are demanding,” he added.

Fox explained that many businesses seek to customise features built into their ERP platform, which can often result in over-complexity and cost overruns, outweighing the benefits these customisations deliver to the business: “It’s also crucial that businesses have an on-going dialogue throughout the process with their partners, and are comfortable that they fully understand what is happening at every stage of implementation. This is the bedrock of the transparency that’s missing.”

He continued: “Using cloud based ERP solutions can help relieve some of the complexity involved with ERP projects. Using these solutions can offer another level of flexibility in terms of speed of deployment and spreading the upfront costs,” but enterprises should keep their implementations as standardised as possible to keep cost and complexity low, particularly when using vertically-specific offerings.

Most companies still opt for broadly-based ERP offerings, but demand is quickly shifting to solutions that are specific to particular industries. There are a few vertically-specific ERP players in the market today (but according to some, not enough) and it’s likely that given the cost-overruns and complexity associated with building custom features into broader SAP and Oracle offerings, these players – which are moving to provide their solutions exclusively via the cloud – will likely rise to challenge more established ERP vendors that sometimes prioritise breadth over depth.

@BizCloud
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