ERP Woes Today’s Apps Still Not Cutting It
Enterprises Rely on ERPToday’s enterprises rely heavily on existing ERP to manage change and react quickly to market shifts and customer needs. IDC’s survey results show that a large number of today’s ERP implementations actually impede change because systems lack the necessary architectural agility to help companies react quickly and mitigate business disruptions in today’s economic climate.
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Addressing Business Disruptions QuicklyEvery business suffers business disruptions, especially in a tough economy. The IDC report surveyed respondents in a wide variety of industries on how their organizations reacted to disruptions like M&As, new regulatory and compliance structures, and process changes.
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Negative Effects on Top- and Bottom-line NumbersSurvey results show businesses are suffering bottom and top line losses due to their inability to react, caused directly by the rigidity and lack of flexibility of their ERP systems. Respondents reported losses anywhere from $10M to $500M, depending on the size of the business.
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Regulatory issues increase fines and decrease customer satisfactionSurvey respondents from businesses forced to make changes based on regulatory requirements reported a slew of business issues because of their ERP systems. 20.9% of respondents observed a drop in customer satisfaction while 19.7% experienced a decrease in stock price. Almost 18% reported they had to pay fines for non-compliance.
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Restructuring leads to M&A delay and stock price dipsRestructuring and reorganizations are commonplace in today’s economic climate, but, according to the survey, ERP systems are making realignment and reorganization difficult for organizations. Almost 23% of respondents said their company experienced a decrease in stock price and 16.2% either missed an M&A opportunity or had to delay a merger or acquisition. Almost 18% reported paying fines for non-compliance issues related to restructuring.
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M&A Integration Leads to Lost Market ShareERP systems are making M&As more painful. 21.1% of respondents reported a dip in stock price directly linked to ERP systems inability to change. Almost 20% had to delay a merger or completely missed an M&A opportunity, and 17% reported a loss in market share.
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Process Change Decreases Operational EfficiencyIn today’s tough economy, companies are looking to shift business processes to improve operational efficiency. Unfortunately, existing ERP systems are hurting more than helping that much needed shift. Almost 16% of respondents report a decrease in operational efficiency because of their ERP systems while almost 17% reported delays in product launches and increased time to market. Almost 22% experienced a dip in the stock price.