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Home ENTERPRISE RESOURCE PLANNING SOFTWARE BUYERVIEW | 2015

ENTERPRISE RESOURCE PLANNING SOFTWARE BUYERVIEW | 2015



We would like to showcase the Buyerview 2015 survey conducted specifically for Enterprise resource planning (ERP) software by www.softwareadvice.com. The report offers variety of key finding with respect to buyer attributes during ERP implementation for their businesses and organizations. As we all know that every year there are variety of Applications and software enters market with different capabilities and features to serve the needs and requirements of the business processes and specially the management, and selecting the best may be a difficult task in the clutter selection process. Every software offer different features some are out of the box and some may need customization to meet the requirements. Buyer view findings dramatically focuses on buying behavior during software purchases.

Key Highlights & Findings:

  • Only Two-thirds of buyers does not use any ERP solution, and 44 percent rely on a combination of disparate systems to execute ERP processes.
  • Fifty-nine percent of buyers cite the need to improve the integration of data between different business processes as a top reason for seeking an ERP system.
  • Forty-seven percent of all buyers cite the need to improve their customer relationship management (CRM) database as a reason for wanting to purchase an ERP system.
  • Among buyers currently using ERP systems, 24 percent cite lack of support and 19 percent cite cost as their primary reasons for wanting to switch to a new system.
  • Twenty-seven percent of buyers who do not currently use an ERP system cite company growth as their reason for wanting to implement one.

Read our Article on – 7 Advantages of using Web based ERP Software

Two-Thirds of Buyers Are Making Their First Foray Into ERP

When asked about their current ERP methods, only one-third of prospective buyers in our sample say they currently use a commercial ERP system. In other words, the businesses of most of these buyers are at the critical point where a system that is fundamentally new and different is required.

We agree with Software advice report that the process of customization, and legacy data migration can be time consuming specifically scraping down existing system and moving forward with a complete new ERP systems. Also Training and Pilot testing time requries constant approach as the users are new to the system who actually make the project successful.

“[First-time buyers] don’t have the problems that a lot of companies with existing ERP systems have, which include the baggage or the set ways that come along with having a system already in place. That can create a lot of risk and challenge,” says Eric Kimberling, founder and managing partner of Panorama Consulting, a firm that advises organizations on ERP implementation.

At the same time, many software vendors offer in-house implementation and consulting services, as prospective buyers—regardless of their experience with ERP—often need the reassurance of assistance throughout the implementation process. Buyers have reason to worry, after all: ERP implementation failure is a very real thing that can cripple even large corporations.

Perhaps the most infamous example of this is the Hershey Company’s botched ERP implementation in 1999, which prevented $100 million worth of candy from being delivered to stores in the weeks before Halloween. When news of the debacle broke to investors, the Fortune 500 company’s stock dropped by 8 percent in a single day.

However, ERP implementation failure is very rarely the fault of the software itself—typically, it is the result of the buyer being overly optimistic with the timeline and budget estimates laid out by the vendor. And vendors, in turn, may lowball these estimates in their desire to make a sale.

Kimberling says this is a difficult problem to solve, and that both clients and vendors can be at fault for a failed implementation. “The biggest thing [prospective buyers] can do is manage expectations better up front,” he says.

Kimberling also notes that prospective buyers should be fully aware of what their and the vendor’s responsibilities will be during the implementation process. Many ERP implementation failures occur because the buyer doesn’t realize that the vendor isn’t going to handle certain critical aspects of the implementation, such as data scrubbing and migration.

Fifty-Nine Percent of Buyers Want to Improve Integration

Nearly half (44 percent) of prospective buyers use multiple disparate systems (see chart above) to handle all ERP processes—typically, a combination of QuickBooks, Excel and basic project management software. This often results in time-consuming, duplicate data entry.

“QuickBooks works. But if we can have a system where we don’t have to tell the accounting department every time we make a transaction, that would obviously save us a lot of time,” says one prospective buyer, an operations manager for an industrial parts manufacturing company.

Improving integration between business processes is the fundamental purpose of ERP, so it is unsurprising that 59 percent of all prospective buyers cite this as a top reason for wanting a new system.

While integration is slightly more of a motivating factor for non-ERP users (61 percent), it is telling that 54 percent of current ERP users are also dissatisfied with their systems’ integration capabilities.

“There are so many gaps in our organization that tie back to our [current system]. Everything is a separate package,” says one prospective buyer, a quality assurance manager at a manufacturing company.

Though accounting, sales, manufacturing and supply chain management have long been the core elements of ERP, CRMhas become an increasingly vital component of these platforms. Indeed, 47 percent of all prospective buyers in our sample specifically request either greater integration with an existing CRM database, or an entirely new CRM application with greater functionality as part of their new ERP system.

For current ERP users, the problems they have are sometimes not even with the software itself, but rather, with its price tag: nearly one-fifth of current ERP users say rising costs are a main reason for wanting to switch systems.

Read our Article  – OpenERP customization services

Current ERP Users Fed Up With Growing Costs and Lack of Support

Drilling deeper into the responses of buyers who cite rising costs as a reason for wanting to deploy a new ERP, we find that the frustration is largely due to increasing annual support and maintenance fees. This is despite the fact that they have a perpetual license for their system—meaning they have paid a one-time fee for the license to use the software in perpetuity.

Perpetual license fees generally do not cover support, which is billed separately. Thus, these businesses are faced with either paying more each year for the same support service, or jeopardizing their entire system if they do not pay and something goes wrong.

“They’re just beating me up. Their latest quote for an annual contract just went up 10 percent,” says one prospective buyer, the IT manager of a beverage distribution company.

Others realize they have bitten off more than they can chew, and have a system that is simply too complex for their needs.

“[Our ERP] has been working pretty well for us, but I think we’re on the smaller edge of who that product is designed and priced for,” says one prospective buyer, the CEO of an employee training company.

In the past few years, more ERP vendors have begun offering subscription-based “Software-as-a-Service” (SaaS) contracts, in which users pay a monthly or annual fee for access to the software, as an alternative to perpetual licenses. The software is typically hosted on the vendor’s servers and accessed by users via the Internet. Kimberling thinks this trend will only become more prevalent.

“The market is demanding it: With demand that great, something is going to give at some point,” he says. “The bad news is [SaaS products] have an ongoing, recurring annual cost that never goes away, but what’s included in that is everything. There are no upgrades; there is no real maintenance you have to do on the system—it’s all embedded in the cost of the subscription.”

Read the Complete Article on why Most Buyers Want to Deploy an ERP System Within Six Month 

Note : This article was originally covered by Forrest Burnson – Market Research Associate, Software Advice for More information you can check software advice link – http://www.softwareadvice.com/erp/

Infographics by Globalteckz 

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Other Articles by Globalteckz

For more information you can email us on sales@globalteckz.com

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