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New business survey reports massive disruption, lost market share, and missed opportunities resulting from the inability of software applications to respond to ongoing change

Sliedrecht, Netherlands, 

Newsfacts

  • 240 executives and managers state failure of ERP solutions to support change wreak havoc on operations and valuations
  • 111% increase since 2009 in business related changes, such as mergers, regulatory or compliance laws and reorganizations

UNIT4, the global cloud-focused business software provider for fast-changing organizations, held a press conference today announcing the results of a major new enterprise resource planning (ERP) software survey aimed at measuring the impact of business-related change on organizations.  The press conference showcased a 2013 study conducted by Mint Jutras, an independent research and advisory firm that specializes in analyzing the business impact of enterprise applications. Results of the survey are accessible here: http://unit4.bz/jtjrk.

Measuring the opinions of 240 business respondents in management, technology, operational and financial roles, the study mirrored questions asked of a similar cross-section of respondents in a 2009 survey.  In both cases, the goal was to assess and measure the impact of business disruption when ERP solutions are changed after their initial deployment.  Specifically, UNIT4, the survey sponsor, aimed to measure how the market’s most widely installed ERP solutions are responding to the five most common types of business-related change, namely: merger/acquisition activities; reorganizations; regulatory changes; financial requirement changes; and business process changes.   Excluded from the survey was the impact of software release upgrades and other types of technically-mandated ERP vendor changes.

As with the 2009 study, and even after four years of continuous ERP improvements reported by the largest firms, organizations are facing massive levels of software modifications to keep up with business-related changes.  Ninety-six percent of all respondents said that ongoing business change requires moderate to extensive levels of modification of their ERP solutions, which for most ERP solutions means expensive re-coding.  Further, the frequency of needing to update ERP solutions has rocketed 111% since first measured in 2009.  In 2009, only 30.3% of survey respondents said they updated their ERP solutions daily, weekly or monthly. In this 2013 survey, 64% are in this continuous cycle of business change.

“The pace of change related  to a wide variety of economic, global, financial and other pressures is accelerating rather than slowing down and it’s clear that many of the ERP solutions on the market – regardless of all the big technology announcements – are not keeping up,” said Cindy Jutras, President of Mint Jutras. “Most ERP solutions remain rigid and require extensive modifications to meet the changing needs of enterprises today. ERP buyers need to understand the very serious P&L implications of rigid systems, which can far outweigh any price concessions made by vendors on the front end of a deal. Our advice is to dive into the architectural components of an ERP solution, to understand the ability to make ongoing change, and to understand whether ongoing business changes can be handled easily, or if they require ongoing IT service intervention.”

Financial Management Driven Change Stresses Today’s ERP Solutions the Most

The Mint Jutras survey assessed the impact of five common categories of business change: financial management driven change, new or changed business processes, organizational restructuring, regulatory requirements and merger/acquisition related change.  Of these, 73% of the respondents said that financial management driven change was requiring moderate to substantial ERP change on a continuous basis.  The disruption numbers were similarly onerous for the four other areas:

  • 69% required moderate to substantial change of their ERP solutions for new or changed business processes;
  • 66% for organizational restructuring;
  • 61% for regulatory requirements; and
  • 58% for merger and acquisition activities.

“When we measure overall what the impact of this change is, we’re not talking about minor inconveniences here, we’re talking about significant impact to the bottom line, due to loss of revenue and/or added costs,” Jutras said. “Specifically, these five most common types of business changes average a 13-15% hit to the real numbers organizations are concerned with.  We’re talking about decreases in market stock valuations, missed business opportunities, lost market share, delayed cost reduction plans, decreases in customer satisfaction, non-compliance to new regulations, lower operational efficiency, delayed product launches and even poorer business decisions.”

UNIT4 Agresso’s Vita Architecture Showcased As Alternative

In today’s press conference, Ton Dobbe, VP of Product and Product Marketing for UNIT4, reaffirmed the company’s long-term strategy aimed at a market sector that UNIT4 refers to as Businesses Living IN Change. UNIT4 has more than 6,000 global enterprise solution customers, including the Agresso ERP suite that is underpinned with unique architectural capabilities for “do it yourself” changes.  Its Vita™ architecture separates the data, business process and ultimate delivery output (reports or analysis), allowing a holistic drag-and-drop type change capability that can easily be performed by most business users, and that does not require recoding.

“UNIT4 does not aim its solutions at all markets or verticals,” Dobbe explained, “Our architectural components support a lower cost of change and that is where businesses and organizations will gain the most value from us.  Agresso ERP customers who live in constant change see a rapid return and a much lower total cost of ownership than competitive products.  Our goal with sponsoring this study is to bring to the forefront a buying decision factor that is rarely talked about – since most competitors answer questions regarding change factors in the context of release and enhancement upgrades.   Our aim is to help buyers know which questions to ask, because their ERP purchase decision can have an enormous impact on cost and organizational disruption over both the short and long term.”

About Mint Jutras

Mint Jutras LLC is an independent research and advisory firm that specializes in analyzing the business impact of enterprise applications, with specific emphasis on Enterprise Resource Planning (ERP). Combining deep and broad domain expertise, decades of technology experience and fresh primary research, we offer actionable insights on how to make software investments pay dividends. We deliver this insight through published reports, eBooks, infographics, speaking and consulting.

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Emma Keates

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