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ERP/enterprise solutions investment 'recovering'

A survey by the National Computing Centre’s Evaluation Centre has registered a marked improvement in the development of enterprise software and ERP applications.

In an equivalent survey last year, 24 per cent of companies had put on hold all projects – while this year no company has put all its projects on hold. Furthermore, 20 per cent of companies have increased their investment in applications, compared to just 6 per cent last year, while 27 per cent say there has been little or no effect on their investment.

In order to meet their requirements, many companies have customised their enterprise or ERP software, the survey reveals. The degree of customisation varies greatly, with 13 per cent making ‘very significant’ changes, 34 per cent ‘significant’ modifications and 13 per cent ‘moderate’ changes. In contrast, 28 per cent have made only ‘minor’ changes and 6 per cent none at all.

In addition, there are mixed views on how difficult it is to customise the software to reflect changes in business requirements. A slight majority say that it is either ‘very difficult’ (22 per cent  per cent) or ‘difficult’ (34 per cent) to implement changes. This compares to 25 per cent who say that it is ‘moderately difficult’, while 13 per cent state that it is ‘easy’, and only 3 per cent ‘very easy’.

As the level of spending on enterprise and ERP solutions is relatively high, it is surprising that 66 per cent of organisations do not formally measure their return on investment (ROI) from these solutions. Of the 28 per cent who do measure ROI, 67 per cent use a mixture of financial and qualitative measures compared to 22 per cent who only use financial metrics.

In addition, only 6 per cent of companies say they put in place a range of metrics to measure the ongoing business performance of their enterprise solutions. A further 50 per cent do this on occasions, but 38 per cent do not implement any performance measurement. The key performance criteria used are improvements in customer service (89 per cent), financial metrics (78 per cent), and improvements in internal productivity (61 per cent).

Companies are expecting to continue investing in new enterprise applications over the next 12 months – 50 per cent plan enhancements or upgrades to their existing ERP or standalone systems. New ERP packages are planned by 28 per cent of companies, while 19 per cent are investing in bespoke development and 13 per cent in new standalone packages. A further 16 per cent are buying third-party additions to existing ERP or standalone packages.

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