It’s Not Always Sunny in ERP Land

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ERP Land- Enterprise resource planning (ERP) systems remain central to company operations. The expansive application suites are heavily relied upon to automate the core business processes that businesses rely on. However, they’re notoriously difficult to implement, and they do not always do what they’re supposed to. And according to a recent survey, they’re often lousy when it comes to providing a return on investment.

For its Technology Trends 2021 study, Computer Economics polled nearly 200 IT professionals to gauge what types of technologies they’re using, and whether they’re getting a good ROI out of them. When the results were tallied, ERP came in dead last out of 15 technologies.

AI, mobile applications, e-commerce, and software-defined wide area networks (SD-WAN) were among the top achievers when it came to low-risk and high-reward, while technologies like RFID, virtual/augmented reality, data analytics, and human capital management (HCM) occupied the middle of the chart.

But ERP was all alone at the bottom of the heap, with the highest risk and the lowest reward, just as it was back in 2019. In fact, ERP delivered the highest risk possible, with the lowest reward possible. Nothing else was even close.

“Relatively speaking, ERP is worst in terms of both risk and reward,” the company says. “This is not to say that no companies see a positive return on investment or find a way to come in under budget with ERP. It is just that, among all the technologies, this happens the least often with ERP.”

Computer Economics Technology Trends 2021 study.

This was the second straight year that ERP came in dead last in the analysis by Computer Economics, which is conducted by a Los Angeles-based management consulting firm called Avasant. The rub, of course, is that nearly every company of any size needs an ERP system, running either on premise or, increasingly, in the cloud.

“ERP systems touch nearly every part of the business, so implementation is complex and requires buy-in throughout the organization,” Tom Dunlap, the director of research for Computer Economics, said in a press release. “ERP implementations often lead to cost overruns and dissatisfaction. But the alternative (no ERP or an aging legacy product) can be even more costly to a company.”

This may not be the case forever. While no technologies have emerged that can replace ERP systems at the heart of businesses, the nature of ERP deployments is slowly changing, as more ERP deployments occur in the cloud.

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