The Top 5 Benefits of ERP Software According to Business Users

April 18, 2011 - PRLog -- UK business technology publication Computing surveyed users of ERP systems to discover how this software has benefited their organisations. The email survey of 150 business decision makers, conducted in association with software vendor Sage, looked at a variety of business functions and asked about the impact of ERP in each.

Most respondents reported that ERP has brought significant advantages in areas such as finance, management information statistics and regulatory compliance, with 70% reporting improved financial reporting, for example. However, the survey also revealed a significant number of organisations without an ERP system or with only partial deployments. Expense remains the main barrier for these firms.

Traditionally most important to the finance function, 70% of respondents stated that their ERP system has enabled better financial reporting, while 52% have realised better cash flow and liquidity, leading – among other things – to a reduction in the age of customer debt. Improved cash management was another benefit.

The survey then turned its attention to the rest of the business. The largest number of respondents (63%) said their ERP means less duplication and time wasting across the board, and 61% reported that cross-departmental processes are now aligned more closely. Over half replied that ERP has had a particularly beneficial effect on IT budgets, with costs such as maintaining multiple software packages and storage of duplicate data being drastically cut.

Looking specifically at management information statistics – the sort of data which helps managers identify performance issues and trends -  three-quarters reported that information is now available across their organisation as a whole rather than being held in discrete departmental silos. This is one of the single biggest benefits of ERP. The efficiencies to be gained from no longer having to consolidate multiple versions of “the truth” into a meaningful format are significant. In addition to this improved availability of information, 51% stated that business analytics had enabled better strategic decision making.

With the compliance landscape becoming harder to navigate in recent years, the survey found that ERP software has helped firms to achieve and maintain compliance with the relevant regulations for 41%; however 58% see a role for ERP in compliance in the near future.

The top five benefits of ERP revealed by the survey are as follows:

1) Information available across organisation as a whole rather than “multiple versions of the truth”
2) Better financial reporting
3) Less duplication and time wasting across the board
4) Better aligned cross-departmental processes
5) Enabling better regulatory compliance

While ERP scored highly in terms of operational efficiency, financial reporting and compliance, budgetary restrictions are leading some to delay deploying the software. Others complained about a lack of flexibility. The belief that ERP software is rigid and difficult to customise is one that endures. ERP deployments of old tended to be huge, enterprise-wide, all-or-nothing affairs. Processes had to change to fit the software.

Possibly as a result of such barriers, only one-third of the respondents described their ERP systems as full end-to-end deployments. The remainder ranged from a financial core module to systems covering some, but not all, departments and functions.

These concerns should be ameliorated by the new generation of ERP software which may be deployed in the cloud or over mobile devices. Certainly if they wish to expand successfully from the enterprise to the mid-market arena, ERP vendors need to focus on cost and flexibility issues.

Download the report here (PDF):
http://www.ithound.com/abstract/erp-building-basics-6626?...

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