Half of organisations willing to be led into the first circle of hell, or what Dante might call upgrading an ERP system
- Reference: 1585728906
- News link: https://www.theregister.co.uk/2020/04/01/half_of_orgs_looking_to_upgrade_erp/
- Source link:
It's a momentous move given the long legacy of [1]failed ERP projects . Just ask aerospace giant BAE, which delivered an [2]Infor ERP system project for its Air sector division four years later than originally planned.
But it seems current systems and architecture are too slow: Across Europe, the Middle East and Africa, 42 per cent of businesses say their mish-mash of legacy ERP and other apps (hybrid IT) is slowing their ability to keep up with needs, according to enterprise architects responding to the survey by market researchers at Coleman Parkes.
In the UK, only 45 per cent of businesses feel they are able to keep applications up to speed with demand; 27 per cent are figuring out how to catch up; and 8 per cent feel they are lagging behind.
But, regardless of how daunting it can be, upgrading ERP is seen as the answer. In moving to the next version or a new ERP supplier, 52 per cent of organisations said they can improve customer experience, 47 per cent said they can integrate their applications, and 40 per cent reckoned they can "achieve IT agility".
When asked how they intend to meet these goals, 79 per cent said by migrating infrastructure to the cloud while 76 per cent said by standardising and consolidating applications.
Hey, £18bn-revenue defence megacorps screw up ERP overhauls too: BAE took a £36m hit for delayed rollout [3]READ MORE
But those wanting to update ERP are hitting barriers too. The survey, sponsored by Dell's cloud integration arm Boomi, found that 42 per cent of UK businesses struggle to convince leadership that modernising these systems is paramount, while lack of proper governance is a roadblock for 56 per cent.
There is hope. The majority of organisations reckoned they have broken the cycle of maintenance that was seen as strangling ambitions to do more than just keep the lights on. Spending here has fallen from around 70 per cent of the IT budget to just 35 per cent, allowing money to be diverted into modernisation (33 per cent) and innovation (32 per cent).
The idea is that this will free up time and money to move to the cloud: 56 per cent of EMEA organisations believed that all ERP deployments will be in the cloud by 2021. This is, after all, a poll paid for by Boomi.
We've heard a lot about moving business applications to the cloud, but they have stayed stubbornly on-prem. In 2016, US IT industry group CompTIA found that only 26 per cent of firms use cloud computing to support core business applications such as ERP. And IDC said last year that 70 per cent of workloads will still remain on-premises until 2023. ®
[1] https://www.theregister.co.uk/2019/12/12/erp_disaster_zone_the_mostly_costly_failures_of_the_past_decade/
[2] https://www.theregister.co.uk/2020/02/26/bae_135m_erp_project/
[3] https://www.theregister.co.uk/2020/02/26/bae_135m_erp_project/
Re: "79 per cent said by migrating infrastructure to the cloud"
Hi Pascal - first again? Don't you have a job to do (says he commenting just 20-odd minutes later) :-)
> What does "standardising and consolidating applications" mean, exactly ?
If it's anything like my clients its where a company with 5 main business divisions has 4 different CRM packages (and two of those were within one division!) decides that "something must be done".
Yup, I've got a job : stay at home, like 70 million of my countrymen and countless million more across the world.
So I occupy myself by reading the hallowed pages of Vulture Central and, because I'm insufferable like that, I sometimes post my opinions.
Just like everyone else here, I guess.
Re: "79 per cent said by migrating infrastructure to the cloud"
It's very much the outcome you'd expect when a cloud vendor surveys somebody whose job may well depend on persuading the board to spend more money on that job.
Move ERP to the cloud
and then shut your eyes and entrust your entire business model to them. You will be subscribed at a level that will ensure you can never explore alternatives, you will be forced to change your business for every quarterly "evergreen update & feature release". You will not be able to extract and port data to your other solutions, particularly if they are in different clouds, and you wont be able to customise anything even if that's your business USP.
When upgrading or replacing ERP systems infrastructure is unlikely to be your key issue, hence moving to the cloud wont fix that.. You are generally forced to change how your Backoffice business works which is where the fun starts. Complex webs of processes, exec power struggles, lack of users that actually know their bit of business rather than what screen they use.. That's the problem, and also often the cause of lack of maintenance... Everyone uses the system, so its not mine - and if it is mine, then i'm not allowed to deal with it because it requires changing everyone else...
Re: Move ERP to the cloud
That is actually a brilliant summary of the true issues. The next time I have a discussion with an ERP vendor, I'm going to quote you.
This round is on me.
Upgrading your ERP System? Now?
or within one year must be mad. Who knows where the business area will be like in 2021 or even 2022? Will your company still be alive? Wasting funds on anything other than survival at the present (unless it is allocated and ringfenced and/or needed by impending regulation) is bonkers.
Protecting your cashflow is or should be the number one concern of all top management unless you happen to be a Premiership Footballer when your agent will point to the relevant sections of his players contract and say 'up yours. Pay what it says in the contract or my player is off to pastures new (or words to that effect)
Upgrading any ERP system is iffy at the best of times. To do it now could be considered just pouring large amounts of dosh straight down the nearest drain.
Re: Upgrading your ERP System? Now?
I would guess this survey was done well before the pandemic hit. So think of these numbers as pre-Covid. Plus it comes from a cloudy software provider, so yeah naturally salt should be applied...
See icon description
"How's the cloud integration business going?"
"Um.Bit of a problem. Everything's on hold due to this coronavirus"
"So how's the revenue looking?"
"Pretty bad. Brakes on spending. Delays in payment."
"What we need then is.."
"A survey! Just need to convince the top management that lots of money to be made next year."
"Boom!"
Ahem...
"... and 40 per cent reckoned they can "achieve IT agility".
Is that the "Bend over, here comes the shafting from the budget committee" type of IT agility?
Re: Ahem...
A survey of more than 80,000 organisations has found that 53 per cent are looking to upgrade early retirement pay (ERP) systems.
"79 per cent said by migrating infrastructure to the cloud"
I've got the feeling that there's a good share of those who think "moving to the cloud" is going to solve all their problems.
If your only solution for IT is The Cloud (TM), you're in for a big disappointment.
Oh, and " 76 per cent said by standardising and consolidating applications " ? Methinks there's some overlap there. As well as some bullshit bingo. What does "standardising and consolidating applications" mean, exactly ? Getting your accounting, HR and CRM from the same vendor ? That might not be such a good idea. Maybe your vendor's accounting package is a pile of crap compared to another one. And how do you standardize an accounting package with a production management package ?
All that boardroom lingo is just code for "we're going to throw money at new versions until the problems stop". Cue the anguish when they've solved all their old problems and find themselves with a bunch of new ones.