ERP is a disaster

Previously everyone thought that ERP software had been packed up in a box and shoved in a dark corner somewhere. Analysts say it consumes roughly one quarter of the average enterprise software budget. Yet hardly anyone talks about ERP anymore -- not since the big bang of the '90s, when most large enterprises spent many millions of dollars to roll out sprawling, complex ERP systems, in part to modernize for Y2K.

But, things are changed a lot now. Recently, AMR Research released ERP Application Spending Report, 2003-2004; it predicts that the number of enterprise managers planning to upgrade or buy new ERP licenses will increase slightly in 2004, the first such rise in three years. These numbers apply to ERP vendors' home turf of core financials, order entry, logistics, manufacturing, human resources, and purchasing, but not to CRM, business intelligence, or other ancillary modules. At the same time, to modernize their products, top ERP vendors now incorporate XML, Web services, and Java to foster easier customization and improve integration with the rest of the enterprise.

Current survey result shows customers who aren't exactly thrilled with their ERP systems but who show little inclination to replace them. And most surprising: Companies are exploiting Web services to expand the reach of ERP in their organizations.

During the Internet boom, ERP got no respect. Compared with sleek Web apps, ERP programs seemed inflexible, overpriced, and mired in client-server deployment hell. To top it off, elaborate modifications wrought by big consultancies often incurred charges even greater than the multimillion-dollar ERP licensing fees.

But now that the dust has settled -- and ERP systems have largely migrated from client/server to Web-based technologies -- satisfaction with ERP among InfoWorld readers stacks up pretty well. Sixty-five percent of respondents to the 2004 InfoWorld ERP Survey say they would be likely to choose the same vendor, while a mere 6 percent complain they're not at all satisfied (29 percent are neutral).

Meanwhile, in the real world, Vendors had chosen to supply their ERP software as Oracle, PeopleSoft, and SAP etc. Applications from SAP earned the most "functions well" ratings in all but the human resources category. A whopping 69 percent of survey respondents think SAP's core financials function well, awarding it nearly 20% more than nearest competitor Oracle. SAP's manufacturing application also enjoys a similar lead.

It has been observed that one of the good things about implementing an ERP system is the opportunity for enterprises to rethink and rationalize business processes across the organization.