Technology

Special Report: ERP’s Second Act

A new generation of enterprise resource planning systems is reducing the total cost of ownership, but can these products deliver on their promises?
Vincent RyanFebruary 4, 2016
Special Report: ERP’s Second Act

ERP is bringing standardization, innovation, and efficiency to many businesses. But for some companies implementing it has remained an expensive, frustrating exercise. Studies by Panorama Consulting show many ERP installations still go overtime and over-budget, and fail to bring the benefits the vendor promised.

Fortunately, however, two changes in the ERP market may wind up rewriting this familiar narrative about ERP adoption. One, many more vendors offer ERP systems today compared with 20 years ago, driving down costs and offering more flexible alternatives to the one-gulp, gargantuan installation. Second, more ERP vendors are packaging their software on cloud platforms, lowering the implementation price-tag and accelerating time-to-payback for companies of many sizes.

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ERP robotTwenty percent of organizations’ ERP systems are in the cloud now, and that number will grow significantly over the next five years, according to Panorama. Of course, as ERP systems move to the cloud they bring with them some baggage. For example, as two contributors to this special report note, ERP software still isn’t very adept at allowing for smooth adoption of new accounting methods.

The other stories in this special report, kicking off with “Trend Spotting: ERP in 2016,” dig deep into the good and the bad of ERP systems, from their ability to speed M&A value creation to their penchant for disenchanting employees at many levels of an organization. How you implement and integrate an ERP system, it turns out, is just as important as which system you buy.

Have ERP systems redeemed themselves? Not entirely. ERP software is still a smart investment for most companies, but a daunting one.

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