How Does Your ERP System Architecture Address Change?

In today’s competitive market, businesses are living in a constant state of change—especially in the services sector, which has to contend with a more fluid “people resource” factor. Yet most installed ERP solutions are falling short. Why are nearly half of all businesses essentially blowing their annual ERP budgets to support change? And what are software vendors doing about it? Find out now, in TEC’s 2008 Market Comparison Report.

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An Examination of Leading Change Management Strategies

In today’s competitive market, businesses are living in a constant state of change. This is especially true in the services sector because of the more fluid “people resource” (versus supply chain commodity) factor, which brings an additional layer of change dynamics to business operations. Whether because of downsizing or expansion, mergers or acquisitions, changing business processes or stringent government and industry compliance regulations, today’s businesses must quickly and cost-effectively react to business change to stay competitive.

Yet most ERP solutions currently installed are falling short. A February 2008 IDC survey of 250 US and UK companies entitled Mid-Market Service Companies’ Enterprise Investment Strategies and Adoption Trends reports that 47 percent of enterprise resource planning (ERP) software users say that their financial applications costs exceeded their planned budgets as much as 100 percent.

How is it that nearly half of all businesses are essentially blowing their ERP budgets each year to support change? How are the software vendors supporting recurring change—be it broad and sweeping, as in the case of changes in US Sarbanes-Oxley (SOX) requirements, or more personalized, like supporting new CEO-mandated business processes and best practices? The question is this: what are software vendors doing right and wrong in facilitating post-implementation change?


Change Management from the User’s Perspective—Services Sector

Organizations comprising the bulk of the activity within the services sector (technology services, management consultants, architecture/engineering/construction firms, financial services, nonprofit organizations, and government services) are subject to high degrees of volatility in their day-to-day business environments.

The majority of IT professionals surveyed in this report said that the ability to easily, quickly, and costeffectively manage ongoing change was their single overriding concern. Specifically, they referenced the following factors:

  • Changes based on new government regulations. In the financial area, they referenced International Financial Reporting Standards (IFRS) and SOX, as well as emerging environmental rules and guidelines.
  • Changes affecting the structure of their charts of accounts (to accommodate new lines of businesses, for example, or for future reporting requirements).
  • Changes tied to analytics or historical projected data.
  • Changes associated with segmented and global account structures that require compiling multiple currencies, varied tax accounting, and even multilingual needs, into one format for final statutory purposes.
The purpose of this report is to convey how adaptable various ERP system vendors are in addressing change. We considered organizations operating in the service industry and that chose to harmonize to a single system. This report examines three leading vendors in the field: Agresso, Oracle, and SAP.

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