Global Recession is Forcing Change in ERP Buying Habits
Services Companies Moving Away from Entrenched ‘Big ERP’ in Favor of Faster ROI
Agresso has reported a change in ERP (Enterprise Resource Planning) buying habits for the first time in 15 years as companies look for a faster ROI in the face of a global recession.
Agresso recently reported strong third quarter global results with a 37% increase in revenues (28.8 % in North America) including many significant new orders of $1+ million deals; this compares to leading market rivals like SAP who announced an unimpressive 9% year-over-year decline in new license revenues over the same period.
“ERP buying habits are changing,” says Shelley Zapp, president of Agresso North America. “The downward trend we see in SAP licensing revenues suggests that organizations are unwilling to invest in a solution that hooks them into a never-ending cycle of need-spend-need-spend. With a recession landing, unnecessary IT spending (totaling billions of dollars annually*) is no longer an option. This is especially true for organizations in the people centric or services sector, where change is frequent and inevitable.”
“Today’s rigid, hard to change ERP systems leaders can’t measure up.” reports Plant-Wide Research Group, Inc. A new survey of nearly 900 users by Technology Evaluation Centers (TEC), aimed at determining the impact of ERP solutions on an organization’s perceived ability to make changes, reports that 70 percent of ERP users feel notably disadvantaged by their existing systems.
According to another survey, conducted by the Business Performance Management Institute, only 11.2 percent of respondents could keep up with business demands to change processes. “With most ERP software, it would be impossible for the business users to respond to industry, regulatory or other change without IT support,” states Plant-Wide Research Group, Inc. “This is not the case with Agresso software solutions … .”
“We’ve been selling to businesses that were spending huge amounts of their annual IT budgets on expensive consultants just keeping their ‘Big ERP’ systems current,” Zapp notes. “Difficult economic times are forcing them to look at the value in this and to consider other, better value options as they look to controlling and minimizing costs. With Agresso, organizations enjoy postimplementation agility; business users are able to change and update their system themselves, long after their implementation phase is complete.”
Earlier this year, the Technology Evaluation Center (TEC) prepared a report detailing the ability of different ERP vendors to manage a comprehensive list of business change scenarios. An analysis of these results shows the overwhelming advantage Agresso offers to companies facing change. “Agresso users can expedite required changes to their ERP solution to support over 95% of the change areas studied. SAP and Oracle systems require application development conducted by external IT consultants to support more than 95 per cent of these changes.”
As an uncertain economy continues to pressure organizations to scrutinize their expenses, the Agresso promise of low total cost of ownership, ease of agility post implementation, and superior ROI is going to resonate more and more.
The survey is available to download at: http://www.agresso.com/files/TEC_market_comparison_2008.pdf
*Technology Evaluation Centers “ongoing change to rigid ERP solutions amounts to billions of dollars spent annually.”
Source: Agresso