ERP system vendors need better account management

Manufacturing business IT users say packaged ERP (enterprise resource planning) systems are still falling short of their requirements. Despite improvements in integrated ERP offerings since 1999, users remain unhappy particularly with ease of upgrade, general e-business and ‘collaborative commerce’ functionality and – the bottom line – business benefits. These are key findings of a survey of 500 end users by market researcher Benchmark, completed in April this year. The research suggests that the answer is largely, although not entirely, in ERP companies’ own hands: most important, it reveals weakness in account management and consequent failure to ensure adequate user education and training. Both of these can be blamed in large measure for failures to realise agreed project justification goals and business expectations where they occur. And both are exacerbated, says the report, by ‘challenges’ in implementation time scales, methodologies and ultimately cost – leading to too many installations still not being achieved on time, on budget, and thus to the kinds of training, people and business culture problems that necessitate excellence in account management. Benchmark classifies users according to three categories of ERP package users: SMEs running systems from the likes of Exel, Infor:Swan, K3 and Sage; mid-market users on Baan, Epicor, Geac and so on; and large corporates with systems from JD Edwards, Oracle, SAP, etc. It also examines system effectiveness in four key areas: implementation, software capability, customer support and business benefits – further checking for users’ eventual loyalty to existing suppliers. In all cases, larger companies and users of heavily modified systems were least satisfied. Although broadly content with implementation, software functionality and support levels, they were less impressed with business benefits. They were, however, more positive about ERP systems’ impact on improving basic management control, reducing stock and improving delivery schedules. SME users were more positive about their systems in terms of aspects like ERP implementation, ERP vendor and consulting services ratings and indeed their ultimate business benefits. Core ERP elements, like stock control, financials and scheduling, they say are largely delivering functionality that users want, and they’re also happy with the stability and scalability of their installed systems. Benchmark finds users “reasonably loyal to their existing ERP suppliers,” although levels of commitment were “not as strong as in other markets”. Perversely, larger users are less likely to change supplier than their more content SME peers – although Benchmark suggests their ‘loyalty’ is due primarily to “lock-in”. All manufacturers using ‘off the shelf’ packaged ERP solutions are significantly happier than those using modified systems. Benchmark confirms received wisdom – companies are invariably far better off using vanilla standard solutions and adapting business practices and operational procedures to them, than customising packages to existing business processes, no matter how complex or specific. On account management and training, Benchmark suggests ERP vendors look to their professional services organisations to deliver more and better. Managing director Guy Washer observes: “Trainers from ERP vendors tend, by definition, to be IT specialists and can fail to address business-related issues.” He believes this is also the reason for ERP vendors’ poor record of proactive account management. “Too many ERP vendors fail to understand the new working practices and procedures companies are seeking to introduce, and the impact these will have on the ERP system. Good proactive account management by the ERP vendor would ensure they were in touch – and this might well help improve satisfaction levels.” Benchmark also has a message for end users though – too many look to save money by not investing in recommended training to achieve maximum benefits. The full report, which provides detailed and direct comparisons between vendors, as seen through the eyes of companies implementing their systems, is available to end users from Benchmark Rersearch.