Integration still major barrier: many must start ERP again

Most SME manufacturers still do not have anything like adequately integrated enterprise software that could allow them to become as agile as they believe they must. Further, in attempting to get there, many are going to have to relinquish their legacy systems, and start again with modern ERP. These are among key findings of research released last month by Microsoft Business Solutions (MBS), the business applications arm of the giant Microsoft. It’s a curious measure, but the firm says that only 40% of manufacturing companies have greater than 70% of their software covering more than one business process – although 98% believe it’s important to have combinations of business processes under one suite. Just 17% of manufacturers describe their software as 90—99% integrated. Drawbacks of non-integration in rank order, according to the survey are: slower access to information (49%); restricted flow of business information (46%); IT maintenance issues (39%); lack of real time information (38%); and software integration issues (33%). Clyde Bennett, manufacturing specialist at MBS, says: “The research indicates that a significant number of manufacturers can still make considerable improvements. The near 20% of manufacturers achieving near total integration should serve as an example of what can be achieved.” And he continues: “In an increasingly competitive market, it stands to reason that those companies liberating the benefits from joined-up software will have the advantage.” Simon Edwards, MBS managing director, adds: “There’s a mountain for us to go for. And maybe there’s a message for us all here – manufacturers need to focus back on the fundamentals before they start going for external goals’ like integrating their supply chains.” Commenting on the research, Dennis Keeling chief executive, BASDA (The Business Application Software Developers Association) comments: “Manufacturing systems have typically been stand-alone. Manufacturers are now seeing the need to have their customer- and personnel-facing systems integrated.” But he adds starkly: “Retrofitting to legacy systems is not easy. The answer is to replace them with a modern enterprise-wide integrated system.” As for additional ERP modules in companies that do have modern systems, MBS finds HR (88%), CRM (customer relationship management, at 87%) and warehousing/logistics modules (80%) the most wanted additions among IT directors planning ERP add-ons in the next 12 months. However, to put that in context, it also finds 52% of manufacturers are not planning any module additions. As for the modules that modern users want to integrate, supply chain management systems and multi-currency modules top that list. Bennett says he’s not surprised by the attention to CRM: “An increasing number of companies are recognising not just the need to become, or return to, a more customer-centric business strategy. They are beginning to see the benefits that a proper CRM system can bring.” Although he accepts that there could be issues around the ‘follow the pack’ mentality, and that aspects of CRM already in their ERP systems might be all they turn out to need. Interestingly, whatever manufacturers do buy, they’re choices are becoming more sophisticated – and apparently now recognise some givens. The research confirms that today’s buyers look to suitability of the software first, with cost (57%), ease of use (37%), and even ability to integrate (35%) and reliability (33%) further down the priority ranking. Only 17% listed implementation time as a key criterion.