ERP and iPad Part 1: Problems in ERP Industry

The ERP (enterprise application) market for large corporate software, one of the 3 largest sectors of software sales, is in big trouble, and has been for a long time. This isn't news to people in that industry...it is continually discussed. Here's a good summary article in CIO Magazine.

"The survey, based on the ERP experience of 214 business executives across a wide variety of midsize and larger industries, found that today's ERP systems "are not providing businesses with the architectural agility necessary to support businesses adequately in today's high-change, global environment."

That's not too shocking. But what is notable about the results (and what makes them different than your garden-variety ERP study that shows sky-high TCO, or application performance problems, or unfavorable implementation odds), is that this survey actually quantifies ERP system-related failings directly to business disruption—expensive, unpleasant and career-killing business disruption.

"Survey respondents said that the inability to easily modify their ERP system deployments is disrupting their businesses by delaying product launches, slowing decision making and delaying acquisitions and other activities that ultimately cost them between $10 million and $500 million in lost opportunities," according to the survey report. (That's a substantial gulf in "lost opportunities," but we'll chalk that up to the size differences in companies surveyed.)

That related impact is costly: 21 percent of respondents reported declines in stock price; 14 percent suffered revenue losses tied to delayed product launches; and 17 percent encountered declines in customer satisfaction.

A couple of verbatim responses from respondents should make the hairs on the back of your neck stand up: "Capital expenditure priorities are shifted into IT from other high-payback projects" just to perform necessary ERP changes, noted one respondent. Said another: "Change to ERP paralyzes the entire organization in moving forward in other areas that can bring more value."

How can the iPad and iPhone help fix this ERP industry problem? That's the question that our group has been studying and will discuss more in future posts.