Report on Manufacturing and ERP: Part Two


Report on Manufacturing and ERP: Part Two
Category: ERP; Manufacturing

In our first post on manufacturing and enterprise resource planning (ERP), we covered the key findings presented by Kevin Prouty, senior vice president, research, at Boston, Massachusetts-based industry analyst Aberdeen Group, based on an Aberdeen survey of manufacturers. He reviewed key findings, figures showing how best-in-class manufacturers get more from ERP than average manufacturers, and how those using mobile ERP are getting better performance from their enterprise systems than those not using mobile capabilities. Today we conclude with what Prouty reports about manufacturers upgrading their ERP systems, as well as their use of cloud-based technology.

Results show that best-in-class manufacturers are much more likely to stay current with their ERP than average and laggard competitors:


Pouty cited four reasons that drive replacing ERP systems:
•    Lack of support from ERP vendor (55 percent)
•    Inability to tailor ERP to integrate changes to the business (42 percent)
•    Lack of qualified resources to maintain and support current system (29 percent)
•    Obsolete technology foundation or infrastructure of current ERP (24 percent)

Those who were reluctant to upgrade cited three reasons:
•    Current release satisfies needs (45 percent)
•    Lack of new features to build a solid business case (38 percent)
•    Fear of disruption to the business (37 percent)
With the rise of cloud-based ERP usage, manufacturers were asked why they would choose a cloud-based system. Sixty-two percent indicated lower cost of ownership, 46 percent cited the ability to scale the solution, 39 percent indicated reducing the cost and effort of upgrades, and 38 percent cited configuration flexibility. Other factors noted included ease of use and seeking the best fit.

Leaders found it important that cloud-based ERP fits into a multi-tiered strategy; they were more than twice as likely to have implemented a multi-tiered ERP strategy featuring corporate standards along with second-tier ERP to support local business models.

The benefits of cloud-based ERP in terms of performance metrics were considerable:


Prouty concluded his presentation with five points and recommendations, based on the performance of industry leaders:

•    Use as much of an ERP system as you can.
•    ERPs don’t fail, organizations do.
•    Extend ERP beyond the box it came in.
•    Look at all implementation options.
•    Strive to continuously improve.

The one thing not to do to keep competitive: nothing.
Posted by Manufacturing Insights Team


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