20.9% Stock Declines, 16.6% Customer Satisfaction Erosion, 14.3% Revenue declines; "It's Not Unrealistic to Say that the Wrong ERP Choice in a High-Change Industry Spells Disaster"

BOSTON, Dec. 7 /PRNewswire/ - A new technology industry white paper featuring the experiences of 214 executives from mid-sized and large businesses spanning a wide variety of industries report a major failing in the technology infrastructure that companies have often spent millions of dollars to implement. The survey, sponsored by Agresso and conducted by IDC, a global provider of market intelligence and advisory services, found that today's enterprise resource planning (ERP) systems are not providing businesses with the architectural agility necessary to support businesses adequately in today's high-change, global environment. The survey was released December 4 at a technology analyst conference in Boston.

Survey respondents stated that the inability to easily modify their ERP system is disrupting their businesses by delaying product launches, slowing decision making and delaying acquisitions and other activities that ultimately cost them between $10M and $500 million in lost opportunities.

The impact is significant: some 20.9% average decline in stock price, 14.3% revenue losses tied to delayed product launches and 16.6% declines in customer satisfaction. A copy of the survey is now available for download at www.AgressoNA.com/ERPDisruption.

"Change to ERP paralyzes the entire organization in moving forward in other areas that can bring more value," said one survey respondent. Another added, "Capital expenditure priorities are shifted into IT from other high payback projects" just to keep the ERP system in line with business.

According to the survey, today's fast-paced business environment forces organizations to continually accommodate their technology support systems. Only 2.8% had not made changes to their ERP systems, and the ERP modification rate for the remainder is staggering:

    -   43% are continuously making changes "as needed"
    -   16.8% are making changes monthly
    -   14.5% alter their systems daily or weekly
    -   12.2% undertake change annually

Mid-sized businesses are already spending $1.2 million annually to undertake these system changes the additional high costs attached to associated business disruption is significantly impacting bottom-line performance. "It's not unrealistic to say that the wrong ERP choice in a high-change industry spells disaster," said Ton Dobbe, VP of Product Marketing for Unit4Agresso. "Companies operating in industries that are highly regulated, consolidating via M&A activity, frequently replacing leaders or making other important changes, need to adjust their ERP selection criteria appropriately when choosing new systems."

IDC analysts agree. "IDC believes that while business change is an inescapable constant, organizations may lack an understanding of the potential cost and impact of business disruption tied to adjusting their ERP system," states the IDC white paper analysts. "For ERP buyers in high-change environments, this means that 'architectural agility to support ongoing change,' may be the single most important buying criterion to minimize change-related revenue loss, business disruption, stock price declines and the lost business opportunities."

Five Leading Areas of Business Change and ERP Disruption

Survey respondents ranked the most frequent business disruptions resulting from ERP changes made to support five leading areas of business change. Included below are the top three repercussions from business disruption directly attributed to underperforming ERP solutions:

    Regulatory Requirement Changes:
    -   20.9% observed a drop in customer satisfaction
    -   19.7% had a decrease in stock price
    -   17.9% had to pay fines for non-compliance

    Reorganizations/Restructuring Change:
    -   22.6% had a decrease in stock price
    -   17.9% had to pay fines for non-compliance
    -   16.2% missed an opportunity for or had to delay a merger or
        acquisition

    Merger or Acquisition Change:
    -   21.1% had a decrease in stock price
    -   19.6% missed an opportunity for or had to delay a merger or
        acquisition
    -   17.0% said they lost market share

    Financial Management Driven Change:
    -   19.4% had a decrease in stock price
    -   18.9% missed an opportunity for or had to delay a merger or
        acquisition
    -   17.1% had to pay fines for non-compliance

    New or Changed Business Process Change:
    -   21.7% had a decrease in stock price
    -   16.7% had to delay a product launch or increased the time to get it
        to market
    -   15.6% reported a decrease in operational efficiency

About Agresso

Agresso (www.AgressoNA.com) is a $500 million enterprise resource planning (ERP) company, listed in the Netherlands as Unit 4 Agresso (Dutch Stock Exchange EURONEXT-U4AGR) and one of the top five providers of ERP solutions for professional services and public sector organizations. Agresso offers a uniquely integrated data/ process/ delivery architecture designed specifically for Businesses Living IN Change (BLINC)(TM). Agresso is known as "The ERP Market's Definition of Agility" as it allows an unlimited amount of ongoing, post-implementation changes without the typical external IT costs and intervention that nets billions of dollars in revenue to the market leaders. Over 2,900 companies and organizations in 100 countries deploy Agresso Business World for both operational support and strategic management. The company's role-based, Web Services and Services-Oriented Architecture (SOA) enabled solutions include: Financial Management, Human Resources and Payroll, Procurement Management, Project Costing and Billing, Reporting and Analytics, Business Process Automation, Field Services and Asset Maintenance, and CRM.

The names of actual companies or products mentioned herein may be the trademarks of their respective owners. Agresso, Agresso Business World, BLINC, and VITA are registered trademarks of Unit4Agresso.

SOURCE Agresso

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