by Thomas Wailgum

Why ERP Is Underused: Companies Are ‘Oversoftwared’

May 18, 20093 mins
Enterprise Applications

No one knows for sure when the slang expression “TMI”—for “too much information”—began, but Wikipedia sums up the catchphrase best: an expression indicating that someone has divulged too much personal information and made the listener uncomfortable.

Right now, companies are experiencing something similar, but having to do with enterprise software. I call it “TMS”—too much software—and it is making companies and their users, CEOs and CFOs, and CIOs and IT pros very uncomfortable.

Nowhere is the TMS phenomenon more apparent, more pervasive and more harmful than inside 21st century enterprise software suites—the jumble of ERP, CRM, supply chain and BI applications spread all over the globe.

A recent Accenture survey of 300 senior IT professionals at the largest 2,000 companies in North American and United Kingdom (150 from each region) found that organizations use only 64 percent of their enterprise systems’ core functions.

Nearly half of the respondents said that they don’t need all the capabilities of their expensive enterprise systems. Also, according to the results, a fifth of respondents explained that they didn’t make use of all the functionality due to lack of time to learn how to apply the features.

As to integrating their company’s core systems with their customers’ systems, only 19 percent of respondents say that they have accomplished that critical task. (Though, when separated, the data showed that more North American respondents—23 percent—reported being fully integrated with customers than those from the U.K., at just 15 percent.)

Last week, I spoke with Seth Ravin, the CEO of third-party ERP maintenance provider Rimini Street, and he talked about the “oversoftware” phenomenon and how that is driving Oracle and SAP ERP customers to use his low-cost service.

SAP and Oracle “customers have more software already than they know what to do with—they’re oversoftwared—and they’re not looking to buy a lot of new stuff,” Ravin said. “And that’s a real problem if you’re in the software business.” (To read the Q&A, see “Rimini Street Keeps Cashing in on Half-Off Oracle and SAP Maintenance Fees.”)

Many Accenture survey respondents still have a “traditional perspective of ERP,” notes the survey report, and “continue to view such systems as monolithic and inflexible.”

Monolithic and inflexible? Hmmm. Those probably aren’t the two words you want used to describe your company’s core software packages.

Not if you’re an IT exec hoping to have a job next year.

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