14 April 2008
Customer complacency around changing ERP vendors is leading to overspending and underperformance for those users that fail to consider alternatives.
According to IDC research commissioned by ERP systems provider Agresso, there are plenty of companies happy to stick with an incumbent supplier — even if that means higher costs and a system that doesn’t deliver what they expected.
The survey showed that 83 per cent of customers were still buying from the same vendor, despite costs going over budget and subsequent flexibility problems. Just shy of half the respondents admitted that the over-run on costs sometimes reached 100 per cent above the planned expenditure.
Agresso managing director John Crooks said changes resulting from bad experiences and greater knowledge of the technology had put customers in the mid-market in a stronger buying position.
He added that despite the need for greater flexibility, particularly in growing with a business, the reasons to sell ERP had remained reasonably constant: "The fundamental benefit [of ERP] should be to deliver information that can be monitored and controlled to reveal how effective the business processes are."
One source said most traditional ERP offerings had "been as flexible as concrete" and the experience of using them had put off some customers. However, there had been growth in vertical-specific products that offered greater freedom.
"Some of the big systems can make it totally inflexible and more specialist products can fit better — there are also hosted alternatives available," he said.
But he warned that a number of customers had had their fingers burnt in old deployments of ERP and resellers would have to be aware of certain levels of cynicism from customers.
