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Customer satisfaction hit by inflexible business systems

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15th Dec 2009
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Underperforming software is having a damaging effect on the customer satisfaction of mid-to-large sized companies and hitting their share price into the bargain.

Many mid-to-large sized companies have admitted the lack in agility from their enterprise resource planning (ERP) system has left them with a dramatic drop in customer satisfaction of nearly 17%.

That’s the key result from a survey carried out by the IDC Group on behalf of business software developer, Agresso. According to the the final report, “Modifying and Maintaining ERP Systems: The High Cost of Business Disruption”,   the impact from underperforming ERP systems is significant, with a 16.6% decline in customer satisfaction, average stock prices experiencing a 20.9% decline, and a 14.3% revenue loss as a product delays.

Many of the 214 respondents to the survey admit an inability to simply modify their ERP systems affects their businesses by delaying product launches, slowing decision making, and delaying acquisitions.  The lack of agility is estimated to cost respondent businesses between £6 million and £300 million in lost opportunities. “Change to ERP paralyses 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.


“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.”


The survey’s results also claim the pace of the current business environment forces organisations modify its systems. Only 2.8% had not made changes to their ERP systems, whilst  nearly 17% make monthly changes – and 43% making changes “as needed”.

“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.  “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.”


 

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