IT Organizations Ready to Spend on ERP Again

Ann All
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12 Tips for a Successful ERP Launch

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I found it interesting to see ERP listed as one of three top technologies being implemented by respondents to a recent CIO Magazine poll. Forty-five percent of respondents mentioned ERP, up from 39 percent in 2010. The other two technologies were mobile/wireless, which was named by 58 percent of respondents, up from 48 percent, and server virtualization, which rose to 56 percent from 42 percent last year.


Server virtualization has been a popular IT project for several years now, thanks to a pretty compelling ROI, and mobile has been coming on strong, with both Gartner and Forrester designating it as a top driver of IT spending in recent months.


But ERP? It's a technology that many organizations have traditionally approached with trepidation, thanks to its reputation for runaway costs. I'd argue it's become more trendy to put off ERP projects than to undertake new ones in recent years.


But that appears to be changing. Sales of ERP software had dropped, especially for companies like SAP and Oracle, Deloitte Consulting's Bill Allison told me when I interviewed him a few weeks ago. But now a growing number of organizations appear ready to tackle ERP projects again, largely because an improving economy once again has them thinking about growing revenue and not just cutting costs.


Thanks to improvements in technology, "the boundaries of ERP are expanding," Allison said, with organizations moving beyond plain vanilla functionality and adding features such as mobility to their initial project scopes.


Organizations are also looking to derive more value from their implementations by moving to common ERP platforms, according to recent Hackett Group research that found this was a priority for 78 percent of IT organizations, a 36 percent increase from last year.


Increasingly global business models are behind the push to standardize technology, especially in core applications like ERP, Hackett's Global IT Advisory Practice Leader Rich Pople told me when I interviewed him last month. He said:

... What we're seeing is a need to be able to tap into the broader world market in a way organizations haven't been focused in the past. Multinational organizations have been international, not global. Now the business is becoming global, and therefore the technology to support it is becoming global as well. This is driving a renewed emphasis on standards and capabilities. That's what is going to drive the mobilization of technology assets, and more importantly, the mobilization of information assets, to support those global business models.

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