Ready to Spend?

70 percent of companies in iSource Business survey planning ERP-related purchase within 12 months

Mesa, AZ  May 9, 2003  Nearly 70 percent of companies in a recent survey of iSource Business readers reported that they plan to make enterprise resource planning (ERP)-related purchases within the next 12 months, and almost one-third of the respondents said their budget exceeds $1 million.

The online survey of 108 readers revealed that more companies are viewing their ERP purchases as strategic investments that will deliver long-term results than are expecting immediate impact from their ERP investments.

The results showed that 84 percent of companies view their ERP-related investments as important or critical to reducing their costs in the long-term. In addition, 81 percent said these initiatives were important or critical to increasing their companies' competitiveness. That compares to 65 percent that view the systems as important or critical to making short-term cost reductions, and 63 percent that took the same view of leveraging their new systems to grow their market share.

With about half the survey participants reporting that their companies have revenues in excess of $100 million, nearly 60 percent of the respondents said they currently have budgets for ERP-related purchases, and 30 percent put their budgets for these investments at over $1 million.

About 18 percent of the respondents said they planned to make their ERP-related purchases within the next three months, and an additional 17 percent said that they would be buying ERP-related solutions within three to six months. Some 35 percent put their buying timeframe at six to 12 months.

What's holding up ERP-related solution purchases at the moment? Budgetary constraints were a major obstacle for nearly a third (32 percent) of respondents, while 30 percent cited the current economic and geopolitical environment as a major obstacle.

However, just 8 percent cited IT staff reductions as a major obstacle, and only 9 percent felt the same way about supply chain staff reductions. On the other hand, fully 50 percent of survey participants said that lack of upper management support was somewhat of an obstacle or a major obstacle.

In terms of what they were looking for in an ERP-related solution, 90 percent of survey participants said that ease-of-use was an important or critical factor in their decision-making process, and 85 percent rated easy adaptability as vital. Revealingly, 44 percent of the respondents said that the ability to offer a comprehensive, end-to-end solution would be a critical factor in their buying decision, and an additional 39 percent said that this would be an important factor.

Return on investment also loomed large in readers' expectations, with 81 percent saying that they wanted to see provable supply and demand chain efficiencies from solution providers, and 80 percent looking for a solid ROI.

Perhaps not surprisingly, given the current economic environment, fully 97 percent of respondents said that financial stability would factor in their choice of solution provider.

As to the degree of influence that different functions within the enterprise have on the ultimate selection of a solution provider, corporate management figured prominently, with 89 percent of respondents saying that their top executives would have an important or critical say in the decision-making process.

Interestingly, while 62 percent of the survey participants said that financial management would play a critical role in the decision, and 55 percent said that the information technology (IT) department would have a critical say, just 42 percent said that procurement, logistics and operations management would be critical to the decision-making process, suggesting that the people within the enterprise who actually use the solutions on a day-to-day basis have less a say in which applications the company buys than the people who have to sign the checks.

iSource Business conducted its online survey in April, with 108 readers participating by answering a series of questions through a Web form.