ERP Users Demanding More Single Source Solutions

by Cindy Jutras

Adoption Rates of Extensions to ERP at 6% to 35% Indicate Significant Growth Opportunities

A recent report conducted by the Aberdeen Group concludes that ERP users are demanding more from their ERP solution providers. While 63% to 90% of extensions such as supply chain management (SCM), CRM, SRM, and EDM/PDM/PLM are purchased from ERP vendors, relatively low adoption rates not only signal significant growth opportunities for ERP vendors but also opportunities for end users to drive the use of ERP and surrounding applications deeper and broader across the enterprise.

The tradeoff between functionality and ease of integration is no longer as simple as it once was. Over the generations, ERP has continued to expand, blurring the boundaries of core functionality. The number of modules and the extent of functionality offered in the ERP suite have steadily grown. At the same time, consolidation within the software industry is having a broad effect beyond ERP itself. ERP companies like Infor, Oracle, Sage, and SAP have been gobbling up pure play vendors that offer extensions to core ERP. This is profoundly affecting the application vendor landscape and how ERP versus "best of breed" decisions are made.

A new Aberdeen report, "Best Practices in Extending ERP," further explores the dimensions of these decisions.

"The three most important factors to consider in extending ERP are functionality, integration, and the ability to upgrade to new releases," said Cindy Jutras, Vice President, Manufacturing and ERP Research. "While business functionality is of primary importance, also evaluate technology architectures, integration capabilities, delivery models, partner status, support approaches, and ownership and maintenance of customized integration."

More than 1,200 companies participated in the original study, including Kraft Foods, Johnson Controls, Schlumberger, Tyco Electronics, Sonoco Products, Ford, and Lockheed Martin.

To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?cid=3686