CNET también está disponible en español.

Ir a español

Don't show this again

Christmas Gift Guide
Tech Industry

Study: Adding ERP gobbles time, money

Setting up enterprise resource planning systems is a task that takes a large bite out of companies' wallets and time, according to a recent survey.

Setting up enterprise resource planning systems is a task that takes a large bite out of companies' wallets and time, according to a recent survey.

A recent study conducted by the Stanford, Connecticut-based Meta Group found that the average time it takes to implement enterprise resource planning applications systems is 23 months. Such projects take anywhere from 18 months, for SSA implementations, to 26 months--the time it takes to install Oracle systems, according to Meta.

The survey, which polls more than 60 organizations that have recently added ERP systems, also said the total cost of ownership (TCO) for the implementation and related work during the following two years ranges from 0.4 percent of the user company's revenues for Lawson implementations, to 1.1 percent for Baan implementations.

However, SAP, which has a reputation for being expensive to install, is actually below the average TCO (as a percentage of corporate revenue) at 0.67 percent, according to the survey.

Meta also reports that it takes 2.5 years from the start of the ERP system's installation to achieve a quantifiable return on investment (ROI). Ninety percent of these quantified benefits are the result of cost reduction, according to the study.

The study indicates it is possible to save money by consolidating all systems in a single ERP system, thus reducing IT costs. However, the greatest rewards are associated with business transformation, the authors of the study stated.

"The report's real value lies in helping clients define the true value proposition of their [enterprise resource planning] implementations," Barry Wilderman, vice president of Meta Group's Application Delivery Strategies service, said.

Overall, ERP applications remain an appropriate choice for enterprises that must integrate key operations, according to Meta.

However, "people need to do a better job of business planning," Wilderman said.