Each year, the researchers at Aberdeen Group survey hundreds of small to midsize enterprises to determine what they’re doing in the way of business management software deployment – the nerve center of today’s business. Their researchers look at what is being deployed… how successfully it’s being done… and the impact on business.
The goal is to find those characteristics and those practices that lead to an organization being deemed among the “best in its class.” In our prior post, we looked at some of the key conclusions of the 2011 study, conducted over the summer. In this post we’ll look at some of the business drivers of those firms, and how those impacted their ERP (Enterprise Resource Program) software initiatives.
As we noted previously, just over three out of every four SMEs (small to midsize enterprises) utilize ERP software today. So the first conclusions to draw are pretty straightforward:
1.) If you’re a company with above $5 to $10 Million in revenues (our revenue estimate, not theirs, and based upon extensive deployment experience) and you’re not using an enterprise management software package – at least basic accounting and manufacturing or distribution capabilities – you are very much in the minority.
2.) If you are using software to manage your business, are you getting the most bang for your buck? Are utilizing at least most of its major functionality? Are you using it to gain competitive advantage… to place yourself in the real of “best in class.”
Some of the observations that follow may help…
Top Business Drivers
According to the survey, there are three key drivers that impact ERP strategies:
1. The need to manage growth expectations (cited by 40%)
2. The need to reduce costs (34%)
3. The need to be easier to do business with (32%)
Two others that rated important, but not as much as those listed above were:
4. Interoperability across multiple locations
5. Improving customer response times
In order to grow, a company must compete effectively and establish itself as an industry leader in its chosen markets. Companies do this by improving their standing among their customers – thus, the importance of being easier to do business with and improving response times. An ERP system “can have a huge effect on the way that SMEs are able to service their customers,” noted Aberdeen. And it goes without saying that doing so while reducing costs internally is among the surest ways to get to the top of the class, and help stay there.
It stands to reason then that among the companies benchmarked as “best in class” over three-fourths reported better than average customer service.
We’ll talk briefly in the next post about how ERP helps you get there.