Trends in the use of ERP in Europe

It has been estimated that annual spend on maintenance and process customisation in the ERP and CRM market represents around 20% to 33% of the overall market spend – indicating an annual spend on maintenance and process customisation of between £1.75 and £2.75bn.

Today, however, ERP systems face serious problems.  Many companies are abandoning traditional ERP systems and are looking for more effective options to meet their business requirements – including software-as-a-service and hosted solutions.

According to Upside Research Inc., almost all enterprise organisations have made significant investments in ERP, CRM, and other packaged applications. Yet in many cases, business drivers are requiring an ever-increasing stream of process changes and additional functionality (or simply integrations) that need to leverage ERP capabilities.

However, these systems are also costly to maintain. Companies spend between 20% and 33% of their implementation costs every year on maintaining the systems (Forrester Research). Customisation increases ownership costs, as the applications become more difficult to upgrade.

Once installed ERP systems become quite rigid and are very difficult to change - "It's like concrete," says Julie Smith David, an associate professor of information systems at the W. P. Carey School of Business, "Pour it out, and you can form it to any shape you want. Once it settles, getting it into a different shape is almost impossible."