ERP systems are still an important part of IT environments today, but seven out of ten business leaders believe that classic systems will no longer play a role in the long term.
More and more IT decision-makers are reconsidering their strategy regarding ERP systems. This is according to a large-scale survey by IT service provider Rimini Street of more than 4,200 C-levels worldwide. While existing ERP platforms largely meet the needs of organizations, the pressure to reduce maintenance costs and make room for innovation is increasing.
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High maintenance costs
The ERP system remains a fundamental component today: there is almost unanimous consensus on this in the survey (97 percent). But high costs and maintenance are a frequently mentioned pain point. On average, 39 percent of the IT budget goes to ERP systems and IT teams spend a quarter of their time maintaining them.
That money and time comes at the expense of strategic innovation. 36 percent of the C-levels call these costs a direct obstacle. Vendor lock-in also causes frustration: 35 percent criticize the limited flexibility and the mandatory upgrades that suppliers impose.
For this reason, almost all companies are looking at outsourcing, including for application support, infrastructure and cybersecurity. By engaging external specialists, they hope to free up internal resources for strategic projects such as AI integration or data-driven transformation. For 46 percent of CIOs and 43 percent of CEOs, automation is the top priority.
Agentic ERP
There is disagreement about the future of ERP systems. 30 percent believe that with incremental improvements their current system will last for a few more years, while 69 percent want radical change. 36 percent believe that the traditional ERP model will become obsolete, 33 percent would like to see an ‘agentic’ ERP system with in-depth AI integration: vendors such as SAP will be happy to hear that.
In the short term, a more pragmatic ERP policy is being considered. The respondents want more control over their IT. By investing less in expensive upgrades of ERP systems and more in complementary technologies, companies can realize value faster. At the same time, the importance of ROI as a criterion for IT investments is increasing: in the short term, an average return of 27 percent is expected, with an increase to 48 percent in the long term (six years and more).
Companies that continue to use ERP as basic infrastructure, but at the same time focus on automation, data analysis and flexible integration, seem best prepared for future digital transformation. The call for agility, cost control and risk reduction is prompting C-levels to reconsider classic ERP thinking, the study concludes.