Earlier this year, OpenText and IDG surveyed enterprises with more than 1,000 employees on ERP integration, including insights on their current system landscape, integration requirements, key challenges, and future plans. The responses covered companies in the United States and Europe, ranging across 19 different industries, but despite this diversity a vast majority of them pointed to a couple of key conclusions: The world of ERP systems is rapidly evolving and existing integration solutions are not keeping up with this change.
Many organizations have a complex ERP landscape
As the adoption of cloud applications continues in organizations, ERP systems are very much impacted by this transition. 63 percent of survey respondents reported having ERP deployments in the public cloud, while 45 percent had private cloud deployments. However, 78 percent of organizations were still using on-premises ERP systems as well.
The high percentages in each category indicate that many organizations currently have a fragmented ERP landscape that spans across different deployment models. The top three ERP vendors used by our respondents included Oracle (53 percent), Microsoft (49 percent), and SAP (39 percent), while cloud native ERP systems including Oracle NetSuite (23 percent) and Workday (20 percent) were also well represented.
ERP integration is increasingly important
The fragmentation of the ERP landscape alone adds complexity to ERP integration, but this is further compounded by the extensive needs around connecting ERPs with various other systems. Systems that are most often integrated with the ERP include CRM (68 percent), HRM (66 percent) and trading partner systems (66 percent), but several other categories of applications were also integrated by more than 50 percent of organizations.
Another interesting point related to integrating the ERP with other systems was that, on average, 44 percent of the transactional data processed in the organization’s ERP system comes from external systems, meaning those managed by suppliers, customers, logistics providers, and so on. The high percentage not only emphasizes how important integrations are, but also highlights the need for managing data quality as part of integration operations. With little to no control over how data is generated by external partners, addressing data quality using content validations, business rules, and other logic embedded in the integration flows can play a critical role in avoiding process errors that lead to business disruption and high cost of operations.
The importance of integration is understood, yet it continues to be a major challenge for organizations
Based on our survey, organizations seem to understand the importance of integration. 79 percent stated that integration is a critical priority for them, and 92 percent said they use a centralized integration platform for delivering some or most of their integrations.
Yet, integration remains a challenge in terms of both project delivery and ongoing operations. 86 percent of the respondents said they have experienced delays in rolling out ERP integration projects, and 63 percent had experienced loss of connectivity due to integration issues.
The biggest challenges relate to having access to the right skills
When inquired about the cause of delays with ERP integration projects, lack of integration expertise was the number one challenge (48 percent), closely followed by competing priority of other projects (47 percent). Open answers concerning the biggest challenges with ERP integration further revealed the diversity of skills required, not just related to different aspects of integration but also to the specific ERP system the organization is using. The responses highlighted several key areas around skills management from hiring and retaining people with the right skills to keeping up with the latest changes in technology.
ERP integration requirements are evolving fast
According to our study, organizations are actively looking to modernize their ERP systems, while many have already taken steps in this direction. When asked about their plans, 56 percent of the respondents stated they plan to move an on-premises ERP solution to the cloud, while 20 percent are planning to update their cloud ERP solution. In addition, 31 percent of organizations had already recently updated a cloud ERP.
However, 54 percent stated that they are planning to update an on-premises ERP solution, creating significant overlap between organizations using cloud versus on-premises ERPs. Only 16 percent of organizations stated that they are looking to consolidate multiple ERP instances onto a single instance, meaning that the fragmentation of the ERP landscape in organizations is likely to persist for some time still.
What about addressing those integration challenges then? 91 percent of organizations said they are looking to develop new integration capabilities.
OpenText’s approach addresses the key pain points in a unified way
OpenText helps organizations extend their integration capabilities by leveraging a fully managed service consisting of a unified integration platform and the people and processes needed for efficient project delivery and program management. This approach ensures availability of the right skills and modern, fit-for-purpose technology to meet various kinds of integrations needs, addressing the key challenges identified by the respondents in our study. More information about OpenText’s managed service approach can be found on our website.
Interested in learning more about the study? Read the full whitepaper:
IDG whitepaper: “ERP Modernization and Growing Data Challenges Drive 91% of Enterprises to Modernize Integration Solutions”
