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Despite its maturity, enterprise resource planning (ERP) systems continue to struggle to demonstrate return on investment (ROI). Moreover, as shown in Figure 2 of the Computer Economics Technology Trends 2018 study, ERP not only has the lowest ROI rating of all the technologies in our study, but organizations also struggled with cost certainty.
The study polled 219 IT organizations on their experience with 14 leading technologies and ranked them based on their risk rates (how often they came in at the expected cost or less) and reward rates (the percentage of companies reporting that they broke even or saw a positive return on investment). Relatively speaking, ERP was worst in both risk and reward. This is not to say that no companies saw a positive return on investment or found a way to come in under budget with ERP. It is just that, among all the technologies, this happened the least often with ERP.
Interestingly, the poor ROI and cost success have not deterred companies from investing in ERP. The technology comes in second in new investment, closely behind business and data analytics.
“This year, we’re seeing strong investment across most technologies in the study,” said David Wagner, vice president for research at Computer Economics, an IT research firm based in Irvine, Calif. “Companies are taking advantage of a strong economy to invest in the new capabilities and flexibility that cloud and SaaS technology has to offer. Organizations these days have no choice but to invest in ERP as the backbone of their application portfolios At the same, they need to spend a lot more attention on making those investments successful. With so much new investment, process improvement and change management are essential.”
On the other side, IT financial management systems showed the best combination of cost success and ROI. IT financial systems had the best cost success rating of the technologies in the system. Other successful systems included infrastructure as a service, artificial intelligence (which is new to the study this year), and software as a service.
Each initiative falls into one of nine sectors, representing low, moderate, or high reward, and low, moderate, or high risk. The findings are as follows: