ERP for Vertical Industries: Demand is Strong

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Enterprise Resource Planning (ERP) software is expected more and more to meet specific industry needs. This study reveals heavy demand for more specific ERP functionality particularly for enterprise asset management (EAM) and service management functions.

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ERP for Vertical Industries: Demand is Strong

  1. 1. IFS ERP Survey: IndustrySpecific Fit and Functionality Overview
  2. 2. BackgroundIn the fall of 2011, a study wasconducted among manufacturing This study wasexecutives and professionals of middle conducted by IFSmarket to large manufacturers to better North Americaunderstand their need for industry- and Mint Jutrasspecific functionality and how well , an independentthose needs are being met. research-based consulting firmThis study illuminates: that specializes in• The importance of industry-specific analyzing the functionality business impact• How well those needs are met of enterprise applications• What impact lack of fit has on the business
  3. 3. Major Areas Explored How important is industry- Applications included: specific functionality?  Enterprise Resource Planning (ERP) How well do current applications  Customer Relationship Mgt fit their needs? (CRM) How do manufacturers respond  Enterprise Asset Management (EAM) to functional gaps  Project/Portfolio Mgt (PPM) How do functional gaps impact  Supply Chain Mgt their business? (SCM)
  4. 4. Key Findings• 67% of those surveyed indicate they required industry- specific functionality and even 29% of those that did not expressed a desire fore it• Those who require industry-specific functionality: – Are 12% less likely to have implemented ERP, but more likely to have implemented other applications – Rate the fit of their current applications only slightly lower than those who have no industry-specific needs – Gaps are filled with additional applications and spreadsheets – But gaps in functionality add risk and present barriers to serving customers
  5. 5. Type of Business Process Mfg 38% Discrete Mfg 36% Other 12% Consultant 7%Contracting/Industrial Projects 5% Utility 1% 0% 10% 20% 30% 40%
  6. 6. Type of Business Industry-specific functionality is important All Other, 28% Discrete MFG, 29% Process MFG, 42%Industry-specific functionality is NOT important All Other, 21% Discrete MFG, 50% Process MFG, 28%
  7. 7. Importance of Industry-Specific Functionality 80% 67% 67% 60% 60% 40% 20% 0%Desire more industry-specific functionality Industry-specific functionality an importantcaused by Industry-specific Reqts Functional Gaps factor Basis of Data Cut: Yes Industry-specific Functionality is Required
  8. 8. Profile of those needing industry-specific functionality Yes No50% 48% 45% 44% 45% 44% 42% 43% 43% 43%40% 37% 33% 32%30% 26% 28%20%10%0% Batch Process Asset Continuous Custom Engineer to Make to Order Repetitive Management Process Manufacturing Order Manufacturing On a macro level there is not much difference, therefore the industry influence are at a more granular level in terms of processes, customer requirements, compliance, regulatory, etc.
  9. 9. Profile of those needing industry-specific functionality Yes No40% 36% 32%30% 26% 21%20% 18% 16% 15% 16% 11% 10%10%0% Configure to Order Depot Repair Design Fabricate Engineer Procure Service Construct Construct Management More significant differences in customer facing methodologies. The three to the right signal more intimate interaction with customers
  10. 10. Profile of those needingindustry-specific functionality Basis of Data Cut: Yes Industry-specific Yes No Functionality is Required 75% 71% 68% 65% 50% 50% 25% Large, high-value, and Managing RoA is a core complex projects discipline
  11. 11. Desire for More Yes No Basis of Data Cut: Yes 85% Industry-specific 90% Functionality is Required 60% 29% 30% 0% "Would like to have" more industry- specific functionalityWhile the majority of those who require industry specificfunctionality would like more, even 29% of those who do notrequire it, desire it.
  12. 12. What are they using now? Yes No Basis of Data Cut: Yes90% 85% 75% Industry-specific Functionality is Required60% 41% 44% 40% 36% 35% 32%30% 19% 16% 7% 5%0% ERP CRM PPM EAM SCM Other Somewhat less likely to have implemented ERP, but not other applications. ERP is most likely to be impacted by industry-specific processes and practices. Not finding the appropriate solution can prevent investment.
  13. 13. How well do they fit now? Basis of Data Cut: Yes Yes No Industry-specific Functionality is Required4 3.8 3.8 3.6 3.7 3.7 3.6 3.7 3.7 3.5 3.432 ERP CRM PPM SCM EAM 1 Poor (many functional gaps on a daily basis) 2 Deficient (prevents us from growing) 3 Neutral 4 Good (Does most of what our industry needs) 5 Excellent (no functional gaps)
  14. 14. How do gaps hurt your business? We are doing non value added work like double entry in multiple systems, negatively 58% impacting productivity 63%We do not have real time visibility, increasing 53% risk 44% Increased riskWe cannot grow our business as quickly as we 23% would like 23% We are limited in our ability to serve the 28% customer 9% Basis of Data Cut: Yes 5% Yes Other (please specify) Industry-specific 5% No Functionality is Required 0% 25% 50% 75%
  15. 15. How do you deal with functional gaps? 56% Basis of Data Cut: Yes60% Yes No Industry-specific50% 47% Functionality is Required40%30% 26% 20% 18%20% 12%10% 4% 6% 5% 5% 2% 0%0% We run more We perform We perform We modify the We create our Other (please than one extensive work inextensive work in source code of own specify) enterprise spreadsheets paper-based enterprise custom, “home application to get and other tools systems software grown” everything we outside of our applications need enterprise application
  16. 16. About IFSIFS is a public company (OMX STO: IFS) founded in1983 that develops, supplies, and implements IFSApplications™, a component-based extended ERPsuite built on SOA technology. IFS focuses on agilebusinesses where any of four core processes arestrategic: Service & assetmanagement, manufacturing, supply chain andprojects. The company has 2,000 customers and ispresent in more than 50 countries with 2,700employees in total.
  17. 17. IFS ERP Survey: IndustrySpecific Fit and Functionality Contact Information: Charles Rathmann, Analyst IFS North America 262.317.7419 chuck.rathmann@ifsworld.com

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