ERP springs eternal

You would think ERP software had been packed up in a box and shoved in a dark corner somewhere. Analysts say it consumes roughly one quarter of the average enterprise software budget. Yet hardly anyone talks about ERP anymore -- not since the big bang of the '90s, when most large enterprises spent many millions of dollars to roll out sprawling, complex ERP systems, in part to modernize for Y2K.

Just when you least expect it, up pop those three little letters again. Recently, AMR Research released ERP Application Spending Report, 2003-2004; it predicts that the number of enterprise managers planning to upgrade or buy new ERP licenses will increase slightly in 2004, the first such rise in three years. These numbers apply to ERP vendors' home turf of core financials, order entry, logistics, manufacturing, human resources, and purchasing, but not to CRM, business intelligence, or other ancillary modules. At the same time, to modernize their products, top ERP vendors now incorporate XML, Web services, and Java to foster easier customization and improve integration with the rest of the enterprise.

To get the real story on ERP, we went where InfoWorld Test Center analysts can't go -- into the heads of our readers to find out what they like, what they don't like, and how Oracle, PeopleSoft, SAP, and other vendors measure up. Our survey results show customers who aren't exactly thrilled with their ERP systems but who show little inclination to replace them. And most surprising: Readers seem to be exploiting Web services to expand the reach of ERP in their organizations.

An Adorable Beast?

During the Internet boom, ERP got no respect. Compared with sleek Web apps, ERP programs seemed inflexible, overpriced, and mired in client-server deployment hell. To top it off, elaborate modifications wrought by big consultancies often incurred charges even greater than the multimillion-dollar ERP licensing fees. Disaster stories abounded.

But now that the dust has settled -- and ERP systems have largely migrated from client/server to Web-based technologies -- satisfaction with ERP among InfoWorld readers stacks up pretty well. Sixty-five percent of respondents to the 2004 InfoWorld ERP Survey say they would be likely to choose the same vendor, while a mere 6 percent complain they're not at all satisfied (29 percent are neutral). Jim Shepherd, vice president of research at AMR Research and co-author of its recent ERP report, believes ERP's drawbacks have always been overblown and that recent product improvements have made deployment and maintenance simpler.

"These products have gotten much, much easier to implement," Shepherd says. "The amount of intellectual property and tools built around these products to help a user through configuration and implementation has expanded dramatically."