Applications on ice
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Economic uncertainty is forcing many businesses to put enterprise software projects on hold, new research has found
Amid the doom and gloom of the past 18 months, some optimistic souls have observed that every crisis is an opportunity. For businesses, some argue, leaner times provide the impetus to reform business processes to become more efficient and more agile.
But new research from the National Computing Centre (NCC), an independent IT advisory group based in the UK, suggests that few organisations are taking that opportunity.
First, the research establishes that deploying or enhancing enterprise software – such as enterprise resource planning, customer relationship management or financial applications – is an important technique for re-engineering business processes.
Of the 100 UK businesses surveyed, the majority of which sit in the £100 million to £1 billion annual turnover bracket, 76% said that the need to improve business processes was a key factor to have shaped their enterprise applications environment, more than any other factor.
But the survey also found that economic uncertainty has, for many businesses, put business process innovation on ice. One in four (24%) said that all of their enterprise software projects had been put on hold as a result of the current economic climate, and 41% said that some of their projects had been frozen in this manner.
Only 6% of respondents had increased their investment in their applications, while 29% said there had been no impact.
According to Cliff Mills, research manager for NCC, the organisation has seen similar trends in IT infrastructure investment.
Is putting software projects on ice in reaction to economic uncertainty a good idea? Mills says that depends on the circumstances of the organisation in question. If they are putting off desirable but non-essential upgrades to existing systems, it may be prudent. “But if they are postponing essential application deployments, it could prove disastrous,” he says.
Confounding both the optimists and the pessimists, then, the impact of the economic downturn upon enterprise IT systems and business processes so far seems to have been to place them in stasis.
The research found, however, that many businesses expect to begin investing in their applications again in the coming year, with 47% planning enhancements or upgrades to their existing applications, and 24% considering new applications.
On a positive note, this particular survey found a higher level of satisfaction among enterprise software buyers than some others. Just under half (47%) of respondents said that the enterprise software deployments had met the majority of their requirements, with 41% saying that requirements had been partially met. Just 12% said their enterprise software meets only a few of their requirements. “From our research, people are reasonably well satisfied with their ERP investments,” said Mills.
