Kearney, one of the largest global management consulting firms, and Rimini Street, a global provider of enterprise software products and services, have just announced the results of the National ERP Benchmark. Conducted between April and May 2024, the first edition of the study surveyedmore than 60 Brazilian companies, creating an overview of their relationship with their management systems, from the main problems faced to the obstacles faced during the implementation processes.
The prices, in fact, remain similar to what the market has become accustomed to seeing in recent years. Among the three main issues identified by the executives interviewed are excessive customizations, which are difficult to maintain (64%); the high volume of satellite systems integrated with ERPs (43%); and the difficulty of managing the large number of existing integrations (26%). The list also includes outdated unsupported versions, basic modules that do not meet needs, business areas' dissatisfaction with the management system, and the high number of incidents in production.
"Even so, 47% of the companies surveyed consider their management systems to be strategic and critical to their business," says Guilherme Silberstein, Kearney's specialist director, also noting that, even while experiencing challenges, most companies consider their management systems to be stable: 80% consider the level of stability high; 18%, medium; and only 2% consider it low.
Regarding AMS (Application Management Services) support, the study found that, regardless of size, most companies prefer outsourced support. Here, the percentage among large companies was 64%, dropping to 58% among small and medium-sized companies. Similarly, small companies are the ones that most invest in support with their own teams (42%), followed by medium-sized (33%) and large companies (29%).
The infrastructure used by these companies was another point of interest in the research, which found that the vast majority of them (63%) still keep their systems outside the public cloud (AWS, Azure, or GCP) and on-premise or dedicated/private cloud infrastructure. "Of this total, however, only 8% do not intend to move their systems to the cloud," he explains.Edenize Maron, Rimini Street CEO, Latin AmericaStill regarding infrastructure, 27% use the cloud in the "Bring Your Own License" model and only 10% use the cloud in the SaaS (Software as a Service) model. Among these, the main criteria cited for choosing the hyperscaler were location (46%); accelerators (46%); value offered as credit (42%); negotiation of other services (38%); and usage percentage (19%).
Difficulties in implementation
The study also aimed to outline a historical overview of ERP implementation projects in Brazil and, in this regard, found that 72% of management systems in operation were implemented before 2017. Following the timeline, 12% were implemented between 2017 and 2019; 6% between 2020 and 2022; 8% in 2023; and only 2% in 2024. On average, these implementations last between 18 and 24 months, with an average cost of over R$25 million, resulting in a standardization level ranging from 50% to 75%; and respective customization between 25% and 50%.
In these projects, obstacles with a direct impact on cost and delivery quality were identified. In the first case, the main issues were a large number of change requests (38%); schedule delays (27%); and scope changes throughout the project (21%). Regarding quality, the main obstacles identified were key users being underprepared (46%) and the difficulty of managing organizational change (40%). In these cases, the main strategies used to mitigate these obstacles were the design and implementation of structured governance, hiring the global PMO separate from the implementer, and selecting representatives to monitor the activities of the program's PMO.
Given the scenario presented by companies, Kearney and Rimini Street suggest five points of attention that the ERP market should focus on in the near future:
- Address the main day-to-day challenges- It is necessary to assess the challenges faced and identify which options are most aligned with the business objective. Here, new hires and migrations may be ideal options for some companies, but other strategies may be more aligned with the objectives of other businesses;
- Implementation risk mitigation– based on lessons learned, it is important to prepare for new projects with attention to strong governance and clear business objectives;
- Migration from SAP ECC to S/4HANA– the end of SAP support for ECC in 2027 is a factor in decision-making about migration to S/4HANA or another non-SAP ERP that should impact the market in the coming years;
- ERP selection– there is great consolidation in the market and in the players invited to new processes, hence the importance of carrying out detailed studies of the available system options, with emphasis on national suppliers;
- Implementer Ecosystem- It is highly complex, and therefore careful analyses and qualifications are necessary before making decisions regarding competition processes. Despite significant consolidation among major suppliers, alignment between the implementer and the company's culture is necessary for a successful relationship.
