Kearney, one of the world's largest business management consulting firms, and Rimini Street, a global provider of enterprise software products and services, have just released the results of the National ERP Benchmark. Conducted between April and May 2024, the first edition of the study surveyed more than 60 Brazilian companies , creating an overview of their relationship with their management systems, from the main pain points they face to the obstacles encountered during the implementation processes.
The pain points, in fact, remain similar to what the market has become accustomed to seeing in recent years. Among the three main issues highlighted 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 in managing the large number of existing integrations (26%). The list also includes outdated versions without support, basic modules that do not meet needs, dissatisfaction of business areas with the management system, and the high number of production incidents.
“Even so, 47% of the companies surveyed consider their management systems to be strategic and critical to their business,” says Guilherme Silberstein, specialist director at Kearney, also noting that, despite experiencing challenges, most companies consider their management systems 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%, falling to 58% among small and medium-sized enterprises. Similarly, small companies are the most likely to rely on in-house support 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 maintain their systems outside the public cloud (AWS, Azure, or GCP) and in on-premise or dedicated/private cloud infrastructure. “Of this total, however, only 8% have no intention of moving their systems to the cloud,” explains Edenize Maron , CEO of Rimini Street in Latin America . 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 a hyperscaler were location (46%); accelerators (46%); value offered as credit (42%); negotiation of other services (38%); and percentage of usage (19%).
Difficulties in implementation
The study also sought to provide a historical overview of ERP implementation projects in Brazil and, in this sense, found that 72% of the 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 were identified that directly impacted the cost and quality of the deliverable. In the first case, the main obstacles 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 poorly prepared key users (46%) and difficult organizational change management (40%). In these cases, the main strategies used to mitigate these obstacles were the design and implementation of structured governance, the hiring of a global PMO separate from the implementer, and the selection of representatives to monitor the activities of the program's PMO.
Given the scenario presented by companies, Kearney and Rimini Street suggest five key areas of focus for the ERP market in the near future:
- Addressing the main day-to-day challenges – it's necessary to assess the challenges faced and identify the options 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;
- Mitigating implementation risks – based on lessons learned, it is important to prepare for new projects by paying 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 the decision-making process regarding migration to S/4HANA or another non-SAP ERP system, which is expected to impact the market in the coming years;
- Choosing an ERP system – there is significant consolidation in the market and among the players invited to participate in new processes, hence the importance of conducting detailed studies of the available system options, with particular emphasis on national suppliers;
- The ecosystem of implementers is highly complex, and therefore requires careful analysis and qualification before bidding processes. Despite significant consolidation among large suppliers, alignment between the implementer and the company culture is necessary for a successful relationship.
