Kearney, one of the largest global business management consultancies, 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 interviewed more than 60 Brazilian companies, creating an overview of their relationship with their management systems, from the main pain points faced to the obstacles faced 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 customization, which is 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 The list also includes outdated versions without support, basic modules that do not meet needs, dissatisfaction among business areas with the management system, and the high number of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, specialist director at Kearney, noting that, despite facing challenges, most companies consider their management systems stable: 80% of them 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. The percentage among large companies was 64%, dropping to 58% among small and medium-sized companies. Similarly, small companies are the ones that most rely on support from 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 maintain their systems outside the public cloud (AWS, Azure, or GCP) and in on-premises or dedicated infrastructure/private cloud. "Of this total, however, only 8% have no intention of moving their systems to the cloud," he explains. Edenize Maron, CEO of Rimini Street in Latin America. Still regarding infrastructure, 27% use the cloud under the "Bring Your Own License" model, and only 10% use the cloud under the SaaS (Software as a Service) model. Among these, the main criteria indicated for choosing the 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 level of standardization ranging from 50% to 75%; and respective customization between 25 and 50%.
In these projects, obstacles were identified with a direct impact on cost and delivery quality. 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 separately from the implementer, and the selection of representatives to monitor the program's PMO activities.
Given the scenario presented by companies, Kearney and Rimini Street suggest five areas of attention that the ERP market should focus on in the near future:
- Address the main day-to-day challenges – It's necessary to assess the challenges faced and identify the options that best align with the business's objectives. 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;
- Mitigation of implementation risks – 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 significant consolidation in the market and among 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 – is highly complex, requiring careful analysis and qualifications before competitive bidding processes. Despite significant consolidation among major suppliers, alignment between the implementer and the company's culture is essential for a successful relationship.
