A Kearney, one of the largest global business management consulting firms, and Rimini Street, global provider of corporate software products and services, the results of the National ERP Benchmark have just been released. Conducted between the months of April and May 2024, the first edition of the study heardmore than 60 Brazilian companies, creating an overview of the relationship between these and their management systems, the main pains faced with the obstacles encountered during the implementation processes
The pains, by the way, remain similar to what the market has become accustomed to seeing in recent years. Among the three main issues pointed out by the interviewed executives, there is an excess of customizations, with difficult maintenance (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 The list also includes outdated unsupported versions, basic modules that do not meet the needs, dissatisfaction of the business areas with the management system and the high number of occurrences in production
"Even so, 47% of the surveyed companies believe that their management systems are strategic and critical to their business, says Guilherme Silberstein, specialist director at Kearney, remembering that, even living with the pains, 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. Here, the percentage among large companies was 64%, falling to 58% among small and medium-sized enterprises. In the same way, small businesses are the ones that invest the most in support with their own teams (42%), followed by medium-sized companies (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 off the public cloud (AWS, Azure ou GCP) e em infraestrutura on-premise ou dedicada/nuvem privada. "From this total, however, only 8% do not intend to move their systems to the cloud, explainEdenize Maron, Rimini Street CEO, Latin America. Still about the infrastructure, 27% use the cloud in the "Bring Your Own License" model and only 10% use cloud in the SaaS (Software as a Service) model. Among these, the main criteria pointed out for the choice of 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 view of ERP implementation projects in Brazil and, in this sense, it was 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 that varies from 50% to 75%; and the respective customization between 25 and 50%.
In these projects, obstacles with a direct impact on the cost and quality of delivery were identified. In the first case, the main ones were a large number of change requests (38%); delays in the schedule (27%); and changes in scope throughout the project (21%). As for the quality, the main obstacles identified were poorly prepared key users (46%) and difficult management of organizational change (40%). In these cases, the main strategies used to mitigate these obstacles were the design and implementation of structured governance, hiring of the global PMO separate from the implementer and the selection of representatives to monitor the activities of the program's PMO
In light of the scenario presented by the 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 what challenges are faced and position which options are more aligned with the business objective. Here, new hires and migrations can be ideal options for some companies, but other strategies may be more aligned with the goals 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
- Migração do SAP ECC para o S/4HANA – o fim do suporte da SAP para o ECC em 2027 é um fator para tomada de decisão sobre migração para S/4HANA ou outro ERP não SAP que deve impactar o mercado nos próximos anos;
- ERP selection – there is significant consolidation in the market and among the players invited for new processes, hence the importance of conducting detailed studies of the available system options, with a focus on national suppliers
- Implementer Ecosystem – it is highly complex and therefore careful analyses and qualifications are necessary for decision-making before competition processes. Despite a significant consolidation among large suppliers, it is necessary to have alignment between the implementer and the company culture for a successful relationship.
