Companies Underutilize ERP Systems, New Research Study from Ventana Research Shows; Failure to Take Advantage of Systems' Capabilities Costs Companies Money and Blunts Strategic Effectiveness.SAN MATEO San Mateo (săn mətā`ō), city (1990 pop. 85,486), San Mateo co., W Calif., on San Francisco Bay; inc. 1894. It is a commercial and retail center with some high-technology manufacturing. San Mateo, Spanish for St. , Calif. -- A just-released research study from Ventana Research reveals that companies are underutilizing one of their key assets: their enterprise resources planning (ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. ) system. Large corporations invest tens of millions of dollars in this type of software, which does their accounting, manages inventories and handles their human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. records. Yet most companies fail to use well-established capabilities of these systems in ways that will reduce their costs, improve customer satisfaction and support strategic initiatives, the study finds. "A CFO See Chief Financial Officer. would demand to know why their company was running a factory only one shift when it could be operated profitably for two or three, but that's exactly what most of them are doing with their ERP systems without even realizing it," observed Robert Kugel ku·gel n. A baked pudding of noodles or potatoes, eggs, and seasonings, traditionally eaten by Jews on the Sabbath. [Yiddish kugel, ball (from its puffed-up shape), from Middle High German. , who directs Ventana Research's Financial Performance Management practice. Benchmarking data shows that in the 1990s, companies cut the cost of their finance operations significantly. Ventana Research's work points to ERP systems as the source of much of this efficiency. However, little progress has been made recently. Ventana Research estimates the Fortune 500(R) is currently saving $60 billion annually because of these investments. "Finance executives often are unaware of the impact ERP has had on efficiency, so they have been overlooking opportunities to use the full capabilities of the software to generate further savings," Mr. Kugel noted. Ventana Research, the leading provider of Performance Management research and advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal , will expand on the key findings of the research study ERP Innovation at a live interactive webinar on Thursday, June 1, 2006 at 9am PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . Sign up for the webinar at www.ventanaresearch.com. The research, sponsored by technology providers Cognos and SAP, investigated companies' attitudes and actions toward ERP and innovation. The findings are based on an analysis of 391 validated respondents. The survey was conducted with the assistance of media partners that included CMP's Intelligent Enterprise, GDS GDS Global Distribution System GDS Google Desktop Search (Google) GDS Goodie Domain Service (Vienna University of Technology, Austria) GDS Guards International's CXO CXO Chief Executive Officer (corporate title) CXO Chandra X-ray Observatory CXO Chief Experience Officer (corporate title) CXO Conroe, TX (Airport Identifier) Magazine and Business Management US, IT BusinessEdge, Montgomery Research's CFO Project, Penton Media's Business Finance, Reed Business' Manufacturing.net, and TechTarget's SearchOracle.com and SearchSAP.com. Among the key research findings, Ventana Research determined that: --A majority of respondents believe ERP can drive and support innovation in 11 of 12 key functional process areas such as financial and managerial reporting, purchasing and compliance and risk management. --Process automation and integration are proven ways to cut operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. , increase cash flow and reduce error and fraud. Yet only half of the study's participants have implemented an "order-to-cash" system that can accelerate cash collections. Only 30% are using image capture which can improve customer satisfaction by cutting the time to respond to inquiries and reducing costs by eliminating unnecessary paperwork. --Enhancing company performance requires companies use both financial and non-financial metrics to set objectives. Most modern ERP systems are capable of tracking much more than just accounting data but only 11 percent thought their ERP system captured all or most of the non-financial information they need to monitor employees' key performance indicators Key Performance Indicators (KPI) are financial and non-financial metrics used to quantify objectives to reflect strategic performance of an organization. KPIs are used in Business Intelligence to assess the present state of the business and to prescribe a course of action. . Additional Performance Management education will be offered at Ventana Research's upcoming analyst summit, Connections 2006, this June 11-14 in San Francisco. To learn more, visit www.ventanaresearch.com/connections2006. About Ventana Research Ventana Research is the leading Performance Management research and advisory services firm. By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach Top-down approach A method of security selection that starts with asset allocation and works systematically through sector and industry allocation to individual security selection. that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit www.ventanaresearch.com. (C) 2006 Ventana Research |
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