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ERP drives operational value

October 1, 2009
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The turbulent economy has caused mid-size companies to focus on cost reductions, and that focus will continue as companies with annual revenues between $50 million and $1 billion face other challenges. Mid-sized companies will look to enterprise resource planning (ERP) solutions to drive more value by standardizing, streamlining and automating business processes and to provide the visibility they need to make well-informed decisions quickly and efficiently, says a report from Aberdeen Group.

The study, entitled ERP in the Midmarket 2009: Managing the Complexities of a Distributed Environment, suggests that mid-sized companies can no longer remain isolated in a world of distributed, global supply chains. Aberdeen found that companies with up to $250 million revenues experienced a steadily increasing number of operating locations, and distributed environments are increasingly causing pressures associated with interoperability between these operating locations.

The study suggests that top performing companies achieved impressive results from ERP implementations. These include a 17% reduction in operating costs, a 17% reduction in administrative costs, elimination or redeployment of 13 full-time employees, and the ability to close a month in 3.9 days.

The report shows that best-performing, midsized companies shared common characteristics:

• 70% have a standardized implementation of ERP across a potentially distributed enterprise;

• 79% use cross-functional teams including IT and a line of business to become involved in the selection and implementation of ERP; and

• 64% enable decision-makers to selectively drill down to successive levels of detail until reaching the underlying transactions.

The report advises midsize companies to take specific actions to be competitive. First, they should select and implement dashboards, portals or other inquiry and reporting tools that will allow drill down into transactions from summary data. Second, they should standardize ERP implementations across the enterprise. For more information visit www.aberdeen.com.

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