April 06, 2009 09:02 ET

The Punishing Cost of Keeping an ERP System Current Does Not Appear in the Sticker Price

A New Report from CFO Research and Agresso Provides Critical Benchmarks For Managing Change in Enterprise Resource Planning (ERP) Systems

IRVING, TEXAS and VICTORIA, BRITISH COLUMBIA--(Marketwire - April 6, 2009) - CFO Research today announced research results from a survey of 157 senior finance executives, examining ongoing Enterprise Resource Planning (ERP) system ownership costs. A key finding of the report reveals that the continuing costs to an organization to keep their ERP system in line with their business is substantial, especially after the system is customized and installed (up to over $1.24 million annually). Agresso, the mid-market ERP company that focuses on Business Living IN Change (BLINC)(TM) sponsored the study that included respondents from a wide range of industries across the United States.

The report is critical reading for organizations seeking a realistic picture of the ongoing cost of an ERP system. It details the many expenses companies face, both anticipated and unanticipated, and demonstrates that the price tag for making changes to an implemented ERP system can be almost double the annual maintenance and support fees.

Agresso commissioned the report to provide independent evidence of its long-held assertion that companies are spending far too much on modifying or updating their ERP systems. The report quantifies these costs (both in dollars and effort), providing a valuable tool for organizations seeking benchmarks for ongoing ERP ownership costs.

"We know that companies who face frequent change need better information about what those changes really cost them," notes Shelley Zapp, president of Agresso North America. "CFO Research's report delivers that message along with the key recommendation that when evaluating ERP systems, companies need to look well beyond their 'sticker price'".

This conclusion is based on the inevitability of business change. For example, 61 percent of respondents undertook moderate or substantial ERP changes just to respond to new or changed business processes. The report considers other change drivers, including re-organizations, financial management-driven changes, mergers or acquisitions, and new regulatory requirements. Given all these change pressures, it's not surprising that the mid-market companies in the survey could spend an average of $1.24 million annually on ERP maintenance, modifications and updates.

One surprising finding in the report: some companies are adapting their processes to avoid impacting their ERP systems. One executive admitted "we will not make custom modifications to the software; we will modify the business process if necessary or create an offline procedure".

"It is clear that in many instances the systems are ruling the companies instead of the other way around, which is unacceptable," says Ton Dobbe, vice president of product marketing at Agresso. "In times of economic recession, the flexibility to adjust to changing market circumstances is critical - it can mean the difference between success or failure. Thus being able to adjust an ERP system quickly and cost effectively is crucial. It is a real shame that most ERP system vendors seem incapable of offering this type of flexibility to their users."

Agresso is unique in the ERP industry for its post-implementation agility, or the ability to accommodate frequent ongoing change after implementation is complete, with minimal cost and disruption. Agresso was designed specifically for organizations in rapid change mode - which, given the economic times, could be practically everyone. The findings of CFO Research support Agresso's advice: a proper evaluation of ERP solutions must not ignore the ability to manage change, or companies risk overlooking significant ownership costs.

The full report is available at

About Agresso

Agresso ( is a $500 million enterprise resource planning (ERP) company, listed in the Netherlands as Unit 4 Agresso (Dutch Stock Exchange EURONEXT-U4AGR) and one of the top five providers of ERP solutions for professional services and public sector organizations. Agresso offers a uniquely integrated data/ process/ delivery architecture designed specifically for Businesses Living IN Change (BLINC)(TM). Agresso is known as "The ERP Market's Definition of Agility" as it allows an unlimited amount of ongoing, post-implementation changes without the typical external IT costs and intervention that nets billions of dollars in revenue to the market leaders. Over 2,900 companies and organizations in 100 countries deploy Agresso Business World for both operational support and strategic management. The company's role-based, Web Services and Services-Oriented Architecture (SOA) enabled solutions include: Financial Management, Human Resources and Payroll, Procurement Management, Project Costing and Billing, Reporting and Analytics, Business Process Automation, Field Services and Asset Maintenance, and CRM.

About CFO Research Services

CFO Research is the sponsored research unit of CFO Publishing Corp., which publishes CFO magazine in the United States and Europe. CFO Publishing is an Economist Group business.

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