Enterprise Systems: Boldly Going Where No One Has Before

It’s only natural that executives want to derive value from their investments. And investments in enterprise systems are no different. Indeed, many companies see these expenditures as preparation for the future, seeking a variety of specific benefits, according to New Growth from Enterprise Systems: Achieving High Performance through Distinctive Capabilities, new research by Accenture.

Traditionally, most companies have seen enterprise systems as a way to save on IT or operational costs. Senior management's underlying objective was to improve the quality and transparency of information.

Today, however, things have changed and grown more complex.

Accenture’s New Growth survey reveals that financially successful organizations are more likely to take steps that contribute directly to business value. Unlike low performers, top performers are also more likely to implement their systems widely throughout the entire organization rather than on a piecemeal basis.

They also are more likely to use enterprise systems to integrate the organization, optimize processes, and use data and analytics to help improve decision-making.

Many organizations are making significant advances in managing key value drivers. On integration, for example, the number of organizations with a broadly integrated enterprise system is up from 18 percent in 2002 to 24 percent in 2006. The percentage of organizations saying that they have implemented their enterprise systems throughout all or most business units and functions has risen from 69 percent to 80 percent—further evidence of integration.

Top performers are far more likely to have moderate-to-significant integration with external systems than low performers. While executives see supplier integration as a simpler challenge, more organizations are establishing direct links to their customers.

Optimizing processes is an ongoing challenge but is steadily making progress according to study participants. In 2002, for example, 77 percent of the participating organizations reported at least a moderate degree of process optimization in conjunction with their enterprise systems; by 2006, 86 percent reported at least a moderate level of process improvement.

As is true for integration, top performers are more likely to have significant ongoing optimization efforts than low performers. However, top performers are no more likely than low performers to engage in radical restructuring of business processes; they are continuing to focus on continuous process improvement, incremental change and high performance.

Organizations are also using their systems much more for help with decision making. Between 2002 and 2006, the number of organizations with some analytical capability had increased almost 20 percent to 74 percent.

Our research shows that organizations should focus on three goals to realize the full benefits from their enterprise systems:

• Integrating the organization
• Optimizing business processes
• Using system data to improve decision making.

New Growth from Enterprise Systems: Achieving High Performance through Distinctive Capabilities is the result of collaboration between thought leaders in Accenture’s SAP and Oracle practices and the Accenture Institute for High Performance Business.

The author is Jeanne G. Harris, an executive research fellow and director of research at the Accenture Institute for High Performance Business.