2010 Readers' Choice: Enterprise Resource Planning

Bob Parker, group vice president, Research at IDC Manufacturing Insights was not surprised by this year's list. For example, he believes that Lawson moving into the list was expected, as the company has grown its base via acquisition and has a good back office story.

CGT: How has the economic downturn impacted ERP initiatives?

Parker: Corporate objectives to preserve cash put tight constraints on capital spending including large projects like ERP implementations and upgrades. Companies tended to look for much smaller scope, faster payback projects, which has helped Oracle as they can sell acquired modules like OTM (nee G-Log) and Demantra into companies that run SAP. Companies also continued to invest in BI to create greater visibility into operating circumstances and speed corrective actions. 

CGT: What trends will impact ERP in the consumer goods industry?

Parker: Prior ERP investment has done a lot (along with the availability of low cost offshore resources and hardware virtualization) to lower the cost of IT at CG companies. In fact, in the past decade companies have lowered their spending from around 4 percent of revenue to 2.5 percent. In the next five years, companies will seek to lower costs (on a percent of revenue basis) another 20 percent, through taking advantage of cloud computing and more integrated analytics. The third area of savings will be ERP where the ability to "virtualize" instances will emerge. Suppose the Wal-Mart account team at a CP company wants to stand up a unique set of business processes to support their efforts. A virtual ERP instance can be created that supports those processes without violating the integrity of a consolidated corporate information model. This will allow companies to become much more effective in their use of information and process workflows contained in the ERP system.

CGT: As the economy improves, do you expect to see the return of large purchases of ERP applications in the consumer goods industry?

Parker: To a certain extent. There is pent up demand for new capabilities and getting to the virtualized ERP vision discussed above starts with a company being on the most current release built on a modern architecture. However, this desire to invest will be somewhat tempered by the fact that companies have learned that they can survive without committing to large ERP projects. Demand will return, but investment justification models will have to be reconsidered. Better business performance, not better bookkeeping will be the key criteria.

"We've developed a great relationship with Oracle that's been a part of our success. Both companies have invested time at all levels of the organization to develop strategic, win-win solutions."
--Andy Platt, Vice President, Information, Service & CIO, JM Smucker Co.

SMB MARKET: SAP

"Silos of information had developed in certain areas of the company over the years. The SAP ERP upgrade project and use of best practices enabled us to harness this information quickly and make one plus one equal three."
-- Bob Torkelson, President and COO, Trinchero Family Estates