Kearney, one of the largest global business management consultancies, and Rimini Street, a global provider of corporate software products and services, have just released the results of the National ERP Benchmark. Conducted between April and May 2024, the first edition of the study heard more than 60 Brazilian companies, creating an overview of their relationship with their management systems, from the main problems faced to the obstacles faced during the implementation processes.
The pain points, in fact, remain similar to what the market has become accustomed to seeing in recent years. Among the three main issues highlighted by the executives interviewed are the excessive customizations, which are difficult to maintain (64%); the high volume of satellite systems integrated with ERPs (43%); and the difficulty in managing the large number of existing integrations (26%). The list also includes outdated versions without support, basic modules that do not meet needs, dissatisfaction of business areas with the management system and the high number of occurrences in production.
“Even so, 47% of the companies interviewed consider that their management systems are strategic and critical for their business”, says Guilherme Silberstein, specialist director at Kearney, also remembering that, even living with the pain, most companies consider their management systems stable: 80% of them consider the level of stability high; 18%, medium; and only 2% consider it low.
Regarding AMS (Application Management Services) support, the study found that, regardless of size, most companies prefer outsourced support. Here, the percentage among large companies was 64%, falling to 58% among small and medium-sized companies. Likewise, small companies are the ones that most rely on support with their own teams (42%), followed by medium-sized (33%) and large companies (29%).
The infrastructure used by these companies was another point of interest in the research, which found that the vast majority of them (63%) still maintain their systems outside the public cloud (AWS, Azure or GCP) and in on-premise or dedicated infrastructure/private cloud. “Of this total, however, only 8% have no intention of moving their systems to the cloud,” he explains. Edenize Maron, Rimini Street CEO, Latin America. Still on the subject of infrastructure, 27% use the cloud in the “Bring Your Own License” model and only 10% use the cloud in the SaaS (Software as a Service) model. Among these, the main criteria indicated for choosing the hyperscaler were location (46%); accelerators (46%); value offered as credit (42%); negotiation of other services (38%); and percentage of use (19%).
Difficulties in implementation
The study also sought to outline a historical view of ERP implementation projects in Brazil and, in this sense, found that 72% of the management systems in operation were implemented before 2017. Following the timeline, 12% were implemented between 2017 and 2019; 6% between 2020 and 2022; 8% in 2023; and only 2% in 2024. On average, these implementations last between 18 and 24 months, with an average cost of more than R$$25 million, resulting in a level of standardization ranging from 50% to 75%; and respective customization between 25 and 50%.
In these projects, obstacles were identified with a direct impact on the cost and quality of delivery. In the first case, the main obstacles were a large number of change requests (38%); schedule delays (27%); and changes in scope throughout the project (21%). In relation to quality, the main obstacles identified were poorly prepared key users (46%) and difficult management of organizational change (40%). In these cases, the main strategies used to mitigate these obstacles were the design and implementation of structured governance, hiring the global PMO separately from the implementer, and choosing representatives to monitor the activities of the program's PMO.
Given the scenario presented by companies, Kearney and Rimini Street suggest five points of attention that the ERP market should focus on in the near future:
- Address the main day-to-day challenges – it is necessary to assess the challenges faced and position the options that are most aligned with the business objective. Here, new hires and migrations may be ideal options for some companies, but other strategies may be more aligned with the objectives of other businesses;
- Implementation risk mitigation – based on lessons learned, it is important to prepare for new projects with attention to strong governance and clear business objectives;
- Migration from SAP ECC to S/4HANA – the end of SAP support for ECC in 2027 is a factor in decision-making about migration to S/4HANA or another non-SAP ERP that should impact the market in the coming years;
- ERP selection – there is great consolidation in the market and in the players invited to new processes, hence the importance of carrying out detailed studies of the available system options, with emphasis on national suppliers;
- Implementer Ecosystem – is highly complex and therefore careful analysis and qualifications are necessary for decision-making before bidding processes. Despite significant consolidation in large suppliers, alignment between the implementer and the company culture is necessary for a successful relationship.
