Enterprise software slows down digital transformation, survey suggests

'In many companies with legacy enterprise applications, ERP still stands for Excel Runs Production.'
Written by Joe McKendrick, Contributing Writer

Are the layers upon layers of enterprise software running today's organizations -- built up over years and decades -- holding them back from embarking on the great digital journey?

To some seasoned IT folks, the answer to this question may be "Duh, yes, hasn't it been obvious?"

Photo: US National Archives, via Wikipedia

Now, a recent survey confirms the drag that much of today's installed software has on transitions to the digital realm. A study of 200 manufacturers, conducted by IFS, finds a connection between enterprise resource planning (ERP), field service management (FSM), enterprise asset management (EAM) and other types of enterprise software and readiness for digital transformation -- or lack of thereof.

Digital transformation is key for many manufacturers these days, as they push to shift their business models away from purely creating and assembling products to service-driven pursuits.

Big ERP has been taking its knocks for years, of course, with a storied reputation for being monolithically inflexible. Vendors have been moving en masse to a cloud-based subscription model, which makes ERP and other enterprise offerings more flexible and modular. It should also be noted that IFS is a contender in this space, so there is a self-serving aspect to this survey. Nevertheless, everyone is fighting the challenges of attempting to be more nimble while an ungainly infrastructure holds things back. In many cases, it's simply a matter of usability -- or lack thereof.

As the IFS study's authors put it: "In many companies, ERP still stands for 'Excel Runs Production.'" There's a lot of truth to this -- in the survey, in situations where enterprise software usability was poor, 88 percent of respondents said they would be likely to use spreadsheets, with 84 percent citing Microsoft Excel.Excel was most popular among 18-35-year-olds, with 95 percent citing the product as a workaround when enterprise software presented usability difficulties.

There's an urgent need, then, for enterprise software that incorporates elements that boost usability, starting with robust data visualization tools, the survey's authors conclude. "Users will find other ways to get the information they need outside the system, resulting in disconnected processes and data silos." Of course, that's not the way to digital enterprise.

There's a strong link between successful digital transformation and software usability, the survey report's authors also suggest. If enterprise software is clunky and hard to use, then don't expect to have a cohesive digital focus anytime soon. Among survey respondents lagging in the digital race, at least 50 percent report their enterprise software is difficult to use. Conversely, 90 percent of the digital leaders report their enterprise software is very easy to user. Coincidence? The survey's authors think not. As they explain:

"Even a firm mandate from senior management to use a system of record will not be very successful in ensuring that information critical to the enterprise winds up in a central repository used to make C-level and board-level decisions. The resulting lack of enterprise visibility, as information winds up in various unconnected silos beyond the visibility of senior management, can make it difficult to make decisions about holistic business changes. It can also make it difficult to operationalize those decisions in the transactional, and systems and execution layers of software used by the business."

Poor usability also holds back efforts of manufacturers to evolve into service-based businesses. This is important, as "with product-related revenue and profit from manufacturing expected to languish in coming years, revenue increases for many of these industrial companies will come from services." For example, close to 90 percent anticipate digital transformation will pave the way for more business from maintenance, repair and operations, another seven in 10 see it opening up more warranty-related business, and a similar number see opportunities in field service work.

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