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June 7, 1999
Costs and budgets have emerged as primary inhibitors to adoption of enterprise resource planning programmes.
In a recent study, IDC India found CEOs and senior managers who have little interest in implementing ERP do not perceive its strategic importance and benefits.
This is perhaps due to lack of awareness and education on the about the technology, the study concludes.
It says, corporate growth has been indicated as the most compelling driver for adoption of ERP amongst senior management respondents. Improved customer service, efficient distribution system and reduced operational expenses are some of the important business imperatives that are driving top management to implement ERP solutions.
They realised that if the organisation has to survive and grow then ERP is an effective tool that can integrate the organisation, provide faster information for decision making and cut costs to increase efficiency.
ERP usage is the highest among organisations with turnover greater than or equal to Rs 3.5 billion. Next highest ERP usage is in organisations with turnover between Rs 1.01 billion and Rs 3.49 billion.
Organisations with a turnover of less than or equal to Rs 1 billion have the lowest ERP penetration.
This indicates a direct relationship between ERP adoption and the size of an organisation. Penetration of ERP application is greatest among larger organisations.
A significant percentage of organisations currently implementing ERP applications or planning to do so within the next year also lie among large and medium organisations.
In respect to vertical segments, industry sectors like consumer goods, auto and auto ancillary, pharmaceuticals, iron and steel and metals and electronics have significantly higher percentage of organisations already using an ERP application than other sectors.
Within the next two years, a significantly higher percentage of organisations in industry sectors like chemicals, automobiles, oil and gas and pharmaceuticals have plans to opt for an ERP solution.
Finance and accounting, sales and distribution and materials and purchasing are the most popular types of ERP modules currently being used or implemented.
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