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IFS Study: ERP Too Complicated and Inflexible for the Electric Power Industry

The fact that enterprise resource planning (ERP) software can be confusing and difficult to use should come as no surprise to executives who rely on this type of software to run their organizations (see sidebar). A new study conducted by IFS North America and POWER magazine suggests that there are indeed things that vendors of ERP and other enterprise software like enterprise asset management (EAM) can do to make their products less complex and easier to use.

The 100 POWER magazine readers participating in the study also indicated that ERP and other enterprise software is often too rigid and inflexible to adapt to changes in their organizations, and they suggested ways that vendors can make products that enable rather than hinder enterprise agility.

Complexity that hinders usability is a concern to electric power executives because it decreases the efficiency and productivity of managers and other employees using the software. Lack of flexibility is a concern because, as new assets are constructed, new business models added, or acquisitions are made, the software cannot accommodate the new and different business requirements.

POWER magazine readers participating in the study reported significant usability challenges with their enterprise software (Figure 1). Less than 12% of respondents characterized their enterprise software as "very easy to use." Meanwhile, 54% of respondents said there are specific tasks performed within their enterprise software that they would consider time-wasters. The most frequently cited included:

  • Navigating around and between different enterprise software products that are not fully integrated.
  • Searching for information through a complex navigation structure.
  • Learning different modules that have different structures, commands, and work in different ways.

1. How easy to use are your enterprise applications—ERP, CRM (customer relationship management), BI (business intelligence, financials), etc.? Source: IFS North America

Respondents indicated that the most helpful usability enhancements would include embedded search functionality that would help them not only find specific data but help them locate the right screen within the application to perform specific functions.

In the electric power sector, powerful embedded search features may be even more important than they are to the market as a whole. As the pool of qualified and trained managers and technicians shrinks due to the aging workforce, fewer people will be available to do the work formerly performed by a larger pool of individuals. That means that each manager’s engineer and technician will need to be able to easily and intuitively navigate through more of the application, covering more specific roles and a broader spectrum of functionality.

Just as powerful search functionality allows us to locate diverse information across the almost endless sea of data on the public Internet, powerful search functionality will allow us to locate functionality within the vast expanses of an enterprise application. This makes it easier for energy executives and managers to wear a lot of hats and perform multiple functions without spending an inordinate amount of time learning to find their way around different parts of an enterprise software suite.

Dipped in Concrete

Enterprise software can also, according to study participants, bring a degree of rigidity to business processes, preventing a company or organization from making changes as rapidly as it would like. The situation is drastic enough that almost a quarter of respondents compared the effect of ERP on their business to "being dipped in concrete."

And more than 66% of electric power executives expect to encounter significant structural business change in the next two years. When asked specifically what changes they plan to make in the next 24 months, almost 47% said they planned to reengineer their internal processes, and more than 45% planned new product or service lines. Another 35% plan to enter a new geographic market, and more than 27% of respondents plan to purchase another company. Major capital projects are on the horizon for another 25%.

Only 16% of respondents said that they expected their enterprise application to handle these changes "extremely well." Almost 20% said that their enterprise software would not handle change very well, and almost 7% said they would need to completely re-implement their enterprise software to handle these drastic business changes (Figure 2). Moreover, 53% of respondents said their ERP prevents them from taking advantage of new opportunities or slows them down as they try to change the way they do business.

2. How well do you think your enterprise application will handle these anticipated changes? Source: IFS North America

Study participants cited a number of ways that their software vendor could help them enhance enterprise agility. Respondents were asked in two different ways about the single most important thing their enterprise software vendor could do to enhance enterprise agility. In both cases the answers were basically the same. The most common response was that software vendors need to make it easy to change the way the software is configured without the additional cost of consultants and system integrators. Other important steps vendors need to take, according to respondents, include simple things like listening and learning about the customers’ business needs. Product design is also a concern; more than 32% stated that software needs to be designed for quick, easy implementation and reconfiguration.

Data suggest that an enterprise software suite based on a single flexible product—as opposed to a tiered product strategy that requires implementation of completely different or more advanced products as needs change—delivers greater agility. Asked about the single most significant way that enterprise software slows the enterprise down or makes change more difficult, more than 37% of respondents said that "in order to gain the new functionality we need to accommodate change, we need to move to a completely different, more advanced enterprise software product offered by our vendor." The second most popular answer had to do with inflexibility of the application once it is in place, and 21% of respondents said they had a hard time reconfiguring their application.


Complete study results are available from IFS, and as the data points above suggest, they are sobering. ERP and other enterprise software packages are supposed to drive efficiency and enhance agility. In too many cases, these tools have the opposite effect on organizations that implement them.

—Patrick Zirnhelt is the director of sales for asset-intensive industries for IFS North America. He has more than 17 years of experience working with enterprise systems, which includes software development, implementation, and sales. He is a professional engineer registered in Ontario and holds an MBA specializing in management information systems from the York University Schulich School of Business in Toronto and a BS degree in mechanical engineering from Queens University, Kingston, Ontario.

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