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

By Patrick Zirnhelt

Pages: 1 2

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.

About ERP Software

Enterprise resource planning (ERP) software has been a hot product in the business world for the past decade, although it was introduced more than 40 years ago, according to a recent analysis by Business-Software.com. The first systems were designed to handle inventory control and management at manufacturing companies, but the concept expanded to include various forms of production and materials management, including at power plants and electric companies.

According to the business software site, ERP systems attempt to link software and hardware in "integrate numerous critical back-office functions across a company." ERP systems typically link functions through a common database so that accounting and finance, human resources, production, and distribution activities can communicate and coordinate activities, share information, and collaborate.

Some firms have gone into ERP in a major way, plunging into the cyber sea in one jump. Others have attempted to build their ERP systems incrementally. The business software website counsels caution: " 'Big Bang' ERP implementations come with quite a bit of risk. Few businesses have the resources to hand an all-at-once deployment. Therefore, it is critical to choose an ERP vendor with a flexible and modular platform, so it can be rolled-out in phases."

The survey by IFS mentioned in this article found that 31 different ERP software packages were in use among those who responded. The most common ERP provider mentioned (by 23 respondents) was SAP, one of the largest software vendors in the world. Maximo, which was acquired by IBM in 2006, was second, with 20 users, followed by Oracle (15), and Peoplesoft (13). Of the total, 21 software systems were used by only one respondent (n = 100).

The Business-Software.com description of the 20 top ERP software packages notes that IFS, founded in 1983, has more than 600,000 users "across seven key vertical sectors: aerospace and defense; automotive; high-tech; industrial manufacturing; process industries; construction, service and facilities management; and utilities and telecom." The description says IFS gets "high markets for customer satisfaction."

—Kennedy Maize is MANAGING POWER's executive editor.

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.