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Sage ERP X3 - Performance

Survey conducted by Ernst & Young Advisory


with medium to large companies
Editorial
‘‘ ‘‘
As a major player in the advisory services market, we are duty bound to keep our clients informed Our clients are best qualified to talk about the performance of our solutions.
about developments in business management solutions. As part of our monitoring of currently Improvements in performance, business management, customer service, cost reduction … the
available solutions, we conduct surveys on behalf of the main integrated business management feedback from our clients on Sage ERP X3 is extremely positive. Looking beyond the benefits our
software producers whereby we analyse value perceived by companies. We interview decision ERP system offers companies, I would like to draw attention to Sage’s respect for the commitments
makers who have had their business management solution in place for at least two years to allow it made when the project started.
us to back up our survey with measurable facts.
Medium to Large Enterprises (MLEs) have reached a high level of maturity in terms of their
This is the context of the survey conducted in 2009 on the Sage ERP X3 solution and funded by information systems. They need software applications with deep and broad functionalities
the producer Sage. It focuses attention on how Sage ERP X3 provides a solution to clients’ needs equivalent to those of very large companies, but they do not yet have the same IT, financial and
and illustrates the benefits as evaluated by the 250 managers in the companies interviewed, human resources. When choosing a solution, MLEs now base decisions on much more operational
supported by figures. We note that the companies view the tool as a performance lever, and and measurable criteria than in the past. They need solutions tailored to automatically meet
even sometimes as a way of making them stand out from direct competitors. Our analysis also their needs: a system that’s simple to implement and use, a rapid return on investment and cost
gives detail on the regular adaptation of the product by the producer in order to keep pace effectiveness.
with companies’ expectations. Yet again, the interviews confirmed good practices: a structured When we conceived of this client satisfaction survey we wanted to construct it so as to bring out
approach upstream, a system not limited purely to the technical dimension but that takes account concrete indicators about Sage ERP X3 performance.
of the end user … these are decisive key factors in order to be able to fully benefit from the wealth Having worked with these companies for many years, we are constantly looking for added value for
of resources this tool offers, irrespective of company size. our clients. It is their expectations and needs that guide the development of our solutions and I am

’’
delighted that this survey very clearly demonstrates this.
We hope you enjoy reading this report.

’’
Happy reading,
Philippe Ausseur
Chairman Ernst & Young Advisory France Christophe LETELLIER
General Manager Sage MLE Division France
and General Manager Sage ERP X3 WW

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Key facts arising from
the survey

80% of customers interviewed  age ERP X3 gives great


S
see Sage ERP X3 as a significant improvement, client satisfaction
even a competitive advantage (13%),
and in ¾ of cases,
operational processes are managed
Contents better than previously

Key facts..............................................................P.5 89% of companies interviewed  age meets the


S
think that commitments commitments made
S
 urvey methodology and profile have been met at the start of the project
of companies interviewed. .....................................P.6
S
 ituation of the companies 75% of companies  age ERP X3
S
before Sage ERP X3..............................................P.7 recording increased profitability attribute improves profitability
C
 riteria for selecting this to Sage ERP X3
an ERP system. ....................................................P.8
P
 riority objectives
72% of companies seeking  age ERP X3 significantly
S
a better general management system noted improves operational
for an ERP system. ..............................................P.9 an improvement, and gains management processes
Time taken to select an ERP system..................P.10 of over 10 % were recorded in terms and cost reduction
of time saved in processing
S
 age ERP X3 implementation time.....................P.11
and producing financial statements
The benefits of Sage ERP X3:
Improved performance.............................P.12 & 13
Improved management processes. ..................P.14
Other information learned
Cost reduction. ................................................P.15
 he companies interviewed noted significant gains that were not anticipated
T
Improved customer service..............................P.16 at the start of the project
Improved profitability........................................P.17 Improvements to business management processes and performance are priority objectives
that the companies consider they have achieved with Sage ERP X3
Conclusion.................................................P.18 & 19

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Methodology and profile Situation of the companies
of companies interviewed before Sage ERP X3

250 companies using The questions related to: Sage ERP X3 is the first ERP 85% of the companies already had IT tools,
Sage ERP X3 were interviewed 
The company’s situation and its information system used in the case of 2/3 but not necessarily an integrated management
during May and June 2009 system before Sage ERP X3 of companies interviewed solution

Reasons for choosing Sage ERP X3


Type of business The previous solution
Operation of the project
5%
The main gains observed
14%

Their expectations as regards
25% evolution of Sage ERP X3 29%

44% 20%

25%
16%
Industry 15%
Retail, distribution 6%
Services
Other
ERP System
Modular management system
Don’t know
No solution at all
The companies interviewed Most of the interviewees were Information
A combination of various software items available
are of medium size and represent System Managers and Financial & Administrative Specifically developed solution
all business areas Directors, traditionally responsible for information
systems projects within companies
In order for the survey to be relevant in terms
Sales
of analysis of obtained performances, the panel
of interviewees represented clients who had
6% used Sage ERP X3 for more than 2 years
11%

18%

27%

15% <5M*
5 to 10M*
23% 10 to 20M*
20 to 50M*
50 to 100M*
>100M*

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Criteria for Priority
selecting an ERP system objectives for an ERP system

Most companies interviewed, Simplicity of use remains an important selection 56% of the companies expressed high  he companies interviewed tend to be looking
T
irrespective of sector or size, chose Sage factor, especially for small companies expectations regarding management for a clear view of corporate activity and for cost
ERP X3 for its functional range processes and 53% regarding reduction. A trend accentuated by the current
The larger the company, the more importance
and its ability to be flexible in terms reduced operating costs economic crisis
is attached to ease of implementation and
of the company’s requirements  he companies express an interest in improving
T
integrator reliability
Working Capital Requirement (WCR), which is
Probably due to the fact that existing tools
starting to become a priority objective,
have reached a certain maturity in technological
as is improved customer service
terms, integration with other tools is no longer a
deciding factor for companies

The main criteria when making the choice Priority objectives for an ERP system

Functional range (ability to meet needs


by function and/or key process) 72% 28%
Improved management processes 39% 16%
16% 22%
22% 22%
22%
The possibility of adapting or adding
new functionalities specific to your needs 54% 46%

Simple to use 36% 64% Reduction in operating


5% costs 26% 27%
27% 14%
14% 33%
33%
Reliability of integrator or producer and continuity 31% 69%

Total cost of the project (including in particular:


licence, implementation service, hardware, etc.) 28% 72%
Improved WCR 15% 26% 13%
13% 45%
45%
Integration with other external tools 21% 79%
0% 100%
Yes No
Very high High Moderate Low

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Time taken to select an ERP system Sage ERP X3
implementation time

51% of the companies, This time period is in line with practices found by Close on ¾ of the companies complete  9% succeed in implementing their solution
2
irrespective of sector or size, Ernst & Young Advisory in this enterprise segment. their project in less than 12 months, in less than 6 months
take 6 months to choose their solution Indeed, it allows time to adopt a coherent once the service provider is in place
approach in choosing the tool and integrator
partner, and to obtain internal validation from users
and decision makers Implementation time
35% of companies interviewed (and maybe more!)
still need one to two years to choose a solution. Sage’s win-win
This may possibly be seen as the consequence approach
Time taken to select of an inadequately managed approach (strategic 16%
the solution vision not shared, poorly defined priorities, Implementation times
etc.) which is not very conducive to obtaining 29%
3%
can be further reduced
consensus
10% with Sage ERP X3
5%
14% Standard Edition

45%
Less than 6 months
27% Between 6 and 12 months
Between 12 and 18 months
51% More than 18 months

The companies who said they took These companies made a strategic choice
6 months to choose their solution (51%) and allocated the necessary resources
More than 2 years in the main implemented it in less
37% of these same companies managed an
More than 18 months than a year (80%)
About 1 year
implementation time of about 6 months
About 6 months  aking account of the panel interviewed, Ernst &
T
Don’t know
Young Advisory sees this breakdown as consistent.
These projects are all part of good practices.
In fact:
 time period of less than 6 months was
the
noted for projects in financial or retail areas
 industrial management the project
For
takes 12 months

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The benefits of Sage ERP X3:
improved performance

80% of companies interviewed The companies base their judgement on: The companies interviewed Sage ERP X3 has brought significant
consider that the solution implemented consider that the situation is better improvement in all functions, at all levels
User satisfaction (75%)
has produced a significant improvement in all user departments
and in some cases (13%) Actual production of the benefits initially
a competitive advantage expected from the ERP system (53%)
Return on Investment (ROI)
of the ERP system (51%)
Evaluation of the benefit
of the solution put in place
Situation of company departments after implementing Sage ERP X3

9% 83% 16% 1%
Sales Administration

Logistics 82% 11% 1% 5%


15%
Management control 81% 10% 4% 4%

Production 77% 18% 2%3%


63% Purchasing 76% 18% 2%4%
13% General
75% 13% 13%
Management

Sales 75% 22% 3%


Significant improvement
A competitive advantage IT 75% 14% 2% 10%
No major change
Accounts 69% 20% 8% 3%
Don’t know
After Sales Service 63% 25% 13%

Better The same Not as good Don’t know

Sage’s win-win
approach
Sage’s win-win Here we clearly see
all the benefits of an
approach integrated management
This result shows solution, especially if,
the real impact of this like Sage ERP X3, it is
information system on a tool appropriate
for any user function
company performance

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The benefits of Sage ERP X3: The benefits of Sage ERP X3:
improved management processes cost reduction

72% of the companies notice Sage ERP X3 has led to significant Overall, Sage ERP X3 has met Over 10% gain in processing time,
an improvement and close on 80% improvements in management processes due the companies’ expectations in the case of 34% of companies interviewed
attribute this directly to Sage ERP X3 to the use of appropriate tools for reporting and in terms of cost reductions
 ver 10% gain in drawing up financial
O
support for operational decision-making
statements, in the case of 29% of clients
Operational aspects are generally the first
 ver 5% fewer IT problems, in the case
O
elements implemented in terms of management
processes. The next areas for the companies are of 57% of companies
“strategic” orientation and risk management Over
 5% more automation, in the case
of 69% of customers

Views on improvement in management processes: the situation as seen since implementation Cost reductions: The benefits of Sage ERP X3
of Sage ERP X3
Have your management processes Financial element
improved since you started processing time
81% 15% 4%
to use Sage ERP X3?
Production costs 80% 20%
14% Supplies processing
time 62% 17% 3% 17%

14% Purchasing budget 59% 29% 6% 6%


Did Sage ERP X3 have an effect To what extent have your
on this improvement? management processes improved?
Return rate 57% 14% 14% 14%

11% 18% IT expenditure 38% 31% 15% 15%

11%
50%
50%
72% The same Better Not as good Don’t know

79%

Sage’s win-win
32%
Less than 5% approach
32%
5 to 10%
Over 10%
The figures are unequivocal,
Yes No Don’t know
the situation is markedly
better with Sage ERP X3

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The benefits of Sage ERP X3: The benefits of Sage ERP X3:
improved customer service improved profitability

Sage’s win-win
Companies which have put in place 
37% attribute this improvement directly Close on 50% of the companies noted approach
customer service improvement indicators
consider that Sage ERP X3 helps to
to Sage ERP X3 increased profitability, of which ¾ attribute The ERP system can make

This result correlates with the previous this directly to Sage ERP X3
improve delivery times, customer service an extensive contribution
observations: Sage ERP X3 improves
levels and stockout percentages to improved profitability,
performance in terms of execution (processing
speed, reliability) since it’s simple to use
 the other hand, they are not all in a position
On and guarantees controlled
to be able to clearly quantify the gains made carrying costs

Elements for measuring improvement in customer service performance Views on improvement in profitability: the situation as seen since implementation of Sage ERP X3

Has your profitability improved


100% since you started to use
Sage ERP X3?

69% 68% 25%


57% 55%
50% 50% 53%
45%
26% 34% Did Sage ERP X3 have To what extent has your
26% an effect on this improvement? profitability improved?
23%
27%
4% 3% 7%
16%
Order-fill ratio Customer retention rate Stockout percentage Service level Delivery times 18%

E
 lements put in place to measure Better The same Not as good
customer service improvement 49%
50%

48%
75%

32%
35%
Less than 5%
5 to 10%
Over 10%

Yes Non Don’t know

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Conclusion
Thank you to all our clients who
responded to this survey
and our questions on how they would
like to see their ERP system evolve.

This “prospective” part confirms the impressions we had formed in our day-to-day relations with our The dawn of the 3rd generation corresponds to increased power of ERP systems and a simple
2,700 clients who use Sage ERP X3: when a company starts to use Sage ERP X3, it becomes the philosophy: the more you automate processes and the more user-centred the solutions are, the
backbone of its information system. And what’s more, it can represent a real competitive advantage. more effective a company’s performance will be. ERP systems need to reach a greater number
of users both within the company and its ecosystem. Now we have the arrival of concepts such
Beyond the operational aspects and the intention of managers, it is clear that the ERP system must
as customisation, collaborative tools, web services, Software as a Service (SaaS), etc. These
adapt more closely to user needs. Companies no longer stop at the functionalities proposed in the
3rd generation ERP systems focus on individual performance and once again on the user.
ERP system, they are also looking at associated services such as e-commerce, Business Intelligence
(BI) and Corporate Performance Management (CPM). In a wider future context, the new-generation ERP system needs to generate a new business model
with the arrival of SaaS. Purchasers will thus gradually become “consumer-players”. This business
A significant investment for any company, an ERP system must also be able to offer support
model – not yet applicable to the ERP system – is eagerly awaited. This new version of Sage ERP X3
solutions such as e-learning, and tools to regularly provide information on the new functionalities.
is a great step forward towards a 3rd generation ERP system ...
In fact, keeping commitments also means enabling companies to benefit from the experience of
others and exchange knowledge via communities.
The survey clearly reveals that a new generation of ERP systems is in the process of being born.
The first generation of ERP systems appeared in the early 1980s, their objective being to automate
processes in order to reduce costs. In the mid-1990s, these ERP systems made way for the 2nd
generation: still oriented towards reducing transaction costs, they now extended to partners via
business line extensions such as Supply Chain Management (SCM), Product Lifecycle Management
(PLM), etc.

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