Published on the 21/05/2019 | Written by Heather Wright
Big spending, integration woes and the rise of enterprise-grade shadow IT…
Enterprises across Australia and New Zealand will be buying up big when it comes to enterprise software this year as demand for refreshes hits break point – but SaaS spending by individual business units may pose some integration headaches for companies.
That’s according to a new IBRS report, The State of Enterprise Software, commissioned by ASX-listed TechnologyOne, which says 68 percent of organisations plan to spend a considerable amount on overhauling their ageing enterprise solutions in 2019-2020 to take advantage of new technologies.
“Business-procured systems often work in isolation of other information sources and processes within the business.”
Notably, despite its headline, the survey didn’t canvas the views of sectors outside of TechnologyOne’s target market, some of which are major consumers of enterprise software such as manufacturing and distribution.
The report says organisations have held back enterprise solution upgrades or replacements, either adopting a ‘wait and see’ approach to cloud or delaying until their existing vendors catch up with technology. Those brakes are now coming off with aging solutions primed for rapid overhaul.
“Most organisations are now either satisfied that upgrading or renewing cloud-based enterprise solutions is feasible, or that they can no longer continue holding onto out-of-date on-premise version of their enterprise solutions.”
The report is drawn from a three month study late last year, involving 261 Australian and New Zealand senior executives.
The report shows utilities, water ports and airports companies are leading the charge on replacements with 92 percent planning to replace aging systems or by new enterprise solutions within the next two years. But that’s forward planning – just 13 percent have projects underway, the lowest ratio of any of the sectors surveyed.
Aged care, disabilities and social services (74 percent), education (72 percent) and local government (58 percent) are also likely to be big spenders in the coming two years.
The report also shows the increasing moving of business units to take on technology budget decisions with sales, human resources, field workforce management and customer services groups joining marking in controlling their budgets for enterprise solutions.
In particular, customer service and field operations have surged ahead in taking control of decision making for enterprise application, something the report says is explained by the desire to provide new customer services experiences as quickly as possible.
“As new digital delivery channels become available such as cloud-based services, these groups are keen to grab the opportunity to innovate.”
That move is providing pluses – with more positive attitudes towards resulting SaaS solutions deployed thanks to business units being directly responsible for trade-offs in functionality – but may also herald new issues for businesses, the report says.
“Satisfaction with SaaS solutions was tempered by the growing realisation that these business-procured systems often work in isolation of other information sources and processes within the business.
“While SaaS has enabled business units to easily acquire and run enterprise-grade business solutions that are specific to their needs, the ease of acquisition and deployment also means that many organisations are now creating silos of information and processes.
“As such, integration is proving to be a challenge for the growing number of organisations where business units have procured cloud-based applications with only superficial ICT involvement.”
Unsurprisingly, Joe Sweeney, principal analyst at IBRS says ease-of-use was the common theme among executives view of an ideal enterprise solution.
“Ease doesn’t just refer to the interface, but rather the entire experience of working with the software, the ability of the solution to solve immediate problems and automate industry-specific processes,” Sweeney says.
“Gone are the days when IT could take months, possibly years to gather requirement, plan, select and implement enterprise software and demand staff change,” the report notes. “SaaS and great business control of IT budgets mean that IT groups are competing against specialised, open-market solutions. This is not just a case of ‘shadow IT’ in the traditional sense, but ‘enterprise-grade shadow IT’.