ERP Project Delays Due to B2B Rollouts Cost Manufacturers More than $1 Million per Month

Sunbury, United Kingdom— September 21, 2009 — GXS™, a leading provider of business-to-business (B2B) e-commerce solutions, today announced the results of an AMR Research study focused on the tie between B2B e-commerce deployments and enterprise resource planning (ERP) system upgrades. The study found that for companies with multi-million dollar ERP deployments, delays due to lack of B2B planning and integration can cost them in excess of $45,000 a day or more than $1 million a month. Nearly 85 percent of the companies surveyed experienced delays in ERP rollouts due to B2B integration issues. In fact, ERP/B2B integration projects have become so prevalent and important, that GXS has launched a web site specifically devoted to best practices and insights in this area.

The AMR Research survey, which included respondents from the food and beverage, high tech and consumer products industries as well as from automotive suppliers and OEMs, established a strong relationship between ERP projects and new B2B e-commerce needs. According to the study:

  1. 65 percent of respondents performed inadequate testing of B2B prior to new ERP launches;
  2. 47 percent of companies expanded the scope of their B2B efforts (e.g. new transaction sets or trading partners during ERP projects);
  3. 79 percent of companies have a greater than 1 percent error rate for B2B data; and
  4. 57 percent of companies have experienced a production outage due to lack of B2B connectivity.

Importantly, the AMR Research survey also found 34 percent (more than one-third) of data in ERP systems originates from outside the enterprise (e.g., from customers, suppliers, 3PLs, etc.). This demonstrates the importance of integrating external trading partner transactions and data with ERP systems. While many companies are focused on managing data inside the corporate eco-system, that approach addresses less than two-thirds of the data typically feeding an ERP system, making it costly and incomplete. By addressing the external data feeding their ERP systems, companies can get more out of their investment and ensure the accuracy of their trading partner transactions. Similarly, 34 percent of respondents said that B2B integration staff are supporting ERP-related projects. A lack of resources to manage both B2B and ERP related integration projects means that B2B projects could be vulnerable to implementation delays and relationships with trading partners could be compromised.

In an article on the study, AMR Research said, “Changes to an organisation’s ERP system often drive significant changes to B2B integration strategies. As a part of the ERP project, many companies will reexamine their entire IT architecture strategy and attempt to modernise their infrastructure while reducing the number of IT suppliers. Almost 60 percent of respondents said they were consolidating multiple, disparate B2B gateways onto a common platform.”

GXS helps companies manage their B2B/ERP integration projects most often through its B2B outsourcing portfolio, GXS Expert Outsourcing through direct integration with a variety of ERP planning software and services including Oracle, SAP, Ariba and Microsoft Dynamics. By outsourcing the management of their B2B environments, businesses can be sure that their B2B networks benefit from the most advanced B2B technologies and that they can achieve 100 percent trading partner participation. In fact, according to AMR Research, “The topic of managed services comes up in every B2B discussion we are having today, and we expect that trend to continue as customers look to get leaner and better at managing B2B integration.”

“The symbiotic nature of B2B and ERP is often overlooked, as many manufacturing companies tend to focus design, development and testing efforts on business processes within the four walls of their enterprise.  Project leaders often forget the critical supply chain links and external data flows needed to power ERP applications,” said Steve Keifer, vice president of product and industry marketing at GXS.  “Too many companies get half-way through a new ERP roll-out to discover that they are not staffed to support the massive mapping, testing and trading partner management activities necessary for ERP upgrades. Our goal is keep ERP projects on-schedule and under budget with a best-in-class approach to B2B integration.”

The 121 companies that participated in the survey range in size from approximately $750 million in revenue to more than $10 billion. The respondents most frequently held IT roles within their organisation (62 percent) with the remainder holding various line of business positions. The high tech industry (32 percent) was the largest vertical represented in the survey, followed closely by food and beverage (27 percent), automotive suppliers and OEMS (23 percent) and consumer products (18 percent).  GXS will be hosting a webinar featuring Dennis Gaughan and Jim Shepherd of AMR Research to address this study and its results in more detail on October 6, 2009 at 16:00 pm London time.
About GXS

GXS is a leading global provider of B2B e-commerce solutions that simplify and enhance business process integration and collabouration among trading partners.  Organisations worldwide, including more than 70 percent of the Fortune 500, leverage the on-demand services on GXS Trading Grid® to extend supply chain networks, optimise product launches, automate warehouse receiving, manage electronic payments and gain supply chain visibility.  GXS Managed Services, GXS’ B2B outsourcing solution, empowers customers with the expertise, technical infrastructure and program support to conduct B2B e-commerce with trading partners globally.

Based in Gaithersburg, Md., GXS has an extensive global network and has local offices in the Americas, Europe and Asia-Pacific regions.  GXS can be found on the Web at www.gxs.co.ukhttp://blogs.gxs.com/ and http://twitter.com/gxs.

All products and services mentioned are trademarks of their respective companies.

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For further information please contact:

Denise Oakley, Director, Marketing Programmes International GXS
Tel – +44 (0) 1932 776408 / +44 (0) 7768 537 481 Email: denise.oakley@gxs.com