Hardware usage: now and in the
future

Respondents were asked which hardware they
use to run their core business applications and which hardware they would be likely to
change to over the next two years.


Fig. 6 – Hardware usage – now and in the
future

Current hardware usage
Clearly, as shown in Figure 6, the most currently used hardware is AS/400. Over half of
respondents in the UK, France and Italy use this hardware. Slightly more US companies also
use Unix based hardware while nearly half of German companies are split between UNIX and
Novell. Primary producers (40%) and suppliers to major outlets (44%) tend to use AS/400
compared with wholesalers who tend to use UNIX based hardware (38%). More medium sized
companies (61%) use AS/400 than other size companies surveyed. Small and large companies
also use AS/400 more than any other hardware, but more of these companies also use UNIX
based hardware when compared to medium sized companies (24% and 31% compared to 11%).

Future hardware usage
Looking at future usage, it is apparent that most suppliers are not likely to change their
hardware within the next two years (75%). Users of NT Servers and AS/400 are least likely
to change (84% and 82%). Any changes are most likely to be made by Novell and UNIX users
moving to NT Servers (11% and 15%). UK and US companies are most likely to change with US
users changing to NT Servers (15%) and UK users changing to a PC-based network or other
(14%). Italy (90%), wholesalers (92%) and small companies (80%) are least likely to change
hardware within the next two years.

Given the significant investment that every
company has made in its hardware and communications infrastructure it is not surprising
that most companies do not envisage changing their hardware. Indeed as supply chains
become more integrated it will become increasingly difficult for companies to change and
for new suppliers of hardware to enter the market.

Main drivers for changing core
business IT systems

Respondents were asked what are, or would
be, the main drivers for changing their core business IT systems.

Overall, the main driver is to increase
efficiency (51%) followed by reducing costs (43%). Wholesalers and large companies are
more likely to change IT systems to increase efficiency (62% and 56% respectively) with
small companies being much more focused on reducing costs (54%). Drivers for change
identified varied considerably depending on the country.


Fig. 7 – Main drivers for changing core
business IT systems

Looking at countries individually compared
to the market average, the UK mentioned increase efficiency much less as a driver than
other countries, except Italy. The UK also mentioned reduce costs fewer times than other
countries, except the US. In fact, overall, the UK mentioned fewer drivers for changing
core IT business systems than the market average. UK respondents did not even mention the
EMU as a driver for change. A strong feeling persists that the UK is not going to join the
European Monetary Union within the next few years. Wholesalers (27%) are more aware of the
EMU than other supplier sectors while large companies appear indifferent (2%). Only one
Italian respondent mentioned the EMU.

For Spain, the main drivers are to increase
efficiency and to be more competitive, outranking other potential proponents for change
and far above the market average. To be more competitive carries similar weight across
supplier sectors. However, fewer large companies, compared to other sizes of company,
mentioned this driver. Spain, along with France and Germany, put more emphasis on the EMU
as a driver for change.

In France, respondents more frequently
mentioned all the main drivers for change when compared against the market average, except
for reduce costs and Year 2000 (which were on a par with the market average). Increasing
efficiency and being more competitive are the main drivers for change in French food
businesses. Legislative issues are also more significant in France with a third of
respondents mentioning it as a driver for change. This especially applies to wholesalers
(31%), small and medium sized (12% and 11%) companies.

For Germany, the most significant drivers
for change, well above the market average, are to reduce costs, to be more competitive and
Year 2000 compliant. These large gaps, illustrated in Figure 10, may be reflective of the
mood of the country. German respondents seem much more aware of the year 2000 as a reason
for changing IT systems. The EMU and legislative issues also carry more weight in Germany.

In Italy, all the main drivers for change
are well below the market average, except for reduce costs which is well above the market
average. Only 10% of Italian respondents mentioned increase efficiency as a driver for
change indicating that either they consider themselves operating at peak efficiency or
they are complacent about it.

Interestingly, the US is lower than the
market average across all categories, except increase efficiency. It appears there are
very few drivers for changing IT systems in the US. Perhaps this indicates that suppliers
have optimal IT systems or it reflects a buoyant economy and profitable companies.

Overall the main drivers are the usual
business ones -increase efficiency, reduce costs and be more competitive. However, year
2000 and EMU are two current issues that are drawing in vast amounts of resources. The
year 2000 is of equal importance to all countries, except surprisingly the US.

As far as EMU is concerned, it is of major
importance to those countries that are expecting to join in the first wave (Spain, France
and Germany). However, it should still be an important issue for the UK as it will need to
trade with those countries that join. Also, it is probable that the UK will not stay
outside for too long.

Familiarity with the term
‘Enterprise Resource Planning’

Respondents were asked whether they were
familiar with the term ‘Enterprise Resource Planning’ and if so, what did it
refer to. Overall, only 27% of respondents were aware of the term. Over half of those
respondents did not know its meaning. Of those respondents who gave a meaning, most
described it as managing business resources.


Fig. 8 – Respondents familiar with the term
ERP

As evident from Fig. 8, nearly half of
respondents in Italy had heard of the term ‘Enterprise Resource Planning’.
However, none of them knew its meaning! The countries with the lowest recognition were
Germany, Spain and the UK. The highest familiarity across sectors was within primary
producers (32%) and medium to large companies (30% and 32% respectively).

The term Enterprise Resource Planning (ERP)
is relatively new, and neither the name nor the acronym have yet achieved full
international recognition. ERP is an evolution from Manufacturing Resource Planning (MRP)
II, which may be a more widely-known term. However, ERP does represent a significantly
different concept from MRP II. Essentially, it provides wider scope and functionality
designed to enable companies to manage many more facets of their business than is possible
with older solutions. True ERP allows widespread integration of business processes across
the enterprise (large or small) to facilitate decision-making, speed processing and to
enhance business results.