European businesses are throwing away billions of Euros worth of technology investment every year by failing to fully utilise their business software, according to new research from Sage.
The survey, which polled 600 IT decision makers from across the EU, showed that on average each of the 222,628 European mid-sized business were wasting €43,138 a year, or a staggering €9.6 billion annually. In fact, 88% of firms fail to completely utilise their investments in business software.
Reasons for under deployment of business software varied between countries, with Germany blaming duplication with other software (35%) while just over a quarter (26%) of UK respondents put under-use down to lack of customer demand. Lack of business need for all features (36%) and a dearth of user training (25%) were the most common reasons given by countries on average.
“This survey should serve as a huge wake-up call to businesses across Europe which are
spending billions of Euros on business software that is under-utilised,” said Christophe
Letellier, CEO, Sage Mid-Market. “Business software should be a key part of any mid-market
strategy to grow forward, but at the moment there is a disconnect between the solutions
purchased and the business need. Decision makers aren’t listening to their users enough,
meaning they are trying to find one-size-fits-all solutions instead of bespoke, user-centric
products. Mid-market businesses need to think user-centric, and understand how employees
will make the best use of the organisation’s investment.”
Business efficiency is the key challenge that needs to be addressed by software, with 63% of respondents choosing it as the core business need. Interestingly, software is only seen by
around a third (35%) of countries as the route to business growth.
IT decision makers are increasingly influenced by users, with many features from the
consumerisation of IT beginning to make the jump into business software. For example, social media emerged as a high-growth area, with 64% of businesses indicating social functionality was quite or very important.
Cloud continues to dominate the IT agenda, with 76% of businesses are considering investing in cloud-based business software in future. It does vary on a country to country basis though, with 92% of Portuguese businesses planning to do so compared to 68% of French businesses.
Encouragingly, the success of business software deployment is measured by all European
countries, with service availability and business impact the two most common metrics. Worryingly, however, more than a tenth (12%) of German companies claimed not to measure the success of a technology deployment at all.
Klaus-Michael Vogelberg, Group CTO, Sage said: “What these shocking survey results highlight is the continued rise of trends like social ERP which are driving change throughout the business community. Companies need to be asking themselves how social media and other consumer trends are effecting their users, and their customers. If business efficiency is their goal, they need solutions that have mobility and accessibility baked into their core, meaning the solution will be as useful tomorrow as it is today.”
Other key findings include:
• Almost half (43%) of European businesses update their software every 3-5 years. Nearly half of French companies update their software every 1-3 years (47%), where as little more than a quarter of German (27%) and Belgium (26%) companies do
• Improving efficiency is one of the two key business priority over the next year, particularly for the UK (61%)
• Ease of use orientated features such as functionality, accessibility and ease of deployment are of greater concern for German and Portuguese companies. In contrast, the UK is heavily driven by cost (69%) which is the primary reason for countries overall at 53%
• The outlook for software spend looks bleak, with half (49%) of European businesses expecting to spend less than last year. Germany is the most optimistic with 19% expecting an increase.