Survey: Business Software Buyers Are Complacent To Change

Business Wire, March 7, 2008

Most Ignore Vendor Alternatives Despite Unexpected Costs After Implementation;

Agresso Customer City of Ventura Provides Counterpoint Argument

VICTORIA, British Columbia -- Agresso (www.agresso.com/USA), the ERP market's definition of agility, released today new survey results showing a clear trend by business software buyers to favor and re-select their current ERP vendors, despite facing substantially higher than expected costs after implementing those vendors. The survey sponsored by Agresso and conducted by IDC as part of its quarterly AppStats Survey, spans more than 250 companies in the U.S. and U.K. An overview of the survey results, entitled "Mid-Market Service Companies' Enterprise Investment Strategies and Adoption Trends,"1 is available at www.agresso.com/IDC.> Forty-seven percent of the respondents state that their financial applications costs exceeded their planned budgets as much as 100 percent. According to IDC, this buyer complacency to continue down the same path with the same vendors may be costing public and private sector businesses millions of dollars annually. Eighty-three percent of ERP customers say they will still buy from the same vendor despite cost over-runs and change issues.

"Companies need to acknowledge the hidden costs of their ERP systems following initial implementations," said Albert Pang, director of enterprise applications research, IDC. "Many users need to ask whether they should continue to stick to their current ERP system providers. If they don't, it seems to suggest that they are not willing to consider the options of using new, perhaps lesser known vendors. There is either a sense of complacency or one of hopelessness that costs can never be reined in."

Pang said that business leaders need to analyze and perhaps adjust their buying behavior to review a wider array of alternatives before deciding on replacement solutions.

City of Ventura Forgoes ERP Leaders, Selects Agresso

One Southern California municipality, the City of Ventura, recently reviewed all of the market leaders, bypassed its current solution, and selected Agresso. "Making a strategic choice, versus an automatic replacement choice is a little more work but can save a lot of dollars down the road," said John Emerson, Senior IT Executive, City of Ventura. "When cities get smarter about software, tax payers are the winners."

Emerson said the City completed a formal Request for Proposal (RFP) process that was responded to by a number of vendors. The City of Ventura signed a $1.3 million deal with Agresso this past December, and according to Emerson, Agresso can now be selected by government entities throughout the State of California.

"I recently saw data showing that government employees spend 29 percent of their time waiting for needed information," Emerson said. "This drives up administrative costs, which can run about 30 percent in government agencies. We have a city-wide initiative to improve business processes and reduce costs. Agresso's architecture facilitates data access and business process change. There is an option out there for reducing costs on an ongoing basis, and that's Agresso. Businesses just have to look beyond the big names."

About Agresso

Agresso (www.agresso.com/usa) is a $480 million enterprise resource planning (ERP) company, listed in the Netherlands as Unit 4 Agresso (Dutch Stock Exchange EURONEXT-U4AGR) and one of the top five providers of ERP solutions for professional services and public sector organizations. Agresso offers a uniquely integrated data/process/delivery architecture designed specifically for Businesses Living IN Change (BLINC) [TM]. Agresso is known as "The ERP Market's Definition of Agility" as it allows an unlimited amount of ongoing, post-implementation changes without the typical external IT costs and intervention that nets billions of dollars in revenue to the market leaders. Over 2,750 companies and organizations in 100 countries deploy Agresso Business World for both operational support and strategic management. The company's role-based, Web Services and Services-Oriented Architecture (SOA) enabled solutions include: Financial Management, Human Resources and Payroll, Procurement Management, Project Costing and Billing, Reporting and Analytics, Business Process Automation, Field Services and Asset Maintenance, and CRM.

1 Source: IDC Presentation prepared for Agresso, "Mid-Market Service Companies' Enterprise Applications Investment Strategies and Adoption Trends," Feb 2008.