Research conducted by Forterro highlights a troubling trend among UK e-commerce firms: a significant percentage is not fully leveraging their cloud Enterprise Resource Planning (ERP) systems. Despite a strong adoption rate, the findings reveal that 64% of these firms see their cloud ERP resources as underutilised, which could have far-reaching implications for their operations and profitability.
The study, titled “The UK Midmarket Ecommerce Report: Key Tech Trends, Best Practice and Future-Proofing,” was developed through a survey of 100 ERP decision-makers within midmarket e-commerce businesses across the UK. While 87% of these companies use cloud-based or hybrid ERP systems, the apparent gap in resource effectiveness is concerning.
A stark testament to the potential risks posed by inadequate ERP functionalities is the reported estimated loss of GBP £26,580 per day for each day that ERP systems experience downtime. This significant figure not only emphasizes the financial ramifications but also raises alarms about operational sustainability. Alongside financial constraints, nearly half of the participants indicated that downtime could hinder staff productivity, and 47% acknowledged the danger of reputational damage stemming from operational failures.
David Coste, President of North & Western Europe at Forterro, articulates the necessity of ERP systems for e-commerce competitiveness. He remarked, “E-commerce is one of the most competitive sectors, and those operating within it have to differentiate themselves with service excellence.” He further noted that while lost revenue is a critical concern, the long-term impact of reputational harm could be even more damaging, underscoring the critical need for constant ERP availability.
Despite acknowledging the evident advantages of cloud ERP systems—such as ease of accessibility (43%), high availability (41%), and enhanced processing speed (40%)—41% of firms reported that ineffective use of cloud capabilities is a barrier to benefiting from emerging technologies like Artificial Intelligence (AI) and the Internet of Things (IoT). This disconnect between technology investment and actual utilisation raises critical questions about strategic alignment within these firms.
Security stands as a pivotal concern, with 43% of respondents prioritising it as their top technology focus. The anxiety surrounding cyber threats understandably drives this urgency. In addition, cost reduction (36%) and supply chain improvement (32%) remain prominent agendas for e-commerce leaders looking toward future growth and stability.
The broader economic landscape adds another layer of complexity, with 40% of respondents identifying global economic uncertainty as a primary challenge. Other issues include maintaining a solid sales pipeline (39%) and navigating the difficulties of acquiring and retaining talent (36%). These ongoing challenges, alongside the underutilisation of cloud ERP systems, create a precarious situation for many firms.
Coste’s perspective on the necessity of technological adoption is worth noting: “UK e-commerce firms are facing a variety of challenges that make their existence that bit harder, so business leaders must do all they can to protect themselves now and in the future.” His statement underscores the essential role that technology, particularly cloud ERP, can play in enhancing operational efficiency and unlocking potential across various technological domains.
The findings of this study serve as a wake-up call. E-commerce firms in the UK must critically assess and revise their approach to cloud ERP system implementation. It is not enough to simply adopt these systems; the full range of their capabilities must be leveraged. This involves investing not only in technology but also in training and processes that allow for optimal system utilisation.
Examples of successful ERP utilisation can be found in companies that have integrated these systems seamlessly into their operations, allowing for real-time data access, streamlined processes, and improved decision-making. For instance, businesses that have effectively utilised ERP for inventory management have reported reduced holding costs and improved order fulfilment rates.
In conclusion, for UK e-commerce firms, the current reliance on cloud-based ERP systems presents both challenges and opportunities. By fully embracing the capabilities these systems offer, firms can not only mitigate the risk of financial loss but also position themselves for future growth in an increasingly competitive digital landscape. Regular training and strategic reviews of software functionalities could transform how these companies operate, paving the way for sustainable success.