The High Cost of Business Disruption

The High Cost of Business DisruptionIn an interesting blog post titled Make the Hairs on the Back of Your Neck Stand Up, Israel Gat discusses the difficulty of maintaining and adapting large ERP installations especially with regard to technical debt:

“The software decayed and decayed but technical debt had never been reduced. Consequently, the cost of change, any change, today is horrendous.”

Israel’s article is based on the IDC Business Disruption Survey of November, 2009 which itself is very interesting. The data was collected from an online survey of 214 business executives from both IT and line-of-business roles. What they found was that ERP systems are frequently changed: 12.2% Annually, 16.8% monthly, 14.5% daily or weekly and 43.0% as needed. And, that these changes caused frequent and significant business disruption:

“These changes had the greatest adverse impact in the areas of customer satisfaction, which survey respondents reported declining 20.9%, and decreased stock price of 19.7% (see Figure 4). From a risk perspective, the potential for noncompliance is high during the system change, and survey respondents reported loss of revenue of 17.9% as a result of fines for noncompliance.”

The survey goes into detail on the types of changes that companies make, and the five key drivers for system change. If you’re involved in any type of ERP activity this is a fascinating survey and I’d encourage you to explore it in more detail.

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One Response to The High Cost of Business Disruption

  1. Israel Gat December 31, 2009 at 1:49 am #

    We might have a metrics problem on our hand. Continuous deployment is quite effective as a software quality improvement strategy. What often happens is that it flies at the teeth of the ‘Man in the Dock’ theory. When a major disruption happens, we look for a single point of accountability instead of deciphering the complex pathway to the disruption. Such a theory in use, of course, leads to less frequent deployments which in the long run adversely affect software quality.Israel

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