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May 15, 2014

European organisations ‘wasting €9.6bn on unused business software’

Sage survey finds businesses are throwing away €43,000 a year on IT.

By Joe Curtis

European businesses are wasting a "scary" €9.6bn every year on business software that is left largely untouched.

Individual companies burn through an average €43,000 annually on everything from ERP to email solutions that are never fully used, according to a survey of 600 IT decision makers across the EU, extrapolated to the 222,600 SMBs based in Europe.

Christophe Letellier, who leads the ERP business at software firm Sage accused businesses of making decisions in an "ivory tower" without keeping end users in mind, leading to under-utilisation.

He said: "They are just not using their investment right. That’s something really scary when everyone is claiming cost control is important. Companies today are choosing business software they chose 10 years ago. End users aren’t in [mind during] the decision-making process.

"You have a few people in an ivory tower making decisions and it ends up costing a fortune afterwards."

Specific reasons for underdeployment varied from country to country. Thirty five per cent of German respondents blame software duplication, while a quarter of UK respondents pinned the problem on a lack of customer demand.

The most common reasons were lack of business need for all features included in a solution, at 36%, and an absence of user training, cited by 25% of respondents. Business efficiency was found to be the key challenge among European firms, with 63% saying it was their central concern.

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Letellier said: "We are moving from a PC model to a CC model, where CC could mean consumer centric or connected computing. We see both as major trends. The more complexity we create the less software gets used. It must be attractive to the end user."

He said the firm would pay close attention to survey results suggesting that only 37% of European SMBs are using ERP software, as it prepares to release X3 version seven next month.

The UK mid-market expressed the least interest in ERP, with a 20% adoption rate, while Spain topped the list with a 39% adoption rate.

Three-quarters of firms said they are considering investing in cloud software with technologies such as cloud, social media and mobility driving a more user-centric approach from businesses. Sage CTO Klaus-Michael Vogelberg said this approach underpins Sage’s latest iteration of of its X3 suite which has been four years in development.

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