Majority of Romanian companies need to modernise ERP systems

04 January 2021 3 min. read

Romanian companies lag behind the rest of Europe when it comes to digitalised business process automation. A new Horváth & Partners analysis explains why now is the time to move ahead.

The European Commission’s Digital Economy and Society Index (DESI) is an annual measurement of digitalisation across EU member states, featuring themes of connectivity, human capital, use of internet services, integration of technology and digital public services. This year, Romania ranked 26th on the list – out of 28 member states.

The country has a long way to go on its digital journey. According to Horváth & Partners researchers, a good place to start is business process optimisation. “The need for initiatives to digitise, automate, simplify and streamline business processes is now increasingly acute,” noted Maria Boldor, a Principal at Horváth & Partners in Romania.

Majority of Romanian companies need to modernise ERP systems

She went on to explain how process optimisation is a crucial link in business performance, and to this end, the value of enterprise resource planning (ERP) platforms. “An ERP system has the role of integrating all the information related to the operation of a company in a single digital platform.”

Indeed, the resultant efficiency can cut average time spent on a variety of tasks by up to 30%, while also delivering a 20% boost in profitability. On the flipside, “an outdated ERP platform also brings with it business profitability problems, is difficult to use and puts major pressure on employees in the operations, finance and IT departments.”

As mentioned, Romanian businesses currently lag behind in digital transformation. The researchers found that more than 80% are currently using insufficient and undercooked ERP systems, giving them a host of extra challenges to navigate. And this was before the Covid-19 pandemic.

The Covid-19 challenge

With disrupted operations, squeezed cash flows and rising costs becoming a pandemic-induced reality, efficiency has been the battle cry for businesses around the world. ERP systems take centre stage in this scenario, offering the flexibility and reliability required to navigate fast paced changes in the market.

The absence of adequate ERP planning makes this an unprecedented challenge for businesses. At the same time, Boldor points out how this is an opportunity to cover some ground and emerge from the crisis stronger than ever. “Now is the best time for Romanian companies to focus on optimising business processes. Adaptation and development are, together, the key to success. The digitisation trend, which has started stronger in Romania in recent years, must continue at a faster pace.”

Businesses are taking note of this, evidenced by recent ERP investments from major players in the Romanian market. Horváth & Partners – a business transformation specialist and member of global management consultancy network Cordence Worldwide – has been at the forefront of these efforts.

Examples include energy company Hoerbiger and fast moving consumer goods (FMCG) business Atlantic Grupa, both of which invested in ERP upgrades recently. Both projects – the former a nine month undertaking while the latter took 12 months – were advised on and supported by Horváth & Partners, with impressive results.

According to the firm’s testimonial, processing times dropped by up to 40%, while downtime was cut by around 30%. Data reliability grew by over 60% and maintenance costs fell by 10%. All these factors combined have driven a profitability increase of up to 15%. At a time when the smallest of savings could make or break a company, these numbers certainly highlight the promise of ERP development.