What is Project ERP? It is enterprise resource planning (ERP) software designed fo r project-intensive environments like engineer to order manufacturing, engineering procurement and construction contracting or even asset-based environmetns like process manufacturing. This study from IFS North American and Mint Jutras indicates that many of these industries lack the Project ERP functionality necessary to increase productivity and manage risk.

1. How Well Does ERP Facilitate
Project Based Business Models?
November 2012

2. Background
In September 2012, a study was conducted
among manufacturing executives and
This study was
professionals of middle market to large conducted by IFS
manufacturers to better understand how North America
well current enterprise resource planning and Mint
(ERP) options meet the needs of Jutras, an
companies in project-driven industries independent
including: research-based
• Engineer to order manufacturing. consulting firm
that specializes in
• Aerospace and defense manufacturing. analyzing the
• Engineering, procurement and business impact
construction contracting. of enterprise
• Asset-intensive business like batch applications.
process manufacturing.
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3. Methodology
• A survey was sent to subscribers to a
specialized industrial publication. This study was
conducted by IFS
• Sample size: 200. North America
• Respondents were screened for and Mint
Jutras, an
involvement in enterprise software independent
decisions and for company size of research-based
greater than $100 million in annual consulting firm
that specializes in
revenue. analyzing the
business impact
of enterprise
applications.
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4. Methodology
• Frequencies on the data were run to reflect
the differing technological approaches taken
This study was
by some specific types of companies, conducted by IFS
including: North America
– Companies engaged in engineer to order and Mint Jutras,
manufacturing. an independent
research-based
– Companies delivering projects as an
consulting firm
engineering, procurement, and that specializes in
construction contractor. analyzing the
– Those involved in batch process, which business impact
would cause them to be involved heavily of enterprise
in enterprise asset management of applications.
process manufacturing plants and
equipment.
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5. Major Areas Explored
– Which project elements can be Applications such as:
controlled in real-time in a  Enterprise Resource
combined ERP and Project Planning (ERP)
 Project and portfolio
Management software
Mgt (PPM)
environment.  Customer Relationship
Mgt (CRM)
 Enterprise Asset
– What level of integration exists? Management (EAM)
 Computerized Maint.
– How well applications currently Mgt System (CMMS)
 Supply Chain Mgt (SCM)
satisfy needs.
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6. Key Findings
– Most manufacturers must deal with managing a variety
of styles of manufacture including multiple flavors of “to
order.”
• Engineer to order
• Configure to order
• Make to order
– While projects are a necessity for 85% of
respondents, 39% have no integration between their
project management systems and enterprise system of
record.
– The ability to control processes in real-time correlates
directly with better integration.
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7. Company Size (Annual Revenue)
$100M -
$149.9M, 16%
$2.5 Billion or
more, 29%
$150M -
$249.9M, 10%
$250M - $1B -
$499.9M, 20% $2.49B, 12%
$500M -
$999.9M, 13%
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8. Manufacturing Styles
Make to Order 66%
Make to Stock 48%
Batch Process 36%
Engineer to Order 36%
Custom Manufacturing 32%
Configure to Order 31%
Continuous Process 27%
Design Fabricate Install 15%
Engineer Procure Construct 12%
0% 10% 20% 30% 40% 50% 60% 70%
Respondents were allowed to select all that apply.
On average each respondent selected 3.26 different
styles, adding to the complexity of the environments.
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9. Why is This Interesting?
• Although projects are an integral part of the environment for 85%
of respondents, 39% had no integration between their project
management and their enterprise system of record, which is
typically an ERP solution.
• Whether an enterprise handles projects through a fully integrated
suite or an accounting, order administration and manufacturing
system of record, that system needs to integrate with project
management functionality in a meaningful way.
• The ability to control processes in real time correlates with better
integration, with the ideal being an ERP solution that is set up to be
for project-oriented companies.
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10. Length of Projects
Engineer to Order Batch Process Engineer Procure Construct
40% 37% 38%
31% 30%
30% 26%
23%
19% 20%
20%
13% 12% 12% 13% 12%
10% 7%
5%
0%
We don’t use Less than 1 1 to 6 months 6 to 12 months Multi-year
projects month projects
The longer the duration of the
project, presumably the more complex. How are
these ETO managing the order without 10
projects?

11. Months-Long Projects Require
Project Management Software
• Another measure of complexity is the length of projects. The
longer the duration of the project, the more complex.
• In some cases, projects are fairly well contained at less than a
month long. But the largest percentage of engineer to order
environment respondents are involved in projects of between one
and six months.
• Batch process manufacturers are likely handling projects that are
refits or design of a batch process or process equipment.
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12. Enterprise Applications in Place
Enterprise Resource Plan. (ERP) 71%
Supply Chain Mgt (SCM) 40%
Manufac. Execution Sys. (MES) 29%
Computerized Maint Mgt (CMMS) 29%
Product Data Mgt (PDM) 27%
Customer Relationship Mgt (CRM) 26%
Enterprise Asset Mgt (EAM) 23%
Human Capital Mgt (HCM) 19%
Project Portfolio Mgt (PPM) 15%
Field Service Mgt (FSM) 12% All Respondents
Other 7%
0% 25% 50% 75%
On average companies have a total of 3.24 different
enterprise application products implemented.
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13. What Level of Integration?
Between Project Management & Enterprise System of Record
All Respondents
40% 39%
30%
30%
20%
13% 14%
10%
4%
0%
None Selective Financial Full Embedded as
integration integration integration a native part
of ERP
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14. Most Common Solutions Used
to Manage Projects
1. Microsoft Project (71%)
2. Microsoft Excel (48%)
3. A module of an ERP solution (20%)
4. IBM (10%)
5. Primavera (8%)
6. No others named were used by more than 4%
Many projects are still managed using
desktop applications. Use of enterprise-
level apps is quite fragmented.
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15. Avoiding Fragmented Data
• Many respondents are still using desktop applications to manage projects.
This can fragment data by pulling it out of shared enterprise environment.
• Microsoft Project is prevalent. There is an enterprise level version, but the
vast majority of Microsoft Project use is in a desktop configuration.
• Microsoft Excel, the universal spreadsheet management tool, is also
heavily used. The key to using Excel without creating silos or islands of
data is to integrate it with your enterprise applications so you can share
the enterprise data through Excel while it still in fact resides in ERP. Once
an Excel spreadsheet exists wholly outside of the enterprise software
environment, managers are at risk of making decision based on bad
data, or your enterprise application may cease to be the true system of
record.
• One in five reported using a module of their ERP solution.
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16. Which of the Following Project Elements
Can You Control in Real-Time in Your
ERP/Project Management Integration?
Time/Schedules 78%
Cost 76%
Materials 52%
Human Resources 40%
Machinery Resources 39% All
Respondents
Cash 34%
Risk Management 34%
0% 20% 40% 60% 80%
Schedules & Costs are controlled fairly well – these
are the primary objectives. But other elements lack.
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17. Which of the Following Project Elements
Can You Control in Real-Time in Your
ERP/Project Management Integration?
Cost 90%
70%
Time/Schedules 88%
74%
Materials 63%
48%
Human Resources 63%
31% Full or
56% embedded
Machinery Resources 33%
Cash 56% Partial
25%
integration
Risk Management 49%
28%
0% 20% 40% 60% 80% 100%
Yet with full integration, the level of control
typically doubles.
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18. Controlled in Real-time?
82%
Cost 75%
76%
59%
Manufacturing Materials 48%
52%
55%
Time/Schedules 92%
81%
41%
Cash 25%
57%
Engineer to Order
36%
Machinery Resources 38%
52%
Batch Process
27%
Risk Management 29%
57% Engineer Procure
23% Construct
Human Resources 44%
67%
0% 50% 100%
Engineering Procurement Construction respondents
have best control but use different 7.6 applications.
ETO uses 3.8 and Batch Process uses 4.6. 18

19. The Risk Management Gap
• Risk management may be intuitively associated with assuring on time
and under budget project performance, but also has implications for
the environment, safety risks & hazardous material risks & contractual
commitments.
– These more challenging areas of risk, which extend beyond the
budget and timeline, become harder to manage than more
concrete factors like cash, machines and materials.
– While 78% of respondents can control schedules in real time and
76% can control costs, a much smaller percentage can manage risk
in real time. However, respondents reporting full integration or
embedded project control within their ERP system, the ability to
control the cost and schedules goes from the high seventies to 90%
and 88%.
– The ability to manage the materials, the human
resources, machinery, cash and risk also increases from the 30%
range to about 50% with increased integration.
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20. Integration Fosters Better Control
Engineer to Order Batch Process Engineer Procure Construct
50% 45%
40% 38%
33% 31%
30% 30%
30% 24%
20%
20%
10% 10%12% 10%
10% 5%
2% 0%
0%
None Selective Financial Full integration Embedded as a
integration integration native part of
ERP
Engineer Procure Construct also has better
integration, so not surprising they have better control
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21. Varying Levels of Integration
• It is amazing that a sizable minority that an engineer to
order, engineering, procurement or construction or even batch
process oriented company reports no integration between their
system of record and project management.
• They may be discounting the need for that level of integration or
could fear the cost and/or the limited returns that come from
point-to-point integrations between disparate products
• The data shows us that many elements of project management
are underserved by existing ERP offerings.
• Overall, the ability of enterprise software to facilitate a
spectrum of important business processes increases with
greater project integration, with the use of Project ERP being a
gold standard.
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22. Project Integration Facilitates
Business Processes
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23. About IFS
IFS is a public company (OMX STO: IFS) founded in 1983 that
develops, supplies, and implements IFS Applications™, a
component-based extended ERP suite built on SOA technology.
IFS focuses on agile businesses where any of four core
processes are strategic: Service & asset
management, manufacturing, supply chain and projects.
The company has 2,000 customers and is present in more than
50 countries with 2,8 00 employees in total.
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24. Contact Information:
Charles Rathmann, Analyst
IFS North America
262.317.7419
chuck.rathmann@ifsworld.com