Enterprise resource planning systems are supposed to simplify finance and operations. Yet many organizations still operate multiple ERPs, driving up costs, fragmenting data and slowing decision-making.
APQC’s Open Standards Benchmarking tracks the total number of ERP systems or ERP instances in finance shared services, a metric that consistently highlights the gap between the ideal of consolidation and the reality of system sprawl.
While there are times when multiple ERPs make sense, such as meeting compliance requirements in different jurisdictions, the general rule still holds: Fewer is better. Every additional ERP increases complexity, extends reporting cycles and undermines efficiency.
For CFOs seeking to benchmark and improve this measure, these four practical steps can help.
Step 1: Build the business case with data
Consolidation requires upfront investment, but the long-term payoff is clear. CFOs should begin with a cost-benefit analysis that captures both visible and hidden costs:
- Visible costs include licensing fees, maintenance and IT support across multiple systems.
- Hidden costs show up in integration workarounds, longer financial close cycles and delayed reporting that slows executive decision-making.
By comparing these recurring expenses against the one-time costs of migration, implementation and training, finance leaders can quantify the value of moving from many to one, or at least fewer, ERPs. By revisiting this analysis roughly every three years, leaders can ensure assumptions stay current as technology evolves.
Step 2: Strengthen the foundation with clean data
Even if full consolidation is not feasible, improving data quality is a practical first step toward reducing ERP complexity. Standardized, validated and reliable data make integration easier, accelerate reporting and lay the groundwork for automation or AI.
Finance leaders should treat data governance as a consolidation strategy. Clean data reduces the pain of operating across multiple systems today and shortens the path to future consolidation. It also ensures that investments in robotic process automation or AI generate real value instead of amplifying bad inputs.
Step 3: Leverage technology, but don’t rely on it alone
The shift to cloud-based ERPs has transformed how organizations deploy and use these systems. Cloud solutions reduce downtime, improve security and enable secure access from anywhere. They also simplify vendor-managed upgrades, making it easier to keep systems current.
But migrating to the cloud without consolidating simply moves existing complexity onto a new platform. CFOs should view cloud adoption as an enabler of simplification, not a substitute for it. Similarly, integration tools such as RPA and AI can help bridge gaps between systems, but they are not long-term fixes for fragmentation. Technology works best when paired with strategic efforts to streamline.
Step 4: Know when to make exceptions
Consolidation may not always be practical or cost-effective. Multinationals often require separate systems to comply with regional regulations. Some acquired business units may depend on specialized platforms that are too expensive or risky to replace.
When multiple ERPs are unavoidable, CFOs can mitigate risk by standardizing data definitions and aligning reporting practices. The goal is to simplify as much as possible, even when full consolidation is out of reach.
The bottom line
The number of ERP systems an organization operates is more than a metric — it is a signal of financial health, operational agility and the efficiency of the finance function. While exceptions exist, most organizations benefit from moving toward fewer ERPs.
CFOs who take deliberate steps to build the business case, strengthen data foundations, leverage technology wisely and recognize when exceptions are warranted will be better positioned to improve this benchmark. The reward is faster reporting, lower costs and a finance function that can focus on insights rather than integration
