A majority of organizations engaged in enterprise resource planning (ERP) initiatives are experiencing extended implementation durations and over-budget scenarios. Still, despite implementation woes, organizations report high levels of satisfaction with ERP successes—and the confirmation that they would do it all over again if necessary, according to a new study from Panorama Consulting, a Denver-based consulting firm specializing in the global ERP market.
Conducted by Panorama Consulting via online polling, the data for the study was collected from January 2013 to February 2014 and included 192 companies with annual revenue ranging from less than $25 million to more than $2 billion. The report discusses findings on ERP vendor selection, the role of ERP consultants and satisfaction and success ratings.
- The average total cost of an ERP implementation was $2.8 million, or 4.6 percent of annual revenue. This is down from 5.5 percent of annual revenue in the prior year.
- 56 percent of companies implementing ERP systems were multinational, while 77 percent were multisite.
- 83 percent used consultants for some or all stages of their ERP implementations.
- 51 percent of organizations experienced some sort of material operational disruption at the time of go-live, such as not being able to ship product or close the books. Of those that experienced an operational disruption, approximately two out of three experienced a disruption lasting one month or more after go-live.
- 63 percent said that managing the change was either difficult or very difficult, while only 2 percent said it was easy or very easy.
In contrast, technical issues were said to be difficult or very difficult by 45 percent of respondents. These organizational challenges may be at least partly due to the fact that most projects invested less than 25 percent of their resources into critical organizational change management activities.
The interesting and good news is that, despite issues, most organizations still reported being satisfied with their implementation and their chosen ERP system.
In fact, 63 percent said they are satisfied with their implementations and a majority said that if they could do it all over again, they would choose the same ERP software.
According to Panorama Consulting, ERP implementations all too often are plagued by technical, process, organizational and management issues—all of which can cause operational disruption.
What could help the ERP implementation process run smoothly?
Better project management, led by project champions, could result in higher instances of ERP implementation success. A project champion is the person within an organization implementing a project who takes on the burden of ensuring everyone involved is on board and behind the ultimate success of the project.
Project champions are responsible for identifying a project’s strategic objectives, critically analyzing and ensuring best practices, identifying and eliminating obstacles that may threaten a project’s viability within the organization itself, prioritizing project phases based on value and relaying timely updates to all managers and project stakeholders.
With cloud and mobile ERP offerings expanding during 2014, more businesses will be adopting ERP solutions to improve crucial processes and operational functionalities.
And why not? ERP solutions deliver a core benefit to businesses—a powerful, responsive platform for doing business better. Perhaps with project champions at the helm, ERP implementations will go more smoothly, resulting in a more cheerful implementation experience and a study beaming with projects delivered in scope, under budget and on time.