Report shows most companies satisfied with ERP solution – in theory

Panorama Consulting has released its latest enterprise resource planning (ERP) report which reveals that the majority of companies feel they’ve made a good choice with their ERP software and provider, even though various challenges remain – but does it tell the whole story?

The primary challenge is one of cost: over half (53%) of ERP implementations went over company budget; more than three in five (61%) went over time with an almost identical number (60%) saying they received less than half of the benefits they were anticipating.

These stats, taken from 172 respondents, could arguably make for grim reading. Yet 86% of those surveyed said they were satisfied with their ERP system and 60% said they were “pleased”. So what’s behind these numbers?

For a start, it’s interesting to note the 40% who didn’t say they were “pleased”; of that number, one in ten said their move to ERP had been a failure, whilst the remainder (30%) said “neutral” or, worryingly, they “don’t know”. This “points to a lack of a business case, lack of post-implementation auditing and/or a lack of communication about project results from leadership”, the report notes.

Eric Kimberling, Panorama Consulting managing partner, believes it’s not much of a surprise that these projects run over.

“ERP project fatigue can affect even the strongest teams,” Kimberling said in a statement. “When durations stretch and scope increases, it can be tempting to stop working towards goals established in the beginning of the initiative or to change the definition of success as ‘getting the system up and running’.

“Independent third-party consultants can provide invaluable assistance by properly planning the initiative, conducting audits and measuring results back to the business case to ensure that the ERP system provides maximised returns,” he added.

So does this mean that because of project fatigue, organisations say they’re ‘satisfied’ just because the project is live and don’t look deeper into tangible figures?

“Organisations must be careful to ensure that end-users and executives know that results will be measured against key performance indicators for the life of the software and that go-live is just one of the goals of the project,” the report asserts.

In terms of specific ERP vendors, SAP was the most popular, followed by Oracle and Microsoft. SAP was selected by 59% of companies after it had been shortlisted, Oracle 50% and Microsoft 48%. Panorama puts this down to the sheer size of the companies, including the benefits of impressive salespeople, huge advertising budgets and being ‘household names’.

Even though a big takeaway was satisfaction with ERP solutions, the overall report had a gloomy tone, summed up by the conclusion that satisfaction doesn’t always mean ROI, and that the extra cost and time spent in getting projects up to speed doesn’t always mean increased benefits.

Panorama recommended the following key principles for a “strong, solid” ERP strategy:

  • Organisational change management issues
  • Business risk
  • A clear definition of key business and functional requirements
  • Project governance to manage system requests and changes
  • Efficient future state processes
  • A strong business case that outlines all benefit realisation opportunities and the time expected to achieve results

If you’re a CIO, are you satisfied with your ERP system? Why do costs sometimes not align with benefits?

 

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