As we outlined in a blog post earlier this year, ERP implementations fail for five key reasons. Unfortunately, some of these failures lead to heads rolling, millions of dollars of budget overruns, and in some extreme cases, lawsuits against software vendors. In fact, the number of inquiries we have received to act as expert witnesses in ERP lawsuits has increased dramatically in the last twelve months.
When working with clients, we often hear the perception that most ERP failures or lawsuits must pertain to SAP implementations . After all, Hershey’s, Waste Management, and a host of other high-visibility failures involved SAP’s ERP software. However, our research shows that there is no pattern to ERP failures and lawsuits, other that they happen more often than they should and no one ERP vendor appears more or less likely to experience failure than the others.
For example, two new lawsuits were announced in the last 30 days: one against Oracle and another against JDA’s i2 unit.
In fact, we looked at the most recent lawsuits to see if there was a pattern among vendors and software solutions. As you will see in the table below, there is no apparent pattern to the vendors named in recent legal matters. If anything, when expressed as a percentage of total client base, SAP and Oracle probably have a lower lawsuit rate than other vendors on the list. However, because large and high-visibility companies are more likely to embark on Oracle or SAP implementations, those organizations are more likely to receive attention when something goes awry.[table “” not found /]
So what are some of the best ways to avoid becoming wrapped up in an ERP lawsuit? There are five key factors that can help you stay out of trouble during your ERP selection and implementation process, regardless of which software you are considering:
- Ensure functional and technical fit of the software you select
- Have realistic expectations about how long the implementation process will take and how much it will cost
- Ensure adequate executive buy-in and support
- Where possible, avoid customizing software rather than leveraging standard functionality
- Ensure sufficient internal and external ERP software implementation expertise on your project team
Read more about these five implementation factors by reading the full blog, Welcome to the Jungle: Lessons Learned from ERP Implementation Failures. In addition, share your opinion about which of the five failure points is the most crucial by taking our poll below.