Our 2008 study of 1,300+ ERP implementations across the globe reveals that 65% of companies are satisfied with their ERP software solutions. On the flip side, the study also reveals that 93% of projects take longer than expected, 65% cost more than expected, and 79% realize less than half of the expected business benefits.
This research suggests that companies are fairly satisfied with their ERP solutions even though implementations are more painful than expected and business benefits fall short of expectations. So what gives?
We have a number of theories and questions that we are exploring in our 2009 study, currently in progress:
- How do companies gauge their level of satisfaction with their ERP systems? ERP implementations can be like an amateur runner being thrilled to simply finish a marathon, regardless of where he or she places. Some CIOs are happy when their projects simply don’t fail and don’t put the whole company at risk; they are often times not even thinking about whether or not the company is better off with the new software or whether or not they’re getting as much out of the system as possible. Is simply getting to go-live a measure of success for some?
- Do executives have different perceptions of ERP satisfaction than lower-level employees? Our study reveals diverging views of satisfaction among executives relative to project managers and other non-executives. Even among individual ERP solutions, there are material differences between executive satisfaction compared to other employees. Perhaps executives are the happies when they have good reports and dashboards to see how the business is running, but employees rely more on robust functionality and efficient business processes?
- Are companies failing to measure satisfaction? Another contributor to this phenomena may be that companies simply aren’t measuring business benefits after go-live. Our research and client experience suggests that companies that fail to develop a comprehensive business case and/or fail to measure post-implementation business results are more likely to realize sub-part results from their ERP initiatives. Perhaps companies are satisfied because they don’t know that they’re underperforming and failing to realize the full potential of their newly implemented ERP systems?
There are a number of other potential explanations. Perhaps the same managers who blew their budget and project milestones are reluctant to suggest that it wasn’t worth it in the end. Or perhaps it’s a way to rationalize all the time and money that went into the implementation. Or perhaps companies really are satisfied, but they don’t realize that they could be even more satisfied than they are if they focused on leveraging an ERP benefits realization program.
These points raise more questions than they resolve. Either way, it’s not clear from our research and client experience that companies are taking full advantage of the benefits potential of their ERP solutions. We plan to continue addressing questions such as these with our clients and in our next round of ERP research.
The 2009 ERP Study is not yet out, so click here to read the 2008 ERP Study.