During the ERP software selection process, it can be difficult to know exactly how long the chosen software will take to fully implement. While software sales reps will typically provide optimistic scenarios, they often do not take into account key activities and other considerations that can materially affect the implementation duration. In fact, according to Panorama Consulting’s 2008 ERP Report, 93% of ERP projects take longer than planned. With that in mind, it is important to go into the software selection and implementation planning process with eyes wide open.
Four Key Reasons Why ERP Projects Take Longer Than Expected
- Unrealistic expectations. The first and most common problem is with unrealistic expectations. When an ERP project team underestimates the time it will take to complete the implementation, they tend to skimp on important activities such as organizational change management or process design, which then creates more risk and delays as the project progresses. Given the snowball effect that it creates, misaligned expectations is often the first domino to fall in a failed ERP project.
- Not adequately accounting for business-oriented activities. ERP is about much more than the software. While it is relatively straightforward for an ERP software vendor to estimate how long it will take to install and configure the software, it is much more difficult to predict activities that are not directly related to the software. For example, defining business processes, making decisions about how the software should be configured, and facilitating conference room pilots are key activities that are important, yet difficult to predict.
- Lack of resources to dedicate to the ERP project. It is important to have clear assumptions in your project plan about how many internal and external resources will be supporting the project. We see many companies agree to a project plan with their chosen vendor, only to find that the two parties have differing expectations of how many and what types of people will support the project.
- Software customization. An overwhelming majority of clients we work with intend to implement their chosen ERP software out of the box with little to no customization. However, once implementation begins, project teams will inevitably find at least a handful of functionality gaps that they would like to address by changing the software. In fact, Panorama’s ERP Report found that only 18% of companies implemented their chosen ERP solution with limited or no customization. So while it may not be realistic to suggest that there will be zero customization to the software, it is important to prioritize and limit the amount of customization to help contain costs and time.
While ERP projects are always challenging, they don’t need to take longer than expected. Companies should begin by setting realistic implementation expectations during the ERP software selection process, then manage resources and customization to stay on schedule. Leveraging the assistance of an independent ERP consulting firm will also help create a realistic implementation plan that considers the project activities required for success and minimizes overall project duration and cost.