Average Cost of Manufacturing ERP Implementations Higher Than Implementation Cost Across All Industries
Heavy customization of ERP software results in high ERP implementation costs for the manufacturing industry, according to The 2014 Manufacturing ERP Report issued today by Panorama Consulting Solutions, the world’s leading independent ERP consulting firm. The report revealed that manufacturing ERP implementations cost 14-percent more than ERP implementations across all industries. While the average ERP implementation across all industries costs $9.8 million, the average manufacturing ERP implementation costs $11.4 million.
“The fact that manufacturing ERP implementations have a relatively high risk of going over budget emphasizes the importance of planning for a realistic and objective project budget and scope during the software selection stage of the initiative,” said Eric Kimberling, managing partner of Panorama Consulting Solutions. “Manufacturing organizations that fail to develop and execute a strong implementation plan often encounter unexpected costs related to integration, customization and change management.”
The report suggests that 63-percent of manufacturing ERP implementations go over budget, compared to 59-percent of ERP implementations across all industries. While actual implementation costs run over budget by an average of $1.7 million in all industries, average implementation costs run over by $3 million in the manufacturing industry. In addition, manufacturing organizations tend to have higher customization levels than organizations across all industries, with 13-percent of manufacturing organizations customizing over 50-percent of their ERP systems’ code. Only 6-percent of organizations across all industries implement ERP with this level of customization.
“The complexity of manufacturing processes often calls for heavy customization, which is a driver of implementation cost,” said Kimberling. “Manufacturing organizations should plan for customization costs upfront in order to reduce the risk of budget overruns and achieve a high return on investment.”
Download The 2014 Manufacturing ERP Report at //www.panorama-consulting.com/resource-center/erp-industry-reports/. For further analysis, register for our Manufacturing ERP Report webinar on December 19, 2103: //www.panorama-consulting.com/resource-center/erp-webinars/.
About The 2014 Manufacturing ERP Report
Research for The 2014 Manufacturing ERP Report was conducted by Panorama Consulting Solutions via online polling on its website from May 2013 to September 2013. The full report (and additional independent industry research) can be accessed at: //www.panorama-consulting.com/resource-center/erp-industry-reports/.
About Panorama Consulting Solutions
Headquartered in Denver, Panorama Consulting Solutions is an IT consulting firm specializing in the enterprise resource planning (ERP) market for mid- to large-sized organizations around the world. Independent of affiliation, Panorama facilitates the evaluation and selection of ERP software, manages ERP implementation, and expedites all related organizational change to ensure that each of its clients realize the full business benefits of their ERP systems. Panorama maintains a global presence with current and planned offices in Chicago, New York, Washington, D.C., San Francisco, London, Shanghai and Dubai.