Many Projects on or Under Budget, but ERP Failure Still on the Rise
Project budget adherence has no correlation with ERP success, according to the 2015 ERP Report issued today by Panorama Consulting Solutions, the world’s leading independent ERP consulting firm.
While nearly half of organizations (45-percent) reported that their ERP projects were on- or under-budget, the number of reported ERP failures increased by five-percent since last year. Organizations indicating that their projects were over-budget pointed to challenges such as expanded scope, underestimated staffing, additional technology requirements and unanticipated technical or organizational issues.
“Reasons for ERP failure vary, but they all tie back to organizational change management or the lack thereof,” said Eric Kimberling, Managing Partner of Panorama. “Our research and experience have always emphasized the importance of organizational change and business process management, and this year’s report provides even more data to support our people- and process-focused methodology.”
The report highlights a $1.7-million increase in average implementation cost and a two-month decrease in average duration. In addition, 60-percent of organizations failed to realize the business benefits they expected from their ERP implementations, which is an increase of 10-percent over last year. The data also reveal that the percentage of organizations implementing software as a service (SaaS) has increased by 29-percent (from four-percent last year to 33-percent this year).
The data for this report was collected in partnership with Mint Jutras, an unbiased, third-party analyst firm.
“While organizations anticipate significant benefits from their ERP systems, our research reveals that many still struggle to achieve these benefits,” said Cindy Jutras, President of Mint Jutras. “In order to maximize benefits realization, organizations need to set parameters and define how they will measure success.”
To offer further analysis of the study results, register for Panorama’s upcoming webinar on April 30, hosted by Eric Kimberling. Register here: //www.panorama-consulting.com/resource-center/erp-webinars/.
About Panorama Consulting Solutions’ 2015 ERP Report
Data for the 2015 ERP Report was collected by Panorama and Mint Jutras via online polling. Information was collected from February 2014 to March 2015. The 562 participants represent organizations that have worked on ERP initiatives within the last year. The full report can be accessed at: //www.panorama-consulting.com/resource-center/2015-erp-report/.
About Panorama Consulting Solutions
Panorama Consulting Solutions specializes in the enterprise consulting, enterprise resource planning (ERP) and IT market for mid- to large-sized, private and public sector organizations across the globe. One-hundred percent independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software and facilitates all related organizational changes to ensure that each of its clients realize the full benefits of their ERP implementation. We also offer our clients IT strategy, business process reengineering, ERP staffing, sales assessments, energy fueling assessments, emergency/disaster fund management, independent verification and validation, project management oversight and expert witness testimony.