Shorter Implementation Times Mean Longer Payback Periods for Tier I Customers
The time it takes for organizations to recoup costs from their Tier I ERP implementations increases as their project durations decrease, according to the Clash of the Titans 2014: An Independent Comparison of SAP, Oracle and Microsoft Dynamics report issued today by Panorama Consulting Solutions, the world’s leading independent ERP consulting firm. Compared to SAP and Oracle, customers of Microsoft Dynamics experienced shorter implementation times (12.5 months on average) but longer payback periods (50-percent of respondents took more than three years to recoup costs). The opposite is true for Oracle customers, who experienced longer implementation times (22.5 months) but shorter payback periods (only 13-percent of respondents took more than three years to recoup costs).
“This negative correlation between implementation duration and payback period emphasizes the importance of developing a thorough and detailed implementation plan,” said Eric Kimberling, managing partner of Panorama Consulting Solutions. “Organizations that rush through implementation or reduce scope to meet an arbitrary go-live date are bound to lose focus on achieving return on investment or expected benefits.”
While the average payback periods across all three vendors has decreased from 2.4 years in 2012 to 1.7 years in the 2014 report, the percent of respondents that have not recouped costs has increased from 31-percent to 38-percent. In addition, 50-percent or more of organizations implementing these three solutions experienced some sort of material operational disruption at the time of go-live, suggesting that organizations that decrease implementation duration and budget are likely to increase their vulnerability to post-implementation operational disruption.
“Organizations that have yet to recoup the costs of their ERP software investment often have either not dedicated the appropriate resources to ensure the new system is accepted and utilized by end-users or implemented the proper performance metrics to gauge efficacy over time,” said Kimberling. “While cutting important project components, such as business case development, organizational change management and business process reengineering, from your timeline may shorten your overall duration, the flipside is that your organization will likely increase implementation risk and struggle to achieve meaningful ROI in a reasonable timeframe.”
To offer further analysis of the study results, Kimberling will present a free webinar on Thursday, October 24 at 12 p.m. EST. Learn more and register at //www.panorama-consulting.com/resource-center/erp-webinars/. Download Clash of the Titans 2014 at //www.panorama-consulting.com/resource-center/clash-of-the-titans-2014-sap-vs-oracle-vs-microsoft-dynamics/.
About Clash of the Titans 2014: An Independent Comparison of SAP, Oracle and Microsoft Dynamics
Research for Clash of the Titans was conducted by Panorama Consulting Solutions via online polling on its website from May 2013 to September 2013. The data set includes more than 400 respondents from 31 countries. The full report (and additional independent industry research) can be accessed at: //www.panorama-consulting.com/resource-center/clash-of-the-titans-2014-sap-vs-oracle-vs-microsoft-dynamics/.
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.