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With another year quickly drawing to an end and our predictions for ERP in 2012 already in place, we thought it would be worth taking a look back at the past year in the ERP industry. As we reflect on the major milestones of 2011, it reminds us of the large spectrum of positive and negative industry incidents. For example, on one hand, Panorama Consulting continued its growth and success by merging with The Prescott Group while, on the other hand, several high-profile organizations failed miserably in their attempts to implement ERP systems.

Here is a look back at three of the major milestones of 2011:

Proliferation of ERP failures and lawsuits. Even with the economy still in the dumps and CFOs and CIOs more risk-averse than ever, lawsuits, fraud and project failures continued to grab headlines. For instance, Lumber Liquidators, CareSource Management Group, Tesco Bank, Whaley Foodservice Repairs, and the City of New York all reported failed or troubled ERP implementations in 2012, reminding us all how awry ERP projects can go if they are not managed well. Case in point: the CityTime payroll system implementation, which had an initial budget of $63 million and rapidly grew to $760 million in actual costs, along with allegations of kickbacks amongst the project’s system integrators and sub-contractors. While our firm will undoubtedly provide ERP expert witness testimony in several high-profile lawsuits in the coming year, we would much rather be earning our revenue by helping companies do ERP right the first time. Hopefully, these examples serve as reminders of the value of independent ERP consulting experts to help select and implement enterprise software effectively.

Industry growth and consolidation. Despite the accelerating rate of ERP failures, the industry as a whole showed continued signs of life in a tough economy. Panorama expanded its reach into new industries, service areas, and geographies by merging with The Prescott Group to form Panorama Consulting Solutions, while Infor continued its march toward becoming a viable Tier I ERP vendor by acquiring Lawson. In addition to these and several other high profile merger and acquisition deals in the enterprise software space, other ERP vendors demonstrated aggressive growth by expanding their footprints of new customers, embracing software as a service (SaaS) and cloud delivery models, and focusing on emerging markets such as China. SAP, for example, continued to push its Business By Design SaaS offering and indicated that China is its number one geographical growth priority in 2012 and beyond.

The cloud is for real. 2011 appears to have been a turning point for cloud ERP software and SaaS solutions, with it becoming more clear that the movement is not a flash in the pan.SaaS ERP vendors such as Salesforce, Workday, Kinaxis, and Netsuite all exhibited strong software license growth in the last year, while traditional on-premise vendors such as SAP, Oracle, and Epicor demonstrated stronger commitments to their SaaS and cloud offerings. While the heaviest rate of adoption is still very concentrated among smaller organizations, the adoption rates in these segments of the market illustrate that the cloud is here to stay. The next step for SaaS ERP vendors is to prove that they can crack the code and concerns of the enterprise software needs for larger organizations.

While 2011 may have been a mixed bag, it left us with enough positive news and opportunity to get us ready for an exciting 2012 with optimistic prospects. On behalf of everyone at Panorama Consulting Solutions: happy new year to our current clients, future clients and industry peers. Here’s to a successful 2012 and we look forward to working with you.

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