As we have highlighted in our 2008 ERP Report (read the reports here), an overwhelming majority of ERP project implementations take longer than expected. In fact, our study of 1,300 implementations across the globe reveals that 9 out of 10 take longer than planned.
But what’s the cause of these delays? As we analyzed the quantitative and qualitative results of the study, we found some key commonalities that caused many of the organizations to take longer than planned when implementing ERP:
- Unrealistic implementation expectations. The first and perhaps most common problem we see is that many companies begin their ERP implementation planning process with unrealistic expectations of how long it will really take to implement ERP. This issue often stems from ERP software vendors or VARs that downplay the required time to implement the software during the sales cycle. It is important to set realistic expectations during the ERP software evaluation and software selection process.
- Failure to account for critical path, business-focused implementation activities. Implementing the software itself is probably the easiest and least time-consuming aspect of an implementation. However, defining business processes and workflows, ensuring thorough testing of business processes and data, and organizational change management and training are activities that are often overlooked or underestimated when developing the implementation plan.
- Mismanagement of ERP project scope. During implementation, there will always be the temptation to customize ERP software where it isn’t an exact fit with what you want it to do. This underscores the need to have a tight project governance structure in place that prioritizes and limits the number of customizations that are required. There is a direct correlation between ERP customization levels and implementation duration, which highlights the importance of managing scope.
- Slow client decision-making. As we often tell our clients, modern ERP software in general is very robust and flexible, which can be a strength and a weakness at the same time. On one hand, it allows you flexibility in how you use the software to address your business needs without the need for extensive customization. On the other hand, such flexibility requires more decision-making and buy-in into the way the software will be set up, which some companies struggle with. It is important to understand who will be making these decisions, how they will be made, and how they impact the overall implementation duration, because these decisions are often reasons for project delays.
By understanding these reasons for project delays, organizations can better build realistic implementation plans that take these factors into account. Implementing ERP software from a technical perspective can often be done in as little as a few weeks. However, aligning the software with your business processes and requirements is often the hard and time-consuming part. An effective ERP software selection process will address these items to develop a realistic implementation timeline.