Panorama polling: New report says ERP implementations take longer, cost more, yield less satisfaction

Implementing an ERP project in the estimated time, for the estimated cost, and with satisfying results is a rare occurrence. Streamlining internal planning and organizational change processes will generate a better ROI.
By Manufacturing Business Technology Staff January 7, 2009

Implementing an ERP project in the estimated time, for the estimated cost, and with satisfying results is a rare occurrence.

So says a new study issued early January by Panorama Consulting Group , a Denver-based independent ERP consulting firm. The survey reveals 93 percent of ERP implementations take longer than expected, and nearly two out of three (59 percent) implementations cost more than initially assumed.

Further, only 13 percent of respondents characterize themselves as “very satisfied” with their company’s software implementation.

“The amount of ERP implementations that are meeting or exceeding corporate expectations is distressingly low,” says Eric Kimberling, president of Panorama Consulting Group. “In my experience, companies that work to streamline their internal planning and organizational change processes prior to beginning ERP projects often have more success and a better return on their overall investment.”

Of the respondents, 38 percent indicated “lack of employee buy-in” as the biggest challenge facing ERP implementation teams, while 33 percent identified “lack of ERP expertise.”

Following “go-live” of the software system, 57 percent of participants suffered operational stoppages, and only 21 percent realized 50 percent or more of their projected benefits.

“To best manage implementations, companies need to plan every detail up front, focus on business operations, secure strong project management, and ensure that every key staff member is adequately trained and completely committed to the process,” says Kimberling. “These are complex projects and they require significant resources to effectively manage—resources often not available in-house nor provided by software vendors. Third-party consultants can offer proven strategies to make ERP implementations run as smoothly as possible.”

About the report:

The 2008 ERP report was conducted by Panorama Consulting Group via online polling and was supplemented with qualitative data gathered from focus group interviews with a sample of survey respondents. Information was collected from December 2005 to November 2008. Respondents represent 1,322 global organizations that have implemented ERP within the last three years. Participants are based in all of the major regions in the world, with a majority operating in either North America (31 percent) or Asia Pacific (31 percent).