ERP Implementations Exceed Budgets, Schedules

 
 
By Dennis McCafferty  |  Posted 07-30-2014 Email Print this article Print
 
 
 
 
 
 
 
 

Organizations pursue enterprise resource planning (ERP) to boost their business management software capabilities. And while, overall, nearly two-thirds of organizations consider their ERP implementations a success, there are lingering pain points, according to a new survey from Panorama Consulting Solutions. Specifically, the vast majority of these projects exceed their scheduled completion time, findings show. And while cost containment is improving, most ERP initiatives still run over budget. Meanwhile, two-of-five survey respondents express dissatisfaction with their ERP vendors. To avoid these pitfalls, CIOs and their teams must spend considerable time anticipating and preparing for numerous "what if?" scenarios. "Successful organizations know that the amount of time and money they invest in training, communication and risk mitigation directly affects benefits realization and overall project results," says Eric Kimberling, managing partner of Panorama Consulting Solutions. More than 190 professionals who have worked on ERP initiatives within the last year participated in the research. For more about the survey, click here.

 
 
 
  • Schedule Change

    72% of ERP implementations experience duration overruns, compared to 61% which did in 2010.
    Schedule Change
  • Footloose Fiscals

    54% exceed their planned budgets, which is actually down from 74% in 2010.
    Footloose Fiscals
  • Diminishing Returns

    66% of organizations gain no more than one-half of the anticipated benefits of their ERP implementations, compared to 48% which did in 2010.
    Diminishing Returns
  • Payback Period

    It takes an average of 30 months to recoup the cost of an ERP implementation, up from 25 months last year.
    Payback Period
  • Top Reasons to Implement ERP

    To improve business performance: 15%, To better integrate systems throughout multiple locations: 14%, To better serve customers: 12%, To ensure reporting and regulatory compliance: 11%, To replace an old ERP or legacy system: 11%
    Top Reasons to Implement ERP
  • Thumbs Up

    More than half of survey respondents are satisfied with the overall software functionality of their ERP implementation, as well as the software's ability to meet business needs.
    Thumbs Up
  • Thumbs Down

    About one-third are dissatisfied with both the implementation services and documentation practices of their vendors.
    Thumbs Down
  • Homebound

    85% of ERP software exists on-premise, while only 11% is hosted in the cloud.
    Homebound
  • ROI Impact

    Nearly two-thirds of survey participants say they're saving more than 20% on costs through a cloud-based ERP initiative.
    ROI Impact
  • Top Consulting Needs of Organizations Pursuing ERP

    ERP implementation: 21%, Training: 19%, Change management: 14%, Software selection: 11%, Contract negotiation: 9%
    Top Consulting Needs of Organizations Pursuing ERP
 
 
 
 
 
Dennis McCafferty is a freelance writer for Baseline Magazine.

 
 
 
 
 
 

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