Many Projects On or Under Budget, but ERP Failure Still On the Rise

Project budget adherence shows no correlation with ERP success, according to the 2015 ERP Report issued recently by Panorama Consulting Solutions, the world’s leading independent ERP consulting firm.

While nearly half of organizations (45-percent) reported that their ERP projects were on- or under-budget, the number of reported ERP failures increased by five-percent since last year. Organizations indicating that their projects were over-budget pointed to challenges such as expanded scope, underestimated staffing, additional technology requirements and unanticipated technical or organizational issues.

“Reasons for ERP failure vary, but they all tie back to organizational change management or the lack thereof,” said Eric Kimberling, Managing Partner of Panorama. “Our research and experience have always emphasized the importance of organizational change and business process management, and this year’s report provides even more data to support our people- and process-focused methodology.”

The report highlights a $1.7-million increase in average implementation cost and a two-month decrease in average duration. In addition, 60-percent of organizations failed to realize the business benefits they expected from their ERP implementations, which is an increase of 10-percent over last year. The data also reveal that the percentage of organizations implementing software as a service (SaaS) has increased by 29-percent (from four-percent last year to 33-percent this year).

 “While organizations anticipate significant benefits from their ERP systems, our research reveals that many still struggle to achieve these benefits,” said Cindy Jutras, President of Mint Jutras. “In order to maximize benefits realization, organizations need to set parameters and define how they will measure success.”

The data for this report was collected in partnership with Mint Jutras, an unbiased, third-party analyst firm.

Source: Panorama Consulting Solutions