In today's cost-conscious business environment, companies implementing enterprise resource planning (ERP) software are controlling budgets and timelines better, and are reaping more business benefits from their systems than they did in 2010.
This is according to the 2012 ERP Report, issued by Panorama Consulting Solutions, an independent ERP consulting firm.
The firm says that, in 2011, 56% of ERP implementations went over budget (compared to 74% in 2010) and 54% went over schedule (compared to 61% in 2010). Ninety-four percent of respondents indicated that they realised some business benefits from their ERP systems, and half realised benefits in excess of 50% (an increase of 8% from 2010).
Though this data shows a positive trend, respondents also indicated a number of troubling points. Implementations that went over budget did so by more than $2 million, or 25% of the total estimated ERP implementation budget ($8 362 984 planned compared to $10 468 500 actual).
Nearly one out of three respondents (29%) had yet to recoup costs of their ERP investments. Further, 63% had difficulty in addressing process or organisational change issues, and 29% soldiered on without top-level management commitment.
“While it is gratifying to see organisations taking control of their ERP implementation budgets and timelines and realising better benefits, it should not come at the price of ignoring key organisational change issues that can and will have a negative impact on the business moving forward,” says Eric Kimberling, president of Panorama Consulting Solutions.
“Companies that don't have strong methodologies in place to cope with changes in processes and organisational design wrought by ERP systems - or the top-level buy-in necessary to mitigate these risks - often find benefits sag or disappear as time goes on.”
Of equal note is that 41% of organisations surveyed indicated they had changed business processes to accommodate their ERP software, and nearly one out of five (19%) had very little or no focus on business processes during the project.
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