A new survey conducted by Panorama Consulting finds that most enterprise resource planning (ERP) software projects experienced cost and budget overruns in 2012. In addition, many companies aren’t seeing the benefits they anticipated from ERP deployments. Strangely, many companies still label their ERP projects a “success” in spite of these problems.
Computerworld’s Chris Kanaracus reported on the study, writing, “Last year, the average cost of an ERP project among those surveyed was US$7.1 million and would take 17.8 months, with 61 percent reporting the implementation would take longer than planned, compared to 54 percent in a survey conducted in 2011 by Panorama, which provides ERP selection and implementation services. However, the percentage of respondents reporting cost overruns fell to 53 percent, compared to 56 percent in 2011 and 74 percent in 2010. But 60 percent of survey-takers said they had received 50 percent or less of the expected benefits of their project in 2012, up from 48 percent who said so in 2011.”
However, according to the Panorama press release, “Despite these results, a full 86 percent of respondents are satisfied with the system itself and 60 percent indicate their ERP project was a ‘success.’ Nearly seven out of ten respondents (69 percent) also indicate at least some level of satisfaction with their chosen ERP vendor.”
ITWeb quoted Panorama’s Eric Kimberling, who said, “But the delta between actual ERP implementation results and the self-reported satisfaction levels indicates that companies are setting expectations of the business benefits they should achieve from an ERP system far too low, and are likely neither developing the performance measurement indicators they need to accurately determine ROI nor sharing those indicators with their employees.”
Earlier this month, IT Journal’s Alex Woodie reported on a separate Panorama study, which found, “the market share of cloud- and SaaS-based ERP systems grew from 6 percent in 2011 to 18 percent in 2012, which spells trouble for traditional, tier-one ERP providers.”