By Davin Wilfrid, ERP Expert
A good friend of mine has the bad habit of sending back her dinner at restaurants, not because it was poorly prepared or tastes bad, but because -- in her words -- "It's not what I wanted." Usually the waiter dutifully returns with a different dish, though I'm sure they mutter "Then why did you order it?" on their way back to the kitchen.
Getting what you want is a lot more difficult that it seems, sometimes. In a recent survey of ERP customers, Panorama consulting found that the average company only realized 37.2% of anticipated benefits from an ERP implementation. Coupled with an average annual cost of $6.2 million, and Panorama estimates that the average company loses $4.3 million of benefits after implementing an ERP system, which would take an extra three years to recover.
Only 5% of customers reported receiving 100% of anticipated benefits.
The Panorama study included SAP customers, but also Oracle, Microsoft, Infor, and several smaller ERP vendors. The study did not isolate the benefits realized by SAP customers alone, but did highlight several issues that could stand in the way of a successful SAP implementation.
For example, the survey identifies a correlation between levels of customization and duration of the implementation project. 34% of SAP customers reported implementing either a "fully customized" or "heavily customized" environment. Naturally, the more customization, the more difficult the implementation.
Then there's the organizational change managem
ent component. Panorama advises companies to start with an organizational readiness assessement:
No ERP project succeeds without addressing the end-users of the software. Conducting an organizational readiness assessment prior to making the final ERP decision will help identify pockets of resistance within the company and determine the organizational change management needed to make the project successful.
You can download the full report at Panorama's Web site.