A new report found that a growing percentage of companies said their ERP deployment project did not end on time...
and resulted in schedule overruns, the highest the report has seen since 2009.
According to the annual report, conducted by Denver-based Panorama Consulting Solutions, 61% of respondents said they experienced project duration overages, with only 34% saying their project completed on time. In last year’s survey, fewer respondents -- roughly 54% -- said their projects did not complete on time.
"The implementation durations kind of spiked this past year," said Eric Kimberling, managing partner at the consulting firm. "That was a fairly big jump after it being kind of steady and or declining the three years prior to that," he said.
Kimberling noted that the average time it took organizations to implement their ERP systems rose from 16 months the year before to almost 18 months last year, the period covered by the new report.
Many of those cost and schedule overruns are being driven by cuts companies made in the recession that are now catching up with them, according to Kimberling. "They have less time and resources to commit to the projects," he said.
Ongoing efforts to control costs are also hindering ERP projects. "Companies are still pretty tight-fisted with their implementations, so they're trying to control costs pretty tightly. That's backfiring to some degree," Kimberling said. "They're cutting corners where they shouldn't and it's actually increasing the duration."
Some of those companies are trying to implement as much functionality as they can, but hoping they can make it up in savings from cutting down on change management, which also extends the length of the project, he said.
ERP systems: The difference between success and satisfaction
The extra resources spent on implementing the systems do not appear to be having a positive impact on the amount of benefits organizations receive, the report found.
The study, which included approximately 170 respondents, found that 86% said they were satisfied with their ERP software -- up from 81% the previous year -- and 81% would choose their software again.
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However, only 60% of respondents called their ERP project a "success," with one-third of respondents saying they were "neutral" or "don't know" if their project was a success.
The disconnect may arise from a range of factors, according to Kimberling. For one, relatively high levels of satisfaction may reflect that employees are relatively content with their day-to-day interaction with the system. At the same time, they may not know if the deployment was really a success, at least in the long-term, grand-scheme view of things.
Lower numbers for perceived success may also result from a range of other factors, including an unclear business case for the deployment itself or a lack of post-implementation auditing.
"Companies that do not use a business case -- and thus do not measure actual project results against any expected benefits -- likely have a harder time defining success or failure for the company, various functional areas or even individuals," the report stated.
Clear communications to users and other interested parties about why the company is deploying the ERP and what the goals and desired benefits are can create more realistic measures of success, according to the report.
In many cases, companies are also setting the bar too low for what they expect from their ERP system, Kimberling added.