Krigsman: ERP contradictions in 2014 – Smaller projects, more delays

InsightaaS: Michael Krigsman — well-known IT expert and author of the widely-read Beyond IT Failure blog on ZDNet — has published a piece analyzing results from a recent Panorama Consulting research report. In it, he remarks on a seemingly-contradictory trend, in which ERP projects are getting smaller, but at the same time, are registering increased durration overruns, and are disappointing a higher proportion of customers. An important factor in this trend is the increased adoption of ERP by smaller organizations which likely have less understanding of what is required to succeed with this type of solution, and may well have less rigorous internal management processes. Krigsman closes the post with advice for CEOs and CFOs. InsightaaS particularly likes his emphasis on not underestimating the importance of change management, with the observation “The real benefit of ERP often lies in process improvement rather than in new technology alone.”

For the last four years, Panorama Consulting Solutions has conducted an annual survey (registration required) of ERP buyers, to gauge project success and customer satisfaction among ERP buyers.

The 2014 results paint an interesting, and somewhat paradoxical, picture of ERP projects and buyer satisfaction. Although most projects run late and over-budget, with buyers reporting less benefit than in the past, most respondents consider their project successful…

The summary reveals the following key points:

  • In 2013, projects significantly decreased in size, relative to past years, although implementation times are more or less unchanged
  • Cost overruns have remained relatively constant over the last few years
  • Duration overruns are increasing, which is interesting since overall project costs have declined
  • An increasing number of respondents report reduced level of benefit from their ERP system

Therefore, we see smaller projects, lasting longer, with increasing delays, and reduced benefit. How can we explain these apparently contradictory results…

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