For those of you who are working on or considering ERP implementations, whether in-house or as SaaS, Panorama consulting has release a survey that delivers some solid statistics as to the likely success of that.
Their survey was taken over the period from September 2012 to January 2013 from 172 respondents.
Among their key findings:
- Average cost of implementation was $7.3 million dollars
- Average duration 16.6 months
- 59% went over budget
- 53% failed to meet their projected schedule
- 56% realized half or less of hope-for or promised business benefits
Panorama’s conclusion: “An organization is more likely to surpass its costs and timeline expectations and receive less than half of the benefits it expects than it is not.” Ouch.
- 61% In-house ERP implementations
- 14% SaaS
- 14% cloud-hosted ERP
- 13% others (I have no idea what this could be.)
- Lots of different vendors with the obvious three out front: SAP, Oracle, and Microsoft.
Other Notable Conclusions
- Epicor and Infor are cutting in the market share of SAP, Oracle, and Microsoft Dynamics.
- Reasons cited why companies did not consider the cloud include: security concerns 32%, lack of knowledge about that 32%, risk of losing data %17. Panorama’s experience has shown the customers are wrong: the cloud is more secure than in-house computing.
- 60% said they realized between 0 and 20% cost-savings using the cloud, even though that is its major selling point. [Ouch again, for the cloud salespeople.]
- A majority used an outside consulting company for implementation. That was a positive factor, as they can help from vendor selection through implementation and grow or shrink resources as needed.
Average payback period is 25 months (Some companies have found a way to calculate this subjective number, others not.).