Each year Panorama Consulting of Colorado releases the results of its annual ERP survey. This year they analyzed the findings from ERP implementation at 342 firms across the U.S. and a variety of industries.
From those surveys, the authors saw five of what they called ‘important headlines’ emerge. A couple of their real-world findings run strongly counter to today’s conventional wisdom.
- Project cost and duration have decreased since last year. We always take this one with a grain of salt because the devil is truly in the details in terms of project sizes, scope, industry, etc. Panorama notes that projects this year were notably smaller than in years past, and that money spent on implementation “does not necessarily mean that long-term costs and overall return on investment improved in parallel. We see many organizations that are willing to step over a dollar to pick up a dime, so to speak, by cutting implementation costs without realizing that it creates more problems later on.”
- A counterintuitive trend is emerging. A year ago, cloud implementations appear to have plateaued according to Panorama. In the past year, the survey showed a 21% decrease in cloud-based ERP adoptions. Meanwhile, on-premise implementations increased by 11%. “Perceived risk of data loss” was the concern cited by over 70% of respondents. And among cloud-only adoptions, the overwhelming majority expressed preference for private or “single-tenant” solutions over multi-tenant solutions.
- 88% of survey respondents reported some level of customization of their systems. The vast majority still make changes to source code in order to customize their ERP experience. They make efforts to manage these efforts closely for cost overruns, but in the end… what’s the point of an ERP system if you can’t have “your way”?
- The respondents who reported “being satisfied” with their ERP implementations, a somewhat subjective measure, increased from 13% to a whopping 70%. Actual ‘benefits realization’ also improved, with more firms realizing benefits within six months, and fewer taking more than two years to recoup some benefit. Says Panorama: “more organizations are realizing a positive return on investment compared to years past.”
- Organizations are investing more in organizational change management and business process reengineering. Lack of business process reengineering is often cited as the number one reason for ERP failure. Companies appear to be learning the lesson. This year, 84% expressed “moderate or intense focus” on organizational change management and 93% said they “they improved some or all of their business processes,” a significant increase. We’ve long considered that the first priority in any roadmap to an ERP system – so we’re happy to see the advice taking hold in so many more firms, and the lessons being learned.