ERP Implementation Challenges
Bottom-Line Up Front: There is nothing earth shattering in the survey findings below. The same challenges and misperceptions still remain. Migrating or implementing a new business system is painful. It takes the right leaders and/or consultants to navigate this process to mitigate these risks and challenges.
ERP implementation projects continue to get a bad rap for running over schedule and costing more to complete. With these issues, customer satisfaction and expectations quickly degrade. ERP consulting firm Panorama Consulting Solutions’ released their finding in their 2014 ERP Report where nearly 200 ERP users were surveyed with 27% of those in the manufacturing sector.
Cloud ERP slows while mobile grows
Software as a Service (SaaS) and cloud ERP adoption rates have leveled off. In the prior years, cloud ERP had shown a steady rate of customer growth, but that pace seems to have slowed. While 86% of respondents have implemented an on-premises ERP system, only 15% are using cloud or SaaS.
The top reason given for not implementing cloud ERP — according to 45% of respondents — was a “lack of knowledge about cloud offerings.” However, 30% were interested in cloud, but feared security breaches.
Overcoming the Perception
“We dug into this and looked at the concerns that IT managers and CIOs have around SaaS and [the] cloud, and there’s a problem with perception,” Kimberling explained. “There’s a lot of concern about security issues and the control that they don’t have [with cloud]. For SaaS vendors to find higher adoption rates, they’re going to have to overcome those perceptions.”
He noted that in reality, most SaaS and cloud providers will offer more security than in-house, employee-built systems.
“When it comes to security, [mobile] is more where you should be concerned,” Kimberling said. “It’s ironic that the concerns are flip-flopped here.” The prevalence of mobile devices for personal use may be the reasoning behind this lack of fretting about mobile security, he added, as the average person is comfortable with transmitting data over smartphones and tablets.
Organizational change management is biggest risk / issue
For the first time since the survey in 2006, organizational change management and training took the top spot on the list of reported implementation challenges.
The majority of respondents that reported projects that went over time and budget also named “organizational issues” as the main culprit for the setbacks. This may be because more than half of those respondents are spending only 0% to 25% of their budgets on organizational change management, the report said.
According to Panorama, 54% of ERP projects went over budget, while 72% took longer than planned. In addition to those bleak statistics, 66% of the users surveyed said they received less than half the benefits they expected to reap from their ERP implementations.
Oddly enough, while only 63% of respondents consider their ERP projects to be successful, 76% said they would choose the same ERP software again, according to the report. This may signal that users are willing to put up with schedule and cost overages if the end result is an ERP system that suits their needs.
What are your thoughts? Are you still struggling with your digital transformation and choosing / implementing a new ERP business system?