Is Your ERP Underperforming?

Is Your ERP Underperforming?

A recent CFO article points to a Panorama survey that confirms what many users of enterprise resource planning systems (ERPs) already knew: implementing one can be a nightmare and reaping its expected benefits is tricky.

Still, some of the surveyed companies may yet realize hoped-for benefits. “In our experience, benefits such as increased interaction or increased availability of information happen quickly, while benefits such as improved productivity or improved data reliability take longer to achieve,” the consulting firm said.

Indeed, the average time it took respondents to recoup the costs of an ERP implementation was 25 months. But the payback period is getting shorter: it declined for the third consecutive year in Panorama’s annual survey, during which the average has fallen by a cumulative 22 percent.

According to Panorama, there are five key reasons why ERP installations don’t go as well as expected:

1. Budgets and timeframes do not take into account the need for business process improvement; organizational change management; backfilling and resource allocation; or software customization.

2. Leadership teams choose systems based on reputation or vendor sales pitches rather than systems that truly fit their “future state” requirements.

3. Leadership teams fail to anticipate the magnitude of the project and the impact it has on end-user productivity, morale or both.

4. Non-customized training is based solely on the technical aspects of the system and fails to train users on new processes.

5. Lack of concerted communication to end users about the reasons behind the implementation, the anticipated benefits stemming from successful adoption, and the ways in which executives and other end users will affect project success or failure.

The first key to preventing overages is to find software that matches the organization’s needs and requires customization only in areas that provide competitive advantage, said Panorama.

Talk to GT Business about the effective provision, implementation and business priming performance of the Greentree ERP Solution.

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