Enterprise resource planning implementation is always a tricky business. Even with working with high-quality software such as Microsoft Dynamics NAV 2015 and an experienced and trusted partner to work with, there is always some risk of failure or that the right choice wasn’t made among other factors. This is especially the case when companies consider different paths to fulfill their needs and possess different understandings of the terms success and failure. Along with that, there’s the matter of numerous technological advances in the last 10 years that have dramatically changed what ERP means as a whole. Looking over the past year in ERP development may give us some hints on what to expect in the future.
An uneven development
Panorama Consulting, one of the leading authorities on all things ERP-related, just released the newest edition of its annual ERP report. The findings are quite interesting. The first statistics on 2014 show inconsistent changes overall. In terms of cost, the average ERP implementation went for $4.5 million. It’s up 61 percent from 2013’s five-year low of $2.8 million, but still below the five-year average of $6.1 million. Some 55 percent of projects exceeded their original budgets, well below the 2010 of 74 percent and below the running mean of 58 percent.
On the positive side, the average duration of an implementation project is at its lowest in five years at 14.3 months. On the other hand, the percentage of companies that suffered from schedule overruns is at its highest at 75 percent.
Presumably, one can extrapolate different interpretations about what’s happening, but the most important factors make things more interesting. The survey found that only 41 percent of companies surveyed received 50 percent of less of the promised benefits that came with their ERP solution, a steep drop from 66 percent in 2013. However, the percent of those who perceived their implementation as a success also declined as well, with only 58 percent saying that their project could be defined as such.
A more flexible world
The reasoning behind such shifting views on success or failure has been heavily based on recent developments in technology as a whole. With mobile devices such as smartphones and tablet becoming ubiquitous all throughout business and a cultural shift caused by millennials entering the workforce, there’s an increased interest of making software and technology that caters to a more individual level. One of the results of this is an increased need to adjust the software to fit a specific need, either through special coding or adding modules such as mobile warehouse management. The report indicated that only 7 percent of companies performed absolutely no customization on their software.
Another major development is the more widespread adoption of the cloud. A significant breakthrough occurred on companies looking to implement software-as-a-service ERP solutions. In 2013, only 4 percent adopted cloud ERP. However, in 2014, 33 percent did so. It’s now possible that ERP could find the cloud as its primary location in as little as two years. Still, the cost savings that are usually associated with this option was found only in 56 percent of companies who took this route.
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