New ERP report notes implementation challenges, cloud hurdles

A new report from Denver-based Panorama Consulting Solutions calculates that the average ERP implementation cost now hits $6.5 million, with an average implementation time of 16.1 months, and a preference for SAP, Oracle, and Microsoft Dynamics solutions. In its 2014 ERP Report, Panorama summarizes its own research into the experiences of ERP customers with regards to enterprise software, vendors, consultants, and implementations overall.

Over the past four years there has been plenty of pain and disappointment in ERP initiatives, according to the consultancy's research.  54 percent of ERP projects have exceeded their planned budgets, 72 percent of projects have exceeded their planned durations, and 66 percent of respondent organizations have received less than 50 percent of the measurable benefits they anticipated from their enterprise software initiatives.

Of those respondents who exceeded their planned durations, the majority cited "organizational issues" as the primary culprit. Panorama's research also revealed that more than half of respondents spent less than 25 percent of their budget on organizational change and business process management. "This data also may explain why only eight percent of respondents reported ‘excellent buy-in' among employees," Panorama says in the report.

Why implement ERP?

Although the organizations represented by Panorama's survey respondents vary in industry, location, size, goals, and needs, all respondents have had recent ERP project experience. Two out of five respondents (39 percent) have completed their ERP implementation while 35 percent are in the process of implementing and 19 percent are in the planning phase.

The top reasons cited for implementing ERP were to improve business performance (15 percent), to better integrate systems across multiple locations (14 percent), to better serve customers (12 percent), and to ensure reporting and regulatory compliance (11 percent). Only a small percentage of organizations stated that the reasons they implemented ERP ...