SaaS ERP adoption grows, cost overruns persist according to 2015 Panorama ERP Report

For the last five years, Panorama Consulting Solutions of Denver has published an ERP Report focused on ERP software selection, implementation, and satisfaction trends across industries, organization sizes, and geographic locations. The report summarizes Panorama's research into the experiences of ERP customers with regard to enterprise software, vendors, consultants, and overall implementations.

The average cost of ERP implementations has fluctuated since 2010, according to the firm's data. This year's survey found an average implementation cost of respondents coming in at  $4.5 million, lower than the $5.5 million in 2010 but higher than last year's average $2.8 million. Meanwhile, cost overruns have dropped from 74 to 55 percent of total implementation cost.

"Unrealistic timelines" was pinpointed as the primary reason for the schedule overruns, while "expanded scope" played the biggest role in budget overruns.

Among the various reasons for implementing ERP, the most common reason that organizations reported this year was to replace their old ERP or legacy system (17 percent). By comparison, the most common reason last year was to improve business performance (15 percent). Overall, organizations anticipate significant benefits from their ERP systems - they expect to improve business performance, integrate systems across multiple locations, and position their organization for growth.

Eric Kimberling, Panorama's president, said in an interview that software-as-a-service (SaaS) adoption among ERP users was one report metric that stood out this year.  

"Basically, SaaS adoption was up exponentially this year over last year - from 4 percent to 33 percent," Kimberling says. "That's a pretty ...