ERP software project woes continue to mount, survey says

Sixty percent of respondents said they'd received less than half of the expected benefits from their projects

ERP (enterprise resource planning) software project schedule overruns got even worse in 2012, according to newly released data from Panorama Consulting.

Some 172 respondents replied to Panorama's online survey between September and January. Last year, the average cost of an ERP project among those surveyed was US$7.1 million and would take 17.8 months, with 61 percent reporting the implementation would take longer than planned, compared to 54 percent in a survey conducted in 2011 by Panorama, which provides ERP selection and implementation services.

However, the percentage of respondents reporting cost overruns fell to 53 percent, compared to 56 percent in 2011 and 74 percent in 2010.

But 60 percent of survey-takers said they had received 50 percent or less of the expected benefits of their project in 2012, up from 48 percent who said so in 2011.

"While costs, durations and benefits received fluctuate year to year due to economic conditions, implementation trends and data set make-up, the facts remain: an organization is more likely to surpass its cost and timeline expectations and receive less than half of the benefits it expects than it is not," Panorama wrote in the report.

Some 40 percent of respondents in the most recent survey had finished their ERP project, while another 36 percent were still implementing it and 17 percent remained in the planning phase, according to the report.

Nearly half of Panorama's respondents stated their project had between one and 100 named users. Some 16 percent had more than 1,000 named users.

Fifty-three percent reported annual revenue of $50 million or less, but 21 percent had at least $1 billion in annual revenue.

The survey turned up some positive albeit somewhat befuddling results as well. While more than 80 percent of respondents said they were satisfied with their software, only 60 percent termed their project a success, Panorama said. "Perhaps even more interesting is that nearly one-third of respondents (30-percent) are 'neutral' or 'don't know' if their project was a success, which points to a lack of a business case, lack of post-implementation auditing and/or a lack of communication about project results from leadership," the report adds.

One in 10 respondents, however, classified their project as a failure.

That last data point is reflected in the many ERP project-related lawsuits that have cropped up in recent years, with both software vendors and systems integrators finding themselves on the legal firing line.

Public-sector IT project failures have particularly drawn headlines, in part because of their propensity to be massive in size.

In the past few weeks alone, California announced the cancellation of two major IT projects, one related to state employee payroll and another tied to modernization at the Department of Motor Vehicles.

U.S. lawmakers, angered by a rising tide of wasteful government IT spending, have called for reforms in recent months, although it's not clear how much momentum such efforts will gain.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags enterprise resource planningIT managementservicessoftwareapplicationsit strategyPanorama Consulting

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?