Every year we talk with hundreds of companies about their ERP systems. They all have the same issues: poor access to information, core systems that are difficult to use, and a number of disparate systems that are islands of information.
They realize that eventually they are going to have to bite the bullet and replace their old ERP system with a new ERP system. The interesting fact is that they all dread the project.
Why is that? Is it because they read about ERP failures and lawsuits in the papers? Is this fear driven by hype of media and consultants?
First let’s define failure. Many have defined failure as the project not delivering expectations. Expectations are usually defined in terms of schedule, budget, and ROI. Does this mean the project failed to be completed on schedule or on budget? This is not uncommon with most projects whether it is ERP or building a house. Reasonable schedule and budget variances are to be expected. ROI expectations are always difficult to define. If you listen to the ERP vendors, these projects are easy, can be done in 6 to 9 months and are going to save you a ton of money.
Or is failure defined as the project just never got completed – it failed. In this case there is no doubt that failure does exist. If we look more carefully at the cases that actually hit litigation, we often find multiple reasons for failure. As a 30 plus year veteran of the industry I would have to say that pure failure is occurring far less today the 10 or 20 years ago.
Why? The industry has matured. Vendors consulting organizations have matured. Vendor sale organizations have matured, and buyers have matured. The entire industry is approaching the projects with a much more practical approach. As a result we are seeing a lot more success stories in the industry. We see the failure rate much less today than 10 years ago.
The point of this article is that ERP projects do succeed. If you are considering a new ERP system do not look for the failures. They are not typical! Look for the successes and learn from their process.
In the coming months we will focus on the successes and the techniques, processes, and people that made the project a success.