Most enterprise and ERP software implementations begin with great expectations: reasonable costs, quick implementation duration, and huge business benefits. However, as Panorama Consulting’s ERP research suggests, these expectations are rarely met.
Part of the problem begins with unrealistic expectations in the planning stage. Software sales vendors are an optimistic bunch and are rarely on the hook for delivery of timely implementations that come in under budget and deliver business benefits, so it’s often easier to share best-case anomalies with their prospects rather than a realistic view. The trick is balancing reality with the desire to pursue an aggressive timeline.
Consideration for Assessing the Reality of Your Organization’s Enterprise Software Implementation Plan, Cost, and Business Benefits
- The average company spends 9% of annual revenue on it’s total enterprise software implementation. This includes the total cost of ownership related to procuring software licenses, technical configuration services, consulting services, hardware upgrades, and internal costs.
- 71% of implementations take between 6 and 18 months. Most software vendors reveal examples of companies that implement their enterprise software solutions in a very short period of time, but the reality is that most ERP initiatives are time consuming.
- Business benefits are not a sure thing. Only 67% of organizations are at least somewhat satisfied with their implementations, despite the time and cost commitments outlined above. Having a clearly defined and realistic business case is the first step to ensuring you realize expected business benefits.
Having been in the ERP and enterprise software industry for over 15 years, I know that implementations can be on time and on budget while delivering measurable business value. However, I’ve also seen enough troubled implementations to know that there can be significant speed bumps along the way. Understanding these challenges and having a realistic sense of what it’s going to take to get the implementation done effectively is the first step to a successful ERP initiative. These expectations are important during an enterprise software evaluation and selection process.