By S.Suren
In this posts I thought I’ll list out some of the finding that have been uncovered from studies by famous research companies on the ERP Industry and its likely trends forecasted for the coming years.
The statistics below have been collected by an independent consulting group that has performed an ERP benchmark study that polled over 2000 organizations. These are some of the more interesting facts pulled out from that report, together with my own analysis of these facts:
• 64% cited poor integration between functional areas in the old system as a driver for a new system, followed by 62% citing poor visibility to reports and key operational data.
- Though it states there is 64% site poor functional areas integration with their old system how many of the companies actually do start off by conducting a study such as this. This is an initiative that needs to be internally triggered.
• Over 60% of organizations suffer from poor visibility to data and poor integration in their old systems.
• 69% percent of companies expect their systems to improve business performance, while 39% expect the new system to standardize business operations and 39% also expect the new system to make employees’ jobs easier.
- Studies also show that typical ERP implementations tend to generate a tangible return on investment after 18 months in operations. This is expected to be the time that the average user and management would take to understand the potential of the system and begin to adhere to the processes setup.
• Over 40% of companies implementing ERP software are dealing with either a new CEO or the addition of new office locations.
• 53% of implementing organizations self-assess their ability to deal with change as fairly poor or very poor.
- This is where Change management plays a very vital role in any project, especially system implementations. Many PMP books emphasis on this, but when in a project environment as most often the case there is no direct focus on change management in terms of milestones to be achieved and documentations to record the progress. This I would believe should be an integral part of the project manager’s duties.
• Nearly 50% of companies in the process of implementing ERP software have not yet started their organizational change, training, or communication plans. In addition, 42% have not developed a business case and ROI analysis, which suggests companies are not ready to measure and manage the business benefits they expect to achieve.
- So often the case, the business is more concerned about the consulting company addressing all the requirements of the users and being able to satisfy this in the system. Even sometime if the process identified is inefficient they might want the exact same thing in the system, and without their knowledge they have brought in the same inefficiencies into the new system as well.
All of these are interesting facts and if you have been long enough in this industry you pretty much have already come across situations such as these, but now since it has been analyzed numerically, it’s easier to quantify the impact.
Feel free to send in your comments/suggestions and feedback to ssurenlk@msn.com.
