Panorama Consulting Group, an independent ERP consulting firm, today released the 2010 ERP Vendor Analysis Report. The 2010 ERP Vendor Analysis Report provides findings on detailed project factors such as implementation costs, durations, and payback periods summarized by vendor.
Though nearly three out of four companies (72%) indicate that they are least “fairly satisfied” with their enterprise resource planning software, the majority fail to realize even half of the business benefits expected after ERP implementation. The findings were relatively consistent across vendor tiers, with a total of 55% of companies reporting realization of just 30% or less of expected benefits. Tier III ERP software clients realized the least amount of benefits (72% reported less than 50% realization) with Tier I ERP clients close behind (69.8% reported less than 50% realization). Over half of Tier II ERP clients (53.3%) reported less than 50% realization but nearly half (46.7%) reported more than 50% realization.
“The fact that most companies are initially satisfied with their ERP selection but then fail to realize more than half of the expected benefits indicates widespread underutilization of the capabilities of these packages,” said Eric Kimberling, president of Panorama Consulting Group. “No matter how robust the enterprise software is, it must be fortified with change management and end-user training to ensure it is being used to its full potential.”
The report confirmed previous findings that each vendor tier has its own set of strengths and weaknesses. Tier I ERP vendors had a strong showing, with SAP as the most commonly short-listed vendor (20.4%), Oracle eBusiness the most frequently selected ERP solution (54.2%), and Microsoft Dynamics has the shortest “payback” period of all the major solutions (2.6 years). However, Tier I ERP implementations are more likely to take longer than expected (30%) as opposed to Tier II (18%) or Tier III (5%). Tier I ERP solutions are much more likely to require heavy customization (25%, on average) than their Tier II and Tier III counterparts (6% and 12%, respectively). In addition, Tier I ERP systems take an average of three years to “payback” their cost, while Tier II ERP packages take 2.2 years, and Tier III ERP packages take only 1.7 years. Conversely, with 70% of clients rating themselves “fairly satisfied” or better, Tier III ERP solutions have the lowest satisfaction levels of all the vendor tiers.
“Companies must weigh so many factors during an ERP evaluation – and put out so many fires during a software implementation – that it’s no wonder many of them fail to realize the full scope of possible benefits,” said Kimberling. “Third-party consultants can provide ERP selection advice, implementation supervision, and organizational change management services to help companies more effectively harness the power of their ERP software.”
To offer further analysis of the study results, Kimberling will present the free webcast, Understanding the Differences Between Leading ERP Software Solutions, on April 1 at 10:00 a.m. MDT. Register for the seminar at: http://panorama-consulting.com/resource-center/erp-webinars/.
Panorama Consulting Group 2010 ERP Report
The 2010 ERP Report was conducted by Panorama Consulting Group via online polling and was supplemented with qualitative data gathered from focus group interviews with a sample of survey respondents. Information was collected from December 2005 to December 2009. The 1,600 participants represent global organizations that have implemented ERP within the last four years. The full report can be accessed at: http://panorama-consulting.com/resource-center/2010-erp-vendor-analysis/.
Panorama Consulting Group
Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) market for mid-sized companies in North America and Europe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational change management to assure that each of its clients realize the full business benefits of their ERP implementation. More information can be found on its web site, www.panorama-consulting.com.