Panorama Consulting Group, an independent ERP consulting firm, today released the 2010 ERP Report. The Report includes data on a wide variety of traditional and SaaS ERP software solutions.
While the average cost of an ERP implementation has decreased from $8.5 million in 2008 to $6.2 million in 2010, companies are realizing significantly less business benefits from the technology, according to the 2010 ERP Report issued today by Panorama Consulting Group, an independent ERP consulting firm in Denver. The report reveals that two out of five (41%) of participants failed to achieve at least half of the business benefits they expected. This figure is nearly double the finding in the 2008 ERP Report (21%).
“While it is promising to see the costs of ERP implementations decrease, we are concerned that it is at the expense of organizational change management and other key activities required to make enterprise software initiatives successful,” said Eric Kimberling, President of Panorama Consulting Group. “Companies that cut costs in these areas suffer lower levels of satisfaction, user buy-in, and return on investment.”
The 2010 Report provides further data on the importance of balancing a company’s high expectations of ERP systems with comprehensive organizational change management initiatives. While 69% of companies expect that a new system will improve business performance and 39% expect it will make employees’ jobs easier, more than half (53%) of respondents assess their company’s ability to deal with change as fairly poor or very poor. Nearly half (47%) indicate communication between management and employees is poor. In addition, more than two out of five (41%) of respondents have experienced significant changes to their business (e.g., a new CEO, new locations, mergers and acquisitions, and layoffs) during the implementation process.
“Turbulence in business operations is magnified by the stress of an ERP implementation,” said Kimberling. “Management must allocate proper time and realistic spending to ensure that employees are aware of the benefits of the process and ready to accept and work through the challenges of a system changeover. In addition to hiring third-party consultants to help with software selection and implementation, smart companies are looking for outside assistanceto manage the user-side processes that are so critical to project success.”
To offer further analysis of the study results, Kimberling will present the free webcast “Overview of Panorama’s 2010 ERP Report,” on Wednesday, February 17, 2010. Register for the webinar at http://www.panorama-consulting.com/erp-webinars/.
About the 2010 ERP Report
The 2010 ERP Report is based on research 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 2010 ERP Report can be accessed at: http://panorama-consulting.com/resource-center/2010-erp-report/.
About Panorama Consulting Group
Founded in 2005, Panorama Consulting Group is a niche consulting firm specializing in the enterprise resource planning (ERP) software market for mid-sized companies across the globe. Independent of affiliation, Panorama helps firms evaluate and select ERP software, manages the implementation of the software, and facilitates all related organizational changes 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.
