The 2013 ERP implementation research reveals mixed results, with over 50% of projects experiencing cost overruns and only 10% deemed failures, despite significant dissatisfaction with realized benefits. Critical success factors include cultural environments, software complexity, and effective implementation teams, while expectations from buyers appear low. The survey highlights the importance of training, management support, and user attitudes in determining ERP project success.

2. ERPs cost, duration, benefits, success and failure
&
Critical Success Factors for ERP Implementation
2013 studies summary
New research offers important lessons for chief financial officers when buying and implementing enterprise
technology
The latest research on the success of ERP implementations reveals mixed results. Although respondents are
satisfied with their choice of software, the survey shows most ERP projects run over budget and buyers do not
fully receive expected benefits.
Nonetheless, only few respondents characterized their ERP project as a failure.
The research survey* was conducted during the four-month period of September, 2012 to January, 2013. The
results are based on data from 172 respondents who completed a on line survey. Seventy-one (71) % reported
revenues of $300 million or less and 21 % of respondent companies had revenues of $1 billion or higher.
*Panorama Consulting Solutions, 2013 survey
http://www.zdnet.com/2013-erp-research-compelling-advice-for-the-cfo-7000011619/

3. Cost, duration, & benefit summary
Although project duration and cost fluctuate from one year to the next, three points stand out about the current data:
 Over 50 %of projects experienced cost overruns
 Over 60 % experienced schedule overruns
 Fully 60 %of respondents received under half of the expected benefit from their ERP implementation
This chart summarizes the top-level results:

4. Implementation budget, schedule, and realizing benefits – data for the past 4 years
According to the survey, 53 % of ERP projects exceeded their budget

5. Schedule - 61 %t of respondent ERP projects went beyond planned time duration

6. The survey shows a significant problem with respect to realizing benefits from the ERP implementation
 27 % of respondents realized less than a third of anticipated project benefits
 11% realize no benefit at all from their ERP implementation
 22% achieved between a third and one-half their expected benefit
Fully 60 %of the ERP projects in the survey realized less than half their desired benefit.

7. ERP success and customer satisfaction
The survey makes a distinction between "implementation outcome" and "customer satisfaction."
As the following chart shows, only 10 % of the respondents called the ERP implementation a failure, meaning 90 % either did not know or
believed their project to be successful:

8. Various measures related to ERP software, vendors, and implementation results showed average satisfaction:
 Implementation service of vendor 40 % satisfaction
 Implementation service of third-party 25 % satisfaction
 Ability to meet business needs 49 % satisfaction
 Employee adoption 35 % satisfaction
 Overall implementation experience 44 % satisfaction
ERP vendor selection
As the graph shows, the primary candidates for ERP software were SAP, Oracle, Microsoft, Epicor, and Infor

9. The cloud question
Despite the hype, only 14 % of respondents are using ERP delivered as Software as a Service (SaaS).
Although the best cloud vendors can deliver superior security and reliability than most internal IT
departments, market momentum to ERP in the cloud is not there yet, as the following diagram
illustrates:

10. Payback period
The survey reports an average payback period of 25 months (down from 32 months in 2009). The graph below
shows that over half the respondents did not recoup their costs or were unsure:
It is important to keep in mind that respondents who have not completed an implementation will naturally report no payback — after all,
the software is not yet operational.
More intriguing is the 25 % who are unsure of their ERP payback period. One wonders whether these people had a clear set of goals and
business when starting their project.

11. Conclusions
Although most ERP implementations run late, over-budget, and do not deliver planned results, only 10 % of
respondents called their ERP implementation a failure.
At the same time, 60 % called their ERP project a success and 30 % expressed neutrality on the success / failure
issue.
These numbers indicate that buyers' expectations are too low — it is indeed unfortunate these numbers are so low.
Important lessons
Implementing an ERP system is always complex because the deployment drives changes to both data and processes
that extend across departmental boundaries inside the organization.

12. ERP implementation
success
1. Environment: Cultural
• Importance of training and
systems
• Resistance to change
• Cultural readiness
• Open and honest
communication
• Unrealistic expectations
2. Environment: Structural
• Competitive pressure
• IT personnel and business
expert availability
• Employee turnover
3. Software
• Complexity of the software
• Ability to comply with local
legislation
• Focus of the software
• Suitability of operating
assumptions and
business rules
4. Firm
• Size of the
Firm
5. Implementation team
characteristics
• Experienced consultants
• Implementation team
responsiveness
• Empowerment of team
• Project champion
• Team composition
6. Top Management
• Clear objectives and
goals
• Support, involvement
and participation
• Age and functional
background of CEO
7. Implementation Process
• Implementation approach
• Business process reengineering vs.
software
modification
• Training and Education
• Data quality and accuracy
• Evaluation of project progress
• Timing of implementation
8. End - users
• Attitudes toward the
ERP system
• User involvement
• Job Tenure and type
Critical Success Factors for ERP Implementation or (CSFs)

13. 1. Cultural aspects of the environment
Unique to corporate culture
 Resistance to change is an important success factor to ERP implementation. 30 % of respondents indicate that resistance to change
is a major problem in the implementation effort. The resistance is identified to be result to job changes and uncertainty of the new
system .. As remedy – honest and open communication, trust between management and employees is a key factor helping the
successful ERP implementation
 Unrealistic expectations – another cultural factor defined as the inability to identify and solve problems. This leads to major
obstruction to ERP success implementation
2. Structural: industry & market conditions
 In some industries competitive pressure is a key factor that stimulates and keeps the organisation motivated during the
implementation process and contributes to success
 The lack of IT personnel, business experts / or employee turnover is being identified as another key factor – without proper ERP
personnel the implementation is difficult to accomplish
3. Characteristics of the software
 The complexity of the ERP software inhibits the ability of the users and implementers to understand and incorporate the software
into the business processes of the organization. Also, the higher the complexity of the software, the more time and hence, expense
of the implementation. Therefore, complexity of the software may have a negative relationship with successful ERP
implementation. The ability of the software to comply with local legislation is an important success factor.
4. Characteristics of the firm
 The firm size
* International Journal of Information Technology & Information Systems
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2256382
* Critical Success Factors for ERP Implementation or (CSFs)

14. 5. Implementation team characteristics
 Consultants are important in bringing both knowledge and experience in implementation. These are two important
implementation success factors often lacking in firms implementing ERP systems.
 The ability of the implementation team to plan and make decisions was named as an important factor. This empowerment of the
implementation team helps to increase their responsiveness to impediments to the implementation process.
 The right mix of IT experts, business experts and consultants can increase the probability of success. Finally, often the project
champion seems to bring significant benefits of the ERP project.
6. Role and characteristics of top management
 The clear objectives and goals are important to move all parties in the same direction. The goals and objectives, set by top
management, are related to another factor: top management support, involvement International Journal of Information
Technology & Information Systems and participation. This factor is often included in models of ERP implementation success.
Interestingly, top management executive’s age and functional background was found significant to ERP implementation success.
7. Characteristics of the implementation process
 One of the major conflicts in ERP implementation is the choice that has to be made between business process engineering vs.
software modification.
 Training and education of users, customers and suppliers is an important part of adoption and satisfaction of the ERP system.
8. End-users characteristics
 End-user attitudes toward the ERP system were found to influence successful implementation. Employees with the lowest job
tenure and those in professional positions were more likely to be satisfied with the ERP system.

15. Literature references:
 Review Paper: Critical Success Factors for ERP Implementation
(http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2256382)
 2013 ERP research: Compelling advice for the CFO
(http://www.zdnet.com/2013-erp-research-compelling-advice-for-the-cfo-7000011619/)
Related articles:
 Exploring the Impediments of Successful ERP Implementation: A Case Study in a Public Organization
( http://www.ijbssnet.com/journals/Vol_2_No_22_December_2011/33.pdf)
 Top Five Factors for ERP Implementation Success
(http://www.collegiateproject.com/articles/Top%20Five%20Factors.pdf)
 Evaluation of Key Success Factors Influencing ERP Implementation Success
(http://www.epscor.hawaii.edu/system/files/er_publication/2012/04/Hailu%2526Rahman_Evaluation_Key.pdf)

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