Reading press-releases made by the various ERP software vendors you would be left with the impression that ERP is going to return you 100% + on your investment!
Looking at the global surveys showing success stories you get a totally different picture!
Since the 1979s MRPII (Manufacturing Resource Planning) days, beginning in the manufacturing sector, companies have struggled to successfully implement MRPII. Whilst most organisations managed to turn on the software the results were generally disappointing. Around 70% of implementers failed to achieve significant benefits. The 30%
that claimed great results did not achieve the benefits they expected to achieve.
Many organisations were not able to define the benefits they achieved and simply adopted MRPII as a recording system.
In the 1990s MRPII was rebadged and called ERP (Enterprise Resource Planning), this was, in part, due to the appalling reputation MRPII had for successful implementations. For many newly rebadged ERP systems there was no change from the MRPII software they had previously had.
The ERP systems of today, in a theoretical sense, have enormous capability and can be described as advanced technology due to the potential of the systems to change the face of business and organisations. The problem is most organisations are unable to master the complexity of changing their business and decision making processes to take advantage of
the capability of the technology.
In 2014 statistics are showing that 70-75% of organisations are failing to successfully implement the technology and give them the benefits expected. Of the 25% who claim successful implementation they only report 50% of the expected benefits. All of these figures are difficult to quantify as success and failure is dependent on the
perspective of the implementing company. For organisations that have low expectations success may simply be turning on software whilst failure for some is that original (unrealistic) expectations were not met. The spectrum of success and failure expectations muddies the water on ERP success and failure but one thing remains certain: ERP systems results are not matching the hype put out by a lot of ERP vendors.
After 40 plus years of integrated systems the fact that we have such controversy and problems with ERP system results, you would have to conclude that the technology is floored or we simply have little clue how to utilise it in a way that the designers intended.
Success in these type of systems is a prerequisite to the businesses of the future, according to research, but the reality is success is a long way off if we continue to implement these systems using the model we have today.