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Monday, July 07, 2014

With such damning statistics on ERP failures cropping up in global surveys ERP vendors are acknowledging most ERP implementations run into trouble with budget over-runs, project delays, software functionality and internal company problems.

Software companies struggle with implementing ERP systems due to the complexity with organisations that they have little control over. Poor software requirements specifications, arrogance of company CIOs who believe they know-it-all, lack of management involvement and a failure to understand the many changes required to an organisation to achieve
successful ERP outcomes all contribute to the problems.

What is clear more than 75% of organisations struggle with their ERP projects and few, if any, achieve the expected benefits the technology is capable of achieving.

Whilst our research and work as expert witnesses show many failings by software vendors and their integrators, implementing clients must also share responsibility for the way in which they approach these projects. Simply pointing the finger at the software houses and their integrators failures obscures the reality of the approach taken in the first place to an ERP acquisition and implementation by
the buying company. We continue to uncover poor initial rationale for acquiring ERP systems, lack of risk assessments and strategies to mitigate risk, limiting software capability with budgets that do not take into account full requirements and internal activity costs necessary to ensure successful outcomes, project scope creep and unrealistic go-live dates all contributing to the ultimate problems experienced by implementing organisations.

It is true most companies manage to get the basics working, eventually, which amounts to little more than an electronic recording system, but, the full potential of ERP is rarely achieved.

Given the failures a different approach must be taken to achieve different outcomes.

A change in approach is nowhere on the horizon as the current model generates significant revenue and profits to software companies and their integration divisions.

These failures have been around ever since the MRPII days and it seems we are either unwilling or unable to learn the lessons of the past. Our prediction is the failures will continue unless a different approach is taken to the whole ERP industry, sellers, integrators and clients.

Experience Worth Listening to!

Ray Atkinson