Monday, January 16, 2006

Well, there's a surprise

A research piece shows some facts that will not stun anyone who has had the joy of living through an ERP implementation. According to a new study:

  • one third of users leave large portions of ERP software entirely unused
  • just 5% of customers are using ERP software to its full extent
  • only 12% install ERP "out of the box"
  • over half did not measure return on investment of their IT applications.
The only thing surprising about these figures is how implausibly good they are. According to Aberdeen group, only 5% of companies regularly carry out post-implementation reviews, so "less than half" seems wildly optimistic there. Moreover, just who are these 12% of companies who install ERP "out of the box" with no modification? Not too many in the real world, I suspect. Similarly, very few companies implement every module of an ERP suite, so the figures on breadth of usage seem also unremarkable.

Many ERP implementations were banged in to try and avert the Y2k catastrophe that never happened, but there were plenty before that, and plenty since, including numerous ERP consolidation projects (though there are fewer of these that ever look like finishing). I guess the scary thing here is the expectation gap between the people who actually paid the bill for these mega-projects, and the reality on the ground. However, as I have written about elsewhere, these projects are just "too big to fail" or at least to be seen to fail, as too many careers are wrapped up in them, so this state of denial seems likely to continue until a new generation of CIOs comes along.

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