Enterprise resource planning implementation project costs and durations are down

Source: Panorama Consulting Group

Apr 29, 2011

Forced to cut ERP implementation budgets and duration periods during the latter half of 2010, companies nonetheless realized significantly more business benefits from their enterprise software than they did in 2009, according to the 2011 ERP Report by Panorama Consulting Group, an independent ERP consulting firm in Denver. The average ERP implementation cost dropped from $6.2 million to $5.48 million and the average project duration dropped from 18.4 months to 14.3 months. 2010 figures show an increase in the percentage of companies (42%) who realized between 51 and 100% of business benefits when compared to 2009 (33%), as well as a significant decrease in the percentage of companies who realized 30% or less of anticipated benefits (55% in 2009 to 21% in 2010). The report also reveals a large upswing in the number of companies reporting project overruns (61.1%) and budget overruns (74.1%) when compared to 2009 (35.5% and 51.4%, respectively).

The report also shows an increase in activities to ensure the chosen ERP software serves the buyer’s specific needs and processes. More companies in 2010 chose to customize their ERP software and to build business cases to better their implementation strategies than they did the year before. In 2010, the percentage of companies who chose not to customize their solution at all (15%) was nearly half what it was in 2009 (28.3%). The percentage of companies who developed a business case as part of their implementation process rose from 85% in 2009 to 97% in 2010.