Actual vs. expected ERP benefits sorely misaligned

by Ashwani Mishra    Nov 03, 2011

A study by Panorama Consulting Solutions states that the actual versus expected benefits of enterprise resource planning (ERP) deployment are still terribly misaligned, with 60 percent plus of SAP, Oracle and Microsoft Dynamics implementations combined realizing less than 60 percent of the expected business benefits.

The report titled ‘Clash of the Titans’ provided an independent comparison of leading ERP software vendor’s viz. SAP, Oracle and Microsoft on detailed project factors such as implementation costs, durations, and payback periods summarized by vendors. The report also includes metrics regarding selection trends, satisfaction and benefits realization.

The findings revealed that 76 percent of Microsoft Dynamics customers realized less than 60 percent of the benefits, while 24 percent realized greater than 60-percent of the benefits planned.

Sixty three percent of Oracle customers realized less than 60 percent of the benefits planned, while 37-percent realized greater than 60-percent of the benefits planned.

Sixty seven percent of SAP customers realized less than 60-percent of the benefits planned, while 33-percent of the customers realized greater than 60 percent of the benefits planned.

Eric Kimberling, President and Chairman of Panorama Consulting Solutions and leading ERP expert wrote that the most interesting finding is the potential correlation between implementation duration and satisfaction. “The more time that customer of the three “titans” of Tier I ERP software take to implement their systems, the lower their self-reported satisfaction rates.”

The online survey found that while Microsoft Dynamics had the longest average implementation duration of 14 months, and had the lowest satisfaction rate (33 percent). Oracle has the shortest average implementation time of 11 months and the highest satisfaction rate of 80 percent.

“Both the success of an implementation and the satisfaction with an ERP system is within the customer’s control,” said Kimberling. “Companies who manage their expectations correctly and who seek third-party assistance with selection, implementation and organizational change will ultimately enjoy greater benefits regardless of the software chosen.”

The report outlines actual results from more than 1,800 implementations across the globe over the last six years.

Additional findings showed that SAP is a leader in terms of ERP market share with 24 percent of the market, followed by Oracle and Microsoft Dynamics, respectively. SAP is short-listed more than Oracle and Microsoft Dynamics, and that ERP implementations still take longer and cost more than expected across the board.

“ERP implementations typically take more time when clients haven’t adequately documented their business processes or devoted enough resources to manage their ERP project,” said Kimberling.