More than half of all ERP projects fail to meet their objectives
If there were a language for ERP transformations, it would contain warnings that look a lot like traffic signs:
◾ 'Proceed with caution'
◾ 'Speed bumps ahead'
◾ 'Blind corner coming'
and – all too often – 'Dead end' and 'Stop'.
According to estimates from the Boston Consulting Group (BCG), more than half of all ERP projects fail to meet their objectives.
The work is complex and time-consuming, with enough twists and turns to stock a Hollywood blockbuster. The price is also comparable to that of a big-budget film, with costs sometimes exceeding 5% of annual revenue.
Yet, when ERP transformations achieve their goals, they are worth many times the investment.
A successfully executed ERP transformation ensures that companies are more agile, robust and better equipped for the challenges of the future. Today and in the coming years, this is mainly in the area of sustainability (ESG, CSRD, CBAM) and compliance (OECD Pillar 2, ViDA), and acquisitions and mergers.
The reality – if we look around us – is that only a few companies succeed in realizing their original objectives.
๐ค These companies set objectives from day one (when considering a new ERP solution), weigh them heavily during the selection process, translate them into go-live acceptance criteria and monitor the progress of the project against these criteria.
And where and when necessary, make every effort to meet the set criteria.
๐ Developing the intended situation is a crucial step and starts with identifying where a company stands, recognizing the pain points and desired improvements, and defining a transformation, portfolio strategy for the future digital landscape.
Attention is especially required for:
◾ standardize processes in all countries and in all locations
◾ Making data more accessible across departments and in distribution and supply chains
◾ involving employees in the change process from the start of the idea
๐ An ERP transformation is not a solo journey but requires the collective effort of everyone in the organization.
An important point of attention is therefore the elimination of silos.
It is important to eliminate any potential for conflict of interest because every department has its own specific pain points and desired areas for improvement, every manager has its own experiences.
Finding the right approach starts with taking a strategic, forward-looking view.
๐ค An ERP transformation often requires skills and expertise that are not present or fall outside the core competencies.
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