One in four ERP projects fail
One in four ERP implementations fail due to poor planning and an unwillingness to modify business practices. Furthermore, such poor ROI is impacting on the willingness of C-level management to green light such projects.
One in four enterprise resource planning (ERP) implementations fail due to poor planning and an unwillingness to modify existing business practices, according to Meta Group. Furthermore, such poor return on investment (ROI) is impacting on the willingness of C-level management to green light such projects.
“The problem that most companies are facing, and the reason why most ERP implementations fail, is that they have incorrect assumptions about what the applications will do for the company,” says Paul Ventura, managing director, Asia Pacific, Meta Group.
“They think that something like a tier one solution will take away the pain of legacy applications and give them a centralised and integrated reporting structure that is hooked into all parts of their business. However, companies underestimate the amount of business process change requires. Automating an inefficient process does not automatically make it an efficient process,” he explains.
According to Ayman Abouseif, senior marketing director for Oracle Middle East & Africa, such mistakes are also made in the Middle East, where a number of local companies simply refuse to reengineer their businesses to reap the advantages ERP apps have to offer.
“We are seeing both extremes in the local market, those customers who are willing to reengineer and streamline their business processes and those who are not willing to consider any process changes,” he comments.