ERP System Failure and Academic Research
Nearly every academic research paper I have read refers to the “many ERP systems failures”. This is usually an assumption which made to justify the main research focus of the paper. But I rarely hear, at industry conferences, a company refers to their project as a failure. So where are these many failures which academics refer to?
Recently I attended an academic conference (CONFENIS) in Natal. This conference has a Enterprise Systems focus. A paper was presented by Ronald Catersels which discussed the gap between academia and practitioners. As part of this research Ronald reviewed 1100 ERP systems academic papers to look at the scientific proof of the ERP systems failures. He found that by tracing back the referenced failures that they can be traced back to 3 papers. These papers were written more than a decade ago with many referring to Fox Myers implementation.
If you listen to academia, failures are occurring everywhere. So what is a ERP systems failure? There are the traditional project methodology terms, on budget, on time, on scope. But this ignores the business value of the implementation. The Accenture report referenced in a previous blog (The Return of Enterprise Solutions) surveyed 163 senior executives from different organisations. It was found that 80% of organizations had achieved at least half of their targeted benefits. However it was also found that 12% had no formal business case that identified specific benefits. A follow-up study which focussed on Asia Pacific organizations asked what they would change if they could implement again, 39.7% indicated nothing would change, 16.6% better product/vendor evaluation, 8.6% better change management. I think that everybody has realised that ROI is not a practical measure.
There is no doubt projects could be done better but are they failures? It is a pity that more effort by academics is not put into defining what is meant by a failure. However from now on when I attend an academic conference presentation and the paper refers to ERP systems failures I am going to ask ” can you tell me about an ERP system failure which has occurred in the last 10 years”? So for the academics reading this blog this is a heads up.