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.
Nice share I don't have exactly the example of failed EPR but 3 years back we tried to implement one EPR module (Now its part of ERP module) at that time it was separate shop floor control system. Based on the demands and requirments stated by project team we started working in devolopment site and soon got UAT approved later when the real production use stated we faced shear from same project team who wanted the system. The shear was based on the changing demands in reporting. As the whole implementation was bounded by cost any change used to reflect in increase in cost and finalising complete go-live with system. Finally it was decided the system is not useful and went to dump with all our efforts. While reviewing the reasons we found out the requirements were not clearly stated after UAT the requirements changed too offen and hence the speed of implementation as well as allocated cost could not meet the internal customers demands hence come the failure. I would be really interested to know more about such cases.
PS: something wrong with the upper part of this blog (looks like some HTML code)
-Pushkar
Great subject.
The easy way to evaluate the success of the project is to measure against the project objectives.
Some clients can state that by implementing "X" there will be a cost saving of "Y". If this is achieved then that is deemed a success. If this has not been achieved, a further review is required to see if the measure was achievable and what steps should have been taken.
Having true senior management buy in always leads to true analysis of the measures, and any client that does not know the key objectives of the project is not asking the right question to the right people.