A Word on ERP Statistics
“If case studies are any indication of the outcomes in ERP investment, insights already suggest that many attempts have not delivered the expected benefits, have failed completely, or will have high probability of failure.” (Bajwa, Garcia, Mooney, 2016)
Don’t Be AN ERP Statistic: The Landscape
There are some incredible numbers that represent Enterprise Resource Planning (ERP) organizational change transformations. ERP success is a big deal for businesses. ERP vendors are spending millions of dollars on product improvement and ease of use and methodology improvements. And, there is a great deal of research and doctorate dissertations trying to contribute to ERP success models. But why do ERP implementation have such impressive numbers and statistics? Why are costs to implement so high, failure so prevalent (still over 50%), and risk of potential failure so significant?
Unveiling ERP Success Factors
There are many ERP transformation “success factors” (see upcoming posts for more details). We, researchers and practitioners, know these factors are all required, no doubts. But organizations may not be aware of all of the quite significant success factors nor be placing the right amount of emphasis on these success factors. Organizations may want to consider placing more emphasis on organizational culture and transformational leadership attributes as being the potential “catch-all” required for success. Our anecdotal experience, as well as objective research, suggests that organizational culture and leadership is the critical ERP success factor. Knowledge of these real, not perceived, success factors can prevent your organization from becoming an unfavorable ERP statistic.
Critical Role of Organizational Culture and Leadership
Of course, no one would argue, successful ERP implementation all starts with a solid project plan and methodology. ERP implementations seldom fail due to technology (Ex. hard drive) failures or because business rules aren’t 100% understood and followed from the onset. It is quite possible, however, that they may fail because the organization is not “all in” from the top down officers to their mailroom. The realities and real expectations of such a significant ERP change endeavor may not be clearly understood (and accepted) among all the stakeholders.
Abstract versus Concrete Cultural Characteristics
Project success demands a sustained collaborative effort rarely carried out. Corporate culture, communication, and leadership successes are composed more of the effectiveness of soft-skills than the structural and strategic characteristics of an organization. This assertion is fundamentally opposed to the conventional understanding of functional-technical systems and project tasks because they tend to be more tangible, testable, and task-oriented, they are deemed more valuable. And, then again these tasks also tend to be easier to quantify and measure and notice.
Understanding all ERP success influences, real versus perceived and abstract versus concrete, will prevent your organization from becoming another unfavorable statistic.
Contact Nestell & Associates today to learn more.