GITNUX MARKETDATA REPORT 2024

Erp Implementation Failure Statistics [Fresh Research]

Last Updated: December 16, 2023

Written & Summarized by: Jannik Lindner

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Highlights: Erp Implementation Failure Statistics

75% of ERP implementations fail due to a variety of factors.
14% of companies experience significant operational disruptions during ERP implementation.
64% of ERP projects exceed allocated budgets.
Average cost of a failed ERP implementation is $1.2 million.
Only 9.4% of respondents considered their ERP implementation project a complete success.
Companies experience a 29% increase in user license fees after ERP implementation.
21% of organizations experience reduced employee morale after ERP implementation.
37.4% of ERP implementations require customization.
40% of ERP projects experience schedule overruns.
A lack of change management is responsible for 20% of ERP implementation failures.
22% of ERP implementations are behind schedule by 25% or more.
67% of companies avoid further investments in their ERP system due to fear of failure.
Only 7% of businesses achieve 80% or more of the expected benefits from their ERP implementation.
In a survey of 315 companies, only 5% implemented ERP without significant customization.

ERP implementation is a complex process that requires careful planning and execution. Unfortunately, statistics show that many ERP implementations fail due to various factors such as lack of change management, budget overruns, operational disruptions and more. According to research conducted by Panorama Consulting Solutions, around 50% of ERP implementations are deemed unsuccessful while 75% fail due to a variety of reasons. Additionally, 14% of companies experience significant operational disruptions during the implementation process and 64% exceed allocated budgets for their projects. Furthermore, 21% rate their success as “neutral” while the average cost for failed implementations is estimated at $1.2 million dollars with only 9.4 percent considering it a complete success according to Supply Chain Dive’s survey results from 2017-2018 fiscal year data collected from over 1K organizations worldwide.. Moreover 46%, mid-size companies experienced challenges in implementing an ERP system whereas user license fees increased 29%. Employee morale also decreased after successful completion in 21 % cases; 37 % required customization which was not anticipated earlier on 55 % executives believed benefits outweighed risks but 40 % faced schedule overruns & 22 % were behind schedule by 25 or more than expected duration 15 months . Lastly 67 percent avoided further investments because they feared failure & 7 percent achieved 80 or more benefits out 31 who did not realize half the anticipated ones respectively

The Most Important Statistics

75% of ERP implementations fail due to a variety of factors. This statistic is a stark reminder of the risks associated with ERP implementations. It highlights the need for careful planning and execution to ensure successful implementation. It also serves as a warning to organizations considering ERP implementations, as it shows that the odds of success are not in their favor. Ultimately, this statistic serves as a reminder that ERP implementations are complex and require a great deal of effort to ensure success. 14% of companies experience significant operational disruptions during ERP implementation. This statistic is a stark reminder of the potential risks associated with ERP implementation. It highlights the fact that a significant portion of companies are not able to successfully implement their ERP systems, leading to operational disruptions that can have a major impact on their business. This statistic serves as a warning to companies considering ERP implementation, and should be taken into account when making decisions about whether or not to proceed with the project.

Erp Implementation Failure Statistics Overview

64% of ERP projects exceed allocated budgets.

This statistic is a stark reminder of the potential pitfalls of ERP implementation projects. It highlights the need for careful planning and budgeting when embarking on such a project, as the consequences of exceeding allocated budgets can be severe.

Average cost of a failed ERP implementation is $1.2 million.

This statistic serves as a stark reminder of the potential financial consequences of an ERP implementation gone wrong. It highlights the importance of taking the necessary steps to ensure a successful implementation, as the cost of failure can be significant.

Only 9.4% of respondents considered their ERP implementation project a complete success.

This statistic serves as a stark reminder of the potential pitfalls of ERP implementation projects. It highlights the fact that, despite the best efforts of those involved, the majority of ERP implementations do not reach the desired level of success. This statistic is a cautionary tale for those considering an ERP implementation, and serves as a reminder of the importance of careful planning and execution.

Companies experience a 29% increase in user license fees after ERP implementation.

This statistic is a stark reminder of the financial implications of ERP implementation failure. It highlights the fact that companies can incur significant costs if their ERP implementation is unsuccessful, with user license fees increasing by almost a third. This serves as a warning to businesses to ensure that they have the right processes and resources in place to ensure a successful ERP implementation.

21% of organizations experience reduced employee morale after ERP implementation.

This statistic is a stark reminder of the potential consequences of ERP implementation failure. It highlights the fact that a failed ERP implementation can have a direct and negative impact on employee morale, which can in turn lead to decreased productivity and a decrease in overall organizational performance. As such, it is important for organizations to be aware of the risks associated with ERP implementation and to take the necessary steps to ensure a successful implementation.

37.4% of ERP implementations require customization.

This statistic is a stark reminder of the potential pitfalls of ERP implementations. It highlights the fact that, even with the best planning and preparation, a significant portion of ERP implementations will require customization in order to meet the specific needs of the organization. This can lead to delays, cost overruns, and other issues that can contribute to ERP implementation failure.

40% of ERP projects experience schedule overruns.

This statistic is a stark reminder of the potential pitfalls of ERP implementation projects. It highlights the importance of careful planning and execution to ensure that projects are completed on time and within budget. It also serves as a warning to organizations to be aware of the risks associated with ERP implementation and to take the necessary steps to mitigate them.

A lack of change management is responsible for 20% of ERP implementation failures.

This statistic is a stark reminder of the importance of change management when it comes to ERP implementation. Without proper change management, 20% of ERP implementations are doomed to fail, highlighting the need for organizations to take the necessary steps to ensure a successful implementation.

22% of ERP implementations are behind schedule by 25% or more.

This statistic is a stark reminder of the potential pitfalls of ERP implementations. It highlights the fact that, despite the best efforts of those involved, a significant portion of ERP implementations are not meeting their deadlines. This can have serious consequences for businesses, as delays can lead to increased costs, missed opportunities, and a lack of confidence in the system. As such, this statistic serves as a warning to those considering ERP implementations, and should be taken into account when making decisions about the project.

67% of companies avoid further investments in their ERP system due to fear of failure.

This statistic is a stark reminder of the risks associated with ERP implementation. It highlights the fact that many companies are hesitant to invest further in their ERP system due to the fear of failure. This fear is likely rooted in the fact that ERP implementation failure is a common occurrence, and companies are aware of the potential for costly mistakes. This statistic serves as a warning to companies considering ERP implementation, and it is an important factor to consider when making decisions about ERP investments.

Only 7% of businesses achieve 80% or more of the expected benefits from their ERP implementation.

This statistic serves as a stark reminder of the potential pitfalls of ERP implementation. It highlights the fact that, despite the best intentions, the majority of businesses are not able to realize the full potential of their ERP system. This is a worrying statistic that should be taken into consideration when planning an ERP implementation.

In a survey of 315 companies, only 5% implemented ERP without significant customization.

This statistic is a telling indication of the difficulty of implementing ERP systems without significant customization. It suggests that the vast majority of companies find it necessary to customize their ERP systems in order to make them work for their specific needs, which can be a time-consuming and costly process. This is an important factor to consider when discussing ERP implementation failure statistics, as it can help to explain why some implementations fail.

Conclusion

It is clear from the statistics presented that ERP implementations are often unsuccessful, with around 50% of projects deemed a failure. This can be attributed to various factors such as lack of change management (20%), schedule overruns (40%) and exceeding allocated budgets (64%). Furthermore, only 7% of businesses achieve 80% or more of their expected benefits from an ERP implementation while 31% have not realized half their anticipated benefits. It is also worth noting that in a survey 315 companies, only 5% implemented ERP without significant customization. These figures demonstrate the importance for organizations to carefully consider all aspects when implementing an Enterprise Resource Planning system if they wish to maximize success and minimize disruption.

References

0. – https://www.www.cioreview.com

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2. – https://www.www.pronto.net

3. – https://www.www.predictiveanalyticstoday.com

4. – https://www.www.forbes.com

5. – https://www.www.aiim.org

6. – https://www.www.dataself.com

7. – https://www.www.eweek.com

8. – https://www.www.datixinc.com

9. – https://www.www.supplychaindive.com

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ZipDo, cited June 2023: Erp Implementation Failure Statistics

FAQs

What are the common reasons for ERP implementation failure?

The common reasons for ERP implementation failure include lack of executive support, inadequate project management, unrealistic expectations, poorly defined business processes, and insufficient end-user training.

How does poor change management contribute to ERP implementation failure?

Poor change management can lead to employee resistance, lack of understanding, and insufficient adoption of new business processes, all of which can contribute to an unsuccessful ERP implementation.

How significant is the role of data migration and data quality in ERP implementation failure?

Data migration and data quality play a crucial role in ERP implementation as inaccurate, incomplete, or duplicate data can cause a myriad of issues in the new system, which may eventually lead to implementation failure.

Can the choice of the ERP vendor impact the likelihood of implementation failure?

Yes, choosing an unsuitable or inexperienced ERP vendor can lead to implementation failure. Factors such as vendor expertise, reputation, and ability to provide adequate support and customization should be considered to increase the chances of a successful implementation.

What steps can be taken to mitigate the risk of ERP implementation failure?

To mitigate the risk of ERP implementation failure, organizations should focus on obtaining executive support, involving end-users in the decision-making process, setting realistic expectations, ensuring adequate training, and investing in project management and proper change management strategies.

How we write our statistic reports:

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly.

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