75% of ERP projects fail – how to de-risk software procurementBy Lucy Giles | 27 Feb 2023
How to ensure you aren’t in the 75% of companies who’s ERP projects are considered a failure.
Face it- you don’t know how to buy software. And as Gartner reports, over 75% of ERP software projects fail. Why is the failure rate so high and what can you do to de-risk software procurement?
First you need to:
- Accept you don’t know the best way to buy and implement software. Even if you’ve done it before, and done it well, it was likely over 5 years ago, and tech has moved on significantly. Without experience of successfully delivering SaaS solutions with iPaaS integrations across multiple teams with a proven ROI delivered in the first quarter, you need to do some homework to de-risk the process.
- Accept that there’s never a perfect time for an implementation, and given that most people don’t plan enough time to consider products, map processes, forecast ROI, prepare a business case and plan implementation, then you probably have your timings off anyway. If your system is end of life or doesn’t support your business then you need to make changes, whether you do so in a recession or a boom is irrelevant if you get the process right. Indeed the only certain is that when you need a new system, putting it off only slows down your growth and weakens your competitive position.
How to De-risk the buying process
- Do your homework, review software providers that are in your sector or recommended to you from relevant companies.
- Know your requirements, identify what you need, whether it’s better reporting, scheduling, or contract management, know your critical success factors, because you need to ensure your chosen system can deliver these aspects and understand any compromises.
- Don’t get awed by a beauty parade, a sharp sales team want to show you all their shiny tech, enjoy this bit if you want to, but only mapping your processes and outcomes to the system will ensure you have everything covered.
- Be prepared with documented processes & outcomes to help the right provider show you how their software can help you complete these activities with increased efficiency or service levels. Don’t forget to do your competitor research and brainstorm new ideas beforehand, so you can also explain any new processes or service offers you want to introduce, to ensure your chosen system can deliver these too.
- Value the benefits, if you are a service maintenance provider don’t forgo bespoke job sheets by asset and job type for something less important (such as a pretty dashboard for Service Managers.) Most teams fail at this because they get excited about something like a fancy reporting suite, failing to realise they aren’t capturing all of the data they need to report on in the first place. Getting this right really helps identify the best system for your needs.
- Forecast your ROI, so many software projects get put off after the quotes come in, not because the budget isn’t right, but due to fear about whether the investment will pay off. Work through how the new processes will save you time and money, get the right people involved, quantify the savings and then your decision making process is clear and easy.
- Involve your team in these steps and you will get a rounded view to help you select the right software product.