Did you know that almost three-quarters of all implementations of enterprise resource planning (ERP) software fail? That is the discovery made by US consulting company Panorama.
The researchers found that for an ERP solution to be considered a "failure", one or more of the following things needed to happen:
- The deployment took longer than expected;
- The solution cost more than was expected;
- It does not deliver at least half of the expected business benefits.
Each sounds relatively easy to avoid, and yet 72 per cent of surveyed companies found their best efforts going to waste.
When businesses attempt to control their information flow, and they understandably turn to technology to help them boost their compliance and productivity around information, it's a shame to see these plans fall by the wayside.
Business leaders who have allocated resources to the implementation of information management software will no doubt also understand the costs that come with such a failure.
Indeed, technology can sometimes leave us running away with ourselves. There's a reason why global spending on cloud services (70 per cent of which is software) will leap from $56 billion last year to $127 billion by 2018, if IDC's predictions are to be believed. However, the solution to all your problems cannot be found in buying the latest software, no matter how well it is marketed.
To understand why failure rates are so high, and to improve on them, we need to go back to basics.
Why does information management software deployment fail?
A CEO will be invested in the success of any plans to improve data management practices; however, he or she will understandably not be the person who manages this. If an executive allocates the resources to develop in this way, they do so through the IT department.
A CIO will likely take responsibility for leading such a strategy, and IT departments tend to prefer the latter letter in their name than the first – it is the technology they are most interested in rather than the information.
Businesses that work with this model are wont to go out and throw money at the problem with the latest technology tools, without thinking about the people who are going to run them and the information that will be used.
Improving the chances of software implementation success starts by revolutionising the way a business approaches information management. Information governance should be a part of business governance, with accountability placed on someone when they mismanage critical resources.
Only then can decisions be made on what software to buy – or indeed, if it is necessary at all.
Getting the most out of software
Software is not a solution; it is a tool. It is one of the physical resources that helps people work with greater efficiency by automating business processes – if implemented successfully and governed accordingly.
At Experience Matters, we help organisations create an information management strategy for the good of the wider business. With the right support, a company can ensure that not only the ideal software choices are made, but the right information is put into them.
We also train staff in the best use of information assets, to improve compliance, boost productivity and reduce risk.
The flip side to Panorama's study is that 28 per cent of ERP software deployments succeeded. It's a relatively low number, but one that proves a business can triumphantly drive ahead with their digital developments.
Doing so can even be the point of difference that allows one company to leapfrog its competitors. However, without thinking about how information truly works for us as a business asset, many may attempt the leapfrog and end up falling flat on their faces.