The reason ERP projects continue to fail at a 70% rate
Companies have spent billions of dollars since 1972 engaging consultants and ERP vendors to assist them in projects to evaluate, acquire and implement enterprise software systems. The 2015 Standish Group International Chaos report studied 50,000 projects around the world and found that 52% of enterprise software implementation projects were challenged (failed to some degree), 19% failed and 29% (the same success rate as in 2011) were successful. Why can’t consultants, ERP vendors and buyers get it right after 45 years?
I’ve been directly involved in over 350 projects to evaluate, acquire and implement enterprise software systems and I managed the implementation of most of them. I wouldn’t proclaim (no one would believe me) if I said everyone of those projects were implemented without any problem, because they weren’t. And most buyers would claim failures occurred because sellers (consultants or ERP vendors) didn’t deliver what their business expected because they didn’t. But don’t blame consultants or ERP vendors for taking buyers through a buying process a buyer wanted and expected (including me).
The traditional buying process for enterprise software acquisition and implementation projects has been used by consulting firms and software sellers since 1972. Sellers control the buying process because buyers let them. Buyers allow sellers, consultants and ERP vendors, to determine their functional requirements based on the functionality some software system must have if the business is to run as it should versus what a software system must do or allow to be done if the business is to run as it should.
ERP acquisition and implementation failures can be dramatically reduced or even eliminated if enterprise software buyers initiate these kinds of projects with what we describe as the Abstract Business System Description for how their business operates.