Posts Tagged ‘Panorama Consulting Group ERP Report’

manufacturing-vs-all-industriesERP consulting firm Panorama Consulting just released its 2015 Manufacturing ERP Report which includes a listing of “Top ERP Vendors” by market share.  While earlier reports showed SAP, Oracle, and Microsoft Dynamics leading the pack among ERP vendors in all industries, the new report shows Microsoft Dynamics holds the largest share in the manufacturing space.  The recent rankings are:

  • Microsoft Dynamics: 38% share of ERP manufacturing space
  • Epicor: 25% of that space
  • Oracle: 13%
  • SAP: 11%

The report also divulges that “unpredictability is more rampant among manufacturing ERP implementations,” and… “that manufacturers are just as likely to take longer to implement than expected, but when they do, they are more likely to extend their timelines by a greater amount than in other industries.”

The report also noted that “manufacturers implement at a lower total cost of ownership than those in other industries.”  They add that “when normalized to account for variation in company size by looking at total costs expressed as a percentage of annual revenue, manufacturers come out ahead with costs of 7.5% of annual revenue compared to 8.4% in all other industries.”

Manufacturers are also more likely to customize their ERP software than those in other industries.  Still, it’s interesting to note the report indicates that virtually every company, manufacturers or not, does some level of customization to their software.  Some 75% (of manufacturers) and 90% (overall) report “minor, some, or significant” modification.

And finally, one interesting note, which we’ll quote directly from Panorama’s report verbatim:

“Adoption of manufacturing-specific functionality is relatively weak. While most manufacturers adopt core modules such as sales and distribution, materials management and MRP, relatively few are actually implementing more advanced functionality in areas such as product lifecycle management, advanced planning or CRM. Many of these same companies actually paid to acquire the software, but didn’t acquire those modules for whatever reason. It is important to be cognizant of the propensity for manufacturers to invest significant money in shelfware and to make sure they are getting a good ROI from some of this advanced functionality offered by ERP vendors.”

Benchmarks, the report concludes, are key.  Everyone needs them to ensure goals are met during implementation and beyond.  You can view the Panorama report here.


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PANORAMA_BENEFITS_2In our prior post, we introduced you to Panorama Consulting’s 2012 ERP study, which reported that roughly half of all ERP projectS go over budget, over time, or both.  In our prior post we listed 3 key action items (“Benefits Realization Activities”) suggested by their staff.  Today, we’ll cover the remaining 7:

4. Operational Metrics and Benchmarks:  After you develop your high-level business metrics (key performance indicators, or goals) translate those metrics into operational numbers to which executives are held accountable.

5. Design Detailed Business Processes:  This process is begun during the initial Business Process Analysis.  Once that’s done, take this modeling to the next level and develop more detailed documentation to ensure that teams clearly understand their roles, responsibilities and key processes.

6. Group Metrics, Processes and Benchmarks:  While departmental metrics are useful, these must be translated to an individual level to gauge performance person-by-person.

7. End-User Training:  Use the process models detailed above to develop end-user training that not only helps employees understand how to use the new technologies but also how to perform new processes and job functions. Many training programs underestimate the value of the latter.

8. Benefits Measurement:  Here’s where real value is found.  Measure actual benefits after implementation and compare the results to projected departmental and individual metrics to identify any potential benefits gaps.  But don’t expect full benefits to be achieved for some time.

9. Root Cause Analysis of Benefit Gaps:  Work to understand why gaps exist between potential and actual benefits realization.  Are workers reverting to workarounds because they understand how to use the technology, but not the importance of doing so?

10. Implementation of Corrective Action:  Follow-up training, enhanced communications, focus groups and process control and governance are some common ways to bridge gaps and enhance ROI.  Remember, it’s part of your Lean process, and thus, it’s all about continuous improvement. 

Apply this thinking and these action items as you roll out your ERP implementation and you’ll be making serious inroads toward improving your ERP return on investment.  Better still, keep it up, and you’ll be maximizing that return for years to come.

As we noted previously, the Panorama White Paper can be found here (registration may be necessary).

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panorama_benefitsAccording to a 2012 report by Panorama Consulting on the state of Enterprise Resource Planning systems – the lifeblood of any growing business today – a whopping 57% of ERP projects go over budget, and nearly that many take longer than expected to implement.  Moreover, according to their research, nearly half of all projects “realize less than half of expected benefits” and nearly 30% “have not recouped any costs.”

It doesn’t have to be that way.

Companies who start with a focus on “benefits realization” have the best shot of measuring, then attaining, a suitable, and even enormous, return on investment (ROI).  Simply put, benefits realization is a comprehensive project approach that focuses on identifying, measuring and ensuring the business benefits achievable through technology.

You break down high-level business benefits into “manageable, actionable chunks” as Panorama best puts it.  You measure the benefits after implementation and utilize tools to ensure that the benefits are maintained, then sustained.  In short, you’re merging the technical aspects of the implementation with the business aspects of the implementation to ensure that benefits are realized.

In a recent White Paper, Panorama described their take on Ten “Key ERP Benefits Realization Activities” that focus on business value, ones companies implement as part of an overall ERP project plan.  [Find the original white paper here.  You may need to register first.]

We’re reprising them here because we believe strongly in the wisdom these profess.  Fully half the action points below relate to how well a company assesses its internal needs, maps its workflow and processes, prepares itself for ERP, and measures its progress – all critical components that being with a functional needs analysis (or what our firm refers to as the Business Process Analysis).

We’ll review Panorama Consulting’s first 3 Benefits Realization Activities in the rest of this post, and list the other seven in our next post.  The first three, with excerpts from their comments…

  1. High-level Business Case, Corporate Metrics and Benchmarks:  It is important to identify and quantify the potential benefits of the project and then compare those benefits to the projected costs associated with the proposed information technology.
  2. Organizational Readiness Assessment:  Assess the company’s culture and identify employee resistance to change early in the project in order to pinpoint activities necessary to overcome this resistance.
  3. High-level, Enterprise-wide Business Processes:  Business processes need to be modeled and improved to improve efficiency and to make certain that technology is not merely used to “pave the cow paths.” Even more importantly, these defined business processes should ultimately drive overall ERP design, configuration and implementation.

This is a critical topic when a company evaluates ERP.  We’ll close out with Panorama’s remaining seven action items in our next post, so stay tuned…


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Panorama Consulting Group has released its 2010 ERP Report, a survey of 1,600 organizations that have implemented an ERP system in the past four years.  It was quoted in this article at CIO.com.  The results seemed to us a logical benchmark for the state of ERP, i.e., what it costs, and how long it takes to get deployed.  We’ll recap some highlights below.  (In part 2 we’ll look at Software as a Service (or “SaaS”) survey results.)

From the data, it’s clear that many of those respondents were large companies.  Readers of our blog know we’re focused on the SMB (Small to Midsize Business) market base, so some of the raw dollars represented here would have to be ratcheted down by perhaps a factor of ten.  But the percents revealed and the lessons being learned apply to any business looking to implement ERP.

The report yielded three key “reference points” when compared to Panorama’s study two years prior (just before the recession really took hold):

1. Total Cost of Ownership.  According to the 2010 survey, the average investment ran $6.2 million, down from about $8.5 million in 2008.  (Like we said, chop off one decimal place, probably, when you’re looking at the small business market.)  Interestingly, while companies are spending 25% less than in years past, they also report that they are less satisfied with their investments.  The correlation is interesting, if not definitive.  They could be cutting corners or minimizing training, which we’ve found always leads to a less than successful implementation.  Or, there could be other factors at play here.

Companies are spending just under 7% of revenues on ERP, down from an earlier figure of 9%.  We find these figures skew somewhat lower in the SMB market place — though they probably shouldn’t, if clients truly want to secure the greatest bang for the buck.  The reason is that ERP — properly implemented — can be a huge cost-reducer and often a signficant competitive differentiator — thus increasing gross margins when properly deployed — as well.

2. Implementation Times.  Average implementation times were 18.4 months, down from 19.8 two years prior.  A weak economy may have driven companies to tighten up on their implementations, and/or to decrease the scope of their initiatives.

3. Implementation Costs.  54% of deployments went “over budget.”  That’s slightly better than the 59% of two years prior.  According to Panorama Consulting, “The finding is attributed to the fact that many organizations in our study failed to identify and budget implementation costs not attributable to software vendors, such as project management, organizational change management, hardware upgrades and the like.”

Specializing in the smaller SMB market, our experiences tend to skew a bit differently.  Generally, costs in that sector typically are under half a million, depending on all the “extras” clients request, and the length of the project.  Implementations tend to run 6 to 9 months on average, somewhat less for in-family upgrades.  The good news for customers however is that a lot of work can be done on “our side” with a less than full-time commitment on our clients’ part, as the preparatory work is done.  That all changes of course when it’s time to “go live.”

In our next post, we’ll look briefly at what the report’s findings revealed when comparing the traditional on-site ERP solution with a SaaS solution.

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