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ERP Survey Results Point to Need For Higher Implementation Success

Robbins-Gioia LLC identifies lack of focused management surrounding ERP implementations

January 28, 2002, Alexandria, Virginia— Robbins-Gioia, LLC, a leading provider of management consulting services, today announced the results of a comprehensive survey indicating that more than half of organizations with an Enterprise Resource Planning (ERP) system in place are dissatisfied with the execution and success of their ERP implementations.

The 232 survey respondents spanned multiple industries including government, Information Technology, communications, financial, utilities, and healthcare.

A total of 36 percent of the companies surveyed had, or were in the process of, implementing an ERP system. Of those respondents:

• 51 percent expressed that the ERP implementation was unsuccessful
• 46 percent of the participants noted that while their organization had an ERP system in place, or was implementing a system, they did not feel their organization understood how to use the system to improve the way they conduct business
• 56 percent of survey respondents noted their organization has a program management office (PMO) in place, and of these respondents, only 36 percent felt their ERP implementation was unsuccessful

"There is a clear need to tighten the management processes surrounding ERP implementations," states Eric Gioia, Robbins-Gioia. "Remediation is required when an organization has a significant investment in an ERP implementation that has not delivered the anticipated ROI. In some cases, these programs are abandoned entirely, costing organizations much more than dollars. Ancillary effects include the erosion of corporate confidence in the IT function, as well as an erosion in staff morale."

An independent third party, skilled in program management, can preempt these negative consequences by providing a clear and honest evaluation of the current situation. This third party, however, cannot be a software vendor or a consulting implementer, and must have no stake in the process other than delivering business value.

Firms should consider the following steps as they embark on a remediation plan:

• Solicit an evaluation from a skilled, independent third party
• Ensure specific business process improvements are identified and accepted by key stakeholders
• Assign responsibility to a person or organization (potentially a PMO) to drive the implementation
• Determine the level of project management infrastructure and identify any gaps before proceeding
• Identify the definition of success and the key metrics to be measured throughout the implementation and at project completion
• Identify links between ERP projects and business objectives in order to prioritize areas of focus

"Looking at the current cost and schedule overruns associated with ERP implementations, as well as the number of implementations that are abandoned mid-stream, it is obvious that the IT world is missing a golden opportunity to deliver business value," said Gioia. "ERP implementation success is gauged by its ability to align IT and business management objectives, demanding program management skills and a refined process for success. Failure is not a given."

About Robbins-Gioia, LLC
Robbins-Gioia has been dedicated to delivering management consulting solutions to government agencies and Fortune 500 companies for 20 years. Robbins-Gioia combines thought leadership, disciplined processes, industry-based knowledge, and integrated tools to help global customers optimize their business processes, accelerate change, and establish time, cost, and quality improvements to transform their businesses.

About Verizon
Verizon Communications Inc. is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 128.5 million access line equivalents and 28.7 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with about 256,000 employees and approximately $65 billion in annual revenues, Verizon's global presence extends to 40 countries in the Americas, Europe, Asia and the Pacific.