Large scale legacy ERP replacement is risky, expensive, and challenging. ERP implementation costs and deployment schedules are amplified by customization – the need to wrap the ERP solution around your business processes and applications. These projects are more known for their failures than for their success. Just look at the horrifying statistics below:
- Hershey’s failed to deliver $100 million dollars in candy for Halloween 1999 after a troubled ERP implementation caused serious operational problems (CIO Magazine)
- 61.1% of ERP implementations take longer than expected (Panorama)
- 74.1% of ERP projects exceed budget (Panorama)
- 21% of ERP implementations fail to deliver significant business benefits (Panorama)
- 40% of ERP implementations cause major operational disruptions after go-live (Panorama)
- 23% are unable to grow their business as quickly as they would like and believe this to be because they lack the tools they need in their current ERP system (Mint Jutras)
- 28% report being unable to serve their customers as well as they would like due to a lack of functionality in their ERP system (Mint Jutras)
Why Do ERP Replacement projects fail?
The strategy for ERP replacement and deployment typically involves keeping the legacy system running until the new ERP system has much of the planned functionality implemented and is then cut over.
The costs and complexity of implementing a new ERP system are largely influenced by how much customization is needed to make the software fit your business processes or to twist it to provide important functionality your legacy system provided. There are many custom applications that just don’t fit into ERP without a great deal of customization. Let’s take a large University example, how do you put a parking application built using Adabas and Natural into a commercial ERP system?
How To Mitigate ERP Replacement Flops
It is possible- and easy- to replatform “one off” Adabas/Natural applications to the Windows environment. This eliminates the immediate need to force fit unique legacy functionality into the new ERP system and provides the functionality you need without all the cost, added project time, or schedule risk. In fact, the money saved by an efficient replatforming of “hard to ERP applications” produces an immediate cost reduction by reducing mainframe MIPS use. Those savings can be applied to the ERP project and in some cases can add up to several million dollars.
When it comes to mitigating the inherent risks of replacing these legacy behemoths, it pays to learn from those who have been there. Do your research, understand your environment, and plan for contingencies. Don’t be afraid to take advantage of the tools that are out there- such as application replatforming to tackle the sticky spots in your ERP replacement. It will save time, money, and maybe a few cracked molars.