I can't believe it's already been 6 weeks, but it must be true because the last "Suitemates" webisode is out – Speak E.A.S.Y. Have you been following Bilk-Moore executives (played by notable actors Kevin Pollak and Ray Wise) as they navigate the perilous world of prison life and legal appeals?! So… was their guilty verdict overturned? You have to watch to find out! We've had a lot of fun with this. And the fun will carry on as the videos continue to be passed around and viewed. Not to mention the blooper reel comes out next week! And the ‘Elephant in the Room' contest is still open. But while the videos were done in jest, they come with a serious message. The corporate landscape is littered with failed ERP-SCM projects. Companies no longer have the IT budgets to support large implementations of complicated licensed solutions…. nor the consulting engagements required to make all the pieces work…. or the maintenance fees that accompany it. Recently, there have been signs of a push back (and we hope we are a part of that). Those in the industry are no longer being seduced by the suites. As we have professed before on this blog, CIOs and supply chain executives deserve to have more confidence in the success of the solution, more accountability on the part of their vendor, and certainly better ROI. In fact, just yesterday I saw this blog post by Panorama Consulting. Based on results of a recent survey they found that
the average annual cost for companies implementing on-premise ERP packages is $6.2 million, and average business benefits realization is 37.2%. So what do these numbers mean to your business? …In general, the total cost of an ERP system includes software costs, service costs and annual maintenance fees, which are typically about 20% of the cost of the software licenses. Based on these assumptions, when we consider an average cost of $6.2 million, an average payback period of 2.7 years, and average benefits realization of 37.2%, the model shows that the benefit loss from the ERP implementation is $4.3 million! Additionally, it takes you 2.7 years to recover these costs while it should have been only 10 months!
Enough is enough. The model is flawed. It's time for a new paradigm right? We think so. We're doing as much as possible to break the mold and move away from the old software model (the tired and failed supply chain software model in particular). We've only begun to shake things up. Don't believe it?...well, stay tuned for some bold moves ahead.