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Fortune 2000 companies spend millions of dollars each year to license third-party ERP and other enterprise software that’s poorly adopted by the end users it’s targeted for. I’m not revealing something that hasn’t already been known for years, but there’s still something very wrong with this picture and it’s not getting any better.
Several recent studies bear this out. According to a recent survey of U.K. organizations conducted by the National Computing Centre, almost a quarter of all ERP and enterprise software projects have been put on hold during the recession while 41% are being postponed. There’s nothing unusual about enterprises pulling back on IT spending and software projects during a recession. But there are other glaring data points that reflect poorly on enterprise software vendors and their offerings, including how 68% of survey respondents found the costs of ERP systems had either ‘exceeded’ or ‘greatly exceeded’ their expectations.
Meanwhile, other studies have found that large blocs of end users aren’t even using enterprise software once it’s been deployed. According to a survey of 353 IT buyers and software executives conducted this summer by SandHill.com, Neochange and the Technology Services Industry Association, 53% of respondents say that fewer than half of end users in their organizations are effectively using installed software. That’s pretty pathetic. Perhaps that explains why a whopping 87% of respondents say they’d be interested in working with vendor partners to improve usage levels and ‘drive business impact beyond technical implementation.’
A lot of CIOs and project managers strive to incorporate the kinds of features and functions that business users are seeking in homegrown software development efforts. They regularly review requirements and revisit software modules that have been developed and piloted to make sure they’re hitting the mark and make adjustments as needed. Some project leaders even go so far as to conduct post-mortems on software development efforts to help determine whether they’ve achieved the goals of end users and project sponsors, though this rarely occurs due to time and resource constraints on IT staffs.
But these types of steps seldom occur with third-party enterprise software implementations, or at least not to the same degree as with internally-developed applications. Most CIOs and project managers I talk to say their organizations typically can’t afford the time and expense of making extensive customization to commercial systems. Instead, project teams often work off a list of end user requirements and hope that they meet most of them.
If high percentages of dormant enterprise software users are any indication, it’s a failed model. Meanwhile, your organization is probably one of many that are spending millions of dollars in annual maintenance for a software system that’s infrequently used.
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