ERP Project Roulette

pjoeckel • August 27, 2024

What Gamblers Know that ERP Buyers May Not

No one who understands simple math would play at a roulette table with the odds configured below. Yet companies take the same gamble daily with their ERP selection, implementation, or upgrade projects.

The ERP Project Roulette Wheel of Pain

Let’s examine the “ERP Failure” math behind this roulette wheel and determine whether better options are available.

ERP Selection Tool

Expected Value (EV)


When analyzing an investment, the expected value (EV) anticipates its value at some future point. EV positive indicates a positive future result for an investment decision, while EV negative indicates a loss.

Negative EV and ERP Projects


I'm just warning you: Math is ahead.
This simple but powerful concept applies to a typical ERP selection, implementation, or upgrade project.
Our basic assumptions are as follows based on industry studies:
  • Twenty-five percent of projects are successful, delivering promised functionality on time and within budget. We would argue that these projects do not exist, but we will agree to this definition for simplicity.
  • Twenty-five percent of projects are considered complete failures requiring a complete do-over.
  • Fifty percent of projects fall into the challenged category, meaning they will incur a substantial cost increase due to a lack of delivered functionality or cost and time overruns.

Assuming a typical enterprise ERP project, our expected value for every dollar spent on that project on that project would be:
  • Success: .25 x $1 = .25 cents (we gained total value for our dollar spent)
  • Failure : .25 x - $1 = - .25 cents (we lost our entire value for our dollar spent)
  • Challenged : .5 x $- .50 = -.25 cents (half the time, we received only a fraction of value for our dollar spent)

Adding up these possible outcomes, what is the expected value for a typical ER project? .25 cents -.25 cents -.50 cents = - .50 cents.

Conclusion



We expect to lose fifty cents for every dollar spent on an ERP project or that all ERP projects have a negative EV. This analysis suggests we should never consider starting ERP selection, implementation, or upgrade projects. This negative ERP project EV is why HandsFree ERP is leading the way with new tools, processes, and attitudes applied to these projects.
Contact us today to discuss how we can increase the odds of your ERP project having a positive EV.

HandsFree ERP We are dedicated to ERP project excellence with experienced people, cutting-edge processes, and innovative productivity tools like GYDE365-Discover. Experience - over one hundred years of combined experience selecting and implementing strategic ERP platforms. 

Microsoft ERP Funding

Peter Joeckel 

With an IE/OR engineering degree and enterprise software implementation experience starting at Price Waterhouse, Peter Joeckel has been in the business application selection, implementation, and challenged project turn-around business for over thirty years. He credits his industrial engineering degree with his search for better processes and tools to implement complex business application platforms. 
Most recently, he was the lead HandsFree client advisor in the Circle of ERP Excellence lounge and speaker at the Community Summit North America.

< Older Post

Newer Post >

HandsFree ERP is dedicated to supporting clients with their ERP initiatives, enabling companies to seamlessly connect users with their ERP partners. By utilizing skilled professionals, streamlined processes, and cutting-edge tools, HandsFree ERP significantly boosts the success rates of ERP projects.

Revolutionize Your ERP Selection: Ditch the Spreadsheets and Go Data-Driven

April 25, 2025
Streamline your ERP selection process with our cloud-based, modern, data-driven evaluation tool. Simplify business process requirements, accelerate ERP implementation, and gain unbiased, real-time insights for optimal manufacturing and solution fit.

Why AI Alone Isn’t Enough to Choose the Right ERP System: A Cautionary Tale from the Field

April 25, 2025
Discover the limitations of AI tools in ERP selection through a real-world case study comparing Microsoft Dynamics 365 Business Central and Finance & Supply Chain Management. Learn why expert analysis is crucial for accurate ERP requirements assessment.

Is Business Central the Right Fit for Your Great Plains Business?

April 25, 2025
Debating if Business Central is the right move for you? The key to making the right decision lies in understanding your business requirements—not just what your ERP system does for you today, but what you truly need from an ERP system now and in the future.
With our latest enhancements to Discover, you can now compare your answers to those of similar busin

Streamlining ERP Selection: How Discover Saves Time and Money

April 25, 2025
With our latest enhancements to Discover, you can now compare your answers to those of similar businesses. This means faster data collection, smarter decisions, and a smoother ERP selection process.
Overbuying mfg erp is just as bad as underbuying

Avoiding ERP Overbuying: Lessons from a Costly Mistake

April 25, 2025
Which is worse? Underbuying results in relentless and expensive change orders, or overbuying and paying for modules that you don't even need? Avoid falling into either of these traps with a Discover Assessment.
The word erp is coming out of a circle with a light coming out of it.

The ERP Wheel of Pain: Avoiding Costly Mistakes in ERP Implementation

April 25, 2025
How do you calculate a successful ERP implementation project? We base it on three aspects: on-time, on-budget, and on-spec. Learn the real cost of a manufacturing ERP implementation.
A blurred image of a city with the word erp and icons.

Making the Right ERP Choice: A Manufacturing Company's Journey

April 25, 2025
Discover simplifies ERP cost estimation by providing a detailed analysis of design and build hours, helping organizations accurately compare the implementation costs of Dynamics Business Central and FSCM to make informed, budget-conscious decisions.
A cupcake with whipped cream and a cherry on top

Choosing the Right ERP: Insights from a Discover Session

April 25, 2025
When considering an ERP system, it’s crucial to invest in a solution that aligns with your long-term goals rather than settling for what meets your immediate needs. If you anticipate your organization evolving rapidly, opting for a simple solution could lead to challenges down the road.
A computer screen with the words navigating erp selection on it

Navigating ERP Selection with REAL tool

By EzPages Support • April 25, 2025
HandsFree ERP understands the importance of unbiased data in making informed decisions. That’s why we rigorously tested the Discover tool to evaluate its impartiality and found that there is no inherent bias.
An isometric illustration of a cube with the word erp on it.

Mastering ERP Selection: The Secret to Successful Projects

April 25, 2025
Discover offers flexibility in how you view your data, allowing you to choose between a module-view or a process-view meaning you can tailor the analysis to fit your specific preferences and business context, making it easier to identify your requirements.

Unlocking the Value of Microsoft's Funding Opportunity

April 25, 2025
For a limited time, Microsoft is funding the Discover assessment, providing Dynamics GP, SL, AX, and NAV users with a detailed analysis of their business needs, a fit/gap evaluation of modern ERP solutions, and project estimates to simplify and guide their cloud transition.
A Junior Consultant's Tale - The Hilarious Truth About ERP Implementations

ERP Implementation Fails: A Junior Consultant's Hilarious Tale

April 25, 2025
Successful ERP implementations require seamless alignment between sales and implementation teams. We can help bridge this gap by clarifying business needs and providing structured execution guidance.