Survey puts software success rate at 40%

A new study has found that only 40 per cent of senior IT managers believe they have successfully introduced new software systems across their organisations. More than half (53 per cent) the respondents in a Cambridge Information Network survey said the success or otherwise of their projects remained "to be determined". Seven per cent deemed their enterprise projects a failure.

Out of 270 respondents from the US and Europe, just 11 Irish companies participated in the research study. However, the Irish experience reflected that of the rest of Europe, and indicates that at least one Irish company failed in the introduction of its enterprise resource plan (ERP). These are business management systems which integrate all facets of a business such as planning, manufacturing, sales and marketing.

However, according to Ms Chris Marsh, European marketing director of the Cambridge Information Network, this is not "as big a nightmare" as might be suggested. "ERP failure rates, and budget and implementation overruns are minimal," she said.

Ms Marsh was in Dublin to present Irish members of the Cambridge Information Network (CIN) - comprised largely of senior IT managers - with the survey findings. CIN is an Internet-based research and consultancy service for senior IT executives.

Despite regular reports about ERP projects running wildly over budget, the CIN survey found that projected and actual budgets were almost identical. Organisations spending $50 million (€45 million) or more did not run over budget at all.

When it came to assessing whether an ERP would provide a return on investment, 22 per cent said they never expected any return, and 15 per cent estimated it would take more than four years to reap any benefits. Ms Marsh said this might be because chief information officers were not looking at the return in terms of improved business processes, but simply in revenue terms. This implies a failure on the part of IT managers to integrate the system completely into the business process.

The survey also found that redesigning the business process tends to be the last factor addressed at the planning stage, even though it is seen as the key motivator for introducing ERP packages.

CIN has identified that ERP is now moving into a wider realm, with many organisations keen to exchange and integrate information online with their customers and suppliers. It is calling this latest development Extended Resource Planning (XRP).