Brightpearl ERP survey (credit image/Pixabay/StartupStockPhotos)Brightpearl has published new research which suggests UK retailers are struggling to effectively implement new Enterprise Resource Planning (ERP) projects. The study indicates that spiralling costs and frustrating delays appear to be the root causes. 500 respondents from retail took part in a study. It found that major ERP projects take six months longer than estimated to get live. UK retailers can expect an average 200-day delay to major back-office software projects that can usually take months or years to finish, even when completed on schedule.

Researchers also found that ERP investments cost 27% more than predicted at the outset of the project. According to the data, within the last 12 months, 18% have attempted to implement an ERP system as an end-to-end solution for their retail needs. However, 34% of UK firms have experienced a ‘major failure’ when trying to implement their ERP system.

(credit image/LinkedIn/Sara Arthrell)
Sara Arthrell, CMO at Brightpearl

Implementing any major back-office software is a significant investment,” said Sara Arthrell, CMO at Brightpearl. “SME retailers cannot afford failure, and yet ERP adoption is a high stakes gamble where the risk of failure is uncomfortably high. Even if these projects are successful, implementing these systems takes longer and costs more than customers are told to expect.”

Implementing ERPs

While many retailers have experienced ERP challenges over the past year, the sectors most impacted by issues include homewares (83%). Sports, leisure, and hobbies (80%) and toys and gifts (50%) – all having seen a greater than 50% failure rate.

The key reasons for ERP failure, according to the data, include:

  • Ongoing integration issues (24%)
  • Being a poor fit for a retail brand (16%)
  • Lack of expert implementation consultants to help guide the process (16%)
  • A lack of scalability and flexibility (15%) was also cited.

Bigger brands experience more issues than average, with 46% of medium brands and 40% of large brands running into problems. SME retailers can rarely afford the delays, spiralling costs or total project failure increasingly associated with major ERP projects.

Jorge Henriques, COO of Bond Touch, a brand which sells emotional wearable bracelets, is not surprised at the problems modern ERPs are presenting to growing brands. Henriques says: “ERP systems take forever to set up. We would have needed lots of costly custom-built integrations to make it work for us. We wanted to have the flexibility to decide what’s best for our business and quickly scale up or down depending on our needs. It was clear a big ERP system could never offer that kind of scalability.”

Research highlights

  • Retailers in the UK say major ERP projects take 6 months longer than estimated to get live (an average 200-day delay)
  • ERP implementation costs almost a third (27%) more than predicted on average, as costs spiral
  • A third (34%) of UK firms have experienced a ‘major failure’ when trying to implement their ERP system – within the last 12 months

Brightpearl believes SME businesses should consider opting for different retail solutions which address the key causes of failure from the outset, to remove risks that the project might go long, cost more or fail.

Sara Arthrell added, “Businesses should create a checklist of requirements their back-office solution should have before making a major investment. Whether that’s being purpose built for retail, coming equipped with native integrations. Being fully scoped so you know the costs and timeframe of the project. Furthermore, having a team of experts on hand to guide the implementation process from start to finish.

In a volatile and ever-changing retail environment, de-risking major back-office software decisions as much as possible is the best way to protect your business. It gives your major tech project the greatest chance of success.”

Enterprise Times: What this means for business.

No project is ever undertaken in isolation. This includes implementing ERP solutions which is perhaps the most complex business challenge for enterprises. This is particularly the case when retailers are managing multiple projects to various budgets and timelines, the challenge is hard enough. However, it becomes more problematic when retailers don’t have visibility on all the project ingredients. Or how all the key project components may fit together. The situation is further compounded when teams, particularly key members, are spread across the globe and work across different systems and tools. Implementing new ERP platforms requires effective resource management and planning. Time must be spent clearly defining the business, data, user and legal requirements of ERP projects. Documenting possible risks to the project. This activity must be undertaken before a single piece of coding has started. This is often the most important part of the development process.


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