Austin, June 15 2022 – Smaller merchants in the U.S. are struggling to get to grips with spiralling delays and costs of major ERP projects, according to a new study by Brightpearl, a world-leading retail operating system.
Leaders from over 500 small-to-medium sized retailers took part in a study, which found that major ERP projects take six months longer than they were told to get live.
Merchants can expect an average 195-day delay to major back-office software projects that can typically take months or years to finish, even when completed on schedule.
Researchers also found that ERP investments cost almost a third (34%) more than predicted at the outset of the project.
According to the data, within the last 12 months more than a quarter of firms (27%) have attempted to implement an ERP system as an end-to-end solution for their retail needs.
However, 4 in 10 brands (38%) have experienced a ‘major failure’ when trying to implement their ERP system.
Half of SME merchants have reported problems (53%), with 63% of medium brands and 38% of large brands running into problems with ERP project failure.
Bigger brands do experience more issues than average, SME retailers can rarely afford the delays, spiralling costs or total project failure increasingly associated with major ERP projects.
“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 officially takes longer and costs more than customers are told to expect.”
While many retailers have experienced ERP challenges over the past year, the sectors most impacted by issues include electronics and components (62%), sports, leisure and hobbies (56%) and luxury goods (50%) — with each category experiencing a greater than 50% failure rate with embarking on an ERP project.
The key reasons for ERP failure, according to the data, includes ongoing integration issues (27%), a lack of scalability and flexibility (25%), being a poor fit for a retail brand (17%), and a lack of expert implementation consultants to help guide the process (15%).
Brightpearl believes SME businesses should now 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 ultimately fail.
“Businesses should do a checklist of key requirements any back-office solution should have before making a major investment in it,” said Arthrell. “Whether that’s being purpose built for retail, coming equipped with native integrations, being fully scoped so you know the costs and timeframe of project, or 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 backoffice software decisions as much as possible is the best way to protect your business.”
About Brightpearl
Based in Bristol (UK) and Austin, Texas (US), Brightpearl provides a retail operating system (ROS) for retailers and wholesalers. Its mission is clear: automate the back office so merchants can spend their time and money growing the business. Brightpearl’s ROS includes financial management, inventory and sales order management, purchasing and supplier management, CRM, fulfillment, warehouse and logistics. In addition, the system has high-performing connectors to the major ecommerce platforms, including Magento, BigCommerce and Shopify. Brightpearl’s platform manages over 10m transactions and $5bn of business a year.
In 2022, Brightpearl became part of the Sage Group plc, with the combination of Sage Intacct and Brightpearl creating a powerful solution for retailers and wholesalers.
You can connect with us on Twitter (@BrightpearlHQ), LinkedIn (linkedin.com/company/Brightpearl), and Facebook (facebook.com/brightpearl).
Media contact:
Mark Hook