In 2021, McKinsey revealed that the average success rate for transformations is 31 percent. That means, for instance, that ERP migrations are more likely to fail than to succeed. What can organizations do to succeed in a seemingly volatile environment?
Of those organizations that underwent succesful transformation, unfortunately only 67 percent felt they realized the maximum financial benefits of the new software. In fact, according to McKinsey’s report, it can take up to 18 months for firms to realize half of the value of their transformations. Those companies with top-quartile financial performance gained 74 percent of the value within 12 months.
Now, McKinsey is talking broadly about transformation projects here – not just the implementation of new ERP systems. But it echoes a (now ancient) statistic from Gartner from 2010, stating that between 55 percent and 75 percent of ERP implementation projects fail.
When it comes specifically to ERP transformations, including migrations to cloud ERP, any organization looking to boost their chances of success would benefit from reviewing their testing processes.
The link between software testing and implementation success
Software testing makes sure that your new ERP can interact with a business and provide the exact means for said business to remain competitive. The consequences of an ERP not working can be serious, however, with a host of issues waiting for firms that haven’t put enough time into testing.
For example, if an ERP system isn’t properly functional, productivity will drop, employee morale will be affected and user engagement could hit a low point. With users unable to work, financial losses could begin to pile up, which in turn could influence a firm’s reputation with customers and clients. With angry clients, can come unfortunate lawsuits, or regulatory fines from incensed shareholders.
How much of a difference does software testing make?
By Original Software’s estimation, testing accounts for around 60 percent of the effort in a software migration. Halving that time, therefore, would shorten the entire implementation phase by a third.
Better software testing also catches more bugs, improving the quality of the software released to an organization. Better software would help increase the total value that can be realized from a transformation.
On top of this, the Original Software testing platform can turn test results into guides, which can be utilized to train users in software. McKinsey highlights the role of “influencers” who can drive transformation; they believe that using influencers to support other employees, role model new mindsets and behaviours, and disseminate best practices and knowledge throughout an organization can increase the chance of a successful transformation by 10-20 percent. Armed with these guides, business users who have been involved in UAT can become those influencers.
