Enterprise Resource Planning (ERP) programs are among the most significant initiatives companies undertake, touching operations, finance, planning, and decision-making. Given their complexity and long implementation timelines, the consequences of failure can be severe.
Gartner predicts that by 2027, over 70% of recent ERP implementations will fail to meet their original business goals, with 25% failing catastrophically. Why? Because critical steps are missed before and during implementation. Below are the most common pitfalls and how to avoid them.
1. Failing to Align Business Needs
ERP programs aim to drive significant change, but many lack a clearly defined vision and specific objectives. Vague goals, weak commitment, and inadequate planning result in competing priorities and misguided assumptions that derail the project from the outset.
2. Selecting the Wrong Technology and Implementation Partners
Choosing the right ERP platform is impossible without a robust planning phase that defines business needs and requirements. It requires a well-aligned, cross-functional team that envisions a future state and conducts thorough research.
Selecting the right System Integrator (SI) is even more crucial. A competent SI understands the client’s context and provides a realistic plan, ensuring key aspects such as business process engineering, architecture design, data migration, change management, and legacy system decommissioning are properly addressed. Resulting proposals are robust, and yes, a larger investment than competing “lean” ones, yet reflect sound planning.
3. Unrealistic “Big Bang” Approach
Until the business needs are clearly defined, planning an implementation timeline is guesswork. SIs operate with predefined delivery playbooks, often focused on speed and efficiency. However, these playbooks don’t account for the client’s unfamiliarity with ERP implementation, leading to inevitable delays and disruptions. They are best case scenarios, optimizing the SI’s delivery teams, not the client’s reality.
4. Misaligned Project Methodology
Project delivery is inherently complex and becomes even more challenging when internal and external teams work with different methodologies. Unclear roles, conflicting priorities, and lack of accountability exacerbate the issue. Questions such as “Which form of Agile? What toolset? Who is in charge?” remain unresolved, creating friction and misalignment.
5. Insisting on Recreating Old Functionality
Faced with complexity, organizations often default to replicating their existing systems with a modern interface—an approach counterproductive to ERP best practices. Modern ERP solutions emphasize out-of-the-box functionality, and unless a process provides a competitive advantage, customization should be minimized. Adopting new workflows requires patience, education, and trust in the process.
6. Underestimating Data Risks
When legacy systems and offline processes are replaced by a centralized platform, data inconsistencies emerge. Testing often reveals that data migration requires extensive cleansing and transformation. At go-live, data must be structured and validated to ensure continuity, making data migration one of the most underestimated workstreams in ERP projects.
7. Failure to Manage Capacity
Optimistic timelines and underestimated risks lead to unrealistic project plans. Project Managers may hesitate to flag risks or escalate issues, leading to burnout, resource turnover, budget overruns, and strained relationships with implementation partners.
8. Low User Adoption
Organizational Change Management (OCM) is often misunderstood and underutilized, yet it plays a pivotal role in project success. Research by ProSci indicates that programs with strong OCM are six times more likely to achieve their goals. Effective OCM goes beyond system training—it involves engaging users, clarifying the “why” behind changes, and fostering a culture of learning and adaptation.
Conclusion
ERP projects frequently fail, but they don’t have to. While the challenges outlined here are well-known, they all have solutions. Success requires clear objectives, stakeholder alignment, realistic planning, and proactive risk management. With transparency, skilled leadership, and a strong focus on people, organizations can avoid becoming another ERP failure statistic.