5 Reasons ERP Projects Go Wrong

An Enterprise Resource Planning (ERP) project aims to integrate all your company’s core processes into a single system—finance, HR, manufacturing, supply chain, services, procurement, whatever else you need to run your business, back-end and front. The term originates in manufacturing, but for many sectors ERP now means the entire suite of business and supporting applications.

When it’s done well, customers are happier, employees are freed from menial tasks, costs are reduced, reporting runs smoothly, and all the separate parts of your business have access to the same information in real-time. A good ERP enables economies of scale and frees up key people to focus on adding value. But when it’s done badly, everybody’s frustrated and unhappy, and money goes down the drain. I once met a CEO who told me his entire company had been traumatized by a failed ERP project.

Freeman Clarke CIOs and CTOs have extensive experience in implementing ERP projects from idea, through business case, to delivered outcomes. Unfortunately, however, we’re often called in to help right things when the project has gone badly wrong.

We asked our experts for the main reasons ERP projects go off the rails, so you can keep yours going smoothly.

1. Not enough resources were dedicated.

Often CEOs see ERP as an IT project rather than a transformative one. They see it as a costly diversion rather than a critical enabler. So they don’t dedicate enough resources, and they certainly don’t dedicate the people needed to make it successful. “ERP is a full-time requirement. It needs dedicated focus and the right people,” says FC CIO Kev Cooper.

2. Not enough time was allowed.

Shaping the project, getting buy-in, training and documentation, data conversion, and integration with external systems—all these things take time. And when you rush them, you can expect things to go wrong. Make time to get it right and make time to fix things.

3. They didn’t know what they were getting into.

An ERP project is complex, and it can’t be done all at once—it needs to be broken down into manageable chunks. There will be challenges and some things won’t go smoothly. Projects fail because decision-makers’ expectations aren’t met. Are your decision-makers aligned around realistic expectations?

4. They lost sight of the customer.

Customers determine what’s valuable! ERP projects that are too focused on internal issues, on doing things the way you’ve always done them, or working around legacy issues, are missing the point. “Don’t start with your problems, start with your customers,” says FC Director, Andy Hart.

5. They may not have actually needed one.

Millions have been spent on ERP projects that were never really needed! Your existing systems might work perfectly well if you address training, data, and user behavour issues. Perhaps you need to better manage your existing suppliers and fix some specific problems. Bad systems can work well if they’re well managed (and good systems can work badly if they’re badly managed!). Perhaps a new ERP if not the answer.

ERP and integration issues Knowledge Center