Why ERP Implementations Fail

Enterprise resource planning software links most of today's business management systems, and thus ERP software implementation is an important part of today's digital transformation for enterprise businesses. Implementing new ERP software can be a challenging undertaking. Explore top reasons for ERP implementation failure and how to carry out a successful ERP implementation.

Many organizations are hesitant to begin such an ambitious project to replace their legacy systems and get a new ERP system, with most companies citing these primary reasons why they are wary of ERP technology solutions:

  • Budget overruns/resources needed
  • Staffing limitations / missing expertise
  • Fears the project may inevitably fail (the psychological factor)

In other posts, we addressed How Much Does An ERP Cost? and What is An ERP Consultant and How Much Do They Cost? Today, we examine the third concern, about why ERP implementations fail.

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Budget Overruns

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Fears Of Project Failure

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Inadequate Resources

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Poor Project Planning

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Staffing Limitations

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Unrealistic Expectations

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Missing Expertise

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Lack Of Training

How Many ERP Implementations Fail?

Never mind the scare tactics that some ERP implementation companies employ, with dire tales of implementation failures they would have you believe. Let's look at the cold, hard data on this issue. We commissioned a leading ERP research firm to do a survey of 315 companies that had recently undergone an ERP system implementation. Here's what we found. (Note: we were not involved in these ERP solution implementations.)

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For more on this landmark study, download the full 14-page report.

Why ERP implementations fail

67% Successful/Very Successful

31% Partially Successful 

2% Not Very Successful

.3% ERP Failure


67% Successful/Very Successful

31% Partially Successful 

2% Not Very Successful

.3% ERP Failure

Why ERP Implementations Fail

So why do ERP implementations fail?  Some ERP projects fail to meet the expectations that many businesses have about their new system. This could be due to inadequate training, lack of ongoing support, an unrealistic project timeline, incomplete or inaccurate data migration, key stakeholders weren’t on the same page, or the ERP system wasn’t configured correctly.

For us at Ultra Consultants, the issue with ERP systems isn’t about whether or not you’ll completely fail at your ERP implementation project. That’s just not going to happen. Instead, we’re all about helping you accomplish your business process improvement goals, achieving ROI goals, staying on budget, and completing the project on time. We know what it takes to drive successful ERP implementation projects. In fact, we enjoy a 100% success rate with our implementation clients, and 93% of our projects are completed on time and on budget. No ERP implementation failure. How do we achieve this?

We have incredible, experienced ERP consultants on staff, consultants who understand manufacturing and distribution and who know the challenges of ERP implementation and how to avoid implementation failures. Experience with the  ERP implementation process makes the difference between a successful project and an ERP system that isn’t a fit for the business processes.

How to Avoid ERP Implementation Failure

Businesses fail for lack of experience, and the way we avoid ERP implementation failure is all about experience. We avoid these four classic mistakes that inexperienced organizations fall into.

1: Poor ERP project planning and unrealistic project expectations

Most organizations significantly underestimate the time and resources required for a methodical and comprehensive ERP implementation.

2: Less-than-thorough requirements gathering

Comprehensive requirements gathering is the foundation on which successful ERP selections and then implementations are built. It’s why we take the time to:

  • analyze your current processes
  • identify pain points, choke points, and problems
  • clearly define your future state–your business objectives

Implementation must include clear objectives to ensure your specific requirements are met by the selected ERP software so that the core business processes can function as efficiently as possible.

3: Excluding critical users from the process

We always include the people who manage your key business processes from across your organization as part of the implementation project team. By employing change management specialists and ensuring the right people are involved, you get crucial decisions correct, such as better process changes, which helps ensure your ERP implementation’s success.

4: Providing inadequate internal support 

A successful ERP implementation can only be achieved with strong organizational buy-in, which is why our change management strategy is essential to the project’s success. It’s why we get management committed to providing the time, resources and budget required and stakeholders from all levels of the organization involved in the process.

Implementation is one of the most complex, time-consuming and high-risk projects your organization will ever undertake, so it’s easy to make mistakes that will result in failure.

How to Plan a Successful ERP Implementation

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The implementation of ERP software is a massive time and resource-consuming project that is best handled by a project management professional, ideally someone who has extensive knowledge and experience implementing company-wide software initiatives. If you have such a person at your company, they won’t need the following information. But if you don’t, you may find the information helpful.

The six stages that we utilize when managing an implementation project are:


Pre-Implementation Phase

ERP Vendors Due Diligence, The Team and Charter, SOW and MSA


  • Implementation Team formed
  • ERP Project Charter created
  • Agreed-upon final contract with vendor
  • Consensus on MSA and other areas of vendor relationship
  • Consensus on vendor’s Statement of Work
  • Agreed-upon start date for planning and other documents preparing for next phase


Project Planning Phase

Vendor Contract Review, Vendor Deliverables, Statement of Work 


  • Finalized ERP System Contract
  • Finalized Statement of Work
  • Finalized Vendor Deliverables


Product Education Phase

Vendor-Based Education Certification, Training Assessment, Enterprise-Wide Education Roll-Out Plan


  • Formalized education curriculum on ERP systems 
  • Roll-out plan
  • Testing mechanisms assessing team  members relating to ERP features,  functions, reporting and user interface  familiarity
  • Ongoing training and support programs


Design/Configuration Phase 

Interactive Team Workshops, Conference Room Pilot With Core Team, Data Management


  • Pilot completed
  • Data converted
  • Technology integrated
  • Verified ERP meets needs of business process owners and current business processes 
  • Plan developed for additions or customizations


Development/Test Phase

Test Simulation Scenarios, Continued Interactive Workshop, Process Owner Involvement With Key Stakeholders


  • Completed all tests
  • Completed all adjustments and configurations
  • Verified system optimization


Go-Live and Post-Implementation

Establish the “Cut-off” Strategy, Manage the Shake-Out Period, Post-Implementation Audit


  • Schedule of metrics tracking
  • Schedule of post-implementation audits

Reasons Why ERP Implementation Efforts Succeed

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The fact is, companies that prepare and plan for their potential ERP system and have the right people, processes, and technology in place in the early stages of an ERP implementation, will inevitably realize their ERP implementation goals. We have found great success with clients who work with us to create the business environment that is ready for the software implementation process. Because of the preparation time, the ERP implementation not only meets the business objectives, but the entire project is completed on time.

Additionally, because the core team from the business has carefully filtered and scrubbed the ERP data, the ERP implementation process goes much smoother. With one source of data truth, the business won’t be fighting through different processes to accomplish simple data entry with the new ERP.

To read our in-depth explanation of each stage and how we manage it, plus tips on selecting a project manager and project team, see our resource: Best Practices for an ERP Implementation.

So, do ERP projects fail? Yes. Some ERP implementation projects fail to meet the business goals. ERP projects can fail to go live on time, costing valuable resources. But one of the most common reasons why ERP implementation isn’t successful is because the core team of the business is inexperienced with ERP implementation and unprepared for the magnitude of the responsibility placed upon them.

To speak with a knowledgeable ERP and digital transformations specialist about the complexities of your business and how best to select an ERP system or begin the ERP research and analysis processes, reach out to us. With new software and new processes, the future possibilities for your business are endless. And after your ERP selection, we’ll stick around to manage your ERP implementation project for you as well.

Let Ultra Consultants handle your ERP implementation, setup your ERP system, and ensure your ERP project achieves the ROI outlined in the Business Case. Call to set a free 30 minute consultation with one of our ERP specialists today.

Don't leave your ERP project to chance.

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