{"id":5552,"date":"2021-05-28T11:09:11","date_gmt":"2021-05-28T11:09:11","guid":{"rendered":"https:\/\/www.exactlly.com\/blog\/?p=5552"},"modified":"2025-03-21T06:48:53","modified_gmt":"2025-03-21T06:48:53","slug":"main-reasons-for-erp-implementation-failure","status":"publish","type":"post","link":"https:\/\/www.exactlly.com\/blog\/main-reasons-for-erp-implementation-failure\/","title":{"rendered":"What are the Main Reasons for ERP Implementation Failure?"},"content":{"rendered":"<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">If we look at history, numerous cases of <\/span><b>ERP implementation failure<\/b><span style=\"font-weight: 400;\"> are visible. But if we call those only failures, it will be a huge understatement. An organization can lose goodwill and reputation to large extents with <\/span><b>ERP failures.<\/b><span style=\"font-weight: 400;\"> But a system won\u2019t fail just like that. Either the system is an outdated one, or else the employees are unable to use it correctly. The reasons can be varied. This blog focuses on the reasons that can lead to <\/span><b>ERP implementation<\/b><span style=\"font-weight: 400;\"> botch. Let us learn how the advanced <\/span><b>cloud ERP<\/b><span style=\"font-weight: 400;\"> can help make every ERP project of a business a success.\u00a0<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h2><b>ERP Failure Causes:<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">When a company first decides on <\/span><a href=\"https:\/\/www.exactlly.com\/blog\/erp-strengthens-business-collaboration\/\"><b>ERP business collaboration<\/b><\/a><span style=\"font-weight: 400;\">, it must note the probable causes of <\/span><b>ERP implementation failure<\/b><span style=\"font-weight: 400;\">. Then, by assessing the steps that can lead to failure, it will help avert it. So the reasons for <\/span><b>ERP<\/b><span style=\"font-weight: 400;\"> system failure are listed below:<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<ul>\n<li>\n<h5><b>Absence of Defined Goals<\/b><span style=\"font-weight: 400;\"> \u2013 <\/span><\/h5>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-5559\" src=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-defined-goals-300x239.jpg\" alt=\"\" width=\"300\" height=\"239\" srcset=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-defined-goals-300x239.jpg 300w, https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-defined-goals.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Several <\/span><b>ERP projects<\/b><span style=\"font-weight: 400;\"> experience <\/span><b>ERP failures<\/b><span style=\"font-weight: 400;\"> right from the beginning. There are even businesses that are not even sure why they are purchasing ERP firstly. Somehow they believe that they can combat all the business-related challenges with <\/span><b>ERP system implementation<\/b><span style=\"font-weight: 400;\">. But it does not work in that manner. Firstly, when they approach these software systems, they need to be realistic and decide what they wish to accomplish with the <\/span><b>ERP<\/b><span style=\"font-weight: 400;\"> system. It can be a reorganization of human resources, channelizing steadfast information flow between various departments or decreasing operational losses. Articulating the defined goals is important for judging the success of the implementation.<\/span><\/p>\n<ul>\n<li>\n<h5><b>System Overselling by Vendors Resulting in Mismatched Expectations<\/b><span style=\"font-weight: 400;\"> \u2013 <\/span><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">How a business wants to keep on boosting its <\/span><a href=\"https:\/\/www.exactlly.com\/blog\/sales-order-process-management-in-erp\/\"><b>sales order<\/b><\/a><span style=\"font-weight: 400;\"> is the same with vendors selling avant-garde <\/span><b>ERP software<\/b><span style=\"font-weight: 400;\"> systems. Sometimes the sales team of the vendor might oversell its product and its advantages. While stating the estimate to the organization concerned, the executive might promise to get the implementation over by one to two months. But in reality, it might take around five months. Also, promises that talk about real-time data availability and with few clicks might not be met sometimes. These are practices that can result in a mismatch of expectations. It will also pose an effect between the customer and ERP vendor. But such unrealistic targets and promises are never the cases with the best <\/span><b>ERP<\/b><span style=\"font-weight: 400;\"> vendors like <\/span><b><a href=\"https:\/\/www.exactlly.com\/\">Exactlly<\/a>.<\/b><span style=\"font-weight: 400;\"> Starting from optimal customer service to unmatched software products, they have it all. <\/span><\/p>\n<ul>\n<li>\n<h5><strong>Customization \u2013<\/strong><\/h5>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-medium wp-image-5561\" src=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Customization-300x239.jpg\" alt=\"\" width=\"300\" height=\"239\" srcset=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Customization-300x239.jpg 300w, https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Customization.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Customization needs minor or major changes in the <\/span><b>ERP system<\/b><span style=\"font-weight: 400;\"> implementation\u2019s source code. It is a complicated procedure and needs a considerable amount of effort and time from both parties. Go-live dates will be delayed due to heavy customization and can also result in cost escalations. So one of the <\/span><b>ERP system<\/b><span style=\"font-weight: 400;\"> failures that businesses commit over here is time. It holds importance for <\/span><a href=\"https:\/\/www.exactlly.com\/blog\/8-key-benefits-of-erp-in-construction-industry\/\"><b>ERP in the construction industry<\/b><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/www.exactlly.com\/blog\/7-benefits-of-erp-in-retail-industry\/\"><b>ERP in the retail industry<\/b><\/a><span style=\"font-weight: 400;\">. Time is a very big factor during the implementation of <\/span><b>ERP software.<\/b><span style=\"font-weight: 400;\"> Businesses can never afford to be in a state of flux for extended periods. Organizations must only commence with Showstopper customizations, after which they can go live on the software even when they find customizations. The management can look over the rest of the customizations after going live. Waiting for all customization to occur will only delay the time that can make the business lose faith in the software.<\/span><\/p>\n<ul>\n<li>\n<h5><strong>Absence of Clearly Defined Implementation Resources \u2013<\/strong><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">One of the biggest reasons for <\/span><b>ERP implementation failure <\/b><span style=\"font-weight: 400;\">is an absence of clearly described SPOC or Single Point of Contact and Steering Group. A successful implementation undoubtedly requires the working of these. Maintaining communication clarity between SPOC, individual users and Steering Group is a must at all times. <\/span><\/p>\n<ul>\n<li>\n<h5><b>Inadequate Communication with the Vendor \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Whatever queries a business has regarding <\/span><b>ERP, <\/b><span style=\"font-weight: 400;\">it must discuss it clearly with the ERP vendor. Putting the concerns at ease and evaluating the requirements is highly crucial. Consistent communication is paramount at the time of <\/span><b>ERP system implementation<\/b><span style=\"font-weight: 400;\">. The entire process becomes smooth when the organization and the vendor schedule calls and meets regularly. <\/span><b>ERP failures<\/b><span style=\"font-weight: 400;\"> cannot be stopped if there is no clear communication. <\/span><\/p>\n<ul>\n<li>\n<h5><b>Absence of Proper Training \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-5562\" src=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-proper-training-300x239.jpg\" alt=\"\" width=\"300\" height=\"239\" srcset=\"https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-proper-training-300x239.jpg 300w, https:\/\/www.exactlly.com\/blog\/wp-content\/uploads\/Absence-of-proper-training.jpg 600w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">One of the most important stages of <\/span><b>ERP software implementation<\/b><span style=\"font-weight: 400;\"> is <\/span><b><a href=\"https:\/\/www.exactlly.com\/blog\/employee-training-key-to-successful-implementation-of-erp\/\">employee training<\/a>. <\/b><span style=\"font-weight: 400;\">The entire workforce must undertake the training seriously. Understanding the entire process thoroughly is critical so that they can work on <\/span><b>ERP projects<\/b><span style=\"font-weight: 400;\"> seamlessly. The company must prepare test cases that should run thoroughly with test data. ERP lifespan can be for decades. Several new candidates will join a company, and few existing employees will also quit. It makes it vital for companies to carry an in-house resource pool of champion users who are well-trained in operating ERP. So these are the users who will then train the new employees. They do not even have to depend on the ERP vendor.<\/span><\/p>\n<ul>\n<li>\n<h5><b>Managing Resistance from Users \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The human brain resists almost anything new. When a company for the first time engages in <\/span><b>ERP implementation<\/b><span style=\"font-weight: 400;\">, it can have several misconceptions and fears regarding it. Heavy involvement from the workforce is required in the implementation, and they must be aware of the aspect of the software. The decision of investing in an ERP, going live, everything requires companywide communication. <\/span><\/p>\n<ul>\n<li>\n<h5><b>Unrealistic User Anticipations \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">When there is unrealistic anticipation on the users\u2019 part, it can cause dissatisfaction and be a major reason for <\/span><b>ERP failure<\/b><span style=\"font-weight: 400;\">. Some processes need to be kept out of the Enterprise Resource Planning software. For instance, let us speak about the G government Tender. Users might think there will be an automatic generation of tender response according to Tender Conditions from ERP. But these are unrealistic anticipations as each Tender carries varied conditions, formats and terms. Data required for filling up Tender might indeed emerge from ERP, but the ERP does not have the capacity of generating a response to Tender automatically. <\/span><b>Cloud ERP<\/b><span style=\"font-weight: 400;\"> implementation failure will never take place if realistic expectations are set from the ERP system. <\/span><\/p>\n<ul>\n<li>\n<h5><b>Absence of Change Management \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Another reason for <\/span><b>ERP software<\/b><span style=\"font-weight: 400;\"> failure can be an inadequate focus on change management. If the organization is not able to handle that change, then the ERP system will fail. Only the correct bunch of people who are adaptive to change must only be involved. Who an organization includes in the core ERP squad holds a lot of importance. The people who will be working towards the new ERP system must always be positive regarding the change.\u00a0<\/span><\/p>\n<ul>\n<li>\n<h5><b>Undefined Project Scope \u2013 <\/b><\/h5>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Working on a new <\/span><b>ERP system implementation<\/b><span style=\"font-weight: 400;\"> without measuring its strength, weakness, threats, and opportunities will only spread confusion within an organization. Due to this reason, the project scope needs to be defined very well. The management can schedule a meeting where all leaders, managers, core ERP crew will be present. Taking their outlook on implementing an ERP system can be beneficial for the business in the long run.<\/span><\/p>\n<h2><b>Final Say:<\/b><\/h2>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">After looking at the kinds of <\/span><b>ERP implementation failure<\/b><span style=\"font-weight: 400;\"> that can occur, we are sure that no organization or business will take such risks. Hence there needs to be a dedicated team that will look after the seamless integration of <\/span><b>ERP implementation<\/b><span style=\"font-weight: 400;\">. The kinds of <\/span><b>ERP failures<\/b><span style=\"font-weight: 400;\"> that can occur within an organization will not just hinder growth but can be the reason for the collapse. <\/span><b>Cloud ERP<\/b><span style=\"font-weight: 400;\"> largely helps in boosting business value via solely customer-driven practices. Learn about <\/span><a href=\"https:\/\/www.exactlly.com\/erp\/\"><b>exactllyERP <\/b><\/a><span style=\"font-weight: 400;\">today through our <a href=\"https:\/\/www.exactlly.com\/request-free-demo\"><strong>Free Demo<\/strong><\/a><\/span><span style=\"font-weight: 400;\">. <\/span><a href=\"https:\/\/www.exactlly.com\/contact-us\"><b>Contact Us<\/b><\/a><span style=\"font-weight: 400;\"> for more discussions.\u00a0<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h2>FAQ:<\/h2>\n<table>\n<tbody>\n<tr>\n<td>\n<h4><strong>(1) What causes ERP Implementation Failure?<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Some of the reasons for ERP implementation failure are the absence of expert project managers, failure to align or alter the system with the business processes, failure to build realistic expectations, etc.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(2) Why is it difficult to find Successful ERP Implementation?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">It is challenging to discover successful ERP implementation because of insufficient communication between the software vendor and workforce, management and project team. If the queries of the employees go unanswered, then negativity can take over. Thus, it will again be problematic for the implementation team.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(3) How often does ERP Implementation fail?<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The resource, time and effort required to implement an ERP system successfully are massive. As per studies, 85% of all the projects witness failure. <\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(4) What can go wrong when Implementing a New ERP System?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Improper maintenance plan, inefficient vendor selection, indecorously organized internal team, absence of consistent use, failure to collect requirements are reasons that can make ERP system implementation go wrong.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(5) What is the Implementation Failure?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Implementation failure refers to an implementation project that suffers cancellation during the development process. As a result, it is detached early with pertinent organizational and financial losses or ends with an underutilized system.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(6) How can we prevent ERP failure?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Preventing ERP failure is possible with gaining a clear timeline, training the employees before going live, getting buy-in across the company and many more.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(7) How can we improve ERP Implementation?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Some ways of improving ERP implementation are choosing the correct partner for the implementation, recognizing the problem, picking an informed ERP selection team, determining the budget, etc.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(8) How do you implement an ERP Successfully?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The ways of implementing an ERP system successfully are by configuring the system, selecting a sound project manager for easing the implementation procedure, testing the system, finding the correct ERP software, etc.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(9) How do you manage ERP implementation?\u00a0<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">Managing ERP implementation is possible by being accurate about the timeline, tracking deliverables status by leveraging DevOps tools, developing a robust cutover plan, etc.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(10) What is the ERP implementation life cycle?<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">The procedure by which the deploying of ERP software is carried out is known as the ERP implementation life cycle.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(11) How long does ERP implementation take?<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">ERP implementation does not have a standard timeframe as it varies. It depends on numerous circumstances. In general, the time that it will be taking will range from six months to two years.<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<h4><strong>(12) What is ERP implementation methodology?<\/strong><\/h4>\n<p style=\"text-align: justify;\"><span style=\"font-weight: 400;\">ERP implementation methodology is when an organization announces the strategic decisions about the way of performing the implementation. It then chooses a focused path for the deployment of ERP.\u00a0<\/span><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>If we look at history, numerous cases of ERP implementation failure are visible. But if we call those only failures, it will be a huge understatement. An organization can lose goodwill and reputation to large extents with ERP failures. But a system won\u2019t fail just like that. Either the system is an outdated one, or&#8230;<\/p>\n","protected":false},"author":6,"featured_media":5553,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kadence_starter_templates_imported_post":false,"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[4],"tags":[],"class_list":["post-5552","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-exactlly-erp"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are the Main Reasons for ERP Implementation Failure?<\/title>\n<meta name=\"description\" content=\"When a company first decides on ERP business collaboration, it must note the probable causes of ERP implementation failure. 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