Lessons learned: Why ERP projects often fail

ERP solutions can improve efficiency and take organisations past their limits in terms of operational performance. The benefits of modern ERP software are indispensable, from automated and optimised workflows to a singular source of truth for all your data.

However, ERP is not infallible, software can be used inefficiently, and efforts can be wasted. Therefore, this article will provide answers as to why businesses experience ERP failure and tips on how to avoid mistakes.

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Why do ERP projects often fail?

Let’s start with a fundamental question, why do ERP projects tend to fail?

1. Poor planning

Before taking a big leap and investing money in ERP systems, it is important to understand what your needs are, what you are looking for and set expectations. Without proper research and planning, you might end up with a software that is ill-suited to your organisation which ultimately, can lead to an unused or poorly used resource.

2. Lack of leadership

Leadership is vital in the change process and in ensuring employees feel motivated and knowledgeable. By not projecting confidence and not providing adequate information, staff can feel blind-sided and unsure about new software systems. This can lead to a lack of effort to understand new procedures and wasted resources.

3. Insufficient resources

Many ERP projects stumble because businesses underestimate the level of resources required, not just financially, but also personnel-wise. Without enough people dedicated to the rollout, testing, data migration, and support, the system can become unusable.

4. Inadequate training

Whilst leadership should promote motivation and increase knowledge, the training itself should not be neglected. When employees don’t understand how to use the system effectively, adoption rates plummet, and old habits (like reverting to spreadsheets) creep back in.

5. Timelines and budgets

It is crucial to have a timeline and budget in mind to ensure that you are communicating the benefits and costs efficiently with stakeholders. Without such targets in place, anything that doesn’t meet expectations can cause friction and unsatisfactory results.

However, this can be remedied, and by taking a few simple steps your organisation can reach continuous improvement and utilise ERP software effectively.

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How to avoid ERP failures

1. Understand your requirements before you commit

Clearly define your business needs, processes, and objectives before choosing a solution. This ensures you select an ERP system that aligns with your company’s goals and avoids costly mismatches.

2. Secure leadership buy-in and clear communication

Leadership support is critical, leaders should promote the project, communicate its value, and showcase confidence in the change. Consistent updates and transparent communication across departments reduces resistance and builds trust.

3. Allocate sufficient resources

Ensure that enough time, people, and budget are dedicated to the project from the get-go. Assign a dedicated team to manage the implementation process and ensure they have the authority and ability to make decisions quickly.

4. Train employees early and involve them in the process

Training shouldn’t be secondary and pushed to the side, you should start early and tailor sessions to different roles. Encourage feedback and involve users in the testing and refinement process, this creates a sense of ownership and smooths the transition.

5. Schedule and budget ahead of time

Build realistic timelines and financial plans, with buffers for unexpected challenges. Regular progress check-ins help keep the project on track and prevent anything from derailing it.

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Why Centerpoint ERP is the right choice

It might feel overwhelming with so many areas to focus on and like you are feeling around in the dark when it comes to ERP software. However, if you are feeling lost, Centerpoint ERP might just be exactly what you need.

• Implementation takes a few days instead of weeks and months

• We provide training support and masterclasses for your employees

• Cloud-based technology, enabling teams to work together, anywhere

• Configurable elements to suit your needs and purposes

• No expensive add-on modules, all ready-to-go in one place

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Have a chat with one of our team members and book a demo to discuss your ERP needs.

If you need more convincing, click here to see how Centerpoint ERP enhances businesses, or here if you want to read about case studies.