When ERP Implementation Fails

ERP failure

You’re in the middle of a failed ERP Implementation. Now What?

Staying ahead of the competition is critical for your success. With growth at the heart of your strategy, it’s likely you will undertake or have already taken on, an ERP implementation to improve and automate your business. With this endeavor and expense comes great risk.

ERP implementations can and do fail. When you’re at the center of an implementation and see it going off the rails, it’s a sickening feeling. The time, money and labor involved is greater than most other projects you’ll lead or in which you play a key role. That’s why watching all of that effort evaporate can jolt you into action. How do you intervene in a faltering implementation without making a bad situation worse?

As long as a crystal ball remains cloudy, there is no way to predict everything that might go wrong with an ERP implementation. Understanding why ERP implementations fail is good to know before you even start the project. If later in the journey, the project starts going south, knowing these common mistakes will allow you to identify and address them more quickly. Planning for some of the common roadblocks in an implementation will ensure your strategy is actively working to avoid these failures.

If you already have a plan to realign a faltering project in place, it will be much easier to get your team back on track. Strategizing around some common problems that ERP projects can run into will prepare you to pivot or jump ship. But first a reminder of why the project may be failing.


What does ERP implementation failure look like?

The causes for ERP implementation failure usually aren’t a mystery. One or more of the following has likely occurred: 

  1. Expectations up front were unrealistic (timelines too short, resource skills or capacities were inadequate, out-of-the-box functionality was less of a fit than expected.)
  2. Scope was not tightly managed or it crept because there was not clear understanding of what you need vs. what you want.
  3. Decisions were not able to be made at the velocity required (inadequate commitment to project, decision making by consensus, every key meeting is too long or has too many participants.)
  4. Not enough testing was performed on applications, data or infrastructure.
  5. Not enough, or not the right kind of training was conducted before go-live, leaving people not knowing how to perform their jobs.

Hopefully, issues 1 through 3 can be recognized before the project is too far along in order that adjustments can be made to keep the project from going too far off the rails.  If you’re running into issues 4 and 5, then the project has already gone off the rails and could be more difficult to recover from.


5 things to consider when you know the project is off the rails

Good change management and goal communication will help you drive project adoption project (one of the most important factors of success) early on. This is helpful when things start to falter, as well. So what can you do when things are going wrong? When you sense or know that your ERP implementation is failing, take control of the situation with these five steps. 

  1. Pause the project to regroup and replan. Your team has likely noticed some red flags, too, and should not be shocked when things are put on hold.
  2. Determine which factor(s) are at the root of the project being off the rails. Be honest and transparent in this process. You need to make an honest, holistic and thorough evaluation of the project to date, including your project team and the software you’ve been using. Do you have a consulting team working with you? If so, they should be able to tell you exactly what is going wrong.
  3. Determine how to remediate those problems. Be honest, transparent and pragmatic in your approach. A project leadership change might be needed, especially if this is a surprise to company leadership. Sometimes people are too engrossed in their role and do not see the “big picture”. If they are so involved in one piece of the project that they missed the mark on their goals, it might be time for them to move onto something else. That’s OK. People can rotate off a project without drama.
  4. Be driven by accountability. Reassess your assumptions, scope, resources, timeline and costs. Factoring in those root causes will up the probability that you can fix them. Businesses have to readjust forecasts and expectations regularly. Being aware of the need to pivot in the thick of an ERP implementation is not the end of the world.
  5. Replot the remainder of the project assuming the remediation steps are taken. Put in place the remediation steps. If you are working with a new partner or have new team members, keep messaging about changes positive. Things happen in business.
  6. Restart the project and continue to monitor: (A) if the remediation steps are working and (B) that the project is back on and continues to stay on the rails.

When do I bail on my ERP implementation?


That answer can only be given based on how much risk and pain the company and the team can endure. Most failing projects can be recovered. The key is recognition that the project is in trouble and taking prompt, decisive action. Typically, the later in the project that the issues are recognized, the more difficult or expensive it can be to recover from.

If everyone follows the mantra ‘bad news early, good news anytime,’ the remainder of your project should have few, if any surprises. Of course, working with the right partner will avoid the necessity to bail from the ERP implementation. Take your time to identify consultants who have deep experience. Above all, take a deep breath – you can recover from a faltering ERP implementation.


Crestwood can help

At Crestwood Associates, we are software agnostic. Our experienced consultants have been advising clients in a range of industries for more than 20 years. Through over 5,000 ERP implementations all over the globe, we’ve learned how to help companies like yours avoid pitfalls and achieve success.  

  • We have a strong and deep team to support the complexity of an ERP implementation.  
  • We have experts in various avenues who can help solve problems on complex projects. 
  • We do not outsource any aspect of the project, saving time and money. 
  • Have you outgrown your current ERP system? 

We advise key stakeholders on which technology solutions will have the greatest impact on your business goals by reviewing your system and processes. We then quantify the goals, and map out a plan for action to achieve them.

If your ERP implementation has gone wrong and you need help, contact us today for an ERP Discover and Advise Consultation Request.

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