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Why are 1 in 4 ERP programs considered a failure by the C-Suite?
Our in-depth study of cloud ERP implementations, involving both top-tier integrators and boutique firms, reveals alarming trends in ERP project failures. Discover the key issues impacting these programs and how to avoid them.
Struggling post-pandemic
In the past three years, AXIA Consulting has seen a surge in clients facing ERP program issues. Since the pandemic, problems like ERP delays, cost overruns, low-quality solutions, and failed go-lives have become more common. These challenges are complex and can severely impact earnings, sometimes requiring public disclosure.
To understand the root causes, AXIA reviewed over 35 cloud ERP implementations using Tier-1 solutions like Oracle, SAP, and Microsoft D365. Clients ranged from $250 million to over $5 billion in revenue, with integrators from big consulting firms to smaller boutiques. The study revealed widespread ERP problems and failures, identifying six key reasons for these issues.
ERP Failure Study Key FIndings
75%
31%
65%
27%
Why ERP programs fail: 6 key reasons
Implementing an ERP system is a critical step in modernizing a business, but many programs fail due to common pitfalls. These failures can derail operations, waste resources, and prevent companies from achieving their goals. Here are six reasons ERP programs often fall short:
Post-Pandemic Landscape Changes
Resource Availability Issues
Limited Time for Adaptation
Cloud ERP solutions often demand a swift rollout, but businesses struggle to adapt quickly. With shorter timelines for process changes and training, companies find themselves unable to manage both the new system and their day-to-day operations. The accelerated pace increases stress, leaving the organization underprepared to handle the complexities of running new digital workflows effectively.
Program Execution Pitfalls
At go-live, businesses frequently find themselves unprepared to balance digital and physical processes. This stems from insufficient design, testing, and implementation phases, where the integration of components wasn’t thorough enough to ensure a smooth operation. The gap between preparation and reality can cripple the program, resulting in operational confusion and delays in key business areas.
Inexperienced Program Management
Program offices without sufficient experience in business transformation struggle to oversee ERP implementations. They fail to identify and manage both physical and digital changes, leading to gaps in the project. These offices often overlook critical elements of the transition, leaving the business unable to properly execute its vision and adapt to the sweeping changes required by the ERP.
Poor Contract Management
Clients often lack the ERP experience to craft contracts that clearly define all responsibilities. This leads to integrators omitting critical components, leaving clients unprepared to meet their obligations. Without a well-crafted contract, both parties face confusion regarding their duties, causing delays, miscommunication, and failure to properly deliver on the project's goals.
Avoid the mistakes others are making
Don't Let ERP Failures Impact Your Business
AXIA Consulting's study highlights the critical issues and provides actionable insights for successful ERP implementation. Contact AXIA today or download our detailed study to learn how we can help you avoid ERP failures and achieve success.