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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%

ERP programs reported major delays

31%

ERP programs changed system integrators

65%

ERP programs that went live had major problems at go-live

27%

ERP programs that went live are considered failures by the C-Suite

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
The move to remote work made knowledge sharing difficult. Integrators couldn’t fully grasp the client's business, and clients struggled to understand how the ERP system operated. Cloud software limited customizations and rushed timelines, leaving less room for essential process changes and training. Key resources were unavailable, delaying progress and creating implementation challenges.
Resource Availability Issues
Critical employees who held deep knowledge of processes and data were often unavailable. Many preferred the old processes but couldn’t spare the time to assist with the ERP implementation. This led to significant bottlenecks, and businesses lacked suitable temporary resources to step in. The absence of these key individuals hindered decision-making and progress during the crucial stages of the transition.
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.

Download the ERP Study

Fill out the form below to read the 2024 Study of Cloud ERP Implementations.