Why do ERP implementations fail?

There are 5 common causes of ERP implementation failure. These are:
1) Lack of IT strategy,
2) Lack of local ERP experts,
3) Decision maker’s availability,
4) Directors’ lack of expertise and
5) Lack of communication.
Read more on each cause below.

1) Lack of IT strategy

Most decision makers are convinced that investing in an ERP is the solution to all the company’s problems. Little has been disclosed on the necessity to have a structured set of business processes, achievable objectives and the available time and resources to appropriately implement an ERP (change) in the organization.
This lack of strategy, leadership and vision will often push decision makers to abandon their ERP after a year of acquisition.

2) Lack of local ERP experts

An expert is someone who has extensive knowledge not only of the ERP he/she is selling but also about the management, administration and operational needs of companies operating in your industry. The expert can identify holes in your business requirement document, or your request for bid. The expert will invest time in order to ensure the success of your ERP in the short and long term. An expert also documents all changes made to your ERP and provides full support on the work delivered for up to 5 years.

The market of ERP is very small, experts often create their own business, and use beginners to deliver services. Most experts are employed by conglomerates to drive the implementation and maintenance of ERP. This leads to a significant shortage in actual experts. Companies facing this reality will find that using international experts is very expensive and take years to implement. By the time the ERP is ready, a newer version has been released and the company is often financially prevented from upgrading.
As an alternative, some businesses choose to trust the value of their investment to independent consultants, who work on many projects and end up never being available when needed, or go bankrupt.

3) Decision maker's availability

Running a business on an affordable ERP and a multitude of excel sheets is extremely time demanding. Companies are often both feet deep in constant activities and have no time to give to manage an ERP project. They often decide to employ an ERP manager (Different to the IT manager). However, the ERP manager has no knowledge of the company’s numerous policies and procedures. He/she will pass strategic questions to their CFO or COO. Both of which being too busy to answer in a timely manner. This leads to the project to taking longer than expected and eventually cancelled for this reason.

4) Director's lack of expertise

An ERP is an entirely different tool than spreadsheets and team sharing documents online. For an ERP to work, a business needs to decide what to stop in terms of uncontrolled practices that take too long to manage, and what the business will be as from now. For example, a company that was previously managing their activities on a case by case basis will now have to streamline their operations, so that more time is freed at all levels, allowing for more sales, zero mistakes and more volumes. Unfortunately, directors are often too busy figuring out the daily mess that their current practice are causing them, and have no vision or experience of streamlining processes. This leads to the directors to expect running a business on an ERP being as chaotic as on spreadsheets.

5) Lack of communication

ERP implementation often fail because of issues in communication between the directors and their users, between the ERP consultants and their project managers. Expectations that were documented can be brought to change during the implementation, leading to new unexpected investments or work. In some cases, the company had not identified a need and ran out of budget to have it implemented. Or the ERP consultants are booked on other projects and are not available to implement anything that was not previously agreed upon.
This often leads to the ERP being abandoned.

The hard truth

Most companies have got to the point of understanding the need of using an ERP. Their resolution is genuine. However, the reality of business makes it close to impossible to  architect the use of the ERP within a reasonable timeframe… or derive substancial value from it. Cloud At Work Mauritius provides extensive industry and ERP expertise, but it always comes down to the decision makers’ ability to change the way they used to work, to adopt a leaner approach…. that determines the success of the ERP project.

Related topics

Need help securing your ERP implementation project?

We are ERP experts that help small to medium size businesses across Africa and Europe.
Our founders and employees have been selected based on their experience with several ERPs as end users or consultants. Our ERP services are on technologies such as on-premise systems and cloud based offers like NetSuite ERP.

We use our knowledge of procurement, general accounting, sales and inventory to help companies best use of their ERP system. This in turn helps user adoption and brings returns on investment faster than any other approach.

 Contact us for a friendly discussion on your needs by leaving us your details and we will schedule a call within 24hrs.


Request an online meeting