3 Main Factors That Make an ERP Implementation Fail

3 main factors that make an ERP implementation fail

While implementing an ERP is something an organisation needs — so that there is an enterprise management system to organise its work processes neatly —

it is also well known that an ERP implementation can fail.

This article discusses the various factors that can cause an ERP implementation to fail,

as information for organisations that want to implement an ERP, so they can study and plan their implementation approach better.

Failure to adopt an ERP within an organisation can arise from the following causes:

1. Poor planning and project management

If planning and project management are poor, the project may run later than the set timeline, causing delays in putting the system into actual use.

It may also cause unclear communication, or poor management of users’ expectations, which can lead to conflict between the team, management, and users. As a result, employees may resist the change because they lack understanding of the project’s objectives, or are unhappy with the new work processes.

So you can see that when planning and project management are poor, it can cause failure in adopting an ERP (Enterprise Resource Planning) system within the organisation.

2. Unclear definition of the ERP system’s requirements

This is a fundamental problem often encountered in implementations, and it greatly affects the project.

The resulting impact may include having to fix the system frequently, causing delays and increased costs.

It also leads to more technical defects in the system, which directly affects the system’s working performance — to the point where users may feel dissatisfied with the system, because it does not meet their actual work needs.

This leads to failure of the ERP implementation.

3. Budget and time overruns in the ERP implementation

This point can be considered a warning sign that the project may be facing problems and has a high chance of not meeting its set goals — but it does not always mean the project will fail.

When the budget and time spent on the ERP implementation exceed what was planned, it shows that some factors were not anticipated, or that project management may not be efficient enough — which can lead to various problems, for example:

• Training that is not fully effective
• System quality lower than the goal that was set
• Possible delays in the implementation, or an unsuccessful implementation

So, the reasons from the 3 main factors that make an ERP implementation fail —

poor planning and project management, unclear definition of system requirements,

and budget and time overruns — are 3 factors that must be watched very carefully, to prevent failure in implementing an ERP.