Top 6 reasons why ERP projects fail

What is ‘failure’ in an ERP project? According to PROSCI, a global leader in change management, it can mean being unsuccessful in achieving your goals, neglecting to do something or ceasing to work properly. We all know by now that in modern projects it’s the human factors – not the purely technical aspects – that are more and more important in determining success or failure.

Let’s take a look at six key reasons for ERP project failure in terms of organisational change management.

1. Project not (clearly) defined

Every project must begin with the “why question.” Sometimes that process takes a while, but it’s well worth it. Think through the answers to the following questions: Why are we doing this? Why are we doing it now? What happens if we don’t?

2. Lack of leadership

Many ERP projects are still seen as pure IT projects, and as such are delegated to the IT department. This is a common mistake. Today’s ERP projects are business projects. And for project success, you need a strong sponsor on your board who is active and visible, building a coalition and communicating across departments. An ERP project should never be considered to be just an IT project.

3. Inefficient communication 

Communication is key in change management. The number one difference between a regular tech project communication and a change management communication is that you should first identify the audience before crafting the message. Organisational change is the sum of individual team members making personal decisions to engage, adopt and use a change – or not.

4. Lack of culture of innovation

If your company does not have a culture of innovation, it will be difficult to reap the benefits of digitisation. “We’ve always done it this way” will bring every single innovation or disruption to a halt. It’s vital for company leaders to model the innovative attitudes they want to see in their teams.

5. Lack of employee participation

If your employees are not involved in your digitisation initiative, it will be difficult to reap the benefits of digitisation. That is by far the most important point. If the end-users don’t understand the ‘why’ of the project and don’t accept the new system, then no business optimisation can take place.

6. Solving the wrong problem

Sometimes companies think they’re creating something to address a problem, but it turns out they’re addressing the wrong one. What is it that people on the front lines of your organisation are telling you is the problem? What is it you need to solve? And what benefits can you expect once this problem is solved?

If you truly strive for project success, it’s of crucial importance to thoroughly prepare yourself, your team and your entire management before you start the software selection process.

Do you need help implementing your new ERP project? Our experienced team is here to assist you with all your ERP needs.

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September 19, 2023