Why do ERP implementations fail? 10 reasons and how to avoid them.

ERP implementation is one of the most complex transformations any organization can undertake. When it works, it becomes the backbone of the business, streamlining operations, improving decision-making, and helping companies to grow. When it fails, the damage can be severe, including halted operations, budget overruns, low user adoption, and years of lost momentum.

The question isn’t simply “why do ERP implementations fail?” It’s why so many organizations, despite investing millions, repeat the same mistakes.

The truth is that ERP projects often fail for repeatable & predictable reasons. By learning these pitfalls in advance, leaders can avoid the costly mistakes that derail ERP initiatives and instead create a foundation for success.

1. Starting implementation without a clear plan

What usually goes wrong?
Organizations often get excited about ERP implementation, diving in without fully understanding the problems they're solving or how to measure success. There's no timeline, and team members are unsure of their roles.

What happens next?
Deadlines are missed with an increase in budget. Everyone is frustrated and starts losing faith in the whole implementation.

What should you do instead?

• Define what success looks like (Faster deliveries? Fewer manual entries?)
• Build a team with people from each department, and not just IT.
• Break the whole implementation into phases.

Review progress regularly. It is better to avoid assuming things are fine.

2. Not preparing people for the change

What usually goes wrong?
ERP changes how people function in an organization. However, if people are unaware of the reason for the change or are not involved early in the process, they tend to push back, either quietly or loudly.

What happens next?
Teams keep using the old system. They avoid using the new one. Often, ERP becomes something like, “The IT team forced us to use it.”

What should you do instead?

• Involve key team members early in planning and testing.
• Show them how the new system will actually make their work easier.
• Offer real training, not just one session and a PDF.
• Have a few team leaders act as go-to people for others.

3. Poor data mapping and integration challenges

What usually goes wrong?
Old data gets dumped into the new system without cleanup, leading to failed integration of ERP with your existing CRM or other tools.

The result?

Confusion and a lot of manual fixing.

What happens next?
Customer info goes missing. Inventory counts are wrong. Reports don’t make sense. People stop trusting the numbers.

What should you do instead?

• Clean and review your data before moving anything.
• Use a reliable ERP implementation partner for mapping and validation.
• Make sure your ERP connects properly with other existing tools.
• Involve team members who are aware of the present data.

4. Not testing the system before launch

What usually goes wrong?
Everyone wants to “go live” quickly, so testing is rushed or skipped. Only basic scenarios are checked. No one stress-tests the whole system.

What happens next?
Key modules break after launch, and teams can't do basic tasks. In such a scenario, the IT team is stuck fixing issues instead of improving the system.

What should you do instead?

• Test each module separately before testing the whole system together.
• Use real-life scenarios where the system tends to fail, instead of just testing ideal cases where nothing goes wrong.
• Simulate during busy periods and see how the system holds up.
• Postpone the go-live if the system is not ready as expected.

5. Thinking one-time training is enough

What usually goes wrong?
Teams are shown how to use the ERP once, often just before go-live. After that, they’re expected to figure things out on their own.

What happens next?
People either don’t use the system correctly or stop using it altogether, losing interest. They go back to Microsoft Excel or Word, or just ask someone else to do it.

What should you do instead?

• Offer role-specific training for each department.
• Share short videos, simple how-to docs, and checklists.
• Choose an ERP implementation partner who supports learning even after launch.

6. Over-customization and loading the system with features

What usually goes wrong?
Companies want an ERP to match the present workflow. So they keep adding custom features, even for things that could be simplified or features that can be avoided.

What happens next?
Upgrades become difficult. New employees struggle to understand the system. You need outside help for every minor change.

What should you do instead?

• Start with standard ERP features that are a must.
• Only customize where it clearly saves time or money.
• Keep records of every change you make.
• Plan upgrades carefully if you have custom code.

7. Leaving it all to the IT team

What usually goes wrong?
The leadership team decides on the ERP implementation and steps back. The whole thing is treated like a technical project rather than a business one.

What happens next?
Key decisions are delayed and priorities clash. Teams aren’t aligned with the new process. And the ERP doesn’t support real business goals.

What should you do instead?

• Have at least one executive from the leadership team leading the change.
• Ensure that the ERP implementation aligns with the overall business purpose and goals.
• Get regular updates regarding the implementation and give timely feedback when needed.

8. Unrealistic budgets and timelines

What usually goes wrong?
Companies expect the ERP to go live in a few months, based on the ERP implementation partner's timeline. They don’t factor in internal delays, data issues, or training needs.

What happens next?
Timelines are extended, and the budget exceeds expectations significantly. In such scenarios, teams get frustrated and lose patience.

• Add a 15–20% buffer to your time and budget plans.
• Ask experienced implementation partners for honest estimates.
• Track progress against clear checkpoints.

9. Treating “Go-Live” as the finish point

What usually goes wrong?
Once the system is live, everyone moves on to the next thing. No one checks if it’s working well, and improvements stop.

What happens next?
Teams stop giving feedback. The ERP becomes outdated. The whole idea of improving the process again goes back to the usual.

What should you do instead?

• Review key metrics regularly after go-live.
• Ask your teams how the system is helping (or not).
• Schedule time to improve features based on usage.
• Treat the ERP like a system that grows with your business.

10. Depending entirely on the vendor after “Go-Live”

What usually goes wrong?
Your team struggles to implement even minor changes, and every issue becomes a support ticket. You’re stuck waiting for the vendor, always.

What happens next?
Teams start feeling helpless and stuck. In addition, costs keep rising, with reduced productivity.

What should you do instead?

• Train a few in-house “power users” who understand the system.
• Create guides for everyday tasks and fixes.
• Work with partners who teach your team the new system.

When one of the world’s largest confectionery companies, Hershey’s, decided to implement a new ERP system, the goal was ambitious. They decided to modernize operations, streamline order processing, and meet the Y2K deadline. But what unfolded instead has become one of the most cited ERP cautionary tales in history, one that every technology and business leader can learn from.

What Went Wrong?

• Insufficient Testing: Hershey’s accelerated the ERP implementation to 30 months (instead of the recommended 48), which left little time for rigorous testing.
• Inadequate User Training: Employees lacked the necessary skills to effectively use the new system, leading to confusion and operational bottlenecks.
• Poor Timing: The company scheduled its ERP go-live during its busiest seasons, Halloween and Christmas, when order volumes were at their peak.
• Aggressive Timeline: The pressure to meet the Y2K deadline forced rushed decisions and left no room for incident planning.

What happened?

• $100 Million in Lost Sales: The system struggled with order processing, resulting in significant revenue loss during critical sales periods.
• Inventory Chaos: Hershey’s couldn’t accurately track or manage inventory, leading to stockouts of popular products.
• Financial Fallout: Quarterly profits dropped by 19%, and the stock price declined by 8%, leading to investors losing confidence.
• Costly Recovery: Stabilizing the ERP required significant additional investment in both time and resources.

Boardroom Takeaway

ERP failures don’t start with software; they begin with leadership decisions. Hershey’s rushed timeline, lack of testing, and poor change management highlight a single truth: ERP is a business transformation, not an IT project.

Modern enterprises must:

• Test exhaustively before going live
• Train users early and continuously
• Schedule go-live strategically and avoid peak revenue windows
• Build contingency buffers into both the timeline and the budget

When leaders drive ERP, it stops being just an IT project. It becomes a safer, smarter business transformation.

ERP projects don’t fail because of software. They fail when organizations treat ERP implementations like a one-time IT purchase instead of a business-wide transformation.

The difference between failure and success often comes down to two things:

• Committed leadership
• The right ERP implementation partner

Partnership brings expertise and accountability to every stage, from planning to testing, from training to continuous improvement. When executives lead with clarity and work with a partner who’s navigated these waters before, ERP implementation stops being a risk. It becomes your organization’s nervous system of growth, efficiency, and better decision-making.

At Uncanny, we don’t just implement ERP systems. We help build internal clarity, process discipline, and long-term capability. Our approach is hands-on, structured, and focused on making sure your ERP doesn’t just go live, but stays valuable for years to come.

ERP success isn’t accidental. It’s engineered. And it’s led by the right mix of people, process, and partners.

Q. How do we know that the ERP implementation timeline is realistic?

If your timeline doesn’t allow for testing, training, and phased rollouts, it’s not realistic. Industry benchmarks show enterprise ERP implementations typically require 12-36 months, depending on scope and customization.

Q. What is the #1 early sign of ERP implementation failure?

If your employees - the people who are supposed to use the ERP - start going back to spreadsheets or finding shortcuts during the pilot phase, it’s a clear sign: adoption is in trouble, and so is your project.

Q. Can ERP failures be reversed, or do companies have to start over?

Most ERP failures don’t require starting over. With the right stabilization program of targeted training, data cleanup, and phased reimplementation of broken workflows, businesses can recover. The key is early leadership intervention before issues become irreversible.