Article

The ERP Minefield, Part 2: 14 Reasons why ERP Implementations Fail

by David Ogilvie
ERP Consultant,

Editor's Note: Part 1 of this article, with 13 tips to lower ERP selection risk, can be found here.  

Companies embarking on system replacement projects can find themselves walking in a sort of minefield; danger lurks, and they only know something's wrong when it "explodes." ERP replacement is complex and risky. According to Panorama Consulting data of ERP implementations over the past five years:

  • Approximately 58% exceeded their planned budgets
  • 65% experienced schedule overruns
  • 53% of organizations achieved less than 50% of the measurable benefits they anticipated from new ERP software
  • 54% of organizations reported being either neutral towards, satisfied or very dissatisfied with their ERP vendors.

So, the chances of success in any one of those benchmarks is less than half.

Those are sobering statistics that underscore the profound impact that a new ERP system can have on your business, both positively and negatively-and this impact can be immediate! It becomes imperative to get both the decision and the execution right. The personnel running these projects were probably neither derelict nor incompetent, so what went wrong?

The ERP landscape is full of areas that require strong professional management to best position your project for success. So to aid in this understanding and help you avoid the pitfalls, I have devised "David Ogilvie's 14 Deadly ERP Sins," to help explain why ERP implementations fail.

Knowing what not to do can be more important than knowing what to do, thereby providing the road map to getting these projects right. My 14 deadly ERP sins are as follows:

1. Choosing the Wrong Software

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About David Ogilvie

David Ogilvie is a Brisbane, Australia-based consultant whose mission is "Helping Executives Build Profitable Companies & Maximise ERP Investments. He aims to work with people motivated by the possibility of transforming their business operations," achieved through the use of Lean Manufacturing and other modern Supply Chain Management techniques; and through the productive use of technology such as ERP software systems and real time data collection systems. He may be reached at david@davidogilvie.com.au. 

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