Why Most ERP Projects Fail Before They Even Start

I sat down with the CEO of a fast-growing distribution company.

He’s been in the role for just a year and already knows their ERP has to go.

He inherited a broken system from the previous management. It cost them millions, frustrated staff, and failed to deliver the objectives. Now, replacing it is one of his top priorities. He gave his IT department a strong mandate to "get it right this time." 

As we unpacked what went wrong in the last rollout, one thing became clear: if you don’t face the root causes, you’ll just repeat the same mistakes with a new system. (This was my mantra during my ISO consulting days)

I have been in the ERP and Process Improvement practice for more than 15 years. So, when asked what I think went wrong, I decided to tell him the hard truth...and hoped he would be wise enough to understand where I was coming from and still consider my company for the project.

I told him: It’s management treating ERP like an IT problem. Most ERP projects are doomed to fail before they even begin. (I said this even though I was formerly CIO and IT Head for a large construction and engineering firm.)

Whether the software was bad or the service provider incompetent is usually not the reason for ERP failures.

They fail because CEOs hand ERP to IT like it’s a server upgrade....That’s the kiss of death! : (

ERP isn’t an IT project. It’s a leadership project. It will expose broken and inefficient processes, unclear accountabilities, and messy data. It demands ownership from the top - we call this management commitment in ISO parlance.

I’ve seen companies spend millions on “transformations” only to end up with a shiny, expensive system that does not generate the expected results because leadership or top management hid behind IT.

The not-so-painless truth is that if you’re not ready to lead the ERP yourself, don’t start.

ERP won’t save you. It will amplify inefficiencies and create more chaos.

The successful projects I've seen are where leaders, even CEOs themselves, own the ERP project. They step into the mess, set the tone, and force the hard decisions. 

For fun, I asked chatGPT to break down what the above statement could mean to business leaders. Here's what it came up with;

IT enables. Leadership leads.

ERP isn’t technology.

It’s discipline. Clarity. Transformation.

I think ChatGPT gets it : )

Enough said.

At Cloudian, we’ve seen firsthand what makes ERP succeed or fail. If you’re a CEO or founder considering ERP, connect with us to discuss how to avoid the common traps and drive real business transformation.

You may also take our ERP Readiness Assessment Test for FREE!

Just click here https://www.cloudian.ph/erpassessmenttool