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Why ERP Systems Fail

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Not every ERP story is a successful one. There are enterprises who invested heavily in the most cutting-edge solutions they could find, only to realize that the system had managed to make things more complicated and slow. But if one were to look deeply, the failure is seldom of the ERP system. What actually happens is that companies fail at one of the critical areas of adopting a new ERP system, leading to an overall disadvantage.

Why ERP Systems Fail Why ERP Systems Fail

Let’s take a quick look at why ERP systems fail in the real world:

  • Lack of usability and flexibility: Perhaps the most common cause of ERP failure is that the system is hard to use, and is not able to grow along with business requirements. This of course points to a flaw in the selection process, where changes were not foreseen and the product was not put on a test run.
  • Configuration and extension problems: ERP solutions are popular because of their highly modular and extensible nature. But some ERP systems don’t have the core modules implemented right, and neither is there scope for extending the system in case the business changes tomorrow. All this leads to the point where the system lags in functionality after some time.
  • Wrong vendor selection: Sometimes businesses select a vendor who has very little presence in the ERP market just because the quoted price is low. The price is then paid in the form of poor support and ERP nightmares when the real world puts pressure on the business. Remember, the vendor is just as important as the ERP itself.

Avoid these mistakes, plan well in advance, and you’ll never have to regret your choice of an ERP system.

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