Why ERP Fails

We've often heard stories of business owners replacing their ERP systems because they believed the software wasn’t good enough. The common mindset is that ERP solutions fail to meet their business requirements or don’t align with their work culture. However, this is a misconception. ERP projects typically fail not because the software itself is inadequate, but because of poor selection decisions made by the business owners. These failures often stem from a lack of clarity regarding the company’s actual needs and internal processes. Many business owners don’t have a well-defined understanding of their goals when choosing an ERP system. Instead, they adopt ERP software simply because their competitors are using it, or to appear more professional by offering features like computer-generated invoices and automated sales, stock, and accounting management. When the business begins to grow and the ERP system no longer aligns with evolving needs, the blame is placed on the software. They claim it’s not delivering accurate or sufficient information. But how can any software produce reliable results if the input data is incorrect or incomplete? There are many other reasons ERP projects fail, including the following:

Reasons of failure

Unaware

Most of the business owners don’t even know what is ERP? Why do they need to buy it? What they need to install ERP, etc. They just purchase ERP software, install it in their computer, and start to work on it. When they find it difficult to work or are not able to use it properly, they start blaming the Software. Your ERP system is not responsible for your mistakes. The actual reason is that you did not know your own business goals and requirements, and you purchased the ERP which wasn’t compatible with your business.

Dependency on Other

There are situations when only a few selected employees know how to operate ERP software. Sometimes there’s only one person who knows how to work on ERP software. Rest of the members are totally dependent upon that person. And when that particular person is absent, or leave the job, the work-structure fells apart, and everyone starts to blame the software.

Negative Feedback from Employees

Many challenges come through when an enterprise change their work-culture and implement an ERP software system. Due to the sudden change of the work process, employees start to fear about workload and also fear that the mistakes they did might come forward. Because of this, they start to give negative feedback about the software.

Improper or Wrong inputs in ERP

Entering the wrong inputs or information in the ERP software can lead to many problems in a business process. If the inputs are not correct, then how can you expect the output results to be correct.

No Clarity of Goals

ERP project also fails when you don’t have clarity about your requirements. As a result, you end up with very common functionalities like sale-purchase, which are available in every ERP software. You can even use Excel for maintaining your sale and purchase. A good ERP is that, which provide various functionalities like sale, purchase, stock details, finance, accounting, daily reports, profitability reports, etc. So before installing the software, make sure you have a complete list of your business goals and requirements.

Exceeding Implementation Time

Sometime ERP fails because of the exceeding time limit of the software implementation than expected.

Other Reasons

Improper testing of the software, untrained employees, miscommunication with ERP software service provider, etc.