Why ERP Implementations Fail. The Hidden Transformation Challenges Leaders Must Address

ERP systems promise a great deal. From integrated financial oversight and streamlined processes to improved reporting and better decision-making, ERP implementations are often sold as all-encompassing solutions. Yet, for many organisations, the reality of implementing ERP software is far from smooth. Despite large budgets and months of planning, too many ERP projects fall short of expectations. Executives in charge of ERP change and transformation projects must ask themselves, what transformation challenges are we facing, and how can we avoid them if they’re to navigate the journey effectively. 

What Percentage of ERP Implementations Fail? 

The numbers are sobering. Data suggests that around 70% of organisational transformations fail to meet their objectives at some level, with up to 26% failing completely. The average success rate is just 30% and ERP-specific data isn’t much better.  

Gartner reports indicate that by 2027 more than 70% of recently implemented ERP initiatives will have failed to fully meet their original business case goals and as many as 25% will end in total project abandonment. 

Even in cases where ERP implementations do succeed technically, businesses often fall short of achieving the return on investment they anticipated. Successful transformations can take up to 18 months just to realise half of their expected value. 

So just why do so many ERP implementation projects get derailed? Here we explore the hidden transformation challenges behind the failures and provide practical insights to help you avoid disaster.
 

Challenge 1: Underestimating the Scope of Transformation 

Too often, leadership views ERP implementation as a technology upgrade rather than an organisational transformation. This mindset is one of the primary transformation challenges facing businesses. ERP projects touch every corner of the business, from finance and operations to HR and procurement, which means they require C-suite sponsorship and end-to-end stakeholder buy-in. Organisations that achieve successful transformations are 14% more likely to develop their business and digital strategies in tandem. Without this alignment at the executive level and clear articulation of how the ERP project will impact people, processes, and technology, projects risk being siloed and reactive. 

Challenge 2: Resistance to Change Across the Organisation 

Human behaviour is often the biggest barrier to change. Even with the best technical solution, internal resistance can delay timelines, increase costs, or lead to outright rejection of the new system.  Employees may fear job loss due to automation or feel overwhelmed by new processes. Middle management may resist ERP implementation if they believe it will undermine their influence. The transformation challenge for those in charge of the project then is to manage change at the cultural and behavioural level. The solution? Investment in robust change management strategies. Early engagement, clear communication, and continuous training can encourage ownership, ease transitions, and improve adoption rates.
 

Challenge 3: Critical Skills Gaps and Talent Shortages 

One of the most persistent transformation challenges is not having the right talent in place. Roles as varied as ERP Project Managers and Functional Consultants to Change Leads and Data Architects, are essential. Yet, many organisations underestimate how difficult it is to recruit and retain professionals, particularly those who can navigate both technical execution and commercial priorities. When these roles are filled late, or not at all, projects lose momentum, quality is compromised, and benefits are delayed. To avoid this plan to build your ERP transformation team early. You can also use interim talent where necessary to fill short-term capability gaps and accelerate delivery.
 

Challenge 4: Legacy Systems and Data Complexity 

Most ERP implementations don’t start from a blank slate. Many businesses are dealing with fragmented legacy systems, manual workarounds, and decades of inconsistent data. Failing to invest in data migration, cleansing, and integration planning from day one is a serious transformation challenge. It can delay go-live dates, damage system performance, and undermine trust in the new platform. Data readiness isn’t optional. Appoint dedicated data leads and budget specifically for legacy clean-up and mapping. 

Challenge 5: Unrealistic Timelines and Budget Assumptions 

In the drive for speed and efficiency, leadership often sets overly ambitious targets. But ERP implementations are complex, involving multiple vendors, internal resources, and change processes. Compressed timelines and tight budgets result in corners being cut, particularly in software testing, training, and stakeholder engagement. This significantly increases risk. At the planning stage make sure you build in buffer time. Use phased rollouts or modular ERP approaches to deliver value incrementally while managing expectations. Improving testing practices can lead to faster implementations, higher quality software, and ultimately greater financial benefits from transformations. Neglecting this area often results in undetected system issues, poor user experience, and increased post-launch support costs. 

Challenge 6: Failure to Focus on User Experience (UX) 

ERP systems are only effective if they’re used. Complex interfaces, unintuitive workflows, and a lack of customisation lead to frustration and low adoption. UX is often overlooked during ERP implementations because the focus is on core functionality and technical integration. If users find it hard to use the system, they’ll resist it or revert to legacy tools. Instead conduct user testing early, involve end-users in the design phase and provide responsive support during rollout.
 

Challenge 7: Inflexible Implementation Models 

Every organisation is different, and no single implementation model fits all. Using rigid waterfall methodologies or relying solely on vendor-led processes can hinder progress. Agility is essential, particularly for large or multinational companies where needs evolve during the project lifecycle.  A hybrid delivery model that combines agile, waterfall, and Statement of Work (SoW)-based delivery can provide structure while still allowing for flexibility and rapid response to change.
 

Navigating ERP Transformation Challenges 

ERP implementations fail not because of software, but because of people, processes, and priorities. The most successful organisations treat ERP transformation as a holistic strategic initiative to overcome their transformation challenges. 

Partnering with a recruitment specialist like Cedar ensures you have access to the right leadership and delivery talent to drive success. Whether you’re recovering from a failed implementation or planning a fresh start, our Change & Transformation team can provide the interim and permanent expertise needed to accelerate delivery, improve adoption and maximise value realisation 

Speak to Cedar Today 

Cedar’s Change & Transformation team partners with forward-thinking organisations across the UK and Europe. From ERP Programme Directors to Data Migration Leads, we help you secure the talent you need to overcome ERP transformation challenges with confidence. 

Learn more about our services or fill out our contact form to speak to a consultant.