The main reason why 75% of ERP implementations fail.

Introduction

We often hear about the high-profile failures of top ERP implementations, such as Nike's $100 million loss in sales in 2000 or Hershey's $100 million loss of Hershey Kisses in 1999 due to mishaps with their SAP ERP, CRM, and supply chain applications. However, these are just the tip of the iceberg. Almost 75% of ERP implementation projects fail, and this occurs with all types of software, including SAP, Oracle, and Netsuite, among others. So, what is the main reason for this high failure rate?

Factors that Cause ERP Implementation Failures

There are many factors that contribute to ERP implementation failures, including unrealistic budget or schedule, lack of top management support, inadequate testing, poor training, and failure to re-engineer business processes. However, the primary reason for the high failure rate is excessive customization.

When a company spends millions of dollars customizing an ERP or supply chain solution, it often results in bugs, errors, and broken processes that require even more time and money to fix. This is because companies often try to fit the ERP or supply chain into their existing processes, rather than the other way around.

The Aftermath of a Failed Implementation

After a failed implementation, companies often change their management team and bring in a top dog to turn the project around. The first step is typically to scrap the customization that cost millions and settle for the out-of-the-box solution offered by the ERP or supply chain provider. Although this solution may not be the best fit for the company, they are often too invested to switch to a better solution.

Why Customization is Appealing

It's understandable why a company would want to customize their ERP or supply chain solution to fit their processes - they believe their processes are better. Most ERP and supply chain solutions in the market require customization or are designed for a specific industry, and companies often choose the latter.

A Better Solution

At Master-BI, we have developed a supply chain solution designed specifically for project-based businesses like construction. Our solution provides best-in-class processes and integrations without the need for costly customization and implementation. Master-BI will perform better and cost less than other solutions on the market.

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