Why ERP Projects Fail: The Hidden Cost of Ignoring Business Change Management
- Richard Keenlyside
- 4 hours ago
- 3 min read
TL;DR:
ERP project failure is often due to neglecting business change management. This blog explores how resistance to change, unclear leadership, and cultural barriers undermine ERP success—and what leaders can do to prevent it.
Why ERP Projects Fail: The Hidden Cost of Ignoring Business Change Management
By Richard Keenlyside
As someone who has led complex ERP implementations across global enterprises—from retail to engineering—I've witnessed a recurring pattern: technology doesn't fail people; people fail to use technology effectively.
Despite modern ERP platforms like SAP S/4HANA, Oracle Fusion, or Microsoft Dynamics offering transformative potential, many projects still fail to deliver. The primary reason? Business change management is sidelined, underestimated, or entirely ignored.
The Myth of Technology as the Solution
Executives often invest in ERP software expecting it to be a silver bullet. However, an ERP system is only as effective as the people and processes around it. When business change management is neglected, adoption falters, and value diminishes.
Research shows over 70% of ERP failures stem not from technical issues but from human and organisational factors. In my experience, this includes:
Poor communication and stakeholder engagement
Inadequate training and support
No clear vision or benefits realisation plan
Cultural resistance to new processes
ERP Projects Are Change Projects
Implementing ERP is not just an IT project—it's a transformational business journey. It demands behavioural change, cultural alignment, and redefined responsibilities. When this change is not carefully managed, employees revert to old habits, bypassing systems or creating workarounds.
At a recent retail client, I led a global ERP transformation. The technical build was sound, but success hinged on aligning stakeholders, embedding change champions, and introducing business-readiness programs. That’s where many fail: no structured approach to change, no voice of the end-user.
Leadership Drives ERP Success
Leadership is a critical enabler. When C-suite executives fail to embody the change, it cascades into disengagement at all levels. Conversely, when leaders visibly support the change, employees feel empowered and accountable.
As CIO at a global manufacturing group, I developed a two-year ERP strategy with a clear change roadmap. This included regular townhalls, cross-border training, and post-go-live coaching—all aligned with our commercial goals. The result? Reduced technical debt and a 20% improvement in data quality.
The Cost of Ignoring Change Management
Neglecting change management doesn’t just delay ERP delivery—it amplifies costs:
Rework and system reconfiguration
Consultancy extensions
Employee turnover due to frustration
Poor decision-making due to inaccurate data
These are hidden, compounding costs that jeopardise the return on investment.
Build Change into the DNA of Your ERP Programme
To prevent ERP project failure, business change management must be embedded from day one. Key actions include:
Develop a structured change strategy tied to business outcomes
Appoint change champions across functions
Run continuous training and communications
Measure adoption and benefits realisation
Involve HR, operations, and finance early
At Northumbrian Water, embedding RPA and AI automation within legacy ERP was successful not due to the tools but because of a centre of excellence, clear KPIs, and executive alignment.
FAQs
Q1: Why do ERP projects fail so often?
A: Most failures result from inadequate change management, poor communication, and lack of leadership support—not the technology itself.
Q2: What is business change management in ERP?
A: It’s a structured approach to transitioning individuals, teams, and organisations from a current state to a desired future state with new systems and processes.
Q3: When should change management begin in an ERP project?
A: At the very beginning—during planning and vendor selection—not after go-live issues arise.
Q4: Can ERP succeed without change management?
A: Technically, yes. But business value will not be realised, leading to shadow systems, resistance, and eventual failure.
Conclusion
ERP implementation is not a tech project—it’s a people transformation. Business change management isn’t optional; it’s the lever that turns ERP from a cost centre into a value engine. If you ignore the people side of change, your ERP will fail, regardless of your chosen software.
Richard Keenlyside is the Global CIO for the LoneStar Group and a former IT Director for J Sainsbury’s PLC.
Call me on +44(0) 1642 040 268 or email richard@rjk.info.
Follow me on X https://x.com/cioinpractice & LinkedIn https://www.linkedin.com/in/richardkeenlyside/
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