Why ERP Projects Fail – Even with Experienced Project Managers
ERP transformation projects fail more often than nearly all other project types. Not because the project managers are incompetent, but because they are working with a project format that fundamentally differs from anything else they have previously encountered.
An ERP project is not a classic IT project. It is a business transformation in which systems, processes, and the organization must change simultaneously. This means that even a seemingly small decision early in the process can influence how the entire organization operates for many years to come.
When technology, processes, and organization shift simultaneously, complexity becomes extreme. Classical project management methods such as PRINCE2, IPMA, or PMI provide solid structure, but they do not address the reality of ERP projects: that business value often arises in the balance between preserving, simplifying, and changing the company’s processes — and that this balance rarely remains fixed from day one.
A concrete example: In one project, consultants were to present a pricing engine capable of handling the client’s many price and discount scenarios. The requirements were complex and expensive to implement. But during the workshop — with the project manager’s guidance — it became clear that the greatest value for the client lay in simplifying its pricing structures. The plan became more dynamic and required additional change management, but the result was a significantly simpler solution with less need for maintenance and testing.
This is what business value looks like in ERP: when the project dares to challenge requirements and create better solutions than those written in the specification.
Most ERP projects do not fail on technology — they fail on people. When stakeholders do not share responsibility appropriately, when the team executes blindly based on a long-outdated requirements document, or when governance becomes so rigid that it blocks innovation, even the most well-designed solution collapses.
Success in ERP projects requires a project manager who speaks both languages: technology and business. A project manager who can establish clear accountability, maintain focus on benefits, and lead an organization that evolves its understanding of the solution throughout the project.
Because the change is not static. The organization reflects itself in the new system capabilities and often adjusts its ambition level during the project. This is why ERP success is not about running a fixed, predefined IT project.
It is about leading a dynamic transformation — one that takes shape as it is being created.
This column is the first of three on project management in ERP projects. If you want to strengthen your handling of the critical phases in an ERP implementation and gain access to a proven toolbox built on experience from hundreds of projects, you can sign up for HNCO’s two-day ERP project management course for experienced project managers.
