# 7 Common ERP Failures and How to Prevent Them

%20(1).avif)

### Free Supplier Risk Scorecard Download

Download our free supplier risk scorecard here!

[Download the free tool!](/content/blog/erp-failures#/index.html)

## What’s [ERP](/content/blog/sap-vs-erp-differences/index.html)?

ERP (Enterprise Resource Planning) is a system built to consolidate business processes in a single system. These processes could include finance operations, human resources activities, supply chain management, and more. The main goal of ERP is to increase a company's efficiency by storing its data in a centralized location.

## How does [ERP](/content/blog/top-erp-ecommerce-software/index.html) work?

ERP integrates various departments and functions into a single system so that information can flow smoothly from one point to another. One of the key benefits of ERP is gaining access to real-time information, which is important for decision-making. Additionally, many ERP systems come with built-in analytics tools that help monitor performance and identify trends.

> Did you know?
> By 2027, over 70% of recently implemented ERP initiatives will fail to fully meet their original business goals. The main reason is lack of training and knowledge.

## Common Reasons Why [ERP](/content/blog/integrated-ecommerce-erp-examples/index.html) Fails

### Poor planning

ERP projects tend to fail due to inadequate planning. Without thorough assessment, you may select a solution that doesn’t align with your business objectives. A successful implementation starts with clear goals and a full understanding of your current processes.

### No training

Having an ERP system is beneficial, but it requires proper training for staff. Without it, using the system can lead to frustration and decreased productivity.

### Underestimating time needed

Implementation and learning about new software require time. Recognizing the resources you can invest helps prevent issues later.

### Data migration

Migrating data can lead to operational disruptions if not done carefully. A well-planned data migration strategy is essential for accuracy.

## 7 Big ERP Disasters

### The Chocolate Chaos

In 1999, Hershey faced significant issues due to a rushed ERP upgrade that lacked proper planning and testing, resulting in lost orders worth $100 million.

### Missing Avocados

Mission Produce implemented a new ERP system but faced inventory issues, leading to sourcing from other suppliers and reducing profit margins.

### Smeared Makeup

Revlon faced a $64 million loss in orders after switching systems without adequate training for their staff.

### A Brewery Dispute

MillerCoors terminated a contract with HCL Technologies due to unsatisfactory results, leading to a lawsuit for $100 million.

### Just Do It…Realistically

Nike invested heavily in a new ERP system but ended up losing $100 million in sales due to unrealistic expectations.

### Going Against Time

National Grid faced multiple failures after rushing to launch a new ERP system right after Hurricane Sandy, leading to significant financial losses.

### Shifting Priorities

Invacare paused their ERP upgrade to address issues in a key unit, demonstrating the importance of being flexible in project management.

## Key Takeaways

- **Plan Thoroughly**: Conduct comprehensive needs assessments and set clear goals.
- **Engage Stakeholders**: Involve representatives from all departments.
- **Invest in Training**: Ensure users are trained and supported.
- **Allocate Resources Wisely**: Acknowledge the time and resources needed.
- **Balance Customization**: Avoid excessive customization.
- **Develop a Data Migration Strategy**: Ensure accuracy and completeness.
- **Communicate Effectively**: Keep lines of communication open.