ERP implementations - complexity still massively underestimated

Back in 2012, I had the honour of giving a WinLink presentation about my experiences with a major ERP implementation. At that time under the provocative title

"Is the crisis in the realisation of ERP implementations pre-programmed?"

In my presentation I took the Standish Group's CHAOS Report to show that, according to this statistic, only approx. 30% of all IT projects (over USD 5 M) are successful at the first attempt, approx. 70% run into (sometimes massive) problems at some point and then approx. 20TP3T of the projects have to be stopped and written off completely.

After numerous assignments in the field of IT projects, this statistic has become an integral part of my repertoire.

Recently, almost 10 years later, I had to refer to this report again and explain to an Executive Board that their project is in serious jeopardy and that we must now do everything we can to prevent it from becoming a complete failure. True to the theme of Rilke : "Who's talking about winning here, surviving is everything".

It is sobering to realise that even today, with all the new Methodologies (Agile, Scrum, Sure Step, ASAP, etc) an IT project still has no more chance than about 30% of being successful at the first attempt. Even worse, that still over approx. 20% of IT projects stopped and completely written off have to be made.

A more prominent example from the present day is the SAP implementation at V-Zug, which forced the parent company Metall Zug to issue a profit warning. But there are many other IT projects that have run into less publicised difficulties.

Numerous consulting firms produce glossy presentations by the metre, which are supposed to show how to do it right. But unfortunately without really resounding success.


Why is it that IT projects (e.g. ERP implementations) still fail too often? Here is an attempt at an explanation from my experience over the last 10+ years

  • A company will only introduce a new ERP system approximately every 10-20 years. This means that the relevant experience is not (or no longer) available in the company. For most project managers (but also project sponsors, steering committees, etc.), it is the first time, that they have to take responsibility for a highly complex IT project. Expectations are high and some people also want to make a name for themselves in the company. That's why people are only too willing to say yes even to very unrealistic deadlines and/or budgets. In the end, you often just don't know any better and there is no off-the-shelf ERP at a standard price.
  • Many companies have Starting position a self-developed ERP, which has been highly customised to the company's requirements over the last 10+ years and has grown together with the company. Now, however, further development has become too expensive and the decision has been made (at the insistence of the Board of Directors) to switch to standard software (SAP, MS Dynamics, Oracle, etc.). However, this is where the first challenge arises, as a decision must now be made as to whether the company should continue to use its traditional and optimised software. Adapt processes to the new standard tool (best practice) or the In turn, the standard tool can be highly customised to your own requirements should. Both are possible, the latter simply costs a lot of time and money.
  • It is often the case that the processes are currently in place but have never been properly documented. This in turn makes it difficult to create a reliable estimate of the effort involved. In this case, it is certainly advisable to record the to-be processes in a structured manner in a preliminary project and to document them in a BPM (Business process modelling) tool. However, many companies shy away from the effort involved and try to define the processes in parallel to implementation. This fast-track methodology has the major disadvantage that the scope of the project can only be defined at a very high-level and therefore an estimate of the time and money required is very imprecise.
  • Naturally, this recording of the processes awakens desires. The User expectations are high and the new system is supposed to make up for all the shortcomings of the existing system, surpassing it in every respect. Too little attention is paid here to the main advantage of a new system, namely the improved expandability and, if necessary, cross-company transparency. Very often, a creeping "Scope creep", in which all stakeholders still want to ensure that their requirements for the new system are also taken into account. Ultimately, the requirements for the new system are so high that it becomes technically impossible to realise them.
  • What is also often forgotten is the categorisation of the new system in a Overarching digital strategy. The ERP (possibly already historically designed as a data silo) is once again planned as a data silo, without coordination with the surrounding systems (CRM, CAQ, MES, etc.). This results in highly complex interfaces and a missed opportunity to digitally transform the company with this ERP replacement.
    Proper clarification and integration into the overarching digitalisation process help to better position the project. A decision must also be made as to whether the company wants to focus more on processes with this ERP implementation. If this is the case, it is no longer just an IT project, but a fully comprehensive digitalisation project. Business Transformation with all the consequences and requirements for customised change management.
  • Before a standard tool (SAP, MS Dynamics, Oracle, etc.) can be considered, the processes must be clearly defined. However, many companies start this discussion far too early and lose valuable decision-making options.
    The tool issue comes much later in the project. More important is the "what" before talking about the "like" is thinking about.



My experience over the last 10+ years shows that IT projects are still massively underestimated and introduced "on the side". Without the right focus, however, such IT projects are doomed to failure.

The success or failure of an ERP implementation begins with the strategic considerations at the very beginning of a project. Without clear strategies about the "what", every IT project will fail sooner or later when it comes to the "how".

The following activities must be carried out in this sequence:

  1. Decision on integration into a superordinate Digitisation strategy (Digital business transformation)
  2. Definition of to-be processes
  3. Choice of standard software (SAP, MS Dynamics, Oracle, etc.) customised to the company's needs
  4. Selection of a suitable and reputable implementation partner
  5. Provision of the necessary structures, as well as a dedicated (100%) and experienced project team. An ERP implementation is not a good project to earn your spurs...

Finally, the tip to regularly exchange ideas with other companies that are undergoing an analogue transformation (Erfa Group) and if necessary Involve an external consultant (as a sounding board, for an audit or as part of the steering committee).

Good luck with your IT project!