ERP implementations can be complex and time-consuming, and failure can occur for several reasons. Several high-profile ERP implementation failures have been reported in the news worldwide in recent years. Some examples include:
In 2011, the Los Angeles Unified School District (LAUSD) had to abandon its $95 million ERP implementation due to cost overruns and delays. The project had been in development for over five years, and the district ultimately decided to terminate the contract with the vendor and start over with a new ERP system.
In 2013, the Australian National Audit Office (ANAO) reported that the Australian Taxation Office's (ATO) $450 million ERP implementation project was significantly delayed and over budget. The ANAO found that the ATO had not adequately planned for the implementation and had not fully considered the risks associated with the project.
In 2014, the United Kingdom’s National Health Service (NHS) abandoned its £10 billion ERP implementation project due to cost overruns and delays. The project had been in development for over a decade, and the NHS ultimately decided to terminate the contract with the vendor and start over with a new ERP system.
In 2019, Australia's New South Wales government abandoned its $100 million ERP implementation project due to cost overruns and delays. The project had been in development for over a year, and the government ultimately decided to terminate the contract with the vendor and start over with a new ERP system.
In 2020, the City of Atlanta's ransomware attack impacted the city's ERP system. The city had to pay a ransom of $2.6 million to regain access to its data, and the ERP system was out of service for several weeks. The attack exposed the ERP's vulnerabilities.
ERP implementation failures can occur due to a variety of reasons. Some of the key reasons why some of these ERP implementations failed include the following:
Lack of clear project scope and objectives: Without a clear project scope, it can be difficult to estimate costs and ensure that the project stays on budget. Additionally, it can be challenging to measure the project's success without clear objectives.
Inadequate planning and risk management: Inadequate planning and risk management can lead to cost overruns, delays and unexpected issues. This is particularly important during the testing phase.
Customisation: Customisation can add complexity and cost to the implementation process. Without proper planning, Customisation costs can quickly spiral out of control.
Change requests: Change requests can be a significant cause of budget overruns. Change requests can be challenging to manage without proper planning and can quickly add costs to the project.
Lack of user involvement: Not involving the end-users in the testing phase can lead to a system that doesn't meet their needs, resulting in low adoption and usage rate.
Technical issues: Technical issues can arise during the implementation process, adding costs and delaying the project.
Insufficient testing: Insufficient testing can lead to errors and defects in the system, which can result in additional costs and delays.
Lack of proper training: Insufficient or improper training of the end-users can lead to low adoption and usage rate of the system.
Security breaches: Security breaches can have a significant impact on ERP systems, leading to data loss, system downtime, and reputational damage.
Remote teams: Remote teams can impose several risks on ERP implementation, including communication