ERP, Malaysia_Blog

The Biggest Challenge with ERP Systems and Why They Fail

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Enterprise Resource Planning (ERP) systems have revolutionized the way businesses operate by integrating and streamlining various organizational processes, from finance and operations to human resources and customer relationship management. Although they offer several benefits, implementing and managing ERP systems come with their fair share of challenges. Among the many obstacles faced, one stands out as the greatest challenge: successful implementation and change management.

The Complexity of ERP Implementation

Enterprise Resource Planning (ERP) systems have revolutionized the business world by offering a comprehensive platform to manage and integrate all the core processes needed to run a company. However, implementing an ERP system is a task fraught with complexities.

Detailed Planning and Resource Allocation

ERP systems affect every aspect of a business. As such, the planning for the implementation must be thorough and accurate. This planning involves identifying the features required in the ERP system, setting the scope of the project, and allocating resources, both human and financial, to assist with the implementation. The immense detail required and the variety of tasks to complete introduce a significant level of complexity.

Technical Challenges

Implementing an ERP system also presents various technical challenges. For example, data migration from existing systems to the new ERP system must be accomplished without disrupting ongoing business operations. Additionally, ensuring that the new ERP system can seamlessly integrate with other existing systems and applications is a complex task that requires significant technical expertise.

Skilled Resource Requirement

The complexity of ERP implementation also lies in the need for skilled personnel. Implementing these systems requires a deep understanding of the organization’s existing processes and the technology itself. Thus, businesses often have to seek the help of external experts or invest in training internal employees, which increases the complexity.

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Why Do Most ERP Systems Fail?

Beyond implementation complexities, there are several core reasons why ERP systems fail to meet their objectives:

  1. Misalignment with Business Needs: ERP systems can fail when they don’t align with a company’s strategic objectives and operational needs. Businesses sometimes give precedence to the system’s features instead of considering whether it matches their unique business requirements.
  2. Faulty Vendor Selection: Choosing the wrong vendor—or a vendor who doesn’t provide the needed post-sale support—can severely hamper the success of an ERP system. The chosen system could be technologically inferior, or the vendor might not possess the requisite industry knowledge to guide the implementation process.
  3. Inadequate Project Management: Lack of strong project management and leadership often results in poor decision-making and strategy planning. Strong leadership guides the project in the right direction, resolving issues promptly.
  4. Unrealistic Expectations: Expecting ERP systems to solve all business problems instantly can lead to discontent. Change is a gradual process, and realizing the full benefits of ERP systems takes time, patience, and fine-tuning.

With various modules designed to cater to specific departments, ERP systems allow organizations to streamline processes, improve decision-making, and increase efficiency. Given the wide array of modules and functionalities available in ERP systems, using them to their maximum potential can be challenging. In this article, we will explore how businesses can gain the most from their ERP system, the aims of implementing such a system, and provide examples of how different modules can work together in achieving success.

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Change Management

The most significant challenge with ERP systems—successful implementation and user adoption—translates into the primary cause of their failure. The silver lining is by recognizing and addressing these challenges proactively, organizations can largely mitigate these issues and maximize the value such systems provide.

Implementing new systems often means changing existing business processes. Employees need to learn how to use the new ERP system and may have to adjust to new workflows and procedures. Managing this process of change can be complex and demands effective communication, training, and patience.


While ERP solutions are designed to cater to a wide range of functionalities, each business has unique needs and processes. Therefore, to fully leverage an ERP system, organizations often need to customize the software, which can be a complex process.

Fostering Buy-In

ERP implementation poses a significant disruption to the status quo, and there may be resistance to this change. Fostering buy-in from all stakeholders, especially end users, is an essential and complex facet of implementing an ERP system. Leaders have to promote the system’s benefits and frame it as a tool to improve everyone’s work efficiency.

Risk Management

Lastly, ERP implementation can present substantial financial risks if not managed properly. Unanticipated costs, extended implementation timelines, and dissatisfaction with system capabilities can lead to financial losses. Recognizing and mitigating these risks make the implementation process complex.

Despite the complexities, careful planning, open communication, and mindfulness of potential challenges can help ensure a smooth and successful ERP implementation. Organizations often benefit greatly from these systems in the long run, making the journey worth the effort.

Navigating Through Change Management in ERP Implementation

Change management, a critical aspect of ERP implementation, involves preparing, supporting, and equipping employees to effectively adopt the new system and adapt to the changes. Given the scale of change that comes with implementing an ERP system, managing this shift can indeed be complex. Here, we delve deeper into the critical components of change management in ERP implementation.

Understanding The Change

Before implementing a new system, assessing the impact of change is crucial to understanding its breadth and depth. This involves identifying areas that the new system profoundly affects, the type of changes expected (process, role, or cultural changes), and who will be affected in the organization.

Effective Communication

Effective communication is the cornerstone of successful change management. Begin with clearly communicating why the change is happening, how it benefits the organization, and how it aligns with the company’s vision. Regular updates at each step of the way, channels for feedback, and open forums for discussion can go a long way in addressing concerns, dispelling rumors, and fostering understanding.

Comprehensive Training

Training is paramount in equipping employees with the knowledge and skills needed to navigate the new ERP system. Each employee will have different interaction levels with the system, so it’s vital to tailor training to various roles. Remember, training is not a one-time event but a continuous process, needed even after the system is up and running.

Acknowledging Resistance

Resistance to change is a natural human tendency. It may result from fear of the unknown, perceived loss of control, or discomfort with new processes. Leaders should proactively identify resistance, understand the reasons behind it, and address it thoughtfully. One-on-one discussions, mentorships, or bringing resistors into the change process can help address and mitigate this.

Active Involvement and Participation

Change is often more readily accepted when individuals feel involved in the process. Employee participation can be encouraged through pilot projects, brainstorming sessions, testing phases, and providing avenues for suggestions. Fostering a sense of ownership of the system can help expedite acceptance and make the transition smoother.

Support System

A robust support system is vital to recover from any missteps and keep acceptance levels high despite initial hurdles. This could include help desks, troubleshooting teams, open-door policies, and resources such as manuals, FAQs, and online forums.

Patience and Persistence

Finally, recognizing that change takes time and allowing for adjustments and settling in periods is critical. Patience, persistence, and consistency in moving towards the desired state will eventually lead to success.

In conclusion, change management in ERP implementation is a complex yet crucial process that requires careful strategy and execution. By focusing on clear communication, proficiency training, acknowledging and addressing resistance, and remaining patient and persistent, the transitions to new systems and processes can be a rewarding journey despite the challenges.


The successful implementation and change management of ERP systems stand as the biggest challenge, with the potential to make or break their overall effectiveness and benefits to an organization. Companies must be prepared to invest time and resources into proper planning, customization, integration, and change management strategies to overcome these challenges. In doing so, they can harness the power of ERP systems to drive efficiency, increase productivity, and ultimately achieve business success.

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About Multiable:

At Multiable, we deliver a robust, comprehensive ERP solution engineered to revolutionize your business tactics and escalate your operational prowess—effectively enhancing your revenue potential. Boasting a substantial presence in Asia and a legacy spanning over thirty years, we relish the unwavering confidence our clients place in us as a leading purveyor of ERP solutions. Our skilled team of professionals is dedicated to provide continuous support throughout the entire implementation phase, assuring a smooth and efficient transition. Get in touch with us today to unlock unmatched potential in your organization and set yourself apart in your industry.

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