5 Critical Mistakes Companies Make During ERP Implementation (and How to Avoid Them)

Enterprise Resource Planning (ERP) implementation is one of the most transformative—and most risky—decisions a company can make. Yet the stakes are devastatingly high: according to Gartner, between 55-75% of ERP implementations fail to meet their original business objectives.

With average budget overruns reaching 189% and timeline extensions stretching projects by 25% on average, many organizations discover too late that they’ve invested millions of dollars in systems that don’t deliver.​

The sobering reality is that 70% of ERP implementations over the next three years are projected to fail, with only 23% of all ERP implementations considered truly successful. Yet these failures are rarely about the technology itself—they’re about predictable human and organizational mistakes that can be prevented with the right approach.​

This blog explores five critical mistakes companies make during ERP implementation, supported by real-world case studies of high-profile failures from companies like Hershey, Revlon, Nike, and National Grid. More importantly, it shows you how to avoid the same costly pitfalls.

Mistake #1: Rushing Timelines While Lacking Executive Sponsorship

The Problem: One of the most dangerous combinations in ERP implementation is compressed timelines paired with weak executive leadership. When business pressure forces an aggressive go-live date, and executives aren’t actively steering the ship, projects collapse under their own complexity.

Technical execution accounts for only 30% of implementation success—the other 70% depends on change management, leadership, and organizational alignment.

Yet most companies allocate 90% of budget and attention to technical components while treating change management and executive leadership as afterthoughts.

The Hershey Story: A $100 Million Halloween Disaster

In 1999, Hershey Company faced the Y2K crisis and decided to implement a new ERP system. Rather than following the recommended 48-month implementation timeline, executives compressed the project into just 30 months to beat the deadline.​

The company attempted something extraordinarily risky: deploying three major systems simultaneously—SAP R/3 for ERP, supply chain management software, and customer relationship management software—all at once.​

The results were catastrophic. When the system went live, transactions failed to flow properly between the CRM, ERP, and supply chain systems. The company couldn’t process $100 million in orders during Halloween—its busiest retail season—despite having the product in inventory. This wasn’t a software bug; it was a systems integration nightmare born from rushing.​

The financial damage was severe: Hershey’s stock price fell 8%, and quarterly profits plummeted 19%. The failure made the front page of the Wall Street Journal, becoming a cautionary tale for decades to come.​

The National Grid Saga: 43 Days Instead of 4

In 2004, National Grid USA undertook a three-year SAP implementation that was marred by constant delays and budget overruns. Despite these warning signs, executives pushed forward with the go-live date to end the costly project phase.​

Within two months of going live, the system had 15,000 vendor invoices it couldn’t process for payment, and inventory record-keeping had deteriorated to the point where vendors were issued payments with the understanding that reconciliation would happen later (if at all). But the operational damage went deeper: the company’s financial close process—once taking 4 days—suddenly took 43 days. This loss of financial visibility was so severe that National Grid lost access to short-term borrowing facilities that were critical to its cash flow.​

The project team eventually identified the root causes: overly ambitious design, significantly underestimated transformation scope, limited availability of internal personnel, and most critically, too much focus on timeline and not enough on quality.​

The Israel Chemical Limited (ICL) Catastrophe: $290 Million Write-Off

In 2012, Israel Chemical Limited decided to implement a new SAP system to consolidate its operations following rapid growth through acquisitions. What started as a $120 million, 5-year project with IBM quickly ballooned.​

The CEO had assigned the project to a relatively new person in the CFO’s office, primarily focused on financial consolidation while neglecting manufacturing and supply chain needs. Employees in factories revolted when the system was imposed without their input.

By 2016, the project was abandoned, resulting in a $290 million write-off and the CEO’s resignation. ICL subsequently sued IBM for $300 million.​

How to Avoid It:

• Secure active executive sponsorship before any other decisions. The CEO or President must commit to more than approving the budget—they must be visibly engaged throughout implementation, attending governance meetings, and championing the change.
• Allocate 10-15% of your project budget to change management, not just technical implementation. This includes training, communication, and organizational readiness activities.​
• Reject artificial timelines. While every project should have realistic milestones, no go-live date is worth implementing a system the organization isn’t ready to use. Better to delay six months and achieve success than to hit an arbitrary date and create chaos.
• Establish a steering committee with executive representation and regular decision-making cadence. Executive sponsors need to understand that their role is not to attend kickoff meetings—it’s to actively guide the transformation.

Mistake #2: Selecting the Wrong ERP System for Your Business

The Problem: Many companies choose an ERP system based on brand reputation, sales pitches, or lowest cost—without thoroughly assessing whether the solution actually fits their business. The result is investing millions in a system that doesn’t match operational requirements.

Research shows that only 41% of manufacturing industry leaders have their ERP system truly aligned with their business objectives, compared to just 28% of non-leaders.

Meanwhile, 48% of industry leaders have industry-specific best practices embedded in their ERP, compared to 43% for other companies. The difference between careful selection and rush selection becomes a competitive advantage.

The Revlon Consolidation Disaster

In February 2018, cosmetics giant Revlon implemented SAP S/4HANA to consolidate its North American business and improve customer support. The company had a complex mandate: merge two separate workflows from different legacy systems into one centralized platform.

The problem was fundamental: Revlon lacked hands-on SAP experience and didn’t adequately validate whether SAP S/4HANA was truly equipped to handle its specific operational requirements. The system went live at a manufacturing facility in Oxford, North Carolina, and immediately problems emerged. The new ERP couldn’t effectively manage Revlon’s manufacturing processes or supply chain analytics, making it nearly impossible to produce sufficient quantities of finished goods.​

Unable to fulfill orders from major retail clients, Revlon had to expedite product shipping to compensate—creating astronomical costs and missed opportunities. The announcement of the implementation failure caused Revlon’s stock price to plummet 6.9% within 24 hours. By Q4 2018, the company posted a $70.3 million net loss—a direct result of the operational disruption.​

Revlon later identified the core failures: poor ERP design, inadequate process mapping, inadequate integration planning, and insufficient IT maintenance. The company had cited a “lack of design and maintenance of effective controls” in connection with the ERP processes themselves.​

The Lidl €500 Million Dead-End

German grocery chain Lidl is perhaps the most striking example of wrong system selection coupled with inflexibility. In 2009, Lidl began implementing SAP S/4HANA as part of a digital transformation. Seven years and €500 million later, the company abandoned the project and returned to its legacy system.​

The core incompatibility was surprisingly simple but fundamental: Lidl’s inventory management system used purchase prices to categorize products, while SAP S/4HANA sorted by retail prices. This wasn’t a minor configuration issue—it was a core operational difference that would have required Lidl to fundamentally restructure how it manages inventory.​

Rather than adapting their processes to the new system (which would have required significant operational change), Lidl’s management insisted on customizing SAP to match their existing methods. The company also placed “blind faith” in system integrators, delegating the entire digital transformation to external partners rather than maintaining strong internal governance. An executive reorganization that occurred mid-project further destabilized the initiative and created ownership gaps.​

The result: seven years of effort and half a billion euros down the drain, with Lidl returning to its original system. The failure teaches an essential lesson: no ERP system, no matter how powerful, can force a company to operate in a way that fundamentally conflicts with its business model—and extensive customization to fight that incompatibility becomes ruinously expensive.

Nike’s $500 Million Supply Chain Meltdown

In 2001, Nike implemented a new I2 demand planning software to improve its supply chain management and inventory forecasting. The company spent $400 million on the initiative, expecting it would solve decades of forecasting challenges in a complex global supply chain.​

The problem: Nike failed to properly evaluate how the new I2 software would integrate with its existing legacy systems. The company rushed implementation of the I2 system before its main SAP package was even ready to deploy, creating a fragmented technical landscape. Combined with inadequate testing and poor communication between IT and business units, the result was a system that couldn’t handle Nike’s complex demand planning requirements.​

When demand planning broke down, so did inventory accuracy. Nike ended up with massive overstock of slower-moving products (like Air Garnett sneakers) while facing severe shortages of hot-selling items (like Air Jordans). The company lost an estimated $100 million in sales and saw its stock price plummet 20%. Recovery took nearly seven years.​

The failure wasn’t about the software’s capabilities—it was about Nike choosing a system without fully understanding how to integrate it with its existing infrastructure, and then implementing it without adequate testing and organizational readiness.

How to Avoid It:

• Define clear business objectives before evaluating any vendor. What specific problems are you trying to solve? Automate, improve visibility, reduce manual processes? Unless you’re crystal clear on your goals, you’ll evaluate systems based on features rather than fit.
• Conduct thorough requirements gathering with input from all departments—not just IT and finance. Manufacturing, supply chain, sales, and operations teams all need to validate that the system can handle their specific workflows.
• Perform hands-on, scenario-based system evaluations. Don’t just watch vendor demos. Have your team actually use the system with realistic data to test specific processes that are critical to your business.
• Evaluate vendor experience in your industry. A vendor with deep expertise in your sector will have pre-built processes and solutions for your common challenges. A vendor treating your industry as just another customer is risky.
• Consider total cost of ownership, not just licensing costs. A system that requires extensive customization, ongoing specialized consulting, or frequent upgrades will cost far more over its lifetime than a higher-priced system that requires minimal customization.

Mistake #3: Poor Data Migration and Inadequate Testing

The Problem: “Garbage in, garbage out.” This IT adage perfectly captures one of the most common ERP failures. Many companies underestimate the complexity of data migration and compress testing timelines to meet go-live dates, resulting in systems that are technically deployed but operationally broken.

Poor data migration accounts for 38% of all ERP implementation failures. Data accuracy issues represent the top post-implementation complaint. Yet companies often treat data migration as a technical checkbox rather than a business-critical activity that requires months of careful planning.​

The National Grid Testing Fiasco

National Grid’s SAP implementation failure included significant testing failures. Testing was compressed due to schedule pressures, with limited ranges of scenarios tested and limited data availability. Functional and technical specifications had to be completely rewritten after go-live, and entire SAP modules had to be rebuilt or abandoned—suggesting the testing phase should have caught these issues before deployment.​

The inadequate testing didn’t reveal integration problems between systems, data mapping errors, or process flow issues that only surfaced when thousands of real-world transactions hit the live environment.

The Mission Produce Supply Chain Disruption

In 2022, Mission Produce upgraded to a new enterprise software system to improve supply chain management. The company’s CEO told investors they had spent hundreds of hours planning and preparing, but when the system went live, the extent and magnitude of the change proved far greater than anticipated.​

Order processing delays, inventory inaccuracies, and communication failures between business units resulted in missed delivery deadlines and significant financial losses. The company had failed to adequately validate requirements, underestimated the complexity of migration, hadn’t conducted beta testing in a sandbox environment, and provided insufficient employee training.

​Waste Management sued SAP, alleging the software company misrepresented its ERP software’s capabilities and used misleading demonstrations during the sales process. The subsequent need for extensive customization led to significant cost increases and project management issues, while SAP contended that Waste Management failed to adapt its business processes and provide adequate resources

Mistake #4: Inadequate Change Management and Insufficient Training

The Problem: Technical people often expect ERP implementation success to depend on proper system configuration and data migration. The uncomfortable truth: technical execution accounts for only 30% of implementation success. The other 70% depends on whether your people will actually use the system as designed.​

Inadequate change management is cited as the root cause in 42% of all ERP failures. Insufficient training accounts for 29% of manufacturing failures specifically. Yet these human factors are routinely underfunded and deprioritized.​

What Inadequate Change Management Looks Like

When executives treat ERP implementation as a technical IT project rather than an organizational transformation, they focus on system configuration meetings and avoid conversations about change management, training strategy, and organizational readiness. They assume “people will adapt” and are shocked when adoption lags, workarounds proliferate, and productivity doesn’t improve.

The “delegation-only approach” is particularly damaging: the CEO approves the budget, delegates the project to the CIO or CFO, makes enthusiastic remarks about transformation, then disappears from the project. The message to employees is clear: “This isn’t actually that important.”​

When leadership is absent during difficult periods—and difficult periods always arise during major ERP transitions—problems compound and confidence erodes. Extended time to value follows: instead of achieving ROI within 12-18 months, companies struggle with basic adoption 2-3 years post-implementation. For a $40 million company, this difference between strong and weak leadership can easily represent $500,000 to $1.5 million in extended losses, delays, and missed opportunities.​

The Haribo Governance Failure

Haribo’s SAP S/4HANA implementation failed due in large part to inadequate executive governance and a lack of proper User Acceptance Testing (UAT). Users weren’t meaningfully involved in testing the system against their actual workflows. The company didn’t have executive leadership actively steering the change, monitoring progress, or making timely decisions about problems that emerged.​

The National Grid Training Breakdown

National Grid’s training methods proved ineffective at preparing users for the new system. Employees trained in classroom settings weren’t translating that knowledge into real-world system usage. The implementation team tried to force process changes without adequate change management scaffolding to help people understand why changes were necessary and how to adapt their daily work.​

How to Avoid It:

• Allocate 10-15% of total project budget to change management, including training, communication, and organizational readiness activities. This isn’t an add-on—it’s a critical investment in project success.
• Involve end-users from day one, not just at training time. User representatives should be on the project team during requirements gathering, system configuration, and testing. They should help shape the system, not just learn to use it after it’s built.
• Develop a tiered training strategy. Different users have different needs: power users need deep technical training, average users need process-focused training, and executives need outcome-focused briefings. Deliver training as close to go-live as practical (2-4 weeks before) so knowledge is fresh.
• Plan for ongoing training and support post-go-live. The first 6-12 months after implementation is when users encounter edge cases, exceptions, and real-world complexity they didn’t encounter in training. Budget for “lunch and learn” sessions, help desk support, and targeted coaching.
• Establish executive sponsorship that includes active change leadership. The executive sponsor should communicate regularly about why the change matters, celebrate adoption milestones, address resistance, and ensure that resources flow to change management activities.
• Use change management to overcome resistance. When employees fear job displacement, resist new processes, or distrust the new system, change management activities—led by executives—address those concerns head-on through transparent communication, involvement, and genuine concern for employee success.

Mistake #5: Scope Creep and Over-Customization

The Problem: One of the most seductive traps in ERP implementation is the desire to customize the system to match existing business processes. While this feels like honoring your company’s unique practices, it’s actually a path to escalating costs, mounting complexity, and systems that become increasingly difficult to upgrade or maintain.

Over-customization accounts for 23% of manufacturing ERP failures specifically. The pattern is predictable: each department requests “just one or two” customizations to make the system work like their legacy processes. Within months, the system bristles with custom code, modified workflows, and specialized integrations that only the original consultants understand. Upgrade costs soar, maintenance becomes expensive, and the system becomes increasingly fragile and resistant to change.​

How It Happens

ERP systems like SAP, Oracle, Microsoft Dynamics, and Infor come pre-built with industry best practices embedded in their standard functionality. These best practices have been refined over thousands of implementations across companies similar to yours.

Yet when implementation teams present these standard processes to users, the reaction is often: “That’s not how we do it here.” Instead of asking “Why should we change to match industry best practices?”, companies often ask “How can we customize the system to match what we’ve always done?”

This creates a Catch-22 that extends timelines and budgets indefinitely: each customization adds complexity, requires specialized expertise, and introduces technical debt that accumulates over the system’s lifetime. Paradoxically, companies end up paying more to keep doing things the old way than they would have paid to optimize their processes to match the system.​

The Lidl Customization Standoff

Lidl’s seven-year, €500 million SAP S/4HANA implementation failure illustrates this principle perfectly. The core issue wasn’t that SAP couldn’t handle Lidl’s business—it was that Lidl wouldn’t adapt its business to match SAP’s model.

Lidl’s inventory management system sorted products by purchase price (what the company paid), while SAP S/4HANA sorted by retail price (what customers paid). This difference reflected different priorities: Lidl prioritized tracking supplier costs, while standard retail ERP prioritizes customer-facing pricing.

Rather than accepting the new approach and redesigning their cost-tracking to work differently (perhaps through different reporting), Lidl demanded extensive customization to preserve their existing method. The project team tried to customize SAP to sort by purchase price, but every attempt created ripple effects through other modules. After seven years of struggle, the company abandoned the project and returned to its legacy system—meaning it paid €500 million to ultimately keep doing exactly what it was doing before.​

The Customization Cost Spiral

Over-customized ERP systems create mounting costs across their entire lifecycle:

• Implementation costs explode: Every customization adds weeks to the implementation timeline and requires specialized consulting expertise that commands premium rates. What seemed like “minor tweaks” during the blueprint phase can add hundreds of thousands of dollars to total project cost.
• Upgrade costs become prohibitive: When new versions of the ERP software are released with security updates, performance improvements, and new features, upgrading a heavily customized system becomes extraordinarily expensive. Consultants must rewrite custom code, test modified integrations, and validate that customizations still function. Many companies find themselves stuck on old versions of software, unable to upgrade because the cost is prohibitive.
• Maintenance becomes permanent consulting: Customized systems require ongoing specialized expertise. You become dependent on the consultants who built the customizations, paying premium rates for ongoing maintenance and fixes that you’d never need with a standard system.
• The system becomes fragile: Over-customized systems are brittle. Changes to one customization can break others. As the system ages and more customizations accumulate, making changes becomes increasingly risky and expensive.

How to Avoid It:

• Start with a principle: leverage ERP best practices, don’t fight them. Before requesting a customization, ask “Why is the system designed this way? What industry best practice does this reflect? Should we adapt our process to match this best practice?”
• Prioritize ruthlessly. Not every request for customization deserves approval. Establish a change control board that asks: “Does this customization provide genuine business value? Can we achieve this through standard configuration instead? What’s the long-term cost?”
• Distinguish between “must-have” and “nice-to-have” customizations. Deploy the system with only critical customizations. For less essential needs, build external systems that integrate with the ERP rather than modifying the ERP itself.
• Plan for post-implementation optimization. Many companies attempt too many customizations during the initial implementation. A better approach: deploy the system with minimal customization, stabilize operations for 6-12 months, then strategically add customizations based on actual operational needs rather than speculative requirements.
• Use standard configuration wherever possible. Modern ERP systems like SAP Business One and Microsoft Dynamics 365 Business Central offer extensive configuration options (parameters, setup tables, workflow rules) that achieve 80-90% of most organizations’ needs without custom code.
• Calculate total cost of ownership for each customization, not just implementation cost. Include upgrade costs, maintenance costs, and opportunity costs of consulting resources that could be deployed elsewhere. Many customizations fail this analysis when long-term costs are factored in.

Real-World Success: What Companies Are Getting Right

While ERP failures are common, successful implementations provide a contrasting blueprint. Companies implementing SAP Business One and Microsoft Dynamics 365 Business Central increasingly follow structured methodologies that avoid these five mistakes.

SAP Business One’s Accelerated Implementation Program (AIP)

Organizations successfully implementing SAP Business One follow the Accelerated Implementation Program, which includes five structured phases:​

1. Project Preparation – Define objectives, assess current processes, allocate resources
2. Business Blueprint – Gather requirements, design solutions, identify scope changes
3. Project Realization – Configure systems, migrate data, test processes, train users
4. Final Preparation – Establish support plans, train end-users, prepare for go-live
5. Go-Live and Support – Monitor the live environment and provide ongoing support

This structured approach emphasizes business objectives first, then maps those objectives to system configuration. It explicitly includes change management, training, and support phases—not as afterthoughts, but as integral components.

Microsoft Dynamics 365 Business Central Success Metrics

Organizations implementing Microsoft Business Central report remarkable results:​

• 162% average ROI over three years – A $1 million investment returns $1.62 million in benefits by year three
• 10-20% productivity gains – Finance and operations teams spend 10-20% less time on routine tasks
• Accelerated month-end close – Month-end financial close time reduced from 15 days to 6 days
• 50% reduction in daily task time – Automation and streamlined workflows cut daily operational work in half

These results aren’t accidents—they follow from disciplined implementation that secures executive sponsorship, manages change effectively, minimizes customization, and invests adequately in training.

One notable example: a financial services organization following the Microsoft Success by Design framework reported 95% reduction in operational costs through automation, improved collaboration across hybrid teams, enhanced financial reporting with dimensional analysis, and a scalable foundation for future Microsoft solution adoption.

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The Path Forward: Your ERP Implementation Checklist

To avoid the fate of Hershey, Revlon, Nike, National Grid, Lidl, and ICL, ensure your ERP implementation includes these foundational elements:

Before You Select a Vendor:

• Define clear, measurable business objectives aligned with strategic goals
• Conduct comprehensive business process analysis—map what’s working and what isn’t
• Assess data quality and readiness
• Establish realistic timelines and budgets (don’t compress for artificial dates)

During Vendor Selection:

• Evaluate industry-specific experience, not just generic ERP expertise
• Assess hands-on system fit through scenario testing with your actual workflows
• Calculate total cost of ownership including implementation, training, maintenance, and upgrade costs
• Prioritize cultural fit and partnership capability, not just lowest cost

During Implementation:

• Secure active executive sponsorship and establish governance structures
• Allocate 10-15% of budget to change management and training
• Involve end-users throughout design and testing, not just at training time
• Enforce rigorous testing before go-live—never compress testing to meet dates
• Minimize customization; adapt your processes to ERP best practices instead
• Plan for adequate data migration resources and time
• Establish clear success metrics and KPIs before implementation begins

After Go-Live:

• Provide intensive support during the first 6-12 months
• Conduct a post-implementation audit to identify quick wins and optimization opportunities
• Plan ongoing training to address edge cases and exceptions
• Measure actual ROI against projected benefits
• Build organizational capability to make future system enhancements without external consultants

Conclusion

ERP implementation failures don’t happen because the technology is flawed. They happen because companies rush timelines, make poor vendor choices, underestimate data complexity, neglect change management, and allow scope creep to spiral into over-customization.

Yet these mistakes are entirely preventable.

The companies that succeed with ERP implementations share common characteristics: they secure genuine executive sponsorship early, they invest heavily in change management and training, they select systems that fit their business model rather than trying to force fit incompatible solutions, they resist the customization trap, and they build adequate time into their timelines for rigorous testing and data migration.

Your ERP implementation doesn’t have to become a Wall Street Journal cautionary tale. By learning from the failures of companies like Hershey, Revlon, and Nike—and by following the successful playbook used by growing organizations implementing SAP Business One and Microsoft Dynamics 365 Business Central—you can build an implementation that delivers genuine business value rather than expensive chaos.

The investment in a properly planned, well-managed ERP implementation returns dividends for years. The cost of a poorly managed implementation extends far beyond the initial project budget. The choice is yours—and the time to make the right choice is now, before implementation begins.