Hidden costs of sticking with a broken ERP – and how to get back on track

An ERP should make it easier to run your manufacturing business. It should give your teams the information they need to plan production, manage materials, track costs and keep orders moving.

But when it stops doing those things reliably, problems start to arise. Staff spend more time checking data, planners lose production time because they are working with incomplete information, and too much cash gets tied up in stock because inventory figures cannot be trusted. These inefficiencies might seem small, but over time they can add up to a significant cost.

With 70% of UK manufacturers now investing in digital tools, including cloud-based ERPs, sticking with a system that is holding you back could leave you losing ground to competitors.

If your ERP is no longer supporting the way your business operates, replacing it may feel like a major undertaking. But sticking with a system that people cannot rely on also takes its toll. Here are five of the hidden costs to look out for – from increased admin and production rework to excess stock and technical debt – followed by three practical steps you can take to get your ERP back on track.

Key takeaways

• A poorly performing ERP can affect your manufacturing operations in ways that are easy to overlook. It can lead to production delays and inaccurate inventory data, and force staff to spend valuable time checking and correcting information.
• When people stop trusting their ERP, they often create their own ways of working around it. Spreadsheets, manual processes and knowledge held by a small number of employees can become difficult to interpret or verify, and cause the system to become harder to manage over time.
• An ERP that does not fit the way you work can also hold back improvements elsewhere. Difficult customisations, poor data and disconnected processes make it harder to use your technology and expertise effectively as the business changes.
• Replacing an ERP starts with understanding what needs to change. Identify the problems you need to solve, clean up your data and choose software that supports your manufacturing processes from the start.

Admin burden

When an ERP stops giving people the information they need, spreadsheets are often the first thing they turn to. They are familiar, easy to change and useful for filling in the gaps left by the main system.

The problem comes when those spreadsheets become part of the process. Staff may have to re-enter bill of materials (BOM) data, check the status of jobs across different systems or update information in more than one place. Each task might only take a few minutes, but repeated across a team and thousands of jobs, that time adds up.

There is also a greater risk of errors. A spreadsheet can quickly become out of date, particularly when several people are working from different versions. If someone makes a change in one place but it does not make its way into the ERP, the next person working with that information may be making decisions based on data that is no longer correct.

The result is an ERP that should be reducing admin but instead creates more of it. Your people spend time checking, copying and correcting information that should already be available to them, leaving less time for the work that moves orders through production.

High scrappage and rework rates

When production teams are working with incomplete or outdated information, it becomes harder to plan work accurately. Planners may not have a reliable view of what is happening elsewhere, which means jobs are often scheduled around assumptions rather than what your production team can deliver.

A job might be scheduled before the right information is available, materials may be ordered based on an inaccurate view of demand, or a change to a job may not reach everyone who needs to know about it. When mistakes like these reach the shop floor, they can lead to wasted material, rework or time spent putting an order back on track.

An ERP should give planners and production teams the same information, so changes are visible and decisions are based on the latest information available. If people have to piece that information together from spreadsheets, emails or conversations, there is more room for mistakes.

The cost of scrap and rework is easy to see when you look at a single job. The harder part is recognising how much of it comes from the way information is managed across the business. A better-connected ERP can help reduce those avoidable errors by giving the people planning and producing the work access to the same information.

Cash stuck in inventory

Good inventory management depends on having accurate information. If your teams cannot rely on the stock figures in your ERP, it becomes harder to know what you have, what you need and when you need it.

One common response is to hold more stock than you would otherwise need. Keeping extra raw materials and components on hand can feel like a sensible way to avoid shortages, particularly when demand changes or lead times are uncertain. But the more stock you hold, the more cash is tied up in materials sitting in the warehouse rather than being used elsewhere.

This can also make it harder to spot what you really need to order. If stock records are incomplete or out of date, purchasing decisions become less certain. You may order materials you already have, while still carrying a buffer against shortages because you do not have enough confidence in the figures.

According to our 2026 Manufacturing Trends Report, over half (53%) of manufacturers use ERP data to optimise their inventories, highlighting the importance of having accurate, up-to-date information when deciding what stock to hold. When that information is unreliable, it becomes harder to make those decisions confidently.

Cost of opportunity

The cost of a broken ERP is not limited to the time and money it wastes today. It can also make it harder to improve the way you work and take advantage of opportunities as your business grows.

One reason is that people gradually lose confidence in a system they do not use properly. If training stops after implementation, new starters may learn from colleagues rather than from a consistent process, while experienced employees may develop their own ways of getting around problems. Over time, fewer people understand how the ERP is meant to be used, and more of the business's knowledge sits with a small number of individuals.

This problem becomes more obvious when someone leaves. If one experienced employee is the only person who knows how to handle a particular process or find the right information, replacing them can mean losing knowledge as well as a member of the team. It can also make it harder to introduce changes, because people are reluctant to alter a system they already find difficult to use.

When your ERP no longer fits the way you operate, it can also stop you getting the best value from the people and technology you already have. Instead of using better data to identify opportunities, improve processes or support growth, your teams can end up spending their time finding ways to keep the existing system running.

Technical debt

Some level of ERP customisation is normal, as manufacturers often need to configure their systems around specific working patterns. But problems can arise when a generic platform needs extensive custom code to handle processes that are central to your operation.

This is particularly relevant for manufacturers with complex requirements such as Make-to-Order (MTO) and Engineer-to-Order (ETO). If the ERP does not support those processes out of the box, you may need bespoke development to make the system fit.

Maintaining, testing and updating that code adds work, and the more changes you make to the standard software, the more difficult upgrades can become. A new version of the ERP might introduce changes that conflict with your custom code, turning what should be a routine upgrade into a larger project.

Over time, this can leave manufacturers stuck with an older version of their ERP because the cost and disruption of upgrading feels too high. You can end up spending money maintaining a system that is increasingly difficult to change, while missing out on improvements in newer versions.

Choosing an ERP that already supports the way you manufacture can reduce the need for this kind of custom development. It means more of your investment goes towards using the system, rather than continually changing it to fit your business.

If your current system is no longer working for your business, replacing it can feel like a big decision. Before you start comparing software, it is worth being clear about what you need to fix and what you want the new system to achieve.

Identify the problem you want to solve

It can be tempting to start with the technology and work backwards, particularly when new ERP systems offer a long list of features. A better starting point is to identify where your current system is costing you time or money – for example due to inaccurate job costing, slow quoting or a lack of reliable information for production planning. 

The important thing is to define the problem clearly enough that you can measure whether a new system has solved it. Once you know what is not working, you can assess potential ERP systems against those requirements rather than choosing one based on features that may have little relevance to your operation.

Clean up your data

A new ERP will only be as useful as the information you put into it. After years of manual entry, your data may contain duplicate supplier records, outdated part specifications or inventory figures that do not match what is actually in your warehouse.

Those problems do not disappear when you move to a new system. An ERP brings purchasing, inventory and production information together, so an error in one area can affect the information people rely on elsewhere. If you move poor-quality data into the new system, you risk carrying those problems with you and undermining confidence in the ERP from the start.

The data cleansing process can also be an opportunity to use AI tools, which can help identify duplicate records, flag inconsistencies and standardise formats across large datasets. This reduces some of the repetitive work involved in preparing data for migration. 

Choose software built for manufacturing

If your current ERP does not suit the way you work, replacing it with another generic system is unlikely to solve the problem. Look for software that already supports the processes your teams rely on, rather than expecting your staff to adapt their work to the system.

This is particularly important when your processes involve multiple teams or complex production requirements. Your ERP should be able to handle the relationships between sales, engineering, purchasing, inventory and production without relying on extensive custom development.

It is also worth looking beyond the features on the software's product sheet. Ask how the system handles the processes that cause problems today, how much configuration is required and what happens when you need to change or upgrade it. The aim is to find an ERP that supports the way you work without creating another layer of complexity.

A manufacturing-specific ERP can also reduce the need for the separate spreadsheets and manual processes that often build up around a system that does not fit. With the right information in one place, teams can spend less time checking and reconciling data and more time using it to assist their work.

Choosing software that fits your operation from the start can help you avoid repeating the problems that made your existing ERP a cost burden in the first place.