10 signs your ERP implementation is failing: How to spot the problems before they damage your business

An ERP can last for decades, so you may well be the first person for years who’s had the responsibility for implementing a new one.  

Perhaps you have come into the business recently and seen straight away that the current system is outdated and unfit for purpose. Or maybe you’re overseeing an implementation project that’s going or gone badly wrong. Pulling the plug on it at this stage feels like an enormous risk and cost, but it might be necessary to save your business from further financial damage.  

There are plenty of high-profile examples online of big organisations seeing their ERP fail spectacularly. For small and mid-sized manufacturers, a poor product or implementation experience might not mean an outright disaster – often, it’s the slow erosion of margins, staff frustration and a low return-on-investment. 

Catching problems early and taking decisive action is critical. But how do you know your ERP is failing? This article looks at the 10 most common signs.  

Key takeaways

• ERPs fail slowly: Issues aren’t always noticeable at first – but become clear when you find employees continuing to use spreadsheets, or relying on last-minute reactive scheduling rather than planning ahead with confidence.  
• The software isn’t usually to blame: Most modern ERP software performs well technically and is easy-to-use. But generic solutions might not be well-suited to the needs of discrete manufacturers and machine shops, resulting in higher-than-expected costs.
• Rescue is possible: You don’t have to live with a poorly-performing ERP – a quick test will highlight the areas for improvement and help you plan your next steps.  

Every business experiences an ERP failure differently, and it’s rarely down to the software alone. You might choose a solution with great reviews, only to find that it’s not suited to the complex workflows of discrete manufacturing. Or your data is poor quality, leading to unreliable decisions.  

Success also depends on your team’s appetite for change, willingness to adopt a new ERP, and the implementation process itself. How well your vendor supported you in choosing the right solution for your business size and objectives also matters, as well as what they’ve done to smooth the transition.  

Here are some common signs to look out for: 

1. Teams continue to work on spreadsheets: If the software isn’t working for your team, they’ll quickly revert to the methods they know – usually spreadsheets. Offline spreadsheets lack flexibility and oversight, and there are issues around version control, duplication and errors. Online spreadsheets might be easier to update, view and share but are still error-prone and backward looking. If employees still choose spreadsheets, despite the well-known problems associated with them, it’s a sign your ERP isn’t up to scratch.  
2. Managers don’t trust the reports: If there’s an underlying trust issue, decision-makers will be hesitant, which leads to missed opportunities or time lost during manual checks. 
3. Scheduling is stuck in reactive mode: You’d hoped the ERP would allow the team to be more forward-looking, allowing you to create an optimal schedule based on demand and resources. The reality is different, with teams scrambling to fit in jobs and problems like machine breakdowns and rushed orders. 
4. Orders delivered late, stock runs out: An ERP should make it easier to meet your customers’ expectations, ensuring full on-time delivery with no stockouts. When the opposite happens, you know it’s not delivering what you need.  
5. Shop floor staff are reluctant to adopt the new system: Staff sometimes resist new software because it’s difficult to learn, disruptive, or are concerned that automation will threaten their jobs. Everyone needs time to adjust to a new system, no matter how well it performs in the long run. But alarm bells should be ringing if your team persistently highlights issues, and it’s slowing them down, not making their lives easier. 
6. More admin, not less: A generic or poorly-configured ERP means teams are continually fighting against it and often reverting to spreadsheets when it doesn’t do what they want.  
7. You need custom code: A solution may look budget-friendly initially, but adapting the code to meet standard manufacturing requirements creates a hidden cost, or debt – assuming customisation is even possible. Custom code is also tricky to update and maintain, and can bring security risks. 
8. Implementation costs escalate: From cleaning up your data to excessive consultancy fees, you see costs spiral out of control even before the system goes live.  
9. Training and support dips: If training and support stops after launch, existing staff could miss out on new features, while new hires may receive patchy or non-existent training, instead having to work out how the system works for themselves. 
10. Poor ROI: Your finance director has raised concerns about the mismatch between expected revenue and profit gains versus implementation costs (including code customisation, training and consultants’ fees that might not have been factored in at the start).  

Choosing the wrong ERP solution will almost certainly lead to failure -- but it’s only part of the problem. Other fundamental challenges can also set you back: 

• Digitising inefficient processes: Transferring an ineffective process into an ERP doesn’t improve it - it just digitises it. You’ll experience the same inefficiencies especially when you try and scale up.
• Poor data quality: Migrating uncleaned, duplicate, or corrupted data into a new system guarantees inaccurate reporting from the start.
• Lack of staff engagement: Employees will not change long-term habits just because you introduce new software – it has to deliver value. There are always tech advocates in any organisation at every level so ask them to help choose and champion the technology their teams will be using.
• Your vendor isn’t a partner: Some solutions are cheap because they’re not backed by reliable support during the implementation and afterwards. Choosing a vendor that understands your industry and can manage the implementation project ensures that the software aligns with your workflows and business goals. 

For small businesses, implementation is quick and straightforward – just five days for Ridder iQ Essentials (5-50 users).  

Larger manufacturing companies need to do more work before going live but the process can be broken down into stages, reducing the risk and ensuring that you see value. A good vendor will become a partner, not just a supplier, which could help to reduce the spend on consultants and help you get the most from the system.

Our team has delivered implementation projects for hundreds of mid-sized manufacturers (50-300 users) deploying Ridder iQ – ECI’s ERP developed specifically for machine shops. Before committing to the project, the team creates a blueprint based on what you need. Next, they build this into a clear system design, and invite feedback from different departments, so there’s buy-in from the start.

The acceptance test is crucial; Auditing, standardising, cleansing and correcting data before it is added to the ERP. Moving all your core operational data (time tracking, sales orders and production scheduling) to your ERP ensures that everyone is acting on the same insights, instead of it being siloed, out-of-date or contradictory.  

This is also the time to identify and empower advocates for the new system, and most importantly, communicate to all the teams why it has been introduced and how they’ll benefit.

After go-live, there are steps you can take to embed and scale the software.  

The first is to make sure everyone is using the system correctly and consistently, so ask them what’s working and whether there are training or functionality gaps. It’s worth testing the system on one task or challenge, such as scheduling, to get a proof-of-concept. Demonstrating tangible returns early on, such as reduced defect rate or number of hours saved, should satisfy everyone from finance directors to shop floor teams.

Then it’s about continuous improvement. How can you upskill the team and make the most of the features your ERP offers, including new ones, and add new modules as needed?  

Your gut might tell you that your ERP is failing if there are no obvious warning signs. Now is the time to reflect honestly on whether or not it’s working.  

To help manufacturers evaluate their software health, we developed the ERP Rescue Audit – a quick checklist covering four operational areas: financial performance, operational efficiency, vendor support, and system integration.