ERP Market Challenges

I didn't know that everyone's second-favourite German supermarket - Lidl (Aldi's the first) - binned a £500m SAP programme until I read about it at the weekend. Over seven years they poured half a billion euros into a SAP ERP rollout, and then scrapped it. Why? Because they refused to change their own processes. SAP was built to run on retail prices. Lidl insisted on using purchase prices. That single legacy quirk unravelled the whole thing. The same could be said of many a project - especially those promising transformational returns. You can't have those returns by grafting a technology solution over the top of legacy processes, and with people who are resistant to change. “They don’t have the right level of business engagement, they do not have the right people to measure business outcomes and the business case is put on a shelf and never looked at again” said an analyst in the piece I was reading. If you’re not willing to optimise your processes, you’ll end up spending millions trying to bend the software instead. And when the vendor says “best practice,” it’s not a suggestion. I know I'm bringing this topic up a lot lately, but that's because I'm seeing similar behaviour to the Lidl story in several facets of many projects; from RFP stage through to delivery, the key is the process. Asking a vendor to fit their technology to a legacy process just isn't going to give you the outcome you want without compromise. EDIT: Tobias has highlighted the following update: "The Appeal of In-House Development, By: Berthold Wesseler" Discount retailer Lidl is investing a nine-figure sum in its new merchandise management system, called Wawi Nexus. This will once again be a bespoke development, after an interim modernisation project based on standard software failed. According to “Lebensmittel Zeitung”, the cloud-based system is intended to link the online business more closely with the physical stores. Over seven years, the retail chain belonging to the Schwarz Group had already invested an estimated €500 million in replacing its in-house system from the 1990s (“Wawi”) with the “Electronic Lidl Merchandise Management Information System” when the ambitious SAP project “Elwis” was halted in 2018. Elwis was based on SAP’s Retail powered by HANA package and Software AG’s webMethods integration middleware. The largest IT transformation project in the company’s history was quietly laid to rest, even though the Neckarsulm-based retailer had already introduced the new system in four countries."

The biggest businesses can get major programmes horribly wrong. Here are 4 famous examples, the fundamental reasons for failure and how that might have been avoided. Hershey: Sought to replace its legacy IT systems with a more powerful ERP system. However, due to a rushed timeline and inadequate testing, the implementation encountered severe issues. Orders worth over $100 million were not fulfilled. Quarterly revenues fell by 19% and the share price by 8% Key Failures: ❌ Rushed implementation without sufficient testing ❌ Lack of clear goals for the transition ❌ Inadequate attention and resource allocation Hewlett Packard: Wanted to consolidate its IT systems into one ERP. They planned to migrate to SAP, expecting any issues to be resolved within 3 weeks. However, due to the lack of configuration between the new ERP and the old systems, 20% of customer orders were not fulfilled. Insufficient investment in change management and the absence of manual workarounds added to the problems. This entire project cost HP an estimated $160 million in lost revenue and delayed orders. Key Failures: ❌ Failure to address potential migration complications. ❌ Lack of interim solutions and supply chain management strategies. ❌ Inadequate change management planning. Miller Coors: Spent almost $100 million on an ERP implementation to streamline procurement, accounting, and supply chain operations. There were significant delays, leading to the termination of the implementation partner and subsequent legal action. Mistakes included insufficient research on ERP options, choosing an inexperienced implementation partner, and the absence of capable in-house advisers overseeing the project. Key Failures: ❌ Inadequate research and evaluation of ERP options. ❌ Selection of an inexperienced implementation partner. ❌ Lack of in-house expertise and oversight. Revlon: Another ERP implementation disaster. Inadequate planning and testing disrupted production and caused delays in fulfilling customer orders across 22 countries. The consequences included a loss of over $64 million in unshipped orders, a 6.9% drop in share price, and investor lawsuits for financial damages. Key Failures: ❌ Insufficient planning and testing of the ERP system. ❌ Lack of robust backup solutions. ❌ Absence of a comprehensive change management strategy. Lessons to be learned: ✅ Thoroughly test and evaluate new software before deployment. ✅ Establish robust backup solutions to address unforeseen challenges. ✅ Design and implement a comprehensive change management strategy during the transition to new tools and solutions. ✅ Ensure sufficient in-house expertise is available; consider capacity of those people as well as their expertise ✅ Plan as much as is practical and sensible ✅ Don’t try to do too much too quickly with too few people ✅ Don’t expect ERP implementation to be straightforward; it rarely is

𝗪𝗵𝘆 𝗱𝗼 𝘀𝗼 𝗺𝗮𝗻𝘆 𝗘𝗥𝗣 𝗺𝗶𝗴𝗿𝗮𝘁𝗶𝗼𝗻𝘀 𝗳𝗮𝗶𝗹? 𝗕𝗲𝗰𝗮𝘂𝘀𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘁𝗿𝗲𝗮𝘁 𝗶𝘁 𝗹𝗶𝗸𝗲 𝗮 𝘀𝗶𝗺𝗽𝗹𝗲 𝘀𝗼𝗳𝘁𝘄𝗮𝗿𝗲 𝗽𝗮𝘁𝗰𝗵, not the business transformation it truly is. Listening to my network, there seems to be a rush to complete ERP migrations, as fast as possible, with SAP S/4HANA plans driving most of it. But an ERP system is more than just an IT upgrade. It’s a chance to redesign how your business operates and build a solution architecture that supports agility and innovation. While necessary, these migrations often become redundant without proper alignment to business goals. Something, I've seen happen! Here some get rights to consider: ◉ 𝗔𝗹𝗶𝗴𝗻 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗮𝗻𝗱 𝘁𝗲𝗰𝗵 𝗴𝗼𝗮𝗹𝘀 Ensure that IT and business leaders are on the same page. ERP systems serve broader business objectives, such as innovation, improving procurement strategies, and enhancing supplier relationships. ◉ 𝗙𝗼𝗰𝘂𝘀 𝗼𝗻 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀, 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝘁𝗼𝗼𝗹𝘀. Instead of getting caught up in the technology itself, be clear about the business benefits you'd like to achieve. New ERP functionality can be of support to achieve goals like efficiency, cost reduction, and agility. ◉ 𝗦𝗶𝗺𝗽𝗹𝗶𝗳𝘆 𝘄𝗼𝗿𝗸𝗳𝗹𝗼𝘄𝘀 𝗮𝗻𝗱 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 𝗲𝗻𝗱-𝘁𝗼-𝗲𝗻𝗱 Don't just migrate complex, outdated processes but streamline them end-to-end. Reevaluate processes for efficiency and desired outcomes. ◉ 𝗜𝗻𝘃𝗲𝘀𝘁 𝗶𝗻 𝗰𝗵𝗮𝗻𝗴𝗲 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 - 𝗻𝗼𝘁 𝗷𝘂𝘀𝘁 𝗶𝗻 𝘁𝗿𝗮𝗶𝗻𝗶𝗻𝗴 ERP migrations often fail due to poor user adoption. Beyond training, invest in communication & ongoing support showing the value and relevance of the system to users. ◉ 𝗜𝗻𝘃𝗼𝗹𝘃𝗲 𝗰𝗿𝗼𝘀𝘀-𝗳𝘂𝗻𝗰𝘁𝗶𝗼𝗻𝗮𝗹 𝘁𝗲𝗮𝗺𝘀 ERP impacts every area of the business, so cross-team collaboration is essential. Involve stakeholders from finance, procurement, IT, and operations ensures the system meets everyone’s needs. ◉ 𝗙𝗼𝗰𝘂𝘀 𝗼𝗻 𝗱𝗮𝘁𝗮 𝗾𝘂𝗮𝗹𝗶𝘁𝘆 - 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗰𝗼𝗺𝗽𝗿𝗼𝗺𝗶𝘀𝗲 An ERP system is only as good as the data it processes. Ensure that data is clean, consistent, and reliable before migration. Dirty or incomplete data is one of the biggest challenges post-go-live. ◉ 𝗣𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝘀𝗲 𝗦𝘆𝘀𝘁𝗲𝗺 𝗳𝗹𝗲𝘅𝗶𝗯𝗶𝗹𝗶𝘁𝘆 𝗮𝗻𝗱 𝗖𝗼𝗺𝗽𝗼𝘀𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Choose an architecture which allows for future-proofing and integration of new features, scalability and integration. Business models evolve, and your ERP must evolve with them." ◉ 𝗦𝗲𝘁 𝗿𝗲𝗮𝗹𝗶𝘀𝘁𝗶𝗰 𝘁𝗶𝗺𝗲𝗹𝗶𝗻𝗲𝘀 - 𝗶𝘁'𝘀 𝗻𝗼𝘁 𝗴𝗼𝗶𝗻𝗴 𝘁𝗼 𝗯𝗲 𝗾𝘂𝗶𝗰𝗸 𝗶𝗳 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝘃𝗲 Don’t rush an implementation. ERP migrations are complex and require time to integrate properly. A phased approach allows for troubleshooting and mitigates a risk for failure. ❓Any other "get rights" i missed and you would add from your experience. #erp #businesstransformation #migration #sap4hana

I can tell within 10 minutes if an ERP project will succeed. I look at who's NOT in the room. If IT sent a project manager instead of the CIO showing up themselves, that's a problem.  You're about to build something that needs to integrate with your entire tech stack, and the person who owns that stack isn't involved enough to be there. If your biggest revenue generator "can't step away from customers," that tells me something too.  You're building a system for people who are already signaling they won't prioritize learning it.  They'll be too busy to train, too busy to adopt it, and too valuable to push back on. If the person who actually does the work sent their manager to represent them, you're going to get a secondhand version of how the work happens.  The system will get designed around how leadership thinks things work, not how they actually work on the ground. I've seen this pattern enough times to know: 𝘁𝗵𝗲 𝗽𝗲𝗼𝗽𝗹𝗲 𝘄𝗵𝗼 𝗮𝗿𝗲 𝘁𝗼𝗼 𝗰𝗿𝗶𝘁𝗶𝗰𝗮𝗹 𝗼𝗿 𝘁𝗼𝗼 𝗯𝘂𝘀𝘆 𝘁𝗼 𝗯𝗲 𝗶𝗻𝘃𝗼𝗹𝘃𝗲𝗱 𝗲𝗮𝗿𝗹𝘆 𝗮𝗿𝗲 𝘁𝗵𝗲 𝘀𝗮𝗺𝗲 𝗽𝗲𝗼𝗽𝗹𝗲 𝘄𝗵𝗼 𝗱𝗲𝗿𝗮𝗶𝗹 𝘁𝗵𝗶𝗻𝗴𝘀 𝗹𝗮𝘁𝗲𝗿. Not on purpose. But when the integrations aren't working during testing, IT points out they were never really consulted.  When your top performers won't use the system, they'll mention that nobody actually asked them what they needed.  When the workflows are off, frontline personnel say "yeah, we knew that wouldn't work." The projects that do work have the hard-to-schedule people in the room from the start. The CIO shows up.  Your best operators make the meetings a priority.  The people doing the actual work get to speak, not just their managers. Attendance signals commitment.  And you can't go back and add that commitment six months in when problems show up. Next time you're in a project kickoff, look around. Who's missing? That tells you a lot about what's coming. #ERPImplementation #ProjectManagement #Leadership

ERP Projects Fail for Many Reasons. Ignoring Integrations is the Fastest Way to Doom One. Too often, ERP projects run over budget, take too long and fail to deliver. The culprit? Overlooked integrations. I see this mistake all the time. Companies focus on ERP functionality but forget that no system operates in isolation. Data flows, third-party systems, and automations must be planned from day one—not as an afterthought. That’s why I put together a no-nonsense whitepaper on how to make ERP integrations work instead of becoming a hidden pitfall. 5 Practical takeaways from the whitepaper: 1. Define all data flows at project kickoff – Document dependencies between systems early. Surprises later = delays & cost overruns. 2. Master data first, transactions second – Sync customers, vendors, and products first. If your master data is broken, transactions will fail. 3. Set a realistic integration timeline – Sync integration tasks with ERP rollout. If integrations are late, the entire project stalls. 4. Test with real data, not fake records – Your ERP test system should mirror production. Otherwise, the first real transaction is your actual test. 5. Make integrations visible – Use visual mapping tools to align teams, avoid assumptions, and ensure all critical systems stay connected. Get the full whitepaper here: https://lnkd.in/dfNHA9nN ERP success is not just about the ERP—it’s about how well everything connects. Integrations First. Always. #ERP #Automation #iPaaS #PMO #ProjectManagement

“We budgeted for an ERP at $500K. We’re at $850K now, and it’s still not live.” A CFO told me this recently. And unfortunately, it’s not the first time I’ve heard this story. ERP projects rarely fail because of technology. They fail because of decisions made (or not made) before the system even goes live. 💸 Where does the budget spiral out of control? 🔴 Scope Creep: "Can we also add this?" "What if the system could do that?" A few ‘small’ changes here and there, and suddenly, you're paying for customizations you never planned for. 🔴 Poor Planning: The team underestimated how much time and effort ERP implementation takes. Now, they’re hiring extra resources, delaying timelines, and paying for extended vendor hours. 🔴 Vendor Misalignment: The ERP provider is focused on selling licenses. The implementation partner is focused on going live. But who’s making sure the system actually works for your business? By the time businesses realize this, they’re too deep into the project to turn back. The best way to avoid budget overruns? 💡 Have someone who keeps the project in check from Day 1. Someone who: ✅ Locks the project scope before it gets out of hand. ✅ Ensures planning is realistic, not just optimistic. ✅ Aligns vendors with your business goals—not theirs. 📌 Most ERP projects don’t fail in implementation. They fail in decision-making. ♻️ We, at Affility Consulting, are a team of independent ERP advisors with the expertise and experience to support you through digital and business transformation. 💬 Have you seen ERP budgets spiral out of control? What went wrong? Let’s talk.

📌 3 Layers of Data Problems (And Why Most Projects Break Down) When a data project doesn’t deliver, most leaders zoom in on the outputs: ⤷ Maybe the Power BI dashboard is too complex. ⤷ Maybe the pipeline isn’t automated enough. ⤷ Maybe we just need to migrate everything into Snowflake or BigQuery. But in reality, those aren’t the real problems. They’re just the symptoms. Here’s how things usually break down inside companies: 1️⃣ 𝐓𝐡𝐞 𝐒𝐲𝐦𝐩𝐭𝐨𝐦𝐬 𝐄𝐯𝐞𝐫𝐲𝐨𝐧𝐞 𝐒𝐞𝐞𝐬 This is what shows up on the surface: → The finance report in Excel doesn’t match the dashboard in Power BI. → Users want to export dashboards into spreadsheets to "clean" them manually. → Reports only get opened at month-end or before board meetings. At this point, leaders assume it’s a tooling or design issue. But fixing symptoms never solves the underlying cause. 2️⃣ 𝐓𝐡𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐆𝐚𝐩𝐬 Dig deeper and you’ll find leaks in the foundation: → No shared definition of core KPIs → No governance. → Projects are started without clear goals, timelines, or accountability. This is where most organizations get stuck. The data team keeps building pipelines, models, and dashboards. But without alignment, every deliverable feels like it’s solving the wrong problem. 3️⃣ 𝐓𝐡𝐞 𝐑𝐨𝐨𝐭 𝐂𝐚𝐮𝐬𝐞𝐬 (𝐋𝐞𝐚𝐝𝐞𝐫𝐬𝐡𝐢𝐩) The hardest truth is this: most data failures don’t start with the engineers or analysts. They start at the leadership level. The business problem isn’t clearly defined. There is no single point of accountability for data ownership. The CRM, ERP, and warehouse all tell different stories. Leaders still see reporting as the end goal, instead of a system for better, faster decision-making. This is why the same problems resurface project after project. Without clarity at the top, no stack or tool can fix it. Remember: You don’t fix data problems by fixing deliverables. You fix them by creating clarity and accountability at the top. ⤷ A clear business problem comes before pipelines. ⤷ Shared definitions come before dashboards. ⤷ Ownership and governance come before adoption. When those foundations are missing, every project will struggle. No matter how advanced the stack (Fabric, Snowflake, Databricks, or anything else). #BusinessIntelligence #DataStrategy

Why do so many ERP projects in manufacturing and distribution go off the rails? It’s rarely the software. It’s the strategy—or lack thereof. In Part 4 of our ERP best practices series, I’m diving into the 10 most common pitfalls we see in ERP adoption—and the real-world pivots that keep projects on track. From misaligned teams and scope creep to data disasters and partner missteps, this post is for any leader preparing for (or in the middle of) an ERP journey. We've led over 1,800 successful implementations—and the insights here come from deep experience across the manufacturing and distribution landscape. 🔴 Align early. 🔴 Choose the right partner, not just a software. 🔴 Think beyond go-live. 🔴 Set your team—and your data—up for long-term success. #ERP #ManufacturingExcellence #DigitalTransformation #Distribution #WMsynergy #Leadership #CloudERP #ERPImplementation #SmartManufacturing #CloudERP #DigitalTransformation #Manufacturing

Five years ago, I was part of an ERP rollout that FAILED—spectacularly. It was a mid-sized manufacturing company, and they were ready to take their operations to the next level. The leadership team was enthusiastic, the ERP system was top-tier, and the budget? Healthy. But within three months, the cracks began to show: ❌ Teams were overwhelmed and disengaged. ❌ Processes didn’t align with the system. ❌ UAT was rushed, leaving critical issues unresolved. By the time we hit go-live, it was chaos. Orders were delayed, inventory was misplaced, and morale hit rock bottom. What went wrong? Looking back, the mistakes were clear: #1. We prioritized speed over alignment. Discovery was rushed, and the implementation partner didn’t fully understand the nuances of the business. #2. Change management was an afterthought. People didn’t know how this “new system” fit into their day-to-day workflows. #3. We underestimated testing. The team treated UAT like a checkbox instead of a critical safety net. It was a hard pill to swallow, but here’s the silver lining: failure taught us exactly how to do it better. What did we learn? When we rebooted the project months later, here’s what made the difference: ✓ Listening deeply. We revisited processes, engaged teams, and ensured the system fit the business—not the other way around. ✓ Prioritizing people. We brought end-users into the fold early and often, with hands-on training and a focus on “what’s in it for them.” ✓ Testing like our lives depended on it. We pressure-tested every scenario, uncovering critical issues before go-live. The second launch wasn’t just successful—it became a turning point for the company. 📈 Five years later, they’re thriving, and that ERP system has scaled with them every step of the way. Here’s the truth: ERP projects don’t fail because of technology—they fail because people, processes, and systems aren’t aligned. 💬 What’s your biggest “lesson learned” during an ERP rollout? Share your story. I’d love to hear it. 👇 Follow me at Shobha Moni to get the best out of your favourite ERP system.

The ERP implementation: $600K. The integrations to make it actually work: $780K. Yeah. You read that right. The "duct tape" cost more than the engine. Here is the anatomy of a $1.4M mistake. The client wanted a clean, modern cloud ERP. But they refused to let go of their legacy baggage The custom CRM (Sunk cost fallacy). The WMS (Change aversion). The Billing System ("Accounting likes it"). I asked the CFO: "Why not consolidate these into the ERP?" His answer: "We don't want to disrupt those areas right now." Famous last words. To avoid "disruption," we built a Frankenstein monster: CRM Sync ($180K): Because sales wouldn't switch. Warehouse Middleware ($220K): Because the WMS had no API. E-commerce Bridge ($150K): Custom mods on Shopify broke standard connectors. HR & Billing Feeds ($230K): Bridging ancient systems to modern tech. Total Integration Cost: $780K. The Aftermath (6 Months Later): Three integrations failed. Not because the code was bad, but because the ecosystem changed. Shopify updated → Integration broke. WMS vendor patched → Middleware crashed. CRM team added a field → Data sync failed. I told the CFO: "You paid more to keep your old systems than you would have to replace them." If we had consolidated everything into SAP: Total Cost: ~$900K. Single point of truth. Unified support. Instead, they paid $1.475M to maintain six points of failure. Every integration you build is technical debt. It will break. It will slow you down. It will cost 3x more than you budget. If you are implementing an ERP to simplify your business, don't complicate it with eight integrations. Consolidate first. Integrate only when you absolutely must. Before you sign that SOW, run the math Cost to Integrate + Maintenance vs. Cost to Replace. If integration costs more, kill the legacy system. Don't trap yourself in integration hell just to avoid an awkward conversation with the Sales VP.