Top 7 Common ERP Implementation Challenges And How To Solve Them (Updated 2024)

Every ERP system promises to streamline operations, but ERP implementation challenges can make the process complex and time-consuming. From data migration issues to managing costs and timelines, there are numerous obstacles that can slow down or derail your ERP system’s launch. 

In this blog, we’ll uncover the top 7 challenges businesses encounter during ERP implementation and share proven strategies to overcome them.

What Is An ERP Implementation?

ERP implementation is the backbone of modern business operations, helping companies integrate key functions like finance, HR, supply chain, and inventory management into a unified system. 

But the journey from planning to deployment is more than just installing software—it's about transforming how your business operates, and it requires careful execution to ensure success.

The process typically follows these key stages:

1. Planning: This involves defining business requirements, setting project goals, and selecting an ERP solution (mở ngoặc thêm ví dụ như Odoo,...), taking 18 to 24 months from start to full deployment
2. Design and Configuration:  At this stage, the system is configured to meet specific business needs.
3. Data Migration: Migrating data from your old systems to a new ERP platform can be quite intricate, depending on the structure of your existing systems and the complexity of your data. 
4. Testing: Ensuring every feature works seamlessly. 
5. Training: Without employee buy-in, even the best ERP systems struggle. Proper training reduces user resistance and accelerates adoption.
6. Deployment: Launching the system company-wide, but this isn't the finish line—it's just the beginning of continuous improvement.
7. Ongoing Support and Maintenance: ERP systems require regular updates and troubleshooting to stay relevant and effective. Companies that invest in post-launch support experience a 20% higher return on their ERP investment.

Why Is ERP Implementation Challenging for Organizations?

ERP implementation can come with various challenges along the process,  because ERP systems are designed to integrate multiple facets of a business—such as finance, HR, inventory, and supply chain—into a single platform. 

This requires a deep understanding of how each department operates and how data flows between them. Without thorough analysis and planning, these challenges can cause ERP implementations to fail to align with the company’s unique processes, leading to operational disruption.

7 Key ERP Implementation Challenges That Secure a Complete Failure for Businesses

#1. Project management

Around 24% of ERP projects fail due to lack of project governance and oversight. Thus, one of the biggest challenges is project management and planning, coordinating participation from all involved departments, as they balance ERP responsibilities with their daily priorities. 

Strong project and people management, including setting realistic expectations, deadlines, and maintaining communication, is vital for success, along with executive support to keep the project moving. 

Appointing a dedicated leader for an ERP implementation is key to keeping the project on time and within scope. The ideal candidate is experienced, detail-oriented, and skilled at building relationships with stakeholders across the company. A strong project manager motivates the team and ensures smooth collaboration, which can be crucial for success

#2. Cost management

ERP implementation challenges often lead to budget overruns because businesses underestimate the effort required. Cost overruns frequently occur when companies need to hire external consultants to fill resource gaps, especially for customizations. 

Data migration, another significant factor, can account for 10-15% of the total project cost, adding to the overall expenses of ERP implementation.

#3. Data Migration Complexity

One of ERP's key benefits is providing a single, reliable data source for the entire organization. However, data migration—moving data from multiple legacy systems into the ERP—can be tricky. Your data may be scattered across various systems, making it harder to gather than expected.

Therefore, proper planning helps keep the ERP project on time and within budget while also clearing out outdated data. Neglecting this step can lead to duplicate or inaccurate data, delaying your go-live date.

#4. Unclear Business Processes

Unclear business processes can significantly derail an ERP implementation by creating confusion and misalignment across teams. When workflows and operations aren’t well-defined, it becomes difficult to align the ERP system with the organization's needs, resulting in misconfigurations and inefficiencies. 

This lack of clarity leads to miscommunication between departments, delays in decision-making, and a system that doesn't fully support business goals.

#5. Continuous improvement

ERP implementation doesn't end when the system goes live—it’s an ongoing effort. The system must adapt to evolving business needs, and the project team should continue managing it, addressing issues and supporting new requirements. 

Since businesses often use ERP systems for over a decade, regular reviews are essential to ensure the system remains effective. On-premises systems can be tougher to upgrade than cloud-based ones, which automatically offer new features. An outdated ERP can slow the business down, so it's important to periodically decide whether to upgrade or replace it.

#6. Project delays

Project delays are a major source of ERP implementation challenges. Extended timelines lead to increased costs, strained resources, and loss of momentum, often causing key stakeholders to disengage. 

Delays typically come from unclear goals, scope changes, or underestimating the ERP system's complexity. These disruptions make it harder to achieve business objectives and create further complications. 

To avoid delays, clear planning and communication are vital for keeping the project on track and minimizing setbacks.

#7. Security and Compliance Concerns

Data security and privacy challenges affect 34% of ERP projects. 

ERP implementation challenges often arise when centralizing sensitive data into a single system, as even a small vulnerability can expose the business to breaches or unauthorized access. 

In addition, staying compliant with industry regulations and data privacy laws can feel like navigating a minefield. Without prioritizing security, businesses face risks like data loss, hefty fines, and damage to their reputation. 

To avoid these pitfalls, building strong security measures and ensuring the ERP system is fully compliant from day one is crucial to a successful implementation.

How To Overcome Challenges in ERP Implementation

Implementing an ERP system can transform your business, but it’s not without its hurdles. To ensure success, it’s essential to address common ERP implementation challenges head-on. Here are three key strategies to help you overcome these obstacles:

Choosing The Right Vendor

Inadequate vendor support can lead to quick ERP failures, so find.  A vendor that understands your industry and offers customizable solutions will help ensure the ERP system aligns with your unique business needs. 

Take the time to evaluate their experience, support services, and customer reviews to see if they can deliver the ERP solutions suitable for your business and avoid costly misalignments down the road.

Clear Workflows

Unclear or inconsistent workflows are a major cause of ERP implementation challenges. Before the system goes live, it’s crucial to standardize and formalize your business processes. This ensures the ERP solution is configured to support your operations efficiently, reducing confusion and errors across departments.

Continuous Monitoring and Support

We can’t emphasize this enough: The work doesn’t stop once your ERP system is live! Regular monitoring and support are key to ensuring everything runs smoothly. 

Schedule ongoing performance reviews to track how the system is operating and address any glitches before they turn into bigger problems. Providing dedicated support ensures any issues that arise are dealt with quickly, preventing disruptions that could impact business operations.

How Comana Navigated ERP Implementation Challenges for Success

Overview

Comana is a standout ERP solution developed by Golden Owl Solutions, designed to revolutionize enterprise data management. With the mission of providing robust data governance features, Comana supports operational data collection, data analysis, while seamlessly connecting various departments within an organization. 

Serving a workforce of over 200 employees across 10+ internal teams and sub-teams, this platform assists us minimize redundancy, unifies all processes, and ensures clear, prompt, and effective operation.

Challenges

• Data silos: Without a centralized system, data remains isolated in different departments, making it difficult to access comprehensive information and causing inconsistencies between internal teams and projects.
• Manual errors and redundancies: Still rely on manual processes, leading to increased errors, repetitive tasks, and slower operations.
• Inefficient workforce management: HR departments struggle to manage employee information, track attendance, handle payroll, and assess performance effectively.

Solutions

To build this ERP system, they have chosen the dynamic Ruby programming language with Rails framework, suited to build complex structures. Also, we thrived to design and deliver  features tailored to the operational requirements for each team (HR, PC, QC, BD, PO). Along with the website, a mobile app version has been crafted to meet the demands of user's convenience and flexibility. 

Key features

• Workspace: Functioning as a project management tool customized for diverse departments, it supports internal staff in keeping track of daily tasks, while line managers can monitor the real-time progress of each project.
• Customer information management: This module works as a CRM - customized for BD team, storing lead information, tracking customer interactions, managing sales pipelines, and providing appropriate customer service.
• Human resources management: 
• Track and manage daily/monthly staff attendance
• Supervise and handle recruitment process

Bottom line

ERP implementation is a powerful tool for modernizing business operations, but it's not without its challenges. From managing complex data migration and navigating unclear business processes to addressing project delays and ensuring security compliance, businesses must be proactive in tackling these obstacles. 

The key to success lies in thorough planning, strong project management, and continuous improvement. By choosing the right vendor, formalizing workflows, and providing ongoing support, organizations can avoid common pitfalls and ensure their ERP system delivers long-term value.

Are your business struggling with the complexities of ERP implementation and looking for a trusted partner to guide you through the process?

Golden Owl Solutions, with over 9 years of experience in IT outsourcing, specializes in ERP services and supports business clients in building custom ERP software tailored to their specific needs. Whether upgrading an outdated system or implementing a new one, overcoming these ERP implementation challenges is essential for driving efficiency and growth.

FAQs 

Q1. What causes ERP implementation delays, and how can they be avoided?

Delays often stem from unclear goals, scope creep, complexity, and poor project management. To avoid this, have a clear plan, assign a project manager, maintain open communication, and set realistic deadlines. Regular progress reviews help keep things on track.

Q2. How do unclear business processes lead to ERP failure, and how can this be fixed?

Unclear processes cause confusion and misalignment. To fix this, standardize workflows before implementing the ERP to ensure the system aligns with business needs.

Q3. What are the challenges with data migration during ERP implementation, and how can accuracy be ensured?

Data migration issues include scattered or inaccurate data and compatibility problems. Ensure accuracy by auditing, cleaning, and testing data before migrating to the new ERP system.

Q4. What are the biggest security and compliance risks during ERP implementation, and how can they be mitigated?

Centralizing data increases the risk of breaches and non-compliance. Protect against this with encryption, access controls, regular audits, and ensuring the ERP meets all legal and regulatory standards.