7 Biggest ERP Implementation Challenges in 2024 (And How To Solve Them)

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 (Odoo, SAP, Oracle,...), 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 and How to Overcome Them

1. Project Management

Poor project management and lack of oversight cause about 24% of ERP projects to fail. Balancing ERP responsibilities with daily operations across departments can make coordination difficult.

How to Overcome:

• Set Clear Goals and Milestones: Break the project into manageable phases with clear goals and deadlines. This helps keep teams focused and prevents scope creep.
• Appoint a Skilled Project Manager: Choose someone with ERP experience, good communication skills, and the ability to engage stakeholders. They’ll ensure smooth collaboration between departments.
• Regular Check-ins: Implement regular progress reviews with key stakeholders to ensure the project is on track and to quickly address any issues.

2. Cost Management

Many ERP implementations exceed their budgets, often due to unforeseen costs like hiring consultants or underestimating customization requirements. Data migration alone can account for 10-15% of the total cost.

How to Overcome:

• Develop a Realistic Budget: Factor in all potential costs from the outset, including data migration, training, and post-launch support. Build a contingency fund for unexpected expenses.
• Use Phased Implementation: Instead of trying to roll out everything at once, prioritize critical functions and implement them in phases. This controls costs and allows you to spread expenses over time.
• Outsource Wisely: If external help is needed, be strategic in choosing consultants or partners who offer both quality and cost efficiency.

3. Data Migration Complexity

Migrating data from legacy systems into the new ERP can be complex, leading to inaccuracies or delays. In fact, 37% of businesses struggle to maintain data accuracy after ERP implementation.

How to Overcome:

• Audit and Clean Data Before Migration: Conduct a thorough review of your existing data to remove duplicates, outdated information, and irrelevant records. Clean data reduces errors and ensures smoother migration.
• Automate Where Possible: Use data migration tools to automate parts of the process. This reduces manual errors and speeds up the migration.
• Test the Migration Process: Before full migration, run tests on small sets of data to ensure everything is transferred correctly. This minimizes issues when you migrate larger volumes.

4. Unclear Business Processes

Undefined or unclear business processes can cause confusion and misalignment between the ERP system and business needs, leading to misconfigurations and inefficiencies.

How to Overcome:

• Map Out Business Processes in Detail: Before implementation, document your key workflows and processes. This ensures the ERP system is configured to support your operations.
• Engage Key Stakeholders: Involve team members from different departments early in the process to ensure their needs are addressed, and the system is aligned with how they work.
• Use Standard Processes First: Instead of customizing from the start, try using standard ERP processes. This reduces complexity and gives you a better understanding of the system.

5. Continuous Improvement

ERP implementation is not a one-time event. The system must adapt to changing business needs and require continuous management, updates, and improvements.

How to Overcome:

• Create a Long-Term Plan for Upgrades: Review the system regularly (at least annually) to assess whether it meets your current needs. Plan for upgrades and updates, especially for on-premise systems that don’t auto-update like cloud solutions.
• Train Employees Continuously: Regular training ensures that your team is aware of new features or updates and can fully utilize the system's capabilities.
• Gather User Feedback: Get regular feedback from your employees to identify areas of improvement. This will help you spot bottlenecks and inefficiencies early.

6. Project Delays

ERP projects often experience delays due to unclear goals, scope changes, or underestimating the complexity of the implementation. Delays lead to increased costs and resource strain.

How to Overcome:

• Define the Scope Clearly: At the start of the project, clearly define the scope and stick to it. Avoid adding new features or changing requirements mid-way unless absolutely necessary.
• Use Agile Methodology: Implement an agile approach where you deploy smaller, functional modules in short sprints. This allows for continuous progress and helps you tackle issues as they arise.
• Resource Allocation: Ensure you have enough resources (people, budget, tools) allocated to each phase of the project to avoid bottlenecks.

7. Security and Compliance Concerns

Centralizing sensitive data in a single system creates security vulnerabilities. Additionally, staying compliant with industry regulations and data privacy laws is critical, yet challenging, especially for complex systems.

How to Overcome:

• Implement Strong Security Protocols: Build security measures into your ERP from the beginning. This includes data encryption, access controls, and regular audits.
• Stay Updated with Compliance Regulations: Ensure your ERP system complies with the latest data privacy laws (e.g., GDPR, HIPAA). Regularly review legal requirements and adjust your system as necessary.
• Train Employees on Data Security: Human error is a significant risk. Provide regular security training to ensure your team knows how to handle sensitive data and follow best practices.

How Comana Navigated ERP Implementation Challenges for Success

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

Implementing an ERP system can significantly enhance your business operations, but it’s not without challenges. From managing complex data migration to addressing project delays and ensuring security compliance, navigating these ERP implementation issues requires careful planning and strong project management.

The key to success is selecting the right vendor, formalizing workflows, and providing ongoing support. This approach helps organizations avoid common pitfalls and ensures their ERP system delivers lasting value.

If you’re facing the complexities of ERP implementation, Golden Owl Solutions is here to help. With over 10 years of experience in IT outsourcing, we specialize in custom ERP software tailored to your needs. Let us assist you in overcoming these challenges for improved efficiency and growth.

FAQs 

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

Delays often result from unclear goals, scope creep, and poor management. To prevent this, create a clear plan, assign a dedicated project manager, maintain open communication, and set realistic deadlines. Regular progress reviews help avoid setbacks.

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

Unclear processes create confusion and misalignment with the ERP system. Standardize workflows before implementation to ensure the system fits your business needs.

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

Data migration issues include scattered or inaccurate data. Ensure accuracy by auditing, cleaning, and testing data before moving it to the ERP system.

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

Centralizing data increases risks of breaches and non-compliance. Mitigate these with encryption, access controls, regular audits, and ensuring the ERP complies with legal standards.