ERP Change Management: Why ERP Implementations Fail
- Terri Marello
- 7 days ago
- 7 min read
Most ERP failures are not caused by bad software. In my experience as a solution architect, they are caused by poor ERP change management.
In many organizations, change management ERP practices are treated as secondary to configuration and timelines, even though they are essential to success.
As noted in Forbes, establishing an effective change management program is of paramount importance to ERP success, because it clarifies objectives and guides people through the transition instead of focusing solely on software deployment.
That distinction matters, because many ERP implementation problems surface only after deployment.
I was reminded of that in a meeting not long after an ERP system went live.
The room was quiet in that uncomfortable way.
The ERP had gone live two weeks earlier. The dashboards were technically working. The ERP project plan said success.
But as the leadership team sat around the table, no one looked relieved.
Finally, someone spoke.
“Why are people still using spreadsheets?”
Another leader added, “My team says the system is slowing them down.”
The IT lead flipped through notes. “Training was completed. The system works. I do not understand what is happening.”
I have seen this moment more times than I can count.
The ERP software is solid.
The implementation partner is experienced.
The timeline is reasonable.
The budget is approved.
And yet the ERP implementation still struggles or outright fails.
When leaders ask why, the answer is almost never about the technology.
It is about ERP change management.
So today, let’s ask the deeper why behind ERP failures and what leaders can do differently.
Once the initial excitement fades and reality sets in, leaders often find themselves asking the same foundational question.
Why do ERP implementations fail even when the software is good?
Here is an uncomfortable truth.
ERP implementations do not fail because systems are bad. They fail because organizations underestimate change.
Modern ERP platforms, especially Microsoft Dynamics 365 Business Central, are powerful, flexible, and well proven.
Yet Microsoft Dynamics 365 Business Central implementation challenges consistently surface in the same places.
Users reverting to spreadsheets
Processes being bypassed
Data quality deteriorating
Frustration rising after go-live
These are not software defects. They are people and process problems, and they are some of the most common ERP problems organizations face.
As the Project Management Institute highlights, project management must integrate change management principles to drive results through stronger adoption and lasting organizational impact. Without that integration, even well-run ERP project management efforts experience ERP system implementation failures.
ERP introduces new workflows, new expectations, and new accountability. If an organization treats ERP as a technical project instead of a business transformation, resistance fills the gap where leadership should have been.
Over time, this resistance becomes one of the hidden ERP project risk factors that quietly drive ERP implementation failures.
When leaders start looking beyond the technology, the conversation quickly turns to a term that is often used but rarely defined clearly.
What does change management really mean in an ERP implementation?
Change management is often misunderstood, or worse, minimized to training and communications.
In reality, ERP change management is the discipline of helping people successfully transition from how work is done today to how it must be done tomorrow.
Strong change management ERP practices reduce the hidden cost of ERP by preventing rework, delays, and stalled adoption.
That includes:
Helping employees understand why the change is happening
Preparing leaders to reinforce new behaviors
Aligning processes with real-world job roles
Addressing fear, uncertainty, and loss of control
ERP change management is not a phase at the end of a project. It is not a slide deck.And it is definitely not optional.
It should start before design, continue through testing, and intensify before go-live.
Understanding change management inevitably raises another question, one that many organizations are uncomfortable asking out loud.
Why do employees resist ERP systems and how should leaders respond?
Let’s be honest. Resistance is not irrational.
Employees resist ERP systems because:
They fear looking incompetent in a new system
They worry automation will reduce their value
They were not involved in decisions that affect their jobs
They do not see how the ERP helps them succeed
When leaders label this as user resistance, they miss the point.
Resistance is feedback.
It is a signal that people do not yet feel safe, informed, or supported in the change. Left unaddressed, resistance becomes one of the most underestimated contributors to ERP implementation failure.
The most effective leaders respond by applying proven strategies for managing resistance to change in ERP projects, including:
Involving users early, not just during training
Listening without defensiveness
Acknowledging what people are losing, not just what the company is gaining
Connecting ERP success to individual success
What is the business impact of poor change management in ERP projects?
At this point, some leaders still view change management as a soft issue, until they see the hard consequences show up in the business.
Poor ERP change management does not just hurt morale. It damages the business.
I have seen organizations experience:
Lower productivity after go-live
Delayed ROI from their ERP investment
Inconsistent or unreliable data
Shadow systems that undermine governance
Burnout among finance, operations, and IT teams
In extreme cases, companies blame the ERP and start planning a replacement before the system ever had a fair chance.
That is an expensive lesson and a classic example of the hidden cost of ERP.
An ERP system can only deliver value if people actually use it the way it was designed.
Without adoption, even the best ERP becomes shelfware, one of the most visible outcomes of ERP failures.
Once the cost of inaction becomes clear, the focus naturally shifts from what went wrong to what leaders can do differently next time.
How can leadership improve ERP adoption before go -live?
This is where ERP implementation leadership makes or breaks ERP success.
Here is what effective leaders do differently.
They talk about why, not just what.
People do not rally around features. They rally around purpose.
Leaders who clearly explain why the ERP matters, what problems it solves, and how it supports the company’s future create alignment long before training begins. This clarity is foundational to strong ERP user adoption strategies.
They model the change themselves.
If leaders do not use dashboards, reports, or workflows in the new system, employees will not either.
ERP adoption accelerates when leadership behavior matches leadership messaging.
They invest in role-based readiness, not generic training.
ERP training should not be “here is how the system works.”
It should answer what changes in my day-to-day job, what does success look like in this role now, and where do I go when I am stuck. These are proven strategies for high user adoption of a new ERP system.
That is where many Microsoft Dynamics 365 Business Central implementation challenges either disappear or multiply.
They treat go-live as the beginning, not the finish.
Go-live is a milestone, not the finish line.
Leaders who plan for post go-live support, continuous improvement, and feedback loops see adoption grow instead of stalling.
The real why behind ERP success is ERP change management
When ERP implementations succeed, it is rarely because of flawless configuration.
They succeed because leaders asked better questions.
Why are we changing?
Why might people struggle?
Why would someone choose not to adopt this system?
That curiosity, the willingness to ask why instead of assigning blame, is the foundation of strong ERP change management.
And in the end, that is what transforms ERP from a system people tolerate into one they rely on.
When leaders begin to realize the challenge is not configuration or training. It is how leadership shows up during change.
That realization sets up the next article in this series, Why Leadership Alignment Makes or Breaks Change.
In it, we will examine how even subtle misalignment among leaders can quietly undermine trust, slow adoption, and drain momentum, even when everyone believes they are supporting the ERP initiative.
The third article, User Adoption Is Not a Training Problem, addresses one of the most persistent ERP myths. Organizations often assume adoption issues can be solved by adding more training. In reality, adoption is driven by clarity, reinforcement, and relevance, long before a training session ever begins.
We will examine why people choose not to use ERP systems and what leaders can do to influence adoption early in the change process.
The Moment Everything Started to Work
A few months after that tense post go-live meeting, I spoke with the same leadership team again.
Something had changed.
The spreadsheets were gone. Conversations were calmer. Decisions were faster. One leader told me, “People stopped fighting the system once they understood what it was actually helping them do.”
Nothing dramatic had happened to the software. There was no reimplementation. No major redesign.
What changed was the way leaders showed up. They asked better questions. They listened longer. They acknowledged frustration instead of dismissing it. They stopped asking why people were resisting and started asking why the change felt hard.
The ERP did not suddenly become easier.
The organization became more ready.
And that is the part of the ERP story we do not talk about enough.
Not the system. Not the go-live date. Not the feature list.
The moment leaders choose to ask why, and keep asking it, until people are ready to move forward together.
If ERP is about running the business better, change management is about helping people believe and experience that reality.
That is the why worth asking.
On April 15, 2026, join us for “Change Management Is the Real ERP Project”, a webinar focused on how leadership alignment and user adoption shape ERP outcomes more than configuration ever will.
About the Author
Terri Marello, President of Key Partner Solutions, is a thought leader in the Microsoft Dynamics space and the author of the LinkedIn newsletter "Why Ask Why?", where she explores the intersection of technology and business strategy.
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Key Partner Solutions is an experienced Microsoft VAR with the in-house skills to optimize your business and smoothly migrate to cloud-based Microsoft Dynamics 365 Business Central.
