Why ERP Implementations Fail (and How to Ensure Success)

August 8, 2023

Many of the biotech or pharma companies we work with start the relationship by asking why there is so much information out there on the high failure rate of ERP implementations? Why do we believe ERP implementation success rates are so low? Typically, the root cause of an ERP implementation failure falls into one of these categories:

  1. Point. Shoot. Aim.
  2. IT-driven
  3. Waiting room
  4. Enigma

Point. Shoot. Aim. Refers to an approach in which the project charter is soft, or where the resource allocation is fluid, or where the ability to make the big decisions in a timely fashion is lacking.

IT-driven. IT is a critical component of every ERP implementation, and often the IT leaders may have designed the first business solution the company used. Sometimes they’ve done so much work that the software has taken on a life of its own. However, the shift from using “software to record stuff” to a “full business solution that works for you,” is a critical one. Designing how you want it to work requires the long-term, dedicated focus of business leaders and their assignees who work as subject matter experts sharing user stories and determining how different processes will work in the new solution. 

Waiting room. Customers who struggle are customers who wait. They tend to delay conditioning their data for data migration; they wait too long to have their subject matter experts test the solution or push off end-user training. They may not pull in the quality team early enough to bring that group and the company SOPs along on the journey. Biotechs and pharmas are under incredible pressure, and product delivery may make the difference in saving lives – it’s easy to justify delaying or waiting – sometimes it’s understandable, but those who prioritize both are most successful.

Enigma. Every biotech or pharma company has uniqueness, and every one of them has similarities. All of them require regulatory compliance and are committed to and invest smartly to ensure patient safety and successful FDA audits. Some believe that if they just deploy the out-of-the-box version of software, it will be sufficient; others have ultra-optimistic timeline expectations.

On the flip side, many feel their processes will never be served by a standard solution or are sold on the idea that they must invest tens of millions to get something that will grow with them. In reality, every company has some processes, forms or reports, or an integration unique to how they do business, but that doesn’t mean they can’t adopt a mostly standard solution. Every company with the potential of being FDA-audited needs to build time into their timeline for solution validation including – IQ/OQ/PQ (installation qualification “IQ,” operational qualification “OQ,” and performance qualification “PQ,”) for testing, training, data migration and ensuring that their users will adopt the solution when they go live.

Choosing the Right ERP Implementation Partner

A successful ERP implementation shouldn’t be just possible – it should be the expectation. Working with ERP implementation consultants that understand the industry requirements biotechs and pharmas face, that have a solution that demonstratively works for your requirements, that follow a proven ERP implementation process, and that are a culture fit for your team will ensure your vision is achieved. At Merit Solutions, we follow a methodology based on experience and partnership.

Prepare for Success

Learn how to prepare for a successful ERP implementation. Grab a copy of our “10 Sure Ways to Fail (or Succeed)” eBook.