How to Avoid the 5 Most Common ERP Transformation Pitfalls?

ERP transformations are among the most ambitious and far-reaching initiatives an organisation can undertake. While ERP systems are technology-driven at their core, the transformation itself is not an IT project; it is a business transformation. This effort demands considerable alignment across strategy, people, processes, and technology.

The lack of collaboration between business and IT, the underestimation of change management, and the failure to treat business processes as the foundation of ERP design are among the most common ERP project pitfalls. But how to overcome them?

Juuli Semi

Juuli is a Business Engineer with a strong background in data-driven process development, particularly within the procurement domain. Before Vuono Group, she worked at Metsä Group on ERP transformation, focusing on testing the system, training users, and improving business processes.

#1 Lack of genuine business engagement

The single biggest predictor of failure is a lack of genuine business engagement from the start. It occurs when senior leadership views the ERP transformation as a technology upgrade to be delegated to the IT department, rather than the fundamental business transformation it truly is. This mindset is evident when business leaders are absent from key decisions, subject matter experts are not empowered to participate, and technical milestones rather than business outcomes measure the project.

Key recommendation:

Reframe the transformation as a business-led initiative. This requires establishing a governance structure steered by senior business executives, and seconding your best operational experts to the project as empowered, core team members. Success must be redefined and measured by the achievement of specific business outcomes, rather than by purely technical milestones. From the C-suite to the front line, leadership must communicate that active, continuous, and committed engagement is the non-negotiable price of admission for a successful transformation.

#2 The “back against the wall” scenario

ERP initiatives launched under severe time pressure (e.g. because a legacy system is nearing failure) frequently end in disappointment or crisis. These “burning platform” situations create a false sense of urgency that drives hasty decision-making and unrealistic project commitments. In many cases, IT is tasked with pushing the project forward to meet an unmovable deadline, often selling it to senior leadership or the board of directors based on overly optimistic estimates of cost, scope, and timeline.

Key recommendation:

Start early, ideally 2-3 years before the planned go-live, especially for large, complex transformations. This lead time is not a luxury; it is a necessity for aligning business strategy, assessing operational readiness, and running pre-project initiatives that reduce risk. Avoid letting the system’s end-of-life dictate the schedule. Instead, proactively shape the transformation agenda so it reflects business priorities, not technical urgency.

#3 Scope overload

From a business leadership perspective, ERP implementation may seem like an ideal opportunity to upgrade multiple systems simultaneously. While the intent is often to streamline and modernise, this approach can quickly overwhelm even well-resourced organisations.

ERP transformation alone demands significant time and attention from business leaders and operational teams. When multiple adjacent renewals, such as finance tools, CRMs, data platforms, or procurement solutions, are added, resources are quickly spread too thin. This results in missed deadlines, disengaged teams, and an inability to deliver on the original business goals.

Most companies underestimate the internal workload. Employees are expected to contribute to the ERP project while continuing to manage their core responsibilities. Without sufficient backfill or structured support, adding more systems to the mix only increases the strain.

The more effective approach is to sequence related initiatives. Some systems need modernisation ahead of the ERP transformation, such as data warehousing, reporting or customer relationship management systems. Custom functionalities built into legacy ERP platforms can often migrate into specialised external applications, following a composable architecture. This approach reduces the complexity and risk of the ERP program itself.

Key recommendation: 

Focus the ERP scope on core needs. Identify adjacent systems that can be addressed separately, either before or after the ERP implementation. Eliminate unnecessary legacy features and redirect efforts toward long-term agility and simplicity.

#4 Lack of process understanding

The third significant risk in ERP transformation is simply copying existing processes into the new system. ERP renewal is an opportunity to redesign the organisation's operations and align business processes with strategic objectives.

However, many companies lack a clear understanding of their current processes. Years of ad-hoc changes, undocumented workarounds, and inconsistent practices across regions or teams often mean that no one truly knows how things work today. Without this knowledge, ERP projects are launched with vague requirements and unclear business priorities, forcing the implementation team to make decisions based on assumptions rather than facts.

This scenario leads to costly rework, missed opportunities for simplification, and in some cases, a modern system that continues to support inefficient or obsolete ways of working.

To avoid this, business leaders need to insist on early and thorough process documentation, which includes not just high-level workflows but also real-life variations, regulatory obligations, and decision-making logic. Modern tools, such as process mining, can help uncover actual usage patterns, identify bottlenecks, and guide redesign efforts. Equally important is to assign clear ownership to each key process and ensure those owners are empowered to define how their areas will work in the future.

Key recommendation:

Begin process discovery well before system selection. Treat it as a strategic initiative in its own right. Build a shared understanding across functions and use that foundation to guide system design and implementation decisions.

#5 Poor master data readiness

Even the most advanced ERP solution cannot function properly without clean, consistent, and well-governed master data. Yet, many organisations enter ERP transformations with the assumption that their existing data is “good enough.” This assumption often proves costly.

Master data, including customers, vendors, materials, products, cost centres, and organisational hierarchies, is the foundation for every process the ERP system supports. Inconsistent definitions, duplicate entries, outdated values, and missing attributes will cause errors in everything from pricing and procurement to reporting and compliance. These issues not only disrupt testing and training but also create significant delays during cutover and hyper-care.

The complexity increases further in global organisations with multiple legacy systems and regional variations. Data ownership is often unclear, and accountability for data quality is fragmented or missing altogether. When the ERP project reaches the design or migration phase, it becomes apparent that significant data cleaning, harmonisation, and enrichment work is needed. But by then, the project is already under pressure, and resources are committed elsewhere.

Key recommendation:

Treat master data as a business-critical asset from day one. Begin data assessment and cleanup well in advance of implementation. Establish business ownership for each data domain, define quality standards, and create governance structures that will remain in place after go-live. Do not wait for IT or the ERP supplier to raise data issues; instead, proactively lead this work from the business side and integrate it into the overall project plan with clear milestones and accountability.

In brief: How to succeed in ERP transformation

• Engage senior business leadership: ERP transformation is not an IT project.

• Start early: Begin planning 2-3 years in advance to align strategy, resources, and reduce risk.

• Avoid urgency: Don’t let system end-of-life drive rushed, poor decisions.

• Focus scope: Keep ERP centred on core needs. Avoid bundling unrelated system renewals.
  Understand processes: Document and take ownership of how the business operates before design begins.

• Own the process and data: Assign clear business owners for each key process and data domain, granting them decision-making authority.

• Prioritise data: Clean and govern master data early. Businesses must own data quality, not just IT.

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