ERP Implementation Failures 2025: What Went Wrong and How to Avoid It

Last Updated on January 21, 2026 by Shrestha Dash

ERP implementations represent some of the most complex and consequential technology projects organizations undertake. When executed well, they transform operations, improve efficiency, and deliver substantial business value. When they fail, the consequences cascade through every aspect of the organization. Thus, disrupting operations, eroding stakeholder confidence, and creating financial impacts that extend for years.

The year 2025 has provided several high-profile examples of ERP implementation failures that offer valuable lessons for organizations embarking on similar transformations. From Quebec’s SAAQ digital platform costing $500 million over budget to Birmingham City Council’s Oracle system reaching almost $216 million in total costs. These cases illustrate common patterns that contribute to implementation challenges.

Understanding what went wrong in these ERP implementation failures is not about assigning blame to specific vendors, consultants, or client organizations. Rather, it is about recognizing systemic issues, identifying warning signs, and implementing protective strategies that help organizations avoid similar outcomes. The lessons from these cases apply across all ERP platforms, implementation partners, and organizational contexts.

Understanding ERP Implementation Failure Patterns

Before examining specific cases, it is essential to understand that ERP implementation failures typically result from combinations of factors rather than single root causes. Industry research and implementation assessments consistently indicate that successful implementations require alignment across technology, process, people, and governance dimensions. When any of these elements breaks down, the project faces heightened risk.

The Common Failure Factors

Analysis of major ERP implementation failures from this year reveals recurring patterns:

• Vendor and Implementation Partner Selection Issues: Choosing partners based on existing relationships rather than demonstrated capability for the specific project scope introduces execution risk. Similarly, sole-source arrangements eliminate competitive tension that validates approaches and pricing.
• Inadequate Planning and Requirements Definition: Organizations frequently underestimate the complexity of defining requirements comprehensively before configuration begins. Incomplete requirements lead to expensive mid-project changes, scope creep, and systems that fail to meet business needs.
• Insufficient Change Management: Technical implementation success means nothing if users cannot or will not adopt the new system. Organizations that treat change management as an afterthought rather than a core project component consistently experience adoption challenges.
• Governance Weaknesses: Complex ERP programs require strong governance structures that balance vendor, implementation partner, and client stakeholder interests. When governance is weak, issues remain hidden until they become crises.
• Timeline and Budget Pressure: External deadlines and cost constraints can push organizations to go live before systems are truly ready. Thus, creating operational disruptions that cost far more to resolve than additional preparation time would have required.

Case Study: SAAQ Digital Platform Implementation

Quebec’s Société de l’assurance automobile du Québec (SAAQ) embarked on a digital transformation project called CASA that included the SAAQclic online platform. The implementation encountered significant challenges that provide instructive lessons about managing complex ERP-adjacent digital transformations.

Project Background

The SAAQ initiated the CASA program to modernize its IT systems and improve online service delivery. The project involved SAP technology implemented with support from LGS, an IBM subsidiary. Initial budget estimates were approximately $600 million Canadian. But by early 2025, the Quebec Auditor General reported that total program costs were estimated to approach $1.1 billion Canadian. Thus, representing roughly $500 million in additional projected cost.

What Went Wrong

According to the Auditor General’s report and subsequent public inquiry, several factors contributed to the implementation challenges:

• Limited Technology Evaluation: The SAAQ conducted minimal evaluation of alternative technology solutions before committing to an ERP approach. While this may have been intended to accelerate decision-making, it limited the organization’s ability to select the optimal technology for its specific needs.
• Insufficient Pre-Implementation Planning: The organization invested inadequately in pre-implementation activities such as detailed requirements mapping and data governance assessments before committing to the program.
• System Readiness Issues: Despite warning signs that the system was not ready for launch, management proceeded with go-live, creating significant service delivery problems including multi-hour customer queues and system outages.
• Transparency and Communication Failures: Information about cost overruns and implementation challenges was not communicated effectively to oversight bodies, delaying corrective action.

Lessons Learned

The SAAQ case illustrates several critical lessons for organizations managing large-scale digital transformations:

• Resist pressure to go live when clear indicators suggest the system is not ready, regardless of external deadline pressures
• Conduct thorough technology evaluations before committing to specific platforms, even when working with familiar vendors
• Invest adequately in Phase 0 planning to establish solid foundations before full-scale implementation begins
• Establish transparent reporting mechanisms that surface problems early when they can be addressed less expensively

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Case Study: Zimmer Biomet SAP S/4HANA Implementation

Zimmer Biomet, a global medical device manufacturer with approximately $8 billion in annual revenue, filed a $172 million lawsuit against implementation partner Deloitte regarding its SAP S/4HANA implementation. This case provides insights into the complexities of large-scale ERP transformations and the importance of governance, contract structures, and readiness validation.

Project Context

Zimmer Biomet engaged Deloitte under a $69 million work order to implement SAP S/4HANA across North America and Latin America, intending to consolidate nine legacy ERP systems. The implementation was projected to deliver $197-316 million in benefits over 10 years through inventory reduction and operational efficiency improvements. The system went live on July 4, 2024, after several postponements.

Implementation Challenges

According to court filings and public disclosures, the implementation faced several significant challenges:

• Operational Disruption: Following go-live, the organization reported difficulties with core business processes including order fulfillment, shipment processing, invoicing, and basic sales reporting. The company stated that it experienced approximately a 1–1.5% revenue decline (roughly $75 million annually), which it attributed to implementation-related shipment delays.
• Cost Overruns: The project experienced 51 change orders totaling an additional $23 million beyond the original contract, representing a 36% increase over baseline estimates. Post-go-live remediation costs added an estimated $72 million in additional expenses.
• Timeline Delays: The go-live date moved several times—from February 2023 to May 2023, then February 2024, May 2024, and finally July 2024—indicating ongoing readiness challenges.

Perspectives on Responsibility

Both parties present different narratives about what occurred. The client organization alleges that the implementation partner overstated capabilities and pushed for premature go-live. The implementation partner contends that contractual terms were followed and that the client benefited from a functioning system. This dispute illustrates an important reality: major implementation challenges typically involve shared responsibility across all parties rather than unilateral fault.

Lessons Learned

The Zimmer Biomet case highlights several critical considerations:

• Contract structures matter: clear change order processes, cost caps, and remediation obligations protect client interestse rather than upgrade their ERP systems is excessive customization that makes upgrades too risky or expensive to undertake.
• Competitive procurement processes validate approach, methodology, staffing quality, and pricing even when working with familiar partners
• Clear acceptance criteria and holdbacks tied to business outcomes provide leverage for ensuring quality delivery
• Independent validation of readiness before go-live can identify issues that internal teams and implementation partners may underestimate
• Governance structures should include independent oversight rather than relying solely on implementation partner recommendations

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Case Study: Birmingham City Council Oracle Implementation

Birmingham City Council, Europe’s largest local authority with approximately £3.7 billion in annual revenue, undertook a project to replace its aging SAP system with Oracle Fusion for finance, HR, procurement, and payroll management. The implementation encountered substantial challenges that were identified as a contributing factor in the council’s 2023 bankruptcy declaration.

Project Trajectory

The Oracle Fusion project began with an initial £19 million budget for implementation by April 2022. The system went live in April 2022 but experienced significant functionality and compliance issues. By 2024, total costs had reached approximately £90 million, with the council now estimating total costs through 2026 could reach £216 million—more than 11 times the original estimate.

Implementation Challenges

According to independent audit reports from Grant Thornton and others, multiple factors contributed to the implementation difficulties:

• Limited Oracle Knowledge: Council officers and the digital department had insufficient understanding of Oracle Fusion, creating heavy dependence on external partners for system design and program management. This made it difficult to act as an “intelligent customer” who could critically evaluate implementation partner recommendations.
• Design Not Finalized Before Go-Live: The council proceeded with go-live before fully resolving the solution design, creating fundamental issues that required eventual re-implementation.
• Customization Decisions: Despite intending to implement out-of-the-box functionality, the council made customized modifications including a Business Rate System that failed to function as planned. These customizations significantly increased complexity and costs.
• Governance and Oversight Weaknesses: No internal audit review occurred until just before go-live, and when this review identified key issues, findings were not acted upon. Operational teams who would be end users were not engaged in a timely manner.
• Compliance and Control Issues: The system did not consistently provide adequate audit trail functionality for approximately 18 months after go-live, and segregation of duties controls that prevent fraud were not properly implemented. This meant the council could not produce compliant financial statements or detect potential fraud during this period.

Lessons Learned

The Birmingham case provides several important insights:

• Engage end users early and continuously to validate that the system will support actual operational needs.
• Develop internal expertise sufficient to critically evaluate implementation partner recommendations and act as informed buyers
• Finalize design before committing to go-live rather than treating implementation as a discovery process
• Resist customization temptation and thoroughly evaluate whether business process changes might be preferable to system modifications
• Implement robust governance including independent audit reviews at critical project phases
• Ensure core compliance and control requirements are non-negotiable requirements verified before go-live

Common Patterns Across ERP Implementation Failures 

Analyzing multiple ERP implementation failures reveals consistent patterns that transcend specific vendors, implementation partners, or client organizations:

Pattern 1: Decision Latency and Schedule Pressure

Several implementations experienced what experts call “decision latency”—the accumulation of unresolved decisions that create project delays. As timelines slip, pressure intensifies to go live regardless of readiness, creating a “doom loop of delay and rising costs.” Organizations that resist this pressure and delay go-live until genuine readiness is achieved typically experience better long-term outcomes, even though short-term schedule impacts are difficult to accept.

Pattern 2: Inadequate Upfront Investment

Organizations consistently underinvest in pre-implementation activities:

• Detailed requirements documentation and process mapping
• Data governance assessments and cleansing
• Change management planning and stakeholder engagement
• Technical architecture validation
• Vendor and implementation partner capability verification

This creates a pattern where expensive problems emerge during configuration and testing that could have been identified and resolved earlier at lower cost.

Pattern 3: Governance Maturity Gaps

Research shows that large-scale, highly complex ERP projects with immature program sponsors and implementation teams overwhelmingly face significant challenges. Effective governance requires:

• Executive sponsors who understand ERP complexity and commit adequate time and attention
• Independent validation of plans, estimates, and risk exposure
• Clear escalation paths that surface issues promptly
• Formal change control processes managed through structured review boards
• Balanced oversight that neither micromanages nor provides inadequate scrutiny

Pattern 4: Shared Responsibility for Outcomes

In virtually every major ERP implementation failure, responsibility for challenges is distributed across multiple parties:

• Client organizations that underinvest in planning, accept unrealistic timelines, or fail to engage business users effectively
• ERP vendors whose software may have functionality gaps or require more customization than marketed
• Implementation partners who may overstate capabilities, underestimate complexity, or staff projects with insufficiently experienced resources

Recognizing this shared responsibility is essential for developing comprehensive mitigation strategies rather than assuming vendor selection alone determines success.

Financial Impact Analysis

The financial consequences of ERP implementation failures 2025 extend far beyond direct technology costs:

These figures illustrate that cost overruns frequently exceed 100-1000% of original estimates, and financial impacts include not just direct technology costs but operational disruptions, market confidence impacts, workforce impacts, and public service reductions.

Prevention Framework: How to Avoid ERP Implementation Failures

Organizations can substantially reduce implementation risk by applying lessons from these ERP implementation failures through systematic approaches across the project lifecycle.

Phase 1: Selection and Planning

• Conduct Rigorous Vendor Selection: Run structured RFP processes with 2-3 qualified vendors, even when familiar with incumbent partners. Require detailed methodology descriptions, named resources with verified experience, and client references with similar scope and complexity.
• Validate Implementation Partner Capabilities: Verify that proposed resources have directly relevant experience, not just general platform knowledge. Request documentation of similar successful implementations and conduct thorough reference checks with specific questions about execution quality, not just general satisfaction.
• Invest in Phase 0 Planning: Allocate 10-15% of total project budget to comprehensive pre-implementation activities including detailed process mapping, requirements documentation, data governance assessment, change readiness evaluation, and technical architecture validation.
• Establish Realistic Timelines and Budgets: Add 20-30% contingency to initial estimates for both timeline and budget. Industry experience indicates that this contingency is typically consumed rather than remaining unused, and projects that launch with inadequate buffers experience higher failure rates.

Phase 2: Governance and Execution

• Implement Strong Governance Structures: Establish steering committees with executive sponsors who have decision authority, regular cadence meetings with transparent reporting, clear escalation paths for issues and risks, and independent reviewers who validate progress and quality.
• Enforce Rigorous Change Control: Document all scope changes through formal processes, evaluate cumulative impact of change orders on budget and timeline, require executive approval for changes above defined thresholds, and track change order patterns as early warning indicators.
• Maintain Independent Oversight: Engage third-party advisors for readiness assessments at critical gates, conduct independent testing beyond implementation partner validation, and perform contract compliance audits to ensure deliverables meet agreed standards.
• Prioritize Change Management: Allocate 15-20% of project budget to change management activities, engage end users early and continuously throughout implementation, conduct thorough training well before go-live, and establish support structures that provide extended post-go-live assistance.

Phase 3: Go-Live and Stabilization

• Establish Objective Readiness Criteria: Define specific, measurable acceptance criteria for go-live decision, conduct independent readiness assessments with authority to recommend delays, resist pressure to go live when criteria are not met, and plan adequate stabilization support post-launch.
• Plan for Post-Go-Live Reality: Allocate budget for stabilization period (typically 3-6 months), maintain parallel systems or manual backup processes initially, establish war rooms for rapid issue resolution, and expect productivity dips during initial adoption period.

Working with Independent ERP Advisors

Organizations facing ERP implementation decisions often lack internal expertise to navigate the complex landscape of vendor claims, implementation partner capabilities, and project governance best practices. This is where independent ERP advisors provide critical value.

At ElevatIQ, we help organizations avoid the patterns that lead to ERP implementation failures through:

• Vendor and Implementation Partner Selection: We conduct rigorous evaluation processes that validate capabilities, verify reference claims, and ensure proposed resources have directly relevant experience for your specific requirements.
• Implementation Governance: We establish governance frameworks appropriate to project complexity, conduct independent readiness assessments at critical phases, and provide objective perspectives that balance vendor, implementation partner, and client interests.
• Contract Protection: We negotiate contract structures that include measurable acceptance criteria, appropriate holdbacks and payment terms tied to delivery milestones, reasonable change order processes with cost protections, and remediation obligations that protect client interests.
• Risk Assessment and Mitigation: We identify warning signs early when corrective action is less expensive, provide independent validation of implementation partner assertions about readiness and progress, and recommend course corrections before issues become crises.

Our independent position means recommendations focus on your long-term success rather than vendor revenue targets or implementation partner utilization rates.

Conclusion

The ERP implementation failures in 2025 included cases like SAAQ, Zimmer Biomet, and Birmingham City Council. They provide valuable lessons for organizations embarking on similar transformations. These cases illustrate that implementation challenges result from combinations of factors. They include inadequate planning, governance weaknesses, timeline pressure, and insufficient change management.

Understanding these patterns is essential because ERP implementations remain high-risk, high-reward initiatives that can either transform organizational capability or create years of operational disruption and financial burden. The difference between success and failure often comes down to recognizing warning signs early, investing adequately in foundational activities, maintaining strong governance throughout the project lifecycle, and making objective readiness assessments that prioritize long-term success over short-term schedule adherence.

Organizations can substantially improve their implementation success rates by applying the lessons from these cases. This includes conducting rigorous vendor and implementation partner selection, establishing mature governance structures with independent oversight, investing in comprehensive pre-implementation planning, enforcing disciplined change control, and validating readiness objectively before committing to go-live. The question is not whether ERP implementations are risky, they are. The question is whether organizations will learn from others’ experiences and implement the protective strategies that transform ERP from a potential liability into a strategic asset.

(This content is based on publicly available vendor statements, industry research, analyst insights, and practitioner experience and is provided for informational purposes only.)

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