Common ERP Implementation Mistakes Small Businesses Should Avoid

ERP Projects Don’t Fail Overnight

ERP projects rarely fall apart suddenly; I can tell you that. After 24+ years of implementing ERP and AI solutions, I seen that problems in implementing ERP solutions, unravel slowly. A few small missteps early on, and the impact starts to build. 

Hi, I’m Noel DCosta and I have been helping business to implement ERP and AI solutions in different industries. So, I can tell you, I have seen it happen more than once. It might start with an unclear requirement, or maybe a missed governance meeting. Then a delay. Then a rushed fix. 

At first, no one says much. But eventually it turns into a timeline that slips, a budget that stretches, and a team that loses confidence in the process.

These failures do not always come from technical problems. Often, it is the process around the implementation that breaks down.

• Vague project scope
• Poor communication between internal and external teams
• Overconfidence in early phases
• Not questioning the timeline until it is too late

All these things add up. If you catch them early, they are manageable. If you ignore them, they grow into real risks.

This article looks at common ERP implementation mistakes that are avoidable if you know what to watch for. If you are just starting, or even in the planning stage, it might help to look at this guide on how to set up your SAP Implementation Project the right way. I have written it based on what actually goes wrong, not just what sounds good in a kick-off meeting.

Over Customization: When Flexibility Becomes a Problem

One of the most common mistakes I see is trying to make the new ERP look and behave exactly like the old system. At first, that seems like a safer path. Familiar screens, familiar steps. It feels like less training, less disruption. But copying the old system too closely often backfires.

Customisation adds weight. It may not show up right away, but it becomes clear during maintenance, upgrades, and especially when the original consultants are no longer around.

Here is what usually happens:

• Every custom field or workflow adds to long-term complexity
• Upgrade cycles slow down or break things unexpectedly
• Internal teams struggle to troubleshoot or make changes without outside help
• Documentation, if it exists, often misses the reasoning behind each change

I once worked with a small manufacturer that customised their sales order process heavily to match their old tool. A year later, they wanted to expand to a second site. The workflow broke. No one on the team could explain why it was built that way, and support hours piled up.

Instead of asking how to replicate the old system, ask what should change. Focus on process improvement, not just familiarity. ERP should move the business forward, not freeze it in place.

Undefined or Shifting Scope

A vague or constantly shifting project scope is one of the fastest ways to derail an ERP implementation. I have seen it happen more than once. The team starts with broad goals like “streamline operations” or “automate reporting,” but without specific deliverables, things begin to drift. New requests come in mid-project. Priorities change. Costs rise. The schedule slips. And the team loses confidence.

Setting a clear scope upfront keeps the project grounded and this is how you do it:

• List out what will be delivered. Be specific. Reports, modules, integrations, training sessions.
• Include what is not part of the project. That reduces assumptions later.
• Review the scope with both internal teams and the vendor, so there are no surprises.
• Use a formal change control process. If new needs come up, they should be reviewed, costed, and approved.

One client I worked with added four reports mid-project, each requiring changes to how data was entered. It set us back three weeks and added costs they had not planned for. It was avoidable.

Scope changes are sometimes necessary. But if they are not tracked and reviewed carefully, they slowly unravel the structure of the project. Clarity at the start protects you later.

No Phasing Strategy

Trying to roll out everything at once often puts small teams under too much pressure. It looks efficient on paper, but in practice, it overloads internal staff, stretches vendor capacity, and leaves no time to absorb mistakes. I have seen teams burned out before go-live even happens. A phased rollout gives breathing room, lets people adjust, and reduces the chance of project fatigue.

Phasing helps for many reasons:

• Teams learn the system in steps, not all at once
• Early feedback can be used to improve the next phase
• Smaller problems stay contained instead of spreading across the whole operation

But not all phasing works. What many articles do not mention is the risk of splitting tightly linked processes across phases. For example, going live with purchasing but delaying inventory creates confusion, duplicate tracking, and poor reporting.

A good phasing plan aligns with how the business actually runs. You can roll out by:

• Module: Finance first, then sales or inventory
• Location: Start with one site, then expand
• Process depth: Begin with core functions, then layer in automation

Phasing is not about going slow. It is about staying in control. For small businesses, that often makes the difference between a manageable rollout and a messy one.

Poor Progress Monitoring

Many ERP projects run into trouble not because the team is doing nothing, but because no one is looking closely enough at what is actually being done. Weekly reports get sent, calls happen, updates sound fine, but nothing is delivered. Or what gets delivered is incomplete. By the time someone notices, several weeks have passed. That is when pressure builds, and reactive decisions take over.

Real progress monitoring goes beyond status updates.

• Track actual deliverables. Not just hours worked, or meetings held. What has been configured? What has been tested?
• Get your internal team involved. Do not rely only on the vendor to confirm progress. Staff should verify and validate work as it moves forward.
• Watch for early signs. Delayed signoffs, skipped walkthroughs, or vague feedback can point to larger problems beneath the surface.
• Keep decision logs. Store every scope change, timeline shift, or technical issue in one place. It avoids confusion later.

Something most teams overlook is how easily updates get lost in email or chat threads. Having a visible log keeps accountability in place.

You do not need complex tools for this. A shared document, reviewed weekly, is enough. The key is consistency and clear ownership. That alone prevents many surprises later.

Weak Knowledge Transfer

One of the most common reasons ERP projects struggle after go-live is weak knowledge transfer. The system may be working, but your team does not fully understand it. Simple questions turn into support calls. Reports stay half-finished. Internal confidence drops. 

Over time, what should be minor adjustments become frustrating delays. Not because the system is broken, but because no one inside knows how to handle it.

This is rarely addressed early enough. Handovers are often rushed or treated as a final checkbox. That approach rarely works.

• Start documentation early. Include decisions, configurations, and why things were set up a certain way.
• Train beyond the basics. Your internal owner needs admin-level knowledge, not just how to enter data.
• Build in time for side-by-side work. Let someone from your team shadow the consultants while tasks are being done.
• Assign clear ownership before go-live. Someone needs to take responsibility for system changes and long-term upkeep.

Bonus tip: Record key walkthroughs. Even informal screen-share sessions can become valuable training tools later, especially when staff leave or roles shift. Most teams do not do this, and they regret it later when trying to recreate steps from memory. A few recordings can save hours down the line.

Final Thoughts: ERP Mistakes Are Usually Process Mistakes

Most ERP failures get blamed on the software. But in my experience, it is rarely the system itself that causes the real damage. It is the process around it. Vague requirements, unclear scope, rushed decisions, poor communication, these are what create problems that later get labelled as “system issues.”

The truth is, ERP works best when the planning and oversight are strong. The tool only follows what it is told to do. If the instructions are unclear or the process is broken, no system can fix that on its own.

Stay involved in your project. Ask questions, especially when something feels off. Do not accept vague responses. Push for clarity. A few uncomfortable conversations early on can prevent major problems later.

If you are in the middle of an ERP project or planning one, I’d encourage you to look closely at how decisions are being made and how progress is being tracked. Sometimes a fresh set of eyes can help spot what is being missed.

I work with small businesses to review plans, identify early risks, and strengthen the way projects are run, not just the software that gets installed. 

If any part of this sounds familiar, or if you have your own experience to share, feel free to reach out. I always welcome a conversation, even if it is just to help you avoid a mistake, I have already seen too many times. You do not have to figure it out alone.

Ready to connect your ERP and AI systems more efficiently?

Thinking about bringing in an ERP or AI system or already working with a vendor? Then how you manage the people behind the software matters just as much as the software itself. A system is only as strong as the process and team delivering it. 

If communication is unclear, scope keeps shifting, or decisions are being made without proper input, it may be time to step back and look at how your ERP project is being handled.

Managing consultants and vendors is often where small ERP projects get off track. It does not need to be complicated, but it does need to be intentional. Clear expectations, documented scope, and regular check-ins go a long way in keeping everything on track.

About the Author
Noel D’Costa is an ERP consultant with over 24 years of experience helping small and mid-sized businesses manage ERP selection, vendor relationships, and project delivery. He has worked across industries including manufacturing, distribution, and public sector, with a focus on making complex projects more manageable. 

Noel shares lessons from real-world ERP and AI projects to help companies avoid common mistakes and get better results from their investments. Through his writing and one-on-one work, he supports business owners and internal teams looking for honest, grounded guidance at every stage of ERP implementation.