Why ERP Implementations Fail: 5 Lessons from Mission Produce
In today's rapidly evolving business landscape, aligning your ERP system with your organizational strategy isn't optional; it's essential. Success in ERP isn't just about technology; it's about executing every project with clear purpose and strategic intent, so when the boat begins to drift, your company will have an internal compass to steer back into alignment. Yet, time and again, companies fall into the same traps: misalignment, unrealistic expectations, and poor planning. This results in operational disruptions, financial losses, and frustrated teams.
Mission Produce's ERP Implementation Disaster
Mission Produce is a global leader in the avocado industry, specializing in sourcing, producing, and distributing fresh Hass avocados. Founded in 1983, Mission Produce has grown to serve 10 countries. Like many long-standing enterprises, Mission Produce had a 30-year-old legacy ERP system, with an enterprise environment pieced together from acquisitions. In November 2021, implementation of a new ERP began—aiming for better operational visibility, improved financial reporting, and international scalability. However, things took an unexpected turn in the first quarter of 2022. The CEO, Stephen Barnard, stated, "While we weren't naive to the risk of disruption to the business, the extent and magnitude was greater than we anticipated." It was a Chernobyl-level meltdown, but instead of radiation pouring into the atmosphere, operational chaos quickly spread throughout the company.
The fallout: loss of visibility of on-hand inventory, inability to accurately assess avocado quality and ripeness, delays in automated customer invoicing, and significant disruptions in the supply chain.
Financially, the impact was severe: operating expenses increased by $4.1 million in just one quarter, nearly $1 million was spent on consulting to address these issues, and gross profit dropped by a staggering $22.2 million year over year. Ultimately, inadequate requirements gathering, underestimating the project's complexity, and a mismatch between software capabilities and actual business needs were identified as the root causes of the issue.
Now, let's break these down further. This article outlines the five biggest reasons ERP implementations fail—why they matter, the lessons learned, and what key success factors we can learn from the Mission Produce failure.
1. Unclear Requirements: The Mismatch Between Software and Mission
Why It Matters:
A common downfall in ERP implementations is the disconnect between what the software promises and what your business truly needs. For Mission Produce, undefined requirements led to a system that couldn't accurately deliver critical functions like assessing avocado quality or managing invoicing processes, resulting in operational chaos and financial setbacks.
Lesson Learned:
Spend time upfront meticulously defining your business requirements and identifying where your processes will change. This alignment is the foundation for a system that genuinely supports your operational goals.
Key Success Factors:
Engage all relevant stakeholders to gather comprehensive requirements.
Validate these requirements through thorough testing and feedback loops before full-scale implementation.
Ensure the chosen ERP solution is capable of evolving with your business needs.
2. Unrealistic Expectations: The Mirage of Quick Wins
Why It Matters:
Setting unrealistic expectations around cost, time, and resources is like planning a cross-country road trip without checking your fuel levels. Mission Produce discovered that when you underestimate the complexity of an ERP rollout and focus on short-term tasks instead of long-term accomplishments, you're forced to choose between overspending or rushing a flawed implementation.
Lesson Learned:
Your ERP project must be grounded in reality. Thorough due diligence is essential—challenge initial proposals and build contingency plans to handle unexpected disruptions. Make sure you go live based on the completeness of the system, not a sense of urgency to get it over with.
Key Success Factors:
Conduct comprehensive risk assessments.
Establish detailed financial and operational forecasts.
Prepare contingency plans that anticipate potential roadblocks.
3. Insufficient Planning: Skipping the Blueprint
Why It Matters:
Imagine constructing a skyscraper without a blueprint—it's a recipe for disaster. Rushing into implementation without detailed planning leaves you with higher costs and no clear direction when problems arise. Mission Produce's challenges were amplified by inadequate requirements gathering and validation, which left them unprepared for the scope of the project. In the end, a blueprint serves as the core of ERP design, and without it, development is aimless.
Lesson Learned:
A well-thought-out blueprint supports a clear, integrated project plan, which is the backbone of any successful ERP implementation. Without it, advanced ERP systems become an albatross that drags your business to its knees.
Key Success Factors:
Develop a comprehensive project blueprint that details business processes and technical requirements.
Use your blueprint to lay out realistic timelines and milestones.
Engage all stakeholders early to ensure alignment on the integrated project plan.
4. Misaligned Leadership: The Vision Vacuum
Why It Matters:
ERP projects can quickly lose focus if the executive team isn't aligned on what success looks like. Mission Produce's experience highlights how unclear executive alignment—whether the goal is to enhance customer experience, improve operational efficiency, or drive revenue—can send mixed signals throughout the organization. These are all great goals, but without a cohesive vision to pull them together, decision-making is skewed toward confused objectives that create consistent results.
Lesson Learned:
Unite your leadership around a clear "north star." When everyone agrees on the end goal, you create a powerful guiding force that keeps the project on track, even during turbulent times. When you're forced to make difficult decisions, your vision should help determine the right path.
Key Success Factors:
Clearly articulate and document success metrics.
Foster regular communication among leadership.
Align on a unified vision that informs every decision.
5. The People Problem: Addressing Change
Why It Matters:
An ERP system isn't just a software deployment—it's a strategy and process change that affects every part of your organization. When change management is ignored, employees resist the new system, morale drops, and productivity suffers. At Mission Produce, operational disruptions were worsened by the lack of a robust change management strategy, exacerbating the negative impacts of the new ERP.
Lesson Learned:
The human side of change is as crucial as the technical side. Ensure that your team is fully onboard and equipped to handle the transition. That way, when there are challenges – and there always are – the team will be ready to lean into them together.
Key Success Factors:
Develop a comprehensive change management plan that includes clear communication and training.
Engage employees early and solicit their feedback.
Provide ongoing support to ease the transition and build long-term buy-in.
In today's day and age, ERP can make or break your growth ambitions and strategies. Whether you're facing challenges with unrealistic expectations, insufficient planning, misaligned leadership, addressing change, or unclear requirements—or any other obstacle along the way—you no longer have to settle for a long wait and an underwhelming result. You don't have to go at it alone. At The Confluencial, we don't just have the skillset for these challenges; we have a passion for conquering them, and we'd be excited to help. We launch successful ERP implementations and rehabilitate troubled ones every day. We can help.
Thank you for reading. Please comment with insights and questions. If you have any questions you want to follow up on, please email us directly at info@theconfluencial.com. If you like what you see, follow us on LinkedIn and YouTube for more thought leadership weekly.
