In this article
What can mid-market leaders learn from the ERP implementation experiences of Woolworths, Nestlé, Nike, Hershey and Lidl?
Each business had different objectives, operating models and implementation challenges. However, each example shows what happens when a newly implemented system is tested by the realities of running a business: store reports stop arriving, users fall back on workarounds, forecasts miss in both directions, orders cannot be filled and costs outgrow the business case.
For mid-market leaders, these ERP implementation failures offer valuable lessons. The five cases below reveal where ERP value is most often lost — and how to recognise the early warning signs before they affect reporting, operations or margins.
Key takeaways
ERP implementation failures reveal leadership gaps. Woolworths, Nestlé, Hershey, Nike and Lidl show how weak reporting, adoption, timing, planning and process fit undermine ERP value.
ERP failure warning signs are visible early. Spreadsheets, manual reconciliations, offline approvals and rebuilt reports signal that critical work has not moved into the ERP.
Go-live does not prove ERP success. Success depends on whether people trust the system, retire old processes and use ERP data to run the business.
The leadership test is performance under pressure. ERP adoption is working when orders, reporting, controls and decisions hold up during peak demand, month-end or disruption.
Mid-market ERP readiness is a business issue. Leaders need clear ownership, practical change management and evidence that the new operating model can replace the old one.
What went wrong at Woolworths, Nestlé, Nike, Hershey and Lidl?
Woolworths, Nestlé, Nike, Hershey and Lidl are among the most widely cited ERP implementation failures.
Each looked different on the surface. In practice, they all exposed weaknesses in how systems, processes and people were prepared for real operating pressure: in-store reports that stopped arriving, planners who kept using spreadsheets, forecasts that missed in both directions, orders that could not be filled and costs that outgrew the business case.
1. Woolworths: the system broke the reports stores ran on
Every Woolworths supermarket used to receive a daily profit-and-loss statement for its own store. After the retailer moved its merchandising platform onto SAP, those statements stopped because the new system could not produce them from the way store data was collected.
The ERP was live, but a critical management routine was not. Restoring daily department-level sales, gross profit and stock-loss reporting became one of the CEO’s KPIs, and FY16 was described as a year of regaining process stability around the new systems – rather than reducing costs or materially improving how the business ran.
In other words, the ERP was absorbing management attention rather than returning value. Shelves had gaps going into Christmas, store managers had lost the numbers they were accountable for and expected productivity gains were pushed into the following year.
Which management routines depend on the system you're replacing, and will they work from day one of the new one?
In a mid-market business, the equivalent may be a daily management report, inventory workflow or margin calculation. If it disappears or stops being trusted, leaders lose the visibility and accountability needed to run the business.
2. Nestlé: the people who would use the ERP weren't in the room
Nestlé USA’s brands were paying the same supplier 29 different prices for vanilla flavouring. Its SAP programme, Best, was meant to bring purchasing, finance, sales and supply chain management into common processes.
However, the people directly affected were not represented in the key stakeholder team. Nestlé’s CIO later called that her near-fatal mistake.
In the rush to get the system live, the team also missed integration points between modules. A discount entered by a salesperson might not reach accounts receivable, making a correctly paid invoice look short.
Employees did not understand the new system or the processes behind it. The help desk was taking 300 calls a day, demand planners kept relying on spreadsheets and turnover among them reached 77 per cent.
Can the people responsible for each critical process explain what is changing, why it is changing and what will replace the old process?
A mid-market business may not have 29 prices for the same ingredient, but it can still have teams using different definitions, systems or approvals for the same activity. User involvement is how leaders make sure the ERP reflects the work people actually need to do.
3. Hershey: the ERP went live at the wrong time
Just as Halloween orders were coming in, Hershey switched to a new US$112 million order-taking and distribution system combining SAP R/3, Siebel and Manugistics.
Demand was high. Because of the change, Hershey couldn’t meet it.
Customer service, warehousing and shipping problems left the business unable to fill orders completely or on time.
The functions that broke were those running the new procedures at peak volume. Hershey’s chief executive said the problems would stop the company delivering US$100 million worth of Halloween candy. Its shares fell more than 8 per cent that day.
Disruption carried into the next quarter. Higher freight and distribution costs also helped push full-year gross margin down.
If the go-live creates disruption, can the business still take orders, fulfil demand, maintain controls and protect customer relationships?
Every business has moments when disruption costs more: a seasonal sales period, major customer launch, month-end, payroll run or project handover. Leaders need to test whether the business can keep taking orders, fulfilling commitments and maintaining financial control while new systems and processes settle in.
4. Nike: technology amplified planning and integration problems
Nike often appears on lists of famous ERP failures. Strictly speaking, the failure stemmed from i2 demand and supply planning software – which was part of a wider supply chain programme that also included SAP ERP.
However, the lesson still applies to ERP implementation: users were not ready, system outputs could not be fully trusted and workarounds were needed to keep the business moving.
The i2 system was slow, buggy and poorly integrated. It forecast too many Air Garnetts and too few Air Jordans, while staff manually reloaded data between applications, sometimes weekly.
Nike cut its quarterly earnings guidance by about a third. Excess stock, discounting and missed demand showed how planning errors can affect margin, inventory and customer commitments.
When the system produces a number that doesn't make commercial sense, who is accountable for overriding it?
Most mid-market businesses are not planning around designer footwear trends, but they still make decisions about demand, stock, capacity and cash. If people cannot explain or challenge a forecast, the ERP is moving uncertainty into decisions that affect purchasing, fulfilment and margin.
5. Lidl: complexity became the failure
Lidl’s abandoned SAP project shows how a mismatch between ERP and established processes can turn customisation into cost and complexity.
Lidl’s SAP programme, Elwis, was meant to replace its in-house merchandise management system. However, Lidl’s inventory management approach did not align neatly with the standard SAP model. Rather than change its inventory evaluation method, Lidl had the software reworked around it.
Customisation accumulated, the system became harder to run and costs moved beyond control.
Elwis went live in three countries. But after about seven years, the board concluded its goals couldn’t be met at acceptable expense. Lidl chose to keep developing its existing system.
Which of the processes you’re protecting create competitive advantage – and which are simply familiar?
A mid-market business is unlikely to spend seven years and hundreds of millions of dollars on customisation. But leaders are still at risk of protecting familiar workflows, reports or approvals without testing whether they create genuine competitive advantage.
What these five ERP failures have in common
These examples are billion-dollar global businesses, but the failure patterns are familiar at a smaller scale: untrusted data, weak ownership, poor process fit, bad timing and workarounds that keep critical decisions outside the ERP.
For mid-market businesses, those patterns can become operational issues quickly. With leaner teams and less capacity, disruption can reach reporting, cash, inventory, customer commitments and controls faster.
The good news is that many of these issues stem from decisions made – or overlooked – before implementation begins. Read ERP change management: How Phase Zero protects adoption and ROI for more on defining ownership, aligning stakeholders and preparing the business for change.
Warning signs ERP adoption is failing
ERP failure rarely announces itself. In most businesses, the early signs are practical and visible if leaders know what to look for.
Warning sign | What it usually means | What it puts at risk |
Critical spreadsheets still in use after go-live | Trust gap: people don't see ERP data as complete or reliable, or the ERP doesn't support a process they still need | Decisions are made on data outside the system's controls, and the single source of truth the business paid for never materialises |
The same data entered in more than one system | Ownership gap: no one has settled who owns the data, or integration and master-data rules are incomplete | Staff time goes on re-keying, records drift apart, and every report depends on which system it came from |
Approvals still happen by email or offline | Control gap: the formal workflow exists but hasn't replaced the informal one | Approvals leave no trail in the system, so control and compliance depend on inboxes |
Reports rebuilt or reconciled by hand | Confidence gap: reporting exists, but trust in the data or its logic hasn't followed | Leaders act on numbers that are slower and costlier to produce, and less reliable than the ones the ERP was bought to deliver |
Knowledge concentrated in a few power users | Capability gap: skills haven't spread beyond a handful of people | The business depends on individuals; when one is away or leaves, a critical process can stall |
No one can say which old steps have been retired | Process gap: ERP activity has been added on top of the old way of working instead of replacing it | The business carries the cost of two operating models, and the efficiency case for the ERP erodes |
Support tickets stay high in one role or process | Design gap: a workflow, integration or training need is unresolved in that part of the business | A local problem left unresolved becomes a local workaround, and the pattern above begins again |
None of these signs proves failure on its own.
Together, they signal that work, data and decisions haven’t moved into the ERP. The business is quietly running two operating models at once.
The leadership test for ERP success
Most ERP problems are recognised too late, because leaders measure completion while the business is still signalling risk. The system is live, tickets are closing and people are logging in – but critical work still moves outside the ERP whenever accuracy, speed or accountability matters most. The practical test is: can the business run critical work and trust the information without recreating the fragmentation the ERP was meant to replace? ERP adoption is starting to stick when:
Critical processes run inside the ERP.
Teams trust the data without rebuilding it elsewhere.
Leaders use ERP reporting without manual validation.
Process owners govern the new way of working.
Old steps, spreadsheets and approvals have been retired.
Controls work under real operating pressure.
That depends on people as much as software. To see what successful adoption looks like after go-live, read How change champions and peer support can improve ERP user adoption.
It's just as important to have the right implementation team – people who understand how your business runs, not only how the software works. MYOB Acumatica is delivered through accredited partners with industry experience and knowledge of Australian and New Zealand business requirements, helping the implementation reflect how the business needs to run, not just how the system is configured.
Talk to an MYOB Acumatica expert to assess implementation readiness and partner fit.
FAQs
What percentage of ERP implementations fail?
There is no single reliable failure percentage because studies define failure differently. Some count abandoned projects. Others include budget overruns, delayed go-lives or implementations that do not deliver the expected benefits.
For leaders, the more useful question is whether the ERP has changed how the business runs, decides and reports.
What counts as an ERP implementation failure?
An implementation can be considered unsuccessful when it does not deliver the business capability it was selected to create. That may mean a project is abandoned, operations are disrupted, reporting cannot be trusted or teams continue relying on disconnected processes after go-live.
Can a failing ERP implementation be recovered?
Often, yes. Recovery starts with identifying the root cause rather than treating low adoption as the problem by itself. That may involve process design, data quality, integration, governance, training, partner capability or executive ownership.
Recovery becomes harder when workarounds become permanent and no one is accountable for fixing the reason they exist.
How long does ERP adoption take to stick?
ERP adoption takes longer than go-live. People need time to build confidence in new workflows, reporting and decision routines.
Adoption is starting to stick when teams stop recreating data outside the system, process owners can govern the new way of working and leaders rely on ERP reporting without manual validation.
Is ERP failure different for mid-market businesses?
The risks are often more immediate because mid-market teams have less spare capacity, fewer specialist resources and less tolerance for disruption.
In Australia and New Zealand, local payroll and tax obligations can also make poor process design, data migration issues and reporting gaps more visible after go-live.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice.
This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
Contributors
MYOB Subject Matter Experts