According to research by Gartner, more than 70 percent of newly implemented ERP projects fall short of achieving the business outcomes they were designed to deliver, costing the U.S. economy hundreds of millions in wasted spending annually. The disconnect is clear: while many businesses report improved processes after an ERP implementation, most still approach selection with mindsets that are more likely to lead to failure than long-term success.
In this article you will learn:
- How your organization can set a foundation for success during the ERP selection process
- How to develop future-state requirements that prevent costly scope creep and implementation delays
- The critical difference between treating ERP as an IT project versus a business transformation initiative
- Why successful organizations invest in transformation leadership before beginning ERP selection
- Practical steps to evaluate vendors and ensure your team is prepared for implementation success
Your 2026 ERP Decision Will Impact Operations Through the 2040s
It is 2026, and many organizations are beginning to realize that the software you select today will shape how you operate for years or even decades. Your ERP decisions are not short-term technology migrations. They are decisions that can directly impact your organization’s long-term viability.
Research from Gartner shows that up to 70 percent of newly implemented ERP projects fail to meet their stated objectives. As a result, hundreds of millions of dollars are spent every year in the US economy on projects that do not deliver the expected outcomes. This doesn’t just create wasted spend for your organization. It leads to missed opportunities, stalled growth, and in many cases, organizations that become less competitive than they should be.
Your ERP system can be a catalyst for transformation. It can streamline your processes, eliminate the physical paperwork that’s still printed to run your day-to-day operations, enable your employees to do better work, and ultimately deliver a better customer experience. Yet if you approach ERP as a technology project rather than a business transformation project, you’re already on the path to failure.
If your organization implements an ERP solution in 2026, there’s a strong chance you’ll still be using that platform in the 2040s. That reality alone should change how you make selection decisions.
Why Digital Transformation Makes ERP Selection Critical Now
We are at a pivotal moment for digital transformation. According to recent industry research, 63% of executives worldwide report positive ROI from digital transformation efforts, with 56% of CEOs specifically citing increased profits from digital investments. And AI has the potential to reshape how organizations operate in the same way business software once replaced paper and pen.
In many industries, getting this wrong could mean falling behind competitors who can move faster, serve your customers better, and adapt more quickly. For some organizations, it will mean selling or exiting the market altogether. I am not simply some technologist jumping on the “AI is going to change the world” bandwagon—we literally have clients that have completely reshaped their operations with digital workers and are continuing to do so.
How Your Selection Process Determines Implementation Success
Once you accept that most ERP projects fail and that the stakes are this high, it becomes clear that your success is largely determined before implementation even begins. In my experience, failure is often baked into your selection process itself.
Earlier in my career, I served as a project manager for ERP implementers and saw this pattern repeat across industries. A manufacturing, distribution, professional service, healthcare, or nonprofit selects an ERP solution, and consultants come onsite for requirements gathering. During these sessions, consultants ask how your company wants the system configured and document those answers for your approval and sign-off before the consultant configures and builds the solution.
Then the moment arrives. The consultant asks, “Tell me how you want your accounts payable process to work.” Your CFO, controller, or finance manager walks through the current process while the consultant takes notes. A few minutes later, someone usually stops the conversation and says, “That is what we do today, but I am not sure that is what we want to do going forward.”
The consultant responds, “Okay, so what do you want to do?”
This is where many projects start to unravel for your organization. You have consultants onsite billing hundreds of dollars per hour, and your team only knows how it operates today. Very little thought has been put into how your business should operate in the future. The result is that you simply replicate your existing processes into a new system that you’ll use for the next several decades.
If you’re building your dream home, you don’t tell the architect about the house you live in today. You tell them about your vision. The same is true for ERP implementation consultants. They need to understand where you want to go, how you want to streamline processes, where workflows should replace manual steps, and how seven steps become five for your team. That is transformation.
Building Your Future-State Vision
- First, you must clearly define a future state vision for your organization. Where will your business be in five, ten, or fifteen years? What will remain the same, and what must change to support your growth, scalability, and new business models?
- Second, your requirements must be built for that future state organization, not the company as it exists today. What capabilities will be required for you to operate effectively at that scale? What processes should be standardized, automated, or reimagined?
- Third, the right leaders must be involved in this work. These are not individuals focused solely on running your day-to-day operations. They are leaders who focus on improvement, can collaborate across functions, make decisions, and own those decisions.
When your organization says it doesn’t know what to tell consultants, this is exactly what these future-state requirements are meant to solve. Context about today’s operations matters, but clarity around your future vision matters more.
Making Vendors Prove They Can Deliver Your Vision
Once your future state requirements are documented and shared through an RFP with software publishers and implementation partners, something interesting often happens. Some vendors bow out and explain that the solution is not a fit for your industry, complexity, or size of organization. That’s a good outcome for you. It means your preparation worked and poor fits were eliminated early.
When it comes time for software demonstrations, you should not accept canned demos that are shown to every prospect. Vendors should be using your requirements to demonstrate real end-to-end process flows that reflect what makes your organization unique.
These demo sessions are not passive meetings for your team. They require focused attention and critical evaluation of both the software and the vendor. This is a long-term marriage with both the solution and the partner, and the diligence you do here sets the foundation for everything that follows.
This might sound like unnecessary work. You might say that you already know what software you need. You very well might. The real question is how confident you are that when consultants spend days or weeks gathering requirements, your team will communicate the future operating model instead of simply describing how things work today across your sales, purchasing, operations, finance, and billing.
Building Your Organization’s Decision-Making Capability
Your team must be able to assess information and make decisions. Decision-making is a major part of ERP implementations. Are your C-suite leaders and line managers willing and capable of doing that? Doing this work upfront builds organizational muscle and develops a team that can deal with roadblocks, make decisions, and move forward. You don’t want to build this capability during an implementation, which often results in go-live dates slipping by months.
If You’re Going to Do This, Do It Right
Selecting and implementing ERP solutions are major initiatives with failure rates similar to those of mergers and acquisitions. If you’re not willing to invest the time upfront to define future state requirements, evaluate solutions and vendors, and build the leadership capability required to succeed, then it’s better to postpone the initiative until the right time or until the right leaders are in place.
I have seen organizations invest heavily in these projects, load systems with bad data and outdated processes from the 1990s, and then live with poor results for the next fifteen years.
Consider this your moment for a full business transformation. Many small and mid-sized organizations are investing in full-time or fractional transformation executives to lead these initiatives. Twenty years ago, the CIO role was largely about running IT departments. That’s still part of the job today, but the amount of time spent on infrastructure, security, and systems upkeep has decreased. More time is now spent leading transformation.
We’re not only seeing SMBs invest in CIOs and transformation executives as employees. They’re also bringing CIOs and transformation leaders into board-level roles to help shape strategy and transformation. This shift is happening for a reason.
The Modern CIO as Your Transformation Leader
At Net at Work, we view the CIO as a transformation executive. Years ago, most basic processes were executed by people. Today, more and more of that work is being executed by digital platforms and AI. If you’re investing in a CIO, the best return is not having them focus on server rooms and system upgrades. Those things still matter, but they’re increasingly handled through cloud and SaaS solutions. The real value is having that leader focused on driving business outcomes through technology and transformation for your organization.
Your Path Forward
Selecting and implementing an ERP is a difficult journey. I would never attempt to climb Mount Everest without training, preparation, and an experienced guide. The ERP selection process is your training. It compels your organization to think about the future, make decisions, align leaders, and build the muscle required to navigate what comes next. If you don’t have the right leadership in place to manage that work, get it in place first. And if you’re going to take this journey, do it right.
We’re already seeing many small and midsized organizations make aggressive moves to digitize and transform. With many small businesses now using ERP software, the competitive landscape is shifting rapidly. If you get this wrong, you may find yourself selling your business at a discount to one of them.
Key Takeaways: Action Items You Can Accomplish Now
- Enlist a Guide for Your ERP Selection – ERP implementation success is largely determined during the selection process. Most organizations go through ERP selection only once every 15 to 20 years, which makes internal experience limited. An experienced ERP selection consultant provides structure, objectivity, and guidance to help you choose the right platform and avoid costly missteps.
- Assess Your Current State – Document your existing processes, but more importantly, identify which ones create competitive advantage versus which should be standardized.
- Define Your Future Vision – Schedule strategic planning sessions with your leadership team to map out where your business needs to be in 5-10 years. In particular, consider how AI and automation will reshape your industry.
- Build Your Selection Team – Identify leaders who can make decisions and own outcomes. Include both operational experts and transformation-focused executives. Consider bringing in fractional CIO expertise if you lack internal capabilities.
- Create Future-State Requirements – Before talking to any vendor, document how you want your business to operate in the future. Focus on outcomes, not features.
- Evaluate Your Change Readiness – Honestly assess whether your organization has the leadership commitment and change management capability to succeed. If not, address these gaps before proceeding.
- Budget for Success – Plan for the true cost of transformation, not just software licenses. Include change management, training, and potential consulting support in your budget.
- Start Small but Think Big – Consider a phased approach that delivers quick wins while building toward your long-term vision. SMBs can typically complete implementations in 3-9 months when properly prepared.