ERP failures rarely begin in the IT department or at the implementation stage. They begin much earlier — in the boardroom, where the direction, intent, and priorities of digital transformation are first defined. In most companies, especially in India’s mid-sized manufacturing and family-run enterprises, ERP becomes a topic of prestige rather than purpose. Executives talk about “AI dashboards,” “predictive analytics,” or “business intelligence,” while the core foundation — the transactional integrity of the ERP — remains incomplete or ignored.

The truth is simple: ERP is not your fancy apartment; it’s the foundation on which everything else stands.

ERP is Like Primary Education Not Post-Graduate Glamour

You cannot discuss quantum physics before learning basic arithmetic. Similarly, you cannot expect AI to optimize decisions when your basic data — your POs, GRNs, material issues, production entries, accounting vouchers, or approvals — are half-baked or incomplete.

In global terms, studies by Gartner and Panorama Consulting reveal that nearly 55% of ERP projects fail to deliver expected ROI, and one in three organizations experience a major disruption during rollout. The reasons cited are strikingly consistent — lack of top management involvement, unclear goals, and unrealistic expectations.

In India, this problem is amplified by our business culture. Many boards view ERP as a “software project” rather than a business reengineering initiative. The focus often shifts prematurely to the end-game — mobile dashboards, analytics, or AI assistants — instead of the foundation: accurate, end-to-end transactional capture from every business process.

The Foundation Before the Penthouse

Think of ERP as a 16-storey building.

• Floors 1–15 are the backbone Procurement, Inventory, Production, Quality, Finance, Sales, HR, Maintenance, and so on.
• Floor 16 is the Penthouse the AI, BI, and Chatbots everyone wants to talk about.

But the irony is without building the first 15 floors, the penthouse floats in a vacuum.

Let’s illustrate:

• A steel manufacturer in Pune implemented a costly ERP but refused to digitize their GRN and material issue process fully, calling it “too operational.” Six months later, their AI-powered BI tool started showing mismatched consumption and yield variances. The management blamed the ERP vendor, not realizing that their foundation data was never accurate.
• A European automotive component company spent €3 million on a new ERP-CRM stack integrated with IoT data. The board’s focus was on predictive maintenance dashboards. Yet, shop-floor teams never entered accurate machine downtime data. The outcome? Their AI engine kept predicting “false positives” — leading to unnecessary maintenance and downtime costs.

In both cases, the failure was never technological — it was philosophical.

Why Boards Are the Real Culprits

Top executives often find “foundation discussions” boring. They want dashboards, not data discipline. They want automation, not accountability. But ERP doesn’t bend to vanity — it rewards discipline, consistency, and process integrity.

A board that constantly speaks about “AI dashboards” without fixing duplicate vendor masters or incomplete GRNs sets the wrong tone for the entire organization. Employees follow leadership signals — if the C-suite discusses the 16th floor, the ground floor will be neglected.

In contrast, companies that succeed with ERP — globally and in India — do the opposite.

• Tata Steel’s ERP journey in the early 2000s was built on a decade-long discipline of capturing every transaction accurately, across locations, long before analytics or AI entered the picture.
• Maruti Suzuki focused first on digitizing approvals, material traceability, and vendor integration before launching BI dashboards.
• Siemens AG runs one of the most integrated ERP ecosystems globally, but it started by standardizing master data across 190 countries — a foundational effort that took years, not months.

These companies didn’t chase glamour — they built grit.

The Psychology of ERP Failure

ERP failure is not about software; it’s about human ego and organizational psychology.

1. Cognitive Dissonance at the Top: Leaders intellectually know data discipline is key but emotionally prefer the excitement of AI or analytics conversations.
2. Cultural Resistance: In family-run or SME businesses, process standardization feels like losing control.
3. Misplaced Accountability: Boards expect ERP success from IT teams, when it’s actually a business ownership issue.
4. Instant Gratification: The impatience for visible outcomes leads to skipping foundational steps — a fatal mistake.

This is why ERP discussions must start with “data sanctity,” not dashboards.

ERP Is the New Business Literacy

In 2025, ERP literacy is equivalent to financial literacy in the 1990s. Every CXO and board member must understand what constitutes good transactional data — not just what AI can do with it.

Because AI, BI, and automation are not creators of data — they are consumers of it. Garbage in, garbage out still applies, whether in India or in Silicon Valley.

So, before dreaming of predictive insights or smart assistants, organizations must ask:

• Are all purchase orders digitally approved?
• Are goods receipts linked to the right supplier and lot?
• Is production data captured from the machine, not a handwritten slip?
• Are accounting vouchers system-generated, not backdated entries?

If not, then no AI in the world can make sense of it.

Building the Right Boardroom Mindset

To ensure ERP success, the boardroom conversation must shift from “What can AI show me?” to “What can ERP teach me about my business discipline?”

Here’s what great boards do differently:

1. Anchor discussions in transaction-level data, not reports.
2. Celebrate process compliance, not just top-line growth.
3. Invest in master data governance — vendors, materials, and customers.
4. Link ERP KPIs to business outcomes — delivery accuracy, working capital, downtime, and rework.
5. Treat ERP as business infrastructure, not a departmental tool.

The Final Word

ERP failure is rarely technical. It’s a leadership failure camouflaged as an IT issue.

If the foundation of your ERP the daily, boring, transactional truth isn’t rock solid, then your AI, BI, and Chatbots will be castles built on sand.

Remember:

ERP is your primary education; AI is your PhD.

You can’t skip school and expect to do research.

So, before dreaming about the 16th-floor penthouse, build your foundation. That’s where real transformation begins not in the boardroom applause, but in the daily discipline of your ERP transactions.

Want to Know How to Build It Right?

If you’d like to understand how a successful ERP roadmap should be planned, implemented, and governed
📞 call +91 79846 17782

Let’s discuss how to make your ERP not just a project — but a true business foundation for growth.