Article · July 2026 · 5 min read

Why ERP projects blow their budgets — the numbers, then the fix

Start with the most sobering dataset in enterprise IT. McKinsey, working with the University of Oxford, analysed over 5,400 large IT projects and found they run 45% over budget and 7% over time on average — while delivering less value than promised. Industry analyses of ERP specifically put the share of projects that fail to meet their objectives at 55% to 75%.

The causes are just as well measured. Surveys of ERP overruns repeatedly land on the same three: underestimated staffing (~38%), scope expansion (~35%) and data or technical issues (~34%). Notice what is missing from that list: the software. ERP projects rarely fail because the product cannot do the job; they fail because the organisation around the project was mis-planned.

Each cause has a practical antidote. Staffing: insist on named consultants with the right module depth before signing — not a rate card and a promise. Scope: freeze what 'done' means in writing, and treat every addition as a costed decision rather than a favour. Data: start migration work in week one — mapping, cleansing, mock loads — because opening balances that don't reconcile are the single most common go-live delay.

There is also a structural fix, and it is the reason we deliver support-first: most of the risk above comes from doing too much at once. A running system, stabilised and understood, is the safest foundation for change — small tested releases, then bigger moves once the foundations have proven themselves. Boring beats broken.

Sources: McKinsey & Oxford — Delivering large-scale IT projects; Testhouse — 55% of ERP projects exceed budgets; Pemeco — Why ERP failure rates exceed 50%.