What risks associated with an ERP migration do you need to be aware of?

Switching ERP systems is one of the riskiest investment decisions a midsize company can make: Depending on the study, 50 to 75 percent of all ERP projects exceed their budget or schedule—or fail to deliver the expected benefits. The greatest risks rarely lie with the software vendor’s offering. They lie within your organization: in the commitment of key internal personnel, in the quality of your data, and in your company’s ability to make structured decisions amid uncertainty.

Based on over 1,200 projects spanning 33 years of vendor-neutral consulting, we know this: Companies that assess these risks before selecting a system are able to make the transition faster and more cost-effectively. This article shows you which risks you need to be aware of—and how to manage them.

Success Factors for an ERP Migration

The most important success factor in an ERP migration is a realistic assessment of the project scope: An upgrade with the same vendor—such as from SAP R/3 to S/4HANA —requires an effort comparable to that of a complete new implementation. Anyone who budgets for it as an “update” has already accepted the first risk before the project has even begun.

The most common triggers for an ERP migration:

• Outdated, inflexible IT landscapes —according to the Trovarit study “ERP in Practice” 2024/25, ERP systems in DACH companies are, on average, over 13 years old.
• Functional shortcomings that the existing system cannot address.
• Digitalization requirements (e-commerce, automation, AI integration).
• Expiring support or terminated maintenance contracts—common with industry-specific packages.
• Obsolete programming languages for which there are no longer any developers.

Notably: 70 percent of medium-sized companies are reluctant to make the switch despite these warning signs—out of fear of costs and complexity (Trovarit 2024/25). This hesitation is itself a risk: it postpones the switch until it must be carried out under time pressure.

Special Considerations When Replacing In-House ERP Systems

In-house ERP systems are common among small and medium-sized enterprises

—and are often surprisingly effective. They precisely map specialized processes that have evolved over the years and benefit from close collaboration with IT. It is precisely this strength that poses the central risk during a system migration: the high degree of customization is rarely documented and understood by only a few people.

The decision then comes down to: further developing the in-house solution, adopting a standard ERP system, or implementing a hybrid solution. If your custom processes are demonstrably valuable to your customers (as evidenced by orders, prices, and loyalty), then they must be included in the requirements specification—as a delta from the standard. If not, the transition is the right time to replace them with the standard system. This delta analysis is at the heart of requirements definition; as a vendor-neutral consulting firm, we deliberately conduct it before any contact with a vendor—because no software vendor can objectively assess which of your specialized processes are dispensable.

Does risk management help in evaluating the alternatives?

Yes—risk management is the most effective tool for objectively comparing alternatives during the ERP selection process, rather than making decisions based on gut instinct. It forces you to clarify the value creation structure before you even consider the system itself: What service do your customers expect? What do your processes cost? More IT alone does not improve process organization.

When switching from one standard system to another, the degree of customization is usually manageable—with a bit of luck, the configuration is documented. When switching from an in-house development, however, the high degree of customization is the decisive factor in defining requirements and creating the requirements specification. Identifying the differences between the standard ERP system and the in-house system is the central task. Excel lists of functions are not sufficient as a basis for such a complex selection process—the requirements specification must meet the quality standards expected of a structured selection process.

How should risk management be structured?

There is no one-size-fits-all approach—the specific implementation depends on the legal form, market, legal requirements, and corporate governance. Gleißner’s six-step model (2008, Risk Controlling and Strategic Risk Management) has proven to be a useful starting point:

1. No risk management —risks are handled on an ad hoc basis.
2. Loss management —response only after an event occurs.
3. Regulatory risk management —systematic identification and assessment.
4. Economic risk management —risks are factored into investment decisions.
5. Integrated value-oriented management – risk-return management.
6. Embedded risk management – every strategic decision is aligned with the risk-adjusted return.

You don’t need Level 6 for ERP selection—it takes years to build up to that level. Levels 3 and 4 are sufficient to answer the key question: Which off-the-shelf software can be procured and implemented, and to what degree of integration? This is exactly where our SCOReX® analysis comes in, which we use to ensure a vendor-neutral ERP selection: It reveals risk patterns from comparable projects before you make a commitment—and shortens selection processes by up to 30 percent.

What additional requirements should be considered when switching ERP systems?

A real-world example: A company employs a development team whose strengths lie in open-source technologies. Management decides to go with established off-the-shelf software—SAP, Microsoft, Oracle. With this decision, the skills of these employees suddenly lose their value. There is a high probability that they will leave the company—and with them goes the undocumented process knowledge that the migration actually requires.

This brain drain is the most commonly overlooked risk during an ERP migration. It is not mentioned in any vendor’s proposal because it is not a software risk but a strategic one. That is why a business model perspective (according to Wirtz 2013, Business Model Management) should be part of every decision to switch: Where does your competitive advantage lie—and which people embody it? Important: The goal is not to build decisions around specific individuals, but to assess these impacts in risk management before they occur.

Why must the migration issue be clarified early on?

Every ERP implementation reaches the point of migration—and the strategy for it must be established before the system is selected, not after. Three basic patterns have emerged:

Important distinction: Adapting standard ERP software to your processes and structures is called “customizing”—it should not be confused with custom programming. The exact specifications for this should be included in the requirements specification.

A phased migration can make risks manageable

Migration is generally not a “big bang” but a phased migration—often with the legacy system running in parallel as part of an encapsulation strategy. This limits the risk of downtime and makes each step individually controllable.

4 Types of Partial Migration During an ERP Switch:

• Data migration – Only data is transferred; programs remain unchanged. Typical use case: replacement of hardware or databases. Users may notice improved performance.
• Program Migration – Programs are modified, but the data structure remains the same. This is typical when new functions cannot be implemented in the legacy system, or can only be implemented with significant effort.
• User InterfaceMigration – Only the user interface (UX) is updated. This is only advisable if the underlying systems are future-proof.
• Interface migration – Interfaces are redesigned so that old and new systems can communicate—including for connecting systems that have already been migrated.

Conclusion and Outlook

Three factors determine the success or failure of an ERP migration: risk management at a minimum of level 3–4, a migration strategy defined early on, and an honest assessment of organizational risks—from resource requirements to brain drain. The software itself is rarely the problem: Of the 50–75% of projects that go over budget, most are due to organizational causes, not technical ones. A high-quality, vendor-neutral selection process is therefore essential.

Frequently Asked Questions (FAQ)

What is the biggest risk involved in an ERP migration?

Not the technology, but the organization: underestimated internal resources, undocumented process knowledge, and a lack of change management. Studies estimate that 50–75% of ERP projects exceed their budget or timeline. In our more than 1,200 projects, a poorly defined requirements specification was the most common single cause.

How long does an ERP migration take for a small-to-medium-sized business?

From selection to go-live, 12–24 months is typical, depending on the degree of customization and data quality. A structured, AI-supported selection process (such as with SCOReX®) can shorten the selection phase by up to 30%.

Should we replace our in-house-developed ERP system?

If a programming language becomes obsolete, developers are in short supply, or new hardware is required: yes, it’s inevitable in the medium term. The key is the delta analysis: Which specific processes does your customer actually value? Only these should be included in the requirements specification.

Big Bang or Phased Migration?

In most cases, phased migrations are preferable: data, program, user interface, and interface migrations can be managed individually and limit the risk of downtime. A “Big Bang” approach is only justifiable in cases of low complexity and very high data quality.

Why choose vendor-neutral ERP consulting?

Because software vendors cannot objectively assess whether their system is a good fit for your processes. Independent consulting is paid for exclusively by you—not through commissions—and can therefore also advise against switching.