ERP Frustration in Mid-Sized Companies: Why a New System Won't Fix the Old Problem
Only 30-40% of ERP capabilities are used, yet companies want a new system. Why process optimization must come before the system switch. Practical analysis.
“Our ERP is the problem.” I hear this sentence in almost every initial meeting. Too slow. Too complicated. Can’t do this. Does that wrong. The solution seems obvious: a new system. More modern, more powerful, better.
In 8 out of 10 cases, the truth is different – and this aligns with findings from the Standish Group, which has analyzed IT project failures for decades: The ERP isn’t the problem. The processes are. And a new system with the same processes delivers exactly the same result — just at a higher cost. This is a core focus of my ERP consulting for SMEs.
ERP Frustration in SMEs: Why Companies Only Use 30%
In almost every company considering an ERP change, I find the same picture.
Employees work around the system. Instead of using standard ERP processes, there are Excel spreadsheets for order planning, email folders serving as approval workflows, and handwritten notes on screens with posting rules that should be configured in the system.
The ERP is used as a data store, not a process tool. Data goes in, but the reports, automations, and workflows the system offers remain unused. The P&L is rebuilt in Excel. Inventory management runs in a parallel spreadsheet. The dunning process is done manually despite being automatable.
Blame is easy to assign. When a process doesn’t work, it’s the system’s fault. Not the process, not the lack of training, not the fact that the work instructions date from 2014 and nobody has questioned whether they still make sense.
The 30% Trap: What Mid-Sized Companies Don’t Use
Most ERP systems in mid-sized companies — whether SAP Business One, Microsoft Dynamics, proALPHA, abas, or an industry-specific solution — offer significantly more functionality than is actually used. The DSAG (German-speaking SAP User Group) regularly confirms that underutilization of existing features is a core issue. In my projects, I regularly see that only 30–40% of available features are actively used.
What typically lies dormant:
- Automatic purchase order suggestions based on minimum stock levels and demand planning — instead, procurement orders by gut feeling
- Integrated workflows for approvals, orders, invoice verification — instead, emails go back and forth
- Standard reports and dashboards — instead, data is exported and prepared in Excel
- Automatic dunning runs — instead, accounting manually checks open items
- Document management — instead, invoices, delivery notes, and contracts sit in the file system or paper folders
This means: companies pay for an enterprise system and use it like a bloated Excel. The functionality is there. It’s just not being used.
New ERP System, Old Processes: The Expensive Repetition
A concrete example from a consulting project: A trading company with 120 employees was unhappy with their ERP. The complaints were classic — too slow, too cumbersome, can’t do this, does that wrong. The decision was made: new system. Budget: 450,000 euros for licenses, implementation, and migration.
After 14 months, the new system was live. Three months later, the sobering realization: Same Excel spreadsheets. Same manual workarounds. Same complaints — just about a system that cost 450,000 euros.
Why? Because nobody adjusted the processes. Workflows were transferred 1:1 from the old system to the new one. Employees kept their familiar detours. The new system was underutilized just like the old one.
This isn’t an isolated case. I see this pattern in the majority of ERP projects that start without prior process analysis. The typical mistakes in ERP migrations almost always begin with missing process work.
When a New ERP Is Actually Necessary
A new system isn’t fundamentally wrong. There are situations where a switch is the right decision.
Technical end-of-life. The vendor discontinues support, security updates are no longer available, the platform is outdated. Then a switch is unavoidable.
Fundamental feature gaps. The system cannot map a business-critical requirement — e.g., multi-entity support, international accounting, or an industry-specific function that can’t be reasonably added.
Exploding operating costs. When the total cost of ownership of the current system is no longer economically viable and an alternative system demonstrably operates at lower cost.
Lack of integration capability. The system can’t connect with other critical applications — no APIs, no standard interfaces, no automation options.
In all these cases, a switch makes sense. But even then: clarify processes first, then choose the system.
Process Optimization Before ERP Switch: The Right Way
Before you think about a new ERP, invest two weeks in an honest assessment.
1. Which Functions Do You Actually Use?
Create a list of all ERP modules you’ve licensed. Then mark which ones are actively used. In most cases, you’ll find that 50–60% of the paid functionality lies dormant.
2. Where Do Your Employees Work Around the System?
Every Excel spreadsheet maintained parallel to the ERP is a symptom. Collect these workarounds. They show you exactly where the process in the system doesn’t work — or where the system offers a function nobody knows about.
3. What Would Full System Utilization Be Worth?
Do the math: If the automatic dunning run saves 10 hours per month, the ordering automation prevents 5 wrong orders per week, and integrated reports make Excel preparation unnecessary — how much is that worth? Often more than the license costs of a new system.
4. Optimize, Then Decide
First optimize the processes on the existing system. Train employees on functions they don’t know. Eliminate the workarounds. Only if the system still falls short after optimization is a switch the right answer.
Conclusion
The “new ERP” reflex is understandable, but in the majority of cases it’s wrong. What’s perceived as a system problem is almost always a process problem. A new ERP without process optimization is like a new car with the old engine — it looks better but drives the same.
Those who first understand and optimize their processes make a better ERP decision afterwards — or discover that their current system works perfectly fine when used properly.
Next Step
Unhappy with your ERP and wondering if a switch makes sense? I do the assessment with you — honest, vendor-independent, and focused on processes, not just software.
→ Or read more first: DATEV Integration Audit