The Invisible Tax Killing Your ERP Project

A chip truck sat idling at the scalehouse.

Six months of requirements gathering. Hundreds of sign-off sheets. User acceptance testing. Conference room piloting. Everything checked and double-checked.

Go-live day arrived at the pulp mill.

The scaler looked at me and asked a simple question: "Sir, how do you sell chips out of this system?"

I was confident. Probably arrogant. "This is a pulp mill. We make paper here. We don't sell chips here."

He stared back. "Well, Mr. Wizard, I've got a chip truck parked over there waiting to go out because a forester sold some chips from the chip pile. So what am I supposed to do with that?"

After six months in that conference room, nobody mentioned that sometimes they sell chips. Not once.

I called the forester's office. "Oh yeah, when chips are worth more than paper, we sell them to offset wood costs. Maybe once a month."

Once a month. For crying out loud.

We missed an entire revenue stream. The refactoring cost nearly $60,000. We had no reports ready for accounting to tie out outbound sales. The fingerpointing started immediately.

My manager asked the question that haunts every implementation: "How did an entire line of business get missed, Mr. Schwartz?"

The Failure You Don't See Coming

Most people think ERP projects fail dramatically. A catastrophic go-live. A system crash. A vendor walking off the job.

That's not how value disappears.

Value erodes gradually through multiple handoffs. Vision blurs between phases. Scope drifts to replicate yesterday's processes. Learnings never make it across team boundaries.

I call this the Hand-Off Tax.

The data backs this up. ERP failure rates range from 55% to 75%. When projects do overrun, average cost overruns hit 178% and schedule overruns reach 230%.

But here's what the statistics miss: these aren't sudden explosions. They're slow bleeds.

Too many customers effectively say to the vendor: "Call me when you're done."

That's where it starts. The executive who greenlights the project, justifies the expense, secures the funding, then disappears into the Ivory Tower.

Anything is possible for the person that doesn't have to do the work.

The Dangerous Gray Zone

We had all the "right" processes at that pulp mill. Requirements documents. Sign-off sheets. UAT (User Acceptance Testing). CRP (Conference Room Piloting).

The rigor created false confidence.

Here's the trap: customers don't know what they don't know. They might implement a full ERP system once, maybe twice, in their career.

Meanwhile, the vendor sells software specifically for your industry. They talk like industry experts. They service multiple customers in your space.

So a dangerous assumption forms on both sides.

The customer thinks: "They're the experts. They should know our business."

The vendor thinks: "They've been running this operation for decades. They should tell us everything about their business."

Both wait for the other to speak up. Neither does.

People run projects, not documents. Few customers acknowledge that even in the same industry, they all do it differently. They think they're following best practices, sure of it.

Without clear rules of engagement that draw the lines of who's responsible for what, you can't answer the question: "Well, why didn't you say anything, Mr. Vendor? Aren't you the expert?"

I've had more customers complain to me: "I expected you to take more of a lead."

That's why I call it the Customer Journey Framework. It's a journey that both customer and vendor go on together.

The People Problem Nobody Talks About

The real killer isn't technical complexity. It's organizational change management.

OCM comes in two flavors that executives consistently underestimate.

First: getting people to adopt new processes, especially when the old one works for them. If you can't share your vision and explain that yes, it works for you, but it's limiting the company's growth potential, they'll kick and scream the entire project.

Second: the rogue systems. The homebrew solutions every department built to make their lives easier. No thought given to scalability, supportability, or security.

These undocumented systems get discovered during rollout. Unless you incentivize employees to self-report.

83% of organizations struggle with user adoption of new ERP systems. Half of all respondents cite poor change management as the primary reason for transformation failure.

But here's what matters: loyal employees will put up with pain if they believe in the why.

The failure is storytelling.

I've watched executives who are brilliant communicators in board meetings completely fail to translate that vision downward. They discuss EBITDA in all-employee emails.

They've spent decades talking to boards and executive steering committees.

They've developed a lexicon all to themselves.

It doesn't translate to the boots on the ground. You've got to get out of the Ivory Tower and find out what matters to your employees. Craft narratives that resonate.

Otherwise, they see you causing pain for reasons they can't understand. To them, you haven't thought about them at all.

Being able to carry a narrative is important. But you have to know your audience.

The Framework That Preserves Value

If that customer had mapped out all their processes before they even went shopping, visually and narratively, they would have caught the chip sales.

Not only would it inform their buying decision, it would feed the vision statement that explains why they're putting themselves through this pain.

There is no change without some pain. If you're not in pain, why bother?

This should have been in an AS-IS process map before they solicited vendors. But the vendor should have conducted AS-IS discovery too, seeing there wasn't one, as part of the project.

The Customer Journey Framework addresses this across 10 phases with clear entry and exit criteria before you can move forward.

After the Before You Buy phase, you enter Kick-Off. This is where identified artifacts get translated into project terminology. A roadmap and narrative that fits operations.

Project management, subject matter experts, and middle managers take that high-level narrative and translate it. Project charters. Distributable vision statements. Plans everyone can get behind.

But if you don't feed the next phase with what it needs, you can't develop what you need to exit that phase.

This gatekeeper approach provides clarity for all levels. It offers a translation matrix back to the board and senior leadership for dashboards and key metrics that matter to them.

The best part: you can work backwards from the stage you're in. Figure out what's missing. Fill in the gaps. Get the project back on track.

This is why it's popular with customers whose projects are already off the rails.

What Gives The Gates Teeth

Here's the question everyone asks: what stops executives from blowing past your exit criteria when the pressure's on?

They've got board pressure. Timelines. Budget burn.

In my experience, executives under pressure will say "yeah, yeah, we'll come back to that" and push through anyway.

The answer is mutual accountability.

Both customer and vendor need to agree to the Customer Journey Framework as rules of engagement. The vendor knows that if you sidestep a quality control gate, it'll most likely mean delayed activation or fingerpointing.

The framework requires both customer and vendor to sign off to move between phases.

Not a unilateral decision. A mutual checkpoint.

Because when that chip truck shows up on go-live day, you need to know who owns the discovery process. You need artifacts that prove the work was done. You need a shared language that translates executive vision into operational reality.

Most digitalization transformation projects cost millions of dollars. The median project cost hits $450,000 with timelines extending to 15.5 months.

The Hand-Off Tax compounds at every transition. Every time knowledge transfers from one team to another. Every time an executive checks out. Every time a vendor assumes the customer knows their own business.

After 35 years deploying enterprise-level ERP and digital solutions across Fortune 100 companies, I've seen the same pattern repeat.

The failures aren't dramatic. They're invisible.

Until a chip truck parks at your scalehouse and asks a question nobody prepared for.

That's when you realize: the value didn't crash. It bled out slowly, one handoff at a time, while everyone assumed someone else was watching.

Where have you encountered a similar problem in a digitalizaiton project you were on? How did you handle it? What would you have done differently, looking back?