How to Keep Your ERP Project on Budget: Practical Strategies That Work
- Kwixand Team
- Jul 2
- 8 min read
Updated: Jul 7
Discover key insights from the Kwixand Solutions team to ensure your ERP project stays on budget.
ERP projects are high-investment, high-risk undertakings. They demand significant resources, cross-departmental collaboration, and months of careful planning and execution. Yet, despite all this, many ERP implementations run over budget, for reasons that are often preventable. These reasons can vary, but the outcome is the same: lost time, strained resources, and unmet expectations.
To avoid these costly outcomes, it’s essential to understand the root causes of budget overruns and to implement strategies that keep your ERP project on track from the beginning. Sebastian Alexander, Director of Professional Services at Kwixand Solutions, offers valuable insight into how organizations can better manage their projects to avoid unnecessary budget increases. The key, he explains, lies in strong planning, clearly defined responsibilities, and disciplined execution.
In this article, we'll cover:
Why Do ERP Projects Go Over Budget?
Before we dive into the solutions, it’s essential to understand the problem. Several factors frequently contribute to ERP budget increases. Alexander identifies the most prevalent ones as:
❌ Insufficient requirements gathering
Failing to thoroughly investigate and document current business processes leads to misaligned solutions. This often requires costly rework to fix during or after implementation.
❌ Poor project planning
When goals, responsibilities, and deliverables are not clearly defined, teams lose direction. A lack of structure results in timeline delays and cost escalations.
❌ Weak change control
Without a formal process for evaluating and approving changes, scope creep becomes inevitable. New ideas may sound great, but when introduced mid-project, they can derail both budget and schedule.
❌ Lack of change management
Both technical and human factors must be addressed. Without a strategy to support people through change, projects lose focus, momentum declines, and milestones are missed.
❌ Absence of ownership and accountability
If stakeholders are not held responsible for their tasks, there is no mechanism to ensure follow-through. Missed deliverables accumulate, deadlines slip, and costs rise.
Practical Strategies to Help You Stay on Budget in Your ERP Project
Staying on budget during an ERP project requires discipline, clear strategy, and strong leadership throughout the process. If you're preparing for an ERP rollout, here are the practical strategies that will help you stay on budget.
1️⃣ Start With Clear and Comprehensive Requirements Gathering
One of the most practical and impactful steps you can take is dedicating adequate time and effort to the requirements gathering phase. Many projects go over budget simply because teams fail to fully understand or document what the business truly needs. When the solution design doesn’t reflect how the company actually operates, the disconnect leads to change requests, design rework, and process reengineering, each of which adds time and cost.
Alexander underscores this point: “If you can’t understand what [the organization is] currently doing and you don’t document it correctly, you’re going to design a solution that doesn’t match what they actually do. You’re going to definitely have cost overruns and timeline impacts as you try to do rework and redesign,” he says.
Requirements gathering means taking time to:
Map out end-to-end business processes
Interview end users and stakeholders
Document operational workflows in detail
Confirm what tools, data, and integrations are necessary
When organizations skip or rush this step, they inevitably pay for it later through delays and cost increases.
2️⃣ Secure Executive Buy-In Early
No ERP project stays on budget without visible and sustained executive support. Leadership sets the tone for the rest of the organization. Without executive buy-in, project teams struggle to get the time, attention, and resources they need from business units and stakeholders.
Executive support does more than keep the project visible. It also:
Fosters organization-wide commitment
Promotes alignment on project goals
Enables faster decision-making during roadblocks
Reinforces the importance of user engagement
Alexander explains the value of executive engagement: “Executive buy-in is key to ensuring an organization supports the planning and implementation process. That executive buy-in fosters an organizational-level unification on the change that's happening,” he says.
Executives should not be passive sponsors. They must actively support the ERP rollout, communicate its importance, and hold teams accountable for progress and deliverables. This level of involvement builds a culture of accountability that strengthens the project from planning to post-launch.
3️⃣ Define Specific Goals and Assign Ownership
Another practical strategy for controlling ERP budgets is to ensure everyone knows what they are responsible for and why it matters. When goals are vague and deliverables are unclear, project team members and stakeholders may avoid taking responsibility. This slows progress and leads to missed deadlines, which quickly adds to the total project cost.
Project leaders must define:
Clear business goals for the ERP implementation
Specific deliverables at each phase of the project
Ownership of tasks across teams and departments
Alexander makes a strong case for this approach: “Defining clear goals and objectives is critical to foster ownership and accountability. You’ve got to promote ownership and accountability at the outset. If you don’t, people will skirt their responsibilities and deliverables.”
Assigning ownership means each individual understands the outcome they’re responsible for and how it contributes to the bigger picture. This structure encourages better execution and reduces the risk of missed deadlines and wasted resources.
4️⃣ Implement a Strong Change Control Process
As identified earlier, one of the most common causes of ERP budget overruns is uncontrolled change during the implementation phase. As the project progresses, stakeholders often suggest new features, additional functionality, or changes to existing plans. While some changes are justified, many are the result of shifting preferences or evolving ideas, not genuine business needs.
Without a formal change control process in place, these additions quickly accumulate and expand the scope beyond what was originally planned or budgeted. “Proper change control or change management is really overlooked. Nine times out of ten, that results in scope creep, which again results in time and cost overruns,” Alexander says.
A strong change control process includes:
A standardized method for submitting change requests
Clear criteria for evaluating business impact
A governance team or steering committee to approve or deny changes
A review of how each change affects cost and timeline
This structure helps protect the core scope of the project while still allowing for necessary adjustments. Disciplined change control ensures the project stays focused and financially controlled.
5️⃣ Keep Users Engaged Throughout the Project
End users play a critical role in ERP success. Their feedback, testing, and adoption are vital to the system’s performance and overall value. Yet many ERP projects suffer from poor user engagement, especially as the timeline progresses.
A disengaged user base signals trouble. If users aren’t showing up to meetings, failing to complete assigned tasks, or deprioritizing project activities, it slows momentum and increases the risk of missed deliverables and increased costs.
Alexander notes, “If your users are no longer engaged, users who aren’t showing up for daily sprint meetings, or say their day-to-day is more important, that’s a red alert. Your project is going to go over budget.”
To improve engagement:
Involve users early in discovery and design
Give them defined roles during execution
Maintain consistent communication
Reinforce how ERP impacts their work and value
When users feel included and supported, their commitment to the project rises, and that reduces the risk of delays or errors.
6️⃣ Conduct a Risk Assessment
Risk management is a necessity when it comes to ERP project planning. Proactively identifying risks allows teams to build mitigation plans instead of reacting to crises later in the timeline.
At Kwixand Solutions, Alexander and his team use SWOT (Strengths, Weaknesses, Opportunities, and Threats) to identify and manage project risks before implementation begins.
He explains, “We categorize the customer's technical prowess. A common misconception is that if your customer base is highly technical, your project will come in on or under budget. But highly technical teams tend to come up with all the brilliant ideas on what should change. That can lead to scope creep if not controlled.”
This insight highlights the importance of understanding not just system risks but also team behaviour. A SWOT analysis helps surface hidden threats and enables project teams to:
Set realistic expectations
Allocate resources where risk is highest
Prepare mitigation plans for technical, operational, or cultural obstacles
This preparation improves responsiveness and helps teams avoid costly surprises.
7️⃣ Build a Realistic Change Management Strategy
Change management is often underestimated in ERP projects. But ignoring the people side of the equation is a direct path to timeline delays and budget overruns. “Without a change management strategy in place, the implementation loses focus. It can drag on. Enthusiasm wanes, and you’ll definitely recognize budget slippage,” says Alexander.
A sound change management plan should include:
Communicating why the ERP change is necessary
Involving business users throughout the project
Providing comprehensive training
Offering real-time support during and after rollout
When people are prepared and supported through change, they adopt new systems faster and with fewer errors, reducing the cost of post-go-live troubleshooting and training.
8️⃣Promote a Culture of Accountability from the Top Down
Among all the strategies to stay on budget, fostering accountability stands out. Without clear accountability, projects become chaotic. Responsibilities get missed, milestones slide, and no one feels ownership over success or failure.
Alexander is clear about this: “If you don’t have ownership and accountability on the executive level, on the stakeholder level, and on the end-user level, people will skirt their responsibilities. They won’t do what they need to do to make the project a success.”
Project leaders must lead by example, demonstrating commitment, meeting deadlines, and communicating proactively. When accountability becomes part of the culture, project teams become more effective and resilient.
Warning Signs Your ERP Budget is in Trouble
Even with meticulous planning, projects can veer off course. Identifying the warning signs early can mean the difference between a timely course correction and a runaway budget. According to Alexander, the number one red flag is missed milestones.
Milestones are more than just checkboxes; they are indicators of whether the project is tracking toward its objectives. "Any good project plan will include key milestone dates. If you don't have those happening on time... you're going to run over and you will miss your go-live date," he shares.
Another warning sign is user disengagement. When users stop participating in key meetings, delay feedback, or deprioritize project tasks in favour of daily responsibilities, the project loses traction. Why? Because disengaged users delay feedback loops, hinder testing phases, and slow down training and adoption. In an ERP project, time really is money.
The third warning sign is changing requirements mid-stream. “If you have a user base or executive team that's talking throughout about 'we want to do this' or 'this makes sense too'-you've got to box that in and stop that squirrel creep,” advises Alexander. Every time requirements shift after the design phase, it incurs additional development, testing, and training costs. Guarding against these shifts requires strict scope management and stakeholder discipline.
Key Takeaways
ERP implementations will always come with challenges, but budget overruns don't have to be one of them. With a disciplined approach that prioritizes planning, ownership, user engagement, and risk management, organizations can deliver successful ERP projects without financial regret.
By focusing on practical execution, such as strong planning, defined ownership, change control, and risk management, organizations can avoid the common pitfalls that lead to cost overruns. As Alexander puts it, “It starts with you. You can set the message, the tone, and the example. Through that, you will foster ownership and accountability, and that is how you deliver ERP projects on time and on budget.”
About Kwixand Solutions
As a trusted Microsoft Dynamics 365 Partner, we work with companies across North America to help achieve their business goals and scale with ease. As your ERP implementation partner, we dive deep to understand your business inside out and develop creative solutions to make the software work for your company, and not the other way around. To learn more about our service and how we could help you, book a free consultation with our team.
