implementation-governance-en

Why 80% of Microsoft Dynamics 365 Finance Implementations Fail

Alex at FitGap

23 Dec 2025 — 3 min read

The Real Problem Is Not Failure — It’s Underestimation

Most Dynamics 365 Finance implementations don’t fail dramatically.
They go live.

Transactions post. Users log in. Reports exist.

And yet, a few months later, the same patterns emerge:

Finance teams still rely heavily on Excel.
Users describe the system as “rigid” or “heavy.”
Key processes feel slower than before.
“Phase 2” quietly becomes permanent.

This outcome is rarely caused by a single mistake.

It happens because organizations systematically underestimate what ERP change really implies — not technically, but organizationally: decision-making, user absorption, governance, and ownership.

Dynamics 365 Finance does not fail projects.
It exposes unresolved issues that already existed.

1. Ownership Is Assigned — But Accountability Isn’t

One of the most consistent failure patterns starts with ownership.

In many projects, Finance is named as the sponsor, but real ownership is delegated to IT, a PMO, or an implementation partner. Finance is consulted — but not required to decide early.

This is a structural problem.

Dynamics 365 Finance forces explicit design decisions, particularly around:

Chart of accounts
Financial dimensions
Posting logic
Controls and approvals

When Finance ownership is diluted, decisions are postponed.
When decisions are postponed, assumptions take their place.

Those assumptions rarely survive real operations.

👉 Related reading:

2. Change Is Assumed to Be Absorbable — All at Once

Another major source of failure is change saturation.

Projects are often designed as if users can:

Learn a new ERP
Adopt redesigned processes
Accept tighter controls
Change reporting habits

…within a short time frame.

In practice, even strong teams struggle when too much change is introduced simultaneously.

The most successful implementations take a different approach:

Core processes first
Limited functional scope per phase
Stabilization periods between waves
Clear postponement of non-essential changes

ERP adoption is not a switch.
It is a gradual accumulation of cognitive adjustments.

👉 Related reading:

3. “Best Practices” Are Applied Without Context

Many projects quietly fail by importing solutions that worked elsewhere.

ERP best practices are not universal truths. They are contextual compromises shaped by:

Organizational size
Centralization level
Regulatory environment
Historical constraints

When best practices are applied without adaptation, they generate:

Forced standardization
Local resistance
Late exceptions
Hidden workarounds

Best practices only work when they are questioned, contextualized, and explicitly owned.

👉 Related reading:

https://www.fitgapfinance.com/erp-best-practices-nuance-d365-finance/

4. Requirements Are Implemented — Not Challenged

This is one of the most damaging patterns in ERP projects.

A team that blindly implements every requirement is not being efficient — it is avoiding responsibility.

Many requirements reflect:

Legacy habits
Workarounds for old system limitations
Governance gaps
Control issues that should not be solved with technology

When teams are not allowed — or encouraged — to challenge requirements:

Complexity explodes
Customization increases
Reporting becomes fragile
The system turns into a collection of exceptions

Strong ERP teams consistently ask:

“Is this truly a system requirement — or a process or governance issue?”

5. Data Migration Is Treated as a Technical Exercise

Data migration is often postponed because it is perceived as technical.

In reality, it forces difficult business decisions:

How much history truly matters?
What becomes the opening source of truth?
Which discrepancies are acceptable?

When these questions are answered late, confidence erodes — and rarely fully recovers.

Data migration is not about moving data.
It is about agreeing on what is true.

👉 Related reading:

6. Governance Exists — But Decisions Don’t Stick

Most failing projects do not lack governance artifacts.

They have:

Steering committees
RACI matrices
Weekly status meetings

What they lack is decision enforcement.

When decisions can be revisited indefinitely:

Scope becomes unstable
Teams lose confidence
Accountability disappears

ERP projects do not fail because of a lack of meetings.
They fail because decisions do not stick.

👉 Related reading:

https://www.fitgapfinance.com/erp-governance-vs-management/

What Actually Works

Projects that succeed are rarely perfect — but they are disciplined.

They typically share the same characteristics:

Clear, enforced Finance ownership
Progressive and realistic change introduction
Requirements that are challenged, not blindly implemented
Limited and intentional customization
Governance that enforces decisions

Most importantly, they accept a difficult truth:

ERP clarity is uncomfortable — but necessary.

Final Thought

Dynamics 365 Finance does not fail organizations.
It reveals them.

It exposes:

Weak ownership
Poor governance
Unquestioned habits
Overestimated change capacity

Organizations that acknowledge this early succeed.
Those that don’t spend years “stabilizing” a system that already told them the truth.

FAQ

Is “80%” an exact statistic?

No. It reflects a commonly observed range across large ERP programs. The precise number matters less than the recurring failure patterns seen across organizations.

Are these issues specific to Dynamics 365 Finance?

No. These patterns exist across most ERP systems. However, Dynamics 365 Finance is particularly revealing because it forces early decisions around finance structures, controls, and governance.

Can a failing Dynamics 365 Finance implementation be fixed after go-live?

Partially. But late corrections are always more expensive, more political, and less effective than addressing ownership, governance, and scope decisions early.