Long read
LKQ called its ERP disruption temporary. Your plan should price the months after go-live
On 23 October 2026 LKQ withdrew its outlook for the year. In preliminary, unaudited figures for the third quarter, it put the expected Europe segment EBITDA margin at 4.1% to 5.1%. That compares with 10.0% in the same quarter of 2025. The release names its German ERP conversion among the causes.
LKQ’s plan called the disruption after go-live temporary. Open your own case and find the line for the months after your go-live.
Below are LKQ’s own words in date order and a sum for an example programme. Then come four lines to put on your plan before your date.
What moved this week
This is the first issue, so there is no earlier one to measure against. Each line is set against one question: when does a change start to pay?
- New. LKQ, 23 October: a disruption the company called temporary in April now sits among the named causes of a withdrawn outlook.
- New. Gartner, 20 October. 44% of CEOs, in a survey of 203 chief executives and senior business executives, “struggle to demonstrate” AI-driven financial returns to stakeholders.
What LKQ said, and when: “temporary” in April became a withdrawn outlook in October
| When | What was planned or reported | The number, and its bound | What it says about cause |
|---|---|---|---|
| April 2026, first-quarter call | The migration “was completed during the first week of April”. Disruption was “anticipated” as “temporary”, and the company “reflected that in our full year guidance”. | No figure given. The benefit was placed in the future: process standardisation and cost reduction. | The plan treated the cost as short and the benefit as later. |
| 30 July 2026, second-quarter call | Revenue impact “approximately $140 million”; EBITDA reduced by “approximately $50 million”. | The company’s own estimates, for one quarter. | “bad data”, “Call them bugs”; “a couple dozen locations” still to be retrained. |
| 23 October 2026, LKQ’s release | Europe segment EBITDA margin 4.1% to 5.1%, against 10.0%. Full-year guidance withdrawn. | Preliminary and unaudited. The ERP is named beside volume declines in the UK and Benelux, with no split. | “operational disruptions associated with the ERP implementation in Germany”. |
The April and July words come from transcripts of the calls published by Fortune, a third party, and not from LKQ’s own recordings.
In April, LKQ’s plan called the disruption temporary and carried it in the guidance
LKQ moved one of its main European markets onto a new ERP system in early April. On the first-quarter call, the company said it “anticipated temporary sales disruption”. It said it had “appropriately reflected that in our full year guidance”.
The benefit sat further out. The company said the new system enables future process standardisation and cost reduction.
So the plan carried a cost it called short, and a return it placed later. That second half is ordinary. The UK’s Infrastructure and Projects Authority wrote in 2021 that benefits “are typically realised late in a project’s life cycle”. The first half is the one that did not hold.
By July, its own account named bad data and retraining
On the second-quarter call, on 30 July, the company put numbers on one quarter. It estimated the revenue impact at “approximately $140 million”. It estimated that the disruption “reduced EBITDA by approximately $50 million”. Both are management’s estimates, for that quarter alone.
Justin Jude, then chief executive, gave the causes: “things like bad data, maybe the system processes weren’t operating as they should have. Call them bugs.”
The people came next. “We have a couple dozen locations that we’ve got to go in and get them retrained up.” That was said almost four months after go-live.
Customers did not wait. “When we were failing on our service levels, on our fill rates, customers had no choice but to find alternatives.” And the company “took all of our outside sales folks and helped put out fires”.
The outside sales force was pulled in to fight fires. Ask whether your build budget holds those hours.
The chief financial officer added: “we think that Q2 would be the low watermark.”
On 23 October, the outlook was withdrawn
LKQ’s preliminary third-quarter release named the Europe segment as the main reason for the shortfall. It cited “operational disruptions associated with the ERP implementation in Germany and volume declines in the United Kingdom and Benelux”.
The release gives no split between the ERP and the falling volumes. The figures are preliminary and unaudited. The cause is management’s account, not an audit finding.
LKQ withdrew full-year guidance, and the board engaged Alvarez & Marsal. Its first focus includes stabilising operations in the region. Justin Jude left as chief executive, “effective today”. The release does not tie that departure to the ERP. Full results come on 29 October.
So your plan prices the months after go-live
We think both of those causes, the data and the retraining, were set before the date. LKQ says its branches took the conversion training before go-live, and by July a couple dozen locations still had to be retrained. On the first-quarter call, according to Fortune’s transcript, the company reported “100% representation at our branches on that conversion training”. What arrived after the date was the bill.
Here is the sum for an example programme. These are labelled example figures. None of them is LKQ’s.
| Example programme | Figure |
|---|---|
| Revenue of the business that converts | £400 million a year, so £100 million a quarter |
| Margin lost after go-live | 2 points, for 2 quarters |
| Cost of that margin | 2% × £100 million × 2 = £4 million |
| Retraining before go-live | 30 sites × 20 staff × 16 hours = 9,600 hours |
| Cost of those hours at £40 an hour | £384,000 |
On these figures, two weak quarters cost more than ten times the retraining. The sum does not say retraining would have saved the margin. It asks which of the two lines your case holds today.
Put your own revenue and site count in. If the first number has no line in your case, the months after go-live are unpriced.
Honeywell, on 22 October, held $7 million after tax of ERP implementation costs out of its third-quarter adjusted earnings. It expects about $26 million for the year. Ask what your own adjusted line leaves out after go-live, and for how many quarters.
The Sign-Off
Every programme has a moment where someone accepts a risk on the record.
Navajo Nation shows that moment in public. At the launch of a $31 million ERP system on 1 October, its Controller said: “It’s not going to be perfect.” On 19 October the Controller reported to the Navajo Nation Council. The first payroll file had held “approximately $2 million in overstated payments resulting from timesheet errors”. It was corrected before release, and several hundred employees at other banks had their deposits delayed to the Wednesday. That is the Controller’s account. The reports do not say which product caused which error. The first payroll was among the first runs on the new system after go-live, and it is the payroll row on the page below.
Name who vouches for the migrated data, and by what date
The person who will run each area after go-live signs that its migrated data is right. The integrator’s data lead advises; the signature is the area owner’s, for your organisation.
Done when: each area of the system has a named role and a signed date, at least four weeks before go-live.
If your date is closer than four weeks, sign what you can now and put the open fixes on the cutover plan.
Count the retraining hours, and put them in the case
Count staff by site, hours by person, and the cost of those hours. Then check the case carries them. Name who covers the day job of each person who signs for data or sits in training.
Done when: the case shows the hours, their cost, an owner for each site’s hours and the cover for each expert’s day job. The training ends before go-live.
Price the first two quarters after go-live
Write a line for the months after the date: margin or service at risk, and whose hours get pulled off their own work. If the case is already signed, take the line to your sponsor as a change to it.
Done when: that line sits in the case you sign, with a figure beside it.
Name who can call a hold, and who decides the cutover
Each area’s owner can call a hold on that area against written tests on data and training. The cutover itself is decided by a named go or no-go group that your sponsor chairs, with the integrator’s lead in the room.
Done when: every area has an owner who can call a hold and the tests are written. The go or no-go group is named, and the integrator has a copy.
Filled in for an example programme, the first months had no line in the case
| Area of the system | Who vouches for the data, and by when | Retraining hours, and in the case? | First months’ cost, and in the case? | Who can call a hold |
|---|---|---|---|---|
| Finance and payroll | Financial controller, 6 weeks before go-live | 1,200 hours; yes | Late or wrong first payroll; no, add it | Financial controller |
| Orders and stock | Head of operations, 4 weeks before go-live | 6,000 hours; yes | Lost orders and stock errors in the first two quarters; no, add it | Head of operations |
| Sales and service | Sales director, 4 weeks before go-live | 2,400 hours; no, add it | Sales staff pulled onto fixes for 6 weeks; no, add it | Sales director |
The hours in this table add up to the example’s 9,600. The go or no-go is the sponsor’s, taken in the group that has seen every area’s tests.
The people who know how each area’s data loads hold know-how that leaves when they do. This week’s Way Pointer, on capability.ai, is for them: how to write one such procedure down and keep it.
Sources
- LKQ Corporation, LKQ Corporation Announces Preliminary Third Quarter 2026 Results and Leadership and Operational Actions, 23 October 2026. investor.lkqcorp.com
- LKQ Corporation, first-quarter 2026 earnings call, a third party’s transcript published by Fortune. fortune.com
- LKQ Corporation, second-quarter 2026 earnings call, 30 July 2026, a third party’s transcript published by Fortune. fortune.com
- Navajo Times, Controller’s office launches $31M ERP system, 1 October 2026. navajotimes.com
- Navajo Nation Council, Office of the Speaker, release on the Controller’s report, 20 October 2026. navajonationcouncil.org
- Gartner, Gartner Says 44% of CEOs Struggle to Demonstrate AI Financial Returns as Technology Becomes Central to Growth, 20 October 2026. gartner.com
- Honeywell, Reports Third Quarter Results, Raises Full-Year 2026 Outlook, 22 October 2026. investor.honeywell.com
- Infrastructure and Projects Authority, Guide on Assurance of Benefits Realisation in Major Projects, version 2.0, October 2021. assets.publishing.service.gov.uk