- Why do you think it is so difficult to find successful ERP implementation?
- How do you think cloud computing will help ERP implementations find success?
- What advice would you give a company deciding to implement an ERP system?
- How can integrating SCM, CRM, and ERP help improve business operations at your school?
The world of ERP may seem boring to those caught up in the hysteria over Twitter and iPhone applications, but theres plenty of drama to be found: Troubled multimillion-dollar software deals that produce spectacular failures and huge spending nightmares; vendor marketing bravado that breeds cutthroat competition and contempt; and embarrassing and costly lawsuits over botched implementations and intellectual property breaches. Consider CIO.coms brief and semichronological history of five ERP scandals as a warning if youre contemplating an upgrade or implementation.
1. Definitely Not a Sweet Experience for Hershey. Could a failed technology implementation take down a Fortune 500 company (in this case, Hershey Foods)? Well, it certainly didnt help Hersheys operations during the Halloween season in 1999 or make Wall Street investors thrilled. In the end, Hersheys ghastly problems with its SAP ERP, Siebel CRM, and Manugistics supply chain applications prevented it from delivering $100 million worth of Kisses for Halloween that year and caused the stock to dip 8 percent. So I guess a failed technology project cant actually take down a Fortune 500 company for good, but it can certainly knock it around a bit.
2. Just Do It: Fix Our Supply Chain System. What did a $400 million upgrade to Nikes supply chain and ERP systems get the world-renowned shoe and athletic gear maker? Well, for starters, $100 million in lost sales, a 20 percent stock dip, and a collection of class-action lawsuits. This was all back in 2000, and the horrendous results were due to a bold ERP, supply chain, and CRM project that aimed to upgrade the systems into one superstar system. Nikes tale is both of woe and warning.
3. HPs Perfect Storm of ERP Problems. The epic tale of HPs centralization of its disparate North American ERP systems onto one SAP system proves that one can never be too pessimistic when it comes to ERP project management. You see, in 2004, HPs project managers knew all of the things that could go wrong with their ERP rollout. But they just didnt plan for so many of them to happen at once. The project eventually cost HP $160 million in order backlogs and lost revenuemore than five times the projects estimated cost. Said Gilles Bouchard, then-CIO of HPs global operations: We had a series of small problems, none of which individually would have been too much to handle. But together they created the perfect storm.
4. A New Type of Freshman Hazing. Pity the college freshmen at the University of Massachusetts in fall 2004: The last thing they needed was some computer program to haunt their lives and make their new collegiate experience even more uncertain. But more than 27,000 students at the University of Massachusetts as well as Stanford University and Indiana University were forced to do battle with buggy portals and ERP applications that left them at best unable to find their classes and at worst unable to collect their financial aid checks. Said one UMass senior at the time: The freshmen were going crazy because they didnt know where to go. After a couple of tense days and weeks, however, everyone eventually got their checks and class schedules.
5. Waste Management Trashes Its Fake ERP Software. Garbage-disposal giant Waste Management is still embroiled in an acrimonious $100 million legal battle with SAP over an 18-month installation of its ERP software. The initial deal began in 2005, but the legal saga commenced in March 2008, when Waste Management filed suit and claimed SAP executives participated in a fraudulent sales scheme that resulted in the massive failure. Several months later, page 359SAP fired back, claiming that Waste Management allegedly violated its contractual agreement with SAP in several ways, including by failing to timely and accurately define its business requirements and not providing sufficient, knowledgeable, decision-empowered users and managers to work on the project. In the fall of 2008, accusations were still flying about documentation, depositions, and delays in bringing the case before a judge. And that proposed 18-month implementation now sounds like a dream scenario.18
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