ERP implementation is a quite an expensive and difficult process not only for small companies but for some multinational giants as well. However, with full preparation and thorough research to manage expectations, a successful ERP implementation can be achieved. Below, we outline the 3 biggest failure cases of ERP implementation and offer tips on what you can do to avoid the same mistakes.
Nike and a $400 Million “Glitch”
In 2000, Nike decided to upgrade their ERP system and invested $400 million dollars into the software called i2, where their initial goal was to manage supply chain and forecast the demand for products. This decision became a disaster for shoe giant with $100 million in sales loss and 20% stock price decrease because of a software glitch, which in turn, made stores unable to fill orders for the Air Jordans.
To avoid the same mistake, be sure to set realistic goals for your ERP implementation process early on and ensure that you take enough time to test the system for any kinks that need to be ironed out before moving forward with implementation.
Hershey and a Halloween Disaster
July of 1999 is a month which everybody in Hershey would rather want to forget because of the new ERP system launch that proved to be unsuccessful. A total of $112 million in investments were supposed to create an integrated ERP environment. However, this decision led to delivery problems of $100 million worth candies for Halloween 1999.
To make sure that your ERP implementation will go smoothly, set enough time to train the employees on a new software and don’t skip any steps in the testing process recommended by your ERP system provider.
Hewlett Packard and Lost Orders
In 2004, ERP implementation in HP was supposed to result in saved costs, shorter delivery time and development of a world-wide distribution network but brought $160 million of losses instead. A failure in migration resulted in 20% of orders to be trapped in the old ERP system
If you don’t want to be in HP’s shoes, plan the internal implementation process very carefully, otherwise it may lead to a lot of small mistakes and ultimately, a big failure in the end.
For more tips and techniques on how to save your company from an ERP implementation disaster, download our free ERP whitepaper.
Alina Hura, Digital Content Creator, WebSan Solutions Inc., a 2014 Ontario Business Achievement Award Winner for Service Excellence