Unsuccessful ERP Implementation Case Studies (common pitfalls to avoid)

By now you've probably heard about Cadbury and Nestle SA's ERP implementation success stories, but not every ERP implementation ends in success, and it's crucial to understand the pitfalls to avoid. Here are two examples of ERP implementation failures that highlight the importance of careful planning and execution.

ERP case study #1: Hershey Candies – A Bitter Failure

An expensive lesson on the importance of synergy; this case study reviews the failure of Hershey, a 147-year-old confectioner, headquartered in Hershey, Pennsylvania. The enterprise saw the implementation of an ERP platform as being central to its future growth. Consequently, rather than approaching its business challenge based on an iterative approach, it decided to execute a holistic plan, involving every operating center in the company.

SAP was then selected for a $10 million systems upgrade, however, management problems emerged immediately. The impact of this decision represented complete chaos, where the company was unable to conduct business because virtually every process, policy, and operating mechanism was in flux simultaneously.

This resulted in a loss of $150 million in revenue, a 19% reduction in share price and 12% in international market share.

Key takeaway: Poor management can scupper implementation, even when you have selected the perfect system.

ERP case study #2: PG&E – A Case For ERP Consultancy

As a major energy utility, San Francisco’s Pacific Gas and Electric should have known better. Its Oracle ERP implementation had gone well, and there had been no problems of note; until it came time to test the system. A manager had chosen a live information database to use during pre-launch testing, although no one thought that the regime would uncover any sensitive company information.

Unfortunately, this was untrue, and consequently created a host of costly recovery programs, in addition to losing public confidence in the company’s brand.

Key takeaway: Brief your staff on exactly what they should do and not do. Don't get non-specialist staff to carry out specialist roles.