Cases of Failure and Success of ERP Implementations
By definition, ERP stands for Enterprise Resource planning- a concept that began to be adopted in the early 90’s as companies attempted to attain seamless management by integration and information sharing between their functions. This creates an efficiency that is difficult to attain using the tradition setup of having independent information management systems in every department (such as CRMs and MRPs). For a business to run successfully, finance, sales, marketing, human resource, inventory among other functions all need to run in tandem like a well-oiled machine. This means that although each business function has its own targets, their collated efforts must ultimately contribute towards …show more content…
In addition to this, the new invoicing system turned out to be a major downgrade in terms of the number of transactions it could support per day. This crippled operations to some extent. Migration of the physical inventory was also not done to precision meaning the $40million projected savings were not realized as planned (“FoxMeyer case”, n.d). Implementation was delayed and the final product was performing way below par so the business became unsustainable. These errors caused FoxMeyer to dig deeper into their pockets trying to keep the business afloat, causing them to spend much more than they had budgeted for. As a matter of fact, due to increasing debt, the huge expenditure that came with the new ERP and the cover charges for unsuccessful shipping, FoxMeyer had to file for bankruptcy (“FoxMeyer case”, n.d). The end users of this system needed to be involved in the process so as to clarify what the complete requirements were. This example illustrates that a feasibility study was not properly done. Both parties also needed to manage their expectations when it comes to these kinds of projects. Such a huge gap in expectation versus reality is …show more content…
They began by consolidating their data when they acquired IBM systems. Their goal was to integrate their data systems into a uniform data model that would be transparent to all their branches worldwide. As such they implemented one of SAP’s ERPs while still running the original legacy system (Jennex, 2005). This implementation successfully standardized their business process, thereby allowing them to do away with redundant procedures and granting them access to updated data always. This migration is a good example of proper risk management because Colgate implemented the new ERP in phases while still running the legacy system then gradually moving migrating fully upon confirmation that the new ERP was stable (Jennex, 2005). This example demonstrates that the basic checklist to fill before seeking an ERP for one’s company should clearly explain what the business wants to achieve, how the ERP will facilitate achievement of this goal and why implementation of the ERP is a matter of priority for the
By definition, ERP stands for Enterprise Resource planning- a concept that began to be adopted in the early 90’s as companies attempted to attain seamless management by integration and information sharing between their functions. This creates an efficiency that is difficult to attain using the tradition setup of having independent information management systems in every department (such as CRMs and MRPs). For a business to run successfully, finance, sales, marketing, human resource, inventory among other functions all need to run in tandem like a well-oiled machine. This means that although each business function has its own targets, their collated efforts must ultimately contribute towards …show more content…
In addition to this, the new invoicing system turned out to be a major downgrade in terms of the number of transactions it could support per day. This crippled operations to some extent. Migration of the physical inventory was also not done to precision meaning the $40million projected savings were not realized as planned (“FoxMeyer case”, n.d). Implementation was delayed and the final product was performing way below par so the business became unsustainable. These errors caused FoxMeyer to dig deeper into their pockets trying to keep the business afloat, causing them to spend much more than they had budgeted for. As a matter of fact, due to increasing debt, the huge expenditure that came with the new ERP and the cover charges for unsuccessful shipping, FoxMeyer had to file for bankruptcy (“FoxMeyer case”, n.d). The end users of this system needed to be involved in the process so as to clarify what the complete requirements were. This example illustrates that a feasibility study was not properly done. Both parties also needed to manage their expectations when it comes to these kinds of projects. Such a huge gap in expectation versus reality is …show more content…
They began by consolidating their data when they acquired IBM systems. Their goal was to integrate their data systems into a uniform data model that would be transparent to all their branches worldwide. As such they implemented one of SAP’s ERPs while still running the original legacy system (Jennex, 2005). This implementation successfully standardized their business process, thereby allowing them to do away with redundant procedures and granting them access to updated data always. This migration is a good example of proper risk management because Colgate implemented the new ERP in phases while still running the legacy system then gradually moving migrating fully upon confirmation that the new ERP was stable (Jennex, 2005). This example demonstrates that the basic checklist to fill before seeking an ERP for one’s company should clearly explain what the business wants to achieve, how the ERP will facilitate achievement of this goal and why implementation of the ERP is a matter of priority for the