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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

Published in Tips & Tricks

If you haven’t read part one of this blog please click the link to get caught up!

If checklist one through three gets a check mark, you’re on the right track to avoiding as little problems as possible. Number four on the list is something that you must be responsible for because, you can’t blame all ERP implementation failures on your partner. Sometimes when a partner gets a client and there ready to kick start their plan, the clients give them all their “baggage” to fix and then leave. They eventually come back at the end, near the go-live date and say things like “Are we ready to go live yet?” Have you tested the system? Nope. Has your staff gotten trained? Nope. Then the answer to your question is nope. You don’t want to be that kind of client. Therefore make sure the implementation goes in steps or phases and make sure to have regular follow ups on the progress that has taken place.

Be motivated! Sometimes implementations take a while to finish, you might be checking off each suggestion on the list but when you come to number five you realize that what’s your lacking in. You need to be upbeat about this whole process, I’m not saying jump up and down and scream for joy that you are getting new accounting software. But at least have a good attitude towards the implementation; I say this because getting something new isn’t always a good thing. You have to retrain your staff; get familiarized with a new system and implement it to your company. That can be a bothersome to someone resulting in them giving you a hard time. As the client, be positive and have a good outlook on this new system, which could ultimately better your performance in the long run.

Last but not least number six on the checklist is to plan for everything and anything that could happen. Once one to five is checked off, be aware of number six. Even though you have everything planned to a T anything could happen from employees’ issues to company changes. Just be prepared for whatever can happen because even though you might be well prepared when it comes to the implementation there’s always a chance of a problem that could occur. You can’t predict and prevent everything but give yourself a fighting chance if a problem arises.

By: Natalie Williams, Marketing Coordinator, WebSan Solutions Inc., a Canadian Certified Microsoft Dynamics Partner

Published in WebSan Blog

I was reading an article called “Six Basics of preventing pain in our ERP implementation” and I thought to myself, why are all these problems with ERP implementation occurring in the first place? It’s happening more than normal and I think I know why, Companies are not doing enough research, therefore, they choose the wrong partner and software. Here I have a checklist of six rules you should consider before saying yes and signing the dotted line.

Really research thoroughly about which partner would be the right partner for you and which software would be the right software for you. Even if you have ten companies and have to narrow it to one then do that. If you’re Googling “accounting software” there are millions of results that come up, I know that can be overwhelming but don’t choose only the top three results. Some people think that the top three results are the best results, but that’s completely untrue. Google doesn’t rank you higher based on your product or services quality, they rank based on search engine optimization, keywords and links. But that’s another blog; basically what I’m saying is take your time to do your homework.

When you find the right partner and software, make it clear on what you expect from your partner. Have a one on one sit down with the company you will be working with, there needs to be impeccable communication between both companies. Make sure you listen to their expectations and make sure they listen to your expectations, because if one person’s not listening to the project is bound to go wrong. Even if you have to take notes, you need and they need to fully understand the expectations of the project. That’s to prevent sentences like: “I never said that”, “But I thought you said…”, “I told you that, remember?” Also, it’s good to get everything in a tightly sealed contract so you can also avoid those phrases.

So once you’ve found the right partner and you found the right accounting software and there’s clear understanding amongst both companies, make sure they don’t go anywhere. Sounds weird enough, but I’m not joking, whoever is in charge of your project make sure they stay in charge of the project. The reason this is on the list is to prevent your partner from doing an 180 on you. If you have one project manager that is in charge of the project, if there are any hiccups in the implementation you can go straight to that person to address the problem. If there’s no one particular in charge of the plan, you’re only going to get the run around when a problem occurs because no one’s in charge. Another reason it’s on the list is because if the company switches the manager, you would have to communicate every single detail about the project all over again hoping that they can comprehend it  and execute it all in a short matter of time.

Tune into part two and see the rest of the checklist!

By: Natalie Williams, Marketing Coordinator, WebSan Solutions Inc., a Canadian Certified Microsoft Dynamics Partner

Published in WebSan Blog