Twelve famous ERP rollouts that went wrong, and one that went right. Each in a tweet, with a lesson, a source and, where one exists, a video. Chronological, from the first big crash to the most recent case.
Two days of downtime after a database crash. The answer: Oracle ERP in 9 months, $15M, no customizing. On that foundation Cisco grows from $1B to $19B in revenue, does 27% of sales online by 1997, and needs just one day to close the books.
Lesson: Adapting your processes to the software can be the fastest route.
Source ↗A $5B pharma distributor rolls out SAP R/3 and an automated warehouse at the same time. Unrealistic schedule, inexperienced consultants, a demoralised warehouse crew. The result: bankruptcy. The trustee sues SAP, Andersen and Deloitte for $500M each. An ERP project that provably killed a company.
Lesson: Big projects can ruin a company.
Source ↗Y2K panic: 30 months instead of 48 for SAP, SCM and CRM, go-live in July just before Halloween. Testing cut. $100M of chocolate sits in the warehouse and cannot ship. −19% quarterly profit, −8% stock in a single day.
Lesson: The business calendar beats the project calendar.
Source ↗The demand planner orders thousands of Air Garnett too many and thousands of Air Jordan too few. $100M in lost sales, −20% stock. Phil Knight: «This is what you get for 400 million dollars, huh?» Nike sticks to its plan and later rolls out SAP across three Thanksgivings without a hitch.
Lesson: A clear business goal outlives a software flop.
Source ↗The demo was «fake» according to the suit: a rigged environment sold as real software. Promised: $220M in benefits per year, an 18-month rollout. A $500M lawsuit, settled around $80M.
Lesson: What sales sells is not necessarily what can be delivered.
Source ↗Lidl values inventory at purchase price, SAP Retail at selling price. Lidl would rather adapt the software than the process. Seven years, €500M, cancelled, back to the in-house build.
Lesson: If a product does not fit, it often cannot be made to fit.
Source ↗133 stores in one year, 75,000 items typed into SAP by hand. Inches instead of centimetres, wrong currency, wrong case sizes, only 30% of the master data correct. Empty shelves next to full warehouses. Retreat, 17,600 jobs, $7B.
Lesson: Garbage in, garbage out, literally.
Source ↗S/4HANA across 16 factories in 10 countries. After go-live Haribo no longer knows where its raw materials and stock are. Empty shelves, Gold-Bear sales down as much as −25%.
Lesson: Old processes not mapped cleanly means the new system does not know your business.
Source ↗After the Elizabeth Arden takeover Revlon picks neither Oracle nor Dynamics but a fresh S/4HANA. Its North Carolina plant grinds to a halt, $64M in sales gone, −6.9% stock, and a shareholder lawsuit over ERP. A first.
Lesson: ERP failures are now an investor topic.
Source ↗The world's largest avocado distributor, ERP go-live on 1 Nov 2021. Afterwards the company no longer knows how many avocados it has, or how ripe. Fruit spoils, they buy from competitors. Revenue +25%, gross profit down from $22.7M to $0.5M.
Lesson: Real time is not a nice-to-have when the product spoils in five days.
Source ↗Europe's largest local authority replaces SAP with Oracle. Budget £39M, overrun £90M. Two years without working financial accounting, books kept «by hand». The auditor's verdict on the culture: «bad news was not welcome».
Lesson: Green status reports are not a project status.
Source ↗CHF 240M for an SAP logistics system that runs autonomously even in war. After 7 of 8 phases it turns out the «Disconnected Operations» module cannot do that. Phase 8 is stopped, war logistics becomes a separate project.
Lesson: When the strategy changes, IT has to be able to follow. Here that takes until 2035.
Source ↗