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15 famous ERP disasters, dustups and disappointments

Josh Fruhlinger,Thomas Wailgum | July 11, 2017
It's no wonder ERP has such a bad reputation: The history surrounding the complex and expensive enterprise software market is packed with tales of vendor mud-slinging, outrageous hype and epic failures.

But now another crisis has emerged: Ciber, the third-party company hired to roll out the PeopleSoft system, went bankrupt in April of this year, only to have its assets scooped up by HTC, a Michigan company — and HTC then cancelled its contract with the school system and sued for $13 million, claiming the failed rollout was due to "internal dysfunction" on the colleges' part.

Crouse says that this sort of mutual animosity is not uncommon. "You get into cases where the client is unhappy with the work the implementation firm has done and so they sue them. You also get into issues of the client’s not happy so they stop paying the bills. Then you have the third parties that sometimes get involved from a vendor reseller perspective. You can see either side being the plaintiff or the defendant, based on who got mad first."

The rollout is meanwhile stuck in limbo.


3. Woolworth's Australia: The death of institutional memory

The Australian outpost of the venerable department store chain, affectionately known as "Woolies," also ran into data-related problems as it transitioned from a system built 30 years ago in-house to SAP. One of the biggest crises that arose was that profit-and-loss reports tailored for individual stores, which managers were accustomed to receiving every week, couldn't be generated for nearly 18 months.

The problem lay in the change in data collection procedures, but the root cause was a failure of the business to fully understand its own processes. The day-to-day business procedures weren't properly documented, and as senior staff left the company over the too-long six-year transition process, all that institutional knowledge was lost — and wasn't able to be baked into the new rollout.

"I often see companies that don’t take the people who really know business processes and dedicate them to the ERP rollout," says Crouse. "They make it a part-time job, or they hire new people to tell the system guys what to build. None of that works. You have to really dedicate the people who know the process that you’re trying to get right, full-time. And it’s a common theme that, when you don’t dedicate those people, you get into trouble."


4. Target Canada: Garbage in, garbage out

Many companies rolling out ERP systems hit snags when it comes to importing data from legacy systems into their shiny new infrastructure. When Target was launching in Canada in 2013, though, they assumed they would avoid this problem: there would be no data to convert, just new information to input into their SAP system.

But upon launch, the company's supply chain collapsed, and investigators quickly tracked the fault down to this supposedly fresh data, which was riddled with errors— items were tagged with incorrect dimensions, prices, manufacturers, you name it. Turns out thousands of entries were put into the system by hand by entry-level employees with no experience to help them recognize when they had been given incorrect information from manufacturers, working on crushingly tight deadlines. An investigation found that only about 30 percent of the data in the system was actually correct.


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