Cringeworthy ERP Disasters
If you’ve forgotten what ERP is, you haven’t been paying attention. Enterprise Resource Planning has been re-taking the B2B tech industry by storm, now delivered from ‘the cloud’, with all the same promises from the 90’s, to standardize and synchronize the major systems and processes of an organization.
Think: human resources, finance (including payroll), and product stock and distribution. And for many teams, ERP deployments have acted as a godsend on their path to business expansion, efficiency, and innovation. However, great tools can act as a double-edged sword, taking down great companies and leaders when not properly implemented with a solid plan. Here are some of the biggest ERP fails in history that have us all thinking “oh no!”
Hershey’s Disses: Everyone’s favorite treat was in for a not-so-sweet surprise when their ERP software from SAP failed to even launch successfully. Brilliantly timed with Halloween of 1999 (sarcasm intended), the fresh system could not handle the increase in seasonal orders. Add on some insecure comments from their CEO, and analysts and investors were left shaking their heads pondering as to whether the Fortune 500 company could recover from the blow. Fortunately, Hershey was back on track by the next Halloween. Unfortunately, the ERP disaster scared many other companies from embracing the new concept of integrated systems until their surge of popularity in the past five years.
All Aboard: The United States Navy is known for sailors, not pilots, right? Well, the military giant did push $1 billion towards SAP system pilots designed to streamline the communications and operations processes of the global branch. Adapting commercial software to a government organization is no easy feat, but Navy officials remained hopeful and optimistic about the undertaking’s potential. The Government Accountability Office, however, did not exactly agree. Their team labeled the project a total failure that “largely wasted” their grand budget, sparking a public PR feud between the government agencies. Talk about a time to jump ship.
Cringe-worthy Classic: While Nike is now making the headlines for their recent marketing campaigns, who can forget about their horrendous year in 2000? The global market leader attempted to implement a more cohesive supply chain system that would curb worldwide distribution errors and track stock from factory to store. The i2 ERP project cost almost half a billion dollars, but its success went unrealized due to a computer glitch. This cost the company 100 million dollars in lost sales, dropped stock prices (by 20%!), and numerous class-action lawsuits. Clearly not a good look, but the company recovered thanks to its proactive PR strategies and new leadership figures.
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