Famous ERP Disasters – Making the Case for Automated ERP Deployment
The benefits of a cloud-based ERP solution are enumerable. After all, a company’s standardization and synchronization of their processes and major systems (i.e., finance, HR, etc.) can help lead the charge for innovation, efficiency and a company’s growth. Unfortunately, the implementation process is complex, time consuming, error-prone and budget-breaking. Here’s a frightening statistic: Gartner states that nearly 75% of all ERP projects fail primarily due to a total lack of an application integration strategy and the skills needed to create one.
Avon famously halted the global rollout of an SAP-based order management system after a failed deployment in Canada. The project was 4 years in the making with intentions of global expansion. The sales team rejected the solution and the project was suspended as pilot deployments were deemed disruptive and unprofitable, with a final price tag of approximately $125 million.
HP’s Terrible, Horrible and Very Bad Summer
The company was attempting to move to a centralized ERP system from SAP but was ill-prepared for an accumulation of problems that happened at once. For example, once live, 20 percent of customer orders for servers were in limbo between the legacy order-entry system and the SAP system and customer satisfaction plummeted. The financial impact? Approximately $160 million: a $120 million order backlog that resulted in $40 million in lost revenue. As a result, the incident cost HP more than five times the project's estimated cost.
Lumber Liquidators was in the final stages of a significant ERP overhaul, including up-to-date point-of-sale, inventory and warehouse management modules. However, despite these updates, the company experienced a 45 percent decrease in net income over its previous quarter. The reason? Plummeting employee productivity. Further investigation revealed a massive problem: employees weren’t on board. They didn’t receive proper training or guidance. As a result, team members opted for a work-around and returned to older methods, slowing production and ultimately leaving at least $12 million in unrealized net sales on the table.
Selecting and implementing an ERP solution is an important step companies can take toward becoming a better business. But it’s also one of the riskiest and most high-stakes things an organization can undertake. Yet, regardless of the ERP solution chosen, there’s no escaping the deep and disruptive change process that is required to succeed.
This is exactly where we come in. ThinkTank, by GroupSystems, is a B2B SaaS that uses intelligent process automation to improve how ERP and enterprise software is selected, deployed and managed. Through automation and machine-learning we help eliminate ERP missteps, drama and disaster and instead accelerate and de-risk enterprise software implementations, reducing costs and driving new business via a differentiated client experience.