Develop A Story Of Any Two Recent ERP Implementation Failure

Develop a story of any two recent ERP implementation failures.

Over the years, ERP (Enterprise Resource Planning) implementations have been marked by significant failures, often resulting in substantial financial losses, operational disruptions, and unmet organizational goals. Two recent notable failures exemplify the challenges inherent in deploying ERP systems: Hershey’s 2012 rollout and Waste Management’s 2015 implementation.

Story 1: Hershey’s 2012 ERP Implementation Failure

Hershey’s chocolate company attempted to upgrade its SAP ERP system in 2012 to streamline supply chain operations and improve forecasting capabilities. The project was under intense pressure to deploy before the Halloween season, a critical sales period. However, shortly after go-live, Hershey faced severe disruptions in order processing, resulting in stock shortages and delayed shipments. The failure was primarily due to inadequate testing, poor change management, and insufficient user training. The rushed timeline did not allow sufficient validation of the system’s capabilities or preparation of staff, leading to errors and operational chaos.

Story 2: Waste Management’s ERP System Deployment

Waste Management, a leading waste disposal services provider, launched a new ERP platform intended to improve billing, dispatch, and customer service in 2015. The implementation faced resistance from employees unfamiliar with the new system and ambiguous communication from management. Technical issues, such as data migration errors and integration failures with existing legacy systems, compounded the problem. The result was significant service delays, billing inaccuracies, and customer dissatisfaction. The failure stemmed from poor project planning, lack of stakeholder engagement, and underestimating the complexity of system integration.

Causes of Failure and What Could Have Been Done Differently

Both cases highlight common causes of ERP failures: insufficient planning, inadequate testing, poor change management, and resistance from users. Hershey’s rushed deployment without thorough testing and user training exemplifies the importance of realistic timelines and comprehensive planning. Waste Management’s issues demonstrate the need for stakeholder engagement and meticulous data management during migration. A more disciplined approach—such as phased rollouts, extensive testing, detailed training programs, and active change management—could have mitigated risks and improved outcomes in both cases.

Payoffs of a Multidisciplinary Approach to ERP Implementation

Taking a multidisciplinary approach involves integrating expertise from IT, business management, organizational change, and human resources. Such a holistic strategy ensures that technological, process, and people issues are jointly addressed. Benefits include better planning, smoother transitions, higher user acceptance, and more effective problem resolution. For example, involving change management specialists can improve communication strategies, reducing resistance and increasing buy-in. Additionally, cross-functional teams can better align system capabilities with organizational goals, resulting in more sustainable success.

Future Outlook: Panorama Survey in 5 and 10 Years

Looking ahead, the Panorama survey’s results may evolve based on technological advancements, organizational readiness, and market dynamics. In 5 years, success rates for ERP projects could improve due to improved project management methodologies, increased use of agile strategies, and enhanced user training. Advances in cloud computing and AI integration may reduce technical complexities and costs, fostering higher success. Conversely, increased reliance on digital transformation might introduce new risks if not carefully managed. In 10 years, success rates may either stabilize or improve significantly as organizations develop more mature approaches to implementation, or potentially worsen if overconfidence in new technologies leads to oversight. Overall, continuous learning, technological evolution, and better project governance are likely to influence success rates positively over the long term.

References

• Umble, E., Haft, R., & Ummble, M. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146(2), 241-257.
• Bradford, M. (2015). Modern ERP: Select, Implement, and Use Today’s Advanced Business Systems. Second Edition. Morgan Kaufmann.
• Hanna, J. (2012). Lessons learned from Hershey’s ERP disaster. Business Intelligence Journal, 17(3), 12-20.
• Waste Management Case Study (2016). Lessons in ERP implementation. Supply Chain Management Review.
• Harvad Business Review. (2018). Successful change management in ERP projects. https://hbr.org.
• Peterson, R., & Ly, A. (2014). Cloud ERP: Opportunities and challenges. Information Systems Management, 31(4), 310-320.
• Melville, N., Kraemer, K., & Gurbaxani, V. (2004). Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283–322.
• Shanks, G., & Seddon, P. (2010). Research methodologies in business information systems. Information Systems Journal, 20(3), 227-261.
• Kurultay, M., & Yilmaz, A. (2017). The future of cloud-based ERP systems in organizations. Journal of Cloud Computing, 6(1), 1-16.
• Seethamraju, R. (2011). Cloud-based ERP systems: Impact on enterprise agility. International Journal of Information Management, 31(2), 124-132.