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Enterprise Resource Planning (ERP) tools, or enterprise-wide client/server applications for managing
accounting, manufacturing, distribution and human resources have become the de facto backbone of
business intelligence. As more and more organizations across the globe have chosen to build their
corporate knowledge-base around this class of complex infrastructure tools, the implementation
challenges have become evident. These challenges have been well publicized in the leading business
periodicals, underscoring organizational frustrations and even total meltdowns. Whirlpool and Gore-Tex
recently blasted SAP and PeopleSoft in separate front page articles in “The Wall Street Journal” articles,
highlighting serious business consequences and blaming these leading ERP vendors and implementing
consultants for botched deployments. What’s more, the nation’s leading chocolate manufacturer,
Hershey Food Corp., recently noted that it has lost its taste for SAP, holding the vendor accountable for
order processing problems that hampered its ability to ship candy and other products to retailers
around the peak Halloween season. In reality, however, the software giants are not to blame for these
high-profile failures. The customers are not to blame either. The real culprit is the process. Revising
implementation management strategies can put ERP solutions back on a successful path. At the root of
many ERP problems lies one overlooked but critical step: new business processes must be established,
thought through, and implemented before software tools are selected, purchased, and rolled out. As
showcased in the recent media articles, business evolution to ERP is about more than software tools.
Herein lies the greatest challenge for end-user organizations and consultants working to implement
solutions. To an even greater degree, the success of an ERP implementation is gauged by its ability to
align IT and business management objectives, supply demanding program management skills and
provide a refined process for success. To add to the complexity, the software world today is undergoing
a significant transformation, with many vendors adapting the popular Web-enabled Application Service
Provider (ASP) model. ASPs lease software to organizations via the Web. Although some will try to apply
this model to ERP implementations, it may well serve to add additional complexity and remove much of
the critical business process planning that can make or break the implementation. In addition, it will
likely encourage “square-pegs-in-round-holes” ERP implementations, in which organizations spend
significant dollars to buy a technology—and are then forced to squeeze their business processes to fit
the mold of the purchased technology. There may be opportunities to marry ERP with the Web through
front-end technologies, giving users access to the system through browser-based alternatives to the
traditional client-server paradigm. Whatever model they choose to roll out, an organization’s success
will depend on redesigning the process and customizing the technology to fit that process—rather than
the other way around.
 An Enterprise Resource Planning (ERP) system is a tool that supports and integrates the different
functional areas of the business to provide easy information flow. It mainly automates the business
process and boosts efficiency. The vast use of ERP is prevalent nowadays among businesses. However,
this system often requires years of implementation and post-implementation. Despite its popularity,
there are still companies which unsuccessfully integrate ERP system. Its implementation is indeed a
complex process and numerous glitches could occur.

The well-known chocolate manufacturing company, Hershey’s Food Corporation, experienced

ERP implementation failure. One case study, stressed that initially, the roll out appeared to be smooth,
but slowly, problems pertaining to order fulfilment, processing and shipping started to arise. Several
consignments were shipped behind schedule and several deliveries were incomplete. Analysts found
out that the problems arise from the several informal structures within the company. During the
implementation, the company did not have appropriate process in place to keep its management
informed regarding the process of the SAP ERP implementation. The consultant brought in subsequently
said that the top management failed to fully understand the scope of the project. This conspicuous
failure should not be blamed to software developers and even to customers. The main cause of this
failure is the process itself. The SAP workers just merely make sure that the business process built in is
properly and correctly used. They are not responsible for strategically implementation of the ERP.

Target is one of the best retailers in North America but one of its branches, Target Canada had
unexpectedly collapsed. One article stated that the company was having trouble moving products from
its cavernous distribution centres and onto store shelves, which would leave Target outlets poorly
stocked. Worse the technology governing inventory and sales was new to the organization and no one
seemed to understand how it worked. A custom-designed system is used in the U.S Target and it has
been in place for years. It uses a customized system in order to meet the retailer’s specific need. While,
Target Canada utilized the SAP system which is different from the latter. This ERP could not store
massive amounts of data related to each and every product of Target Canada. Another case, NIKE Inc.,
had experienced the drastic effect of ERP implementation failure due to unprepared deployment of I2
system and incompatible ERP. This led to system failure within their supply chain. The demand planner
did not accurately interpreted the way in which orders with such big leading time should be placed.
Incompatibility with the business process results from poor understanding of the underlying process.
Perepu, I. ERP Implementation Failure at Hershey’s Foods Corporation. Retreived from
https://www.academia.edu./4630187/ERP_Implementation_Failure_Hershey_Foods_Corporation?auto=download

https://www.academia.edu/4630187/ERP_Implementation_Failure_Hershey_Foods_Corporation?auto=download

Perepu, I. ERP Implementation Failure at Hershey's Foods Corporation . Retrieved

fromhttps://www.academia.edu/4630187/ERP_Implementat

ERP implementation is a quite an expensive and difficult process not only for small
companies but for some multinational giants as well. However, with full preparation and
thorough research to manage expectations, a successful ERP implementation can be
achieved. Below, we outline the 3 biggest failure cases of ERP implementation and offer
tips on what you can do to avoid the same mistakes.
Nike and a $400 Million “Glitch”
In 2000, Nike decided to upgrade their ERP system and invested $400 million dollars into
the software called i2, where their initial goal was to manage supply chain and forecast the
demand for products. This decision became a disaster for shoe giant with $100 million in
sales loss and 20% stock price decrease because of a software glitch, which in turn, made
stores unable to fill orders for the Air Jordans.
To avoid the same mistake, be sure to set realistic goals for your ERP implementation
process early on and ensure that you take enough time to test the system for any kinks that
need to be ironed out before moving forward with implementation.
Hershey and a Halloween Disaster
July of 1999 is a month which everybody in Hershey would rather want to forget because of
the new ERP system launch that proved to be unsuccessful. A total of $112 million in
investments were supposed to create an integrated ERP environment. However, this
decision led to delivery problems of $100 million worth candies for Halloween 1999.
To make sure that your ERP implementation will go smoothly, set enough time to train the
employees on a new software and don’t skip any steps in the testing process recommended
by your ERP system provider.
Hewlett Packard and Lost Orders
In 2004, ERP implementation in HP was supposed to result in saved costs, shorter delivery
time and development of a world-wide distribution network but brought $160 million of
losses instead. A failure in migration resulted in 20% of orders to be trapped in the old ERP
system
If you don’t want to be in HP’s shoes, plan the internal implementation process very
carefully, otherwise it may lead to a lot of small mistakes and ultimately, a big failure in the
end.

https://www.erpsoftwareblog.com/2017/05/3-biggest-failure-cases-erp-implementation-can-avoid-
mistakes/