The country’s biggest trash hauler, Waste Management, has announced that it is suing SAP for $100 million as a result of the failed implementation of SAP’s ERP package. The suit claims that, “Unknown to Waste Management, this ‘United States’ version of the Waste and Recycling Software was undeveloped, untested, and defective.” The damages sought by Waste Management include its expenses in implementing the package plus punitive damages.
Though there are many reasons why an ERP implementation can fail, one of the biggest reasons is existing business processes and people unwilling to change them, according to a consultant who analyzes ERP failures. Here is a piece of his analysis:
ERP packages, even those that are industry specific, are designed for a large audience of companies looking to achieve success by following a template of best business practices. However, software often fails to achieve its promise due to the reluctance to change by people who have a vested interest in existing processes.
It can be tempting to simply scrap a failed implementation rather than throwing good money after bad, but as with any major IT implementation, companies should look at their options for fixing the problems rather than simply writing off the time and money as wasted. Before embarking on a new ERP implementation, a detailed business case is the best way to analyze the situation, pick an appropriate package, and then get it implemented on time and on budget.
The real reasons why ERP systems fail (Reliable Plant)
Fixing a Failed ERP Implementation (IT Toolbox)
ERP Risk and ROI Explained (Industry Week)
The college where I work has had its share of problems with ERP packages, and unfortunately, we are in an industry that absolutely requires a package to take care of and report on student information. We are about to start on the third ERP implementation in less than eight years, having gone through everything from proprietary systems to PeopleSoft. Our current vendor has decided that they will not develop their software anymore and will stop supporting it in 2011, causing us to scramble in order to get something in place, as we expect our implementation to take two years or more. With all of the risks inherent in ERP implementations, what have you done to mitigate them, and have you seen the rewards that the ERP vendors tout?
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