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When ERP Solutions Go Bad . . . ?

By John Connell ·
The footwear manufacturer Nike is placing some of the blame for its low third-quarter results on i2 Technologies?the power behind the company?s supply-chain management system. When Nike announced that i2?s management software led to both inventory shortages and excesses along with delayed deliveries, i2?s shares plummeted 22 percent.

Nike?s announcement has sparked doubts throughout the marketplace as potential customers question the viability of i2?s applications. The two firms are working on the problems that are expected to last for several months. Despite the problems and the public criticism, both companies report that they intend to work together in the future.

Why, after harsh public criticism and damaged earnings and share prices, would these two firms continue to push ahead? Are the problems that Nike claims to have encountered with the software just part of the process towards forging a reliable, supply-chain management system?

I think that Nike?s willingness to continue its relationship with i2 illustrates the growing need to rely on enterprise application services to maintain a competitive edge in the marketplace. Even though there have been problems at the outset, Nike knows that it can?t afford to not relyon B2B e-commerce solutions.

But, how can a company avoid the problems that Nike encountered? Are there ways for a firm to evaluate potential enterprise applications and their providers to make sure that they are a ?good fit? for the company? If things go awry in the long run, is there any kind of recourse for either firm?

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has Nike gone mad??

by eemp In reply to When ERP Solutions Go Bad ...

Why are Nike blaming i2? They chose to implement the system in the first place didn`t they? I worked as a programmer of ERP software for some years and I now implement systems. One of the most difficult issues is communication between the customer and the company which implements the solution the customer chose. Blaming i2 may be taken to show that Nike has lost control of the implementation process, which is not a good sign. Blaming i2 is the easy (and stupid) way out. Ofcourse the implementors made mistakes, but Nike must have made mistakes too.

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Why is Nike Blaming others

by JimHM In reply to When ERP Solutions Go Bad ...

Why are they blaming i2, didn't Nike test it's functionality prior to implementation? No acceptance testing - no system testing - no trail run - no parrall testing? Who to blame - NIKE IT Staff -

Here, any new product, modification of rewrite Enterprise critical application goes through a battery of tests from TPOC - Technical Proof of Concept to Parrall test (call it A-alpha to D-detla testing, before PR (production release).

I believe i2 accepted the blame, and they are going to get some major buc's from Nike for accepting the blame. Otherwise, you would think the law suites would be filed for financial restution to i2.

How do corporations avoid Nike's problem - but having established and publishede life cycle, testing and migration procedures/standards. Starting with, a proof of concept - "prove to me that what you say your product does, it will do in our environment." Contracts written with proformance points, and testing points. A strong corporate team that is well trained in project management and life cycle methodologies. To avoid NIKE's failure - a corporation has to be involved heavly in the project - business knowledge support, infrastructure support, project management. i2 only knows their product, if the information from NIKE on the way they do business wasn't communicated or wasn't communicated correctly then i2 built what they had knowledge of. Communication - Commuincation - Design Sessions - Knowledge transfer from Nike to i2 - it sounds like NIKE failed in all those area's.

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i2 works well for us!

by RobRoyNJ In reply to Why is Nike Blaming other ...

i2 has been a strong choice for our SCM solution. I can only echo everyone else's posts by assuming that Nike didn't have their act together and needed a scapegoat. This is too big an issue (especially for a company with such a large distribution network) for Nike to have overlooked the problems. Either they didn't provide correct data to i2 or they didn't implement/use the solution effectively. Period.

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what about expectations?

by krmoorthy In reply to i2 works well for us!

Expectations are set by the company's sales people and more often than not, shaped by the person in-charge of evaluating software options? Doesn't this play an important role in deciding the fate of the implementation?

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Nike's Excuse

by davidclark In reply to When ERP Solutions Go Bad ...

I have a hard time with Nike's excuse.
Blame is easy- fix the problems. Are the the software or people's capacity to evaluate and recommend, both people and coded-solutions at fault here I suspect the real situation is more complex and diffused throughout several layers of managment.

Yes, managment. Nike needs to remember that its in the shoe business, and deal with the CPA's and MBA 90 day wonders that created the mess.

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Nike - Stop Crying

by shetmet In reply to When ERP Solutions Go Bad ...

Nike's problem is the high cost of there sneakers. Stop whinning - do a better job of evaluating technology - LOL

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by andrewp In reply to When ERP Solutions Go Bad ...

I am presently working for a company that is in the process of implementing Oracle. We are finding it is a perfect match for the distribution business we are in. We are experts at supply chains and understand the value that Oracle will bring to our operation right from ordering to storage to distribution to our dealer base of approximately 8000 retailers. The retailers will also benefit because of their ability to keep stock updated real time. This then feeds our ordering dept. etc.....

It is not so much the vendor. It is the implemmentation that is the key.


A. Page
Xplore Networks Support Manager

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by serializable In reply to Nike

I2 OBVIOUSLY DROPPED THE BALL. I2 are the supposed experts in this field. They should know the ins and out of their game, and in this case, they bit off more than they could chew. So many times, the client wants something, but it's up to the consultant to manage the client and deliver a usefule product under budget and on time. The I2 management team obviously made a huge blunder, and now they will have to somehow SPIN this bad PR. Once again, it's up to the consultant to make certain thatthe client is happy, after all NIKE did pay them $400 million!

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Be diligent as a buyer of ERP solutions

by dschmit In reply to I2 OBVIOUSLY DROPPED THE ...

Our company is well into discussions with SAP in evaluating their solution to the issues we are encountering. We have found that being diligent in requiring SAP to prove it's software has involved extensive time being spent by our field employees with their consultants. In this way, we have educated them in our business and can now write an agreement based on live demonstrations and specific performance criteria. We have also shared with them our need for a friendly solution for our users byhaving them participate in field operations first hand. We believe this level of communication is essential to a successful implementation.

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Non tech view...

by skicat In reply to When ERP Solutions Go Bad ...

Typical upper management doesn't see the whole picture. It is tough being in IT when something goes wrong it is always our fault. I wonder if it has dawned on the shoe giant that their shoes are ugly! I don't play basketball. I don't want wild looking shoes to work out in or to walk to the store in. Not everyone has aspiratons to match every pair of shoes with ugly outfits. I like the way Nike shoes last and fit but I have switched to KSwiss and Addidas for the look of the shoes. I want people to focus on me not what I wear and when the last thing I put on in the morning gets the most attention...enough said.

Jim Gleason; MCPx5

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