Before implementing an enterprise resource planning system, an organization should be aware of some issues. Troubled multi-million dollar software deals that create spectacular failures and big spending nightmares, embarrassing and expensive lawsuits over botched implementations and breaches of intellectual property.
Below are ten ERP scandals that could serve as warning for those planning an upgrade or implementations of this system.
1. The $400 million upgrade to the supply chain of Nike and ERP systems created a $100 M loss in sales, a twenty percent stock dip and a collection of class-action lawsuits. This was back in the year 2000 and the terrifying results were because of a bold enterprise resource planning, CRM project and supply chain that aimed to update the programs in to one superstar one.
2. The failed technology implementation failed to help Hershey’s operation during the Halloween season in 1999. Hershey’s ghastly issues with its system supply chain apps prevented it from delivering $100 million Kisses for Halloween and caused a dip in the stock at about eight percent.
3. In the fall of 2004, more than 27,000 students at the University of Massachusetts and Stanford and Indiana University as well were forced to do battle with ERP apps and buggy portals which left them at best unable to find their classes and worst unable to collect their financial aid checks.
4. The epic tale of the centralization of HP of its disparate North American systems onto one SAP frameworks proves that one could never be too pessimistic in terms of an enterprise resource planning venture management. In 2004, HP’s project managers knew all things that could go wrong with their rollout but did not plan for so many of them happening at once. Eventually, the undertaking cost $160 M order backlogs and lost revenue which is more than five times the estimated cost of the venture.
5. The garbage-disposal giant Waste Management is still embroiled in a $100 million legal battle with SAP over an eighteen-month ERP software installation. The garbage –disposal giant filed suit and claimed that SAP executives participated in a fraud sales scheme which resulted to massive failure.
6. All wasn’t well with bedding-maker Select Comfort’s multi-module system implementation, supply chain and other apps. Thus, in 2008, with serious shareholder pressure to tend the $20 million more project that was indicative of very poor management judgment, the company put the undertaking on hold.
7. In January 2006, Oracle boasted that it’s halfway through the Fusion Applications development process. The master plan was to create the next generation of applications that are thoroughly standard. Over three years later, people are still waiting for the first generation of its suite of Fusion Apps.
8. When CIO magazine surveyed 400 information technology leaders regarding their enterprise systems in early 2008, CIOs declared they remained committed to traditional, on-premise systems regardless of aggravating integration and high-cost issues.
9. The details of the popular ‘mooning’ between Hasso Plattner of SAP and Oracle’s Larry Ellison have become an urban legend. IN 1996, Ellison’s sailing crew was reported to ignore Plattner’s wounded sailing yacht that has a broken mast and bloodied crew member. Oracle and SAP have not stopped battling it out both on land and water ever since.
10. Fallout with the massive CityTime payroll system project in New York which was wracked by cost overruns and a criminal investigation to an alleged kickback scheme that involves former employees of systems integrator SAIC and the subcontractor TechnoDyne.
Outsourcing Software Development & Global Trend 