Four ERP implementation case studies you can learn from
Because of high degrees of complexity associated with large-scale ERP installations, over time the proportion of successful, versus failed outcomes tend to become fifty-fifty propositions from a business case perspective. Some enterprises are simply ready for ERP, and some aren’t, some are paying attention to what they’re doing, and others aren’t; but either way, any ERP case investigation is worth understanding what went right, and what didn’t.
Consequently, here are four examples of what I’m talking about.
1. Cadbury – success
Cadbury is a 123 year-old confectioner currently owned by American snack foods conglomerate Modelez International. The company was on an accelerated growth-track while facing problems meeting its production and distribution requirements.
Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation; multi-node resources-management was extended throughout its supply-chain, along with a complete revamping of existing warehouse, and distribution processes.
The consequent impacts afforded Cadbury an opportunity to reduce overall operating costs, while its newly engaged supply-chain, produced significantly better production efficiencies throughout its manufacturing chain.
Remember: for an ERP implementation to really pay off, you'll need to see improvements in key areas. A thorough requirements gathering effort during the selection phase is therefore essential
2. Hershey Candies – failure
Hershey is a 147 year-old confectioner, headquartered in Hershey Pennsylvania. The enterprise saw the implementation of an ERP platform as being central to its future growth.
Consequently, rather than approaching its business challenge on the basis of an iterative approach, it decided to execute a holistic plan, involving every operating center in the company. Subsequently SAP was engaged to implement a $10 million systems upgrade, however, management problems emerged immediately.
The impact of this decision represented complete chaos, where the company was unable to conduct business, because virtually every process, policy, and operating mechanism was in flux simultaneously. The consequent result was the loss of $150 million in revenue, a 19% reduction in share price, and the loss of 12% in international market share.
Remember: poor management can scupper implementation, even when you have selected the perfect system
3. Nestle - success
As a enormous international candy-maker, Nestle SA headquartered in Konicki Switzerland, had harbored a goal of integrating ERP across all three of its operating companies; Nestle SA, Nestle UK, and Nestle USA. The latter operation had been working toward complete integration of a set of ERP solutions since in the late 90s, but various requirements, organizational, and policy problems had plagued the complete initiation.
By the turn of the millennium, its management finally decided that a holistic re-approach to its business requirements were in order. Consequently, this effort paid dividends that allowed SAP to finally get the $200 million job done.
Ultimately, positive business impacts included the consolidation of an outdated accounting structure, better and more efficient communications throughout its supply-chain, and a much more confident workforce.
Remember: integration across different sites requires a lot of upfront effort - but it pays off in the long run
4. PG&E– failure
As a major energy utility San Francisco’s Pacific Gas and Electric should have know better. Its Oracle ERP implementation had gone well, and there had been no problems of note; until it came time to test the system.
Apparently, a manager had chosen a live information database to use during pre-launch testing, although no one thought that the regime would uncover any sensitive company information. Unfortunately, this was untrue, and consequently created a host of costly recovery programs, in addition to losing public confidence in the company’s brand.
Remember: brief your staff on exactly what they should do and not do. Don't get non-specialist staff to carry out non-specialist roles
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