HP ERP FAILURE - Cloud ERP Solutions HP ERP Implementation Failure Case Study PDF 2004
HP ERP Failure
8 months after he had become CIO and govt vice president of global operations at Hewlett-Packard co., Gilles Bouchard changed into installed approximately as unenviable a position as it supervisor can discover himself. in August, CEO Carly Fiorina said HP had "achieved poorly" on a migration to an order-processing and delivery chain system based totally on sap ag's packages. she partly blamed the problems for a $four hundred million 0.33-sector sales shortfall inside hp's corporation servers and garage organization. in an interview this month, Bouchard spoke candidly about what it changed into wanting to be on it hot seat. excerpts follow:
ERP Implementation Failure at HP
given which you're directly responsible for hp's supply chains and its structures, what was your role in the failed ERP migration? I got this task in December, and in the following 4 or 5 months, what I didn't want to do became merge enterprise and it simply on the corporate degree. I wanted to additionally merge it inside the subject, in each vicinity and every USA. numerous the portions of the supply chain, order management and it [functions] were in exceptional groups. bringing those things collectively into one operation became reputable on may also 1.
this [ERP migration] hassle broke out 3 weeks later inside America's place. it becomes certainly one of many transitions we had carried out, and are still doing, in which we simplify our portfolio of ERP [systems]. this becomes the thirty-fifth transition we had done; 34 had long gone nicely, and this one did not cross properly.
ERP Implementation Failure at HP
what went incorrect? it is a whole lot of little things that delivered up. no longer one or of them could have created the problem, however, the aggregate of them created a larger trouble than we expected. we had planned for 3 weeks of disruption, and there were six weeks.
hp ERP failure story
these problems are in 3 main categories. one we name "operating across silos." the group that changed into driving this software needed to paintings with different parts of the business enterprise. and working throughout those seams proved hard. ... secondly, there has been a lot of statistics-integrity [problems]. orders fell out among the legacy the front-quit gadget and sap on the lower back quit, which required a variety of guide intervention. ... the 1/3 element was extended the call for. this migration needed to do with our intel-primarily based server enterprise. the call for truly elevated for the one's products, and it is nevertheless very excessive proper now, which is the right information. however, it positioned even more pressure at the whole machine. we have to have had a contingency plan for four, 5 or six weeks.
HP ERP Failure Story
he has made it clear that this became an implementation hassle, not an sap trouble. so where precisely does sap match into the mix? genuinely, there was a sap factor to it, but the issue that created the hassle was no longer the sap [software] itself. it becomes the set of business techniques that went around it.
do you trust Carly Fiorina's conclusion that HP"achieved poorly at the migration?" sure. when orders fall out and there is more guide intervention and there are facts integrity troubles, I would call the one's execution troubles.
what should you have executed otherwise? in August, we went again and basically polled everybody worried within the application and all the stakeholders and attempted to show this right into a mastering enjoy. we just were given the results some weeks ago. ... whilst you consolidate, through definition, there are plenty of extra interdependencies. when everybody's got their very own ERP [system], they could all work inside their very own silos. now there is a lot more commonality and lots extra sharing, and loads of learning in terms of application control. we have invested lots in application control.
HP Failure in ERP implementation
ERP implementation is pretty an costly and tough process now not only for small groups however for a few multinational giants as nicely. however, with full coaching and thorough studies to manage expectancies, a successful ERP implementation can be achieved. beneath, we outline the 3 biggest failure cases of ERP implementation and provide suggestions on what you may do to keep away from the identical errors.
in 2000, Nike decided to upgrade their ERP gadget and invested $400 million bucks into the software program known as i2, in which their preliminary aim changed into to control deliver chain and forecast the call for products. this choice has become a disaster for shoe large with $100 million in income loss and 20% stock price lower due to a software glitch, which in turn, made stores unable to fill orders for the air jordans.
to keep away from the equal mistake, be sure to set sensible goals on your ERP implementation system early on and ensure which you take enough time to test the device for any kinks that need to be ironed out before moving ahead with implementation.
HP ERP Failure 2004
july of 1999 is a month which anyone in Hershey could alternatively want to forget about because of the new ERP device launch that proved to be unsuccessful. a total of $112 million in investments had been presupposed to create an included ERP environment. however, this decision led to transport issues of $100 million worth sweets for Halloween 1999.
to make certain that your ERP implementation will pass smoothly, set sufficient time to teach the employees on a new software and don’t pass any steps within the trying out process recommended by means of your ERP gadget issuer.
in 2004, ERP implementation in hp become alleged to result in stored prices, shorter delivery time and development of a worldwide distribution community but introduced $one hundred sixty million losses as a substitute. a failure in migration led to 20% of orders to be trapped within the antique ERP gadget.
ERP HP Failure
in case you don’t need to be in hp’s footwear, plan the internal implementation technique very cautiously, in any other case, it may cause loads of small errors and in the end, a large failure in the long run.
fiorina fired three managers because of what happened in the 0.33 sector. how did you escape the guillotine? why did we miss [our numbers in] q3? it turned into not simply due to this. we've got four businesses at hp: computers, servers, services, and printers. in q3, three of the companies met their desires and did nicely, and one missed. and it missed for 3 reasons. one became the sap transition, one was a weak spot in the garage commercial enterprise, and one changed into some channel issues in Europe. what Carly did is she put accountability on the enterprise control stage. she took human beings out who have been in charge of those corporations.
HP ERP Failure Case Study
are the issues fixed? can customers count on their orders on time? the demand being nonetheless strong, we've some product shortages. so that you may discover a customer with a lead time it's longer than perfect, however, that has nothing to do with what took place in q3.
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hershey's 1999.
