Chapter 10 - When Gummy Bears Are Late Due to an ERP Project Failure Flashcards
What percentage of ERP fails?
55-75%
What percentage of customers are unhappy with their ERP?
60%
What percentage of people feel like their ERP did not provide a measurable return on ROI?
90%
What percentage felt that the ERP transition took longer than expected?
54%
What percentage felt that the ERP transition caused operation disruptions
40%
Why do firms transition to an ERP if the task is difficult to do so?
1) The on premise softwares life may be coming to an end and requires an update.
2) The partners have updated their systems and thus they must update their systems as well.
3) The current information systems are not flexible enough to keep up with the fast paced changing environment.
Describe the Haribo company ERP failure.
In 2018, they moved their headquarters from Bonn to Grafschaft. They decided to adopt a new SAP built ERP to streamline it production and update the old goods management systems, and for a short period increased the demands of effective supply chain management. However, the adoption of the new system disrupted the Haribo’s supply chain, affecting production, delivery, cash, sales, and profitability.
What are the four possible reasons that Haribo failed?
- Lack of alignment with the business mode
- Failure to effectively manage business processes
- Insufficient systems training
- Insufficient or lack of executive leadership support.
Describe the lack of alignment with the business mode. How did this affect Haribo.
It should be in line with a firms business model. It is especially important for a large scale project like an ERP adoption to make sure it aligns with their future state business model. They wanted to expand their international supply chain operations and manufacturing, but many experts say that SAP S / 4HANA was not sufficient to perform this goal.
Describe the failure to effectively manage business processes. What was described that happened to Haribo?
Before using an ERP you must have a good understanding of the business process, as well as which processes may and may not work for you. Once you have this understanding, you take the goal and the future processes and see if it matches the needs and the new software. Experts point out that many business processes became broken after implementing the system, indicating that there was a failure to manage the business process.
Describe the insufficient systems testing. How did this affect Haribo.
It is important to test the system first because there may be a bug or an error in one area, and in an integrated system like an ERP this can bring the whole thing down. A problem with the sales will bring down the accounting, production, and inventory. If there is an error, you must fix it, retest, and ensure all areas are functioning as they should be. Experts say that if Haribo had done adequate systems testing they should have been able to find issues even before it went live, but since the issues still came up[ when it went live they probably did not test it enough.
Describe the insufficient or lack of executive leadership and support.
The idea that if you are going to implement a wide range project such as this, you must involve all members within the firm to understand their new tasks and responsibilities, and ensure they know how it is going to work before you use it. Top management should not just authorize but be involved in the design, development and implementation, including C-Suite of executive managers. By doing this it can allow the alignment of the ERP goals and the business goals.
What must be done with an ERP after its initial startup
Continually m monitor it, watch over it, address bugs, ensure it is adaptable and scalable with the business.
What are three ways to better prepare for an ERP upgrade?
1) Have clear defined objectives for the ERP project that is inline with future objectives.
2) Spend more time and energy on reengineering and managing the business processes.
3) Conduct thorough systems tests, and plan for operational disruptions.
