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ERP: When Enterprise Software Rollout Falter
ERP projects are famous for pricetags that can reach into the tens of millions of dollars and for implementation timelines that stretch across years. The results are often worth the huge effort, but projects can go wrong, and sometimes the failures can be devastating.
Consider Levi Strauss. The company spent five years to build an single ERP system instance that is used by 5000 users globally spread across Europe, North America and the Asia Pacific. But glitches in their rollout caused it to shutdown three distribution centers in the US for a week in April because of software problems related to receiving and fulfullment, resulting in a loss of $192.5 million.
The loss filtered down to their second-quarter results, resulting in a 98 percent drop in net income. Levi Strauss’ SEC quarterly filing explicitly called out the ERP software problems as the major contributor to the decline.
The Register also notes that this isn’t the first instance of an SAP failed rollout. Earlier failures included Hershey’s, Whirlpool, HP and FoxMeyer.
