This grim list includes Hershey Foods, Whirlpool, Allied Waste Industries, and
the maker of Gore-Tex, W.L. Gore & Associates. Other stories of troubled enterprise
resource planning (ERP) software implementations are also leaking out from additional
companies, colleges and universities across the country. Some companies are
even turning to lawsuits, alleging the software doesn't work and pointing a
finger at the ERP software makers and consultants who install the systems intended
to automate their accounting, order entry, and manufacturing processes. However,
many analysts say that when huge software projects go wrong, it is often the
buyer's fault, particularly when companies fail to understand the scope of the
project or spend the time and money necessary to move from an old computer system
to a new one.
We believe that this is only the tip of the iceberg. It is an open secret that
a large number of ERP implementations do not live up to their expectations.
As a matter of fact, a number of consulting practices are not only surviving
these bleak days of ERP market downturn, but also making a very lucrative business
by utilizing their ERP consultants in projects aimed at resolving major post-implementation
"blues". The idea is the same, although each renowned consulting firm will sell
their "unique" methodology disguised under the names like "Enterprise Effectiveness",
"Second Wave" and "Continuous Improvement".
believe this bad news will have greater market consequences for both the ERP
vendors and consulting firms then one would initially imagine. The news will
make it much more difficult for big ERP vendors to make inroads into the much
coveted mid-market territory, where the prospective clients are forced to be
cost conscious. Moreover, some mid-market ERP players go so far in their sales
campaigns as to offer 50% of the software license payment deferral until successful
The old adage is "Such a beginning, such an end". The foundation of any ERP
implementation must be a proper exercise of aligning customers' IT technology
with their business strategy, and subsequent software selection. These steps
are very often neglected despite the amount of expert literature and articles
that emphasize their importance. Upon ERP project failure, consulting firms'
assertion that clients' expectations differ from those originally agreed upon
is often a poor cover-up for larger implementation or product deficiencies.
organizations should conduct a detailed ERP software selection process where
all critical business requirements are identified and pinpointed. The scripted
scenario demonstration phase of an ERP selection process is the perfect opportunity
to put potential ERP packages through their paces, and we urge users to exercise
this prerogative. Finally, users are strongly advised to require fixed time
and cost contract commitments from both vendors and their affiliates.