The following SAP ERP project failures cover the importance of testing, change management, training, senior management involvement, scope management, and quality of the consultants provided by ERP implementation vendors.
With the exception of the inept, incompetent, or otherwise unqualified “con”sultants provided by some system integrators it is important to note that these failure overviews illustrate many of the points made by Steve Phillips in the post on Software Consulting Firms and Clients Myths and Half Truths .
There Mr. Phillips lays out pretty significant areas where the business must chart and then control their own project destiny.
For a table of the primary areas of responsibility for end customers to ensure project success please see SAP Success Factors for Vender Selection – Responsibility Matrix 2 . The table developed there is derived from the academic literature and my own experience. I have added my opinion on how the responsibility for those success factors is divided between the customer and the SAP implementation partner or vendor.
Continuing on the series of SAP ERP project failure overviews, here are three more.
SAP ERP Implementation Failure Overviews – part 2
Levi Strauss & Company – SAP Failure? (2008)
- After go-live shipping was prevented for one week and there were legacy system integration issues. Levi was an interesting case study because many industry experts believe the SAP implementation was used as an excuse for broader economic issues affecting Levi.
- One week of delayed deliveries was insufficient to explain the overall drop in financial performance (approximately 98% decrease in revenue could not be sufficiently tied back to the SAP implementation).
- Levi Strauss has since worked through and resolved the implementation issues and SAP is running smoothly.
Lessons Learned: Ensure that all legacy system interfaces are carefully tested before going live. Don’t use SAP or enterprise application implementations as an excuse for poor economic or poor overall market conditions.
Waste Management Incorporated – SAP ERP Failure Overview (2008)
- Waste Management claimed in its lawsuit that they “wanted an ERP package that could meet its business requirements without large amounts of custom development…” They also claimed “SAP used a ‘fake’ product demonstration” and “SAP’s technical team had ‘recommended that SAP deliver to Waste Management a later version of the software than the version SAP in fact delivered’.” They also claimed SAP knew the software was “unstable and lacking key functionality…” [FN1]
- SAP claimed that its application could meet the company’s needs without modification.
- SAP claimed in its legal counterclaims that “Waste Management didn’t ‘timely and accurately define its business requirements’ nor provide ‘sufficient, knowledgeable, decision-empowered users and managers’ to work on the project.” [FN1]
Lessons Learned: First and foremost any organization or company who implements SAP, ERP, or other enterprise software applications must ensure they are in control of their own project. This would generally fall under numerous critical success factors: business process engineering / change management, scope management, senior management support, formal project plan and schedule, consultant experience, implementation strategy, and amount of custom coding. Delivering a project with standard system functionality, and on time / on budget requires strong leadership from both the customer and the integrator. For additional insight and a somewhat different perspective please see the post where SAP and Waste Management Finally Settle .
Los Angeles Unified School District – SAP ERP-HR Failure Overview (2007)
- Fake Consultants / Trainees / unqualified consulting resources on the project
- “[I]t appears Deloitte (the implementation partner) brought unqualified resources (i.e., personnel) to the project.” [FN2, pg. 28].
- I personally encountered one of these fakes as a project manager for another company looking for a workflow resource. Their ABAP and SAP skills were horrible but they got a great reference from LAUSD.
- Lack of cooperation with the Teacher’s Union and no user buy in.
- This is a project planning and change management issue; the company and the integrator bear this responsibility.
- Has since worked through and resolved the implementation issues and SAP is running smoothly.
Lessons Learned: SAP implementation vendors and partners may allow margin desires to override quality to the point of presenting significant project risks. It is critical to evaluate every consultant any integrator brings onto your project. There are just too many fakes in the marketplace that do not have proper background checks.
[FN1] SAP, Waste Management settle lawsuit. Business Week. May 3, 2010.
http://www.businessweek.com/idg/2010-05-03/sap-waste-management-settle-lawsuit.html (retrieved 5/11/2010)
[FN2] Bhagwani, A. (2009). Critical Success Factors In Implementing SAP ERP Software, University of Kansas Graduate School. http://www.r3now.com/literature/2009-Bhagwani-SAP-Project-Success.pdf
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- waste management erp sap case study first publication in 2008