2010 Year End - ERP failures

At the end of a year, all sorts of lists pop up. The media bombs us with top selling albums of the year, the world's richest billionaires and ... the biggest ERP failures of 2010.
Yes, it 's true. Now and then, an ERP implementation fails. Sure, most IT projects end up being late and over budget. But when its by a factor 4 or 5, it fails. Big time.
Sometimes the GO LIVE milestone is even never reached. Or only when the original scope was changed so badly, the customer, vendor or integrator could not recognize it any longer.

I can't help but notice that the name SAP comes up more then once in this story. But no chuckles from me, a Dynamics Ax fan.
When the new accouting software of your uncle's Bob grocery store isn't quite what was expected, that's not big news. But when the city of New York is modernizing it's payroll system, where talking different numbers and headline news.
SAP is simply more active on the upside of the market, aiming for bigger customers. When those kind of projects are not a success, it's news. Simple as that. As a defense, one can argue that the mentioned failed projects are not all 2010 based, some are "old news" to say the least. But is there something we can learn from the article, even for people with no connection to SAP whatsoever?

Some highlights from the original article on ComputerWorld:

Customers have to plan well, budget enough money for training and evolve their usual way of working.

No arguing there. This goes for all customers: small, medium, large and very large.

XYZ used the project as "a trial-and-error training ground" for inexperienced employees.

Haven't we seen this happen before, where a rookie employee of the integrator is sent out to the customer to get results. Just to make sure the new guys hours are billable from day 1 on the job.

As a customer, ask for references before you start the project. Get the team member list of your integrator, with the years of experience of each consultant noted before you sign the contract.

XYZ used a "fake" product demonstration to trick it into believing its software was a good fit.

How many customers still buy a product (or software for that matter) based on a Powerpoint presentation? If needed, involve a third party to help you judge product demo's. Make sure the demo is customized to your business, your processes.

The customer didn't "timely and accurately define its business requirements" or provide "sufficient, knowledgeable, decision-empowered users and managers" to the implementation.


When things do go wrong, how many customers are up for self-criticism? Did they do everything within their might in order for a successful implementation? There are two sides to every story...





The article made me remember this other news headline from last year, the lawsuit Oracle filed against TomorrowNow. After the ruling everyone agreed the 1.3 billion dollar awarded was out of proportion. Did it make other parties in IT nervous as well? Because when an IT project fails and the partner is fired, someone else has to step in. Giving the new partner access to the original documentation, or even maybe the original code. When only the partner is replaced, not the product.
Wait and see if 2011 brings more of the same.

SAP bashing

Wow! It’s SAP bashing time again.
Apparently some disgruntled customer of an SAP vendor feels left out in the cold.
So he decides to turn his anger and frustration into other use and launches a website, http://saphorrorstories.com/

Now if you search Google for “SAP horror stories” you get a 57.300 hits.
Just for fun, look up “Oracle horror stories”. That racks up 147.000 hits!
Now google “Dynamics horror stories”…
Puts things in perspective for all the Microsoft believers, not?

I have never used any of SAP’s products, and I don’t have any experience with the vendor that is so heavily targeted with this site.

But how come the number 1 ERP player in the world (yes, SAP), fails so miserably? After all, the SAP reseller in question claims “it can help run SAP for small and mid-sized companies”.

I can understand that an ERP implementation goes wrong. As these things costs time and money, it will end up with an unhappy customer.
But the site’s designer is more than unhappy, he’s pretty angry.
How could have gotten things this far? I believe there are two sides to every story. And as different parties are involved in an erp migration project, there sure are different sides here.
Every ERP implementation has it’s milestones: Missing deadlines in an early stage of a project is big warning.
What about the match between required functionality according to the customer and the available functionality in the proposed solution? These are things that can be included in the contract between customer and vendor, before the implementation starts. Just like the required training of personnel. Don’t leave anything in the dark, but it in black and white.

With year 2000 projects and the euro conversion well behind us, one would think that the slogan “no such thing as a bad erp implementation” is reality. But as products get more mature and complex, contain more and more functionality, implementation costs rise. And in today’s market, the need for qualified, trained business consultants grows.

Lots of things in nature come with waves: sometimes draught for weeks, then days of pooring rain.
Similar to that I do believe we are on the rise regarding this issue: More ERP projects will fail the next few years, or not meet predefined targets.

So my advice: Make sure you do your homework before you even start looking for an erp suite.