I've followed stories like these for over 20 years. What never gets reported is the impact on the outside consultants and integrators, and their employees involved in the failure. On rare occasions there is litigation, but usually no real recourse for the integrator. Their sales and project mgmt teams generate huge revenues for the company and are richly rewarded, whether the project is a success or a failure. Consequently, their priorities are revenue generation and CYA documentation, over actual success of the implementation. They need to have adequate skin in the game. Their success criteria needs to align with the project implementations success! Many of the biggest IT and ERP failures I have looked at would have been prevented, if this was the case, because the contracts would/should not have been signed in the first place.
You are right cutting cost in important stages of implementation cost the companies. Data migration and change management are two ignored stages in ERP implementation. Data migration and go live needs extra care and knowledge.
Hi Eric. I have been following your work for some time now down here on the Southern tip of Africa. My question is - of those top 10 failures, how many are still persevering with their failed software (primarily SAP) and if not, what alternative software did they turn to??? I am curious to understand what the Dollar/Disruption threshold is for throwing in the towel with this Corporate's.
Very useful information. You are right about companies cutting corners when it comes to change management. One company I know of did not realize that they needed trainers in more than one language in Eastern Europe. They assumed they only needed a Russian language trainer. It did not go well and go live in some countries had to be postponed a few months. The company left everything to the system integrator and didn’t examine anything independently until things started falling apart.
Thanks very informative. One option i have used is to implement just a stand alone module and explore if it is good fit for the organisation. Also, big name ERPs does not neatly fit certain industries like education, govt, military and environment.
Interesting! Surprised how many failures involved SAP...it is difficult to train your ERP implementator in you Business Processes. The Key is to make your Implementator fit your Processes into their Scope
Good point, Mario. SAP is more likely to be implemented by big complex companies that are more likely to run into problems, so this is a big part of why so many of the big failures are related to SAP.
You get the most out of ERP by adapting to the way it is designed. SAP has the most sophisticated designed processes [IDS Prof. Sheer] built in. What you need is custom software developed to your specs. You don't need a system INTEGRATOR, you need a fleet of developers. Don't do ERP. I got a company to double their business volume in 18 months with only 12% increase in staff, due to brutal organizational adherence to the SAP process flow, avoiding touching any document twice and all information available at the earliest possible time. ERP without change management is a bad idea.
If i am not mistaken Whirlpool had two ERP failures. One with Oracle about 20 years ago. And with SAP. They should be #1 on the list from lessons not learnt
All failures mentioned will have a single thread in common "Low Cost Resources" IT is the only group that would hire 3 persons at $15/hr to do surgery versus a medical professional. If IT projects came with malpractice insurance there would be a whole lot less fails and a lot more success. But the fact that you can program Boeing 737 Max for $9/hr and think all will be grand is a clear demonstration that college degrees for anyone hiring System Integrators was a complete waste of their time and money.. IT buyers make purchasing decision like buying a VCR out of the back of car.... "hey man but it was really cheap" Those that pay the big 3-5 and find that the resources that show up are clueless simply must be more interested in free golf...
Outstanding composition, sound and message... Lav mic is great.. One suggestion. assure that the camera lens is at eye level so it looks more natural.. The looking up is not natural..
hi Eric in my small company we were running both system in parallel at same time (the old on premises one and the new on cloud one for a period of almost one year, this procedure gave us the following: 1/ a safety net in case the new system fails partially or totally,. 2/ more flexibility in time and less urgency and less disruptions. 3/ a seamless transition from one system to another. i wonder is that procedure possible with bigger companies or not (Dual system, Gradual transformation)? regards
Hi Ameen, the approach you suggest can also be accomplished in parallel user acceptance testing - that may be less work and risk than running in parallel after go-live.
@@erickimberling I agree but still some surprises or obstacles you may encounter see until you go live and test the system in real life, weather it is from your enterprise side or the system side, i just guess so
If you refresh your DEV system every month with a full cut over plan, your development has the best possible data, the team can spot problems easier, and you have refined your cut over plan to the point of being flawless. Do that, and you will go live with very little surprise. It gets one better, flaws in the legacy data can be corrected in the legacy system with next to no effort, making data conversion very clean.
All big companies go for SAP....SAP's market share in ERP market is more than twice the next on the list.. Therefore the biggest failures should naturally have more SAP customers
Mess up your org structures and you have a recipe for disaster. That project should find a very experienced INDEPENDENT consultant, preferably born in Europe [likely the most experience] as a project quality assurance, system architecture, and org structure / functional design review. When he finds serious issues bring him in as project manager or team lead replacement. His asking rate is very cheap for what you get. The Big firms have very few of those high-caliber players.
Hi Eric, glad to have come across this video. What are your thoughts of combining 2 or three different ERPs to implement? In your Top 10 ERP video, you extolled on the strengths of the ERPs you listed. So for the sake of example, what advise can you give if my company purchase the supply chain management module of a certain ERP (because that is their strength) and buy another module from another ERP for financials?
You get the most out of an ERP system if processes are designed to follow the system's process. The biggest value of an ERP system is integration. If the plan is to redesign ERP you are high up on the don't do ERP list.
@Erick, Not sure why have you have specifically mentioned Indian based firm but excluded other companies including SAP headquartered in Germany. I hope you know that, in order to carry out implementation in the US, you need to incorporate in the US and hire US citizens.
Hi eric thanks for sharing. How to.identify good erp implementer any tool we can use especially if new to them? For multiple erp with other supporting software such as weighing lims etc any common platform to integrate all of them pls make video in this? Tq
I've followed stories like these for over 20 years. What never gets reported is the impact on the outside consultants and integrators, and their employees involved in the failure. On rare occasions there is litigation, but usually no real recourse for the integrator. Their sales and project mgmt teams generate huge revenues for the company and are richly rewarded, whether the project is a success or a failure. Consequently, their priorities are revenue generation and CYA documentation, over actual success of the implementation. They need to have adequate skin in the game. Their success criteria needs to align with the project implementations success! Many of the biggest IT and ERP failures I have looked at would have been prevented, if this was the case, because the contracts would/should not have been signed in the first place.
You are right cutting cost in important stages of implementation cost the companies. Data migration and change management are two ignored stages in ERP implementation. Data migration and go live needs extra care and knowledge.
Very true
Hi Eric. I have been following your work for some time now down here on the Southern tip of Africa. My question is - of those top 10 failures, how many are still persevering with their failed software (primarily SAP) and if not, what alternative software did they turn to??? I am curious to understand what the Dollar/Disruption threshold is for throwing in the towel with this Corporate's.
Good one Eric. Really useful info to understand the inside out of ERP implementations..
Glad you enjoyed it!
Very useful information. You are right about companies cutting corners when it comes to change management. One company I know of did not realize that they needed trainers in more than one language in Eastern Europe. They assumed they only needed a Russian language trainer. It did not go well and go live in some countries had to be postponed a few months. The company left everything to the system integrator and didn’t examine anything independently until things started falling apart.
Amazing videos, and very well explained! aslo congratulations for the decision to found an independent consultancy company
Superb video. It also highlights the pitfalls of a not upto the mark Erp project implementation and the huge loss it may entail.
Thanks very informative. One option i have used is to implement just a stand alone module and explore if it is good fit for the organisation. Also, big name ERPs does not neatly fit certain industries like education, govt, military and environment.
Interesting! Surprised how many failures involved SAP...it is difficult to train your ERP implementator in you Business Processes. The Key is to make your Implementator fit your Processes into their Scope
Good point, Mario. SAP is more likely to be implemented by big complex companies that are more likely to run into problems, so this is a big part of why so many of the big failures are related to SAP.
You get the most out of ERP by adapting to the way it is designed. SAP has the most sophisticated designed processes [IDS Prof. Sheer] built in. What you need is custom software developed to your specs. You don't need a system INTEGRATOR, you need a fleet of developers. Don't do ERP. I got a company to double their business volume in 18 months with only 12% increase in staff, due to brutal organizational adherence to the SAP process flow, avoiding touching any document twice and all information available at the earliest possible time. ERP without change management is a bad idea.
If i am not mistaken Whirlpool had two ERP failures. One with Oracle about 20 years ago. And with SAP. They should be #1 on the list from lessons not learnt
Yes, there are lots of other examples of ERP failures that we could argue should also be in the top 10!
All failures mentioned will have a single thread in common "Low Cost Resources" IT is the only group that would hire 3 persons at $15/hr to do surgery versus a medical professional. If IT projects came with malpractice insurance there would be a whole lot less fails and a lot more success.
But the fact that you can program Boeing 737 Max for $9/hr and think all will be grand is a clear demonstration that college degrees for anyone hiring System Integrators was a complete waste of their time and money..
IT buyers make purchasing decision like buying a VCR out of the back of car.... "hey man but it was really cheap"
Those that pay the big 3-5 and find that the resources that show up are clueless simply must be more interested in free golf...
Thank you for the feedback. I agree with you!
Great info and excellent presentation!
Thank you!
Outstanding composition, sound and message... Lav mic is great..
One suggestion. assure that the camera lens is at eye level so it looks more natural.. The looking up is not natural..
Thank you, Jaleo. I appreciate the feedback and suggestions!
Hello Eric, thanks interesting group of 10, which system was being implemented at Nike and the Us Navy. Thanks, Jerome
Orecal failed in Alcatel in California in 2008
Hi Eric, do you have any examples of companies that experienced a failed ERP implementation due to insufficient funding?
Interestingly most failures involved SAP.
For large companies, SAP is the only show in town. There is nothing even remotely close.
hi Eric
in my small company we were running both system in parallel at same time (the old on premises one and the new on cloud one for a period of almost one year, this procedure gave us the following:
1/ a safety net in case the new system fails partially or totally,.
2/ more flexibility in time and less urgency and less disruptions.
3/ a seamless transition from one system to another.
i wonder is that procedure possible with bigger companies or not (Dual system, Gradual transformation)?
regards
Hi Ameen, the approach you suggest can also be accomplished in parallel user acceptance testing - that may be less work and risk than running in parallel after go-live.
@@erickimberling I agree but still some surprises or obstacles you may encounter see until you go live and test the system in real life, weather it is from your enterprise side or the system side, i just guess so
If you refresh your DEV system every month with a full cut over plan, your development has the best possible data, the team can spot problems easier, and you have refined your cut over plan to the point of being flawless. Do that, and you will go live with very little surprise. It gets one better, flaws in the legacy data can be corrected in the legacy system with next to no effort, making data conversion very clean.
Just WOW!!!! and just OUCH!!!!!
Why are all the failed ERP implementations SAP based... Integrator problem or a solution problem?
All big companies go for SAP....SAP's market share in ERP market is more than twice the next on the list.. Therefore the biggest failures should naturally have more SAP customers
DEEMS - Air Force well over a billion... SS Admin (Highglass) well over a billion...
There were almost too many to choose from, so lots of really good candidates for the Top 10 didn't make it. Maybe a top 20 next time!
Almost always SAP?!
Someone I know is about to fail, and they are just starting out. S/B around a 2Mil loss when all is said and done.
Mess up your org structures and you have a recipe for disaster. That project should find a very experienced INDEPENDENT consultant, preferably born in Europe [likely the most experience] as a project quality assurance, system architecture, and org structure / functional design review. When he finds serious issues bring him in as project manager or team lead replacement. His asking rate is very cheap for what you get. The Big firms have very few of those high-caliber players.
Where FoxMeyer ? What a good fail ! :)
shout out ENG202
do not erp erp is bad
How about Lidl and SAP.. be a good one to cover, even by itself...
Lessons from an SAP Failure at Lidl | ERP IMPLEMENTATION CASE STUDY th-cam.com/video/QP6CPg3Bfb4/w-d-xo.html
we were on Intuivive. It was not very good.
Hi Eric, glad to have come across this video. What are your thoughts of combining 2 or three different ERPs to implement? In your Top 10 ERP video, you extolled on the strengths of the ERPs you listed. So for the sake of example, what advise can you give if my company purchase the supply chain management module of a certain ERP (because that is their strength) and buy another module from another ERP for financials?
You get the most out of an ERP system if processes are designed to follow the system's process. The biggest value of an ERP system is integration. If the plan is to redesign ERP you are high up on the don't do ERP list.
Eric, Thank you for sharing !
@Erick, Not sure why have you have specifically mentioned Indian based firm but excluded other companies including SAP headquartered in Germany. I hope you know that, in order to carry out implementation in the US, you need to incorporate in the US and hire US citizens.
Hi eric thanks for sharing. How to.identify good erp implementer any tool we can use especially if new to them? For multiple erp with other supporting software such as weighing lims etc any common platform to integrate all of them pls make video in this? Tq
Can you cover 'Proven Path' to ERP implementation in some of your videos?
Thanks, excellent info. and presentation,
Thank you, Steve!
I
Me too!
Superb video