Lessons Learned from National Grid ERP Failure

Previously we discussed various ERP implementation failures like Revlon ERP failure and Hershey ERP failure case study that included brands like Haribo. Now, we will discuss more brands like National Grid, Vodafone ERP failure, and Nike ERP failure. These case studies are designed to help you understand the possible reasons for ERP implementation failure as much as you can by learning from others’ mistakes rather than just implementing them on your own.

Who is the National Grid?

 

National Grid USA knows the value of timely delivery as one of the world’s largest investor-owned power distribution firms. After three years of growth, team leaders decided to complete the most awaited SAP ERP Project on the schedule.

The outcome? A disastrous domino effect that has affected almost all sector facets, from financial statements to wages.

The facts behind this failure and others like Gartner ERP implementation failure will warn organizations who are ready for their implementation of ERPs.

Lessons Learned:

Revlon’s SAP failure

In 2009, NGUSA (included in United Kingdom National Grid Ltd.) embarked on an SAP ERP project to boost its internal operations and customer services.

On 5 November 2012, the new system will go live. However, it was obvious, as that date approached, that the company was not ready to launch the program. Failure to meet the crucial deadline would have been time and money-intensive. It would shift production back five additional months and cost an additional expenditure of up to $50 million.

For these reasons, NGUSA was convinced to try to keep the original date. Hurricane Sandy, which hit customers on the East Coast in October 2012, was another reason why they chose to stick to the original date that ended with major power loss and damage.

So, what are the ERP implementation lessons learned?

·     Project managers are must

 

Deloitte signed fin 2009 and became the system integrator for the NGUSA project.

However, in 2010, the status shifted to Wipro.

Following the fiasco, NGUSA sued Wipro for 140 million dollars and finally paid 75 million dollars. Among other concerns, they argued that Wipro pressured them to sign agreements and distorted SAP software functionality.

Here comes the role of a project manager. A project manager should review and approve everything before any plans or tactics go live. The same applies to the outcomes of the tests. Experts, in-house staff should be on-hand to define the right specifications to ensure that the report contains them.

·     ERP testing should be in the detail

 

The New York Public Service Commission sponsored the NGUSA deficiency audit in 2014. The results of this audit showed many weaknesses, including that the emphasis of system testing is on refining active parts of the system. Although experiments were carried out at every point, areas in which the system did not function were not accurately identified.

Errors were noted and noted before the final studies. While remedies are in place, the time for testing and validation was not sufficient. With this in mind, we advise creating a variety of scenarios and ensuring data availability at each point.

·     Complex designs take time & require money

 

There were over 635 RICEFWs in the NGUSA project. For a service firm of their size, this was a huge undertaking. This degree of complexity can make any move challenging and time-consuming, from testing to ERP data migration. Such a project necessitates a significant amount of ERP internal capital as well as dedicated attention, which NGUSA did not provide.

This problem got worse because most internal employees were busy dealing with Hurricane Sandy recovery efforts. It was unwise to hurry such a large business investment with such a tight schedule.

·     You cannot overlook training

 

Furthermore, during the NGUSA implementation, there was a lack of dedicated training, especially on how to query data. There was also a lack of understanding about using the data to generate customized reports for upper management.

End-user training will ensure that all staff understood how to use the new program to its full potential.

DFSM Rescue plan

 

From ERP implementation to go-live and beyond, our ERP consultants will assist you with any aspect of your implementation. All the information and consultancy services can stop you from becoming part of increasing the ERP failure rate. If you don’t want to be a part of the list of ERP implementation failure companies, contact DFSM now for comprehensive support, guidance and implementation.

Microsoft Dynamics 365 Experts

Lessons learned from the Haribo SAP ERP Failure

Previously, we discussed the Hershey ERP failure case study, the Revlon SAP failure and Lidl failure amongst others… The articles were meant to help you determine your ERP implementation journey carefully through learning from the aforementioned failures. If you want a smooth and successful implementation of the ERP system, you need professionals to help you. The companies who had to face failure did so because of a few mistakes they could have avoided altogether if they had chosen to work with experts.

Revlon’s SAP failure

Haribo SAP Failure 

 

Haribo is a German candy company that produces gummy bears and other candies. In late 2018, they decided to go live with SAP. Soon after they began experiencing supply chain system failures. This eventually influenced profits, leading to a decline in revenues afterlife.

In some respects, the problem Haribo faced was slightly more subtle and far more likely to occur than some of the other more dramatic case studies. Here are some of the common lessons learned from Haribo about lowering the ERP failure rate.

Lessons Learned:

·    Operational disruption is the #1 hidden cost and risk of a poor ERP implementation 

 

Hundreds of millions of dollars have been spent in previous cases, adding to the overall cost of the serious losses. However, this can be avoided as the transition challenges for the average organization are usually subtler when done correctly.

Haribo may not have spent a huge amount of money implementing the SAP or take legal actions against the scheme. However, these failures of the supply chain and profit losses can be of great benefit to many enterprises. Our team’s research over the years has shown that approximately half of businesses experience material damage during digital transformations. This is because the cost and danger are not planned by or mitigated sufficiently by most organizations.

·    Business Process Reengineering is Critical

 

The fact that business processes have been damaged after the go-live suggests that Haribo did not spend sufficient time and effort on their operations management. They did not know what they need to do during their digital transformation in the sense of business process management. For failure to effectively overcome challenges, entities must plan their State businesses’ future processes to align themselves with their overall organizational model.

·    Align Your ERP System with Your Organizational Goals

 

Haribo wanted its international production footprint to increase and its supply chain business to improve. Therefore, they decided to implement SAP. Unfortunately, the features incorporated in the S/4HANA platform may not have completely supported this view.

We suggest identifying your organizational priorities first during the ERP selection process. Which steps will help you get into your brand, and what do you want? You can only understand with such answers which features a new platform should be a priority.

·    Never Skip Testing!

 

It is hard to understand how Haribo went live with the program without testing the supply chain in advance. Effective device testing and the meeting room operators should unveil possible big interruptions like this long before their livelihood. If not, then your research technique is incorrect. Before your digital transformation, make sure you understand the significance of ERP systems testing.(What is ERP testing)

Why does an ERP implementation fail?

 

Before pulling the plug on their SAP transformation, Lidl spent hundreds of millions of dollars. To ensure that your project does not escalate out of control or harm your activities, Haribo and others need good leadership, dedication, and project governance. Lack of all these qualities is the only reason why these implementations fail badly.

two-tier-erp

DFSM Rescue Plan

 

If you are unsure about your ERP implementation or plan or need to know if the system is failing, let us help you with it. Knowing what the problems in implementing ERP systems are can be a huge help. At DFSM we have the rescue plan for you through assessment, consultation, and testing. If you want an instant response, you can check out our form, answer the questions, and see if you are failing and need help. DFSM is always there for you.

Lidl SAP implementation failure (ERP Failure serie)

The companies acquire ERP systems helps them in managing work with a balanced flow and in a more organized way. They get to have easy access to the information, manage different departments from a single platform. Some companies wanted to streamline their business and started implemented ERP systems but had to meet the failure. 

In one of our previous blogs, we discussed one of the ERP failed projects/ERP failure example, i.e. Hershey ERP failure. Companies looking for failure lessons and failure factors of ERP implementation can have a lot to learn from it. There are many reasons for these failures. In this case study, we are going to talk about the Lidl SAP implementation failure. Let’s help you take a walk through their failures for your understanding.

 

benefits_of_erp

How it all started?

Lidl implemented SAP three years ago, considering their step towards a transformative journey. The goal was to meet the market ends for innovation and efficiency. Initially, they went live with the merchandise management at its Austrian stores in May 2015. The roll-out plan was to reach 10,000 stores and more than 140 logistics hubs. However, now the recent news states that Lidl is dropping the project worth €500m project.

 

Why did the project fail?

 

A recent survey study based on 113 individuals shows that across the SAP has failed to companies have failed in the SAP implementation. The reason is common, and that is SAP, not meeting the expectations of the company. The reason for the Lidl SAP implementation failure was:

  • It shows that customization is not one of the strengths of the SAP system. Projects are completed successfully with a specific model. Changes, however, demand more and fail SAP.
  • In the case of Lidl, it demanded a higher cost for consultation and implementation cost consider the adjustments.
  • The company also states that the problem has risen despite the technology solution.

A Lesson Learned

 

We all know that the system is supposed to ease up the process and help organizations in reaching a higher level of success. Now, most companies fail as they lack business engagement. So, with the failure of Lidl SAP, we have learned to:

 

·Open to Business Process Reengineering

 

A willingness to improve process engineering will help you define the helpful processes and separate the changes you need. You need to look closely at the requirement gaps and fix them.

 

·Follow the defined timelines

 

The Lidl project spanned around seven years. See, the problem lies in the timelines. You have to adhere to them. Competition doesn’t stop, and the market keeps moving on. So, avoiding intensive customizations will help companies in following deadlines or timelines in a better way.

 

·Ensure executive alignment

 

Since the team was in constant fluctuation, managing business alignment or buy-in became tougher. So, it is important to maintain the focus.

·Prioritize organizational change management

 

Prioritizing internal growth in the team is also important. It seems easy, but it is not. You have a focus on training during the project implementation and help the team understand the smart use of functions.

 

DFSM ERP Rescue failed project

 

DFSM can help you in saving your time and money. Talk to our consultants, and they can assess if the project is failing or not. So, they can offer immediate solutions along with the training to help the team learn better use of the ERP system.

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