ERP Implementation Failure A Case Study (Woolworths Australia)
When we talk about ERP failures, we cannot just end up the debate with a single example of a case study. There are many popular and prominent case studies for ERP implementation failures teaching precious lessons to the companies. While we are getting into the ERP implementation failure examples, we have talked in the last post about Hershey ERP failure
Today, we have an interesting case study of Australia’s supermarket leader Woolworths Australia;
Woolworths – ERP implementation failure a case study worth studying
If we check the ERP implementation failure statistics, Woolworths is still topping the list with the loss of AU$1.2 billion in 2016.
How did it start?
In the financial year 2016, CEO Brad Banducci announced some major changes in the operations sector. It included the removal of unnecessary costs and bureaucracy. So, the reconstruction of Woolworths begins and the main aim was to improve the culture of the organization. They are now looking for the SAP solution and trying to get rid of the payroll system that is in use form the past 20 years.
So, the company seeks out for the SAP to ensure the end-to-end human capital management system. The different modules of it included: Performance objectives, talent and success, payroll and self-service, learning, and reward.
The times of Crises….
The main crisis was the tailor reports which managers were supposed to receive every week, but couldn’t generate it for 18 months. The root problem over here is said to be the lack of planning and less understanding of the own business processes. The company didn’t document the data for the last 6 years. So, as a result, it lost important institutional knowledge.
The real cause of the Failure
The go-live of the platform mid-last year for Woolworths subsidiary Big W caused the retailer millions in lost sales after it was unable to submit orders to suppliers, leaving shelves empty.
“It was one of the major reasons why we had availability issues in store. And there were points in time when we lost visibility on sales and profit performance in our business, and those were worrisome times because as retailers we need to know all the time where we’re at,” he said.
To avoid a failed ERP, companies need to have a full understanding of HCM solutions. and the staff needs extended training.
Losing the tailored reports for individual stores was not just the lack of workforce planning. But it was also a result of poor understanding of the core business processes. The senior staff left the six-year transition process and then it couldn’t bake out in a new roll-out process. So, if you are also looking to invest in SAP solutions, make sure you have a workforce with business understanding. Moreover, get the experts to guide you through the implementation process. DFSM is helping organizations to rescue such failures by providing expert resue plans.