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.
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.