CASE STUDY: AN ERP SYSTEM GONE BAD
The following is a true story. A designer, importer, and distributor of collectible giftware with annual revenues of $250 million hired a consulting firm to oversee the selection and implementation of an Enterprise Resource Planning (ERP) computer system. When the new system was being installed, the consulting firm estimated the cost to implement the system at $3 million. The cost after implementation was over $12 million. When the new system was finally put into operation, the business was so totally disrupted that it was virtually destroyed. Orders could not be taken, or if taken, were irretrievably lost. Orders were not properly filled and shipments went out with no billing. The business spent millions of dollars in an attempt to remedy the problems and in the process lost significant goodwill and continued patronage of a great number of its customers.
Many lessons can be learned from this failed implementation.
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