Implementing Enterprise Resource Planning Systems: The Role of Learning from Failure

doi:10.1017/CBO9780511815072.011

10 - Implementing Enterprise Resource Planning Systems: The Role of Learning from Failure

from Part III - From Learning to Knowledge

Published online by Cambridge University Press: 05 February 2012

Judy E. Scott and

Edited by

Peter B. Seddon and

Judy E. Scott: Affiliation:
Assistant Professor, University of Colorado
Iris Vessey: Affiliation:
Professor of Information Systems, Indiana University's Kelley School of Business, Bloomington
Graeme Shanks: Affiliation:
University of Melbourne
Peter B. Seddon: Affiliation:
University of Melbourne
Leslie P. Willcocks: Affiliation:
University of Warwick

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Summary

Introduction

Problems associated with software implementations are not new, nor specific to enterprise resource planning (ERP) systems. Nevertheless, ERP systems have been blamed for the poor performance of several organizations (Osterland, 2000). A number of companies have reported negative impacts on earnings as the changeover to an ERP takes place, among them Hershey (Girard and Farmer, 1999), AeroGroup (Asbrand, 1999), and Snap-On (Hoffman, 1998). Hershey, for example, suffered a third quarter (1999) sales decrease of 12.4% and an earnings decrease of 18.6% compared with the preceding year (Osterland, 2000).

Implementing an ERP is a major undertaking and the Standish Group International estimates that 90% of SAP R/3 (the dominant ERP) projects run late (Williamson, 1997). The trade press is now also replete with articles on ERP failures, cancellations, and cost/time overruns. Dell canceled its R/3 system after two years when it determined that it could not support the required processes (King, 1997). AeroGroup (Asbrand, 1999), Unisource (IW, 1998), and a number of garbage disposal companies (Bailey, 1999) also abandoned their ERP projects. The most dramatic example of an organization claiming to be damaged by an ERP implementation is that of FoxMeyer Drug Corporation. FoxMeyer claims that its SAP R/3 system sent the company into bankruptcy (Bulkeley, 1996). Note, however, that, at the same time, many companies have experienced benefits that far exceeded their expectations (Davenport, 1998; Deloitte Consulting, 1998).

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Type: Chapter
Information: Second-Wave Enterprise Resource Planning Systems
Implementing for Effectiveness
, pp. 241 - 274
DOI: https://doi.org/10.1017/CBO9780511815072.011 [Opens in a new window]
Publisher: Cambridge University Press
Print publication year: 2003

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