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In the decades since enterprise resource planning (ERP) technology was first introduced, there have been many high-profile successes and failures. However, the failures often draw more attention than ERP triumphs. One memorable case of ERP deployment fraught with operational issues is Hershey's adoption of a system in 1999.
When the ERP platform was adopted poorly, Hershey's was unable to satisfy more than $100 million worth of orders for products they actually had in inventory. The price of Hershey's stock dipped and according to CIO Magazine, analysts didn't trust the company to properly deliver on promises again for nearly nine months. While your enterprise might not operate on that scale, you can imagine a comparable scenario based on your operating model.
According to Geneco Consulting, these are some of the reasons why that integration went disastrously:
Executives rushed the process. While Hershey's was given 48 months as a suggested deployment period, leaders at the company insisted on 30 months. Due to the rushed deployment, issues appeared that might have been resolved with more time.
Too many systems were deployed at once. Rather than focusing on a single centralized solution, Hershey attempted to launch three different resource planning technologies at the same time. This created conflict among the various operations.
"With respect to the Hershey's case, many authors have criticized the company's decision to roll out all three systems concurrently, using a 'big bang' implementation approach," writes Jonathan Gross of Geneco. "In my view, Hershey's implementation would have failed regardless of the approach. Failure was rooted in shortcuts related to systems testing, data migration and training."
The company was too busy. In 1999, hysteria about the impact of "Y2K" motivated Hershey to insist on implementation before the new year. Unfortunately, this meant the transition of critical systems happened during the busiest sales and distribution period of the company's fiscal year. In addition to raising the stakes, this window of time also made it harder to provide sufficient attention to the new technology.
"Back in 1999, of course, it was a terrifying new prospect for investors to consider: Could a failed computer project take down a Fortune 500 company?" writes Christopher Koch of CIO . "Hershey's stock price fell more than 8 percent on that September day, and the computer system mystery made the front page of The Wall Street Journal."
The benefit of working with experts to deploy a business management software solution is that we can help determine worst-case scenarios and establish ways to avoid them. Contact Accent Software today to learn more about how our technology can optimize operations at your enterprise.