How EPOS technology can maximise retailer revenues

September 3, 2015

As a specialist in EPOS (electronic point of sale/tills) and hospitality application hosting and analytics, C24 has
worked with EPOS vendors to take their solution from an onsite, hardware-based proposition to a cloud-enabled, agile service for retail and hospitality clients – keen to make the most out of their investment through business analytics and seamless delivery.

We have seen EPOS vendors move from offering C24 EPOS Hosting 1straightforward EPOS solutions to retail clients that facilitate payment, through to offering a more holistic, analytics-driven solution that provides organisations with visibility across their organisation.

So how can retailers look to harness their EPOS technology to increase customer spend in-store?

Powerful analytics can give you more control over data, enabling you to collate information across your operations that is more visual and easy to digest.  Through data maps, word clouds and graphical representations of complex data, EPOS users can quickly gain insights from their information in real-time.

This enables stores to potentially make changes on the fly, rather than waiting for reports to be produced.  For instance, if certain products are selling more rapidly over a period of time (rather than stock levels just running low), then that could trigger an order for more inventory and increased marketing.

In-store offers could be suggested on the day through recommendation analytics, based on certain factors (i.e. weather, day, trends from previous year, number of customers in-store).  The casinos sector is seen as the market leader in this respect, constantly combining data feeds about their customers from all of their till points across the hotel, restaurants, casino and gambling machines, to build a picture of their customers’ behaviour.

The true value comes when analytics services don’t just focus on EPOS, but instead incorporate all of the applications across the business; combining data from multiple feeds for maximum visibility of how end consumers are interacting through EPOS tills and other points of contact across clients’ businesses.

This helps retailers to start looking at the entire customer experience and interaction points that consumers have with their brand.  Being able to understand how they acquired customers, what marketing worked, what offers failed to impress and who spent what on which day, helps the retailer to build a more accurate picture of where to focus their efforts.

I will be publishing a series of articles focused on how EPOS technology can help drive revenues fo
r retailers and hospitality providers through analytics, so please follow me to read more.

Also, find out more about C24’s partnerships with EPOS vendors at http://www.c24.co.uk/sectors/epos-partnerships/ or follow C24 on LinkedIn.

 

 

About C24 Ltd

C24 is a specialist applications hosting provider, with particular expertise in hosting and analytics for the manufacturing, legal and hospitality sector.

C24 helps retailers and hospitality providers to take their EPOS, and other hospitality applications, to a new level; integrating apps with insightful business analytics and tailored cloud hosting services for a seamless, customer experience.

Find out more about our EPOS hosting and analytics solutions at: http://www.c24.co.uk/sectors/epos-partnerships/

 

 

 

Image courtesy of Nate Grigg

 


ERP: Stuck in a web of unstructured data

August 25, 2015

Files

Enterprise Resource Planning (ERP) platforms have traditionally been home to structured data feeds; informing users about manufacturing and operational performance across the business.  However, unstructured data is becoming a blessing (and a pain point) for many ERP managers who are looking to incorporate these new, disparate feeds into their reporting systems for increased visibility.

A report highlighted that complex supply chains can have up to 52 different sources of big data, generated from the supply chain alone.  The unstructured data that is providing new insights (and making up these additional streams) within a complex network of relationships involved in each supply chain, includes:

  • Web traffic statistics
  • Customer loyalty programs
  • Blogs and news feeds
  • Twitter feeds
  • User generated reviews and forums
  • Facebook statuses
  • Geoanalytics
  • Mobile application data

By mining these sources of data which are a relatively new addition to any supply chain, and not inherently catered for in any legacy ERP systems developed over ten years ago, companies highlighted the top areas of improvements from big data activities, namely:

  • Improvement in customer service levels
  • Effective reaction to supply chain issues
  • Increased efficiency
  • Better customer and supplier relationships

For instance, by reviewing geoanalytics data of delivery paths, organisations can start to layer historic detail with real-time analysis to optimise delivery networks for greater efficiency and reduced travel time.

Overall, unstructured data feeds now help supply chain managers to achieve better ‘contextual intelligence’ about how their supply chain strategies perform – an outcome which would not be possible with structure, traditional ERP feeds alone.

Additional to these unstructured feeds already in existence, the Internet of Things phenomenon means that there will be more data-generating components within each supply chain, as sensors are put in manufacturing production lines, and geo-data collectors are installed onto delivery vans – all of which will transmit information and data back into the central supply chain reporting tools.

 

ERP Data in Real-Time

As traditional supply chain is historically slow at responding to changes in demand or supply due to data being historic, unstructured data collection can help organisations to see their operations in real-time.  Social media feeds and geo-data can provide visibility into operational activities as developments occur rather than waiting to see a trend develop over a period of time, prior to taking action.

This move to unstructured data is helping to reduce some of the top pains experienced within supply chain management, such as:

  • Cross-functional alignment between departments
  • Demand and supply volatility
  • Supply chain visibility
  • Ability to use data

Effective control of unstructured data enables organisations to now take into account the wider context around their operational data, and use it to make better business decisions.  Real-time information can help manufacturers to better plan for supply and demand fluctuations during busy periods, or business analytics tools can be employed to drill down into supply chain processes for better visibility.

 

Top 4 Supply Chain Tech Trends

Based on these key pain points, there are 4 top technology trends that organisations are looking to utilise to help with their supply chain challenges:

  • Data visualisation
  • Demand sensing
  • Increased visibility into supply chain
  • Big data

Organisations are then looking to employ these technologies in order to create actionable insights, which can tangibly impact their business.  Targeted marketing also becomes possible, as sentiment analysis can be assessed in realtime and access to consumers’ information is easier than ever. Inventory management becomes more accurate as an array of unstructured data feeds can help to provide context to existing supply chain information. And finally, as insights do become more actionable, businesses can start to automate activities based on data feeds (i.e. increasing IT hosting allowance on website when traffic peaks, creating alerts for workers when staffing resources are constrained or warning managers when inventory is running dangerously low).

Overall, ERP systems are being flooded with new information as technology developments mean that data is being created at every touch point that a product has within an organisation – from concept, through to production, through to being used by a consumer.  A report from Information Week highlighted that organisations only analyse 12% of their data, and that the challenge was dealing with the remaining 88% of data left.  We think that, in fact, the challenge is incorporating disparate and unstructured feeds into existing data streams to create more valuable, actionable insights within ERP platforms.

 

Find out more about C24’s activities within ERP hosting and analytics at http://www.c24.co.uk/erp/

 

 

 

Image courtesy of Ilamont.

 


60% cheaper to deploy ERP in the cloud than on-premise

August 12, 2015

The advent of cloud ERP solutions means that organisations have more choice than ever about how and where they deploy their ERP system, whether that’s on-premise, privately hosted or on a cloud platform.

Sale sign

A report from PWC has looked at how to assess which model is the right fit for your ERP deployment, based on complexity and project size.

Typically, on-premise deployments for ERP have the following attributes:

  • Large implementation
  • Highly complex solution
  • High initial capital costs invested
  • Low to medium ongoing operational costs
  • Implementation time: 12 – 36 months

And Cloud based ERP deployments tend to take pretty much the opposite position:

  • Small to medium implementation
  • Low solution complexity
  • Low capital costs
  • Medium ongoing operational costs
  • Implementation time: 4 – 8 months

So for solutions that are relatively low in complexity, it often makes perfect sense for organisations to consider the cloud, even just for elements of the overall ERP requirement (such as payroll, or workforce management systems) – especially if timescales are tight.

Cloud based ERP solutions often take into account all of the backend services and processes that an organisation would usually have to complete themselves in an on-premise ERP deployment, a fact that is often overlooked when assessing costs.  Many companies do their due diligence about subtracting hardware and infrastructure management costs when selecting a cloud service, but many SAAS solutions also come with backup, upgrades, patching and ongoing development services built into the product, which would be an additional outlay for an IT team deploying an on-premise ERP solution.

This is in part why PWC have calculated that over a 10 year period, the total cost of ownership of a cloud-based ERP solution can be 50 to 60% less expensive than a traditional on-premise system.

However, there are compromises that have to be made.

Cloud-based ERP solutions and SAAS applications usually have reduced capabilities for customisation across the platform; it is a model that works at scale and if you fit into the 80% of businesses who probably have a standardised ERP requirement then cloud based ERP can be a great cost-saving solution.  If, however, you regularly need to customise your ERP tools to suit your organisation’s processes, then a cloud based ERP system is probably not going to be able to solve all of your problems.  A hybrid approach, where standardised systems are deployed in the cloud for simpler applications whilst the more complex, central ERP tool is deployed on-premise or within a private hosting environment can be a way to overcome the cost challenges of a complex ERP deployment.

Another point to consider when choosing the right model for your organisation, is how an ERP application will integrate with other applications and tools across your business.

An on-premise deployment could mean that your IT team is responsible for linking applications together, whereas for many cloud-based services, applications are built on standardised platforms that often have pre-built APIs to plug different apps together and integrate solutions.  An example of this is how Twitter or Facebook can be used as a login tool to other applications or websites.

PWC also use a simple, yet effective, framework to assess the likelihood of success for deploying your ERP onto a cloud platform or on-premise.

 

For a cloud-based SAAS ERP deployment the likelihood of success is high if:

Size of implementation is small + complexity of solution is low.

The solution is estimated to be relatively successful still if:

Size of implementation is large + complexity of solution is low.

 

The likelihood of success drops dramatically once complex ERP solutions are being considered that require in-depth customisation.

The critical factor is the complexity and ability to scale a standardised solution across many different users, locations and processes.  For complex deployments that don’t fit the standardised model, yet where an organisation could still reap cost and efficiency benefits of cloud, then a private, dedicated hosting environment could be the perfect solution that marries the benefits of both ERP models.

We also highlighted in a recent article how Hybrid ERP is becoming a popular solution for businesses who need the flexibility of cloud in some areas, combined with traditional, centralised ERP infrastructures for business critical processes.

 

Image courtesy of Tim Parkinson.


Is traditional ERP broken?

August 7, 2015

Revenues for traditional ERP licences have been declining since 2013, and with SAAS revenues on the rise, the gap will only get bigger as the cloud ERP app market matures.

ERP Broken

PWC reports that investments in SAAS applications will more than double to $78bn while investments in traditional ERP deployments will decline by more than 30% to less than $15bn in the next year.  The rise of SAAS is undoubtedly taking its toll on traditional licencing revenues, and even traditional ERP vendors are seeing their SAAS offerings overtake their traditional ERP sales in terms of revenues.

So is traditional ERP finally broken?

Maybe.  What is for certain is that “Hybrid ERP” – a term coined by Gartner, is becoming the go-to standard for many organisations struggling to maintain legacy ERP systems.  Sometimes referred to as “two-tier ERP”, Hybrid ERP is a mix of legacy, centralised ERP platforms combined with departmentally focused, cloud solutions; such as SAAS solutions for payroll, invoicing or workforce management.  Gartner predicts that most organisations will move away from monolithic ERP platforms to a hybrid ERP approach within the next 5 years, but warns that it may not improve TCO over the solution lifecycle if not managed carefully and integrated into existing systems and working practices.

Organisations are now looking at cloud-based applications to fulfil functionality that would traditionally sit within a comprehensive ERP package, but focus on a single function or department, such as:

  • Payroll
  • Sourcing
  • Web and ecommerce platform
  • Workforce management
  • Invoicing and self-service capabilities for suppliers

The flexibility of cloud is obvious, but why are more organisations really moving away from traditional ERP deployments in favour of cloud based SAAS solutions for parts of their ERP strategy?

 

  • Cost effectiveness

PWC predicts that cloud based SAAS ERP models are 6x less costly to implement, manage and support than traditional ERP deployments, due to the high costs associated with changing large scale, mission critical ERP solutions.

 

  • One size does not fit all

Without heavy customisation and development, off the shelf ERP platforms often don’t fit a company’s operations so hybrid ERP offers an approach for organisations to ‘customise’ their ERP approach by moving to cloud SAAS applications for specific functions whilst leaving the core ERP platform in place.

 

  • Applications can be chosen by departments themselves.

Departments now have the autonomy to make choices about the applications they choose to work with, by bolting on function specific tools to their central ERP system for a hybrid approach to software management.  This now means that the payroll application utilised by a payroll department can be chosen by them, rather than dictated to them by a central IT team deploying an organisation-wide ERP solution.  This gives department leaders more control over how they run their operations and the tools that their teams work with.

 

  • Hybrid ERP suits companies with diverse locations and operations.

Centralised ERP platforms can work well if there is just a handful of office locations, based in one country.  However, once a company has offices in a number of countries, legacy ERP systems struggle to keep up with localisation requirements such as country-specific regulations or financial guidelines.  Utilising cloud SAAS solutions to supplement a central ERP system could be a way of ensuring that subsidiaries meet the requirements required locally without impacting the entire organisation’s operations.

 

  • Legacy applications don’t work for the world in 2015

Working practices continue to change rapidly as communications between suppliers, vendors and buyers become near-instant through technology and connectivity tools.  This impacts on ERP platforms which can be seen as outdated and slow to react in comparison with modern cloud apps that are being developed with speed and agility in mind.  This chasm between legacy ERP and modern working expectations causes organisations to look outside of their onsite ERP systems for a more flexible approach, in order to be more agile for suppliers and responsive to clients.

 

  • Modular approach is the rule, not the exception

The days of making large capital IT purchases for multi-year ERP deployments are nearing their end, as IT and business leaders want faster results from their IT investments, and cannot wait 2 years for a solution to be implemented (and then many more years while the solution is in use) in order to access new functionality.  Taking a modular approach where new services are commissioned on demand from the cloud makes perfect sense for organisations experiencing growth; who cannot predict what their organisation will look like five years from now.  It’s also more cost-effective and accessible financially for smaller businesses who can’t afford the outlay of a company-wide ERP upgrade.

 

  • User experience is critical

Many ERP programs were originally scoped, designed and delivered by central IT teams with input from department heads on what the business’ requirements were.  Tactical SAAS cloud services that are overlaying traditional ERP applications are often chosen by the individuals who will be working in the proposed application, so many are now designed with user experience as the main deliverable, rather than IT teams defining the solution requirement.

Most cloud SAAS ERP solutions have a strong focus on usability, and are often delivered within a standardised web interface for easy adoption.  The apps are usually simple to purchase, making it easier than ever for businesses to trial and test solutions and integrate them quickly into operations, compared with a rip and replace of an ERP infrastructure.

 

  • Pay as you go capability

ERP is usually a one size fits all affair, or at most has a “small, medium and large” offering.  With a hybrid ERP model, cloud SAAS apps can be purchased on a pay-as-you-go basis, linked to the number of users rather than the size of the organisation.  This can prove to be a much more scalable and cost-effective model for organisations who just need tactical solutions to immediate problems, without disrupting their existing ERP strategy.

 

Hybrid ERP definitely looks set to be a growth area as legacy ERP solutions become less attractive both in terms of cost, ease of deployment and functionality.  The key to a successful hybrid ERP deployment will be ensuring that procurement controls are in place for new cloud SAAS ERP apps to prevent sprawl across the organisation and that there is an internal team focused on integration between solutions, building APIs where possible between applications for seamless delivery.

With many cloud apps being delivered from the same public cloud platforms, this process of integration should become easier as the base infrastructure and architecture converges between providers.

 

 

Image courtesy of ShineALight.


Four questions I always ask sales candidates in interviews

July 31, 2015

Being a sales and marketing manager of a busy technology company, I do my fair share of interviews for new sales candidates.  Some interviews go very well, some go very badly, but the majority tend to go ok, but just lack that spark that makes me think that the person sitting in front of me has what it takes to survive in a competitive sales environment.  And the reason for that is rarely down to expertise and experience, it’s down to mindset and how the candidate perceives what sales means to them.  All of which can be learnt and picked up quickly.

To share a little insight from what I’ve learnt up over multiple interviews, I’ve shared four key questions I ask in sales interviews that give me a better understanding of the candidate.

Working

1. Tell me about a customer. In detail.

Many sales reps forget the most important thing.  The customer.  When I ask them to talk to me about one of their customers, they usually find this very difficult.  They might tell me about the turnover and industry the customer operates in, but little more.  To be a great sales person you need to understand your customer and be able to talk articulately about the customer, their challenges and objectives to sales management.

If a candidate can effectively explain a customer’s challenges and goals, alongside a backdrop of industry awareness about the commercial climate that customer is operating in, then I know they are well on their way to being able to align our products to those needs.

 

2. What have you read about selling?

I’m a great believer in self-improvement, and just because sales might not be recognised as a professional function in the same way that Marketing or Finance is with industry-recognised exams and accreditations, it doesn’t mean that sales people should rest on their laurels.  There is more quality content and research available than ever for sales people to share and consume and I am always interested in what sales and marketing books candidates have read recently to keep their skills sharp.

Books that I have found particularly influential in their field of selling include Rainmaking Conversations by Mike Shultz and John E. Doerr, Spin Selling by Neil Rackham and The New Strategic Selling by Miller and Heiman.

Showing that you have taken the time to regularly read key selling publications and books demonstrates that you view sales as a craft, rather than just a job.  It shows you are motivated, a self-starter and keen to improve.

 

3. What does failure mean to you?

We all know that selling involves a degree of failures, whether it be failing to get through a gate-keeper to a decision maker or losing a big deal at the last minute.

How you cope with that failure is what differentiates a good sales person from a great sales person.

Being able to bounce back quickly and move on to the next customer with a positive, proactive mindset reduces any time lost deliberating the sales loss.

Additionally, being able to critically assess your role in the deal loss and what you could have done better next time shows you can take accountability and recognise the areas that need to be improved on next time.  A failure to understand your own limitations is much worse than making a mistake in the first place.

 

4. What role did you actually play in your last sales success?

When sales people come in to see me from large, corporate organisations, it’s often difficult to understand what role the person actually played in their cited sales successes and won deals.

As C24 is an SMB company where sales people have to wear many hats and deliver all parts of the sales process end to end, it’s important to understand early on the roles that potential sales candidates have played in previous sales.

Larger companies give sales people the opportunity to work in large teams on deals, and some reps may only have responsibility for part of the process.  When they come to a smaller organisation, they struggle to deliver the entire sales function as they may have only been previously responsible for quoting, or telemarketing for instance.

Not having end to end sales experience is not a deal breaker, but having a candidate who can be upfront and straightforward about the role and responsibilities they previously had makes it easier to identify potential training requirements and see where they could fit within our sales organisation.

Sales reps will inevitably ‘big themselves up’ but hiring sales managers will appreciate your direct and honest approach early on before they hire you and quickly run into issues.  It’s better for both the candidate and manager in the long run.

 

 

I hope that’s given a little insight into how I approach sales interviews with prospective candidates and some of the things that sales managers are looking out for when interviewing reps.  I hear of some interviews where candidates are asked to “sell me a pen” but it’s not something I have experienced myself.  What’s the strangest thing you have been asked in a sales interview?

 

 

 

 

Image provided courtesy of Reyner Media (https://www.flickr.com/photos/89228431@N06/)


47% of organizations plan to move ERP to the cloud within 5 years

July 30, 2015

A recent article from Forbes highlighted some interesting research from Gartner on organisations choosing the cloud for their ERP.

Gartner is predicting that 47% of organisations are planning to move their ERP systems to the cloud within the next 5 years, and 26% of those surveyed said they plan to do it much sooner; within the next 3 years.

ERP in Operation

30% of ERP will remain onsite

This is a big change for a business critical software application that has traditionally been the bread and butter on on-premise IT.  Yet despite the large numbers being expected to move to cloud ERP, 30% of organisations are expecting the majority of their ERP infrastructure to remain onsite for the foreseeable future.

One of the reasons Gartner cites for the proliferation of cloud ERP services is the wide range of potential SAAS offerings on the administrative side of ERP (financial, HR), yet ERP manufacturing cloud products are scarcer due to their intrinsic complexity.  However this is also set to change as software vendors start to develop products primarily in the cloud.

 

Two tier ERP will speed up Cloud ERP adoption

Forbes contributor Louis Columbus responds in his recent article that in fact cloud ERP adoption is expected to grow at a faster rate than even Gartner is predicting, due to the rise of two-tier ERP systems within larger organisations.

Two tier ERP is usually the result of a complex ERP structure that is too inflexible to bend and flex to serve smaller subsidiaries or new acquisitions.  Large sunken costs in an existing, central ERP system often mean it is too complex and costly to roll out the same instances of the application to all subsidiaries, plus many subs have localization and geography requirements that may not fit the central ERP system.

That’s when a more cost-effective, streamlined ERP solution can work at the local level, and be integrated into a legacy ERP environment for minimal disruption and fuss.  This is predicted to be one of the main contributing factors to the growth in cloud ERP adoption rates.

 

Reasons behind two tier ERP growth

Some of the key reasons behind the high growth predictions for two tier ERP from Forbes’ article are:

  • Organisations often cannot wait to replace legacy ERP systems before new functionality and features need to be implemented. Bringing in a simpler ERP system to solve a tactical problem, whilst utilizing cloud services to streamline costs, can be a way of accessing those features without a rip and replace process.
  • Legacy ERP systems may not be modern enough to cope with today’s compliance requirements as many were originally engineered decades ago when information governance frameworks were not as critical and high-profile as they are today. Leveraging cloud ERP can sometimes help organisations to ‘leapfrog’ versions and move to a newer platform in the business departments that need it.

This comes at a time when even vendors in the ERP space are recognising that the legacy, one-size-fits-all approach doesn’t work.

 

ERP vendors change perspective on legacy ERP

Microsoft has a two tier ERP system in place, with SAP deployed centrally and Microsoft’s own Dynamics AX platform delivered locally.  This gives country operations teams the ability to adjust the ERP tool to fit systems locally and comply with local regulations.

Sage has even gone as far to drop the term “ERP”, saying that it now stands for “Expense, Pain, Regret” (although hopefully not in that order), for many customers today – and has come out to say to customers that Sage will not be pushing users to move to the cloud, instead just letting them move their accounting systems over if they wish.  This is another example of two tier approach in practice, where individual functions are siloed out and delivered from different platforms to suit the application and users.

Sage’s decision is in direct opposition to SAP’s decision to adopt a ‘cloud-first’ policy when taking their products to market with customers.

This is an insight into how the industry to changing and flexing to respond to perceived customer demand across cloud and on-premise ERP delivery.  ERP providers are choosing their sides and getting off the fence in a bid to differentiate their offerings, however it may just end up causing more confusion for customers who want to choose the solution that fits their current business model best, not based on a vendor-led trend.

 

Image provided courtesy of Karl Baron.

 

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If you liked this post then please read our other posts on ERP in the cloud:

6 Most Shocking ERP Failures

Can the cloud deliver for large scale ERP deployments?

Should You Risk Your ERP With The Cloud?

The Top 5 Things Not To Do When Deploying ERP in the Cloud


The 6 Most Shocking ERP Failures

July 27, 2015

What does Nike, the US Air Force and the UK NHS all have in common?

USairforce

They have experienced the pain of a failed ERP project.  And when ERP goes wrong, it goes really wrong.  As enterprise resource planning systems usually touch many points within an organisation, a rocky implementation can result in widespread outages, customer order issues and manufacturing and delivery delays.

Here are some of the most monumental ERP failures over recent years:

 

1) Nike’s software sneaker snag

In 2000, Nike invested $400 million in a warehouse order fulfilment system but instead ended up with over $100m in sales losses and a 20% drop in their stock market value due to a glitch in upgrading their ERP software.  This left stores unable to fill orders, creating a PR disaster.

The ERP project failure resulted in Nike delivering too many Air Garnett sneakers than the world wanted and too few Air Jordans, meaning that Nike didn’t capitalise on a great sales opportunity for Nike Air Jordans.

As Nike’s Vice President of Global Operations and Technology, Roland Wolfram, put it, Nike become the ‘poster child’ for failed software implementations.

Find out more: http://www.cio.com/article/2439601/supply-chain-management/nike-rebounds–how–and-why–nike-recovered-from-its-supply-chain-disaster.html

 

2) UK NHS project left feeling under the weather

A national project to implement a new patient record system for the UK NHS was abandoned and reportedly cost the UK taxpayer in the region of £10bn.

This number doesn’t even include the future costs of a new ERP system to replace the failed project, which could run into many millions of pounds more.

After the project was launched in 2002, it struggled on until 2011 when it was officially dismantled.  The provider, CSC, was accused of “poor performance” and a “failure to deliver”.  In 2013, over ten years after the project was started, no NHS trust had a functioning care records system delivered through the original project scope.

Read in detail: http://www.theguardian.com/society/2013/sep/18/nhs-records-system-10bn

 

3) US Air Force flying low with a $1bn failed ERP project

The US Air Force spectacularly spent over $1bn over seven years on an ERP system that was eventually deemed to have no “significant military capability”.

The four causes highlighted which caused the failure of the project were:

  • Governance – there was apparently a “confusing” and “ineffectual” governance structure throughout the project delivery.
  • Tactics, techniques and procedures – the team implementing the solution were eventually found to have underestimated how complicated and enormous the scale of deploying the solution was. In simple terms, they were in over their heads.
  • Difficulty of implementing change – there was significant staff churn throughout the project; 6 different program managers in 8 years, 5 Programme Exec Officers in 6 years and over 10 organisational constructs. No one knew who was in charge.

These factors resulted in a chaotic and confused approach to the implementation which ultimately contributed to its failure.  Find out more detail here: http://spectrum.ieee.org/riskfactor/aerospace/military/the-us-air-force-explains-its-billion-ecss-bonfire

 

4) Hershey Foods gets it teeth into a tough (and costly) project

Investors balked when the CEO of Hershey Foods announced in 2009 that the company was facing issues with its new ERP implementation, preventing it from delivering $100 million dollars’ worth of stock.  Hershey Foods’ stock price consequently fell 8% and investors were concerned that a failed a software implementation could result in the breaking up of a Fortune 500 company.

The software implementation and delivery was mainly delivered by SAP, Siebel and Manugistics.  Both SAP and Siebel affirm that there were no issues with their software, and that the cause of the issue was more likely to be the ‘big bang’ approach employed by Hershey Foods.

This case not only highlights how complex large scale ERP projects can be, but also about how companies must make smart choices about when they choose to go-live with their new ERP systems (i.e. not before a busy sales period as Hershey did).

Read a detailed case study on the Hershey Foods ERP project here: http://www.academia.edu/4630187/ERP_Implementation_Failure_Hershey_Foods_Corporation

 

5) Time ran out for New York City’s CityTime project

New York City’s CityTime project to implement a system of timekeeping and payroll for municipal workers resulted in a criminal investigation into a wide-ranging fraud scheme involving the project implementation.

The outcome of the investigation ended with 8 convictions and the return of half a billion dollars back to the City.

A report on the failed ERP implementation highlighted failures to control the scope and cost of the project and an inability to hold contractors and service providers accountable as critical to the overall failure of the project.

The project was originally budgeted to cost $63 million but the real costs end up being closer to $700 million!

Read further detail about the doomed program: http://www.nyc.gov/html/doi/downloads/pdf/2014/July-2014/pr13citytime_72514.pdf

 

6) HP eating its own dog food in a major ERP fail

In 2004, HP announced that its third quarter profits had dropped by 5% in its Enterprise Server and Storage division, attributed to problems faced in migrating to a centralised SAP ERP system.

The total cost of the ERP implementation failure including backlogs and lost revenues was cited at $160m – more than five times the cost of implementing the ERP project originally.  One of the original objectives for implementing the solution had in fact been cost savings!

As a result, industry analysts predictably questioned HP’s supposed  expertise around SAP ERP implementations after its own project failure.  Customer orders were trapped in old ERP systems and created huge backlogs in product and ordering systems.
Many analysts suspected the issues lay with the project’s execution rather than fundamental flaws with the software itself, however as HP and SAP are close partners and deliver many joint ERP projects, HP declined from publically blaming SAP.

Read a case study on the project failure: http://astro.temple.edu/~wurban/Case%20Studies/HP’s%20ERP%20Failure.pdf

 

Do you think we missed any?

 

 

 

Image courtesy of Gary [Flickr] (https://www.flickr.com/photos/kwantis/)

 


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