Lessons From Hershey
Athough an older story, it still highlights errors a company can make when implementing ERP:
In 1999 Hershey deployed a $112 million dollar ERP system made up of parts from SAP, Siebel, and Manugistics. SAP provided the main components of the system, Siebel provided the CRM, and Manugistics provided supply chain management.
The project was originally scheduled to take 4 years, but Hershey decided to squeeze the implementation into 30 months, mistake #1. Hershey also decided to go live with the system in July, just in time for orders to start rolling in Halloween, mistake #2. The 3rd flaw in their plan was to roll out the system all at once. With 3 different vendors provided pieces to the puzzle, the system should have been rolled out piecemeal and each piece should have been tested extensively before moving on to the next, but with a shortened project calendar there was not time.
Because of these mistakes Hershey was unable to effectively ship candy and other products to retailers for Halloween and Christmas of 1999. The company took a 19% hit in candy sales for the 1999 Halloween season and a 12% hit in 1999 revenue.
· Take your time. Hershey didn't seem to need this ERP system implemented so quickly, and certainly didn't plan accordingly. At the time Hershey was tight-lipped about the project and its problems and has remained that way, although I don't expect Hershey to be discussing the issue at this point.
· Don't rollout an ERP system before a critical business season. Halloween has got to be one of the busiest times for a company like Hershey. I can't imagine why they would need to speed up the implementation of this system so it could be in place before Halloween.
· For a company of Hershey's size, and the size of the project ($112 Million), they could and should have rolled out the components in a more staggered fashion. Training users on each component, and ensuring the system was working as planned every step of the way. Implementing a project this large all at once does not provide the time to learn and test everything extensively.
Some CEOs, might feel like a member of the Flying Wallendas when improving the company's ERP system. On the one hand, organizations are reluctant to change. The "if it ain't broke don't fix it" mentality can keep things running smoothly, but the competition, however, is making improvements. He who does not improve is lost. If you are the CEO, you (usually) must push your organization to fix the ain't brokes.
2. Based on their input, choose an improvement
3. Decide on three measurements of the improvement to be done at least each week, preferably each day
4. Document those measurements for four weeks
5. Only now, start an improvement project with typical definition, requirements, design, construction, etc steps
6. Make adjustments during implementation of the improvement
1. I don't know what your problem is, but I'll bet it's hard to pronounce.
2. How about never? Is never good for you?
3. I see you've set aside this special time to humiliate yourself in public.
4. I will always cherish the initial misconceptions I had about you.
5. And your crybaby whiney-butt opinion would be?
6. It sounds like English, but I can't understand a word you're saying.
7. I'm not being rude. You're just insignificant.
8. Look, if I throw a stick, will you leave?
9. Back off! I've set the laser printer to "stun".
10. I can see your point. You're still full of ****.
Over the last several newsletters, I have been sharing some handy information that may be new to you! Here is ERP Implementation Pitfall 4:
Come One, Come All!
On Friday, September 28th, eIS Business Solutions will be manning a booth at the Palm Desert Chamber of Commerce 2007 Business-To-Business Expo at the Fanstasy Springs Resort & Casino in Indio, California.
This is a wonderful opportunity to visit face-to-face. We'd love to get to know you better.
-------------------------------------
I'll Know it When I See it - Will You? Are You Sure? By Rebecca Gill
In the implementation world, there is a wide range of companies, software selection teams, and project managers. They embody all types of philosophies and all types of management styles. Of all the mindsets out there, the most dumfounding is the "I'll know it when I see it" method of software evaluation.
Seriously. Sometimes, this is the only criteria for selecting software that is going to help manage an entire business and hopefully give them a competitive edge. The only criteria for making a large investment and spending months on implementation, training employees, and migrating data.
Dumbfounding, indeed.
Companies who successfully buy, implement, and utilize ERP software do not do so by chance. They do so based on a solid project plan, a strong project leader, and clear project objectives. They know why they need new software and they have a fairly good idea of what functionality they need in an ERP system.
Granted, as the demonstrations commence and vendors show off their fanciest functionality, the selection team may realize they need additional functionality they didn't initially consider. This is great and completely different than the "I'll know it when I see it" mantra. This shows they are not only doing a thorough search, they are open to new ideas and new functionality to help operate more efficiently.
Smart vendors will remove themselves from selection projects that have this limited approach. Why? It is as simple as expectations or the lack thereof. Without having a solid selection framework and clear objectives, it is impossible to select the right ERP package. Thus, no matter what package a company chooses, there is a very good chance that it won't be the right package for them. In other words, not a good start to a long-term relationship.
So, if you are part of an evaluation team and you find yourself dealing with the "I'll know it when I see it" mentality, know you're in for a long and bumpy ride.
---------------------------------
News From eIS!
eIS Business Solutions has recently joined the Chambers of Commerce of Palm Springs, Palm Desert and Indio, California.
Bob Smith, President and Wendy Cohen, Marketing Coordinator, have been mixing it up at the various Chamber-sponsored events. It's been a lot of work and fun integrating the company into the Coachella Valley business community.
Bob has also recently become a member of PIHRA (Professionals in Human Resources Association). Read more about it here.
Bob has also joined Leadership Coachella Valley. You can find out more about them here.
The eIS Team has also joined an internet networking organization - LinkedIn.com. It's a unique system based on relationships and reputation. To learn more about LinkedIn, take their tour.
---------------------------------
News From Our Team
Janice Caldwell, our Senior Software Architect, has a bit of news to share as well:
"Well, I finished my 3rd and last triathlon of the 2007 season. This triathlon consisted of a ½ mile open water swim, an 11 mile bike ride (1/2 of it riding against the wind) and a 3.1 mile run/walk.
Although I am really, really slow, I managed to come in 941 out of 1303 (I was 660 out of 671 in Philadelphia in July) with a total time of 1:40:57.
My goal for next year is to concentrate on the swim and run - and training will start next weekend. I cannot wait until the 2008 season because I am going to kick some *** !"
SUCCESS STORIES | CUSTOMER RESOURCE CENTER | eIS REFERRAL PROGRAM | NEWS & INFORMATION
ADDITIONAL RESOURCES | BLOG | SITE MAP
© 2007 eIS Business Solutions, Inc. All rights reserved.