Enterprise Resource Planning is the integration of internal and external management infotmation across an entire organisation. ERP systems automate this activity with an integrated software application. ERP enables the flow of information between all business functions within the organisation. Below i will give some famous examples of ERP failures in well know businesses and how costly they proved to be.
-Back in 2000, Nike tried to implement a new bold ERP, supply chain and CRM project that aimed to upgrade the systems into one major system. The upgrade costing Nike $400 million ended up costing them a loss of $100 million in sales, a 20% dip in stock and a numerous amount of lawsuits.
-Another example of a failure in ERP IS HP’s famous failure in 2004. HP decided to run a new project for the ERP and the project ended up costing them $160 million in order backlogs and lost revenue (more than 5 times the estimated project cost).
These two examples of ERP failures by Nike and HP serve as a warning to other companies looking to upgrade their information systems.