Costly examples of IS failure

10 Mar

Here are some more real life examples that I found of companies who have suffered losses because of IS failure:

Hershey Foods Corp.

Hershey’s spent $112 million on the implementation of an enterprise resource planning system to meet the Halloween and Christmas demand, which eventually failed. Incorrect stock and problems with orders resulted in a sales drop of 12% for the organisation.

Norfolk Southern Corp.

This rail company lost over $113 million because of system failure while doing a merger. The logistics software was not tested properly and incorrect data was fed into the system, causing serious backups and delays. Not only this but the company had to fork out a further $80 million on overtime pay and repair work.

Grainger Inc.

An industrial supplies company who paid $9 million on new software. The problem occurred when the ERP overcounted the stock, there was also routine crahes. Over a 6 month period, the company lost sales and profits of $19 million and $23 million respectively. The firm eventually worked with the supplier on repairs and fixes.

 

One Response to “Costly examples of IS failure”

  1. sad109417338 March 10, 2013 at 1:32 pm #

    Very interesting. It’s crazy the amount of money that can be spent on IS projects and not get anything in return if they fail!

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