A Lesson Learned from Hershey’s Failed ERP Implementation - ERP Cloud Software
 
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Anya Ciecierski, CAL Business Solutions

A Lesson Learned from Hershey’s Failed ERP Implementation


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According to a Software Advice survey 66% of businesses looking to invest in an ERP system are not currently using one. That’s a lot of potential ERP buyers without experience in choosing or implementing a system that will be at the heart of their business.

Hershey is a major corporation that made a switch from legacy systems to a new ERP solution. When they chose their new system, they were inexperienced with the complexities of implementing it. Hershey’s top management and their board members had little idea of how massive the project was going to be for their huge corporation.

The implementation failed catastrophically, costing Hershey $100 million in sales in 1999 from being unable to fill customer orders during their peak season. The disaster wasn’t caused by the ERP system itself. Kenneth Wolfe, Hershey’s CEO at the time, attributed the sales loss to problems with the system’s setup, and experts generally agree

There are several lessons here, but the one most relevant for inexperienced ERP buyers is: get help. If a corporation the size of Hershey can mess up an ERP update, it can happen to anyone. But it didn’t have to happen. As Dave Boulanger, AMR Research Director and one that helped Hershey work out the snafus, said, “Inputs from consulting firms…could have helped Hershey avoid the catastrophe.”

Your business may not be as big as Hershey’s, but you could run into similar problems. An ERP solution is as significant an investment for you as it was for Hershey. If you are new to ERP systems, a third party ERP consultant can help you prevent such problems and save you time. They can help you find the right software and vendor more quickly, and point out differences between what you expect in terms of support from what you will actually get. An experienced consultant can help keep your company from its own implementation meltdown.

For a closer look at these and other factors influencing buyer ERP decisions and how to ensure a successful outcome, see the complete Software Advice survey at:

http://www.softwareadvice.com/erp/buyerview/report-2015/

Oh, and Hershey? If you’re a chocolate lover, you can see they are doing fine. In fact, they rebounded. By the next year they were back on track. Once the setup was worked out, then, as Wolfe said, Hershey began “to realize the benefits of the new system’s power.”

If you would like assistance evaluating your next ERP Software implementation, contact CAL Business Solutions. [email protected] 860-485-0910 x4.

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner, www.calszone.com

 

2 Responses to “A Lesson Learned from Hershey’s Failed ERP Implementation”

  1. ERP Cloud Blog Proofreader says:

    Excellent post!

  2. Very well presented topic. Bottom line is any sized SAP implementation can succeed or fail. Hershey situation highlights the fact that this was a situation that could be 100% avoided provided we did the scoping, blueprinting, testing and overall execution correctly and that too with the right set of project resources. All companies implementing SAP should certainly consider getting third party independent advisors or program leaders to avoid catastrophes like these.

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