ERP Implementation Failure at HP

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Case Details:

Case Code : ITSY045
Case Length : 16 Pages
Period : 1998 - 2005
Pub Date : 2005
Teaching Note :Not Available
Organization : Hewlett Packard, HP
Industry : Information Technology, Hardware
Countries : United States

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

Industry analysts raised questions as to HP's credibility as a consultant for SAP ERP implementations. In the role of a consultant, HP's primary responsibility was to prevent exactly such execution problems on which it had faltered.

Its "Adaptive Enterprise" concept focused on the use of IT to help companies adapt to change in a quick and effective way (Refer Exhibit I for details). The failure demonstrated the adverse financial and business impact of poor ERP implementation for an IT company, especially if it took on the role of a consultant for implementations. HP conducted an internal investigation to review the causes of failure of the ERP project.

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The report revealed that the major problem did not relate to SAP⁴ software but to execution related issues.

It was found that the technical glitches were small but the contingency planning for the ERP project implementation had left many issues unaddressed.

HP claimed that the data modeling problems between the new SAP software and the legacy system involved were of a minor nature, and it did not hold SAP responsible for the failure.

Commenting on the debacle, Joshua Greenbaum, Consultant at Enterprise Applications Consulting, California, said, "It's surprising that good software could take a company down like this. It doesn't get more embarrassing than that."⁵...

Excerpts >>

4] SAP is an acronymn for Systems Applications Products. It is the biggest European software company headquartered in Germany. It had revenues of Euro 9.76 bn and profits of Euro 1.70 bn in fiscal 2004.

5] Marc L. Songini, HP Puts Part of the Blame on SAP Migration, Computerworld, August 16, 2004.

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