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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"We executed poorly on the migration. The migration was more disruptive than we'd anticipated."¹

-Carly Fiorina, Former Chairman and Chief Executive Officer, HP.

"We are very well aware of the difficulty of integrating systems and business processes and are taking steps to fix it, but we weren't aware of this in time."²

-Gilles Bouchard, Chief Information Officer, HP.

Introduction

In August 2004, HP announced that its revenues for the third quarter ended July 31, 2004, from its Enterprise Servers and Storage (ESS) segment had gone down by 5% to $3.4 bn, as compared to the same quarter the previous year.

The company attributed this revenue shortfall mainly to the problems faced in migrating to a centralized ERP system at one of its North American divisions.

The total financial impact of the failure including backlogs and lost revenue was pegged at $160 million, more than five times the cost of implementing the ERP project.³

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ERP Implementation Failure at HP - Next Page>>

1] Ashlee Vance, HP: The Adaptive Enterprise that can't adapt, The Register UK, August 13, 2004.

2] Rene Boucher Ferguson, Migration Woes Cause HP Backlog, September 13, 2004.

3] AMR Research had estimated the cost of the project to be $30 million.

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