18 well-known ERP disasters, dustups, and disappointments – Cyber Tech

ERP programs have grow to be invaluable to many organizations, by their administration of enterprise processes throughout the enterprise. The expertise, stemming from a humble starting in manufacturing and supplies useful resource administration, has expanded to incorporate almost all core enterprise capabilities.

The excellent news is that when an ERP system works as marketed, it could actually cut back prices, enhance productiveness, and enhance effectivity by linking numerous companies processes and unifying all enterprise models and their knowledge on a single system that works seamlessly.

[ See also: 10 most powerful ERP vendors today ]

However as ERP programs have expanded the variety of companies processes they contact, they’ve additionally introduced their very own complexity to customers’ IT programs. Preliminary deployments, upgrades, and replacements are susceptible to large errors that may value many tens of millions of {dollars} and take many months to repair.

Right here we’ve assembled some dramatic ERP flops from through the years and tried to glean knowledge from the wreckage.

1. The Birmingham Metropolis Council fails to plan

The Birmingham Metropolis Council, within the UK, launched a undertaking in 2022 to switch its SAP ERP with Oracle, with the purpose of streamlining funds and HR processes. However a collection of missteps, together with insufficient undertaking oversight and shifting design requests, have ballooned the price of the undertaking and led to essential performance unlikely to be prepared by 2026.

The unique value of the undertaking was estimated at about £39 million ($53 million at present change charges), however a 67-page Grant Thornton report, launched in February 2025, estimated extra prices to be within the £90 million ($123 million) vary.

“The affect of the failed implementation has resulted within the Council being with out an satisfactory monetary administration system and money receipting system for over two years,” the Grant Thornton audit says.

The blistering audit famous a lot of issues with the undertaking, together with insufficient undertaking governance, poor design selections, shifting performance requests, and a scarcity of in-house experience with excessive turnover.

The undertaking managers did not report issues in a well timed method, the audit provides. Within the pervasive tradition surrounding the undertaking, “unhealthy information was not welcome.”

Inside reporting on the standing of the undertaking persistently introduced an optimistic view, burying critical dangers and challenges in supporting supplies the place they had been much less more likely to entice consideration, the audit says.

2. Mission Produce: This avocado will self-destruct in 5 days

Mission Produce packs, ripens, and distributes avocados all around the world, and prides itself on its capability to ship just-ripe avocados year-round. In November 2021 it turned on a brand new ERP system meant to assist worldwide progress with improved operational visibility and monetary reporting capabilities.

Then all the things went pear-shaped, and all of a sudden Mission now not knew for certain what number of avocados it had readily available, nor how ripe they had been, with a lot of them ending up unfit on the market. It had to purchase in fruit from different suppliers to satisfy its supply commitments, taking a success to margins. And on prime of that, there have been delays in its automated buyer invoicing.

“Regardless of the numerous hours we spent planning and making ready for this conversion, we however skilled important challenges with the implementation,” CEO Stephen Barnard instructed buyers with pleasant understatement. “Whereas we weren’t naïve to the chance of disruption to the enterprise, the extent and magnitude was higher than we anticipated.”

The corporate was pressured to develop new processes to maintain data flowing across the enterprise, and rent a third-party marketing consultant to type out the ERP system at a price of $3.8 million over the next 9 months.

That’s nothing, although, to the hit Mission took to its earnings. Attributing a precise value to the ERP failure is tough, as the corporate confronted extra challenges from a poor avocado harvest in Mexico across the similar time. Nevertheless, it mentioned that the $22.2 million year-on-year drop in gross revenue for the quarter following the go-live was primarily as a result of ERP drawback.

3. Invacare faces lengthy wait and elevated value for well being care ERP intervention

Invacare, a producer of medical units, has put its ailing SAP improve right into a coma, briefly stopping the undertaking — however not the payments.

The corporate’s North American enterprise unit, which accounts for 40% of its income, was the primary to maneuver to the brand new system in October 2021. It didn’t go properly, initially limiting on-line ordering and inflicting delays in accounts receivable, though issues had been getting again to regular by the top of the quarter.

ERP pains are a recurring sickness for Invacare, which additionally had issues with an earlier improve between 2005 and 2009.

The corporate is busy restructuring within the wake of the pandemic, simplifying its product strains and adapting its provide chain to the brand new actuality. That’s made it laborious for the workforce engaged on the ERP improve to maintain up, so early in 2022 Invacare determined to place the undertaking on maintain.

“We needed to pause on investing within the present footprint, which might solely be redone primarily based on how the footprint is revised. And we predict that’ll take a few quarters to resolve,” chairman, president, and CEO Matt Monaghan instructed buyers in August 2022. “As soon as we now have that template created in North America, that will likely be deployed globally.”

Though work on the ERP undertaking has stopped, the corporate nonetheless has to maintain paying its programs integrator the identical month-to-month payment, he mentioned.

The continuing delays and prices seem to not have happy Invacare’s board, which two weeks later nudged Monaghan out saying the corporate wanted “a change in management to supervise the profitable execution of Invacare’s enterprise transformation.”

If there’s one factor CIOs can take away from Invacare’s expertise, it’s to ensure programs integrators’ contracts don’t require them to be paid when there’s nothing for them to do.

4. Protecting packaging agency’s revenue takes a knock from ERP

Packaging agency Ranpak’s SAP migration was removed from a catastrophe — it took lower than a 12 months and was delivered on time and to finances — however however initially led to disappointing outcomes.

The transfer to a cloud-based ERP system got here a number of years right into a broader digital transformation at Ranpak.

The corporate rolled out the brand new ERP in January 2022, coinciding with its new fiscal 12 months. After a interval of deliberate downtime, “We skilled inefficiencies as we acquired up the training curve within the new system,” CEO Omar Asali mentioned in a presentation of first-quarter outcomes.

The software program roll-out coincided with Russia’s assault on Ukraine, making it more durable for the corporate to answer provide chain disruption and rising enter prices. That meant a decline in gross sales throughout the board, inefficiencies in processing and transport, and an lack of ability to extend costs in keeping with prices, resulting in a $5 million drop in web revenue within the quarter.

A few of the software program points remained unresolved into the second quarter, and by the top of the third quarter the corporate had run up $6.5 million in implementation prices. However in early November Asali mentioned the brand new ERP system had began to ship higher and sooner measurement of productiveness and KPIs.

5. Snack producer bites off greater than it could actually chew with ERP change

J&J Snack Meals’ ERP issues stem not from a contemporary system however an older one — Oracle’s JD Edwards.

J&J has lengthy used JD Edwards in its frozen drinks division and determined to maneuver the whole firm to the identical platform. Unusually, the corporate determined to not change ERP programs after closing its books for the 12 months, however in the course of its second fiscal quarter. For J&J, that was in February, often a quiet interval for snack gross sales.

February 2022 turned out to be busier than standard, though not for the perfect of causes.

“The implementation created unexpected short-term, operational, manufacturing and provide chain challenges that affected the efficiency of our meals service and retail segments through the quarter,” CEO Daniel Fachner instructed buyers in Might. By then, although, the issues had been largely resolved and the corporate was “simply fine-tuning just a few items of it,” he mentioned.

These challenges meant J&J misplaced out on $20 million in gross sales and $4.5 million in working earnings. It could’ve been a banner quarter if not for the ERP disruption: The corporate’s frozen drinks section, already working JD Edwards, noticed gross sales rise 50%.

6. Haribo’s failure to map workflows

Haribo, a German firm famed for creating gummy bears a century in the past, started a transfer to SAP S/4HANA in October 2018. The plan was to transform 16 sweet factories throughout 10 international locations away from their standalone ERPs, a few of which had been a long time outdated.

Nevertheless, the implementation initially did not map outdated enterprise processes and workflows to the brand new ERP.

Shortly after the brand new ERP went reside, Haribo was unable to trace uncooked supplies and stock, resulting in product shortages at grocery shops. Haribo noticed a 25% decline in gross sales of its signature Gold Bear gummy sweet in 2018.

7. Leaseplan: A monolith unfit for the rising digital world

After an initially profitable SAP deployment at its Australian subsidiary, in 2016 car administration firm Leaseplan commissioned HCL Applied sciences to develop a brand new SAP-based Core Leasing System (CLS) that was to be the guts of the group’s IT transformation throughout 32 international locations.

In early 2018, auditors warned of exceptions with respect to person entry and alter administration in CLS, and beneficial enhancements to IT controls and governance as extra international locations had been anticipated emigrate to CLS that 12 months. By March 2019, issues had been slipping. The auditors famous that rollout of “the primary phases” of CLS was now anticipated that very same 12 months, and added suggestions on managing outsourcing threat to their earlier warnings.

Leaseplan deserted CLS months later, writing off €92 million ($100 million) in undertaking prices, and tens of millions extra in associated restructuring and consultancy charges. It managed to salvage simply €14 million it had spent on individually developed IT modules that it anticipated would generate financial advantages sooner or later.

The issue, Leaseplan mentioned in its second-quarter outcomes, was that CLS would “not be match for goal within the rising digital world through which [it] operated.” The monolithic nature of the SAP system “hindered its capability to make incremental product and repair enhancements at a time of accelerated technological change,” in keeping with Leaseplan.

As an alternative, the corporate deliberate to construct a modular system utilizing best-of-breed third-party parts alongside its current predictive upkeep, insurance coverage declare and contract administration programs. It anticipated this to be extra scalable and permit incremental product deployments and updates.

8. Southeast Energy Group’s unhealthy knowledge

Southeast Energy, an electrical infrastructure producer, partnered with SAP again in 2014, with a purpose of streamlining its operations by shifting its knowledge from its legacy programs into the SAP Enterprise One platform. 

The corporate had deliberate a deployment date in January 2018, however undertaking deadlines slipped due to corrupted knowledge and confusion about pricing. Due to the info issues, the ERP system being put in couldn’t create correct invoices, monetary statements, and different accounting supplies.

The undertaking was not completed 4 years after Southeast Energy contracted with SAP and a programs integrator to maneuver to Enterprise One, regardless that comparable deployments usually take lower than a 12 months, in keeping with court docket paperwork.

Southeast Energy filed a lawsuit in 2018 towards SAP and the programs integrator concerned within the undertaking. The case towards SAP and the programs integrator was dismissed in 2022.

The ERP issues created delays in Southeast Energy’s capability to satisfy buyer orders on time. The failed undertaking led to delays within the development of energy turbines made by Southeast Energy and resulted in a lack of firm knowledge.

9. MillerCoors: Combating in public, then making good

In 2014, MillerCoors was working seven totally different situations of SAP’s ERP software program, a legacy of the years of booze trade consolidation that had produced the alcohol behemoth. The merged firm employed Indian IT companies agency HCL Applied sciences to roll out a unified SAP implementation to serve the whole firm. Issues didn’t go easily: The primary rollout was marked by eight “essential” severity defects, 47 high-severity defects, and 1000’s of extra issues recorded throughout an prolonged interval of “go-live hypercare.” By March 2017 the undertaking had gone up to now south that MillerCoors sued HCL for $100 million, claiming HCL had inadequately staffed the undertaking and did not reside as much as its guarantees.

However the IT companies firm didn’t take that mendacity down. In June 2017, HCL countersued, claiming MillerCoors was in essence blaming HCL for its personal administration dysfunction, which HCL mentioned was at the true explanation for the failure. Outdoors observers famous that the wording of the contracts, as outlined within the lawsuits, gave the impression to be primarily based on a pre-existing basic companies contract between the 2 corporations, and left loads of room for error. Then, in December 2018, the 2 corporations resolved the dispute “amicably,” having apparently used the courts as a venue for a high-stakes, public negotiating session.

10. Revlon: Screwing up badly sufficient to enrage buyers

Cosmetics big Revlon was one other firm that discovered itself needing to combine its processes throughout enterprise models after a merger — on this case, it had acquired Elizabeth Arden, Inc., in 2016. Each corporations had constructive experiences with ERP rollouts up to now: Elizabeth Arden with Oracle Fusion Purposes, and Revlon with Microsoft Dynamics AX. However the merged firm made the fateful option to go along with a brand new supplier, SAP HANA, by December 2016.

Was HANA an undercooked product doomed to fail? Perhaps. What’s clear was that the rollout was disastrous sufficient to basically sabotage Revlon’s personal North Carolina manufacturing facility, leading to tens of millions of {dollars} in misplaced gross sales. The corporate blamed “lack of design and upkeep of efficient controls in reference to the … implementation” for the fiasco in March 2019. It additionally famous that “these ERP-related disruptions have triggered the corporate to incur expedited transport charges and different unanticipated bills in reference to actions that the corporate has applied to remediate the decline in customer support ranges, which may proceed till the ERP programs points are resolved.” The disaster despatched Revlon inventory right into a tailspin that, in flip, led to the firm’s personal stockholders to sue.

11. Lidl: Large drawback for German grocery store big

It was presupposed to be the wedding of two nice German corporations: SAP, the ERP/CRM famous person, and Lidl, a nationwide grocery chain with €100 billion in annual income. The 2 started working collectively on a transition away from Lidl’s creaky in-house stock system since 2011. However by 2018, after spending almost €500 million, Lidl scrapped the undertaking.

What occurred? The scuttlebutt centered on a quirk in Lidl’s record-keeping: They’ve all the time primarily based their stock programs on the value they pay for items, whereas most corporations base their programs on the retail value they promote the products for. Lidl didn’t need to change its method of doing issues, so the SAP implementation needed to be custom-made, which set off a cascade of implementation issues. Mix this with an excessive amount of turnover within the government ranks of Lidl’s IT division, and finger-pointing on the consultancy charged with guiding the implementation, and you’ve got a recipe for ERP catastrophe.

12. Nationwide Grid: An ideal storm

Nationwide Grid, a utility firm serving fuel and electrical clients in New York, Rhode Island, and Massachusetts, was going through a tough state of affairs. Their rollout of a brand new SAP implementation was three years within the making and already overdue. In the event that they missed their go-live date, there could be value overruns to the tune of tens of tens of millions of {dollars}, and so they must get authorities approval to lift charges to pay for them. In the event that they turned on their new SAP system prematurely, their very own operations might be compromised. Oh, and their go-live date was November 5, 2012 — lower than every week after Superstorm Sandy devastated Nationwide Grid’s service space and left tens of millions with out energy.

Within the midst of the chaos, Nationwide Grid made the fateful resolution to throw the change, and the outcomes had been much more disastrous than the pessimists feared: some workers acquired paychecks that had been too huge, whereas others had been underpaid; 15,000 vendor invoices couldn’t be processed; and monetary reporting collapsed to the extent that the corporate may now not get the form of short-term loans it usually relied on for cashflow. Nationwide Grid’s lawsuit towards Wipro, its system integrator, was ultimately settled out of court docket for $75 million, however that didn’t come near masking the losses.

13. Price & Co.: Interminable rollout results in a lawsuit on the supply

Price & Co. is a Pennsylvania-based manufacturing firm that simply needed a brand new ERP system, and after listening to a number of pitches in 2014, determined to rent EDREi Options to implement Oracle’s E-Enterprise Suite. The primary go-live date was November 2015. However issues started to slide. The deadline was pushed again to February 2016. At that time, Oracle demanded that Price & Co. pony up $260,000 for coaching programs and assist contracts. However 2016 got here and went and nonetheless no rollout. In 2017 Price & Co. jettisoned EDREi for an additional integrator, Monument Knowledge Options. One other 12 months was spent making an attempt, with out success, to customise Oracle’s suite for Price & Co.’s functions.

Lastly, after the undertaking was deserted, Price & Co. did one thing novel in February 2019: they sued not their IT vendor, however Oracle, particularly citing the $4.5 million they paid the software program big for licenses, skilled companies, and coaching. The lawsuit continues to be ongoing.

14. Goal Canada: Rubbish in, rubbish out

Many corporations rolling out ERP programs hit snags relating to importing knowledge from legacy programs into their shiny new infrastructure. When Goal was launching in Canada in 2013, although, they assumed they’d keep away from this drawback: there could be no knowledge to transform, simply new data to enter into their SAP system.

However upon launch, the corporate’s provide chain collapsed, and investigators rapidly tracked the fault all the way down to this supposedly contemporary knowledge, which was riddled with errors — objects had been tagged with incorrect dimensions, costs, producers, you title it. Seems 1000’s of entries had been put into the system by hand by entry-level workers with no expertise to assist them acknowledge once they had been given incorrect data from producers, engaged on crushingly tight deadlines. An investigation discovered that solely about 30% of the info within the system was really right.

15. PG&E: When ‘pattern’ knowledge isn’t

Some rollouts goal to deal with this form of drawback by testing new programs with manufacturing knowledge, typically imported from current databases. This will make sure that knowledge errors are corrected earlier than rollout — however manufacturing knowledge is effective stuff containing numerous confidential and proprietary data, and it must be guarded with the identical care as it might in precise manufacturing.

In Might 2016, Chris Vickery, threat analyst at UpGuard, found a publicly uncovered database that gave the impression to be Pacific Gasoline and Electrical’s asset administration system, containing particulars for over 47,000 PG&E computer systems, digital machines, servers, and different units — utterly open to viewing, with out username or password required. Whereas PG&E initially denied this was manufacturing knowledge, Vickery says that it was, and was uncovered because of an ERP rollout: a third-party vendor was given reside PG&E knowledge so as to fill a “demo” database and take a look at how it might react in actual manufacturing follow. They then failed to produce any of the safety an actual manufacturing database would want.

16. Waste Administration disputes vendor’s guarantees

Waste Administration, a waste elimination companies supplier, launched an enterprise-wide ERP undertaking in 2005, scheduled to go reside in 2007.

The corporate’s purpose for the brand new ERP was to simplify and automate its order-to-cash processes and transfer them away from outdated workflows and legacy IT programs.

Waste Administration selected SAP for the undertaking. In keeping with Waste Administration, the ERP vendor touted as an out-of-the-box answer that might be applied with minimal customization.

SAP additionally allegedly instructed the corporate that it may obtain as much as $220 million a 12 months in advantages from a consolidated ERP system that might be able to go reside in 18 months. After the ERP undertaking didn’t go as deliberate, Waste Administration disputed that it labored as marketed.

Waste Administration filed a $100 million lawsuit towards SAP, alleging, amongst different issues, that the ERP vendor confirmed off a software program mockup modified to appear like it was totally purposeful. Waste Administration later amended the lawsuit to see $500 million in damages.

The 2 corporations later reached an out-of-court settlement to the lawsuit.

17. The US Navy’s 4 siloed pilot tasks

Starting in 1998, the US Navy tried to launch 4 separate and unbiased ERP pilot tasks meant to modernize the group’s provide chain, acquisition and monetary administration operations, and different capabilities.

By 2005, the Navy had spent about $1 billion on the pilots however had not created a unified ERP.  The pilot tasks weren’t interoperable, regardless that they overlapped, due to inconsistent designs and implementation, in keeping with the US Authorities Accountability Workplace. The $1 billion was largely wasted, the GAO mentioned, though Navy leaders disputed that evaluation.

The Navy ultimately labored with SAP to deploy a consolidated ERP. Three of the 4 pilot ERPs had been scrapped and changed with a single SAP ERP, with an estimated value of $800 million.

18. Hershey’s rushed timelines

This ERP failure is an outdated one, however it had a huge effect on the corporate. Again in 1996, involved concerning the results of the Y2K bug on its legacy programs, Hershey’s determined to switch its ERP.

Aiming for an built-in ERP setting, Hershey’s selected three separate software program options, SAP’s R/3 ERP, Manugistics’ provide chain administration (SCM) bundle, and Seibel’s CRM. Hershey’s pushed for a 30-month deployment to beat potential Y2K issues, regardless of the distributors recommending a 48-month timeframe.

The programs went reside in July 1999, three months not on time, throughout a busy time of the 12 months for Hershey’s within the lead as much as Halloween and Christmas. Hershey’s reduce corners on testing, resulting in programs integration issues.

With the programs not working as meant, Hershey’s was unable to course of greater than $100 million in sweet orders, regardless that a lot of the merchandise had been in inventory.

The mess led to a 19% decline in quarterly earnings and an 8% decline in inventory value in a single day. Annual income dropped by 12% from 1998 to 1999. Between October 1998 and October 1999, the corporate’s inventory value dropped by 35%.

Surviving an ERP rollout

So what have we discovered? Nicely, don’t fall afoul of regulators, make sure that your knowledge is safe and clear, and doc your processes earlier than you progress to a brand new platform — all good recommendation for any rollout or every other huge IT undertaking, actually.