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Technologies+ +ERP+1+ Study.

Agilent Technologies implemented an Oracle ERP system that caused major production issues, costing the company $105 million in lost revenue and $70 million in profits. The complex migration of 2,200 legacy applications to the new Oracle system resulted in configuration problems that disrupted business operations more than expected. While Oracle said it is committed to supporting Agilent, an analyst stated that 99% of ERP failures are due to internal issues like a lack of clear requirements specification and poor implementation of documented specs.

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Prateek Gupta
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84 views1 page

Technologies+ +ERP+1+ Study.

Agilent Technologies implemented an Oracle ERP system that caused major production issues, costing the company $105 million in lost revenue and $70 million in profits. The complex migration of 2,200 legacy applications to the new Oracle system resulted in configuration problems that disrupted business operations more than expected. While Oracle said it is committed to supporting Agilent, an analyst stated that 99% of ERP failures are due to internal issues like a lack of clear requirements specification and poor implementation of documented specs.

Uploaded by

Prateek Gupta
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Agilent Technologies : Challenges of Implementing ERP Systems

The good news is that Agilent Technologies Inc. (www.agilent.com) says its enterprise resource planning
applications are stable. The bad news is they got the way only after a rocky ERP migration project that
cost the company $105 million in revenue and $70 million in profits.

In mid-August 2002, the multinational communications and life sciences company, formerly a part of
Hewlett-Packard Co. said problems with the ERP components in Oracle’s e-Business Suite 11e software
froze production for the equivalent of a week, leading to the massive losses. The Oracle system, part of
which went live in June handles, half of the company’s world-wide production of test, measurement and
monitoring products and almost all of its financial operations, as well as functions such as order handling
and shipping.

Agilent is in the process of migrating ass many as 2,200 legacy applications that it inherited from HP to
Oracle. As part of the switchover, approximately 6000 orders in the internally developed legacy systems
had to be converted to an Oracle friendly format, an Agilent spokeswoman said from company
headquarters in Palo Alto, California. She said the configuration process had problems requiring
correction.

In a statement last week, Agilent President and CEO Ned Barnholt said the disruptions to the business
after implementing the ERP system were “more extensive than we expected”. An Agilent spokeswoman
said the issue wasn’t the quality of the Oracle application, but rather the very complex nature of the
enterprise resource planning implementation.

For its part, Oracle Corp. said it’s working closely with Agilent. “At Oracle, we are fully committed to all
of our customers for the long haul and support them in any way necessary,” the company said in a
statement. “We have a strong relationship with Agilent, and both companies believe the implementation
is stable.”

Agilent also had a take-away lesson : “Enterprise resource planning implementations are a lotr more than
software packages,” the company said in a statement. “They are a fundamental transformation of a
company’s business processes. People, processes, policies, the company’s culture are all factors that
should be taken into consideration when implementing a major enterprise system.”

According to one analyst, ERP disasters are often caused by the user company itself. Joshua Greenbaum,
an analyst at Enterprise Applications Consulting, said 99 percent of such rollout fiascoes are caused by
“management’s inability to spec out their own requirements and the implementer’s inability to implement
those specs.”
Case Study Questions
1. What are the main reasons companies experience failures in implementing ERP Systems
2. What are several key things companies should do to avoid ERP system failures ? Explain the
reasons for your proposals.
3. Why do you think ERP systems in particular, are often cited as examples of failures in IT
systems development, implementation, or management ?

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