Case Study-Mis Failure Abstract:: Keywords
Case Study-Mis Failure Abstract:: Keywords
Case Study-Mis Failure Abstract:: Keywords
Abstract:
The case gives a detailed account of the failure of an ERP migration project at the US-based HP, a leading
computer hardware and information technology company. The case traces the history of ERP
implementations at HP and presents the rationale behind the decision to migrate to a centralized ERP
system. It details the circumstances that led to the ERP migration failure and also examines the damage
control efforts made by the company. The case highlights the barriers to successful ERP migrations
including project management issues, poor contingency planning and cultural issues. Finally, the case
explores whether there are chances of re-occurrence of such failures within the company.
Issues:
» Understand the rationale for implementing ERP software.
» Study and analyze the problems faced in an ERP migration project.
» Examine the reasons for ERP rollout failures.
» Analyze the role of cultural issues in ERP implementation.
» Critically examine the strategic impact of ERP implementation failures
Keywords:
Hewlett-Packard Enterprise Resource Planning ERP Migration Failure Adaptive Enterprise Centralized
ERP System
"We executed poorly on the migration. The migration was more disruptive than we'd anticipated."1
"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
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
Background Note
Stanford engineers Bill Hewlett and David Packard started HP in California in 1938 as an electronic
instruments company. Its first product was a resistance-capacity audio oscillator, an electronic
instrument used to test sound equipment...
The Impact
The ISS division's order system became unstable due to problems with data integrity and a simultaneous
increase in demand for HP's Standard Servers. This technical glitch led to improper routing of orders and
caused backlogs to escalate till the end of August 2004...
The Learning
Analysts commented that ERP implementation failure at HP was a demonstration of how such failure
could impact overall business performance. HP had spent huge amounts of money in speeding up
delayed orders...