Inquisitive customers ask us about the merits of selecting Kinetech vs. a more “established software vendor” like SAP, Oracle, or IBM. However, a misperception exists in the marketplace that established = reliable. This is likely due to the massive marketing budgets of these firms and their ability to bury lawsuits as quickly as they seem to appear. For example, look at this article from CIO magazine from March 2009. 10 Famous ERP Disasters, Dust-ups, and Disappointments
Here are some of the costly facts:
Company: Hershey’s System: SAP, Siebel CRM, & Manugistics Scope: Enterprise Resource Planning (ERP) Result: System bugs prevented ~ $100 Million worth of goods to be delivered for Halloween in 1999. Stock dropped 8%
Company: Nike System: Supply Chain Management & CRM Upgrade Scope: Enterprise Resource Planning (ERP) Result: A $400 Million Upgrade failed, costing ~ $100 Million in lost sales and a 20% Stock dip.
Company: Hewlett Packard (HP) System: SAP Enterprise Resource Planning (ERP) Scope: Centralization of Disparate North American Systems Result: $160 Million in order backlogs and lost revenue. A budget overrun five (5) times the estimated cost.
Company: Waste Management System: SAP Enterprise Resource Planning (ERP) Scope: “18 Month” Off the shelf installation started in 2005 Result: Litigation started in 2008 as the system was still not functional with a $100 Million in damages
Company: Select Comfort System: SAP ERP, CRM, & “Other Application” Scope: Streamline Operations Result: After $20 Million Plus Project, Shareholders put the project on hold in 2008
So how should Business and IT Executives face the challenges of scale, globalization, and operational excellence and why do these systems implementations fail?
It is a two part answer. First, continue to differentiate your business on the things you do best. After all, you were the one who grew your business from where it was to its current state. Have confidence in your management abilities and do not bite off more than you can chew.
Secondly, these implementations fail because no matter what anyone says, no two business are exactly alike. To reduce the risk of systems implementation failure, businesses need to begin thinking differently. In the Waste Management example above, SAP contends the client did not specify the business requirements fast enough. In a waterfall (this is common terminology for the traditional Software Development Lifecycle (SDLC)) implementation all requirements are supposed to be completed at the beginning of the implementation. The problem with this assumption is that businesses are expecting an “Out of the Box” solution with minimum configuration and the stakeholders cannot possibly comprehend all of the desired functionality.
At Kinetech, we address this issue head on by embracing the agile methodology. The gist of agile consists of developing the application in pieces focusing ONLY on the most critical parts of the application first (the parts that will drive the most value for the business). The result is that we can absorb new requirements as the end user tests our development (which is deployed for the end users periodically rather than a “big-bang” approach like our competitors). This approach creates successful application delivery because the application is designed, developed, and refined hand in hand with the business.
Do you have a failed implementation that needs saving? Contact us now for a risk free demonstration and discussion with one of our technology experts to see how Kinetech can transform your business potential into dynamic performance.