{"id":6873,"date":"2022-03-28T14:54:13","date_gmt":"2022-03-28T14:54:13","guid":{"rendered":"https:\/\/www.brightpearl.com\/?p=6873"},"modified":"2022-03-28T14:54:13","modified_gmt":"2022-03-28T14:54:13","slug":"hold-ups-losses-and-million-dollar-lawsuits-4-infamous-cases-of-erp-implementation-failure","status":"publish","type":"post","link":"https:\/\/www.brightpearl.com\/blog\/hold-ups-losses-and-million-dollar-lawsuits-4-infamous-cases-of-erp-implementation-failure","title":{"rendered":"Hold-Ups, Losses and Million-Dollar Lawsuits: 4 Infamous Cases of ERP Implementation Failure"},"content":{"rendered":"

Let\u2019s be frank – when it comes to today\u2019s e-commerce environment and how modern businesses operate, ERPs just no longer cut it. With a host of well-known risks, a brand of any size or influence can be hit by the gridlocked processes, eye-watering costs and long-lasting reputational damage of a failed ERP implementation – as these high-profile cases show.<\/span><\/p>\n

Read on for four infamous tales of ERP-related disasters that were catastrophic for business – and get the full facts on why traditional ERPs spectacularly fall down when it comes to supporting your fast-growing enterprise.<\/span><\/p>\n

Revlon<\/b><\/h2>\n

Huge ERP failure has the brand sued by its own shareholders<\/b><\/p>\n

A merger is a textbook case for a software upgrade; a progressive enough platform should seamlessly integrate multiple processes and data into one central, real-time source of truth.\u00a0<\/span><\/p>\n

However, when Revlon acquired Elizabeth Arden Inc. in 2018\u00a0 and signed up with ERP, SAP HANA, to merge their operations, the results were far from harmonious.\u00a0<\/span><\/p>\n

In a resulting lawsuit that was rife with blame-shifting, Revlon claimed that \u2018ERP-related disruptions\u2019 <\/span>completely bungled processes<\/span><\/a> at the brand\u2019s North Carolina manufacturing plant, claiming the software wasn\u2019t \u2018mature enough\u2019 for such a large-scale integration (something SAP HANA disputes).<\/span><\/p>\n

In any case, the migration failure ended up costing the brand a cool<\/span> $64M in sales losses. <\/b>Revlon\u2019s stock value crashed so much within 24 hours that even its own investors sued.\u00a0<\/span><\/p>\n


\nWorth & Co.<\/b><\/h2>\n

Deadlocked ERP implementation bleeds money and time, achieving nothing<\/b><\/p>\n

It\u2019s a fact that 75% of ERP implementations fail, and 59% take longer to implement than originally quoted – yet merchants will still end up paying thousands – or in this case, millions – for the effort.\u00a0<\/span><\/p>\n

When the Pennsylvania-based manufacturing company Worth & Co. sought an ERP upgrade with Oracle\u2019s E-business Suite, they hired an IT-systems operator to implement it by late 2015.\u00a0<\/span><\/p>\n

Hold-ups in deployment pushed the launch to early 2016. This became 2017\u2026 then 2018. By 2019, despite Worth & Co. paying Oracle\u2019s $260,000 in training fees and even hiring a new IT-systems operator to move things along, Oracle was still not implemented nor adequately customized for Worth & Co\u2019s specific needs.<\/span><\/p>\n

Eventually <\/span>Worth & Co. sued Oracle<\/span><\/a> for the <\/span>$4.5M<\/b> it had spent on multiple unsuccessful implementation efforts for \u2018an essentially non-functioning product\u2019.<\/span><\/p>\n

The lawsuit is still ongoing.<\/span><\/p>\n

 <\/p>\n

Nike<\/b><\/h2>\n

A triple software upgrade ends in $400M losses<\/b><\/p>\n

ERP failures can take even the biggest-hitting brands to their knees – as was the case when Nike\u2019s nightmare triple upgrade became one of its most brand-damaging mistakes.<\/span><\/p>\n

Back in 2000, Nike attempted to implement three softwares to streamline its processes into one slick operational machine: a supply management system by i2 Technologies; a SAP ERP; and a CRM (customer relationship management) software by Siebel Systems.<\/span><\/p>\n

The clunky triple implementation was a disaster. Of the many undesired outcomes, Nike said the i2 product had \u2018failed to properly match inventories with customer demand\u2019 – leaving the athletics giant with masses of excess inventory<\/a> in some lines and shortages in others.\u00a0<\/span><\/p>\n

Ultimately the brand lost an eye-watering <\/span>$400M <\/b>– leading to a cool 20% dip in stock value, and a handful of lawsuits to boot.<\/span><\/p>\n

 <\/p>\n

Hershey\u2019s<\/b><\/h2>\n

ERP disaster halts manufacturing of $100M worth of stock – right in time for busiest period<\/b>\u00a0<\/span><\/p>\n

In another vintage case that\u2019s far from irrelevant, treasured candy brand Hershey\u2019s suffered a <\/span>botched ERP migration<\/span><\/a> in 1999 that came just before their busiest sales period – Halloween and Christmas.\u00a0<\/span><\/p>\n

One of the largest chocolate manufacturers in the world, Hershey\u2019s had spent $112M on implementing a combination of ERP systems in time for Y2K to hit – but the immense task, rife with \u2018testing, data migration and training shortcuts\u2019, ended up in the brand\u2019s supply chain<\/a> halting completely. While kids were braced to load up their Halloween hauls, a planned $100M worth of Hershey\u2019s Kisses hadn\u2019t even been manufactured.\u00a0\u00a0<\/span><\/p>\n

It was a heavy hit for Hershey\u2019s as profits dropped 19%, its stock value by 35%, and the brand lost $150M in damages.<\/span><\/p>\n

Whether you\u2019re a young fast-growing brand or a multinational mid-level enterprise, here\u2019s why opting for a traditional ERP can kaibosh business growth:<\/b><\/p>\n