Tuesday, April 01, 2008

Who's to Blame For Failed ERP Project that Prompted SAP Lawsuit?

It's a safe stake that executive directors of Waste Management, the company suing sap for $100 million over a failing ERP implementation, hadn't read the Massachusetts Institute of Technology Sloan Management Reappraisal article written by Artemis Rettig in which she depicts ERP systems as "massive programs, with billions of lines of code, one thousands of installing options and infinite interconnected pieces."

In an article, which I wrote about back in August, Rettig point outs that a typical ERP execution "introduce(s) so many complex, hard technical and concern issues that just making it to the coating line with one's shirt on (is) considered a win."

If they had, would they have got bought SAP's alleged pitch that the system it sold to Waste Management was "an 'out-of-the-box' solution that would ran into Waste Management's demands without any customization or enhancements," one that could be fully implemented throughout the company inside of 18 months? Highly doubtful.

According to a statement cited in an ITWorld.com article, Waste Management claims sap deceived it by creating "fake software system environments" for merchandise demonstrations. The undertaking went bad almost immediately after a gross sales understanding was signed in October of 2005. Though sap promised a airplane pilot version of the system would be up and running by Dec. 15, 2006, "it is not even fold to being completed today."

The increasingly bitter dealings between the two companies included an sap "Solutions Review" that establish the software system did not ran into Waste Management's demands and a failing attempt at consensual mediation. Waste Management postulates that it rejected SAP's suggestion that it would have got to "start over" with an updated version of the sap platform if it ever hoped to implement the software system throughout the company. According to its statement, which is cited in ITWorld.com:


"SAP's 2007 proposal is precisely the sort of risky, expensive and time-consuming project that Waste Management rejected from other companies two old age earlier. Indeed, the development undertaking that sap proposed would drastically lengthen the execution timetable from the original December 2007 end-date to an end-date sometime in 2010 without any self-assurance of success."

As with most any failing relationship, however, it sounds as if the "wronged" political party may also necessitate to take some responsibility. According to a SearchSAP.com blog, Waste Management may have got had unrealistic outlooks that the software system could repair all of its problems, which included a wholesale fire of its direction squad and assignment of new executive directors following a fiscal scandal.

Waste Management "had a batch on its plate at once," composes blogger Demir Barlas. Certainly, taking on an ERP execution while in the thick of such as a major passage looks unwise. A spot of perfunctory research should have got clued Waste Management to ERP's repute for complexity.

Barlas also inquiries - and rightfully so - Waste Management's seller rating procedure and in progress direction of the sap relationship. Barlas writes:


"More pertinently, how could these facts about the software system be "unknown" to management? ERP executions can take years, and are accompanied by strict testing and planning. If SAP's software system is indeed a "complete failure," Waste Management's executive directors might well have got been asleep at the wheel; no 1 should pay $100 million and wait two old age to happen out they've bought a faulty product."

The larger issue here is that traditional ERP systems for many organisations look to be more than problem than they are worth. That is why well-known IT cynic Saint Nicholas Carr suggested - in a station that I referenced and linked to in August - that Workday and other ERP systems delivered via a software-as-a-service theoretical account may be the "end of ERP as we cognize it."

Waste Management is far from the lone organisation to have got suffered major ERP pain. IT Business Edge blogger Susan Hallway wrote about the Los Angeles School District's narrative of ERP suffering in October. Nine calendar months after implementing a $95 million ERP system from SAP, one thousands of employees were receiving wrong paychecks, with some receiving too much and others not enough, and the mistakes creating possible taxation jobs for the district.

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