With SAP, failure is not an option . . . often times its the only option!

Posted on September 20, 2010


What does a bankrupt drug store chain, a County in Washington and an IT integrator have in common?  All have collectively lost tens of millions of dollars through failed SAP initiatives.

The following is a white paper that was originally released in early 2008 and examines the myriad of challenges experienced by government organizations in their efforts to successfully implement an SAP-based eProcurement solution.

Citing actual case studies including the City of Houston and King County, it is ironic that against the backdrop of SAP’s current move towards offering a SaaS-based model, the relevancy of these failed projects takes on an even greater significance.

Demonstrating an inherent flaw in the foundational premise of ERP-based initiatives, an added benefit the paper delivers is through the revelation that colossal failures such as these were not limited to the public sector as demonstrated by misses at companies such as Hewlett-Packard, Fox Meyer Drugs and Hershey Food Corp.

In fact, more recent articles from earlier this month including; While Rome Burns, Jason Busch Talks About Remodelling The City, and Spend Matters’ Recent Guest Author Post Underlines How The Industry Has Lost Its Objectivity through Familiarity speaks to a much larger issue that is not indigenous to any one company but the industry as a whole.

While I will leave it up to you to decide what this means relative to your own organization’s direction in terms of supply chain or eProcurement automation, the following video will certainly give you something to think about . . .

While referencing the City of San Diego as a case study at Sapphire 2009 relative to “Managing Performance and Risk Across Public Sector Organizations,” a ZDNet article dated February 25th, 2009 (San Diego fires Axon over ERP implementation problems) paints an interesting picture, especially given the fact that the City made the decision to deal with SAP directly.

However, fast forward to 2010, and the question that immediately comes to mind is simply this – did the move to a more direct relationship with the vendor make a difference?

According to The Computerworld Honors Program, which seeks to honor “those who use Information Technology to benefit society,” San Diego’s OneSD program was a nominee for the award.  But does this actually mean anything?

It’s hard to say especially when you consider the fact that SAP was using King County, Washington as a case reference in an effort to land Multnomah County as an upgrade client in December 2007.  In January 2008, King County announced that after approximately 2 to 3 years and $38 million, the County’s SAP initiative “blew up” creating a political maelstrom.

In short, today’s case reference could be tomorrow’s embarrassment which means that you have to do your due diligence and make decisions based on your own organization’s ability to successfully implement any solution, while minimizing the cost of vendor engagement through meaningful risk allocation.