Implementing an enterprise resource planning platform is no easy task. In fact, more than half of all ERP implementation projects fail to meet fundamental objectives, according to research from Gartner published by Deloitte. However, this does not mean prospective adopters should discontinue their efforts to modernize internal workflows via new ERP solutions. These cutting-edge systems have the power to catalyze true transformation across the organization, facilitating accurate, data-backed processes with bottom line-building potential.

That said, firms embarking on the ERP implementation journey should keep that admittedly scary statistic in mind and familiarize themselves with some of its most notable data points. Here are five ERP disasters every adopter should know and understand:

Hewlett-Packard
By June 2004, Hewlett-Packard had successfully centralized and updated 34 of the 35 ERP systems bolstering its global operations, according to the International Data Group. The computing giant was on track to transition the final platform when major issues materialized, disrupting business operations in the Americas Region for six weeks – double the planned disruption period. HP experienced immediate repercussions as order fulfillment times lagged and customers complained. On top of that, third-quarter earnings came in below projected levels, creating further turmoil within the organization. Former CEO Carly Fiorina ultimately removed three members of the management team who oversaw the division responsible for the Q3 dip, which amounted to roughly $400 million. The failed ERP transition, while not directly related to the drop, helped color the situation – another internal misstep with serious fiscal implications.

What went wrong? According to former HP Chief Information Officer Gilles Bouchard, the HP ERP implementation team was to blame. Bouchard said three key issues came to the fore. One, stakeholders within the cross-functional group had trouble collaborating across silos. Secondly, established data integration processes broke down due to ineffective manual input practices on the HP side. Finally, increased demand pressurized the situation and led to unintended operational problems.

In the wake of this episode, Bouchard conducted an internal survey to further explore the ERP implementation failure and search workable solutions that might yield success in future enterprise information technology efforts. The CIO found that more collaborative business processes were required when combining disparate systems into one central platform.

"When you consolidate, by definition, there's a lot more interdependencies," Bouchard told IDG. "When everybody's got their own ERP [system], they can all work within their own silos. Now there's a lot more commonality and a lot more sharing, and a lot of learning in terms of program management."

Lumber Liquidators
In August 2010, Lumber Liquidators completed the final stage of a significant ERP overhaul, IDG reported. This late push bookended a seemingly successful implementation project, as stakeholders put the finishing touches on up-to-date point-of-sale, inventory and warehouse management modules made for the modern marketplace. However, these new systems failed to stoke fiscal gains. In fact, the company saw a 45 percent decrease in net income over Q3. Why? Employee productivity plummeted.

Production teams left at least $12 million in unrealized net sales on the table, as they struggled to adapt to the new workflows that accompanied the recently-implemented ERP. System analysts watching the situation unfold immediately recognized the problem: Lumber Liquidators and its solutions partner SAP had not done enough to engage employees about the new platform, according to the ERP advisement firm Panorama Consulting Solutions. Without proper IT training or guidance, personnel on the ground simply side-stepped the system and returned to older methods, ultimately slowing production.

Unlike HP, Lumber Liquidators was not willing to accept all of the blame and argued that SAP was partially responsible for their Q3 losses. However, the materials supplier never took its complaint to the court of law, a common tactic for ERP adopters that link flagging sales to vendor shortcomings.

Nike
Back in 2000, Nike oversaw an ERP disaster of truly epic proportions, CIO reported. The athletic clothing company partnered with i2 Technologies, which merged with JDA Software in 2009, to design and implement an industry-leading solution that would help automat its backend ordering processes and forecast market demand for some of its key product lines, including the Jordan Brand shoes. Trouble began soon after the live launch, when a software glitch resulted in skewed factory orders. Nike ended up flooding the market with low-performing Air Garnett sneakers, while leaving sellers short thousands of pairs of in-demand Jordan models. The company took considerable losses as a result, incurring $100 million in lost sales and suffering a stock price drop of 20 percent.

"For the people who follow this sort of thing, we became a poster child [for failed implementations]," Roland Wolfram, former vice president of global operations for Nike, told CIO.

Nike placed the blame squarely on i2 Technologies, contending that the company's flawed software was the root cause of the supply chain breakdown. On top of that, the clothes company claimed the software provider could have easily addressed the issues, which resulted in sluggish integration and failed ordering operations. However, those on the outside looking in believed Nike shared some of the responsibility. The i2 Technologies solution accounted for just 10 percent of a $400 million supply chain overhaul that seemed overly ambitious from the start, according to CNET. The company wanted to consolidate a client relationship management system, an ERP and supply chain tools into a single functioning system, CIO reported. This is a tall order for any technology firm, as an innumerable number of variables must line up for things to go off without a hitch.

"Doing those things at a small company is hard, but doing it at a global enterprise like Nike ups the extremely high chances of failure," Joshua Greenbaum, an analyst for Enterprise Applications Consulting, told CNET. "When these systems fail, they fail big."

Nike ultimately recovered from this hit, working with other vendors involved in the massive project to clean up misconfigured internal systems and get the project back on track. However, the implementation timeline did expand, growing from two to seven years. The budget grew as well. As the company completed the final stages of the massive initiative back in 2006, project costs had moved past the $500 million mark – an overrun Nike has successfully accounted for in the years since.

These stories constitute a cautionary tale for companies looking to integrate ERP technology into their operations. ERP adoption comes with considerable roadblocks. Those set on navigating these obstacles must carefully chart out their implementation efforts and work with employees across the organization to successfully meld new technology with existing processes. Vendor selection is, of course, another key concern, as adopters must collaborate with proven partners who have the industry knowledge, technical skill and solutions to meet their unique business needs.

Is your company prepared to bolster its digital infrastructure with an advanced ERP solution from a trusted software provider? Connect with Accent Software. As a Microsoft businesses solutions partner, we offer the Dynamics NAV platform, the perfect ERP solution for enterprises of all sizes. Learn more about our offerings today.