ERP implemention failure at the Hershey Company

ERP Implementation Failure at Hershey Foods Corporation

Nikola Djokovic

Northwest University

Introduction:

Technology is amazing. Some people might argue technology is bad, some might argue that technology is good, but no one can deny that technological achievements of modern age are awe inspiring. It is a fact, however, that society as a whole relies heavily on technology. Everyone uses technology in their everyday lives such as cell phones, laptops, the Internet and so on. It might be said that technology is the one of the reasons people living today enjoy a higher level of comfort and higher standard of living than people living hundred years ago. However, even today, with so many technological advances, it is still possible for technology to fail. Approximately 77% of businesses rely on information systems for their success today, and when an information system fails, it causes a significant problem for that company. There are many famous information system failures throughout history such as Snap-On’s order-entry system failure which caused company to lose $50 million in the first half of 1998, or FoxMeyer’s failed implementation of ERP which drove the company into the bankruptcy. The information systems failure that is going to be focus of this paper, is the Hershey Foods Corporation’s failure at implementing Enterprise Resources Planning (ERP) in 1999, causing problems with order management and fulfillment, rendering Hershey Foods Corporation unable to fulfill many orders, which dropped company’s revenues by 12% compared to the previous year. This essay is going to look at what Enterprise Resource Planning is, how and why the implementation at Hershey Foods Corporation failed (compared to some other companies...

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...shey’s order management and fulfillment, even though the company had finished products in their inventory. The initial startup seemed to runs smoothly. However, little by little, issues with fulfillment of orders, processing and shipping started to arise. Some of the batches were shipped late, and among those some were shipped incomplete.

Due to this Hershey lost their credibility in the high competition market that food industry is. The effects of this failed implementation reflected on the Hershey Company immediately, dropping the revenue of the company for the third quarter of 1999 by significant 12%, which led to total loss of almost $150 million in revenues, compared to the previous year.

Discussion:

What they did about it, how they dealt with the failure

Future recommendations:

Future implementation projects,

Conclusion:

Restating most important