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Alleged SAP ERP failures in 2011

I evaluate experiences with SAP implementations to formulate some actual conclusions. In this work I investigate also the list of ERP failures in the year 2011 to find the reasons for troubles:

So far I found that two first items on the list are no ERP implementations but tailored developed payroll solutions (NHS RiO project and City Time project in NY). What can be interesting the first one was conducted with Agile and PRINCE2 on the top (as usually in public sector in Britain)

The third and sixth on the list are SAP ERP implementations. But as I see the both do not fulfill the hard criteria of failure.

The third on the list (SAP by Ingram Micro) was not failure at all – rather smart excuse. First the project ended successfully in time. The potential discrepancy was foreseen (second). Three is that there was no drop in the trade (as the alleged result of discrepancy) because the reve and gross profit were in two first quarters of 2011 higher y2y. The drop was in net income – it means that blaming of SAP was rather smart excuse for some other costs – probably the invoices of implementation?

Now I am evaluating the very interested case of Marine County – civil suit against Deloitte and SAP. This is very interesting since this is very good documented and described and publicly available in Internet. There you can find contracts (with prices!) and court documents.

To keep it short: implementation was completed and paid due to the agreement mid of 2007. It is still unclear why – once the implementation was completed Marin County raised very serious claims against Deloitte and SAP. The report made by independent auditor shows that system is working in 2010 in scope even wider than described in first implementation contracts.

Deloitte claimed that County never used the procedure of rejection of services as they were provided. The agreement even permitted the County under certain conditions to provide a written report about deficiencies in already approved services and deliverables. The County accepted all services and deliverables and never provided any written reports of such kind.

For sure customer is very unhappy – as I found in the claims the arguments against Deloitte seems very weak in the area of implementation process – only small pieces is describing some mistakes in the system. But that (points 60 to 70 in the body of claim) are more description of some art of conflict between consultants rather than serious implementation problems.

To the point: project ended with time, system still working. The disruptions after go live in 2006 and by the very end in 2007 are described only on very general level . We have to wait till the court will clear this but for today it is to early to talk about this project as about failure.

Probably the information can help in your activities.

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    • Hi Gregory,

      these investigations are for me some kind of funny exercise. My belief is that SAP ERP is 100% able to be successful implemented and very tolerant. I faced problems causing some delays or overruns on the projects but I am wondering that it is possible to have real failure of SAP ERP.

      On the list of 2011 there is only one another SAP implementation named but it is about problems with payroll what is rather bad implementation of this functionality and not ERP failure. That means that in 2011 there was no real SAP ERP failure. I will look on previous lists. Probably you can suggest a interesting case to be evaluated? Especially the public sector (what in fact is the majority on failures lists) – is very good “documented” in Internet.



      • Waldemar,

        you are right, there’s something about public sector that makes them only too happy to start spreading the blame around. maybe, because their actions are scrutinized by the taxpayers? the failures i have seen in banking were a very quiet affair, team dismissed, but people were able to move on. hundreds of millions written off, some reshuffling and somebody declaring the project a success, a totally different mindset. since many SAP projects involve large teams from different companies, it’s hard to find one single reason why things had fallen apart. i don’t think my previous clients like to mention failures and if they did they would be successes once cleared by their legal departments.

        Thanks again for reporting on this.



        • Hi Gregory,

          Thank you for comment.

          Based on my experience in public s. I see that around the globe it is similar. One thing I can already formulate as thesis is that public sector has no ability to consume the technology transfer and is no able to keep the skilled people. In the service contract of M. County there is 1 million $ only for trainings. Not small even in States isn’t? Depending on rate it reflects about 400 to 600 consulting days what gives about 100 trainings in average 5 days each. Taking in addition that people are learning by doing and testing it sounds not bad in terms of knowledge transfer – at least for some dozens of trained key users. But if we see in documents of MC case even the auditors are claiming about weak skills and not sufficient staff of trained key users. It means the big part of Marine County problems are missing skills to use the system in efficient way. Where is the knowledge that was paid now? Probably in the business.