The document discusses an ERP failure story at Hershey, a leading chocolate manufacturer. Key reasons for the failure include implementing ERP during a peak business period, which disrupted normal operations and diverted attention away from core activities. This led to losses in profits and sales as the business faced uncertainties and the ERP implementation was not completed properly. Choosing a less busy time period may have avoided these issues for Hershey.

1. ERP
AssignmEnt 2
submittEd by:
KARunA (18)
PRiyAnKA (22)
VEgA (28)

2. succEss stoRy
This case study discussion will gives an idea of ERP success stories. These issues
are not tot be taken as such for ERP's Success. Many of them apart from these
arise out of practical difficulties. Hence the critical success factor for ERP systems
and critical success factors for ERP implementation are never ending list. This
analysis only gives a rough idea though a comprehensive one.
About Sun Microsystems
Sun Microsystems is a pioneer in providing IT services to companies and has
been instrumental in capitalizing their expertise and converting them into
advantages in a particular organization by making an accurate analysis of the
requirements and functions of the organization. They merge technology with the
business process and have demonstrated excellent results in diverse companies.
Their clientele list is quiet impressive and includes everyone the top notch
players in any business requiring IT services.
Impact of oracle ERP in Sun Microsystems
Oracle ERP application Suite was installed in Sun Microsystems. The hardware
and software programs chosen by the company happen to be Sun's high
performance Ultra SPARC III server technology, Sun Ray desktop appliances and
Solaris operating environment. It was set up in Linlithgow Manufacturing
Facility of Sun Microsoft Systems. Sun Microsystems experienced the following
as a result of Oracle ERP's implementation.
Saving in costs
Sun Microsystems were not able to make use of the IT facilities cost effectively
because they have to do repeated maneuvering and manipulation due to the
presence of multiple platforms. The presence of multiple problems was not a
problem. However these platforms lacked connectivity and integration. Even
though they produced good results they were very expensive and time
consuming.
This problem was removed by oracle ERP applications. Apart from doing away
with the burden of connectivity Oracle ERP helped in faster transmission. This
helped to speed up the business process gradually. The amount of money
invested on It operations went down on a staggering pace. This not only reduced
the money invested but also brought down the time spent on the same. The
connectivity eased other process in turn and benefited the business in all possible
ways.
Before the implementation of ERP the Servers were not consolidated. This meant

3. the operational costs of each server were high and did not concede or justify the
returns to the business. However after Oracle ERP was installed the servers were
outsourced and consolidated. Even though outsourcing function existed before
ERP implementation they did were not cost effective in the absence of
consolidation. The consolidation was an outlet to bring down the costs. Secondly
the consolidation increased the scope of server and as well reduced their
operational costs.
Accessibility
Prior to ERP intervention the organization did not facilitate much accessibility in
spite of possessing multiple servers. The reason was that the servers were neither
connected nor dependable of one another. Therefore each of them functioned in
their own manner and was independent. This meant that all of them were not
accessible at a particular point of time or at all times. The consolidation of the
servers put a full stop to this menace. The ERP process has changed this
dimension and made everything available under one roof for everyone through
the consolidation process.
Mechanization
The tasks in the organization had been carried on manually in spite of the IT
advancements. There were some processes that strongly required the operation
of manpower. However ERP intervention changed this idea by mechanizing
those tasks also with an intention to save time and money and increase the
productivity as well. It worked out true to the connotation.
Better results
The cut down in procedural delays and lacuna have helped organizations to
maintain a steady performance ratio. This benefited the employees and other
stake holders like customer suppliers because they were able to get everything at
a quicker time and cheaper price when compared with the previous occasions. In
addition the company was able to analyze the flaws and errors.
Enables change both present and future
Sun Microsystems always suffered from a limitation when it comes to the
business process. They were not able to make any changes instantly or even over
a period of time even after identifying that the change was required to be
implemented in the larger interests of the business. The reason was primarily the
large size of the business and different IT operations.
This trend underwent a change with the implementation of Oracle ERP. It was

4. now possible for changes to be made now and then. This feature is very
important not only for enterprise operation but for the business process as such.
The business was capable of frequently adapting to change and staying in tunes
with the market and competition. ERP intervention made this possible in this
company and now the company is able to accumulate a whooping amount both
in terms of incurring profits and reducing costs.
Conclusion
ERP success is a result of combined work of all the concerned persons in the
organization. It is not only the critical success factors for ERP implementation
and critical success factors for ERP systems that decide ERP success. Various
factors act in combination to streamline the process stage by stage and ensure
ERP success in the end.

5. FAiluRE stoRy
Analyzing ERP failures in Hershey
There are chances of minute errors in an ERP implementation
process. These errors are not negligible and could undermine ERP
implementation process. If one were to analyze an ERP failure story it will be
evident that these mistakes cost the bounty in the long run. The pathetic issue is
that many bigger companies also failed to be cautious and paid the price later
and that too heavily. The following study shows how things got messed up due
to process failure in an organization, after ERP's intervention.
Company Profile
Hershey is a leading manufacturer of chocolates, confectionaries and beverages
in United States of America. They offer lots of delicious and lip smacking
chocolates in various assortments. The company also makes sugar free chocolates
and products suiting the nutritional constraints of the customers. What started as
a small entity by Milton.S.Hershey in Pennsylvania has now become a very big
company commanding a stake in the U.S. food market. They are also an
important player in the international scenario.
An Outline of the problem
The technical team at Hershey had been working hard to implement ERP
solutions for more than three years. They had chosen to implement SAP ERP a
favorite choice of corporates ever since SAP ventured on to the service in the year
1992. This process went on during the peak periods when business was expected
to do its best. The company had chosen to implement ERP by using a popular
method whereby the whole process was brought into action at a stretch. The
implementation and the business process which followed it proved to be a major
setback for the company. There was a heavy loss in profits and sales.
Reasons
Hershey was prompt in doing things expected by an ERP vendor. They did not
resort to any move capable of disturbing the plans of the vendor. They had
extended full cooperation to the vendor in all aspect. There was really nothing to
complain from the vendor's point of view or from the technical point of view.
However the following issues led to their downfall in an unexpected manner.
Choosing the Wrong time for implementation

6. This is citied to be the first and foremost reason for the debacle. The business
prospects are slated to be promising in this period. The companies cannot be
expected to change their way of business or restructure at this point of time. It is
the period wherein competitors will vie in with each other to become the market
leader and as well as defeat their rivals. In other words the company must
concentrate on its core activities which will directly or indirectly reflect on the
income generated.
This is not to mean that the development activities and others that are not
connected with profit making should be ignored. They should also be given due
importance. They should take place simultaneously and of course receive the
proper attention. The company will be more focused on trade activities while the
amount of energy spent on the others will be considerably low.
When this is the case Hershey made a blunder of not only restructuring the
business process and changing it but it went to the extent of spending the whole
time and efforts on implementing Enterprise resource planning. This disrupted
the normal functioning of the business and as well as created lots of confusions in
the company. Since their attention was wholly diverted to ERP it was not
possible to rectify the uncertainties that emerged in the business as a result of
ERP.
When they tried to do that the attention paid to ERP was low. As a result the
business faced a tragedy. Firstly they could not make good the sudden damages
caused. On the process of doing the same they were not able to concentrate on
ERP which was nearing completion. When the subsequent process were carried
the company again had a rude shock because the ERP systems were not working
in full Capacity as there were some final touches which were not done.
The company would have very well avoided this trouble if only they thought of
going ahead with ERP during those occasions when the business process in the
whole market experiences a slow movement. Any business will have such
periods in all the years. Since Hershey took the right decision in the wrong time
things were totally against their favor. If something had gone wrong in the dull
period they would have very well concentrated on that and made ERP a hit if.
Since the companies can very well work on that process and pay full attention
because of the slow/no business activities any potential trouble could have been
easily averted and an ERP failure story would not have taken place.
Too much of workload
ERP is a complex process which calls for lots of maneuvering and processing in
the company. The company needs to put many efforts in order to ensure the

7. success of this process. As seen in the earlier paragraph the company should go
ahead with the process only after assuring that it has the necessary time and can
put the necessary efforts to ensure the success of the enterprise operation.
However the company made another mistake in addition to implementing it at
the wrong time. They had also implemented many more enterprise applications
like CRM and others. The company was at the receiving end by this time. They
had already messed up by choosing the wrong time and spoiled the business
prospects. They only found that things were getting worse and not better with
the simultaneous implementation of the enterprise applications.
When they were about to rectify the business process ERP and other applications
were not implemented fully. Hence when they came back after making major
changes in the business process to suit the enterprise applications modality of
operations the applications were not functioning with full vigor not only because
of the incomplete works but also due to the break in continuity.
Conclusion
The company could have avoided this menace if only they remained focused.
They would have set an example for success instead of an ERP failure story.
Companies have failed to learn from the ERP failure story in 1998.They had
performed explicably in all areas whereby companies usually make mistakes like
not cooperating with the vendor or not changing the business process. It is
therefore evident that ERP implementation is a long drawn process which needs
to be implemented meticulously as even the minute mistake will spoil the hopes
and purpose of the project.

8. PEoPlEsoFt
PeopleSoft is a leading provider of e-business application software and claims to
be the only software company to provide e-business solutions purely over the
Internet for Fortune 1000 corporations. The company was founded in 1987 by
Dave Duffield and Ken Morris, whose goal was to build
client/server applications that empower the user, are easily adaptable in a
changing marketplace, and are supported by superior customer service.
PeopleSoft originally offered human resources and finance applications. Over the
years, it has developed tools and applications for general business processes such
as materials management and e-business in addition to applications for specific
industries, such as the automotive, communications, and higher-education fields.
In 1999, the company shifted its focus to the Internet. In 2000, the company
launched PeopleSoft8, the first pure Internet software, as well as PeopleSoft e-
centre, its in-house application service provider (ASP). Its Web-based
applications are intended to integrate systems easily so that a company can
connect customers, employees, and suppliers more cost-effectively. An
organization can streamline operations due to the fact that the information is
readily accessible by a wide-variety of people anytime, anywhere, which
includes mobile equipment such as personal digital assistants (PDAs) and mobile
phones.
Based in Pleasanton, California, PeopleSoft in 2001 employed more than 7,000
people worldwide and had over 4,000 customers. PeopleSoft (PSFT) is publicly
traded on the NASDAQ.
PeopleSoft, Inc. was a company that provided human resource management
systems (HRMS) and customer relationship management (CRM) software, as
well as software solutions for manufacturing, financials, enterprise performance
management, and student administration to large corporations, governments,
and organizations. It existed as an independent corporation until its acquisition
by Oracle Corporation in 2005. The PeopleSoft name and product line are now
marketed by Oracle.
History
Founded in 1987 by David Duffield and Ken Morris, PeopleSoft was originally
headquartered in Walnut Creek, California before moving to Pleasanton,
California. Duffield envisioned a client–server version of Integral Systems'
popular mainframe HRMS package.

9. The company's sole venture backing came from Norwest Venture Partners
("NVP")). George J. Still, Jr. from NVP joined the Board of Directors.
PeopleSoft version 1, released in the late 1980s, was the first fully-integrated,
robust client–server HRMS application suite.
PeopleSoft expanded its product range to include a financials module in 1992,
distribution in 1994, and manufacturing in 1996 after the acquisition of Red
Pepper.
Product design
Applications
PeopleSoft's product suite was initially based on a client–server approach with a
dedicated client.[1] With the release of version 8, the entire suite moved to a web-
centric design called Pure Internet Architecture (PIA).[1] The new format allowed
all of a company's business functions to be accessed and run on a web browser.
Originally, a small number of security and system setup functions still needed to
be performed on a fat client machine; however, this is no longer the case.
Development platform
The architecture is built around PeopleSoft’s proprietary People
Tools technology. People Tools includes many different components used to
create web-based applications: a scripting language known as People Code,
design tools to define various types of metadata, standard security
structure, batch processing tools, and the ability to interface with
an SQL database. The metadata describes data for user interfaces, tables,
messages, security, navigation, portals, etc. This set of tools allows the PeopleSoft
suite to be platform independent
With Version 6, the vendor intends to deliver one enterprise solution that
multinationals can deploy worldwide. This move to shore up its lack of
international functionality positions PeopleSoft as a strong contender in the ERP
race.
PeopleSoft burst onto the U.S. market in 1987 and capitalized on the paradigm
shift to client/server computing with a high-end human resource management
system that was designed to be both database and operating system agnostic.

10. PeopleSoft's HRMS quickly gained favour among large U.S. corporations shifting
to a client/server model, and today, the Pleasanton, Calif.-based company
commands the number two spot in the worldwide human resource software
market, right behind its older brethren, Germany-based SAP.
The HRMS was just the first step in PeopleSoft's strategy to race after SAP and
others into the more lucrative enterprise resource planning (ERP) market and
over time PeopleSoft added financial applications, distribution, and, more
recently, manufacturing. With its products in place, PeopleSoft then set about the
task of adding global capabilities to its suite to capitalize on yet another
paradigm shift: the move to a global marketplace, where corporations are
increasingly doing business across country boundaries and managing employees
and operations scattered throughout the world.
With the year-end '96 rollout of PeopleSoft 6, which features globalize versions of
the HRMS and financials, as well as multicurrency and Multilanguage support,
the company says it is now ready to take on the world market. The company's
strategy is to deliver one enterprise solution that multinational companies can
deploy worldwide, with core functionality common to all countries and built-in
localizations for those tasks and requirements that are country-specific.