HP announced a 5% revenue decline in its Enterprise Servers and Storage segment due to issues migrating a North American division to a centralized ERP system. The ERP implementation at HP failed due to poor planning, improper testing, data integration issues, demand forecasting problems, and a lack of contingency planning. As a result, HP lost $400 million in revenue and $160 million spent on the failed implementation. The failure negatively impacted employees, customers, HP's reputation, and market share against competitors like IBM and Dell.

1. ERP IMPLEMENTATION
FAILUER AT HP
Based on case study by:Ruchi Chaturvedi N.

2. INTRODUCTION
• August 2004, HP announced that their revenue for
3rd quarter from its Enterprise Servers and Storage
(ESS) segment had gone down by 5% to $3.4 bn
• Reasons stated for the downfall was due to
migrating to a centralized ERP system at one of its
North American division

3. BACK GROUND
• Founded in 1938 by Bill
Hewlett and David Packard as
an electronic instrument
company
• The company was founded in a
one-car garage
• HP launched its first mini
computer in 1974
• First Personal Computer in 1981

4. OBJECTIVE
• To keep orders and deliveries flowing during the
problem period
• To ready solutions assuming the new system would fail
during final rollout
• Make sure to have additional manufacturing capacity
ready, before the ERP rollout

5. WHAT IS ERP SYSTEM
• An Enterprise Resource
Planning System, commonly
known as an ERP system, is a
set of business software tools
designed to facilitate the flow
of information between all
departments or functions
within a business.

6. USE OF ERP SYSTEM
• ERP systems make it easier for order tracking, inventory
tracking, revenue tracking, sales forecasting and related
activities.
• Advanced e-commerce integration
• Cost Savings

7. ERP FAILUER
• HP revealed that there was execution problem and there
was no fault of SAP in it.
• There were small technical glitches but the main issue
was contingency planning, which was not addresses
properly.
• The other issues were like:
– Data Integration Issues
– Demand Forecasting Problems
– Poor planning & Improper Testing

8. IMPACT OF FAILUER
Dissatisfied employees
Dissatisfied customers
Bad reputation
• Loses according to HP
• $400m in revenue.
• $160m during the implantation.
 Lost market share to IBM, Dell.
Doubtful future for next SAP implementations

9. SUGGESTION
 Decide upon all 3 basic factors before migrating
• Define the requirements
• Develop a plan
• Implement the plan using IT integration & user training
 “Enterprise software isn’t just software. It requires changing the
way you do business.”

10. Thank You