The document discusses the failed ERP implementation by Hershey's, called Enterprise 21. The $112 million project aimed to integrate SAP, Manugistics, and Seibel software by 1999 but faced major issues. Post-implementation, order fulfillment doubled to 15 days and inventories grew by 25% with a 0.5% loss in market share. Key failure factors included unrealistic timelines, inadequate testing and training, and attempting a "big bang" go-live for the entire system. Hershey's was able to recover by upgrading more gradually in parts with improved testing, training, and a new CIO. The case highlights lessons about properly scoping ERP projects and change management.

1. ERP IMPLEMENTATIONERP IMPLEMENTATION
FAILURE AT:FAILURE AT:

2. HERSHEY’ S : CASE STUDY:
Presented By:
1.Sadia Butt-355
2.Hafza Mateen-3100
3.Sabeena Irfan-364
4.Amina Khan-376
Institute of Quality and Technology Management
Punjab University
ERP Implementation FailureERP Implementation Failure

3. CONTENTS
Introduction to ERP:
History, Product Selection criteria
Steps to Implement ERP
Key Success Factors
Benefits of Implementation
Hershey’S– A Brief Overview
Business Case-Summary
Hershey's Enterprise 21 Project-
Overview
Pre-Implementation- Expectations
Post Implementation-Actual Scenario
What Went Wrong?/Failure FactorsFailure Factors
Bouncing Back
Lessons Learned

4. ENTERPRISE RESOURCE PLANNING
( ERP ) :

5. ENTERPRISE RESOURCE PLANNING
( ERP )
 ERP systems are large computer systems that integrate
application programs in accounting ,sales & marketing,
inventory management, customer relationship management
(CRM ), manufacturing and the other functions in the firm.
 This integration is accomplished through a database
shared by all the application programs.

6. ERP HISTORY

7. VENDORS OF ERP

8. Technology
Support
Costs
55 StrategicStrategic
RequirementRequirement
LevelsLevels
Functionality
Goal:Goal:
To select theTo select the
Most SuitableMost Suitable
SoftwareSoftware
Package SolutionPackage Solution
Vendor
ERP Product selection Criteria

9. STEPS TO IMPLEMENT AN ERP SYSTEM:

10. CRITICAL SUCCESS FACTORS FOR ERP IMPLEMENTATION:
 The firm & optimistic approach of the Management
- on adapting the ERP product driven methodologies
- on customization
- on monetary commitments
 The dedicated Team
 Good Training
 Strict adherence to the Project schedules
 Right technical infra-structure
 Change Management
Data Accuracy

11. ERP- IMPLEMENTATION BENEFITS:

13. Jordan May

14.  One of the leading chocolate manufacturer across
world- Its products are sold in about 60 countries
worldwide.
 Founded in 1876 by Milton Hershey. It has
headquarters in Pennsylvania.
 Revenues of nearly $5 billion and almost 13,000
employees worldwide.
 Hershey's sales are roughly 80% chocolate and 20%
non-chocolate
 Hershey’s Competitors include Mars, Nestle, Russell Stover,
Palmer and Nabisco
HERSHEY’S– A Brief Overview

15. BUSINESS CASE-SUMMARY
 The company was running on “legacy systems”, needed modernization of
IT System to:
i. Solve Y2K Problem ii. Have better coordinated deliveries to retailers
 To tackle these issues, Harshey’s management decided to replace
existing systems with modules from three (3) IT partners:
i. SAP's R/3 ERP software ii. Manugistics SCM software iii. Seibel's CRM software
so as to manage integration among these three systems.
 Management decided to go with “Big Bang “approach instead of “phased
“approach.
 During late 1996, the management of Hershey gave its approval to a project
named “Enterprise 21” to help business processes.

16. ““ENTERPRISE 21ENTERPRISE 21”PROJECT”PROJECT -OVERVIEW-OVERVIEW
• Overall Project Cost:
$112 million worth of combination of software for CRM, ERP
and forecasting.
• Implementation Time:
• Shift to the new system by the end of year 1999.
• The recommended implementation time for the project was 4
yrs. and Hershey demanded for 2.5 yrs.
• decided to go with “Big Bang” approach instead of “phased”
approach.

17. ““ENTERPRISE 21ENTERPRISE 21”PROJECT”PROJECT ––
OVERVIEW ( CONT’D )OVERVIEW ( CONT’D )

18. ““ENTERPRISE 21”PROJECTENTERPRISE 21”PROJECT ––
OVERVIEW(CONT’D)-OVERVIEW(CONT’D)- IT PARTNERS

19. 5. “ENTERPRISE 21”:-IMPLEMENTATION
TIMELINES

20. ““ENTERPRISE 21ENTERPRISE 21” –PRE-IMPLEMENTATION” –PRE-IMPLEMENTATION
EXPECTATIONSEXPECTATIONS::

21. ““ENTERPRISE 21ENTERPRISE 21” –POST IMPLEMENTATION” –POST IMPLEMENTATION
ACTUAL SCENARIO:
•Order fulfillment
time doubled
•15 days delay on
orders
•Accumulating
inventories (+25%)

22. - 0.5% market
share

24. FAILURE FACTORS:

25. FAILURE FACTORS:

26. FAILURE FACTORS:

27. A NEW CHALLENGE FOR HARSHEY

28. BOUNCING BACK:
 Hershey learned from mistakes and Began work
on the upgrade to mySAP in July 2001.
 Hershey Foods said it had completed an upgrade
to mySAP.com —in 11 months, 20% under budget
by taking these initiatives:
i. Rigorous software testing iv. Appointed a new CIO
ii. Adequate training to employees v. implementation in parts
iii.Redesigned the Entire Process instead of “Big Bang”

29. SuccessfulSuccessful
ERPERP
LESSONS LEARNED/ CONCLUSIONS:

30. SuccessfulSuccessful
ERPERP
LESSONS LEARNED/ CONCLUSIONS

31. THANK
YOU…..