The money, resources and time invested by businesses for enterprise applications can be staggering. Such is the importance that software plays in the world of corporate America today, and such is the importance in investing those resources wisely and in the right application.
So when I came across this PC World article about Shane Co., a Colorado-based retail jeweler, filing for Chapter 11 bankruptcy due to rampant cost overruns of an SAP ERP implementation, I laughed.
Now in Shane’s defense, the implementation supposedly went over budget by nearly four times, or $36 million, and caused excess inventory problems. If those numbers are even remotely accurate (or honest), I shudder at the thought that there are still software implementations that can run that high. But excess inventory?
The fact is poor management…and bad alignment between business and IT…is what causes excess inventory, and that falls squarely on the shoulders of Shane’s management, not SAP. And for that matter, who at Shane Co. continued to allow the implementation of a $36 million “point of sale and inventory management system” that began in 2005? I can’t imagine that today, in the year 2009, somebody at Shane didn’t understand that the implementation was simply not working and taking entirely too long.
In SAP’s defense, no vendor can overcome an inept and/or broken business culture, no matter how good the software is. As the old saying goes, CRM…or for that matter ERP, SCM, or accounting software…is a business problem first and technological one second. Selecting the right software and aligning it with the former is what keeps prices down, end users happy, and ROI high. It seems none of which was adhered to by Shane management.
God help us if the bankruptcy judge actually buys into this story, because if Shane’s management of this implementation is any reflection of their ability to run their company, they shouldn’t be given a second chance in bankruptcy court either.