In recent years, large companies have invested a great deal of money — and faith — in IT systems as a means of leading vital organizational or competitive change. More than half of such investment has been in what I call “process-enabling information technology,” or IT that facilitates the execution of entire business processes rather than individual tasks.1 Such technology includes systems devoted to enterprise resource planning (ERP), supply chain management (SCM), customer relationship management (CRM), and e-commerce operations. The coordination, managerial oversight and marshaling of resources needed to implement any of these systems make for a change effort like no other.
All too often, however, hopes are dashed, and the effort is deemed a failure. Various studies have shown that in 30% to 75% of cases, new systems don’t live up to expectations, register a measurable financial impact, improve work processes, or bring about organizational change.2 In some cases, the result is catastrophe. Nike, for example, spent hundreds of millions of dollars on a system that forecasted sales inaccurately; Hershey Foods suffered through a Halloween season in which it failed to keep its candy in stock with major retailers; and FoxMeyer Drug filed for Chapter 11 at least in part because of problems with its ERP implementation.
Technical snafus are not the reason for these and other failures.To read the complete article, login or sign-up using the form below.
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