Read the below case study and answer the following questions.

1. In your opinion, what are the reasons for the Hershey CRM software failure? [2.5 Marks]
2. What are the ways to overcome the failures in ERP system implementation? [2.5 Marks]

Hersheys Bittersweet Halloween

This incident is perhaps one of the most dramatic failure stories of ERP implementation failure. Founded in 1876, one of the largest North American chocolate manufacturers, Hersheys undertook a project to implement SAP R3 ERP software. However, nothing went according to plan. In

the end, its new order-taking and distribution computer system which was a $112 million combination of software from ERP maker SAP, CRM provider Siebel and supply chain software from Manugistics, failed to deliver $100 million worth of Kisses and Jolly Ranchers for Halloween. It was told that the incident happened because of malfunctioning of the ERP system. As a result, the stock price declined 8 percent in a single day, profit dropped by 19 percent, and sales plunged by 12 percent, not to mention the credibility they lost in the market.

Hersheys made another critical scheduling mistake it timed its cutover during its busy season. It was unreasonable for Hersheys to expect that it would be able to meet peak demand when its employees had not yet been fully trained on the new systems and workflows. Even in best-case implementation scenarios, companies should still expect performance declines because of the steep learning curves. By timing cutover during slow business periods; a company can use slack time to iron out systems kinks. It also gives employees more time to learn the new business processes and systems. In many cases, we advise our clients to reduce incoming orders during the cutover period.