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Case Studies of Successful Enterprise Resource Planning

Enterprise Resource Planning (ERP)  solutions are vital for all kinds of companies, especially those that are growing or very large.

ERP may also be discussed within the corporate setting as Information Management Technology (IMT) , or it may have other code names.

Companies look to software providers for help in managing all kinds of enterprise resources . Some of the biggest needs fall in the categories of accounting, financial analysis, human resource management, client relations, manufacturing, supply chain, and inventory management. Some of the largest solution providers include Oracle , IBM, SAP , Salesforce , and Microsoft.

Below are a few ERP success stories to help understand some companies’ biggest challenges and goals in this area.

Key Takeaways

• Choosing the Oracle ERP Cloud solution helped Western Digital merge three businesses.
• In 2018, Walmart announced a five-year agreement with Microsoft for Microsoft Azure, which creates a framework for multiple ERP systems.
• The TD Bank Group of companies also contracted with Microsoft Azure for a cloud framework that can integrate multiple capabilities and create more digital innovation opportunities.

Western Digital

Western Digital is a technology company with offerings in the areas of data, data storage, data systems, and data solutions. A merger of Western Digital, SanDisk, and HGST was a big challenge for the company around 2019. With the merger, Western Digital wanted to centralize ERP so that all three companies could better work together.

After final deliberations among two providers, the company went with the Oracle ERP Cloud. This choice also followed with an Oracle Suite of products that included solutions for performance management and analytics, all integrated together.

The major benefits of the Oracle choice included integrations from the three businesses across the following:

• Cost center management
• Information technology
• Human resource management
• Payroll processing
• Streamlined systems for forecasting business analytics and forecasts
• Workforce planning
• Comprehensive dashboards and automated reporting
• Improved customer relationship analysis
• Systems all running efficiently in the cloud for easier accessibility and document management

As of August 2022, Walmart is one of the top fifteen largest companies in the United States by market capitalization. Sales for the company in FY 2022 were over $570 billion.

The company operates globally with brick and mortar supercenters, discount stores, and neighborhood markets. It owns hundreds of brands, including the well known Sam’s Club. To successfully keep its shelves stocked it works with thousands of suppliers. Its e-commerce business is also a behemoth, with a long list of online seller partnerships. The sheer size of Walmart’s business is one of its greatest advantages, but also challenges when it comes to ERP.

Walmart works with many ERP providers. In 2018 however, it announced a strategic partnership for building out a digital transformation through Microsoft Azure. Benefits of the Microsoft Azure relationship include:

• Building out a cloud-based enterprise system that serves as the framework for managing all of its resources
• The capability to plug-in existing ERP applications to the Microsoft Azure framework
• Integration of Microsoft 365
• Broader and more efficient opportunities for e-commerce
• Broader opportunities for automated warehousing capabilities
• Use of artificial intelligence for supplier relationships
• Integration with SAP Hana and other legacy inventory management solutions
• Integration with blockchain-based solutions that are evolving

TD Bank Group

A migration to a sound cloud framework was also the driver for a relationship between TD Bank and Microsoft for the Microsoft Azure ERP. For the TD Bank Group, some of its biggest challenges are centered around digital storage and the digital experience for customers.

With Microsoft Azure, the TD Bank Group will also integrate Office 365. Some of the greatest benefits TD Bank will experience with its Azure relationship include:

• Enhancements in derivative pricing and risk management for TD Securities
• Integrations for its proprietary data and analytics database used in cross-bank reporting
• Integrations with artificial intelligence developments through its subsidiary Layer 6
• Greater opportunities for managing TD Bank customer relationships and digital experiences

The Bottom Line

ERP systems are usually big-ticket projects with high costs and varying timeframes. Often, the commitment to an ERP system is one a company hopes to keep over the long haul. Comprehensively, a company can utilize many different ERP solutions and providers, which can create a lot of compatibility complexity.

Oracle. " Inside Western Digital's Massive Cloud ERP Migration ."

CompaniesMarketCap. " Largest American Companies by Market Capitalization ."

Walmart. " 2022 Annual Report ," Page 53.

Walmart. " Walmart Establishes Strategic Partnership with Microsoft to Further Accelerate Digital Innovation in Retail ."

Microsoft. " TD and Microsoft Enter into a Strategic Relationship to Power the Future of Digital Customer Experiences ."

Microsoft. " TD Bank Group: Focused on Making Every Customer Experience Legendary ."

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3 successful ERP implementation case studies to learn from

Because of the high degree of complexity associated with large-scale ERP implementations, over time the proportion of successful outcomes tends to become fifty-fifty propositions from a business case perspective.

ERP case study #1: Cadbury – A Sweet Success

Our first successful ERP implementation case study focuses on Cadbury, a 123-year-old confectioner currently owned by American snack foods conglomerate Mondelēz International. The company was on an accelerated growth track while facing problems meeting its production and distribution requirements.

Subsequently, SAP was engaged to resolve these concerns. Along with other significant changes triggered by the ERP implementation, multi-node resources management was extended throughout its supply chain, along with a complete revamping of existing warehouse and distribution processes.

The consequent impacts allowed Cadbury to reduce overall operating costs, while its newly engaged supply chain produced significantly better production efficiencies throughout its manufacturing chain.

Key takeaway: For an ERP implementation to really pay off, you'll need to see improvements in key areas. A thorough ERP requirements gathering effort during the selection phase is therefore essential.

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ERP case study #2: Nestle SA – Integration Excellence

As an enormous international candy-maker, Nestle SA headquartered in Konicki Switzerland, had harbored a goal of integrating ERP across all three of its operating companies; Nestle SA, Nestle UK, and Nestle USA.

The latter operation had been working toward complete integration of a set of ERP solutions since the late 90s, but various requirements, organizational, and policy problems had plagued the complete initiation.

By the turn of the millennium, its management finally decided that a holistic re-approach to its business requirements was in order. Consequently, this effort paid dividends that allowed SAP to finally get the $200 million job done.

Ultimately, positive business impacts included the consolidation of an outdated accounting structure, better and more efficient communications throughout its supply chain, and a much more confident workforce.

Key takeaway: Integration across different sites requires a lot of upfront effort - but it pays off in the long run.

Guide: ERP Implementation: 11 steps to success

 ERP case study #3: ABC Compounding – A Timely Switch

ABC Compounding, based in Atlanta, Georgia in the United States, provides industrial cleaning supplies to businesses around the world. Most of the products are private-labeled and they are sold through regional and national distributors. 

They had a legacy ERP that was no longer a good fit and that lacked essential tools such as planning, scheduling, and MRP. The solution for ABC Compounding was Sage ERP X3.

ABC Compounding employs about 150 people and presents an interesting study as most examples use much larger multinational companies.

ABC is a process manufacturing business. Some of their customers are in food processing and other industries that require FDA and similar control systems.

Myra Hager, chief information officer, had used Sage ERP X3 in a prior position and was familiar with its comprehensive manufacturing capabilities. “The time was right, and the pricing to make the switch was very competitive,” she says. A common thread among companies using ERP at the time.

New Sage functions

ABC lets the MRP function create work orders for us based on orders and stocking levels. Previously they printed reports, did separate calculations, and manually entered the work orders. There were often several hundred work orders active at once, each with dozens of items.  Eliminating the manual data entry tasks has been an enormous time saver.

Step-Saving Tools 

Intercompany transfers of inventory are common, as are transfers between site locations within each company. Using Sage ERP X3, such transfers are straightforward and easily traceable. Previously, ABC Compounding had to enter separate buy and sell transactions to transfer ownership of the material.

Sales and customer service staff appreciate the software’s easy and intuitive navigation. Six staff members that enter more than 200 orders each day. Speed is of the essence, and Sage ERP X3 provides the tools they need to quickly enter orders and answer any customers’ questions that arise throughout the work day.

Quick Access to Actionable Data 

The single biggest benefit of Sage ERP X3 to ABC Compounding is the easy access to critical information. The ability to drill down and tunnel around following a transaction is invaluable.

They have access to relevant documents and data with just a few clicks. The staff loves what they call the Left List, a display of tasks and data related to the screen they’re working on. It’s a quick way to navigate and uncover all the information we need.

Hager says it is still too early to accurately measure the actual return on investment ABC Compounding will realize with the switch to Sage ERP X3, but many dividends became obvious from the start.

“We have only been live for a short time, but already our team is positive about the contribution of Sage ERP X3,” she concludes. “It is a powerful ERP solution with strong manufacturing capabilities.

We have been able to abandon several third-party applications that we had needed, because the functionality they provided is part of Sage ERP X3. That saves us money and effort. In addition, the comfort level of relying on a software solution that uses a modern, industry-standard database and platform can’t be underestimated.”

Key takeaway: Success in ERP implementation can lead to significant efficiency gains, cost savings, and improved customer service, as evidenced by ABC Compounding's experience with Sage ERP X3.

To read about ERP implementations that didn’t go nearly as smoothly, click here .

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3 ERP Implementation Case Studies

Mark Jackley | Content Strategist | January 2023

In This Article

Why Do ERP Implementations Fail?

Keys to successful erp implementation projects, your erp implementation starts by choosing the right system, erp implementation case study faqs.

Enterprise resource planning (ERP) software connects the most important functions of businesses—including financials and asset management, supply chain management, customer relationship management (CRM), and human resources. That’s why an ERP implementation is such a big deal. The payoff can be substantial: A single system to connect and standardize data in real-time gives teams across the business a shared view of performance—and one source of truth to improve decision-making and planning.

However, ERP implementations have potential pitfalls. If your project team fails to create a vision to guide the project, instill a spirit of teamwork among everyone involved, and communicate its objectives to employees, you might not solve your business challenges and get the results you need.

The following three case studies spotlight companies that did things right. By borrowing from their playbooks, your business can also enjoy the benefits of a successful ERP implementation.

1. A clear vision: Discover Financial Services moves to cloud ERP

In 2019, Discover Financial Services, the third-largest credit card brand in the United States, was running seven highly customized on-premises ERP systems. Their IT landscape was complex and lacked standardization, which resulted in slow and sometimes inaccurate reporting. Moreover, the accounting team and their counterparts in financial analysis and planning needed more scalable systems to support their growing workloads. After evaluating several vendors, Discover chose to simplify its environment by consolidating systems on Oracle Fusion Cloud ERP, integrated with Oracle Fusion Cloud Enterprise Performance Management (EPM).

The project team had a clear vision: The ERP implementation was more than an IT upgrade. It was an opportunity to create and sustain business value companywide, generating “more data and higher quality,” says Michelle Green, vice president, business technology: strategy, transformation, and governance. “Ultimately, the functionality and automation help us make more effective enterprisewide decisions.”

This vision helped Discover complete the ERP implementation on time and on budget, despite working remotely during the COVID-19 pandemic. “There are two things I look for in an implementation,” says Green. “The first is when people say the implementation was a nonevent. The second is when people start giving unsolicited feedback that they’re loving the systems. On day 15, post go-live, we heard both.”

The modernized ERP platform has paid off. With faster access to financial information, Discover employees companywide can more effectively manage expenses . Lines of business enjoy more accurate planning projections and cost analysis. With standardized functionality replacing customization, employees spend less time deciphering technology and more time achieving results. And with quarterly cloud functionality updates delivered automatically, Discover can continue to enhance its processes and ways of working.

2. Teamwork and trust: ERP helps Hormel Foods unify the business

With a long history of making strategic acquisitions, Hormel Foods owns more than 50 iconic brands, such as Dinty Moore, Planters Peanuts, SPAM, and Skippy Peanut Butter. But at one time, it also owned a patchwork of different IT systems.

“We had various systems for various companies that did not interface well together,” says Jim Sheehan, executive vice president and chief financial officer, Hormel Foods. “They did not provide us with a clear view of the company's performance, were difficult to maintain, and honestly, had become a burden to our competitiveness.”

In some cases, the human capital management (HCM) and ERP applications hadn’t been upgraded in more than 15 years. Some systems depended on a single person—“whoever remained who understood the code it was written on,” Sheehan says. Adding to the complexity, Hormel Foods had customized many of its applications to meet the needs of individual brands.

To simplify business processes and improve data quality, Hormel worked with KPMG to implement Oracle Cloud ERP, part of the Oracle Cloud Applications suite that now also supports Hormel’s supply chain management, enterprise performance management, and human resources.

“We had to rely on teamwork,” says Assistant Controller Eldon Quam. “We had Oracle, KPMG, and Hormel Foods people all working together. If you weren’t familiar with the group, you wouldn’t have known the difference between a Hormel Foods person and someone who worked for another company.”

When the ERP system went live, Hormel gained a unified system to standardize business processes, data, and decision-making. “We have visibility into every business from the same point of view,” Sheehan says.

Hormel Foods also has a forecasting model to pinpoint growth opportunities across its many brands. “In the past, we looked at things brand by brand,” says Jana Haynes, vice president and controller. “That’s still important to do, but now that we’re on a centralized platform, we’re able to notice things that weren’t apparent before.”

With procurement in all countries except China and Brazil now on the same platform, it’s easier to analyze vendors as well. For instance, the company discovered that some of its brands paid more than others for the same item. Hormel can also pinpoint the number of vendors that are the sole source of items its brands rely on. Knowing this allows the company to explore alternative sources and be ready should a vendor prove unable to meet demand.

With the entire company running on one ERP system, every brand does financial reporting in the same way. “Whether it’s their cash flow, their income statement, or their balance sheet items,” Sheehan says. In other words, all that teamwork enhanced their ability to operate as one team.

3. Employee buy-in: Taylor Corporation rallies support for digital transformation

A diversified global company that operates printing, data, and marketing businesses, Taylor Corporation embarked on a four-to-five-year effort to implement an ERP solution and modernize its back office, moving financial, supply chain, and manufacturing applications to Oracle Cloud. When all phases of the ERP implementation are completed, Taylor estimates it will see between $20 to $30 million in total cost savings.

CEO Charlie Whitaker has made it his personal mission to see the program succeed. On a kickoff video conference early in the implementation, Whitaker rallied the company’s 10,000 employees, urging them to see the program as key to Taylor’s growth and prosperity. He also led steering-committee meetings and working sessions with project team members.

“If you talk with Charlie, it's not an option to participate. It’s a requirement: Don’t debate it, participate in it, which I think is a fantastic message,” says Jenn Warpinski, Taylor’s vice president of enterprise transformation.

Several Taylor managers who were initially skeptical now are leading the way in bringing their colleagues around. “They’re now jumping in, and they’re doing the talking, they’re doing the change management,” Warpinski says.

Workforce support is necessary to succeed with such a transformational project. Indeed, the scope was significant: Taylor needed to consolidate data and business processes across 85 different systems, some of them no longer supported by vendors. Taylor wanted to make timely and informed financial and supplier decisions, automate manual processes that were costly and time consuming, and make it easier for customers to operate across the company’s business units.

For example, one of Taylor’s five multisubsidiary enterprise groups had customer information sitting in 16 different systems. That made it difficult for the group to cross-sell products across business lines. (Taylor units sell everything from printed wedding invitations to digital marketing services.)

Before phase one of the implementation—a global rollout of cloud financials completed in January 2022—it would take Taylor’s finance teams a couple of weeks to assemble a consolidated view of outstanding accounts receivable across the company. That data is now available for executives to act on in real time.

Now that Taylor is also live on cloud procurement applications, it can negotiate better volume discounts with approved indirect suppliers, while end users can get approvals and execute orders for supplies with just a couple of clicks.

One leading cause is failing to practice contingency planning. At the outset, implementation teams should identify likely causes of delays or cost overruns and plan accordingly. For instance, are there existing vulnerabilities in your company’s business model that need to be fixed before launching the project?

Unrealistic expectations are another reason for failure. If your timetable shrinks but your list of deliverables doesn’t, the ERP implementation could be doomed from the start, or at the very least become chaotic and expensive.

Some careful whiteboarding can help you avoid these potential problems. You can enjoy a successful ERP implementation with the right ERP provider, executive support, and a willingness to learn from other businesses’ successes and mistakes and a willingness to learn from other businesses’ successes and mistakes, you can enjoy a successful ERP implementation.

Besides crafting a vision, working as one team, and enlisting the support and patience of employees at all levels, other factors can lead to a successful ERP implementation. First, you’ll need to clearly define the project’s scope, objectives, and budget. A project team with the right expertise is another must. So are having plans for migrating data to the new system as well as a realistic timeframe for going live. A detailed change management plan that includes user training and education, such as the one Taylor created, is perhaps most critical to success.

Another ERP success factor: The system you implement should be easy for people to use. After all, simplifying the IT landscape and the user experience is a critical objective of any ERP system. If your implementation unfolds in stages, you can conduct periodic surveys to see if employees think the system is user friendly.

Your Complete Guide to Modern ERP

Discover what defines a modern ERP solution and how cloud ERP drives business agility and innovation.

Even if you devise a flawless implementation plan, it won’t yield great results if you choose the wrong ERP system. Look for a solution that can not only integrate disparate data and business processes but can also integrate with existing systems and applications your business will continue to run. Additionally, you’ll want capabilities that are purpose-built for functions, such as cash management or procurement, giving you faster and more accurate information to improve decision-making. It’s also smart to choose a system that can both monetize and measure business value as you plan new products and set pricing strategies.

Of course, your project management team should thoroughly assess ERP vendors. It’s important to listen carefully to what they can actually deliver, looking beyond basic features and capabilities. For example, what is their support offering like? What kind of training do they provide? What does the future look like—is the vendor truly invested in the emerging technologies you’ll need to compete? You’ll also want to hear what industry analysts, such as Gartner, say about cloud ERP solutions, including Oracle Fusion Cloud ERP.

Lastly, consider what else an ERP system can offer your company. Oracle’s solution, for example, includes built-in risk management tools that use AI and machine learning to strengthen financial controls. It also can integrate with your customer relationship management (CRM) system, so your front- and back-office teams can seamlessly share data.

What are the top challenges of ERP implementations?

Three of the most common challenges are:

• Defining a vision of what the ERP system needs to do and how to manage the implementation—who should lead it and set priorities
• Engendering trust and teamwork between the project team, your ERP provider, and your consulting partner
• Communicating with employees about how the implementation will benefit them, freeing up time from mundane tasks to do more interesting work

See how Oracle Cloud ERP gives you the agility to adopt new business models and processes quickly, helping you reduce costs, sharpen forecasts, and innovate faster.

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How a modern enterprise resource planning (ERP) system supports growth

Diamondback Energy implements SAP S/4HANA® for a quick-to-market solution with minimal business disruptions.

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How can back-office optimization fuel market-facing acceleration?

For Diamondback Energy, agile technology was needed to lay a pipeline of opportunity.

T oday’s leading companies depend on internal technology to support their external growth strategies. In response,  chief finance officers  need systems and processes that can help enable these growth goals. To strike an equilibrium between the need for speed and accuracy, a smart financial driver is a must.

As a result of several acquisitions, Diamondback Energy, a US-based independent oil and natural gas company known for being quick to market, was experiencing significant growth. This expansion caused operational complexities and began to put increased pressure on their current systems. Realizing they had outgrown their accounting and finance platforms, Diamondback needed an enterprise resource planning (ERP) solution that could improve efficiencies in their financial processes and better support their expansion goals.

We wanted an ERP solution that was stable, supportable, secure and scalable. EY Energy Industry Cloud for SAP solutions met those criteria

Greg Dolezal

VP of Information Technology for Diamondback Energy

Diamondback chose the  SAP S/4HANA®   suite because of its proven track record with many upstream oil and gas companies. And, when it came time to implement the new solution, Diamondback turned to Ernst & Young LLP (EY) professionals. The EY team has proven experience leading large transformation projects and had already created ready-to-market  EY Energy Industry Cloud for SAP solutions , saving Diamondback considerable time and the need for customizations. In addition, the EY team could deploy the solution with little disruption to Diamondback’s employees.

“Our business is growing fast, and we needed to quickly invest in our accounting and finance functions,” said Tracy Dick, Chief Accounting Officer for Diamondback Energy. “We also recognized the need for an experienced ERP implementation team who understood the essence of what we wanted to achieve. For us, it wasn’t just about choosing a new ERP, it was about finding the right strategic advisor who could help us deploy the solution efficiently with minimal disruption for our employees.”

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The better the answer

Smart teaming and proven technologies deliver long-term value

A seamless ERP implementation supports Diamondback Energy’s long-term growth goals.

“We wanted an ERP solution that was stable, supportable, secure and scalable,” said Greg Dolezal, VP of Information Technology for Diamondback Energy. “EY Energy Industry Cloud for SAP solutions met those criteria.” 

Smart teaming makes for better decision-making and faster results

Implementing an ERP system is a massive change and can be met with countless challenges including integration with existing systems and processes, flexibility for future growth and all-in support from the various departments within an organization. Acknowledging these potential obstacles, Diamondback brought together business and information technology (IT) stakeholders, resulting in quick and informed decision-making, as well as successful adoption of the new system. Concurrently, the EY team brought professionals from both the  Consulting   and  Tax  service lines contributing to a smooth deployment and a better understanding of the downstream effects of data integration. This cross-company teaming allowed for quick implementation and helped manage costs.

Templated tools limit the need for customization aiding in faster implementation

To accelerate the SAP S/4HANA transformation, EY professionals tapped into the EY Energy Industry Cloud for SAP solutions, which seamlessly integrates pre-built, sector-specific ERP assets with the latest versions of SAP offerings. Leveraging over 3,000 EY-created SAP accelerators including processes, training, test scripts, data mapping templates, IT controls and security roles, the EY team helped Diamondback implement the ERP software within a timeline never thought possible. The EY team’s leading-class Intelligent Transformation Platform toolset was also leveraged for the effective migration of data and integration of recently acquired companies.

“To help our clients gain the best of the technology while preparing their businesses for the future, we have developed detailed pre-built oil- and gas-specific SAP solutions augmented with our differentiators,” said Jim White, Principal, Technology Consulting, Ernst & Young LLP. “And by quickly adjusting to individual client needs, we’ve proven ERP implementations don’t have to be complex or time-consuming.” 

Leveraging over 3,000 EY-created SAP accelerators, Diamondback implemented the ERP software within a timeline never thought possible.

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A new way of thinking about ERP implementations

But success is not just about implementing the right technology – it’s about embracing the right mindset, with proven project and change management processes. While traditional ERP implementations follow a more linear approach, Diamondback adopted the hybrid-agile methodology allowing the team to stay on track and keep a close eye on progress. Solution review sessions were held focusing on adopting industry-leading best practices and demonstrating how end-to-end processes would be executed in the future. This approach allowed the EY team to continually address Diamondback’s feedback and successfully finish this implementation with minimal business disruptions.

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Built-in functionality means an ERP that continues to extract value

Diamondback is laying the foundation for tomorrow’s possibilities.

The result is a new SAP S/4HANA suite that accelerates Diamondback’s system performance, improves data integration and availability, and supports its growth strategy. 

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And even with two additional acquisitions during the project and the virtual working requirements resulting from the COVID-19 global pandemic, this end-to-end implementation was completed in an impressive 16 months — balancing speed, quality and workload for the client.

“It’s easy to forget that a transformation is as much about the journey, as it is about the destination,” said Mike Kelly,  EY Americas Finance Consulting Leader. “The real value comes from delivering measurable business impact over time. By embedding lasting change in the way an organization works and operates, hidden potential can be unlocked and the organization can be set up for long-term success.”

Six months post-launch, Diamondback is already seeing a 30% reduction in the time required to complete month-end close processes and a 25% reduction in the time required for their first year-end closing.

Additional ERP benefits include:

• Highly stable system
• Improved data integration
• Efficient close processes
• Increased mobility capabilities

While Diamondback has reinvented its finance functions to achieve faster outcomes and to prepare for future growth, the flexibility of the SAP S/4HANA portfolio has potential benefits across several other areas of the company. In fact, they have already begun addressing back-office simplification and automation opportunities including integrations and further data automation. And with emerging technologies like artificial intelligence (AI) and machine learning built into the software, Diamondback Energy can see more benefits in the future.

Discover how EY's technology transformation team can help your business fully align technology to your overall purpose and business objectives.

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The company faced several challenges for improved business processes and ERP solution selection and implementation:

A variety of business processes needed more formal definition including supply chain, accounts payable, purchase requisitions and POs, order-to-cash, serialization and more.

Global Distribution Company

The company had attempted to implement a new ERP solution, but the effort was stalled.

In later years, the company continued to discuss ways to get back on track with its goal of implementing a better enterprise technology system but was unsuccessful.

Ipsen had been running a legacy version of Infor’s Syteline product for past decades.

This placed the system on an older technology platform, lacking a modern user interface and capabilities that are inherent in more current systems.

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Independent Can Company

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Knox Machine Company

Before working with Ultra’s team of independent ERP consultants, the company’s processes consisted of an awkward combination of a homegrown legacy software package, Excel for inventory control and reporting functions, and various manual processes for material planning and shop floor execution.

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Spirent Communications had acquired 5 companies in 5 different locations: California, Hawaii, Canada, New Jersey, and London. Adtech, the Hawaiian company was growing at 100% a year and was operating on a number of Tier III disparate systems.

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A legacy software system was in place that primarily supported the telemarketing efforts of the in-house sales organization. The system used an outdated database and was eventually ported to a Linux operation system.

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Case Study: Successful ERP Implementation

case study, erp, erp system

Enterprise Resource Planning (ERP) systems have become a cornerstone in the operations of businesses worldwide. These systems integrate all facets of an enterprise into a single, coherent structure, simplifying and unifying processes such as planning, purchasing, inventory, sales, marketing, finance, and human resources. The importance of ERP systems is underscored by their ability to streamline workflows, improve efficiency, and ultimately, drive profitability. In today’s digitally-driven business landscape, ERP systems are not just advantageous they have become practically indispensable, gaining widespread recognition and adoption.  

To underscore the significance and showcase the efficacy of ERP systems, let’s delve into real-world applications. These case studies will illustrate how diverse businesses have successfully integrated ERP systems, reaping substantial benefits in terms of efficiency, workflow optimization, and overall profitability. By analyzing these examples, businesses can gain a clearer understanding of how ERP systems function in practice and how to maximize their potential. Therefore, without further ado, let’s explore three illuminating case studies. 

3 Successful ERP Implementations 

Case Study: ERP Implementation at Nestlé  

Nestlé, a multinational food and beverage corporation, undertook an ambitious project to standardize its operations and processes worldwide. The key step in achieving this goal was the successful implementation of SAP’s ERP system.  

Nestlé initiated the ERP implementation process with a comprehensive analysis of their existing systems and processes in their various locations worldwide. By undertaking a detailed audit, the company identified areas of improvement and potential challenges that could arise during the integration of the ERP system.  

Once these areas were identified, a dedicated team was formed to oversee the implementation. This team, composed of IT experts and process owners, worked closely with SAP to tailor the ERP system to Nestlé’s unique needs. Rather than rushing the implementation, the team opted for a phased approach, allowing for continuous testing and fine-tuning of the system. 

The roll-out of the ERP system was done incrementally, with the system first being implemented in the company’s less complex markets. This strategic approach allowed the team to gain experience and insights, which were then applied to the subsequent roll-outs in more complex markets.  

Throughout the implementation process, Nestlé placed great emphasis on training its employees to use the new system effectively. This was essential to ensuring a smooth transition and maximizing the system’s benefits. Despite facing initial challenges, Nestlé’s careful planning and execution resulted in a successful ERP implementation, leading to improved efficiency and standardization of processes across its global operations.  

Case Study: ERP Success at Cisco Systems  

Cisco Systems, a worldwide leader in IT and networking, also embarked on an ERP implementation journey. The company recognized the need for a comprehensive, integrated solution to manage its complex operations and chose Oracle’s ERP system. 

The implementation at Cisco Systems was strategic and highly structured. The company assembled a cross-functional team, comprising representatives from each department, to oversee the process. Cisco further streamlined the implementation by focusing on standardizing and simplifying operations before starting the system configuration. 

Cisco opted for a “big bang” approach, launching the entire ERP system at once, which was a risky yet rewarding strategy. This method required extensive planning, testing, and employee training, but the outcome was a fully functional ERP system in a relatively short timeframe. 

The success of the ERP implementation at Cisco Systems was measured in several ways. Post-implementation, the company reported considerable improvements in inventory management, financial consolidation, order tracking, and customer service. The ERP system provided Cisco with a unified view of its operations, leading to more informed decision-making and strategic planning. 

Additionally, the ERP system allowed for streamlined processes and reduced redundancy. With improved efficiency and reduced operational costs, Cisco was able to allocate more resources towards innovation and strategic growth, positioning the company for long-term success. 

Overall, despite the challenges and extensive efforts involved, the implementation of the ERP system at Cisco Systems was a resounding success. The company’s experience serves as a valuable example of the potential benefits an ERP system can bring when implemented effectively and strategically. 

Case Study: ERP Transformation at Hershey’s  

Hershey’s, a global confectionery giant, embarked on an ERP transformation journey to streamline its operations and increase efficiency. The company chose SAP’s ERP system with the aim to integrate various aspects of its business such as finance, procurement, manufacturing, and distribution. 

The implementation of ERP at Hershey’s was strategically planned and executed. The company began by mapping out their existing processes and identifying areas for improvement. The insights gained from this initial step guided the customization of the ERP system to suit Hershey’s specific needs. 

Hershey’s assigned a dedicated team of IT professionals, business process owners, and consultants from SAP for the implementation. The team followed a phased approach, initially rolling out the system in areas of the business that were less complex, before moving on to the more intricate aspects of the company’s operations. This allowed for consistent testing and refinement of the system throughout the implementation process. 

To ensure a smooth transition, Hershey’s invested heavily in training its employees. Prior to rolling out the ERP system, the company conducted comprehensive training sessions to familiarize employees with the new system and processes. This proactive approach significantly reduced resistance and enhanced the adoption rate of the new system within the company. 

Post-implementation, Hershey’s reported a marked improvement in business processes efficiency, inventory management, and data accuracy. The ERP transformation was a significant success at Hershey’s, demonstrating the power of a well-implemented ERP system in driving operational excellence and business growth. 

Reasons for ERP implementations failure  

Despite the potential benefits, ERP implementation doesn’t always end successfully. Several factors can lead to ERP failure, which we’ll delve into below: 

1/ Poor Planning and Management  

Inadequate planning and management are often at the root of unsuccessful ERP implementations. ERP systems are complex and require a strategic approach, including setting clear objectives, defining roles and responsibilities, and developing a detailed implementation plan. 

2/ Insufficient Training and Change Management  

ERP systems introduce significant changes to business processes and workflows. If employees don’t receive adequate training, or if the changes are not appropriately managed, the ERP implementation is likely to fail. 

3/ Lack of Stakeholder Buy-In  

For an ERP implementation to succeed, it requires support and cooperation from all involved, from top-level management to end-users. Lack of stakeholder buy-in can lead to resistance, hampering the implementation process. 

4/ Choosing the Wrong ERP System  

Not all ERP systems are created equal, and not every system will be a good fit for every business. Choosing an ERP system that doesn’t align with the company’s specific needs and objectives can lead to implementation failure. 

5/ Over Customization  

While ERP systems can and should be tailored to a company’s unique needs, over-customization can be problematic. It can make the system overly complex, difficult to maintain, and may even cause functionality issues. 

Understanding these potential pitfalls can help businesses better prepare for ERP implementation, increasing the likelihood of success and maximizing the benefits derived from these potent systems. 

Conclusion  

In conclusion, ERP system implementation can significantly transform businesses by optimizing processes, improving efficiency, and fostering informed decision-making. However, the success of an ERP transformation is contingent on strategic planning, adept management, appropriate training, and stakeholder buy-in. Moreover, selecting a suitable ERP system and avoiding over-customization are critical considerations. Cisco Systems and Hershey’s serve as prominent examples of effective ERP implementation. Their experiences underscore the transformative potential of ERP systems when implemented thoughtfully and strategically. Yet, the challenges cannot be overlooked. By understanding and mitigating potential pitfalls, businesses can maximize their chances of ERP implementation success, thereby leveraging this powerful tool to drive operational excellence and business growth. 

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Building an ERP Business Case: A Complete Guide for CIOs

As a Chief Information Officer (CIO), justifying a major ERP investment requires building a compelling business case backed by complex data. With costs potentially in the millions, skepticism around ROI is understandable.

This data-driven CIO's guide to ERP provides a blueprint for demonstrating the tangible benefits of ERP to leadership. Each step followed leads businesses toward successful ERP implementation for the best ROI.

Steps to Build an ERP Business Case

Understand the strategic objectives.

Before embarking on the journey of building an ERP business case, the CIO must thoroughly understand the company's strategic objectives. The CIO must grasp the organization's long-term vision and mission to align the ERP system with specific business goals. This clarity enables the identification of crucial functionalities and ensures that the ERP implementation strategy is tailored to meet the organization's unique needs. The ERP implementation becomes purpose-driven by linking the technology investment to strategic objectives, facilitating improved efficiency and a clear path toward business growth and success.

Define clear goals and benefits

Articulate the specific goals and benefits the organization aims to achieve through ERP implementation. Whether it's streamlining processes, enhancing productivity, improving data accuracy, or gaining a competitive edge, by outlining tangible benefits, stakeholders gain insight into how ERP implementation will positively impact the organization. Clear goals create a shared vision for success and demonstrate the value that the ERP system brings, fostering support and commitment from key decision-makers.

Conduct ROI analysis

A crucial aspect of the ERP business case is the Return on Investment (ROI) analysis. Calculate the expected financial gains, cost savings, and increased efficiency the ERP system will bring over time. By presenting a well-documented ROI analysis, decision-makers gain confidence in the project's long-term viability and potential to generate a positive return on investment. This analysis provides crucial insights into the ERP system's value and serves as a persuasive tool to secure support and funding for the implementation.

Perform cost analysis

In addition to ROI, conducting a comprehensive cost-benefit analysis is equally vital. Evaluate both direct and indirect costs associated with ERP implementation, including software licensing, hardware, training, data migration, and ongoing maintenance. Accurate cost projections enable realistic budgeting, resource allocation and help manage expectations. A precise cost analysis demonstrates financial prudence and ensures stakeholders have a holistic view of the investment required, fostering transparency and informed decision-making.

Identify risks and mitigation strategies

Every project comes with inherent risks, and ERP implementation is no exception. CIOs should identify potential challenges and have well-thought-out mitigation strategies in place. Presenting a risk-aware approach demonstrates thorough planning and enhances stakeholders' confidence in the project's success. Addressing risks proactively demonstrates a well-prepared approach, instilling trust and support from decision-makers and ensuring a smoother ERP implementation journey.

Present business process improvement opportunities

An ERP system offers an excellent opportunity for business process improvement. Highlight specific areas where the ERP solution will optimize workflows, eliminate redundancies, and enhance collaboration among departments. Clearly outline the resulting positive impact on overall organizational efficiency.

Collaborate with key stakeholders

Building a successful ERP business case requires collaboration with various stakeholders, including executives, department heads, and end-users. Engaging stakeholders early in the process allows the CIO to understand their concerns, expectations, and requirements, ensuring the business case is well-aligned with their needs. Demonstrating the transformative effect on business processes helps secure support for ERP implementation, emphasizing the system's ability to drive positive organizational change.

Showcase successful case studies

Incorporate relevant and compelling ERP success stories from the industry or similar organizations. Real-life case studies demonstrating tangible benefits and positive outcomes can inspire confidence and enthusiasm among stakeholders. This collaborative approach fosters a sense of ownership and support, ensuring a successful ERP implementation that meets the organization's diverse requirements.

Create a clear implementation strategy

A compelling ERP business case should also include a clear implementation strategy. Outline the step-by-step plan, estimated timelines, and key milestones. Demonstrating a structured approach instills confidence in stakeholders about the project's execution, mitigates uncertainties, and paves the way for a successful ERP implementation aligned with the organization's objectives.

Emphasize flexibility and scalability

Emphasizing flexibility and scalability is essential in the ERP business case. A flexible and scalable solution ensures seamless integration with evolving technologies. It accommodates changing business requirements and highlighting the system's flexibility to accommodate future growth and changing business needs, assuring stakeholders of a long-term investment.

Building an ironclad business case is the key to securing leadership support and the budget for a significant ERP investment. By quantifying the limitations of current systems and the strategic benefits of the system, CIOs can present a compelling ROI rationale tied directly to corporate objectives, paving the path to smoother ERP approval and successful implementation.

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ERP Case Study with Solution | ERP Success Stories

December 2, 2019 Actouch Technologies Entrepreneurship

Successful ERP Implementation Case Studies

A ERP case study is an effective way to learn more about how advancements of ERP Software have impacted actual businesses and what benefits they have achieved. In this research article, we will have a look at ERP Case Studies of Successful ERP Implementations & some ERP Case Studies Success Stories to determine how recent invention has boosted business.

ERP Case Study – 1: Managing Dealers Network

How a large Manufacturer found benefits with ACTouch.com ERP systems along with MobileApps for his dealers?

INDIA’S LARGEST MANUFACTURER OF SWITCHES WANTED TO BRING in it’s INTERNAL OPERATIONS AND DISTRIBUTORS TOGETHER for a new Customer experience.

About the company:

• 40+ years old company managed by First and Second generation owners. They have more than 350 distributors across India.
• Planning to enter overseas market with dedicated product lines and new launches.
• A great brand name with dedicated Dealers, Distributors and customers built over the years.
• Production takes place across 2 units with 100’s of employees. So the control of the materials movements and quality production is of prime concerns.
• Senior management’s focus on the delivery of 100% Quality products.

Customer Challenges:

As the Company was in transformation mode, it was looking at some of the best practices used in the Industry to adopt itself. Increased competition and awareness of new product and features in the internet to its Distributors was building pressure to be a Digital Company now.

• Manage Production process and Inventory management together to control cost of Production, FIFO issuance of materials and ensure good quality products to customers
• Accurate Finished Goods Costing and By-products details.
• Distributors wanted some better and quick turnaround services with quality products.
• Order Backlogs creates more problems.
• Not able to expand to new market as they wish to do.
• It was a challenge to the new management to hold the existing Distributors and create a new set of distributors.

ACTouch.com Cloud ERP Modules Deployed to benefit the management. 

• Sales and Invoice modules.
• An effective Inventory control with Batch numbers, Bar Code generation etc
• Manufacturing modules with In-house production, Subcontracting & Jobwork management.
• Helped to manage the scrap items and the cost is adjusted across the Finished Goods costs.
• Financial Control module with Payments and Receipts.
• Purchase and Goods Receipts
• Taxations, General ledger with Reports
• Mobile Apps – Dealer Management Solution.
• Daily Production Planning with Shortage of materials for the production.

How ACTouch.com, helped to resolve these challenges?

• Implemented ABC process (Activity Based costing)
• Manufacturing process is redefined with a focus on Costing and tracking of by-products.
• 100% Inventory tracking with right time alerts for Vendors to supply materials.
• 100% Cloud ERP Solution integrated with Mobile Apps helped management to go aggressively with their new market expansion plans.

According to Director of the company, within 3 months:

• They started seeing improvement in Production tracking. Reduction in the scrap and other expenses.
• Management could able to see the entire process at one place.
• Improved inventory management, tracking of materials movements helped the team to own up the process.
• Improved vendor relations as their payments started happening on time.
• Dealer’s stickiness towards Company has increased as new  technology is helping to expand and bring more dealers now. Now Dealer can see all his transactions, Sales requests etc at one place.
• New transparency across the departments is helping them to work towards the single goal of “Customer Happiness”.

Download ERP Case Studies PDF – CASE STUDY OF ERP IMPLEMENTATION IN MANUFACTURING INDUSTRY PDF

ERP CASE STUDY 2: MANAGE PRODUCTION AND SUBCONTRACTING

How Casting and Forged components manufacture found benefits with ACTouch.com?

MANUFACTURER OF CNG GAS REGULATOR WANTS TO CONTROL COMPONENT COSTS & SUBCONTRACTOR OPERATIONS

• 5+ years old company managed by First generation entrepreneurs.
• A growing brand with huge growth potential with dedicated Dealers.
• Their R&D is famous for launching new Cast Products with intricate designs.
• Customer across India

Customer Challenges.

• Accurate Finished Goods Costing with Subcontracting operations
• Tracking of Brass casting materials with scrap items at Vendor Location
• Order Backlogs created more problems.
• Wanted to reduce the human usage and move to automation.

Modules Deployed:

• Sales and Invoices
• Inventory control
• Manufacturing modules with Subcontracting and Jobwork
• Taxation, General ledger with Reports
• Implemented Location based stock tracking and issuance
• Implemented ABC process (Activity Based costing) with Subcontracting operations
• Able to track the materials at Subcontractor locations. This reduced the friction to manage the stocks

According to Managing Director of the company, within 3 months:

• Nearly 80% time saved in tracking of materials and issuance.
• Improved in Taxes and compliance regulation and last minute rush to file the returns have reduced.
• We become independent of CA’s and started seeing the right details

ERP CASE STUDY 3:  FASTENERS TRADING BUSINESS

How Fasteners Manufacture and Trader managed Inventory and reduced costs with ACTouch.com?

A AUTO FASTENERS COMPANY STRUGGLING WITH INVENTORY AND CASH–FLOW.

• 5+ year old company started by a first generation Entrepreneur.
• Growing by 80% to 100% every year.
• Lot of items are imported and has a dedicated & loyal customer base developed over the years.
• 30+ Employees with a turnover of more than Rs.10.00 Crs (USD 2M)

Challenges that Customer wanted to resolve ASAP.

• Slow moving inventory and not able to track what is available and how to sell them fast enough?
• Huge money was in inventory.
• Not able to track and sell stocks in FIFO model.
• Not able to supply materials as per the Order. Backlogs of orders are more than expected.
• Delays and not able to assess the Customer payment and its status.

Modules Deployed.

• Sales Inquiry – CRM & Prospects management tool
• Inventory control with Batch numbers, Bar Code generation etc

How ACTouch.com, helped to resolve the challenges?

• Redefined the Purchase and Sales cycles with Inventory controls
• Inventory management through auto batch numbers and Barcode generation as stocks are received Stores department
• FIFO module deployed to clear the stocks
• Inventory and Payment alerts were set for Senior Management
• Cloud Solution helped to redeploy the resources for other controls and work.

According to CEO, within 6 months:

• Stock and inventory controls improved by 35%.
• Paper movement and printing is reduced by 60%
• Business is increased by 50% as the same People could do more operations efficiently

ACTouch.com is designed for Manufacturing Communities and integrate them. eMail us at [email protected]

Actouch Technologies

ACTouch Technologies is a start up company from India with its development centre at Bangalore, India. We focus on SMEs with our Cloud ERP Manufacturing Software. Company Founders have Management and Engineering degrees from prestigious colleges like INSEAD Business School France, NUS Singapore, BITS Pilani etc. Prior to starting this company, Founders have worked for 20+ years in large MNCs & Indian IT Big companies (Infosys Technologies, Misys, Thomson Reuters etc) and managed multi-million dollars of Software business heading APAC Regions.

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ERP Success and Failure Stories

by Panorama Consulting Group | May 4, 2020

Any time a business undergoes a transformation, there’s opportunity for major growth. Yet, the opposite could also hold true if the rollout isn’t managed correctly. This is especially the case with ERP implementations.

While most ERP projects are designed to help companies improve efficiencies, reduce costs and meet customer expectations, there are plenty of projects that don’t exactly go as planned. When this happens, the consequences can be serious and long-term.

Are you considering a new ERP system ? If so, it helps to take a cue from others who have been there. Today, we’re sharing a few ERP success and failure stories to prepare you for the journey ahead. Read on to learn the steps to take, and the ones to avoid.

88.5% of respondents said they deployed or plan to deploy AI at their organization. Learn about AI adoption and other ERP trends by downloading our latest report.

How to Differentiate Between ERP Success and Failure

In many cases, if a project is on-time and on-budget, that’s enough to consider it successful, but that isn’t the case with ERP. To measure true ERP ROI, it’s important to define and quantify how your ERP project team will gauge success in terms of specific ERP business benefits .

In other words, what outcomes do you expect to achieve by moving to ERP? For instance, do you want to reduce overhead and lower inventory costs? What about improving supply chain visibility or quickening your time to market?

It’s important to set key performance indicators (KPIs) at the outset and share them with key stakeholders. This way, you can track results and see if your project is truly delivering the value you expect.

ERP Failure Stories

While no one likes to dwell on the negative, ERP failure stories can provide important insights into the challenges and obstacles that many organizations face when implementing a new enterprise-wide software solution.

To that end, let’s take a look at three recent ERP projects that failed to deliver the ROI the client expected, resulting in a high-profile failure that led to reputational damage, financial setbacks and ERP lawsuits . 

MillerCoors

As a result of multiple business acquisitions and brewing industry consolidation, MillerCoors was running seven unique instances of SAP ERP by 2014. Amid the chaos, the newly merged company hired an IT services firm to roll out a more unified structure designed to serve the entire enterprise.

However, what should have been a seamless transition was anything but. The initial rollout resulted in several issues, including:

• Eight critical severity defects
• 47 high-severity defects
• Thousands of other issues and problems

Three years later, in March 2017, the project had failed so badly that MillerCoors sued the firm for $100 million. The claim? The firm hadn’t allocated the proper resources to the project and made promises it couldn’t keep.

In response, the firm countersued, claiming that internal mismanagement issues led to the project’s downfall. Later, it was revealed that the ERP contracts, which were released with the legal documents, were loosely based on a pre-existing “general services” agreement that was poorly defined.

A few takeaways and lessons learned from this ERP failure include:

• Always get the specific details of your ERP contract in writing
• Ensure the IT firm you partner with has dedicated resources to assign to your project
• Ensure internal management buy-in and participation in an ERP rollout

When nationwide grocery chain Lidl partnered with SAP, the two German giants should have found great success from the start. However, that wasn’t the case.

In 2011, the two teams started working together to transition Lidl away from its legacy systems and onto a more unified ERP platform. Yet, by 2018 the project was so far gone that Lidl scrapped it altogether.

Though there were many issues that led to the fallout, one challenge was Lidl’s unique pricing structure. While most companies base their inventory systems on the retail price they charge for their goods, Lidl has always taken a different approach. They use the price they pay for the goods as their metric.

This single quirk required a customized SAP solution, which triggered a domino effect of implementation issues. In addition, there were issues with executive turnover in Lidl’s IT department, as well as challenges with the consultancy tasked with overseeing the implementation.

With this failure, we learn that:

• It’s important to relay ERP customizations at the very beginning of a project
• Clients and ERP providers should  set expectations  early on so there are no surprises
• IT leaders play a major role in a successful ERP project and should support the company’s goals

ERP Success Stories

We can’t include a list of high-profile failures without mentioning some ERP successes! Here are a few to inspire and encourage you as you begin your own implementation. 

LG Electronics

By any measure, LG is an industry giant. With nearly 115 subsidiaries and more than 82,000 employees working in 40 countries, the company needed a solution to consolidate and centralize its HR operations.

When LG attempted to unify using legacy systems, the challenges were enormous. Issues ranged from sky-high maintenance costs to inefficient decision making, manual processes and more. An ERP platform was in order, and Oracle fit the bill.

Out of the gate, the ERP solution had to be robust enough to solve all of LG’s existing pain points, which were mostly attributed to its location-specific programs and processes. A few top issues included:

• Reporting obstacles at the top level
• A lack of transparency and automation
• A disengaged workforce
• Few, localized resources for employee development
• Decision making difficulties

The five-year project was spread out into five planned phases. At the completion, LG was able to achieve the following benefits, among others:

• Expansive data hosting
• Simple scalability
• Cost savings
• Seamless data migration
• Centralized access and control
• Real-time reporting
• Better-informed decision making

From this ERP “win”, we can take away the following ERP implementation success factors :

• Always express your operational needs at the start of an ERP project, however expansive they might be
• Set clear objectives at the beginning
• Don’t rush an ERP implementation but stagger into phases if feasible

B2B Product Supply Company

We’ll wrap up this list of ERP successes with one of our own. One of our past engagements involved helping a B2B Product Supply Company navigate from a manual, paper-based setup to an automated ERP solution.

Before we came on board, the company relied on Microsoft Excel and Order Tracker to handle its ERP requirements. Although the setup was rudimentary, the company was experiencing impressive growth. To meet customer expectations and meet sales demand, it was time for a modern upgrade.

Our ERP consulting firm was chosen to help lead this company into a successful ERP implementation. In the initial stages, we used our  ERP selection methodology to determine which ERP software to select. In addition, we performed  business process reengineering  to accommodate the new setup and help the company improve operational efficiencies.

A few of the lessons learned during this project include:

• It’s critical to define goals and obstacles up-front (e.g. current processes, pain points, ERP business requirements)
• You should evaluate ERP vendors carefully and weigh their offerings against your business needs

A new ERP system requires changes to your existing business processes and workflows

Learn from These ERP Success and Failure Stories

When you’re in the initial stages of planning an ERP implementation, the road ahead might seem riddled with potholes. Yet, it doesn’t have to be this way. When you learn from these ERP success and failure stories, you can ensure that your project achieves the business goals you expect.

While you might experience hiccups along the way, a firm foundation sets the stage for a profitable, rewarding journey. Request a free consultation below to learn how to successfully select and implement ERP software .

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Decoding Starbucks’ Brewing Success: A Case Study on the Impact of ERP Systems

by PanGrow | Feb 6, 2024

With over 32,000 stores spanning 83 global markets, Starbucks has cemented itself as the premier roaster, retailer and marketer of specialty coffee worldwide. But what many customers don’t realize is the enormous operational complexity behind delivering consistent, quality products and service across thousands of locations. 

Starbucks struggled with fragmented systems and processes before embarking on an ambitious ERP implementation in 2008. Let us delve into this case study to understand this better!

Life Before ERP: Disconnected Systems, Inconsistent Processes

In Starbucks’ early days, they relied on limited point-of-sale and financial systems patched together for their handful of stores. However, hyper-growth took priority over operational integration. With thousands of new locations opening globally, Starbucks’ systems became increasingly fragmented:

POS, inventory, procurement, finance, HR, and warehouse management systems were siloed and disjointed:

• No unified data source or version of truth across the enterprise
• Processes were ad-hoc across geographies, with no standardization
• The supply chain was plagued by manual inventory management and inaccuracy
• Forecasting, reporting, and insights were challenged by fragmented data
• This complex web of systems caused significant pain points:
• Supply Chain Inefficiencies:
• Lack of inventory visibility resulting in waste and shortages
• Difficulty forecasting demand and managing suppliers
• Distribution and logistics bottlenecks

Operational Chaos:

• Inconsistent procedures across stores and markets
• Difficulty training employees and maintaining brand standards
• No unified view of performance metrics

Constrained Growth:

• Hard to expand into new markets and add stores rapidly
• Challenging to integrate acquisitions
• IT complexity and costs spiraling out of control

Reduced Profits:

• Increasing overheads eating into margins
• Limited financial visibility to identify cost issues
• Declining same-store sales growth

Facing slowing revenue and eroding margins, Starbucks knew it needed an operational overhaul. Integrating its business processes through ERP would provide the visibility, efficiency, and flexibility to restart growth.

Brewing a Bold ERP Initiative

In 2008, Starbucks announced a bold initiative to implement SAP ERP across their enterprise. With CEO Howard Schultz at the helm, they committed $250-300 million over 2.5 years to deploy a comprehensive solution integrating:

• Finance and Accounting
• Supply chain and inventory
• Procurement
• Warehouse management
• Production planning
• Quality control
• Sales order processing
• Business intelligence and analytics
• Human capital management
• Master data management

The complex project scope encompassed redesigning processes, rolling out to over 11,000 stores, and change management across 200,000+ employees.

Key Strategies for Success

• A phased approach focusing first on Canadian and US stores
• Close IT and business collaboration throughout
• Customized training programs across the organization
• Pilot testing and iterative refinements before global rollout
• Ongoing enhancements even post-implementation

With careful planning and commitment from leadership down, Starbucks saw their multi-year ERP investment bear fruit.

The Transformational Business Impacts of ERP

While costly and requiring significant change management, Starbucks reaped tremendous benefits from unified ERP:

• Complete Visibility into Operations
• ERP delivered detailed visibility across procurement, inventory, logistics, sales, costs, and profitability across geographies. This guided better decision-making.
• Supply Chain Optimization
• Inventory accuracy rose from 60-70% to over 95% through real-time ERP tracking. Waste declined and profitability improved.
• Speed and Agility
• Automation of everything from ordering to new store opening accelerated Starbucks’ responsiveness to market demands.
• Enhanced Customer Experience

A 360-degree customer view enabled personalized marketing and promotions as well as omni-channel conveniences like mobile ordering.

Foundation for Innovation

With a modern integrated platform, Starbucks could rapidly launch new initiatives from loyalty programs to AI-enabled mobile features.

Cost Control and Financial Discipline

Automation and integration drove efficiency. Granular cost analytics also improved expense management and controls.

Business Results

Beyond benefits like $30 million saved annually in IT costs, Starbucks credits ERP for supporting tremendous business growth since 2008:

• 25% increased earnings in 2011 post-ERP implementation
• 60% revenue growth from 2011-2019 with over 10,000 new store openings
• Expansion into 5 new international markets
• Consistent innovation in products and customer experience
• Stock price growth from $9 in ’08 to $90 in ’22

The Proof is in the Pumpkin Spice Latte

Starbucks’ ERP journey illustrates how aged systems and “duct tape” processes hindered even this iconic brand. But with visionary leadership, robust project management, and employee change management, they transformed into an operationally excellent business. The numbers speak for themselves – normalized earnings growth, global expansion, and a stock price nearly 10X higher. 

Starbucks is now positioned to continue innovating and exciting customers worldwide. So next time you sip a pumpkin-spiced latte, take a moment to recognize the enterprise-wide coordination and efficiency that delivered it!

Like any complex IT project, Starbucks’ ERP implementation was not without challenges. But the rewards have been tremendous – streamlined operations, global consistency, cost reductions, and business growth. For any enterprise struggling with fragmented systems and inconsistent processes, Starbucks provides an inspiring case study of how reengineering technology and processes hand-in-hand can enable innovation and competitive advantage. 

With ERP now firmly brewed into their operations, Starbucks is positioned to continue excelling on all fronts – from supply chain to sustainability, and global customer experience to profitability.

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Why enterprise resource planning initiatives do succeed in the long run: A case-based causal network

Pierluigi zerbino.

Department of Energy, Systems, Territory and Construction Engineering, University of Pisa, Largo Lucio Lazzarino, Pisa, Italy

Davide Aloini

Riccardo dulmin, valeria mininno, associated data.

The minimal data set underlying the results described in the paper can be found in the paper and in the Supporting Information file.

Despite remarkable academic efforts, why Enterprise Resource Planning (ERP) post-implementation success occurs still remains elusive. A reason for this shortage may be the insufficient addressing of an ERP-specific interior boundary condition, i . e ., the multi-stakeholder perspective, in explaining this phenomenon. This issue may entail a gap between how ERP success is supposed to occur and how ERP success may actually occur, leading to theoretical inconsistency when investigating its causal roots. Through a case-based, inductive approach, this manuscript presents an ERP success causal network that embeds the overlooked boundary condition and offers a theoretical explanation of why the most relevant observed causal relationships may occur. The results provide a deeper understanding of the ERP success causal mechanisms and informative managerial suggestions to steer ERP initiatives towards long-haul success.

1 Introduction

Despite the COVID-19 pandemic, the global Enterprise Resource Planning (ERP) market is experiencing a prosperous trend in 2021 [ 1 ]. In 2020, SAP, the ERP market leader, has registered a greater increase in turnover than expected [ 2 ] by harnessing the Cloud technologies [ 3 ]. During the last five years, ERP systems have been building new momentum on the wave of topical streams, such as postmodern ERP [ 4 ], Big Data [ 5 ], Internet of Things [ 6 ], Process Mining [ 7 ].

Notwithstanding this, ERP failure rates are notoriously high [ 8 ], ranging from 40% to 90% according to different failure meanings [ 9 , 10 ]. The costs associated with a failure an ERP initiative may put the whole organisation at stake [ 11 ]. In 2016, Gartner [ 12 ] estimated that the lack of capabilities to fulfil future postmodern ERP strategies may give rise to a widespread failure on the ERP cloud initiatives. The contrast between growing investments and high failure rates characterises the ERP conundrum: in spite of a wealth of research regarding ERP success, the scientific literature is still lacking a thorough comprehension of why ERP initiatives succeed. This brainteaser may be rooted in two reasons.

First, the ERP scientific literature has spent remarkable efforts on figuring out what ERP success is, i . e ., which constructs may define it, and how it may occur, i . e ., which patterns may link the constructs to each other, but has mostly neglected why the proposed relationships may be observed [ 13 ]. The little focus on why a phenomenon is expected to occur points out the lack of causal explanations for such a phenomenon [ 14 , 15 ]. In investigating a phenomenon and its implications, exploring what and how has mainly descriptive purposes tied to an empirically driven perspective [ 16 ]. Delving into the why may enrich this valuable approach with theoretically driven explanations of the phenomenon. Conversely, the lack of why limits the understanding of a phenomenon [ 16 ] and the development of conceptually rigorous insights into it [ 17 – 19 ].

Second, in attempting to define and explain ERP success, the scientific literature has rarely considered its multi-stakeholder nature. This multi-stakeholder perspective may embody an interior boundary condition under which success occurs. Overlooking it may widen the gap between the theoretical models that define and explain the phenomenon under study–ERP success, in our case–and the empirical phenomenon itself [ 20 ]. Exploring the why of a phenomenon on the basis of theoretical models that might not adequately fit the reality may lead to theoretical inconsistency, hindering knowledge cumulativeness in the corresponding research stream [ 21 ].

To tackle these issues, this paper aims at answering the following research question:

" Why does ERP success occur ?"

In doing so, we refer to success in the long run, which is conceived in the ERP post-implementation phase called "onward/upward" by [ 22 ]. This phase begins after overcoming the performance dip that typically occurs during the shakedown phase and is associated with the potential achievement of most ERP benefits [ 22 ]. It is mainly at this stage that it is possible to effectively assess whether the attained results have lived up to the expectations. Thus, success notions such as implementation and project success are outside the scope of this work because the success of an Information System (IS) is " not intended to understand implementation or project success ", which may be better studied by change and project management theories [ 23 , p. 504]. We used the ERP life cycle by [ 22 ] as a theoretical reference for the development of this paper.

To answer the research question, we developed a multiple case study based on the theory-building guidelines by [ 24 ]. From a managerial standpoint, to achieve our research objective may help decision makers in planning more accurate strategies for attaining the post-implementation benefits and in better addressing the use of resources during the ERP initiative.

The findings contribute to the ERP success scientific stream by showing that the continuous flow of ERP benefits may be achieved by the synergistic actions of three causes: the degree to which the ERP specifications are fulfilled over time; the user-system interaction, conceptualised as a cognition that diverges from frequency-oriented evaluations; and the continuous compliance between the attained benefits flow and the stakeholders’ expectations. This contrasts the predominant behavioural conceptualisation of system use and emphasises the role of the expectations and the longitudinal assessment of the system and information quality in attaining ERP success.

The remainder of this work is structured as follows: Section 2 provides a theoretical background; Section 3 expounds the research design; Section 4 illustrates the case findings; Section 5 discusses the results; Section 6 concludes the manuscript.

2 Theoretical background

This section reviews ERP post-implementation success to better highlight the research gap (2.1) and structures a theoretical framework for leading the development of this work (2.2).

2.1 ERP post-implementation success

ERP systems are commercial software packages that automate and integrate firm’s business processes [ 25 ]. Their implementation enables and often drives a business process reengineering based on best practices embedded in the software [ 26 ]. ERP systems are part of the Enterprise Systems [ 27 ], i . e ., extensive organisation-wide applications including components such as ERP, Customer Relationship Management, Supply Chain Management, Product Lifecycle Management, Advanced Planning and Scheduling, Manufacturing Execution Systems, Business Intelligence and Data Analytics.

ERP systems are characterised by high integration– i . e ., their parts are tightly amalgamated–and complexity– i . e ., the relationships among their parts are numerous, nested, and interdependent [ 28 ]. Higher levels of integration and complexity usually correspond to a wider scope of the ERP initiative [ 28 ], which may thus gather interest and expectations from an increased number of stakeholders. This is a major reason why ERP success should be conceptualised from a multi-stakeholder standpoint [ 29 – 31 ], and not only from the perspective of the adopting firm and/or the end users. Example of additional stakeholders may be customers, suppliers, project leaders, key users, shareholders, vendors.

By drawing on [ 32 ], we define ERP post-implementation success as the effective exploitation of the ERP system and of the information it generates to achieve the intended benefits flow over time from the perspective of all the pertinent stakeholders. This excludes the technical installation success and all the related indicators ( e . g ., cost overruns, time estimates, project management metrics). Henceforth, for the sake of brevity, we use "ERP success" rather than "ERP post-implementation success". We make the following distinction regarding the benefits:

• Immediate benefits: benefits associated with the early effects of ERP-enabled business practices adoption and of modifications to the system and/or the information it generates. They directly affect profitability and are operational, e . g ., reduction of labour, inventory, and quality costs.
• Future benefits: benefits associated with the mid- and long-term effective consolidation of the ERP-enabled business practices adoption and of modifications to the system and/or the information it generates. They include most of the benefits that indirectly affect profitability, such as managerial benefits ( e . g ., improved decision making), strategic benefits ( e . g ., support to growth plans), organisational benefits ( e . g ., facilitated organisational learning), and potential benefits ( e . g ., future ERP-enabled investment opportunities).

Table 1 reviews how the scientific literature has conceived and operationalised ERP post-implementation success. The papers were identified through a systematic review we conducted on Scopus using the following search string: ("ERP" OR "Enterprise Resource Planning" OR "Enterprise Systems" OR "Organisational-wide information system") AND (success OR benefits OR impacts). The query was restricted to journal papers. To grant comprehensiveness of the review, no restrictions on the year or type of publication were applied. Furthermore, the review was enriched by applying the snowballing method.

The review we conducted highlights two evidences. First, surprisingly, only [ 53 ] probed why ERP success may occur. Despite the undoubted merit of their work, the ERP success definition they adopted coincides with ERP business benefits from the perspective of the implementing firm only. This overlooks the multi-stakeholder nature of ERP success. Moreover, their definition of post-implementation combines the shakedown and onward/upward phases. This may be debatable because, in these two phases, the conceptualisation of the success notion is deeply different [ 57 ].

Second, ERP success has been defined and described by drawing from the Information System (IS) success field. This was carried out in two ways. In the first one, the ERP literature used a single construct ( e . g ., User Satisfaction or Organisational Benefits) as a proxy for ERP success. This may be questionable because it is strongly subjective [ 72 ] and may lead to contrasting results [ 23 ]. In the second one, the ERP literature has borrowed and re-specified success models from the IS environment to the ERP one. Most papers equal ERP success to IS success explained through the IS success models by DeLone and McLean [ 39 , 59 ]. In particular, they generally leverage the quality of the information system, the quality of the information generated by the system, and the benefits or impacts yielded by the system to explain the success of the ERP. However, to the best of our knowledge, the ERP success literature has not adequately taken into account the multi-stakeholder perspective, despite its relevance to the topic. This finding may be worrying. Indeed, from a theory building perspective, the multi-stakeholder perspective is an interior boundary condition that may better specify the domain of a theoretical model, enhancing its adherence to the empirical system [ 20 ].

Therefore, the reason(s) why ERP post-implementation success occurs is still an open research question. A prominent reason for this may be that an ERP-specific interior boundary condition ( i . e ., the multi-stakeholder perspective) has often been discussed but not sufficiently considered in investigating the causal mechanisms conducive to ERP post-implementation success.

Thus, the next section sets a theoretical framework for investigating the reason(s) why ERP success may occur.

2.2 Theoretical framework

The awareness of commonalities and differences between IS failure and success has been effectively exploited for investigating the success of specific ISs, e . g ., monitoring systems [ 73 ]. In particular, while recognising the causal asymmetry between IS success and failure, [ 73 ] set the simplifying hypothesis that " the negated concept , ie , the lack of success , is the same thing as the opposite concept , ie , failure " (p. 404). Indeed, to a certain extent, IS failure and success are linked to each other [ 74 ].

Although IS success and failure are two sides of the same coin, they are not totally specular because the relationships among variables describing IS phenomena do not necessarily assume causal symmetry [ 75 ]. IS failure may propagate in a domino effect [ 76 ], while success does not. " With the benefit of hindsight one can usually reconstruct a systematic pattern of events that led to the failure " [ 76 , p. 284], while this is not true for success. Moreover, failure and success antecedents are not necessarily opposites [ 77 ]. Despite these differences, " there can be multiple , equally effective pathways to IS success " [ 73 , p. 385], and this equifinality is valid for the IS failure too [ 76 ].

Lyytinen and Hirschheim [ 76 ] presented one of the most complete and spread empirical taxonomies of IS failure, consisting of four failure types:

• Process failure . It refers to two aspects of inadequate project management performance in developing an IS. First, the IS development process cannot create a workable system because of severe issues in the design, implementation, or configuration phases. Second, more frequently, the IS development process oversteps budget and/or time constraints.
• Correspondence failure . The IS design objectives expressed by the management are not met. It represents the management’s perspective of IS failure.
• Interaction failure . The users do not use the IS as intended or reject it because of their negative attitude towards it.
• Expectation failure . An IS may attract the attention of several stakeholders. This attention consists of expectations on how the IS will serve the stakeholders’ interest. Expectation failure occurs when the IS fails to meet a stakeholder group’s expectations. Thus, while Correspondence failure regards the system requirements expressed from the internal management perspective only, Expectation failure potentially voices the expectations of all the other stakeholders.

This IS failure taxonomy leverages four IS domains (Project, Correspondence, Interaction, Expectation) to classify several failures reported in the IS literature. The concepts underlying such domains are rather general: Project relates to time and/or budget; Correspondence to design objectives/specifications; Interaction to IS use/acceptance; Expectation to stakeholder group’s expectations. It is our contention that the four IS domain may be harnessed in a success context too. Indeed, the definition of the most prominent IS success constructs may be associated with the main concepts underlying such domains ( Fig 1 ). We excluded the Process domain because if refers to a project management standpoint that is out of the scope of this manuscript. To identify the most prominent IS success constructs in Fig 1 , we conducted a systematic literature on the IS success topic. Further detail on the protocol and the results of this review are provided in the Supporting Information file.

Hence, we argue that the Correspondence, Interaction, and Expectation domains may be framed as logical clusters according to which explain ERP success and collect the related evidences to answer our research question. A similar approach was adopted by [ 29 ], who used the four IS domains as a theoretical reference to define four ERP success categories and to integrate them into an ERP Critical Success Factors taxonomy. Thereby, the three selected domains are not intended to have any descriptive or explanatory power per se. Instead, their role is to offer a theoretical reference for steering the collection and arrangement of the evidences to pursue our inquiry.

3 Research design

To pursue our research objective, we adopted the case study methodology for theory building. Case research is always proper in IS research and appropriate at any stage of knowledge about a phenomenon, particularly when capturing the context of the phenomenon is of utmost importance [ 78 ]. We chose the inductive, positivist, case-based roadmap for theory building by [ 24 ] because of two reasons. First, the positivist epistemological approach aims at identifying the individual components of a phenomenon and at explaining them [ 78 ]. Second, inductive methods strongly relate to the development of explanations [ 79 ].

This section expounds the methodological choices underpinning the multiple case study. To facilitate its understandability, it was structured in three parts in line with the case research framework by [ 80 , p. 172]: case selection (3.1), data collection (3.2), and data analysis (3.3).

3.1 Case selection

To define the case population, we considered only firms that completed the project phase. To exclude excessively small cases, we chose manufacturing firms with at least 250 system users and that challenged the same ERP implementation category [ cf . 81 ]. We excluded the Vanilla implementations because of their small number of prospective users and limited scope and budget [ 81 ].

By following a geographical proximity criterion within the defined population, we selected four European cases, the unit of analysis of which was the whole ERP initiative. The number of cases provided sufficient analytical power [ 24 ]. To achieve both the theoretical replication and the literal replication, we investigated two cases in which the ERP initiative was in the advanced onward/upward phase and two cases in which it was at the very beginning of this phase. As regards the latter cases, our investigation proceeded until over two years after returning to "normal operations". Indeed, while success is mostly conceived within the advanced onward/upward phase, some operational concerns are strongly linked to the early period of this phase [ 30 , 31 ].

Company A is a worldwide Swedish–Swiss multinational corporation that operates in the field of automation and power. The plant in which we carried out the case study experienced an Oracle roll-out after being acquired by Company A.

Company B is an engineering and systems technologies international company that decided to replace its legacy system with a Microsoft Dynamics NAV ERP. Company B top managers were initially reluctant to adopt the ERP because wanted to retain the flexibility of their old system. Yet, they changed their mind because their existing ICT infrastructure was Microsoft-based.

Company C is an iron and steel international company that implemented an Infor ERP. After initial indecision, the top managers advocated the replacement of the old legacy system because it was not able to support their business anymore due to the lack of required functionalities.

Company D is an Italian national leader in manufacturing and installing cargo systems for liquified gas carriers. Its extant legacy system was not able to back up the firm’s growth and was replaced by a JD Edwards ERP solution.

Table 2 summarises the main characteristics of the ERP implementations.

3.2 Data collection

We developed a case study protocol according to [ 82 ]. Each case started with a kick-off meeting with the Project Sponsor, the Information and Communication Technology (ICT) Manager, and the Project Manager of the ERP initiative–if different from the ICT manager. During the kick-off meeting, commitment to the research project was guaranteed, visits were arranged, and the data collection methods were discussed and approved. Fig 2 summarises the data collection process, which started in April 2015 and ended in October 2020.

The data collection methods we relied on are:

Personal notes by the investigators regarding the on-going development of the case and the links with other cases were recorded in field notes [ 78 ].

• Participant observation [ 82 , 84 ]. We employed the participant observation method for observing the end users interacting with the ERP system in their daily routine, according to the guidelines by [ 85 ]. For each functional area in each case, the corresponding manager suggested two end users to observe, and the observation was performed until saturation.
• Archival records [ 82 ]. For each case, we analysed the main project documents. In addition, as suggested by [ 83 ], we probed quantitative data on the ERP initiatives, particularly about the size of the ERP system, scope, and budget.

3.3 Data analysis

The data analysis ( Fig 4 ) was arranged in a two-stage way: within-case analysis (Steps 1–4) to develop a set of causal explanations for figuring out the mechanisms that led to ERP success; and cross-case analysis (Step 5) to cross the results from the within-case analyses for trying to generalise the findings.

The data analysis steps in Fig 4 are detailed in the following:

• Step 1 : developing interim case summaries . Drawing from the case archives, an interim case summary [ 86 ] was developed to synthesise and review the case data and findings.
• Step 1/bis : inter-functional analysis . For each case, we compared the evidences stemmed from the different business functions by contrast tables [ 86 ] for obtaining an inter-functional overview concerning the success topic across the three logical clusters ( i . e ., Correspondence, Interaction, Expectation).
• Step 2 : holistic coding . The purpose of the holistic coding step [ 86 ] was to elicit the Conceptual Units from the case evidences. A Conceptual Unit is the main concept expressed by a unit of case data and appropriately labelled. Table A1 in Appendix A in the S1 File reports some examples of holistic coding. The outcomes from this step were jointly discussed among the authors to reach consensus regarding the sixty-one identified Conceptual Units.
• Step 3 : causation coding . We formalised the causal sequences, called Causal Chains (CCs), among the sixty-one Conceptual Units by causation coding [ 86 ]. A CC is a plausible, causal link between two or more Conceptual Units. Appendix B in the S1 File contains Table B1, which displays an example of the CCs we developed from case B, and Figure B1, which graphically illustrates how they may be used. Appendix B in S1 File also includes further details on how Conceptual Units form CCs.
• Step 4 : developing within-case causal networks . By combining all the CCs from the four cases and the three logical clusters, we developed twelve within-case causal networks. A within-case causal network is a graphical representation of multiple CCs and its purpose is to group and illustrate the causal relationships stemmed from the cases.
• Step 5 : pairwise comparison . The within-case causal networks were pairwise compared to assess their similarities and differences and to synthesise them into three cross-case causal networks (one for each logical cluster).
• Step 6 : formalisation . By combining the three cross-case causal networks, reported in the Supporting Information file, we developed the overall ERP success causal network. Furthermore, we discussed how the resulting network embedded the multi-stakeholder boundary condition, why the main causal relationships were observed, and the theoretical and managerial implications.

This section briefly reports the results from the within-case analysis (4.1) and illustrates the results from the cross-case one (4.2).

4.1 Within-case analysis results

The four manufacturing firms are characterised by different approaches and challenged the ERP implementation for different reasons. Despite some operational issues, all of them overcame the shakedown phase and are currently benefiting from their new system. Table 4 describes the company cases.

The four ERP initiatives are judged as successful according the respondents. Although the point in time in which some benefits were perceived has been different than expected, the overall benefits flow has been satisfying.

For the sake of brevity, we did not include the within-case causal networks because they are an intermediate result that is included within the cross-case analysis. Despite the differences among the cases, no idiosyncratic Conceptual Units or CCs were found.

4.2 Cross-case analysis results

The overall ERP success causal network in Fig 5 contains a wealth of information on plausible causal mechanisms leading to ERP success. For the sake of brevity, this section focuses on the most relevant findings concerning the role of the Correspondence (4.2.1), Interaction (4.2.2), and Expectation (4.2.3) Conceptual Units in explaining ERP success.

4.2.1 Correspondence cluster

The realisation of a proficiently usable ERP is strongly driven by the satisfactory implementation of the specifications, which regard the system, the needed input, and the desired output and which emerge from the as-is and to-be analysis of the business processes. Thus, the specification implementation, review, and test cycles are the core concepts in the Correspondence cluster.

The ERP specifications should not be considered as indisputable data over time because they may be reasonable only in the specific point in time which they were approved in, based on the information available in that moment. Some of them may be successfully tested and be still valid in the shakedown phase, as occurred in case D. They may be successfully tested, but changed later in the shakedown phase because of operational issues, as highlighted by a Key User from the manufacturing function in Case C:

" We need to push the materials into production by the system as fast as possible because our production peak occurs in the summer […]. They [the functional managers] satisfied our requests . Two months later , during the summer , [name retained for privacy] started yelling with the keyboard in his hands because the system was still too slow ."

Moreover, some specifications may be successfully tested and still valid in the shakedown phase, but partly inadequate in the onward/upward phase–as stemmed from case A. The reasons for this latter occurrence are the unlikelihood to conduct the functional and non-functional tests in a complete way in all the possible scenarios and the difficulty in evaluating some specifications until after utilising the ERP massively.

Furthermore, some specifications may change over time during the onward/upward phase for responding to market needs, e . g ., in case A, the company switched from standard management practices to lean production ones. Notably, the CIO from case B stated that:

" The most important aspect is that the ERP includes the requested functionalities . The potential mistakes should not be linked to a wrong implementation but to a right implementation of specifications that , later , may turn out to be partly unsatisfactory and be modified/updated ".

More importantly, the fulfilment of the specifications over time is key to attain a benefits flow, as shown by some relevant case quotations in Table 5 .

Interestingly, the quotations in Table 5 show that the relationship between fulfilling the ERP requirements and achieving the benefits flow develops over time. During this time, the users may experience usage of the ERP and of its information, as suggested by the link between the Correspondence and the Interaction clusters in Fig 5 . While this aspect is more evident in the following section, we argue that:

The system and information specifications may not be static over time even during the onward-upward phase and may causally affect the ERP benefits flow indirectly through the Interaction Conceptual Units.

4.2.2 Interaction cluster

The user-system interaction may highlight the need to revise the implemented specifications to improve the usability of the ERP and of its information. This may occur during the shakedown phase, but also during the onward/upward phase after utilising the ERP for a while. In case A, the users of the logistics and finance functions experienced mediocre usability, despite appropriate vendor and package selection and the complete fulfilment of the specifications. The interaction was described as "intricate" to the extent that, after almost one year of the onward/upward phase, the Logistics Manager required additional human resources for managing the same activities:

" After almost one year , […] four new employees were needed to perform our activities because this devilish system was muddled and not convincing ."

Interestingly, this opinion was quite the opposite during the test phases. Moreover, additional issues in the sourcing functionalities emerged later fortuitously, only when the sourcing users had to revise some sub-sourcing activities.

In case A, the usability was also negatively affected by the excessive number of unused functionalities. Most of them were specifically requested and/or customised, since they were considered as " absolutely necessary to our daily routine " by the key users and the process owners. Notwithstanding this, one year and half after the go-live, 30% of the overall functionalities were removed because they were not actually used, burdening the windows and the Graphical User Interface, entailing relevant albeit superfluous maintenance costs, and garbling the maintenance of other functionalities.

In line with this, several respondents from cases B and D, particularly those from the accounting and finance functions, underlined that an ERP system has its own life cycle and it is not advisable to squander it by poor usability and suboptimal configurations. In addition, the Chief Commercial Officer from case C stated that:

" One may use an ERP that works as planned , but if s/he does so without smooth and serene utilisation , this may lead to abandon the system in the long run ".

ERP updates or modifications usually require users time to adapt by additional specific training and education activities. These activities make users more confident while using the ERP, and the more their use is acknowledged as correct, the more they build improved awareness and knowledge. In particular, the awareness concerns how the system works, how its information output is yielded, how to interpret the data, and which are the effects that user’s action exert on the business processes. The knowledge regards the link between the purpose ( e . g ., performing a task) for using the system and its information, on one hand, and the commands and functionalities for achieving this purpose, on the other hand.

These higher awareness and knowledge gratify the user and generate an enhanced interaction–an advanced form of interaction that is not meant as simply mechanical. In case B, the achievement of the advanced interaction required almost two years over the end of the shakedown phase. On one side, it entailed users realising the ERP-enabled improvements in their daily operations. On the other side, it allowed them to detect a mistake in the elaboration of an index for the production order management. In case A, under the same circumstances, the users discovered a function for solving misalignments between purchase orders and work orders. In case C, two users found a licit shortcut in the ERP for avoiding using a bugged functionality. Interestingly, the vendor-side Project Manager in case D stated that:

" The interaction with the ERP must be appropriate , where appropriate means to use the system in a way to avoid not to use the system . It is necessary to understand how the data steer the execution of the processes […] or the processes may fail even if the ERP works fine ".

Fig 5 exhibits a causal effect of this enhanced interaction on the ERP benefits flow. As shown by some case quotations in Table 6 , this effect is stronger when the above-mentioned awareness and knowledge are higher or, in other words, when the interaction is further enhanced.

Accordingly, we contend that:

User-system interaction, when developed by building awareness about using the system and its information and knowledge concerning the purpose for using the ERP, may cause the achievement of ERP post-implementation benefits.

4.2.3 Expectation cluster

The case evidences pointed out the usefulness of distinguishing between direct and indirect stakeholders. Direct stakeholders are those who directly interact with the ERP, i . e . the users. They may include end end/key users, process owners, members of the project team, but also external actors, e . g . partner suppliers that may be allowed to use some ERP functionalities for checking a stock level (cases A and B) or for loading a Bill of Materials (case D). For instance, an external Key User from a partner supplier in case A reported that:

"[Firm A] procures our engines since years . […] I pushed for including a functionality in their system to grant us visibility of their engine stock levels . We did not want to disappoint each other ."

Another example of external actors is a partner customer that may exploit other functionalities to intervene in the product design (case B) or to check the reserved stocks (cases A and C).

Indirect stakeholders are actors who have expectations towards the ERP initiative, but that do not interact with the system. Indirect stakeholders should be informed of the status of the ERP initiative, or they would experience the consequences of the implementation without figuring out whether their expectations were not met. Table 7 contains some examples of indirect stakeholders suggested by the case informants.

Both direct and indirect stakeholders have expectations towards the ERP initiative, which are summarised by the Aiming at business continuity and onward/upward performance Conceptual Unit. They type of performance to improve depends on the expectations that each stakeholder sets for the ERP initiative. Nonetheless, such expectations exert different effects on the ERP benefits flow. Direct stakeholders’ expectations cause ERP benefits indirectly by the translation of these expectations into requirements to fulfil, which eventually lead to Enhanced interaction through the Correspondence and Interaction CCs ( Fig 5 ). Instead, indirect stakeholders’ expectations showed a mutual causal relationship with the ERP benefits flow. This seems to be rather trivial, since having an expectation is not enough to achieve a benefit by itself. Although this unexpected finding is discussed in the next section, we can state that:

Direct stakeholders’ expectations may indirectly cause ERP benefits by the enhanced interaction between the users and a proficiently usable ERP if these stakeholders are actively involved in the elicitation of the requirements.

Indirect stakeholders’ expectations and the flow of ERP benefits may causally affect each other.

It is worth underlying that we assume that all the expectations are realistic. This is a basic assumption hypothesising that the change management activities conducted during the implementation project phase have been successful. Basic assumptions may not be perfectly true, but provide leverage in understanding the phenomenon under investigation. As underlined by Burton-Jones & Grange (2013, p. 634), making basic assumptions is typical in building theoretical concepts also in other fields, e.g.: in Economics, assuming that humans are rational.

5. Discussion

This section argues why ERP success may occur (5.1) and discusses the scientific and managerial implications (5.2).

5.1 Why ERP success may occur in the long run

The analysis of the causal network in Fig 5 revealed that ERP success may be mainly caused by three conjoint mechanisms: first, the causal action of direct stakeholders’ expectations on Enhanced interaction through ERP proficient usability ; second, the causal effect of Enhanced interaction on ERP benefits flow ; third, the mutual relationship between the indirect stakeholders’ expectations and ERP benefits flow .

As concerns the first causal mechanism, its explanation may be supported by the Expectation-Confirmation Theory (ECT). ECT posits that the match between the expectation towards a product or service prior to purchase and the performance perceived when using that product or service leads to post-purchase satisfaction, which in turn forms a repurchase intention [ 87 ]. Within the IS scope, ECT suggests that IS continuance is mainly explained by satisfaction with prior IS use, which stems from the consistency between the expectations over the IS and the perceptions after using the IS [ 88 ]. As pointed out by the ERP causal network, to satisfy direct stakeholders’ expectations means that the definition, review, and test cycles of the implemented specifications have fulfilled the established requirements. The initial interaction with the ERP developed in this way may entail further revising the specifications, which improves the proficient usability of the ERP. This increases the consistency between the expectations that direct stakeholders have towards the ERP and their judgement on the ERP. According to ECT, such a consistency makes users satisfied and more likely to continue using the ERP [ cf . 89 ]. As showed by our findings, the prolonged interaction between a proficiently usable ERP and trained and satisfied users allows users to make cognitive progresses regarding ERP-related awareness and knowledge while performing a task. In doing so, users master the ERP and become further gratified and satisfied. This higher, aware, and knowledgeable satisfaction over time generates the enhanced interaction and users’ willingness to use the ERP at their best.

The second causal mechanism requires explaining why Enhanced interaction may cause ERP benefits flow . This mechanism may be explained by the Theory of Effective Use (TEU) by [ 90 ]. TEU posits that the IS use founded on the task-user-system interdependence is a necessary and sufficient condition for attaining performance improvements. Analogously, the Enhanced interaction Conceptual Unit is meant as an interaction involving interdependence among system and information characteristics, task characteristics, and user skills and capabilities. In particular, Fig 5 displays that it is generated by a set of CCs that consider the proficient usability of the ERP system and information, user capabilities in the interaction with the ERP, and the user-task link while using the ERP for one or more purposes. Furthermore, TEU claims that, given a task and a system, the use value may vary according to the user’s capabilities, leading to variations in achieving benefits. This is consistent with the findings reported in Table 6 , which stress that a more aware and knowledgeable use causally leads to more benefits. Therefore, the CCs generating the enhanced interaction Conceptual Unit and the rationale underpinning Effective Use notion are consistent with each other. This analogy may thus explain the interaction-caused ERP benefits flow we observed.

The third causal mechanism accounts for the causal effect of the indirect stakeholders’ expectations on the ERP benefits flow. Admittedly, it is unlikely that having expectations over ERP benefits may be a necessary and sufficient condition to attain them. This direct action is attributable to the enhanced interaction. Instead, indirect stakeholders’ expectations strengthen the commitment and the economic support towards the ERP: although this does not cause any benefit, it grants continuity of the ERP initiative. Thus, the synergistic action of such expectations and of the enhanced interaction may cause the achievement of progressive ERP benefits distributed over time, i . e ., the attainment of a distributed flow of ERP benefits.

In addition, attaining ERP benefits may cause a positive effect on future direct and indirect stakeholders’ expectations because it highlights that the outcomes from the ERP initiative are satisfactory. The stakeholders become more certain about the usefulness of the ERP and more inclined to use and support it over time. In this regard, ECT overlooks that consumer’s expectations towards a product or a service often changes following the consumption experience [ 88 ]. In our case, the achievement of an ERP benefit is advantageous for one or more stakeholders, which directly experience the positive impacts of the ERP implementation. Consequently, their realistic expectations of future benefits become more optimistic because their cognitive processes set a new positive reference to guide their decision processes. The new optimistic expectations shape their positive attitude towards the ERP initiative and, thus, their direct or indirect support towards it, which is needed to guarantee the potential flow of future benefits. Conversely, although lower expectations do not necessarily prevent the achievement of a benefit, they may reduce the stakeholders’ support and the interest towards the ERP initiative. If the attainment of one or more benefits does not reshape any low expectation positively, the system might be abandoned.

5.2 Implications for theory and practice

The proposed explanations for the causal mechanisms conducive to ERP success have some implications for the ERP success research stream. First, in evaluating the quality of an ERP system and of the information it generates, e . g ., through the renowned System Quality and Information Quality constructs [ 91 ], it may advisable to consider the degree to which the desirable system and information specifications are fulfilled over time. This introduces a temporal dimension in the evaluation to reflect the evidence that ERP specifications are not a long-lasting constraint to be verified in the go-live date only. Instead, their assessment should account for the potential interventions on the ERP to cope with future, contingent upgrades/changes in the system or in its information during the ERP whole life cycle. It is not uncommon for turbulent market environments to call for changes in the business requirements during the onward/upward phase, which may imply adjustments in the ERP system and/or in the business processes over time [ 92 , 93 ]. Although the quality aspects have largely been considered in the ERP success literature [ e . g ., 30 , 32 , 55 , 56 , 63 , 65 , 94 , 95 ], to the best of our knowledge their multiple evaluations over time have never been linked to any ERP success causal mechanism. Staehr and colleagues [ 53 ] cunningly posited that additional IS projects may leverage off the ERP system to drive ERP benefits over time. Yet, they did not draw any relationship between ERP success and the longitudinal evaluation of the system and information quality. Instead, according to our findings, this overlooked aspect is critical to guarantee logical and temporal continuity between direct stakeholders’ expectations, proficient usability, and enhanced interaction over time.

Second, our findings suggest that the user-system interaction should be conceptualised as a cognition to capture the user cognitive progresses regarding aware and knowledgeable use. This is relevant because some ERP benefits are obtained only by massive use over long time [ 27 ], and their achievement is also affected by the user cognitive changes needed to adapt to the ERP modifications. The ERP success literature has mostly considered user-system interaction as a behavioural form of use, which cannot explain ERP success because frequency-related measurement of user-system interaction do not necessarily entail success [ 96 ]. For instance, [ 56 ] dropped any use-related variable in investigating the role of Information Technology governance in driving the ERP success because they were “ not seen as a fitting dimension of success unless system use is voluntary , which is not the case for ERP ” (p. 260). Our findings confirm this. In addition, they suggest that re-conceptualising the use of the system and of the information it generates as a cognition rather than a behaviour may be more effective in explaining performance improvements [ 97 ]. This provides an alternative view on the user-system interaction issue ( cf . Table 1 ). Indeed, the behavioural conceptualisation is not able to grasp the above-mentioned cognitive aspects based on the system-task-user interdependence, which is instead fundamental to include the ERP integration and complexity notions while conceiving the use of an ERP [ 98 ].

Third, the degree to which the realistic expectations of direct and indirect stakeholders are fulfilled does matter to the achievement of the ERP benefits flow. Although [ 99 ] found that creating and maintaining realistic expectations of future benefits may positively affect the level of perceived benefits, the ERP literature has not addressed the role of the expectations in explaining the benefits flow from a multi-stakeholder perspective. Yet, we found that the expectations-benefits compliance may causally ensure the necessary endorsement, funding, and active participation and interaction to attain the distributed flow of benefits over time. Thus, to address the multi-stakeholder perspective in theorising and assessing ERP success, such a compliance should not be overlooked.

From a managerial standpoint, our findings provide useful hints. First, users should be enabled to work with higher self-cognition and with increased system and information awareness and knowledge to beget a benefits-generative enhanced interaction. To satisfy both direct and indirect stakeholders, the enhanced interaction should be consistent over time and should be constantly intertwined with high ERP proficient usability, which should be assessed in multiple points in time according to the system life cycle ( e . g ., at fixed time intervals and after system every update). In this regard, the top management may design an incentive system to foster enhanced interaction, e . g ., a system that grants benefits to the users that exhibit increased system awareness in carrying out their activities. Second, it is advisable to assess the expectations-benefits compliance over time to figure out if the Correspondence-Interaction-Expectation loops maximise the ERP benefits flow. This knowledge of the ERP success causal mechanisms may help firms in better addressing the managerial efforts, reducing both the squandered resources during the ERP life cycle and the variability in achieving the ERP benefits. In turn, this may positively affect the propensity towards any rollout initiative.

6. Conclusions

The outstanding efforts spent by academics and practitioners over the last twenty years have transformed the ERP phenomenon in a renowned and mature reality. Nonetheless, the ERP acronym is still associated not only with long-lasting holistic benefits, but also with episodes of echoing failures, financial meltdown, and notorious lawsuits. Despite some notably contributions [ e . g ., 53 , 100 ], why ERP initiatives do succeed in the long run is largely unaddressed. One of the main reasons for this gap may be the lack of the context-specific "multi-stakeholder perspective" boundary condition in addressing ERP success. This widens the gap between any theoretical explanation of ERP success and the empirical occurrence of such a phenomenon, and may imply theoretical inconsistency. To fill this gap, we adopted the inductive case-based theory-building methodology by [ 24 ] and different qualitative data analysis techniques by [ 86 ] to explain why ERP success may occur. Thereby, we developed an ERP success causal network that embeds the multi-stakeholder overlooked boundary condition.

According to the findings, we justified the occurrence of the main Causal Chains by leveraging the Expectation-Confirmation Theory and the Theory of Effective Use. We argue that ERP post-implementation success may occur because of the conjoint and synergistic action of causal mechanisms related to ERP specifications, users’ cognitions, and stakeholders’ expectations. Thereby, this manuscript contributes to the understanding of the why theoretical criterion of the ERP success and proposes some implications regarding the ERP post-implementation success theorisation.

Nonetheless, this work is not free from limitations. Despite its appropriateness in establishing relationships among variables, case research methodology cannot always specify the direction of causation [ 78 ]. Moreover, although four cases provide sufficient explanatory power to attempt theory building [ 24 ], additional cases would have implied higher confidence in the completeness of the theory. Although no idiosyncratic evidences were found, more cases may have further reduced the gap between the ERP success causal network and the empirical phenomenon under study. This is true for the number of interviews too, which could be increased. In increasing the number of the cases, the data collection may be extended to non-European implementations to take into consideration possible ERP cultural misfits [ 101 ]. In fact, the geographical context which the cases were developed in might affect the managerial conduct [ 102 , 103 ].

The possible avenues for further research are rooted in such limitations. First, additional case studies may be conducted to strengthen the internal validity of the conclusions. Second, the explanation of the causal mechanisms we analysed may be formalised into a success model that may be operationalised and tested. This may open the way to the empirical application of a validated model. Third, text mining tools may be used to automate the analysis of the interview data and, thus, to account for additional data sources and larger data samples.

Supporting information

Funding statement.

The author(s) received no specific funding for this work.

Data Availability