An ERP system is supposed to make work easier for your employees. It isn’t meant to make operations more complicated. This is a lesson that cosmetics giant Avon learned in 2013, when it officially pulled the plug on its SAP ERP integration project after four years of work.
Where did the Avon ERP implementation failure originate, and what exactly went wrong? Today, we’re looking at where this project derailed, and how you can keep your own implementation on track.
A Failed Payroll System Implementation
Panorama’s Expert Witness team was retained to provide a forensic analysis and written report to the court regarding the failed implementation of a major software developer’s ERP/payroll system.
3 Lessons Learned From This ERP Failure
1. Prioritize Ease of Use
Yes, a new ERP system should be feature-rich and full of functionality. However, more importantly than that, it should be easy to use. Otherwise, even the most robust solution will sit on the shelf as employees revert to their familiar workflows.
One issue at Avon was that the SAP software was more complex than most users were comfortable handling. More focus on usability testing could have helped the company recognize this issue earlier.
Then, budget could have been allocated to employee training and organizational change management.
Alternatively, the company could have chosen a system with a different user interface. This wouldn’t have invalidated the need for change management and training, but it certainly would have reduced much of the employee resistance.
2. Ensure Adequate System Testing
As soon as the ERP solution launched, it didn’t operate as expected.
At first, Avon sales reps were unable to log into the new website. Then, once they got in, they couldn’t accept or save any new orders, nor could they reserve inventory for their buyers.
When these users experienced issues, the problems didn’t stay isolated. Instead, they snowballed. This is because Avon utilizes a multi-level marketing approach, relying on part-time reps to sell to their inner circles through at-home shows and networking events.
Thus, when one rep couldn’t access the site, it affected their entire downline. As such, those toward the bottom who hadn’t risen in the ranks quite yet decided that the minimal income they were making through Avon wasn’t enough to deal with the stress of the new system.
While system testing might not have saved this project completely, there’s a good chance that many of the errors and issues could have been mitigated or resolved.
3. Ensure Component Integration
There were many moving parts in Avon’s new enterprise software platform. Though SAP was the primary software vendor, the web front-end was not built around an SAP user interface (UI). Instead, Avon used a third-party eCommerce solution to fill that role: IBM WebSphere.
While there’s nothing wrong with utilizing different vendors in a software project, it’s critical to ensure the seamless integration of all systems.
In this case, the IBM WebSphere system was supposed to connect to the SAP system’s APIs, thus delivering the front-end app and UI. However, somewhere along the way, a massive disconnect occurred.
Not only did this make the platform more error-prone, but it also made it less user-friendly.
Find Digital Transformation Success and Avoid ERP Failure
An ERP software solution can be the first step toward a successful digital transformation. When you automate and streamline your back-office functions, you can empower your entire organization to work more effectively.
However, it’s important to make sure that the tools you’re putting in your employees’ hands will actually serve them, not sabotage them. The Avon ERP implementation failure is proof that ERP selection and implementation are challenging, and you can lose more than just dollars.
Contact our ERP consultants below for a free consultation.