Shane Co., a Colorado-based jewelry store retailer, filed for Chapter 11 bankruptcy in Denver on January 12, citing a mismanaged SAP implementation as a key factor of its financial difficulties. To help clients and the public better understand the scope of Shane Co.’s ERP troubles – and how companies can avoid similar situations – Panorama Consulting Group, a Denver-based independent consulting firm, will present a free webcast, “Lessons Learned From Shane Co.’s ERP Failure,” on Thursday, January 29 at 11 a.m. EST.
“There is no question that a properly installed ERP package can help a company transform – and better maintain – its overall operating functions,” said Eric Kimberling, president of Panorama Consulting Group. “But no company should invest in an ERP project without a realistic understanding of both the risks and the rewards offered by this software, as well as how to effectively manage its implementation and usage.”
Key Steps to Realize the Full Benefits of an ERP System
- Invest time in ERP software selection. Small and mid-sized businesses have dozens of viable software options to choose from. Companies must take the time to evaluate and select the ERP system appropriate for their needs.
- Adequately manage project scope and cost. A company must balance its annual revenue with the cost of an ERP implementation.
- Create realistic budget and implementation plans. Any company considering a new ERP system must understand software companies may understate the cost and duration of an ERP implementation in order to close the deal. An independent ERP evaluation will often alleviate such mismanagement of expectations.
- Define and test business requirements and workflows. In order to ensure maximum effectiveness and minimum business interruptions, companies must clearly define their requirements – and thoroughly test their ERP systems – prior to go-live.
“There is no reason that a 200 million dollar company like Shane Co. should have spent 36 million dollars and taken three years to implement an ERP solution,” said Kimberling. “Our research shows that the average company spends nine percent of its annual revenue on an ERP implementation and the average Panorama client spends just five percent of its annual revenue. An independent ERP evaluation would have limited the pitfalls of the project early in the process – saving the company’s time, money and reputation.”
Kimberling will present additional findings during the free “Lessons Learned From Shane Co.’s ERP Failure” webcast on January 29 at 11 a.m. EST.