As a follow-up to our recent post, Avoiding Bankruptcy From an ERP Implementation: Three Dirty Secrets, we’d like to take it to the next level and discuss how an organization actually can recover from being driven into bankruptcy by an ERP failure. Indeed, it’s a worst-case scenario, but also one we’ve seen too many times to ignore. The good news is that bankruptcy, whatever its cause, doesn’t have to mean the end of the organization. Take Denver, Colorado-based jewelry retailer Shane Co., for instance. As we’ve detailed previously, the company filed for Chapter 11 bankruptcy protection in January 2009 following a failed SAP implementation. After closing three locations, it filed a plan of reorganization and eventually emerged from bankruptcy protection in December of 2010.
While we’re not privy to how Shane Co. managed its ERP failure preceding or following the bankruptcy filing, there are a number of ways that Panorama suggests companies emerge from a situation such as this:
1. Reassess the ERP software. In Shane Co.’s case, it’s arguable that SAP wasn’t the best fit for the organization. If the company is experiencing such a high level of difficulty with its ERP system that its threatening its operations on a whole, then there’s a good chance that the team did not evaluate or select the software appropriately.
2. Reorganize the ERP project. In the same way a company must reorganize its operations to emerge from a bankruptcy filing, it too must reorganize its ERP project to emerge from an ERP failure. Panorama offers the third-party, independent guidance needed to salvage an ERP implementation . . . and save a company.
3. Allocate the resources to move forward. Understandably, a company in bankruptcy is watching every penny. This doesn’t mean, however, that funding for the ERP system can be abandoned. Indeed, the company needs to hire a third-party ERP consultant to craft a comprehensive implementation and business benefits realization plan to get the project back on track. Throwing the baby out with the bathwater by renouncing the ERP system will do nothing but derail any future profitability.
Panorama’s 360-degree approach to ERP projects means we can step in at any time during selection or implementation or following a failed or stalled selection or implementation. Click to learn more about Panorama’s ERP methodology and offerings, and don’t forget to download our recent white paper, Lessons Learned From a Government ERP Failure. Though the focus is on the public sector, the lessons learned are applicable to private organizations as well.