For many companies, moving from legacy systems to a cloud-based ERP platform can usher in an era of improved performance and heightened success. However, for Travis Perkins, an ERP project was simply an expensive lesson in how not to approach an implementation.
In September 2020, it was announced that software giant, Infor, paid the well-known U.K. retailer a staggering $5.8m to help cover the costs associated with its failed, four-year ERP project. While that’s a hefty sum, it only covered a portion of the $148m that the effort cost.
What led to the Travis Perkins-Infor lawsuit? More importantly, how can you safeguard your own organization from falling into the same potholes? Let’s take a look.
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The Travis Perkins-Infor Settlement: Behind the Scenes
Founded in 1988, Travis Perkins has long been a highly regarded name in the hardware and home improvement niche. In its heyday, it was the go-to source for contractors seeking building materials, plumbing and heating supplies, tools and other resources.
Yet, as the construction sector became increasingly digitized in the early 2010s, the company started to lose ground against smaller, more tech-savvy competitors.
In a 2017 interview, Travis Perkins’ group strategy director acknowledged this shortcoming. He explained that the company intended to deploy digital capabilities to become more customer-focused.
The plan was to replace the company’s existing, 30-year-old legacy systems with a cloud-based ERP system from Infor. This new platform, which would encompass 24,000 users, would integrate the company’s disparate functions, so Travis Perkins poised to provide Infor with a $200m payout over the next 15 years.
However, by the fall of 2020, Travis Perkins was more than $137m in the red, and Infor was in hot water.
How did it all snowball so drastically? Let’s take a look at a few of the red flags, and how you can avoid them in your own ERP implementation.
1. The Design Phase is Critical
With legacy systems dating more than three decades back, it’s understandable that Travis Perkins wanted to move forward with the ERP software implementation as quickly as possible. However, it’s never a good idea to rush the initial design phase.
Insiders explained that the Infor project moved forward without a great deal of design scrutiny. Specifically, there were no formal specifications given for the system’s primary components, including:
- Database schemas
- Security schemas
One of the main reasons for the oversight? The Travis Perkins IT department did not have direct involvement in the effort from the beginning. Instead, reports note that business leaders overseeing the project deemed those technical aspects not critically important. Instead, they insisted they could be decided in a later phase.
Taking the time to define process and system requirements from the very beginning can prevent headaches and unexpected costs down the road. Had the Travis Perkins team involved their IT staff in this first stage, they could have identified issues at the onset.
2. Organizational Change Management is Key
At the time of the 2017 interview, the Infor project was still in the design phase. At that time, the global strategy director noted that the company was already facing a few roadblocks. Change resistance was one of them.
When you’re dealing with workflows and systems that have been in place for 30 years, you’re bound to experience some form of pushback and hesitation, especially from long-term employees.
An effective change management plan can help you circumvent these obstacles. In this plan, we recommend assigning key team members to lead the change effort and outlining activities that include:
- Clearly communicating the details of the change
- Explaining the benefits the change will provide
- Answering any questions that may arise
- Managing resistance as it occurs
- Training employees to use the new system
The “people side” of change is just as important as the technical side. In many cases, it’s the most significant barrier to a successful ERP implementation. Acknowledging this reality and putting a plan in place to support employees is essential.
3. Early Data Management Impacts Your Final Rollout
Another issue brought to light was that the company was experiencing data management challenges. With systems of such age, it’s easy to see why this might be the case.
For one, data requirements have changed significantly since the 1980s, as have design principles. The global strategy director explained that years ago, the leading notion was that data took up too much space. As such, IT leaders were taught to minimize the amount they stored, to conserve both computing power and company resources.
Now, as we all know, data is considered a major asset. Instead of reducing it, we’re now looking for any way possible to acquire more of it. As long as it’s clean and accurate, volume is less of a concern.
Travis Perkins discovered that not having enough data was a major hindrance to building the solid base that it needed for the new Infor system.
While hindsight is 20/20, companies planning a future ERP project can learn from this oversight. Taking the time now to actively collect, clean and organize data can make the cutover phase much easier.
Planning is Essential to ERP Success
If we’ve learned anything from the Travis Perkins Infor settlement, it’s that ERP implementation planning is essential. While some of those initial steps might not be the most glamorous, they are vital to creating the foundation you need to realize the benefits of ERP.
Our ERP consultants are here to help you start your project on the right foot. Contact us below to learn more and receive a free consultation.