Short Story Of Success And Failure Of Nestle

Stories of the success and failures of ERP in real life, a story of Nestlé

ERP has become a nightmarish idea for many companies in previous years, and since its first appearance until almost 25 years later lots have been said about the system. Plenty of failures in the headlines of news-articles together with a high price has made companies think of the actual use of this new system, often articles state the amount of loss a company made by implementing ERP systems. While scholars have proven the ERP system to work. Plenty of large corporations have shown proven benefits from implementing the systems. However failure stories tend to stick better in public opinions.

Nestle is the worlds market leader on food and beverages with an annual revenue of $76 billion. Which singed a $200 million contract with SAP and used another $80 million for consulting and maintenance to install the ERP system for the company. Nestle intended to use the SAP system to centralize its 200 different operating companies and subsidiaries in 80 different countries.

Previous to the decision of using ERP systems, Nestle used 80 different IT units that ran nearly 900 IBM AS/400 midrange computers, 15 mainframes, and 200 UNIX systems , enabling observers to describe its infrastructure as a complex network where little to non cooperation was possible due to

Change management is the key issue, and so for ERP systems. And change takes time, training and good managerial cooperation and understanding. And according to the article Ms. Dunn CIO of Nestle U.S.A. said the following "If you weren’t concerned with how the business ran, you could probably install the ERP software in 18 to 24 months," she says. Then "you would probably be in the unemployment line in 19 to 25 months." She being the person that lobbied for getting the ERP system in the U.S. knew it would take more than just the software to make this operation a