Nike Inc. ( Nike ) Essay

Nike Inc. ( Nike ) Essay

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Nike Inc. (Nike) is another example of an organisation that failed to successfully implement a new ERP system due to the lack of importance placed on critical success factors. Nike is the largest manufacturer of athletic shoes, apparel and other sports equipment in the world. Nike employs more than 44,000 people worldwide and in 2012 alone their revenue topped 24 billion US dollars (Jeng & Dunk, 2013).

A company the size of Nike would obviously see serious financial implications if an ERP system wasn’t successfully implemented, and in 2000, that’s exactly what happened. Nike decided to go ahead and implement an ERP system designed by i2 Technologies that would streamline communications with buyers and suppliers and lower operating costs (Jeng & Dunk, 2013). The ERP system disrupted Nike’s inventory, leading to shortages of stock and costing the firm $100 million in lost sales and a 20% stock dip. The reason for the failure boils down to Nike over customising and complicating the ERP system (Jeng & Dunk, 2013).
Careful ERP package selection is a key critical success factor that cannot be overlooked, and as shown, can be financially disastrous. Complicated customization of an ERP system should only be done if necessary. It is important to note that it is near impossible to incorporate a ‘one size fits all’ ERP as different industries have different goals and different objectives that they want to succeed in more than others, while small customizations are appropriate to match the organisations wants and needs (Shahin, 2004).

Electronic Enterprise
An electronic enterprise (E-enterprise) is a company that involves communications and taking part in business electronically via the internet (Sharma, Lavania, & Gupta, 2011). An E-ent...


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... On the other hand, Alcoa is an example of an organisation that successfully implemented an ERP system as they incorporated key critical success factors to do so. While Hershey and Nike did not take into account critical success factors such as project management and careful selection of the ERP package, Alcoa implemented both effective vendor support and maintaining clear goals and objectives, leading to financial advantages and effective collaboration. E-enterprises need to be made aware of critical success factors as they subject to fast changes in technology and their staff need to be cross trained in different areas.

While ERP systems can bring substantial benefits to an organisation, it is important to note that without successful implementation, an ERP can be disastrous. Critical success factors are the key to implementation and should not be overlooked.

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