Santosh Padhi

MMS-I
Roll No. 554

HP Case

Hewlett-Packard (HP) is a US-based leading computer hardware and information

technology company. It is known for its expertise in various product fields and consulting
capabilities, especially in the segment of SAP & ERP implementations. This case
highlights the reasons behind its decision to migrate to a centralized ERP system. The
circumstances that led to the ERP migration failure are mentioned. The case also
examines the damage control efforts made by the company. The case highlights the
barriers to successful ERP implementation and explores the chances of reoccurrence of
such failure.

HP introduced the My SAP because it offered various benefits over the previous software
which is as follows:
1. It enabled all programs to be run on single browser
2. It had the query option which would make it easier to use
3. There is a reduction in IT costs
4. It would provide greater speed in implementation
5. It would improve forecasting and hence increase transparency
The reasons for failure of implementation of ERP are as follows:
1. There was a problem of communication between the various teams.
2. There was lack of effective product training and improper product data
management led to problems between the legacy system and the new SAP system.
3. The system has been tested only for standardises orders and not for customised
orders. The contingency plan being an expanded version of an old plan used for earlier
migrations failed to deal with these issues.
4. It was not able to forecast the demand for customized products nor was the
existing capacity good enough to handle additional orders.
5. Inadequate Implementation Support/Training - The IT personnel did not have
adequate time to develop their skills for the new system.

Implications Of Poor Implementation

• About 20% of the orders failed to move from the legacy system to the new one
due to programming errors.
• HP was able to fix this within a month but orders began to backlog.
• Backlogs counted to US$ 160 mn. Revenues down by 5%.
• Analysts raised credibility of HP as a consultant for SAP.
• The company had to direct orders through distributers and other orders through
flight to speed up order fulfillment.
• This increased the expenses.
• Customers were unhappy and there were continuous complaints about delayed
processing, configuration and duplicated orders.
HR’s Role In Ensuring Proper Implementation
• Refresher training was not helpful because of huge backlogs
• Therefore, valuable suggestions and feedback from the employees were ignored
• Inadequate training time to develop employees’ skills in the new system
• This led to a feeling of distrust of upper management and dissatisfaction among
employees
• Upper management was perceived by employees as being overpaid and inefficient
• Active involvement of employees was not encouraged or allowed in the
organization
• There also existed a cultural divide within the organization and work culture
differences between HP & Compaq leading to incompatibility between departments
• There was no cooperation or coordination within IT Team & Business Team
• All of these factors led to high attrition

Preventive Measures That Could Have Been Adopted By Hp

• Too much interdependence among teams should be removed. This would lead to
efficient communication thereby better process implementation
• Ensure each employee goes through sufficient training before joining work
• The company should have motivated employees and ensure that their suggestions
are heard and if beneficial, even implemented
• Ensure a new process/ product undergoes proper testing
• HP should increase dependency between front and back end teams