foxmeyer

foxmeyer Using the Foxmeyer case study (Scott) discuss how Foxmeyer's failure might have been caused by ineffective conception and planning. Abstract This interpretive case study of FoxMeyer Drugs' ERP implementation is based on empirical frameworks and models of software project risks and project escalation. Implications of the study offer suggestions on how to avoid ERP failure. Introduction FoxMeyer Drugs was a $5 billion company and the nation's fourth largest distributor of pharmaceuticals before the fiasco. With the goal of using technology to increase efficiency, the Delta III project began in 1993. FoxMeyer conducted market research and product evaluation and purchased SAP R/3 in December of that year. FoxMeyer also purchased warehouse-automation from a vendor called Pinnacle, and chose Andersen Consulting to integrate and implement the two systems. Implementation of the Delta III project took place during 1994 and 1995. According to Christopher Cole, chief operating officer at Pinnacle, the FoxMeyer mess was "not a failure of automation. It was not a failure of commercial software per se. It was a management failure" (Jesitus, 1997). Perhaps management had unrealistic expectations. Did management expect technology to be a "magic bullet"? (Markus and Benjamin 1997a, 1997b). In reality, it was the opposite. FoxMeyer was driven to bankruptcy in 1996, and the trustee of FoxMeyer announced in 1998 that he is suing SAP, the ERP vendor, as well as Andersen Consulting, its SAP integrator, for $500 million each (Caldwell 1998, Stein 1998). Project Risks The Delta III project at FoxMeyer Drugs was at risk for several reasons. Using a framework developed for identifying software project risks (Keil, Cule, Lyytinen and Schmidt 1998), this study classifies the project risks at FoxMeyer into (1) customer mandate, (2) scope and requirements, (3) execution and (4) environment. First, the customer mandate relies on commitment from both top management and users. At FoxMeyer, although senior management commitment was high, reports reveal that some users were not as committed. In fact, there was a definite morale problem among the warehouse employees. This was not surprising, since the project's Pinnacle warehouse automation integrated with SAP R/3 threatened their jobs. With the closing of three

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