IST 301 Lecture Notes - Lecture 5: Data Migration, Big Bang, Kpmg
4 Dec 2017
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Part 1:
Search the Internet and scan information technology industry magazines or Web sites to find one example of
an information technology project that had problems or failed. Write a 1 to 2 page description of what went
wrong and why and what possible lessons can be learned in retrospect.
The case study that I found regarding problems with information technology project is based on
Hershey’s ERP implementation. Hershey Company is a major chocolate manufacturer in North America that
deals with customers all around the world. In 1996, the company decided to upgrade its traditional legacy IT
systems by implementing Enterprise Resource Planning environment. Despite Hershey’s objective to enhance
their customer service and competitiveness, ERP implementation has caused the company to lose millions of
dollars. The project was done right before the Halloween and its failure has resulted in mismanaging over $100
million worth of Hershey’s product to its customers.
The problem with ERP implementation at the Hershey Company could be divided into two different
causes. Firstly, the main reason behind such large magnitude of failure is due to ERP systems testing. The
Hershey’s implementation team excluded the process of systems testing before going live with the new ERP
system. The company made this decision to finalize the project as soon as possible to reduce business
expenditure and save time. However, without the thorough testing of different phases within the newly
implemented ERP system, specific aspects such as data migration and training is simply not guaranteed. This
results to the “big bang” implementation approach where the ERP system goes through different components
all at once as the system goes live without having any sort of testing beforehand. Secondly, the Hershey’s
made a mistake with the scheduling of the ERP implementation. The company took the complex ERP
implementation project that was suppose to take 4 years and reduced it to 30 months. Such reduction in time
has affected the scheduling of the project and result in rushing the implementation process. In addition, the
company also made a huge mistake by ending its project right before the busiest season for the business.
Clearly the employees were not fully trained for the new system and it was a disaster to think that everything
will work fine without having a smaller trial round.
There are few things to be learned through the Hershey Company’s case study of ERP
implementation. Most importantly, it is crucial for businesses to test the newly adopted system using
methodology designed to simulate realistic operating scenarios. This process will not only minimize to risk of
the system collapsing when going live but also provide opportunities to enhance aspects that are lacking.
Another lesson to be learned is to never rush a project that involves large scale of IT implementation. Whether
it is the executives or the managerial decision, giving the adequate scheduling for a project is just as important
as any other components of the project. Afterall having a shortened schedule may cut costs and save time for
the company, there is a high risk of malfunction or even complete failure when operating complex projects.
Lastly, it is very important to seek advice and receive inputs from external consulting firms especially when
dealing with technological implementation that requires high set of professional skills and related experiences.
Through the involvement of third party within the project, Hershey Company could have avoided catastrophic
