Nike Case Study
Nike Case Study
The US-based Nike Corporation announced that it had generated profits of $97.4 million, around $48 million below its earlier forecast for the third quarter ended February 28, 2001. The company said that the failure in the supply chain software installation by i2 Technologies3 was the cause of this revenue shortfall.
This admission of failure also affected the company's reputation as an innovative user of technology. The supply chain software implementation was the first part of a huge project to install an integrated ERP system from SAP, and customer relationship management (CRM) software from Siebel Systems.
For over a year, Nike reeled as a result of this failure. i2 and Nike blamed each other in public, for the failure and this led to a further downslide in the share price of both the companies. Analysts pointed to lapses in project management, too much customization and an over reliance on demand forecasting software. Nike insiders raised doubts about the 'Single Instance Strategy'4 being followed by Nike. However, the company remained firm and relentlessly pursued its Single Instance Strategy for SAP implementation. The guiding instruction as put across by Gordon Steele (Steele), CIO of Nike was that the "Single Instance was a decision not a discussion."
By 2004, the company had successfully implemented its Nike Supply Chain (NSC) project, indicating that its centralized planning, production and delivery processes were right for the Single Instance Strategy. With this success, Nike's Single Instance Strategy became the desired approach for many companies implementing ERP software. Nike used SAP for 95% of its global business. An AMR Research5 survey of 110 companies of annual revenues of $500 million or more using ERP revealed that only 23% had adopted a single instance strategy while 36% were planning to put it in place, while another 17% were trying to get the instances down to one per major global region and were investing
The US-based Nike Corporation announced that it had generated profits of $97.4 million, around $48 million below its earlier forecast for the third quarter ended February 28, 2001. The company said that the failure in the supply chain software installation by i2 Technologies3 was the cause of this revenue shortfall.
This admission of failure also affected the company's reputation as an innovative user of technology. The supply chain software implementation was the first part of a huge project to install an integrated ERP system from SAP, and customer relationship management (CRM) software from Siebel Systems.
For over a year, Nike reeled as a result of this failure. i2 and Nike blamed each other in public, for the failure and this led to a further downslide in the share price of both the companies. Analysts pointed to lapses in project management, too much customization and an over reliance on demand forecasting software. Nike insiders raised doubts about the 'Single Instance Strategy'4 being followed by Nike. However, the company remained firm and relentlessly pursued its Single Instance Strategy for SAP implementation. The guiding instruction as put across by Gordon Steele (Steele), CIO of Nike was that the "Single Instance was a decision not a discussion."
By 2004, the company had successfully implemented its Nike Supply Chain (NSC) project, indicating that its centralized planning, production and delivery processes were right for the Single Instance Strategy. With this success, Nike's Single Instance Strategy became the desired approach for many companies implementing ERP software. Nike used SAP for 95% of its global business. An AMR Research5 survey of 110 companies of annual revenues of $500 million or more using ERP revealed that only 23% had adopted a single instance strategy while 36% were planning to put it in place, while another 17% were trying to get the instances down to one per major global region and were investing