Nike ERP Implementation
1. What are the failure factors for the first NIKE-i2 ERP-SCM implementation?
All ERP implementations have risks associated that can lead to failure situations. The complexity of ERP systems together with demanding business environment, represent big challenges for companies when implementing an ERP.
In the case of Nike, the situation is even more challenging because of the worldwide ERP deployment, and the large and complex scope of the project. Inevitably, and like all ERP implementations, Nike-i2’s project faced complications at the different stages of the implementation cycle but those complications could have been minimized if the so called “Critical Success Factors” (CSF)1 had been planned and managed properly.
Using the 5 stages structure proposed in the report “Drawing Competitive Advantage through Successful ERP
Implementation Projects”2, the failure factors are analyzed in detail in the following sections.
First stage of implementation (project preparation):
● One of the failures in the Nike-i2 ERP implementation was the lack of Formalized project plan/schedule.
Feeling the market pressures, Nike did not commit to a disciplined plan and rushed up ERP’s implementation, by “began to input data for its forthcoming Spring 2001 line when the system was still to stabilize”3 , giving reason to the opinions that projects cannot be driven by external deadlines4. Industry experts also warned about the boomerang effect (tight and unrealistic deadlines would come back in low quality results in the future) but Nike felt “i2 technology was smaller and therefore easier to implement”.
The result was the project failure and a financial storm (reduced profits) in the following financial periods.
● The executive team as the responsibility to define the mission and scope of the project by analyzing the project business benefits and goals, and aligning them with strategic business goals. It is clear that in this case, Nike’s executives were too ambitious by
All ERP implementations have risks associated that can lead to failure situations. The complexity of ERP systems together with demanding business environment, represent big challenges for companies when implementing an ERP.
In the case of Nike, the situation is even more challenging because of the worldwide ERP deployment, and the large and complex scope of the project. Inevitably, and like all ERP implementations, Nike-i2’s project faced complications at the different stages of the implementation cycle but those complications could have been minimized if the so called “Critical Success Factors” (CSF)1 had been planned and managed properly.
Using the 5 stages structure proposed in the report “Drawing Competitive Advantage through Successful ERP
Implementation Projects”2, the failure factors are analyzed in detail in the following sections.
First stage of implementation (project preparation):
● One of the failures in the Nike-i2 ERP implementation was the lack of Formalized project plan/schedule.
Feeling the market pressures, Nike did not commit to a disciplined plan and rushed up ERP’s implementation, by “began to input data for its forthcoming Spring 2001 line when the system was still to stabilize”3 , giving reason to the opinions that projects cannot be driven by external deadlines4. Industry experts also warned about the boomerang effect (tight and unrealistic deadlines would come back in low quality results in the future) but Nike felt “i2 technology was smaller and therefore easier to implement”.
The result was the project failure and a financial storm (reduced profits) in the following financial periods.
● The executive team as the responsibility to define the mission and scope of the project by analyzing the project business benefits and goals, and aligning them with strategic business goals. It is clear that in this case, Nike’s executives were too ambitious by