HP's CIO Points to Internal Issues in ERP Project Snafus

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September 27, 2004 (Computerworld) -- Eight months after he became CIO and executive vice president of global operations at Hewlett-Packard Co., Gilles Bouchard was put in about as unenviable a position as an IT manager can find himself. In August, CEO Carly Fiorina said HP had "executed poorly" on a migration to an order-processing and supply chain system based on SAP AG's applications . She partly blamed the problems for a $400 million third-quarter revenue shortfall within HP's enterprise servers and storage group. In an interview this month, Bouchard spoke candidly about what it was like to be on the IT hot seat. Excerpts follow:

Given that you're directly responsible for HP's supply chains and IT systems, what was your role in the failed ERP migration? I got this job in December, and in the following four or five months, what I didn't want to do was merge business and IT just at the corporate level. I wanted to also merge it in the field, in each region and each country. A lot of the pieces of the supply chain, order management and IT [functions] were in different businesses. Bringing those things together into one operation became official on May 1.
This [ERP migration] problem broke out three weeks later in the Americas region. It was one of many transitions we had done, and are still doing, where we simplify our portfolio of ERP [systems]. This was the 35th transition we had done; 34 had gone well, and this one did not go well.

What went wrong? It's a lot of little things that added up. Not one or two of them would have created the problem, but the combination of them created a bigger problem than we expected. We had planned for three weeks of disruption, and there were six weeks.

Gilles Bouchard of Hewlett-Packard Co.

These problems are in three major categories. One we call "working across silos." The team that was driving this program had to work with other parts of the company. And working across these seams proved difficult. ... Secondly, there were a lot of data-integrity [problems]. Orders fell out between the legacy front-end system and SAP on the back end, which required a lot of manual intervention. ... The third element was increased demand. This migration had to do with our Intel-based server business. The demand really increased for those products, and it's still very high right now, which is good news. But it put even more pressure on the whole system. We should have had a contingency plan for four, five or six weeks.




HP has made it clear that this was an implementation problem, not an SAP problem. So where exactly does SAP fit into the mix?

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