by Thomas Wailgum

ERP Lessons from Rich People Who Stink at Golf

Sep 24, 20084 mins
Enterprise Applications

I absolutely love it when I’m at the golf course and I see some rich guy saunter up to the first tee, with his brand-new set of high-priced golf clubs. His new TaylorMades (or Titleists or Callaways, doesn’t matter) glisten in the sun, a supposed reflection of his need for the latest and greatest in golfing technology to match his impressive athletic skills and golfing abilities.

And then he shanks his ball into the woods. Most often he admonishes the club, staring in utter disbelief at what his $1,000 TaylorMade r7 CGB Max Limited Driver just did (“What the heck?!”). A second, third and fourth shot, however, confirms what we bemused spectators already know: His belief in the faulty nature of his clubs belies reality—he just sucks at golf.

An analogous scenario, my friends, has been happening inside companies since technology-driven automation came on the scene in the latter part of the 20th century: Namely that companies have gone out and bought ultra-expensive, state-of-the-art ERP systems when they were nowhere near ready to properly implement and take advantage of the benefits contained within said systems.

And just like the guy on the golf course throwing his new clubs into the woods in disgust, ERP deployments at companies ill-prepared for the massive and complex change demanded by today’s systems have failed miserably.

The originator of this analogy is AMR Research CEO Tony Friscia. I recently stumbled across his opinion piece, “You’re Not Tiger Woods!”, and it just crystallized everything that I’ve been thinking about and hearing from IT people for years. (Of course, there are other analogies you can use to illustrate this point—the recently popularized “putting lipstick on a pig” comes to mind.)

In it, Friscia posits “with every introduction of new golf technology—bigger sweet spots, lighter metals, longer flying balls—players race to their local clubs and pro shops to buy a better game,” many every two or three years during the last decade.

But a funny thing has happened: The average golfer’s handicap (a reflection of a golfer’s ability, where the lower your handicap the better you are) hasn’t dropped one point, Friscia writes. However, even the slightest tweaks in new golf technology in the hands of professionals, like Tiger Woods, can make a huge difference.

Unfortunately, he notes, most of us aren’t Tiger Woods.

“Companies can buy all the enterprise software they want, but unless their companies are performing well to begin with, as Tiger Woods is, that software isn’t going to help a whole lot,” Friscia writes. “To most companies, these investments are a cost without an ROI.”

Throwing multimillion-dollar and complex ERP software at operations and processes that are already broken and defective is obviously a complete waste of time, money and effort. Yet it happens with alarming and head-scratching frequency. (See “25 Terrifying IT Horror Stories” for a sampling of the misery.)

One recent example of a big company bombing with its ERP software implementation was Waste Management, the trash-disposal giant, which is now suing SAP for $100 million.

In court filings, SAP claims that Waste Management allegedly violated its contractual agreement with SAP in a number of ways, including by “failing to timely and accurately define its business requirements”; not providing “sufficient, knowledgeable, decision-empowered users and managers” to work on the project; and failing to successfully migrate data from the legacy system.

In other words, Waste Management didn’t know what they were getting themselves into.

Waste Management, however, claims that, among other transgressions, SAP fraudulently sold it bad software.

The truth, as is the case in many of these disputes, lies somewhere in between. However, I have heard from an ERP analyst who has close connections to the saga that “this is a classic example of a company that did a selection with completely inadequate due diligence, and they had no history or track record of how to do a large project and large implementation,” he says. “I suspect that when it all comes out, and it eventually will, what we’ll find is that it has very little, if anything, to do with the software and everything to do with how the project was managed.”

AMR’s Friscia has witnessed enough of these types of debacles over his 30-year career to know that too many companies act just like the free-spending and clueless golfer.

“To a well-run company, technology investments do matter. However, these investments can be a waste of money when they’re purchased before an organization is operating efficiently,” he writes. “Just as new golf clubs won’t improve a bad swing, new technology won’t overcome operating inefficiencies. You’ll just end up with an automated mess.”