AGILENT TECHNOLOGIES AND RUSS BERRIE: CHALLENGES OF IMPLEMENTING ERP SYSTEMS
The good news is that Agilent Technologies Inc.(www.agilent.com) says its enterprise resource planning applications are stable. The bad news is they got that way only after a rocky ERP migration project that cost the company $105 million in revenue and $70 million in profits.
In mid-August 2002, the multinational communications and life sciences company, formerly a part of Hewlett-Packard Co., said problems with the ERP components in Oracle's e-Business Suite 11e software froze production for the equivalent of a week, leading to the massive losses. The Oracle system, part of which went live in June, handles about half of the company's worldwide production of test, measurement, and monitoring products and almost all of its financial operations, as well as functions such as order handling and shipping.
Agilent is in the process of migrating as many as 2,200 legacy applications that it inherited from HP to Oracle. As part of the switchover, approximately 6,000 orders in the internally developed legacy systems had to be converted to an Oracle-friendly format, an Agilent spokeswoman said from company headquarters in Palo Alto, California. She said the configuration process had problems requiring correction.
In a statement last week, Agilent President and CEO Ned Barnholt said the disruptions to the business after implementing the ERP system were "more extensive than we expected." An Agilent spokeswoman said the issue wasn't the quality of the Oracle application, but rather the "very complex nature of the enterprise resource planning implementation."
For its part, Oracle Corp. said it's working closely with Agilent. "At Oracle, we are fully committed to all of our customers for the long haul and support them in any way necessary," the company said in a statement. "We have a strong