How a Failed ERP Implementation Took Down the FoxMeyer Drug Company

FoxMeyer Drug Logo

In 1993, FoxMeyer Drug was a $5 billion company and the United States’ fourth largest distributor of pharmaceuticals in terms of national market share.

With the support of the company’s CIO and CEO, the FoxMeyer Drug began a 100 million dollar project to implement SAP’s R/3 ERP software.

To implement the contract management software, the FoxMeyer drug company chose Andersen Consulting, a proven SAP integrator. When the ERP was first released during the year, customer order processing decreased from 420,000 to 10,000 per night, as the new ERP could not cope with the business’s transaction volume.

It was a significant ERP implementation failure, and there were obvious leadership issues. Four years and over $100M later, the pharmaceutical giant filed for bankruptcy.

SAP was an established software provider, Andersen Consulting had a history of success, and the FoxMeyer drug company had deep pockets; yet, a disastrous ERP implementation toppled one of the largest American pharmaceutical companies.

Learnings from the FoxMeyer ERP Failure

The FoxMeyer ERP failure, and many other large technology system implementation failures are still fresh in the minds of CIOs around the world. Risk reduction is a critical part of selling in B2B.

You must be aware of the risks perceived by corporations if you are to succeed in landing your first customers.

It’s important to learn from similar failures. You’ll be more successful if you’re able to take on the perspective of your prospects.

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