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.
More on Risk Reduction in B2B
- How the Best Companies Reduce Risk to Win in B2B
- Why You Want to Consider Doing Pilot Projects With Your Customers
- Innovation Consultant Joyce Oomen on The Right Time to Think About Innovation
⚡⚡ Enjoyed this content? I go into way more detail on this subject in Lean B2B. It covers the ins and outs of finding traction in the market for B2B products. Check it out »
Download the First 6 Chapters for Free
This sampler covers the differences between B2B and Business-to-Customer (B2C) product-market validation, shows you how to define your vision for success, find early adopters, select market opportunities and assess a venture's risk. Download The First 6 Chapters Today »