How a Failed ERP Implementation Took Down a $5 Billion Pharma Company

In 1993, FoxMeyer Drugs was a $5 billion company and the United States’ fourth largest distributor of pharmaceuticals.

With the support of the company’s CIO and CEO, the large company began a $100M project to implement SAP’s R/3 ERP software.

To implement the software, FoxMeyer 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 transaction volume.

There were significant failures of implementation and 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 FoxMeyer Drugs had deep pockets; yet, a disastrous ERP implementation toppled one of the largest American pharmaceutical companies.

This case and many other large technology 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.