American LaFrance

On January 28, 2008, American LaFrance, an American emergency and vocational vehicle manufacturer, filed for Chapter 11 bankruptcy, blaming an ERP implementation project failure.

American LaFrance was one of the oldest fire apparatus manufacturers in the United States founded in 1873

but with roots going back to approximately 1832. In 2005, the company was the fifth largest manufacturer of emergency vehicles in North America. The company was bought by Freightliner LLC in 1995 and in 2005 it was sold to investment firm, Patriarch Partners, LLC.

American LaFrance, for a number of years up until the sale in 2005, had relied on the use of the systems of its parent company Freightliner. For a period of time after the disposition, the company continued to use Freightliner systems on an outsourced basis for its accounting, inventory, payroll and manufacturing process services. To replace the Freightliner based systems, American LaFrance commenced the development of a new standalone ERP system contracting with IBM Corp. and IBM Global Services for the development and implementation of the new system.

The bankruptcy filings listed a number of problems with the new system and the system conversion that American LaFrance cited as critically impacting its ability to operate which in turn led to its bankruptcy.

Answer each of the following 5 questions.

1. The management of ALF blamed IBM Corp. and IBM Global Services (referred to collectively as IBM) for the failures of the development and implementation of the new ERP. What specific things did management say that IBM failed to do properly that led to the failures?
2. IBM in turn alleged failures of ALF management and employees contributed to the development and implementation failures. What specific things did IBM say that ALF management and employees failed to do properly that led to the failures?
3. In your opinion, what were the most important reasons that the development and implementation failed?
4. What other options (if any) could have ALF management considered that might have resulted in a better result for ALF?
5. Were there other factors that contributed to the bankruptcy of ALF and in your opinion could they have been overcome if a new system had been successfully implemented?