ERP FAILURE: Company: Waste Management, Estimated Sunk Cost: $100 million

Waste Management, the biggest company of its kind in North America, decided to partner with one of the largest global vendors to implement a new ERP without having to extensively customize the product. The two companies agreed upon an 18-month implementation cycle, which involved costs estimated at more than $100 million, with the expectation that Waste Management would realize more than $350 million in cost benefits. When the project snowballed into a failed ERP, the lawsuits began to fly. Waste Management believed that the software giant didnt deliver the solution as promised. The vendor responded by stating that Waste Management had ducked its responsibility through an inability to define its business requirements, including receiving input from sufficient, knowledgeable, decision-empowered users and managers to collaborate on the project.

After years of pre-trial litigation, the two sides eventually agreed to a settlement to the plaintiff (Waste Management) for an undisclosed amount. If Waste Management had deployed a team dedicated to change management for ERP implementation, the project may have succeeded in the long run. Instead, a lack of dedicated change management was used against the company in a court of law. Waste Managements failure to clearly define specific requirements during the early stages of their ERP project placed the company in a poor position to implement a competent change management plan. After years of pre-trial litigation, the two sides eventually agreed to a settlement to the plaintiff (Waste Management) for an undisclosed amount.

Question:

What was the main cause of this ERP failure and what could have been done to avoid this failure?