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Woolworths Australia: The death of institutional memory

The Australian outpost of the venerable department store chain, affectionately known as Woolies, also ran into data-related problems as it transitioned from a system built 30 years ago in-house to SAP. One of the biggest crises that arose was that profit-and-loss reports tailored for individual stores, which managers were accustomed to receiving every week, couldnt be generated for nearly 18 months.

The problem lay in the change in data collection procedures, but the root cause was a failure of the business to fully understand its own processes. The day-to-day business procedures werent properly documented, and as senior staff left the company over the too-long six-year transition process, all that institutional knowledge was lost and wasnt able to be baked into the new rollout.

I often see companies that dont take the people who really know business processes and dedicate them to the ERP rollout, says Crouse. They make it a part-time job, or they hire new people to tell the system guys what to build. None of that works. You have to really dedicate the people who know the process that youre trying to get right, full-time. And its a common theme that, when you dont dedicate those people, you get into trouble.

Identify the issues the company encountered during the ERP implementation? (2 marks)