Question 1: what are the failure factors for the first *NIKE-i2 *ERP-SCM implementation?
The software implementation failure that took place in 2001 was due to several factors that, all together, caused a total revenue shortfall of at least $48 million that year, on top of the cost of the implementation ($40 million)
One of the main factors was that neither part was 100% aware of the complexity of this project. In a nutshell, both parts were inexperienced and unrealistic when they set up their goals and that could only lead to failure.
From Nike’s perspective, they clearly underestimate the complexity of the project, as they demanded from i2 an unrealistic level of customization (especially trying to forecast too far out ahead and being overambitious with their demands), which made the task even more difficult, as it took more efforts to adapt the system, causing unexpected delays and some crashes in the system when used in conjunction with the existing systems.
Also, they should have hired a third party integrator, which could have provided a better, more realistic and objective view of the flaws in the implementation, in order to tackle some of the problems and to improve the communication required between all parts involved, as it was not good enough the level of cooperation between i2 and Nike (no review meetings held to monitor the progress of the project).
Another aspect that should have been considered is a pilot test or parallel simulation to assess the feasibility of the project and to foresee any pitfall or improvements required. Nike ignored the potential risk of the implementation failure so it was not planned in advance how to react in a negative scenario. This test would have been useful especially due to the additional complexity that the NSC project caused, as Nike tried to implement both ERP and CRM software together with i2 (which showed poor integration plans, inadequate training, incompatibility of software, etc.....)