The $12.9 Million ERP Implementation Error

Another company has announced issues with the implementation of their Enterprise Resource Planning (ERP) system. In a letter to its shareholders, Overstock.com reported problems with the implementation of Oracle’s ERP suite. The error caused them to overstate their earnings by $12.9 million. The company is now required to restate all their earnings records since 2003. Overstock stressed that the issues are not with the Oracle software, but with their own flawed financial procedures.

Overstock.com themselves point to the fact that the ERP system was “rushed” into production before the 2005 holiday season. Although the company does not indicate when or how the errors were discovered, it serves as a warning to companies currently working through an ERP implementation or upgrade to constantly review, test and retest all their procedures before going live.