TechnologyAccounting SoftwareSAP is blamed for problems at European hi-fi manufacturer

SAP is blamed for problems at European hi-fi manufacturer

Enterprise software giant SAP has been left to face the music after European hi-fi manufacturer Bang & Olufsen blamed an installation of the German vendor’s software for a ‘loss of financial overview’ and a breakdown in its supply chain.

In its 1998/1999 financial results released last week, Danish-based Bang & Olufsen claimed the year-long installation of SAP’s flagship R/3 product damaged the effectiveness of its supply chain and pushed up ‘consumption’ costs by DKK25m (£2.2m). The product is widely used by blue-chip companies in the UK and across the world.

Bang & Olufsen has said problems installing the software, at a cost of around £2.7m, caused deliveries to shut down for eight days and disrupted its cashflow.

The unexpected additional costs also forced Bang & Olufsen to make a special announcement to the Copenhagen stock exchange.

The Bang & Olufsen broadside against SAP highlights a growing trend for companies to blame software installations and suppliers for disappointing financial results.

In July UK pub and hotel group, Greenalls, issued a profit warning and blamed an exceptional £8m provision on an installation of software, supplied by System Software Associates at its wholesaling division, Tavern. The spotlight on software projects could also put companies on a collision course with the Big Five consultancies, who are dominant players in IT consultancy.

Nick Griffin, managing partner of Deloitte & Touche management solutions, said most ERP installations ran smoothly despite the complexity of the software involved.

‘People are realising that ERP solutions go to the heart of the business,’ he added.

Related Articles

5 key tech innovations helping accountants transform their businesses

Accounting Software 5 key tech innovations helping accountants transform their businesses

3w Heather Darnell, Founder of Ask the BOSS
Finance and the tech foundation: what’s needed to deliver impactful business insights?

Accounting Software Finance and the tech foundation: what’s needed to deliver impactful business insights?

3m Workday | Sponsored
Best accounting software for businesses in the UK

Accounting Software Best accounting software for businesses in the UK

3m Accountancy Age, Reporters
Making sense of enterprise tech concepts for finance teams

Accounting Software Making sense of enterprise tech concepts for finance teams

4m Workday | Sponsored
Open Banking: what you need to know

Accounting Software Open Banking: what you need to know

4m Edward Berks, Xero
Accountancy in the digital age: Flexibility, agility, efficiency

Accounting Software Accountancy in the digital age: Flexibility, agility, efficiency

6m Pegasus Software | Sponsored
Sage purchases Intacct in its largest ever acquisition

Accounting Software Sage purchases Intacct in its largest ever acquisition

10m Alia Shoaib, Reporter
5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

10m Alia Shoaib, Reporter