The real cost of a failed migration
A migration budget extends beyond extraction and loading. A cutover that disrupts purchasing, production or shipping can also affect revenue and tie up teams during recovery. A useful discussion starts by naming what each amount measures.
Three public reports provide context. They cover ERP programmes and operations; they do not establish that data migration alone caused every difficulty.
Revlon, 2018: lower sales and additional charges
Revlon’s 2018 annual report estimates that its ERP launch reduced net sales by approximately $64 million, affecting its ability to manufacture and ship products. It also reports $53.6 million in incremental charges in 2018, mainly associated with restoring customer service. Source: Revlon, 2018 Form 10-K, “Risk Factors”.
These are different measures. Foregone revenue is not an equal loss of profit, so adding lower sales to extra charges does not produce a total accounting loss.
Hershey, 1999: documented disruption, no single bill
Hershey describes customer service, warehousing and order fulfilment difficulties after new systems and processes went live in July 1999. Its annual report also explains that the year’s sales decline included the disposal of its pasta business. Attributing the entire decline to the implementation would be misleading. Source: Hershey, 1999 annual report, “Operating Results” and “Net Sales”.
The operational finding raises a useful question: do end-to-end rehearsals cover warehousing, picking and shipping under peak demand?
US Navy, 2005: the cost of four ERP pilots
The GAO reports approximately $1 billion invested through September 2004 in four Navy ERP pilots. The pilots were not interoperable, and the GAO judged their benefits limited relative to the expenditure. The Department of Defense disputed that assessment and highlighted work reused in the subsequent programme. Source: GAO-05-858, September 29, 2005, results, Table 1 and agency response.
This is programme expenditure, including design and implementation, rather than lost sales or a data migration bill. It raises a question about model and interface consistency between workstreams, beyond the local success of each pilot.
Estimate your risk from your own data
These cases establish neither your project’s probability of failure nor a budget that would prevent it. An estimate needs to start with your operation:
- Migration scope: source systems, data families, history and dependencies;
- Preparation effort: transformation rules, business decisions, interfaces and rehearsals;
- Cutover exposure: interrupted processes, recovery capacity, emergency costs and rollback time;
- Acceptance criteria: tolerated discrepancies, required evidence and ownership of the cutover decision.
The readiness audit is sold separately. Scope, access and deliverables are agreed before quoting; its findings then support a migration estimate. An amount reported by another company cannot replace that measurement.
What you actually pay for
Dedicated expertise funds concrete controls: an anomaly map, explicit rules, source-to-target reconciliation, rejection handling and cutover rehearsals. These help teams find and address discrepancies before they affect operations, without guaranteeing an incident-free launch.
Our execution methodology organises that work. For the factors that determine the effort, see the ERP migration guide or the PLM migration guide.