The CEO of C&C Group, a drinks company listed on the London Stock Exchange, has fallen on his sword after an ERP upgrade went badly wrong, costing the company €25 million in lost revenues due to systems disruption.
FTSE 250 company C&C Group, which owns Bulmers cider, among other brands, said in a market update that the update had been “significantly more challenging and disruptive than originally envisaged, with a consequent material impact on service and profitability” – it faces ongoing implementation challenges.
“An improvement through May is being achieved by investing in material additional cost and resources, ahead of a system fix being implemented to permanently restore service to normal levels” it said, adding that it expects a one-off €25 million hit “reflecting the cost associated with restoring service levels and lost revenue.”
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The ERP update was taking place in its Matthew Clark and Bibendum unit and appears to have been part of efforts to unify disparate ERP systems. E.g. The company had said in its 2022 annual report that “we have made great progress in aligning our core ERP system across the Group which will further simplify our operations.”
(The history of acquisitions at the group suggests that its ERP systems may be many... e.g. C&C Group bought Matthew Clark and Bibendum from Conviviliaty in 2018. Conviviliaty had bought wholesaler Matthew Clarke for £200 million in 2015 and Bibendum for £60 million in 2016 before falling into administration in 2018.)
CEO David Forde, “having navigated C&C through the challenges of the COVID-19 pandemic, has informed the Board that he wishes to step down as Chief Executive Officer” C&C Group said. “He will cease to be a Director with immediate effect but will be available to help ensure a smooth handover of responsibilities.
“Patrick McMahon, Group CFO, has been appointed Group CEO with immediate effect.”
ERP software systems -- which can span accounting, finance, HR, procurement, supply chain and more -- are notoriously tough to update. Many have complex custom integrations (sometimes poorly documented) and modernisation also often requires significant workflow changes. This won't be the first to fall apart.
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