ICI loses £23m over SAP failure

ICI will write off a total of £23m as a result of a failed SAP supply chain software implementation last year in its Quest...

ICI will write off a total of £23m as a result of a failed SAP supply chain software implementation last year in its Quest flavours and fragrances division.

Following its full year results, issued this week, an ICI spokesman said the company wrote off £18m last year as a result of the problem, and £5m is to be written off in the coming financial year.

The problems involved a project known as Q-Star - a SAP-based plan to optimise the supply chain. ICI had hoped that Q-Star would save Quest £20m a year by 2004. The company this week admitted it would not gain this saving.

At the end of May 2002, when the system went live across four locations in Holland, problems locating raw materials were encountered and a huge backlog in orders to be processed resulted.

Quarterly earnings at the Quest flavour and fragrance division fell for the three quarters following the installation.

SAP's share price dipped by 3.6% following the release of ICI's results.

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