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Fiorina: HP's SAP disaster under control

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HP Chief Carly Fiorina has assured financial analysts that last quarter's server and storage ordering system fiasco is truly a thing of the past.

Fiorina, addressing yesterday a Banc of America Securities conference in San Francisco, promised that HP has made its way through a stunning order backlog and that all squeaky wheels have been properly greased. HP suffered one of its more embarrassing recent episodes when an internal SAP consolidation cost it $400m in third quarter revenue. Equally bad, the ordering debacle hurt HP's reputation with customers - many of whom were unable to obtain gear.

"We have completed the (SAP) migration, and we are now through the order backlog that created," Fiorina told the analyst crowd, according to CNET. "We've been very forthright what those execution issues are. We've taken steps to deal with those and believe those are behind us."

But how forthright was HP?

During its third quarter earnings call, the company was typically hesitant to say exactly what went wrong with its ordering system. Only later, did word leak out that a failed SAP consolidation was to blame. HP was working to unite its SAP ordering systems with those from Compaq, bring down some 40 systems to about 6, sources have said.

Many insiders knew the project - code-named Fusion - had every chance of going wrong, despite HP's supposed expertise in dealing with SAP migrations. HP picked its traditionally slowest quarter for the move, but sales folk warned that some kind of backup system had to be put in place to avoid disaster. Instead, HP simply pumped the channel full of servers and storage boxes a couple weeks ahead of the switch, crossed its fingers and hoped for the best.

Insiders agree that most of the SAP plan went just fine, but there were enough problems to disrupt HP's entire supply chain. HP staffers were standing inside 18-wheelers hand-labeling shipments of million-dollar Superdome servers and the like. High-ranking executives were being forced to spend their time approving rush orders of $50 parts to key customers. In total, a disaster - and not one that HP described in exacting detail to the public.

Has HP righted the ship? We'd like to know. ®

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