"improving its inventory management. The lack of consistency, proper planning, management andsupport partially resulted in such failure (Kanaracus, 2009).2.3. Risk IdentificationFor the proper identification of the risk, it is important to categorise the risk into three areasnamely technical, business and organizational. The state of the organisation will determine thatto which area the risk is belonged as illustrated below in the figure (Anderson, 2008):Figure: 2.3.1: Main Areas for Risk Identification Source: (Anderson, 2008)Similar to the view of Anderson (2008), the risks identified for the SAP implementation can becategorised into four different types namely, internal, external, limitation and system as proposedby Moeller (2011). Each of them could be easily reflected in the implementation of SAP inShane Co. The system failure was the failure of SAP itself as the company tied up about 18% ofits revenue without identifying its technical capabilities (Kimberling, 2009). Furthermore, theexternal risks were attributed to rash decline in the retail sales across the US, especially in theluxury good (Kanaracus, 2009). The internal risks were identified as the lack of propermanagement and the skill needed to manage the new software at Shane Co. (JoshEAC, 2009).The limitation was the financial resources and the time that exceeded approximately 4 times towhat was estimated at the initiation of the plan (Averch, 2013). The following table wouldcritically analyse each risk against different states of the organisation:Table 2.3.1: Risk Identification Matrix Technical Business OrganisationalX X Lack of properInternal management andskills External X X Rask decline in theretail salesLimitation X Lack of financialresources and timeSystem Lack of technicalcapabilities toimplement SAPThus with reference to above matrix, there are numerous risks identified in the case of Shane Co.which was the result of lack of proper planning in implementing SAP. These risks would now becross analysed with the help of following table in order to present a theoretical support to theidentified risks:Table 2.3.1: Risk Matrix for Shane Co. Risk Identification Technical Business OrganisationalLack of properLack of managementNeedmanagement and the focusskill needed to managethe new softwareVendor SelectionCost exceeded 4 times Lack of identification Tied up 18% of the Implementationof technical abilities total revenueGo Live & Review System failureImprovement Unable to improve Lack of system analysis Failed to improveinventory management and evaluation continuously Source: (Anderson, 2008)Conclusively, the Shane Co. was unable to Identify the risks at all the levels be it technical,business or organization. Much of the failure however is attributed to the top management asthere were serious flaws in the proper planning of the risk involved in the SAP implementation."