Nestlé's ERP Odyssey

Von Ben Worthen

Jose Iglesias, director of information systems, says the retreatstarted off as a gripe session. The time constraints necessitated byY2K had put too much pressure on the people in charge of executing thechanges. The project team had lost the big picture of how the variouscomponents would work together. And there was still work to be done.The existing modules had to be integrated and the team still needed toroll out two more SAP modules - sales and distribution on the domesticside, and accounts receivable - as well as a new module for the supplychain. Since Dunn had rejected the SAP supply chain module two yearsbefore, it had improved and been named a Nestlé global standard byDunn's old standards group in Switzerland. So she decided to replaceall but a couple of parts of the Manugistics system with APO. Dunnestimates that last-minute switcheroo accounted for 5 percent ofBest's $210 million cost.

The offsite group members eventually decided that to finish theproject they would need to begin at the beginning, starting with thebusiness requirements then reaching an end date, rather than trying tofit the project into a mold shaped by a predetermined end date. Theyalso concluded they had to do a better job of making sure that theyhad support from key divisional heads and that all the employees knewexactly what changes were taking place, when, why and how.

The End Game: Sadder But Wiser

By April 2001, the end-state design was complete, giving the projectteam a highly detailed road map to follow. A month later, Tom Jamescame on board as director of process change for the Best project,having the sole responsibility of acting as a liaison between thedivisions and the project team. James says that he was shocked by thestill poor relationship between the divisions and the project team. Heand Dunn began meeting with more of the division heads. They alsostarted conducting regular surveys of how the employees affected bythe new systems were dealing with the changes.

They were not afraid to react to what they found. Dunn says thatNestlé recently delayed the rollout of a new comanufacturing packagefor six months based on feedback indicating that the would-be userswere not prepared to make the process changes that wereinvolved.

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