ERP
Nestlé's ERP Odyssey
Quelle: CIO USA
In June 2000, Nestlé SA signed a much publicized $200 million contractwith SAPSAP - and threw in an additional$80 million for consulting andmaintenance - to install an ERPERP system for its global enterprise. TheSwitzerland-based consumer goods giant intends to use the SAP systemto help centralize a conglomerate that owns 200 operating companiesand subsidiaries in 80 countries. Alles zu ERP auf CIO.de Alles zu SAP auf CIO.de
Not surprisingly, a move of this magnitude sparked skepticism. AnneAlexandre, an analyst who covers Nestlé for HSBC Securities in London(the company is traded only in Europe), downgraded her recommendationon Nestlé stock a year after the project was announced. While she saysthat the ERP system will likely have long-term benefits, she is waryof what the project will do to the company along the way. "It touchesthe corporate culture, which is decentralized, and tries to centralizeit," she says. "That's risky. It's always a risk when you touch thecorporate culture."
It is a risk that Jeri Dunn, vice president and CIO of Nestlé USA, the$8.1 billion U.S. subsidiary, knows all too well. In 1997, theGlendale, Calif.-based company embarked on an SAP project code-namedBest (business excellence through systems technology). By the time itreaches the finish line, Best will have gobbled up six years and morethan $200 million (the same amount its global parent intends tospend). Dunn now says she sees the light at the end of the tunnel. Thelast rollouts will take place in the first quarter of 2003. But theimplementation has been fraught with dead ends and costly mistakes. Itis a cautionary tale, full of lessons not only for its Swiss parentbut for any Fortune 1000 company intent on an enterprisewide softwareimplementation.
"I took eight or nine autonomous divisions and said we are going touse common processes, systems and organization structures," says Dunn."[Nestlé SA is] looking at 80 autonomous countries and saying the samething. They're just taking it up a notch. If they go in with anattitude that there's not going to be resistance and pain, they'regoing to be disappointed."