Nestlé's ERP Odyssey

Before 1991, Nestlé was simply a collection of independently operatingbrands, such as Stouffer's and Carnation, owned by the Swiss-basedparent. In 1991, the brands were unified and reorganized into NestléUSA. Even so, the new company continued to function more like aholding corporation than a single entity. Divisions still hadgeographically dispersed headquarters and were free to make their ownbusiness decisions, although they now reported to corporate Nestlé USAexecutives in Glendale rather than in Vevey, Switzerland. The newcompany was trying to introduce economies of scale and commonpractices, but years of autonomous operation proved an almostinsurmountable hurdle.

In 1997, a team examining the various systems across the companyfound, among many other troubling redundancies, that Nestlé USA'sbrands were paying 29 different prices for vanilla - to the samevendor. "Every plant would buy vanilla from the vendor, and the vendorwould just get whatever it thought it could get," Dunn says. "And thereason we couldn't even check is because every division and everyfactory got to name vanilla whatever they wanted to. So you could callit 1234, and it might have a whole specification behind it, and Imight call it 7778. We had no way of comparing."

While the American brands were willing to go about their business asautonomous companies - headaches be damned - the Swiss parent knew thatsimilar problems would continue. In 1991, the same year that NestléUSA was created, Dunn, then associate director for application systemsof Stouffer's Hotels, one of the many Nestlé brands, went toSwitzerland to help implement a common methodology for Nestlé projectsworldwide. In 1995, she was promoted to assistant vice president oftechnology and standards for Nestlé SA, where she came up withtechnology standards for every Nestlé company to follow. Dunn figuredthat common systems across the Nestlé empire would create savingsthrough group buying power and facilitate data sharing betweensubsidiaries.

Yet when Dunn returned stateside to take the more hands-on CIO job atNestlé USA in 1997, she found that few of her recommendations had beenacted on. "My team could name the standards, but the implementationrollout was at the whim of the businesses," she says during a recentinterview in her sparsely decorated fourth floor office in Glendale.Dunn takes cigarette breaks at every possible opportunity and isn'tafraid to dress in a leopard-print skirt and blouse. At 47, she is asurvivor who is refreshingly open about her mistakes and is respectedthroughout the company. Her staff speaks of her in almost reverentialtones.