What Went Wrong
By David F. Carr | Posted 2002-12-16
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The confectioner's holiday sales melted when it switched software in 1999. Now, a second try is succeeding. Here are the lessons learned.
#3: No Leadership">What Went Wrong #3: No Leadership
Before Hershey hired CIO George Davis, a former Computer Sciences Corp. consultant, the highest ranking information technology executive at the company was a vice president a couple of levels down. Yet the people involved say the lack of a CIO wasn't necessarily the issue in 1999 so much as a lack of management understanding of how much effort, both in systems development and organizational change, would be required for success.
Penn State's Sawyer believes many of the pitfalls of enterprise systems implementation revolve around governance issues. At Hershey, he suspects that business and technology managers aligned with different parts of the business were pulling in different directions, and no one at the top pulled these demands together to guide the creation of a system that would work for the whole business. That's very typical, Sawyer says: "You get 100 little committees, with no oversight."
Often, the people within the company charged with project management are so overwhelmed by the number of details that must be addressed that they wind up leaving the definition of basic business processes to consultants who lack the necessary inside knowledge of their business, Sawyer says.
Lesson Learned: Oversight Matters
If Hershey didn't understand the importance of systems project oversight before Halloween 1999, it certainly did afterward. In the distribution center modernization, because top management was determined that nothing go wrong, "we wound up with a very high-powered steering committee," Miesemer said in his speech. "We had the CEO himself involved."
By all accounts, Hershey has put significantly more emphasis on close executive oversight of systems projects ever since. And it's for that reason that Sawyer suspects that Hershey may have benefited, in a perverse way, from its suffering. Many enterprise systems can use a fundamental redesign after their initial implementation, and they don't often get that opportunity, he says. "In other words, most corporations don't fail so dramatically the first time, so their repair is never so good."
David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.
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