New World Pasta: Spaghetti CodeBy Kim S. Nash Print
New systems obscured key financial data, forcing managers to make decisions on half-cooked information. After filing for bankruptcy, the company is working to recover.
New World Pasta, once the king of macaroni with powerhouse brands such as Ronzoni, Prince and San Giorgio, retreated into bankruptcy protection last year, in no small part because of a faulty enterprise software project. Rather than provide a clearer view of New World's manufacturing and financial businesses, the 2001 installation is blamed for obscuring critical accounting and operations data.
Acquiring another business—Borden Foods' pasta division—six months into the software installation project didn't help, either. New World underestimated the amount of work it would take to blend the new company into its own, New World executives say. Business and technology employees who otherwise would have focused primarily on the big initiative to install the OneWorld software package from J.D. Edwards were asked to plan and execute the Borden integration as well.
New World "didn't have the resources needed to do both of those activities at the same time," says Barry West, acting chief information officer at the $300 million company in Harrisburg, Pa. By May 2004, New World petitioned voluntarily for Chapter 11 bankruptcy protection, reporting assets of $194 million and liabilities of $512 million.
Painful as bankruptcy is, it can spur dramatic technology-led change that, done well, strengthens the company and improves skills in the information-technology group, West says. He is an associate at AlixPartners, the turnaround firm hired to help New World reorganize. The pasta company is being run largely by AlixPartners associates while in bankruptcy, including a chief executive officer and heads of finance and operations in addition to West as CIO.
West points out that visibility within the company is still not ideal, and he'll be overseeing an upgrade in September to the next version of OneWorld, to add more access to more data for higher-level managers. "But we do have better control than was here originally," he says. Those managers should be able to, for example, see whether production is down due to equipment problems or a large number of employees on sick leave.
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