Standardizing IT

By Tom Steinert-Threlkeld  |  Posted 2006-01-20 Print this article Print

More than five years ago, the world's largest food maker set out to standardize how it operates around the world. GLOBE, or the Global Business Excellence program, is aimed at getting far-flung operations to use a single system to predict demand, purchase

: No So Tough; Standardizing Managers: Not So Easy">
No matter how he sliced it, however, Johnson was walking uphill, into the wind. Even though Brabeck had "stuck his name on that project,"' as computer systems consultant Robert Barton puts it, Nestlé managers had always conducted their businesses as they saw fit. Even standardizing on behind-the-scenes practices like how to record information for creating bills to customers could produce heat. Decision-making was being taken out of local markets and being centralized. Beyond that, someone had to pay the bill for the project itself. That would be the countries, too.

"In a case like Nestlé, you're saying, well, you used to decide locally how you work. Well, we're globalizing supply chain, and if everybody does it differently, it's not going to work. So, let me explain it to you. You're all going to do your supply chain like this," says Barton, a former Computer Sciences Corp. consultant who studied Nestlé for his 2003 book, Global IT Management.

Which is why Johnson found himself under attack by October 2001, when he pulled the country managers together to go over the purpose of the project and how to get the processes deployed.

The managers saw a "unified" solution as a "central" solution. It was ridiculous, they said, to think all back-office operations could be standardized. And if they were to be standardized, it's my country's practices that should be the template. Because they're the best. And GLOBE might mean you couldn't be best at anything.

And so, when the market heads were brought together once more in May 2003, Johnson again let the executives let off steam. And then again let their peers speak. But this time, at least a handful of market heads could actually describe the "operational efficiencies" they had achieved, like getting faster financial reports and demand forecasts, so they could run their businesses better.

And by May 2005, when the market heads met a third time, 20 of them could speak from experience. The general consensus: Another mass meeting was probably not necessary.

If Brabeck, however, had expected GLOBE to curb the company's information-technology expenses, which had steadily risen in the last half of the '90s, he was mistaken. From 1.6% of sales in 1999, the project was pushing costs toward 2% of sales. That was a Rubicon the chairman was not willing to cross.

So, before 2003 even rolled around, Johnson and Gouin had to reset the schedule. Again.

Brabeck put a cap on spending at 1.9% of sales, per year. Which meant, in order to hit that new target, the project would have to last longer.

Story Guide:

Nestlé Cooks Up A Global Supply Chain

  • One Supply Chain, 127,000 Products
  • Signed: Global Project Manager; Undefined: The Project
  • Project Plan: Finalized; Schedule: Not So Much
  • Drafting a Project Team of Business-Unit All-Stars
  • Standardizing IT: No So Tough; Standardizing Managers: Not So Easy
  • Project Costs: Capped; Project Schedule: Changed Again
  • Rollout: Fix it as You Go; Goal: Customer Can't Feel the Pain
  • SAP Project: Global; Computing Resources: Limited
  • Nestlé By the Numbers
    Player Roster: Who's Who Among Nestlé Project Planners
    Roadblock: Regional Managers
    Hurdles Overcome: Deploying a Common Global System
    Base Technologies: Nestlé
    SAP: Not Pretty, But It Did the Job

    Next page: Project Costs: Capped; Project Schedule: Changed Again

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    Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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