A Comparative Case Study of Knowledge Resource Utilization 241Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without writtenprocesses and practices to determine what was working well in addition to what areas
could be improved within the company. The team recommended changes that could be
made within three to five years and presented its report to the Nestlé management. An
ERP solution formed the cornerstone of the recommendation.
A team of 50 top business executives and 10 senior IT professionals were assembled
to implement the project using SAP’s ERP solution. The team was to identify a set of best
practices that would become common work procedures for every Nestlé division. A
smaller team worked concurrently with the executive team. Members of this team
examined data in each division in order to implement a standardized structure across the
company (e.g., vanilla would be coded consistently across divisions). After months of
development, the key stakeholders planned an implementation incorporating purchas-
ing, financials, sales and distribution, accounts payable, and accounts receivable using
SAP and a supply-chain module from Manugistics Corporation, a supply-chain manage-
ment advising company. Each of the modules was deployed across every Nestlé USA
division.
Four of the modules were scheduled to be completed by 2000. The new systems
doubled as code fixes for changes due to the millennium date problem. Nestlé USA made
the deadline but created other problems in its haste to implement the solution. The BEST
project team had overlooked integration points between the modules. The departments
now used standardized names, systems, and a common process, but the systems were
not well integrated. For instance, a salesperson could give a customer a discount rate and
enter the rate into the new system. Unfortunately, the lack of integration prevented
accounts receivable from knowing about the discount. Consequently, when the cus-
tomer paid the discounted rate, it would appear to the accounts receivable operative as
though the invoice were only partially paid.
Projects also met employee resistance before three of the SAP and Manugistics’
modules were implemented. The groups being directly affected by the new processes and
systems had not been represented on the key stakeholders team. As a result, the
stakeholder team was always surprising the heads of these divisions. The workers did
not understand how to use the new system or the new processes. Moreover, the
divisional executives, who were just as confused as their employees and even more upset,
did not help. No one wanted to learn the new way of doing things, including the firm’s
planners who were unwilling or unable to abandon their familiar spreadsheets for the
more complex Manugistics’ models.
To address these problems, 19 key stakeholders and business executives from
Nestlé USA gathered for a three-day meeting. The group members decided that to finish
the project they would need to start with the business requirements and reach an end
date, rather than trying to fit the project into a mold shaped by a predetermined end date.
They also concluded that they had to do a better job of obtaining support from divisional
heads and that all the employees knew exactly what changes were taking place. Therefore,
a liaison between the divisions and the project team was added to fix the poor relationship
between the divisions and the project team. The new liaison and the CIO began meeting
more with the division heads and conducting regular surveys on how the employees
affected by the new systems were dealing with the changes.
In the end, the BEST project took six years and cost more than $200 million to
complete. However, with all of Nestlé USA using the same data, the company was able