Both of these failures have a common theme.
Not necessarily Y2K alone, although the need to move away from legacy systems probably was a driving force in both cases.
Hershey:
The project called for 5,000 personal computers, as well as network hubs and servers and several different vendors. Under the new system, software from Siebel Systems Inc., San Mateo, Calif., Manugistics Group Inc., Rockville, Md., and SAP AG, Walldorf, Germany, is used by Hershey?s 1,200-person sales force and other departments for handling every step in the process, from original placement of an order to final delivery. It also runs the company?s fundamental accounting and touches nearly every operation; tracking raw ingredients; scheduling production; measuring the effectiveness of promotional campaigns; setting prices; and even deciding how products ought to be stacked inside trucks. International Business Machines Corp. was hired to pull it all together.
In Addition:
The bitter irony for Hershey is that the computer system was part of a broader overhaul intended to sharpen the company?s focus on its core mass-market candy business. In early 1996, Hershey sold its Planters nut and Life Savers operations in Canada and its Beech-Nut cough-drop business, as well as stakes in a German praline maker and an Italian candy and grocery firm.
In January this year, it sold its pasta business to New World Pasta LLC for $450 million.
In the meantime, it picked up Leaf North America, the maker of Good & Plenty, Heath, Jolly Rancher, Milk Duds, Payday and Whoppers, for about $450 million. While Hershey eliminated about half of Leaf?s products, the purchase still boosted its number of specific product offerings by 30%.
A lot of major changes in the company, new hardware, new software, and all of it changed in a "big bang" approach.
W. L. Gore & Associates Inc:
Software used and company involved: PeopleSoft Inc. and Deloitte & Touche
Gore has 6,100 employees in 45 locations around the world, and generates about $1.25 billion in annual revenue from its breathable fabric, which is used in outerwear, hernia repair patches, dental floss and guitar strings.
Gore employees acknowledged that the company's unusual culture and structure could be a factor in its troubles. Some of the company's business methods for benefits and vacation accrual tracking were described by Lisa King, a Gore spokeswoman, "somewhat manual" before the PeopleSoft installation began, even though the processes were actually computerized.
Both of these failures involve big companies doing major re-structuring of their data processing operations. In both cases they were also moving to a new technology (called ERP) and with Hershey, re-structuring the company and product line in a big way. I would think that both of these used a large team of people distributed in several cities to get the job done.
This is reminescent of the mid 1960's when the so called "third generation" of mainframes was starting to make an impact. A lot of companies got into deep trouble moving to this new technology. There were all kinds of horror stories of billing errors, over or under shipment problems, unknown inventory, etc.
However, once the problems got solved, and everyone learned how to use the new stuff, people acknowleged that progress has been made and the companies involved went on to prosper.
Some lessons learned from all this was:
1. Only change one major component at a time - hardware, software, or company organization.
2. If it ain't broken, dont fix it. (And this is where the Y2K problem came from - the use of too many systems for too long a time beyond expected lifetimes) |
