2012 PMI Project of the Year AWARD finalist
Behind
the
by Keith Jackson II
Scenes
One of the world’s biggest manufacturers overhauls its systems
and processes—with few in the outside world ever noticing.
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Bruno Pont, left, and
Francisco Fraga, P&G
That was the challenge facing Procter & Gamble (P&G), the global consumer products company, when it needed to enhance its nearly 20-year-old
ordering, shipping and billing software and work processes.
This was no simple IT patch, however: The system served the very heart of
P&G’s US$84 billion business. The company knew it had to identify, mitigate and
manage any and all risks to the new system.
“This was the equivalent of heart transplant surgery,” says Bruno Pont, P&G
associate director of global business services, Geneva, Switzerland.
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Photo by LEANNE SCHERP
Large systems at the
core of even the biggest,
and most successful,
businesses sometimes
need upgrade projects
fraught with risk.
Covering North America, Europe and 150-plus export markets, the
project would directly impact a diverse portfolio of 250,000 products
that includes everything from laundry detergent to pharmaceuticals to
snacks. In a single day, the IT system typically juggles 18,000 orders
shipped to 150,000 retailers on 8,000 trucks—accounting for US$200
million in revenue.
Any glitch would generate unwanted attention and potentially mean a
hit to the bottom line.
In a single day, the IT system
typically juggles 18,000 orders
shipped to 150,000 retailers on
8,000 trucks—accounting for
US$200 million in revenue.
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The Start of Something New
The original plan called for a simple IT upgrade project, but that changed
as P&G leaders recognized the project’s potential to produce more benefits.
Implementing a new, more sophisticated system could also help the company minimize lost sales, create efficiencies in the supply chain and drive
down costs across the enterprise.
“These were all incredibly important issues that the company needed to
address,” says Mr. Pont. “This project provided an excellent opportunity to not
only fix an outdated system, but also to move the company forward.”
The P&G project was launched in 2009 with two driving goals: to collect and
respond to feedback in real time and thereby create more compelling promotions and increase sales, and to identify the best ordering, billing and shipping
processes for shipping products to target locations.
To ensure the revamp would align with those business goals, P&G’s global
business services group created a project charter that included a business case,
project assets, enterprise environmental factors, and a summary milestone
schedule and budget.
“We knew it would be a project that would take several years,” says Patrick
Arlequeeuw, P&G’s vice president of global business services, Antwerp, Belgium. “We spent some time on making the business case: What did we want
to get out of it? What were the business capabilities we wanted to have? What
is the investment and return needed as such? The interesting part is that the
preparation time was almost half the project.”
Sight Unseen
2010
The P&G team rolled out the transformation of the work process, organization and systems in waves
for a given set of geographies (in Western Europe) or customers (in North America).
1
1 July 2010: Western
Europe pilot: France
2011
2 1 January 2011: U.S. wave 1
3 4 1 April 2011: U.S. wave 2;
5
2 3
6
Germany, Austria, Switzerland, Belgium and Holland
4
7
1
5 1 May 2011: United Kingdom and Ireland
8
6 1 July 2011: U.S. wave 3:
all customer exports and
interplant systems
7
1 October 2011: Denmark,
Finland, Norway, Poland,
Portugal, Spain and Sweden
8 1 November 2011: Italy
P&G’s DAILY ordering, shipping and billing process
ORDER
OPEN
18,000 orders/day
The team also created a project statement of work that outlined the business needs and scope description. The overriding message was clear: The system would protect business continuity, deliver computer cost reduction and
improve governance.
8,000 trucks/day
SHIPMENT
Work This Out
CUSTOMER
150,000+
Information
Systems
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PAYMENT
Work
Processes
US$200 million/day
Organization
Structure
Operating
Strategy
250,000+ products
Go to Market
Strategy
The project was one of the largest in the company’s history, and carried great
risk along with the potential for big benefits. The team took a good, long look at
what could go right—and wrong.
“We looked at three sources to identify our risks,” explains Francisco Fraga,
director of IT, P&G, Cincinnati, Ohio. “First, we really looked at what has gone
well or not-so-well in other previous implementations in other companies. So,
we really looked externally to learn from those.
“At the point we’d started this project, we’d already done 70 smaller successful implementations of the software in the order, shipping and billing area of
P&G, so we had a wealth of knowledge internally.
“Finally, we reached out to our retailers, and I personally met with many of
our top retailers in North America to understand their own experiences with
other vendors that had gone through similar transformations.”
“The interesting
part is that the
preparation time
was almost half
the project.”
—Patrick Arlequeeuw, P&G,
Antwerp, Belgium
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P&G world
headquarters,
Cincinnati,
Ohio, USA
“At the point we’d started this project, we’d already done 70 smaller
successful implementations of the software in the order, shipping and
billing area of P&G, so we had a wealth of knowledge internally.”
Now or Never
With the project encompassing thousands of customers, products and retailers
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Photo by LEANNE SCHERP
From these discussions, the team identified three major risks:
Loss of business due to an inability to process orders in a timely way
n Loss of credibility because of a lack of quality in the shipping process
n Loss of sales as competitors took advantage of the transition
To mitigate and manage those risks, P&G introduced a board that
included three of P&G’s five regional presidents, along with all 14 of
P&G’s business unit presidents.
The move proved vital. Amidst one major acquisition deal, for
example, the board identified potential human resourcing issues
that could have thrown off the project. To minimize disruptions
Watch a video case
to the schedule, P&G reallocated staff from other areas of the
study of the Procter
company.
& Gamble project
Given the complexity of the project, P&G also implemented a
on the PMI YouTube
central technical and project management office team in each region.
channel.
Local market teams mostly gathered in country head offices, but collocation of big parts of the teams was required for critical weeks such
as training and integrated testing.
To build esprit de corps among the team members in more than 50 countries,
leaders implemented networking events when central and local resources were
mixed for specific project periods. They also encouraged management visits that
featured inspirational speeches, milestone recognition and celebrations for the
completion of particular phases.
n
Photo courtesy of P&G
—Francisco Fraga, P&G, Cincinnati, Ohio, USA
from small shops to one of its
largest global retail partners, the
team kept a keen eye out for features being added. “With a project like this, it is so easy to add
scope,” says Mr. Arlequeeuw.
Looking to keep the project
on track, the team established
a set of global workshops to
refine the scope as the project
progressed.
Headed by a business leader,
a subject-matter expert and an
IT leader, the workshops used
techniques such as brainstorming and mind mapping to document potential gaps in scope.
The results allowed for planning, tracking and reporting of
any given requirement throughout the project life cycle.
The board also discussed possible project enhancements—and
dug deep to see if the potential
benefits were actually worth it.
As implementation drew closer, P&G conducted vigorous testing to simulate the daily order cycle. Once the system was ready, the team executed the
rollout in three waves.
To keep things running smoothly, so-called “war rooms” let team members
“stay on top of what was going on inside the project and react to anything out
of the ordinary,” says Mr. Pont. The goal was to communicate everything that
happened on the first day of implementation to other teams across the world.
“This project was all about changing everything with the external world not
noticing at all,” says Mr. Pont.
It worked.
“One of the things I feel very proud of was how we were able to mitigate
the risks successfully and really be able to have a zero impact on the day-to-day
operations of our business and our retailers,” says Mr. Fraga.
Shipping times and customer satisfaction improved with the new system—
though to the outside world, it just seemed like business as usual. PM
Bruno Pont,
left, and
Francisco
Fraga, P&G
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