Failure of Final)

8/3/2019 Failure of Final)

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CRM FailureHersheys Foods Corp.

Group MembersRishi Mehta (35)

Priyam Modi (36)Gaurav Mehta (124)

Hetal Gutka (159)


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Causes of CRM Failure & Impact

Introduction

Need for an ERP implementation

IT Partners & PlanActual Outcome

What went wrong?

Learnings

Hershey today The turnaround

Flow of Presentation


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CAUSES OF CRM FAILURE


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Causes CRM failure

Poorly set objectives

a. Efficiency vs. competitive advantage

b. Select strategic changes, re-platformingexisting processes, or converting currentprocesses to Best Practices

c. Focusing on Internal rather thanCustomer Priorities


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Causes CRM failure

Lack of Senior Leadership

a. Leaders fail to engage themselves

b. Leaders disengage themselves before thecompletion of project

Inadequate Planning and Scope Setting

a. Bing Bang Approach


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Causes CRM failure

Implementation Missteps Improperly staffed teams, and

Falling into technology traps

Lack of change Management

Inadequate Post-ImplementationOperation


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IMPACTS OF CRM FAILURE


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Impacts CRM failure

Financial Performance Market share and operating losses

Failure to achieve a return on investments

Budget overruns

High post-implementation running costs


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Impacts CRM failureCustomer Service Quality

Customer confusion, frustration, and dissatisfaction Lower service levels

Slower time to market

Negative brand perception Sales Effectiveness

Lower sales force productivity

Increased sales force cynicism toward new systems

Increased sales force turnover


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Impacts- CRM Failure

Cultural Impacts Low morale within IT and affected departments Growing cultural cynicism within the company

toward adopting business change Company-wide loss of confidence in its ability

to enact change Lost jobs in the executive suite

Propensity for companies to become overlyconservative with regard to investments instrategic initiatives.


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INTRODUCTION

H h


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HersheysA brief overview

One of leading chocolate manufacturer in world.

Large chunk of the companys sales comes in followingseason Easter

Valentines day

Back to school Halloween

Christmas

*Halloween & Christmas accounted for 40% Profit

Need of an efficient and reliable logistics system to cater tothese large number of seasonal requirements. Reliableproduct availability is critical.


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NEED FOR IT

H h


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HersheysExisting System

A network of 19 manufacturing plants, eightcontract manufacturers and more than 20 co-packers.

To tackle Y2K problem Hershey decided toreplace existing legacy systems.

The company was running on legacy systems, and with the

impending Y2K problems, it chose to replace those systemsand shift to client/server environment.


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IT PARTNERS & PLAN


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IT Partners

A $112 million worth of combination of softwaresfor CRM, ERP and forecasting.

Replace existing mainframe based legacy systemsby SAP R3 Accenture.

Production forecasting, scheduling andtransportation management Manugistics GroupInc.

Managing customer relations and trackingeffectiveness of marketing activities Siebel CRM.


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Implementation Plan

April 1999

Enterprise 21 went live

Jan 1997

Replaced 5000 desktop computersInstalled new TCP/IP network

hardware

Jan 1996-Roll out of the plan

Tackle Y2K issue byJan 2000

Replace Mainframe withSAP R/3

Advanced final date toApril 1999


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BENEFITS EXPECTED


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Potential Benefits

Fine-tune deliveries to suppliers. Upgrade and standardize companies business

processes.

Efficient customer driven processes capable of

managing changing customer needs. Reduce order cycle times and boost inventory

accuracy.

Reduce inventory costs.

Better execution of business strategy ofemphasizing core mass market candy business.


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ACTUAL SCENARIO


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After CRM implementation Unable to deliver $100 million worth of

Kisses and Jolly Ranchers for Halloween in1999.

Stock price down 35% Earnings drop 18% Order fulfillment time doubled to 12 days. Lost prominent shelf space for the season. Several consignments were shipped behind

schedule, and even among those, severaldeliveries were incomplete.


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WHAT WENT WRONG?


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Reason for problems

Squeezed Deadlines

Wrong Timing

Big-Bang Approach

Un-entered Data


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LEARNING'S


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Learnings

The evolutionary way Test each module before

releaseGo Slow

Data migration is important. Discipline in inventory.Data is King

Management should keep aclose watch.

Work for a common goal.Oversight Matters


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HERSHEYS TODAY


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A new challenge

To restore confidence in distributionsystems following the 1999 breakdown; to

extract additional efficiencies from the

supply chain.


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Turnaround Hershey made sure to take the time and resources to

thoroughly test the computer systems. Testing included putting bar codes on empty pallets and going

through the motions of loading them onto trucks so that any kinkswould be worked out before the distribution center opened forbusiness.

Began work on the upgrade to mySAP in July 2001. Hershey Foods said it had completed an upgrade to

mySAP.com completed in 11 months, 20% under budget.

Hershey now has an inventory location accuracy of 99.96 %

and can turn orders within 24 to 48 hours of receiving anorder as opposed to the previous 10-plus days that it took.


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Additional facilities Opened in 2000, to help custom pack some

products at its distribution centers, removing co-packers from the chain.

To strengthen the overloaded physical logisticsinfrastructure.

To help with errors in forecasting. Enabled by WMS from Mc Hugh DM+. In its few short months of operations, EDC III

nearly has halved the companys order-cycletimes of a year ago while dramatically boostinginventory accuracy.


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HERSHEYS TODAY

Revenues of nearly $5 billion and almost 13,000employees worldwide.

In 2005 & 2006, Hershey acquired the Berkeley,California-based boutique chocolate-maker Scharffen

Berger, Joseph Schmidt Confections, the San Francisco-based chocolatier and Dagoba Organic Chocolate, aboutique chocolate maker in Oregon.

Markets Hershey's, Reese's, Hershey's Kisses, Kit Kat,

Twizzlers, and Ice Breakers.


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REFERENCE LINKS http://www2.isye.gatech.edu/~jjb/wh/tidbits/top-sc-disasters.pdf

http://www.crm-resources.net/CRM-Software-Failure.php

http://www.computerworld.com/computerworld/records/images/pdf/44NfailChart.pdf

http://www.crmodyssey.com/Documentation/Documentation_PDF/Why%20CRM%20Fails-Memo%20to%20CEO.pdf

http://www.cio.com/article/31518/Supply_Chain_Hershey_s_Bittersweet_Lesson

http://www.icmrindia.org/casestudies/catalogue/IT%20and%20Systems/ERP%20Implementation%20Failure-Hershey%20Foods%20Corporation-Marketing.htm

http://www.zdnet.com/blog/projectfailures/three-big-reasons-crm-initiatives-fail/5143

http://media.techtarget.com/searchCRM/downloads/CRMUnpluggedch2.pdf


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Thank you!

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Failure of Final)