1. Campbell Soup Company Harmonizing Processes and Empowering Workers
By: J. Ross & C. Beath
MIT (2008)
Presentation by Silvia Faulstich
Dec. 7, 2010 BUS 550
My presentation is on the Campbell Soup company that has been around for 141 years since It is a global manufacturer and marketer in 2007 it made 8Billion in sales and had 23,000 employees. This case these two ladies presented at MIT’s school of management takes an indepth description of a Campbells Soup approach to an IT management issue.

2. 2001
CEO; Douglas Conant took over What he found: -Company was lagging its competitors in both financial & market performance -Consumers were becoming more price and health conscious -Campbell was competing with giants such as Kraft and Nestle.

3. Rejuvenation Strategy
Shift Campbell’s portfolio of brands and products to emphasize growth, and driving a quality agenda.
Distinguish core business activities from non- core, then manage non-core for low cost while managing core (sales, marketing, and R&D, trade management, & product lifecycle management-for differentiation and growth).

4. Project Harmony
Four year effort to create more standardized and integrated business processes
Campbell did not want to experience the performance dip common in companies implementing major new systems
SAP (Systems Applications and Products)

5. New Governance Design
Allocate ownership of project outcomes to senior executives
Free up top talent to ensure effective process design and smooth implementation
Benefit from the expertise of external partners
Empower stakeholders to learn from one another and drive benefits from new systems and processes

6. Original Plan
Reduce Operating Costs

7. Improvements
Supply Chain
Accounting
Customer Service

8. Sustained Benefits
Depended more on empowering workforce across functional lines to improve business performance

9. 2007 Campbell was significantly outperforming industry averages.
Shareholders returns of 16.2% vs. industries 7.7%

10. HOW First corporate CIO
Had Decentralized IT made IT more standarized and centralized

11. IS Lite Approach
Centralized shared IT services not unique to business units
Outsource IT responsibilities that did not differentiate the company from its competitors

12. Focus
By outsourcing the non distinctive; IT leaders could focus on strategic requirements such as relationship management, governance and architecture.
Not necessarily cheaper to out source infrastructure operations and other technical responsibilities; but gained a partner who could deliver best practice, readily available computing capacity, and protection against disasters

13. Outsourcing To IBM most IT operations and desktop support
IBM took on more application maintaince
IBM ;three in the box management team
An account manager;coordinated IBM sales and services
IBM Business Consulting services; Campbell’s client satisfaction and IBM’s revenue and profits goals
Executive IBM strategic outsourcing

14. IBM
IBM was the Campbell’s integration partner for the their SAP implementation.
Win-Win for Campbell and IBM
Campbell was driving costs down by outsourcing while IBM was getting Campbell business value projects (SAP) and able to add new requirements into their contract.

15. IBM $ IBM consistently reduced their annual base charges
The total IBM contract grew between $.5 and $1 million a year because of the new service requirements

16. 2005
Campbell had invested $20 million to make infrastructure “standard and industrial strength”.
Through benchmarking; Campbell was average or above average in technical infrastructure, security control and computer operations reliability
Able to eliminate $4 million in base operating costs

17. Campbell software
Overtime Campbell had developed multiple software applications to meet specific needs that created nonstandard business processes.
Campbell was like a many different stores ; each one doing business differently .
Confusing for customer

18. Infrastructure
Clean up its systems and transform it business processes
Not just process improvement; create more competitive and agile company

19. The Big Change Have the same software in every unit
Reporting everything the same
Handling transactions the same
Changes to the software would be centralized

20. Effects of the big change..
Employees would have more time to think about how to utilize information to their advantage.

21. 2003 Project Harmony is endorsed Implementing SAP
4 months for development of a formal business case and implementation plan

22. 2004 $125 million is committed in capital for a three year project
They pulled people from around the world to ask what things had to be the same when they deployed SAP?
Way to engage everyone in the fact that they were going to deploy SAP around the world over time

23. Global Framework Objectives
Utilize standard SAP capabilities
Reduce unnecessary touches
Maintain/Improve customer service
Maintain/Enhance order fulfillment process
Utilize “available to promise”
Create customer transparency
Drive “easy to do business with” concept
Streamline/Improve controls
Present a single voice to customer

24. Project Harmony’s streams
Make to Ship
Account to Report
Order to Cash
These were horizontal business streams. Standardizing and integrating these made them more efficient and improved customer service

25. One Standard Solution
Not deviating from the process but offering on standard solution, even if it’s not perfect; the standardization benefits will outweigh the loss.-David White SVP GSC

26. Total Delivered Cost (TDC)
New key performance metric to focus managements attention
End to end cost of producing a product and getting it to the customer
Campbell’s goal; flat TDC

27. Project Harmony Implementing SAP
Additional system components (creation of data warehouse)
Establishment of a shared services organization for finance and accounting
Six month planning state to identify key resources and prepare managers

28. Planning Harmony Defined the business case Implementation Plan
Resource requirements
“Invested all lot of time, but made the difference-”Robert Depani, VP, Project Harmony

29. Governance Structure 1. A sponsor team of senior executives
2. Operating committee made up of project leaders
3. Three process advisory groups-one for each of the three key processes

30. The Teams Senior Management Sponsors Operating Committee
Process Advisory Groups
Project Team-approximately 60 Campbell people and more than 70 consultants and other external experts

31. Other Location
Moved the project team into a separate building and focused full time on project implementation
People has their areas back-filled or restructured
Allowed team to stay focused

32. Peeling the Onion
Peeling the Onion approach starting with broad goals and high level expectations and drilling down to work group and individual level .
Created functional roles, which described the different sets of responsibilities that somebody would need to perform in each process

33. New Company
“Pretend you have joined a new company, you have to forget everything you’ve been doing for the last however years”
-Nigel Payne

34. Canadian Pilot Program
2006 Canadian headquarters served as a pilot program
Implemented 75% of the project’s global processess
Prepared employees and customers one year ahead of the implementation

35. Implementation
Site preparation involved several month period of team building, data cleansing, local configuration tailoring, application interface development and organization design.
Each site received 3-6 weeks of training before going “live”.
After going “live” received at least one-two months..two people doing one job, provide hands on support, resolving problems.

36. Lessons learned
After each roll-out the lessons learned were captured and passed on to the next site

37. Savings
By 2007, Campbell reported hard savings in IT from retiring legacy technology and applications and reducing maintenance just under $10 million.
2008-well over $10 million

38. New Culture
Managers can now identify were they can improve the process
Now there is an infrastructure that encourages and allows process improvements

39. Future Going to a full running business using SAP for everything
Supporting and maintaining interfaces to the legacy systems are very expensive

40. End Results
Customer Care employees could manage by exception; they followed up on fewer order problems while responding more effectively to orders needing their attention.
Supply Chain employees reported the ability to quickly diagnose errors and provide training when errors resulted from people mistakes.
Plant managers claimed significant savings from faster recognition of equipment problems.

41. Most profound change
The company’s culture.

42. questions How old is Campbell Soup Company? 141 years
What was the biggest change for the company?
The culture
What software program did they implement?
SAP