In 2001, Douglas Conant was named CEO of Campbell's soup, at that time the context was not ideal since the company was lacking in terms of performance and was facing competitive pressure from consumers (price and health conscious), competitors (domination of Kraft and Nestlé) and even from retail partners (private labels). According to Scott (1992 ) and his contingency theory, organizations have to adapt to their environment to achieve success.
Conant's needed to deal with uncertainty; his goal was to operate a deep business transformation, and information management would be the key to success since information helps to reduce uncertainty, to adapt and to develop a strategy. All for one purpose: to hold the grail of organisational performance. In order to adapt to a constantly changing environment, organisations need to implement communication and coordination mechanisms to ease information flows.
For the CEO and senior management, the best way to improve the company's situation would be to improve business performance through information management. In order to do so, Campbell Soup decided to implement SAP with the aim of reducing operating cost, empowering work force and innovating in order to achieve competitive differentiation. We will discuss how the implementation of SAP reflected an organizational perspective on information management, and the critical success factors in terms of organizational design, culture and leadership.
The implementation of SAP reflects an organizational perspective on information management.
According to Detlor (2009), the fundamental aspect of the organizational perspective on information management is that it perceives information as a strategic asset. Organizational perspective on information management also implies management and control over the full lifecycle of information processes ranging from creation to use for the betterment of the organization itself. As well, information technology plays a critical role (Detlor, 2009, p. 104-105).
The implementation of SAP at Campbell Soup is the result of the company's need to standardized and integrate businesses in order to achieve growth. The implementation of SAP does reflect an organizational perspective on information management.
One key indicator for that assumption is the critical role played by information technology. Right after she has been named CIO of Campbell Soup, Doreen Wright has decided to focus on IT. She rapidly noticed the lack of harmony within the IT organization, which was creating a mess in the whole company as it was composed of 22 businesses that were taking their own decisions and working their own ways. As she says, “there was no glue”. As a consequence, the company was using the same system, but under different versions and had to deal with more than one thousand applications.
As a solution, she decided to centralize most of IT and build a strong IT infrastructure in order to give it a global of governance that would be the starting point of standardization and integration of Campbell Soup businesses. However, according to Marchand et al., focusing on IT is not enough as it is the interaction of people, information and technology that affect business performance.
Detlor (2009) has set management and control over the full lifecycle of information processes as another key indicator for organizational perspective on information management. The CEO's main strategy was to distinguish core activities from non-core activities. He wanted the company to focus on sales, marketing and R&D, trade management and product lifecycle management. Basically, activities based on information as each of these departments develops and uses information to control performance measures. According to Choo (2008), management of information processes is a strategic advantage that gives benefits to organisations in terms of reduction of costs, reduction of uncertainty and risks, added value to existing products and services, creation of new value for information-based products and services.
Managing information for differentiation and growth depicts the third key indicator of the organizational perspective on information management represented by the implementation of SAP, namely, the consideration of information as a strategic asset. Indeed, SAP has been implemented to support Douglas Conant, and his strategy of differentiation, putting the activities that use information on the frontline.
The critical success factors related to organisational design, culture and leadership for SAP deployment at Campbell Soup.
Organisations use systems to advance their organisational design. Campbell Soup has decided to opt for an ERP, namely, SAP. According to Jones (2012), organisational design is the result of the selection and management of organisational structure and culture elements in order to achieve organizational goals and to control activities.
The organizational structure is a formal system of task and authority relationships that controls how people cooperate and achieve organisational goals. And organizational culture is a set of shared values and norms that controls members' interaction within and with people outside the organisation.
Campbell's senior management had planned a transformation and everything was ready for the successful deployment of SAP. One of the critical success factors was that the CIO and IT departments were connected to the executive teams and the business need of Campbell Soup. For success, Campbell needed a continuous and dynamic process (Chan et al. 1997, Henderson & Venkatraman 1992) called alignment that would synergize SAP with business strategies and objectives in order to contribute or enhance the business performance over time. It not a coincidence if the project is called Harmony, it is the word Luftman et al. (1993) used to refer to alignment. Campbell has changed the business activities of departments in order to meet the requirement of SAP in a way that there will be a harmony and internal coordination with overall organisational objectives. Processes were going to be integrated and standardized, new roles and responsibilities were emerging in the company. Another critical success facto is that Campbell Soup senior management took into consideration the human factor. Indeed, "Human behaviour disrupts the best laid organisational plans and thwarts the cleanliness of the logical relationships found in the structure” (William Scott, Organisation Theory, 1951). Senior management knew they would have to deal with behaviours, not only once SAP implemented, but as well during the transformation. They took the time to make everyone aware of the deployment of SAP around the world. They set global framework objectives that made evident the need for an enterprise-wide-performance mindset rather than a business unit performance mindset. That was going to be a huge shift in organisational culture. They have created a common goal by setting the Total Delivery Cost metric that allows calculating the end-to-end cost of producing a product and getting it to the customer. The common goal was a flat TDC, which required an enterprise-wide thinking. According to Mark Sarvary (former president of Campbell North America), SAP would give the ability to know TDC as well as it will contribute in improving it. TDC is a good representation of SAP's strategic alignment. That helped people to accept the organizational transformation and to overcome their natural resistance to change. It was also useful as it prevented senior management from loosing sight of the bigger picture while concentrating on the IS implementation. And finally, it brought commitment
Organisations need knowledge about the individual activities and about the ways that the different activities are integrated and linked together in a coherent organisational system in order to make effective design decisions. Without that knowledge there is a risk of taking incorrect design decisions. Senior management decided to make a cross-functional company rather than functional. They reorganized the enterprise into a matrix structure. In formal terms, a matrix is an organizational design in which employees have multiple reporting relationships; one person may be accountable to two or more functions or businesses. The typical goal of this design is to ensure cooperation among business and market leaders, by dispersing accountability. Senior management worked thoughtfully and diligently to redefine decision rights, to place strong talent in high-priority roles, and to set up new financial systems that made the data on business results highly transparent throughout the company. They put everyone into new, cross-disciplinary management teams, in which one individual would report to two or three teams, and charged the teams with developing local strategies that would reflect the global strategy set by business units.
Another key success factor was the emphasis put by the company on sharing information and communication. Indeed, it was applying lessons learned, once a business unit had went live, they had to assist the next business unit for the implementation of SAP. It created informal national and international networks that are essential in such a complex and wide spread company like Campbell Soup. Senior management has encouraged communication to see fresh ideas emerging all along and after the implementation.
The implementation of SAP at Campbell Soup has been a compelling success story that is very rare to find in the field of ERP implementation. This success has been possible because of the management's awareness of the organisation's complexity. It has been taken into account seriously, along with the need to adapt to a rapidly changing environment. It has been a success because of the organizational perspective on information management and because of the alignment of SAP with the organizational goals. The success also relies on the change of organisational culture and the consideration of the need to manage behaviours from the start of the project. The company hasn't been scared to operate a deep transformation and to adapt the whole business to the new Information System. The management has never forgotten the global framework and stuck to the initial objectives in order to create an enterprise-wide perspective for the growth and performance of Campbell Soup.
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