Avon’s US$125M IT Software Project Mistake

by drjim on August 20, 2014

Avon made a big mistake when they designed their new software

Avon made a big mistake when they designed their new software
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As CIO we have a number of different tasks that the company is expecting us to do. However, there is one task that takes priority over all of these other takes: implementing large software projects. Over at Avon they just did one of these big projects and it has ended in failure. What did the Avon CIO, Donagh Herlihy do wrong?

The Project

Avon knew that they had a problem. Their order management software system was old and out-of-date. Avon is a company that is built on a direct sales model. This means that its representatives are not employees. The order management software is a fundamental way that the company interacts with these front line troops and so it can be very difficult to make changes to this software system.

However, four years ago Avon’s CIO Donagh Herlihy who has been with the company since 2008 decided that it was time to update the system. Since Avon is not a software company, they knew that they needed a vendor partner for this project. They picked SAP AG as the partner that they wanted to work with.

There were three goals for the new order management software solution. The first was to boost the productivity of their representatives Next they wanted to improve their inventory management. Finally, they wanted to streamline their procurement.

What Went Wrong

In the end this IT project did not work out correctly. The new order management system was rolled out in Canada first with the expectation that Russia, Brazil, U.S., U.K., and Mexico would be next. However, the system was so burdensome and disruptive to the Avon Canadian sales representatives that instead of learning how to use the new system, they instead left the company.

So many representatives left the company because of the new software that the company has changed its mind and will not be rolling out the software to other countries. Instead they are going to write down between US$100M and US$125M.

What went wrong here? Donagh Herlihy brought in a respected software integration company, SAP, and a SAP spokesman is saying that “… the software is working as designed…” Having worked on a number of these SAP projects, I suspect that what he is saying is correct, but at the same time I’m willing to guess that the system is almost unusable and that’s why representatives are leaving in droves.

Something went wrong with this project. I am just guessing, but I think that the user interface is just too hard to use. Out of the box the SAP software’s user the interface is very, very technical. It is designed to be “hidden” from the end users as a part of the project. What I think happened to Donagh Herlihy’s project is that all of the time / money was spent on the back end of the SAP software hooking it into the various Avon ordering and inventory management systems. There was not enough time or money left over to change the generic SAP user interface enough to make it easy for the untrained Avon field representative to use.

What this means is that when Avon sat down with their Canadian sales representatives to show them what they were going to have to do to enter orders into the new system, it turned out that it was going to take a long time and be very difficult to do. Clearly the Avon CIO had not done enough research into just what the impact of the SAP software’s user interface would have on the end users.

What All Of This Means For You

Avon is in the process of writing off US$125M for a SAP order management IT software project that failed. The Avon Canadian sales representatives have been voting with their feet and have been leaving the company in large numbers rather than use this difficult and complicated piece of software.

Avon’s CIO Donagh Herlihy was in charge of this project. What went wrong? It’s not completely clear, but based on experience with other SAP projects the guess is that the user interface portion of the project was left being too complicated. The project’s money and time was spent on interfacing the back end systems and the user interface turned out to be too complicated for the Avon representatives to learn to use.

As CIOs we are ultimately responsible for the success of our IT projects. In the case of Avon, it appears as though the end users were not involved in the design of the new system. The end result was a solution that they were not willing to use. You need to make sure that you take the time to carefully work with your end users so that there are no surprises and the final product that you deliver to them meets their needs.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: What do you think that Avon should do now? Their existing systems are still old and out of date…?

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P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

The era of IT as we’ve come to know it is coming to an end. The IT department functions that have gotten us this far are now coming to an end. Keeping the company’s email systems up and running, implementing an big ERP project, and securing the corporate network from the bad guys is no longer what the company needs us to do for them. Will you and your IT department be ready for the new world?

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When you are hiring, make sure that you hire the right people…

When you are hiring, make sure that you hire the right people…
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As the person with the CIO job, one of your most important jobs is to hire the right team to help you run the IT department. The importance of information technology is understood by CIOs, but the importance of the hiring process all too often is not. CIOs will often try to perform this job based on their “gut feel”. What we all need to understand is that hiring the right people is a process. If we follow the right process, then we’ll get the right people – every time.

The Hiring Process

All too often we fail to create any sort of process for getting to know the person that we are considering inviting to join our team. Instead, we grab a copy of their resume just before the interview happens and head off to use what we think has worked for us in the past. Bad idea.

Instead, what we need is a process. The goal of this process has to be to uncover if the person that we are talking with would be a good fit for the company, the job, and your IT department. One way to create process that works would be to use the following four steps:

  1. Ditch The “Silver Bullets”: There is no such thing as a magical interview question. We have all heard about places like Google and Microsoft in which the interview process contains so-called curveball questions like “how many golf balls could you fit on a school bus”. These questions really don’t serve any purpose and the candidate knows all about them so you are not going to be getting any useful information from them when you use this type of question.
  2. Know What You Want: All too often we enter into the hiring process with a vague or ill-formed understanding of just exactly what type of person and skill set we are looking for. You can’t do this. Instead, you need to make sure that you have a crystal clear understanding of exactly what you are looking for in terms of skills, attitudes, and behaviors in the perfect candidate. Take the time to talk to people who’ve had the job before and find out what it’s going to take for the next person to be successful.
  3. Prove It: Some candidates can talk a good line. By listening to them you’ll come away with the impression that they’ve “been there, done that”. Don’t believe what you are hearing. Instead, always ask for proof. For hard skills, have them do whatever they say that they can do. For soft skills, put them in a situation where they can show you how good their soft skills are. Make sure that you are buying what you really think that you are buying.
  4. Don’t Do It Alone: Hiring is a difficult process. Don’t try to pull this off all by yourself. Instead, involve other people. In order to hire the right person, it takes perspective. Always try to involve at least two people in the interviewing process and try to expose the candidate to the people that they would be working with in order to get their feedback. The more inputs that you are able to collect, the better the chances that you’ll make the right hiring decision are.

What All Of This Means For You

The person in the CIO position has the responsibility to correctly staff their IT department. This means that you need to know how to go about hiring the right people. Forget about going with your “gut feel” and instead implement a process that will deliver to you the right person for the job each and every time.

This process has to be based on fact. Ditch the clever silver bullet questions – they never work. Make sure that you know what you are looking for – you’ll never find it if you don’t. However, never take the candidate’s word for it, instead verify that they have what it takes to do the job. You can only do so much, make sure that you’ve got back up on this task and get their input as the process moves forward.

The good news is that you can avoid hiring the wrong candidates and you can hire the right ones. The bad news is that this is never easy to do. Take the time to implement a hiring process that works and you’ll find that your IT department has been staffed with all the right people.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World IT Department Leadership Skills™

Question For You: How many separate interviews with a candidate do you think that you should have?

Click here to get automatic updates when The Accidental Successful CIO Blog is updated.

P.S.: Free subscriptions to The Accidental Successful CIO Newsletter are now available. Learn what you need to know to do the job. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

As CIO we have a number of different tasks that the company is expecting us to do. However, there is one task that takes priority over all of these other takes: implementing large software projects. Over at Avon they just did one of these big projects and it has ended in failure. What did the Avon CIO, Donagh Herlihy do wrong?

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