Continuous Improvement
Colgate-Palmolive has implemented its core SAP portfolio in 100 countries representing more than 99 percent of the business. "Our 12 year strategic partnership with SAP continues to grow and serves as a key enabler to our business growth and success. This partnership success has most recently been highlighted by our joint development work on customer investments known internally as Colgate Business Planning (SAP Trade Promotion Management)," says Ed Toben, senior vice president, Global Information Technology & Business Services .
A core directive the Colgate-Palmolive IT Organization adheres to is "continuous improvement"; case in point, the Colgate Business Planning project (CBP). First started as a sales initiative around trade promotion management (TPM), it has grown into a company-wide platform with aggressive global implementation goals. The project has challenged Colgate's IT department to re-design the successful project management strategy they have been using to develop and implement SAP software solutions for a decade.
LEVERAGING THE SAP INVESTMENT
Colgate's first SAP Order to Cash (SAP R3) implementation was in 1996. Today, 100 countries representing more than 99 percent of the business are on this core system. The full portfolio includes SAP's Supply Chain, CRM, Business Intelligence, Human Resources and Portals applications. With this infrastructure in place, emphasis could now shift to trade promotion effectiveness, leveraging the end-to-end information flow: Customer Development, Operations and Finance.
MAKING IT HAPPEN
To ensure success and meet aggressive timelines, a global business team was formed headed by a senior business leader. Key individuals from customer development, marketing, finance, supply chain and change management with diverse global backgrounds were chosen for the team. They were charged with both designing a standard process that could be implemented globally and working with the IT department to develop the system solution needed to enable that global process. In addition, each business region was assigned a senior business sponsor, supported by an expert champion.
The creation of this senior business team working with regional support has been a critical factor in the success of this initiative, according to Lou Schneider, director Global Development, Demand Chain & Commercial Effectiveness. "This team engaged thought leaders throughout our company to include both the current best practices, as well as the future vision in the design of our CBP process. Having the top senior managers in the company constantly asking 'Are you thinking of everything? What are you missing?' was the right message to the organization about the high priority this project has within the company."
While the business owners were the genesis for the project, Colgate's practice is to treat IT as a business partner as well. In addition, Schneider says, Colgate's strategic relationship with SAP means they too brought new concepts to the table. "So, with ideas coming from three sources, we have an equal partnership in continuously improving processes and application solutions -- the business, the IT department and SAP," he explains.
INTEGRATED PROCESS AND EXPECTATIONS
The resulting CBP process designed by this team is now rapidly becoming the new global culture for all subsidiaries around the Colgate world. Simply put, CBP has four basic steps: "top down" goal setting, "bottom up" account planning, plan execution, and finally, post-evaluation. All of these steps are integrated from a process and organization perspective. The challenge for the global business team and the IT development group was to provide a user-friendly system solution that would truly support and enable these processes. From a project management standpoint, the system was required to be both globally standard plus flexible to local "go to market" requirements. In addition, the project was being tested concurrently on four continents. Clearly a new project development and implementation model was required.
Schneider says because of Colgate's close partnership with SAP and aggressive strategy to implement all SAP systems applicable to Colgate's business model, the foundation was there to access all the master and transactional data needed to support this integrated business process. So with the core IT systems in place, Colgate was able to design a process that built improvements from there using SAP's Trade Promotion Management application as the engine, but using SAP Portal, SNP, R/3 and BW modules as vital components.
OUT OF THE BOX" PLAN
Since the early days with SAP in the mid 90's, Colgate has had two groups focused on the development and implementation of new applications. The Global Development Department has been responsible for the evaluation of new software from SAP, working with the Colgate business "owners" on choosing the products that best align with their process strategies and then preparing global implementation bundles so these new products could be rolled out globally.
Three shared service organizations are in place around the world and charged with the actual implementation and support of those new applications in Colgate subsidiaries. One major key to the success of Colgate's many SAP software applications has been a rigorous approach to the first implementation in any region. Global development, the shared service organization for that division, and, many times, SAP work together to document the detailed specifications and scenarios needed for that first country. Both Colgate groups then implement and support the pilot through an agreed "post go-live" period of time. Once that pilot is complete, that shared service organization begins rolling out the "application bundle" to the other subsidiaries. Global development then moves to the next region and shared service organization and begins the joint implementation process all over again.
According to Schneider, this was a very productive method of implementing new systems and transferring knowledge of the new applications from global development to the shared service organizations. However, the implementation timetable for CBP required a new, faster and even more rigorous approach.
So, Colgate's IT department decided the best way to approach this challenge was by re-designing their project methodology to more closely reflect the way their strategic partner develops and releases applications to their customers. With the global business team in place to lead the design, the decision was made to set up a project plan having global development build the first version system and implementation bundle centrally, pilot in two subsidiaries at the same time and then have all three shared service organizations begin roll outs concurrently while global development moved on to the next cycle of development requirements.
Schneider states, "This cut the overall global plan timeline by almost 35 percent versus the traditional methodology."
Colgate also made the decision to develop its evolving system solution in "cycles" to accelerate the implementations and identify additional functionality requirements for future cycles. As new "work packages" are surfaced from either the subsidiaries, divisions or the global business team, they must survive strict scrutiny and prioritization based on their global applicability. Once there is a substantial work package list that has been approved and prioritized by the global team, global development groups these packages into a cycle and, based on resource and timelines calculations, publishes a release schedule. To maintain the integrity of requirements and quality of development, the shared service organizations and selected subsidiary users test and approve the cycles before they are released for implementation.
CONTINUOUS IMPROVEMENT
CBP is still in the early stages as a global business process and will continue to evolve and improve as Colgate subsidiaries around the world begin to surface best practices and the global business team identifies additional process opportunities. In a testament to the core IT directive of "continuous improvement," Colgate's IT global organization is tackling the challenges of concurrent development and implementations for each cycle. Subsequent cycle plans are modified to minimize those issues and to reduce development testing times.
"We are very excited to have established a global standard which will enable us to quickly layer on any new developments and upgrade our core SAP applications when appropriate. This gives our business the confidence that no matter how far out of the box they take the process, we can develop and implement a global integrated system solution to support it much faster than ever before," says Schneider.
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COLGATE BY THE NUMBERS
WORLDWIDE SALES IN 2006:
$12,237,700,000, a 7.5 percent increase to an all-time record level.
COUNTRIES OF OPERATION: 200
INTERNATIONAL OPERATIONS: Account for 70 percent of sales
CORE GLOBAL BUSINESSES: Four - Oral Care, Personal Care, Home Care and Pet Nutrition
FOUNDING YEAR: 1806 - William Colgate starts a starch, soap and candle business in New York City
MERGER: 1928 with the "Palmolive-Peet Company"
NAME CHANGE: 1953, officially becomes Colgate-Palmolive Company
SELECTED ACQUISITIONS:
1972 Hoyt Laboratories 1976 Hill's Pet Nutrition
1987 Softsoap from the Minnetonka Corporation
1991 Murphy Oil Soap 1992 the Mennen Company 2006 Tom's of Maine
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COLGATE'S CORE DIRECTIVES
According to Colgate's Web site, the company's three "fundamental values" are - caring, global teamwork and continuous improvement. The company states that "they are the foundation for our business strategy and are reflected in every aspect of our work life." The company defines the values as follows:
Caring
The company cares about people: Colgate people, customers, shareholders and business partners. Colgate is committed to act with compassion, integrity and honesty in all situations, to listen with respect to others and to value differences. The company is also committed to protect the global environment and to enhance the communities where Colgate people live and work.
Global Teamwork
All Colgate people are part of a global team, committed to working together across countries and throughout the world. Only by sharing ideas, technologies and talents can the company achieve and sustain profitable growth.
Continuous Improvement
Colgate is committed to getting better every day in all it does, as individuals and as teams. By better understanding consumers' and customers' expectations and continuously working to innovate and improve products, services and processes, Colgate will "become the best".
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ON INNOVATION
In Colgate-Palmolive's 2006 Annual Report, President and Chief Executive Officer Ian Cook talks about the company's innovation strategy.
"Our innovation strategy encompasses initiatives touching all of the company's business functions and processes. We have established a Global Innovation Fund that allocates seed money to employees who recommend innovative ideas in any area of the business. At the same time, we are continuing to establish partnerships with outside experts, suppliers that are technical leaders, the academic community and leading research firms, to develop ideas for new products and processes. We have also established a new Global Big Hits process that identifies new product opportunities that are of the highest strategic value for Colgate based on a combination of criteria including: size of opportunity, which projects have the most incremental potential to reach new consumers, which are truly new to the market and which have potential for global expansion. Once identified, these projects are provided additional resources, including ongoing senior management involvement, to get them to market faster. The Ajax Professional line of cleaning products in Europe is just one example of several successful introductions already nurtured by this process."