Hitting the Sweet Spot

It was a party no one wanted to miss. The CEO was there and so were a handful of his direct reports. Top brass from a select team of technical and functional executives were there, too. All attendees were charged with executing a multimillion dollar ERP implementation and the kickoff party marked the official launch. The day was Wednesday, April 9, 2003. The place was the boardroom of Imperial Sugar, the nation's largest public sugar producer.

Rounding out the group of nearly 40 attendees were representatives from PeopleSoft, a key business partner in the IT implementation, and George Muller, Imperial Sugar's vice president and CIO. As head of the project, Muller used the party to clarify the vision and context of the company's large capital investment in technology.

Conversation centered on the project's budget and milestones, on key people and perspectives. In the end, it was a great success and an important morale booster. But everyone who attended knew the stakes were high. Imperial Sugar was at a crossroads. Mistakes had been made. A new team was in place. And now it was time for a turnaround.

"The team we assembled was a result of our board of directors approving a multimillion dollar upgrade and implementation on Friday, February 28 of last year," says Muller. "This was part of a success strategy I call the 10 commandments. (See "Muller's 10 Commandments" on page 13.) One of those commandments is to make sure you have good representation from the functional and technical sides of the business. Another commandment is to have executive support. So, we had the CEO and his direct reports and the functional and technical people there. Then we articulated the vision and set the wheels in motion."

Sugarland, Texas

Begun in 1843, the Imperial Sugar Company is one of the oldest companies in America. It grew steadily over the years until 1997 when it more than doubled in size. The acquisition of Savannah Foods and Industries boosted Imperial Sugar's annual revenues from $800 million a year to $2 billion.

When the economy of the sugar industry faltered, Imperial Sugar was weighted down with a tremendous debt load and forced to declare Chapter 11 bankruptcy in January 2001. When it emerged from bankruptcy eight months later, it had new owners, a new management team and a new turnaround strategy, which can be summed up as a commitment to paying down debt and giving Imperial Sugar associates the tools they need to do their jobs more effectively and efficiently.

"Technology is part of our turnaround strategy, which really puts the ERP project into perspective as to how important it is," says Muller. "We want to create tools that enable Imperial associates to have access to real-time information, to be able to focus on the customer and collaborate with them in real-time. The ERP project is also important in terms of helping us really make a presence in the sugar industry. One way to differentiate yourself in a commodity business is through technology and we have done some things in the last year and half that no other sugar company is doing."

The technology Muller is talking about is a multiphase, multiyear IT vision that includes upgrading or implementing the systems for financials, order-to-cash, plan to purchase and a full refresh of the extranet. That's a tall order for any IT team to tackle. Here's the gameplan.

Four-Part Project

One of Muller's 10 commandments for an ERP implementation is to pick an enterprise application with a strong suit in best business practices. In his estimation, the PeopleSoft ERP suite provides this through an integrated, feature-rich portfolio of modules that includes nearly everything Imperial Sugar needs. Just prior to the start of the current project, Imperial Sugar upgraded its PeopleSoft human resources and payroll modules from client-server technology (version 7.5) to Web-based architecture (version 8.3). The project took six months to complete, and one of the benefits Muller discovered is that now the HR, benefits and payroll departments can be supported by a single IT associate, something that couldn't be done prior to the installation.

Seven months after the big launch party, the first phase of the four-part project was complete. This involved upgrading the financial systems from PeopleSoft 7.52 to 8.4, and, according to Muller, the system went online "flawlessly. We had temperature gauges (milestones) laid out along the way and we came in right on target."

The second phase of the project, now under development, is to implement order-to-cash systems that include order management, billing and finished goods inventory.

This will be followed by a third phase that focuses on manufacturing modules, including demand planning, production planning, production management, billing, routing and cost management.

The final phase calls for rewriting and redeveloping Imperial Sugar's award-winning extranet, which was developed two years ago. While the extranet is the only one of its kind and allows customers to buy Imperial Sugar products 24x7 using just a Web browser, it interfaces with a 13-year-old mainframe order-management system that was written internally using Cobol and CICS.

The benefit the extranet brings to Imperial is "a more customer-centric focus on providing real-time collaborative information that helps customers reduce their supply-chain processing times," according to Muller. Other benefits include a reduction in playing phone tag with customers and overall customer-service costs.

Smart-Bomb Consulting

Although it didn't make the top-10 list, Muller's concept of smart-bomb consulting could well be the 11th commandment for successful IT deployments. "The name of the game," says Muller, "is to have the consultants come in, do their thing, transfer their knowledge and get out."

Muller keeps two or three consultants busy throughout the course of the project to help anchor the team, but whenever the team's forward momentum runs up against a wall he finds a consultant that knows how to make a particular process work. He brings them in for two or three weeks and says goodbye.

"For example, we were having a problem optimizing the payment predictor function and we wanted to find a consultant who had worked with it and knew how to get a really high hit rate," explains Muller. "We brought that person in for two or three weeks. He worked with our team and then we said goodbye. This system has worked unbelievably well for us and has kept costs down."

Another technique Muller uses to help achieve success is to develop a financial incentive plan for the technical and functional team members as a way to give them something to strive for. The incentive plan is devised to go beyond rewarding simple on-time delivery and link performance to quality-control criteria.

For example, according to Muller, "Not only did the general-ledger module have to be done on time, but it also had to be well tested. In other words, the business process owner, the vice president of accounting, had to sign off on it. Also, it had to interface with the accounts payable and accounts receivable modules. So, the plan doesn't reward modules by themselves on a little island. Incentives are based on criteria that include both the technical and functional sides of the project."

Part of the Imperial incentive on the go-live date and another part is payable 30 days later.

A big factor for a large, multiphase, multiyear ERP deployment is team work and Muller credits his talented, highly energized team of professionals for the success of the project, and that credit extends all the way up to the top brass and board of directors.

After the kickoff party, team-building events included attending Houston Astros baseball games, off-site barbecues and other fun, strategic events. But this is sandwiched between a lot of long hours and hard days.

No George Muller story would be complete without a final commandment, so here's the 12th -- training. "The best team can install the best infrastructure, the best database and the best applications, but if you don't train the end users," Muller says, "you will have a failure on your hands."

To prevent this from occurring, Imperial Sugar built a state-of-the-art, wireless-network equipped facility for in-depth training. "You can't wait until two weeks before you go live to start everyone learning the applications," he says. "If you do, it will be a disaster and you will miss your target."

There are no illusions in a commodity business. Sugar is sugar. Companies have to work hard to earn a customer's business through marketing, packaging, promotions and other methods of differentiation. One of those methods is technology, but not technology for technology's sake.

"The goal is to provide our internal folks with the right tools to extend our reach and connectivity to our strategic business partners and customers," concludes Muller. "We want to make it as easy as possible to do business with us. If we are truly delivering a value added proposition to our customers, we are going to make it a more compelling case for them to want to do business with us. And we are doing just that through technology, specifically through our current ERP project."

Sounds like the turnaround of Imperial is right on target thanks to a sound gameplan and adherance to Muller's 10 commandments.