Avon Canada The ‘Promise’ ProjectGROUP 4 – GENNA BERSANI, ERICA WYNN-KEARSE, ANTHONY SMITH

Agenda

• AVON BACKGROUND

• PROJECT OVERVIEW

• TIMELINE

• INITIAL PROBLEMS/RED FLAGS

• MATURITY LEVELS

• PREVENTION

• RECOVERY

• LESSONS LEARNED

Who is Avon?

Beauty Product Company

Founded in 1886

Multi-level Marketing Structure

Offices in over 100 Countries

Millions of Representatives

CEO at the time: Andrea Jung

Pic 1: http://wildmorrealty.com/wp-content/uploads/avon-logo.jpgPic2: http://www.forbes.com/profile/andrea-jung/

Project Background Perspective

2006, Avon announces its plan to invest in its Representatives

$120 million investment in revisions

Expected $400 million cost savings

Initiatives included:

Training representatives for leadership

Restructuring global supply chain operations

Realigning certain local business support functions

Streamlining transaction-related services

Why Create the ‘Promise’ Project?

Problem:

Original Ordering Done from Catalogs

Slow order placement or acknowledgement

No indication of availability or backlog

Result:

Unfulfilled orders

Backlogs

Excessively Long Lead Times

Pic: http://www.hints4beauty.com/avoncatalog/2013/campaign5/p42.jpg

The ‘Promise’ Project

Goal:

Create a new interface and app for use on mobile devices

Integrate real time inventory and shipping info

The Result:

Install three separate pieces of software to update the process

SAP

CRM (Customer Relations Module)

ERP (Enterprise Resource Planning)

IBM WebSphere e-commerce

Timeline – finish by late 2012 (less than 2 years)

Budget – Between $100-120 million – ROI of 5 years must not be exceeded

Pic1: http://egov.eletsonline.com/wp-content/uploads/2012/08/SAP-2.jpg

Timeline

2006: Announcement to stakeholders

Today: Still amassing losses

2010: Planning Began

May 2011: Plan is signed off by Executive Leadership

April 22, 2012: Andrea Jung is Replaced with Sherilyn McCoy

Late 2012: ‘Big Bang’ Release in Canada

2013: Shut Down in Q3

2014: Estimated $48.4 Million Loss

$55.4 Million Loss

•A team is established in White Plains, NY and comprised of select associates from Brazil, Mexico, Russia, US, and UK

Initial Problems

Combined two independent vendor products with a third party to integrate

No clear Lead Project Manager Identified

Hiring individual PM’s for each module of software during building process

Leadership of the company lacked cultural competence

Executive Sales Leader had little knowledge of new technology being launched

Large Scale Project

Poor communication with sales reps

Mobile App concept was relatively new

Rollout and Problem Discovery

In 2012/2013, the ‘Promise’ project was released in Canada

From the start, Representatives faced issues

Couldn’t properly use the new system

Logging in

Saving orders

Checking Inventory

Saving Inventory

Representatives

Not tech savvy

Part time – Low Pay

No incentives to stay

Results

Estimated that 16,000 employees left the company

Total Number of Avon Representatives lost: 6.21mill (2013) – 5.96 mill(2014) (4% decrease)

7% decline in revenue by Q3 of 2013

Discontinued global rollout indefinitely

1. Project IntegrationLevel: 1 2 3 4 5

Project Plan Development

Ad hoc Documented process

Risk, cost, schedule, quality, HR

Integrated w/ organization’s strategic plan

Improvement process in place

Project Plan Execution

Informal, verbal direction

Summary level metrics

Detail level metrics, templates

Variance & performance analysis

Lessons learned

Change Control

Ad hoc, without PM awareness

Scope only changes identified

Scope, cost, schedule identified

Integrated w/ control, risk management

Changes are in efficiency metrics

Project Information System

None Simple PM information system

Standardized system for all projects

Automated system

Continuous improvement of data & sys.

Project Office Informal, no standards or training

Established, training available

PM methods, PM training mandatory

Best practice, PM training for all team

Cost-tracking support, EV, PMP training

“Project Management Maturity Model,” Crawford, 2002

2. Project Quality Management

“Project Management Maturity Model,” Crawford, 2002

Level: 1 2 3 4 5

Quality Planning

High-level plans, ad hoc

Metrics of reviews, tests

Quality milestones, checklists

Product environment included

Process critiqued during project

Quality Assurance

No established practices

Walkthroughs peer reviews

QA checklists standard

Walkthroughs with other project teams

Feedback on processes

Quality Control

No established practices

Guidelines for testing (unit, integration)

Standards for testing, client involvement

Performance standards in place

Decisions on usability and fit of product

Management Oversight

Management involvement limited

Mgt assigns PM, receives reports

Institution has standard PM practices

Integrated w/ corporate processes

Active role in management

3. Human Resources Management

“Project Management Maturity Model,” Crawford, 2002

Level: 1 2 3 4 5

Organization Planning

Ad hoc assignment, informal report

Skill sets, timeframe identified

Resource constraints included

Resource mgt and prioritization

Periodic evaluation

Staff Acquisition

Ad hoc Skill matching, resource cost

Resource pool management

Skills inventory data base

Enterprise resource forecasting

Team Development

Occasional team meetings

Kickoff, reviews, meetings

Collocation, peer evaluation

Team member training

Member training forecasting

Professional Development

No standards or processes for PM

PM exper & knowledge required

Solid PM exper & knowledge

Corporate PM development

Lessons learned training

4. Communications Management

“Project Management Maturity Model,” Crawford, 2002

Level: 1 2 3 4 5

Communi-cations planning

No standards Informal stakeholder analysis

Comm plan expected for all projects

Update and refine comm mgt plan

Lessons learned analyzed

Information Distribution

Ad hoc distribution of information

Stakeholder distribution of status

Formal info status system for stkholder

Automated database queries

Improve process measures

Performance Reporting

Informal reporting of status

Summarize status, progress

Graphical performance reporting

Formal variance & trend analysis

Efficiency & effectiveness metrics

Issues Tracking

Issues handled as ad hoc basis

Issues management not enforced

Regular issues meetings

Impacts of issues on other areas

Tracking process evaluated

5. Project Risk Management

“Project Management Maturity Model,” Crawford, 2002

Level: 1 2 3 4 5

Risk Identification

Risks not identified

Risk identification process

Standards for risk/symptom identification

Integrated w/ cost & time mgt, PMO

Identify org. priority, lessons learn

Risk Quantification

Speculate on impact if risks occur

Structured approach to rating risks

Multiple criteria prioritization

Integrated w/ cost & time mgt, finance

Improve quantification

Risk Response Development

Risks considered as they arise

Informal strategy for handling risks

Contingency plans

Integrated w/ cost & time mgt, PMO

Tracking project reserves

Risk Control Day-to-day problem solving

Individualized approach to managing risk

Risks routinely tracked

Integrated with control systems

Risk assess included in proj execution

Risk Docu-mentation

No historical database

Some historical data

Historical data on common risks

Interdepen-dent risks betw projects

Improve collection activity

Recovery

Form Task Force to Analyze User Interface

Cross-functional Team

New Training Program

Top-down approach

Training Simulation

Recovery Team

Identify Risk and Mitigation techniques

Assessing Representatives Capabilities

Propose Ideas for future updates using collected data

Prevention

Improved Initial Planning Phase

Phased Approach

Include sales execs and representatives

Improved communication

Investors

Representatives

Hire Experienced Project Manager

User testing

Provide training opportunities for representatives

Lessons Learned

Learn from previous failures

Importance of understanding company culture

Planning should include members of each level

Testing should start small

Softer Rollout when possible

Open Communication

New Software = Employee Training

Questions?

KIND REGARDS…

Group 4

Picture Sources:Slide 2:http://wildmorrealty.com/wp-content/uploads/avon-logo.jpghttp://www.forbes.com/profile/andrea-jung/

Slide 4:http://www.hints4beauty.com/avoncatalog/2013/campaign5/p42.jpg

References

http://www.trefis.com/stock/avp/articles/218972/maryimplications-of-discontinuing-smt-program-on-avons-q4/2014-01-06

https://www.linkedin.com/jobs2/view/2640116

https://www.linkedin.com/jobs2/view/5290641

http://www.upperedge.com/2013/12/avon-to-sap-we-cant-put-enough-lipstick-on-this-pig-a-failure-in-program-risk-management/

http://www.zacks.com/stock/news/116796/layoffs-amp-smt-halt-at-avon-shares-fall

http://www.computerweekly.com/news/2240211011/Avon-drops-SAP-big-bang-transformation

http://www.informationweek.com/software/information-management/inside-avons-failed-order-management-project/d/d-id/1113100

http://www.forbes.com/sites/benkepes/2013/12/17/avons-failed-sap-implementation-a-perfect-example-of-enterprise-it-revolution/

http://blogs.wsj.com/cio/2013/12/11/avons-failed-sap-implementation-reflects-rise-of-usability/

http://www.dailymail.co.uk/femail/article-2335348/As-Joan-Peggy-battle-Avon-account-Mad-Men-beauty-giant-transformed-housewife-staple-favorite-working-woman.html