By the beginning of 2000, the rollout had collapsed into chaos. Not only did workers not understand how to use the new system, they didn’t even understand the new pro-cesses. And the divisional executives, who were just as confused as their employees?and even angrier?didn’t go out of their way to help. Dunn says her help desk calls reached 300 a day. "We were really naive in the respect that these changes had to be managed," she admits now.

Nobody wanted to learn the new way of doing things. Morale tumbled. Turnover among the employees who forecast demand for Nestlé products reached 77 percent; the planners simply were loath or unable to abandon their familiar spreadsheets for the complex models of Manugistics.

A technical problem soon emerged as well. In the rush to beat the Y2K deadline, the Best project team had overlooked the integration points between the modules. All the purchasing departments now used common names and systems, and followed a common process, but their system was not integrated with the financial, planning or sales groups. A salesperson, for example, may have given a valuable customer a discount rate and entered it into the new system, but the accounts receivable department wouldn’t know about it. So when the customer paid the discounted rate, it would appear to the accounts receivable operative as though the invoice were only partially paid. In its haste to unify the company’s separate brands, the project team had essentially replaced divisional silos with process silos.

In June 2000, the project was reorganized. Project leader Mark Richenderfer was promoted to a new job in Switzerland, working on Nestlé's global SAP implementation and business process improvement initiatives. Dunn given full responsibility for the project. It was time for self-examination. In October 2000, Dunn gathered 19 Nestlé USA key stakeholders and business executives for a three-day offsite at the DoubleTree Hotel in Pasadena, Calif., about 10 miles from Nestlé headquarters. (Information in this paragraph was corrected on 12/8/08. Read the correction)

Jose Iglesias, director of information systems, says the retreat started off as a gripe session. The time constraints necessitated by Y2K had put too much pressure on the people in charge of executing the changes. The project team had lost the big picture of how the various components would work together. And there was still work to be done. The existing modules had to be integrated and the team still needed to roll out two more SAP modules?sales and distribution on the domestic side, and accounts receivable?as well as a new module for the supply chain. Since Dunn had rejected the SAP supply chain module two years before, it had improved and been named a Nestlé global standard by Dunn’s old standards group in Switzerland. So she decided to replace all but a couple of parts of the Manugistics system with APO. Dunn estimates that last-minute switcheroo accounted for 5 percent of Best’s $210 million cost.