Supply Chain: Hershey's Bittersweet Lesson
So when Hershey issued a press release in August saying that it had completed a successful upgrade of its SAP ERP system, we figured the company might want to end the 3-year-old mystery. But we couldn’t get an interview.
Here’s what former CEO Wolfe (he retired in 2001) should have said in 1999: Enterprise software is hard. It takes a long time. It’s hard to get people to change the ways they work so that the system will function correctly. But they eventually adapt. And you will have problems in your business at first because enterprise software isn’t just software. It requires changing the way you do business.
More and more, CEOs are going to have to talk intelligently about their computer systems during quarterly conference calls with Wall Street?if they can’t do it well, investors, analysts and the press will bash their companies, probably harder than they deserve. Most companies hide their problems with computer systems from public scrutiny. "I tell my clients never to talk about the problems," says Jim Shepard, senior vice president for AMR Research in Boston. "The thing Hershey can be faulted for was to announce that they had blown ERP as justification for missing earnings."
But it’s getting harder to hide computer systems from Wall Street. Software systems run the business now. And if problems are hidden they can fester and explode in an even bigger mess. If there is a lesson in the Hershey soap opera, it’s not that companies should hide their computer system problems; it’s that CIOs have to help their CEOs do a better job of explaining the problems and outlining the solutions.



