In With The New

A lot can change in 10 years and that goes doubly for technology. Hormel Foods was faced with a home-grown legacy system from 1996 that was Excel based, inaccurate, time consuming and redundant -- not a very effective way to keep track of trade spend. Like the rest of the industry, trade spending here was the largest expense after cost of goods sold, and the company was facing increased pressure to optimize spending.

 

Chris Boever, vice president category sales, Hormel Foods Sales, says in the early stages, "We completed a detailed assessment of all current business processes and identified our business needs. This resulted in the identification of current pain points and the development of an RFP." Some of those pain points included planning challenges, limited data, a transactional approach and incentivizing (the sales force operated mainly on incentives to drive volume to the channel warehouse, but not through to the consumer).

 

"The RFP process gave us the ability to clearly outline new processes and what was required from third party suppliers to support our business. By developing new processes up front we were more effective in the technology selection process," says Boever. They realized restructuring of sales and combining center of store and fresh meats divisions into one customer centric sales organization was necessary for success. The challenge herein included merging two cultures, business processes and technology platforms into one unified approach.

 

With all this up front groundwork, Hormel was ready to choose a provider. Boever explains, "We selected IBM Business Consulting Services to assist in the selection and implementation process. Oracle/Siebel eConsumer Goods Module was selected for its transaction suite and analytics capabilities. In addition, we partnered with eVia, a VNU company to aid in the statistical modeling surround baseline creation, internal planning and data integration into Siebel."

 

He says the business intelligence suite offered by Oracle/Siebel was the key value add and critical to the final selection. "We stayed true to our initial goal of minimal customization, if we needed to review a process to avoid rewriting software code than we did just that," he says.

 

The project went live in March of this year, with the overall expectation obviously being improved trade spend efficiency and effectiveness. Other benefits anticipated include improved personnel productivity, demand planning and better marketing. Boever notes, "The success of the project started with the commitment we made to training. Each individual received sequenced information about the new processes and go to market strategies in advance, which allowed training to focus on how to strategically plan and transact in the new system. User adoption has been exceptional and we will be reporting our fiscal financials in the near future."