|Headquarters: New York, New York
|Industry: Global consumer products
|Revenues: $13.8 billion
|SAP Solutions: SAP NetWe
SAP NetWeaver MDM, SAP CRM,
SAP ERP HCM, SAP PLM, SAP SCM,
and SAP SRM
- Serving customers in more than 200 countries and territories
- Focused on strong global brands in core businesses — oral care, personal care, household care, and pet nutrition
Colgate-Palmolive, a leading global consumer products company, has mastered distributing its products to even the smallest shops in more than 200 countries and territories around the world.
When the company wanted to apply its directive of continuous improvement to its resource planning to attain the same proficiency, Colgate-Palmolive turned to SAP Resource and Portfolio Management (SAP RPM).
“In the past, the way we gathered information about our available IT resources was very labor intensive, very spreadsheet-oriented,” says Tom Greene, CIO for Colgate-Palmolive. That method was manageable when the IT philosophy was that the European team handled the projects in Europe and the North American team executed the projects in the US. In time, this practice became cumbersome as the IT philosophy went global.
“What we found is that we increasingly were sharing global projects,” says Greene. For example, the North American team brought up a new plant in Poland last year because they had been concurrently working on a similar plant in Tennessee. But to plan, monitor, and measure IT resources around the world required a tool more powerful than spreadsheets.
This need is what prompted Colgate-Palmolive to implement SAP RPM.
SAP RPM is a composite application that uses the functions from SAP NetWeaver Business Intelligence (SAP NetWeaver BI) to report data. This application enables companies to inventory and track resources, skills, and budgets related to planning and managing of projects. It uses easy-to-understand dashboards with traffic light indicators to relay the status of budgets, schedules, and key performance indicators (KPIs). And because it is a composite application, it integrates with SAP ERP Human Capital Management (SAP ERP HCM) and other SAP systems. SAP RPM holds the promise that a company can achieve a “real-time” view of its IT project portfolio and better synchronize those projects with corporate strategy and priorities.
The monitoring and reporting capabilities of SAP RPM enable the Colgate IT team to better align its priorities to business objectives. The measurement of actual time spent working on IT initiatives has enabled a clear understanding of the percentage of time spent on application development and support.
This analysis has helped IT management to make strategic decisions that reduce the amount of time spent on support and to measure progress against this goal. In addition, it has helped free up resource capacity to focus on development efforts.
Seeking Better Resourcing on a Global Level
“We wanted a better understanding of who was working on what project globally so that we could, from a resource perspective, do a better job planning,” says Kevin Moore, Business Analyst. “We have resources working around the globe on individual projects, but the consolidation of these plans was manually intensive.”
The company had been planning and tracking resources on a subsidiary and division basis with a myriad of different project planning tools. As the IT organization drove toward globalization, the need for a single tool to help manage the process and resources globally increased.
Every year, Colgate IT reviews a slate of projects. Prior to implementing SAP RPM, the IT steering committee evaluated projects and set the priorities for the organization. “Once those priorities were set, the project managers would assign resources for their respective projects to assure that all the work that had been promised was done,” Moore says.
It was, according to Moore, a “bottom-up” approach, looking at the resources as the key and spreading their effort across the approved projects. Now, with SAP RPM, projects can utilize resources from multiple teams across the enterprise and anywhere around the globe.
The Colgate IT team can now take better advantage of existing resources and utilize them more efficiently. Every project manager estimates the number of full-time equivalents (FTEs) needed to execute a given project. Once all the projects are submitted and prioritized, IT management knows how many FTE resources are required across the company to fully staff all of its projects.
As Moore points out, the IT team almost always has more demand for resources than there are resources available. With SAP RPM, the team can now report back to project stakeholders well in advance where the resource shortfalls will occur, and with plenty of time for stakeholders to evaluate the options for meeting their objectives.
Monitoring and Tracking Project Resources
Every month, the IT staff fills out an Actuals update. “It’s a Web page, an iView, that enables the staff to record their time against projects as well as non-project time, such as out-of-office or vacation, holiday, or sickness,” Moore says. The relevant non-project fields report back to the system to set the employee’s availability for the future months.
This data is then aggregated and rolled up into a comprehensive resource report for the organization.
While SAP RPM is not a project management reporting system, a feature does permit project managers to report their project status at a high level. “You can say, ‘This project is at risk,’ or ‘This project is going fine,’” Moore explains. An additional field allows project managers to type comments to further explain any issues.
Why SAP RPM?
“SAP RPM offered the features that we needed to improve the managing and monitoring of our IT portfolio,” Moore says. “The tool offered a complement of features that we felt we could benefit from, while leveraging our existing expertise with SAP technologies.” Colgate wanted a tool that would improve their management of resources on global projects. With a global pool of resources, centrally maintained in SAP RPM, Colgate’s project managers are better able to take advantage of resources regardless of their physical location.
The application’s personalizable dashboards enable senior managers to centrally monitor all relevant project data, including KPIs. This capability provides a quick overview of the health and status of the portfolio and details on individual projects across the entire enterprise.
Using the dashboards, senior managers can collect standard BI reports and add many customized reports, which provides in-depth analysis to help them make educated decisions regarding which projects to continue, cancel, postpone, or add resources to. It also leverages an existing skill-set within Colgate’s organization.
“We were aggressive in our implementation plan,” Moore says about their schedule and ambitions for the project. But Colgate was confident that if the project encountered any issues, they, together with SAP, would quickly correct them.
The Colgate implementation team anticipated several improvements to their process with the adoption of SAP RPM. They expected to make the resource planning process more transparent and to enable the transition to a global process. “We’d have the ability to view the data from top-down, as well as bottom-up, which would be extremely beneficial, especially for the leadership and management to quickly understand who is working on what project,” Moore says.
“When it first went live, there were some challenges primarily around change management,” Moore says. “We worked hard to standardize our process at the same time as we introduced a new tool. So it took a little bit of effort for us to make those changes.”
The project had generous support from management, which recognized how important it is to improve the resource planning process and make the transition much smoother.
Another challenge centered on collecting Actuals updates from each IT resource, which was a big incentive. With SAP RPM, Colgate can capture information that lets the company review how well the projects were planned, which helps provide feedback to improve planning on future projects.
While improved project planning would help Colgate-Palmolive’s efficiency, some users feared that they would have to spend too much time on administrative tasks. “There was an initial perception that it was management monitoring each minute of the day,” Moore says. “Adoption became much easier once everyone saw the simplicity of the tool and understood that we were really trying to get a true understanding of the project efforts.” Thanks to SAP RPM, the IT organization has improved its effectiveness in delivering application bundles throughout the globe.
Driving Down Support Costs
SAP RPM has also been a significant factor in driving down IT support costs. “It has improved our reporting drastically,” Moore says. “It’s now one of the driving factors our CIO uses for helping manage and report on our business.”
“Our CIO uses it largely to understand the percentage of time spent supporting applications compared to the time spent developing applications,” Moore says. Colgate uses SAP RPM to track all IT activities, not only development but also support. Every activity is defined as a “project” within SAP RPM and is tracked accordingly. Colgate’s goal is to drive down the percentage of time spent on application support, which allows resources to work on development projects. “Within about 18 months, we have made significant progress toward that goal. This reduction has been a huge advantage for us.”
CIO Greene concurs. “Over a two-year period, we have freed up 20% of our IT organization, just by doing a better job of monitoring and tracking the work.”
“What we’ve done during the last two years or so was to build our support organization overseas, particularly in India, and now the majority, if not all, of our application support will be provided by Colgate resources offshore,” Moore says. “We’re looking to maintain our levels of support, while freeing up the time for the people closer to the core business users to be focused on development.”
Colgate has gone through three budget cycles using SAP RPM. At the end of last year, they began their upgrade to version 4.5. Originally, the plan was to move to 4.0, but 4.5 offered functionality that Colgate needed as their deployment of SAP RPM extended beyond IT and into New Product Development Introduction (NPDI). This process provides a better ability to resource plan and introduces phase-and-gate process management.
So far, SAP RPM has enabled Colgate-Palmolive to plan and assign its global IT resources for the coming year more efficiently, to monitor those resources, and to more accurately report against them, including at the corporate financial level.
“We are highly global, with resources around the world,” says Greene. “We have a very structured governance process with our business on how we agree on what projects we are going to work on for the coming year.” With SAP RPM, Greene can now back up every claim in his proposed project list and give the business hard numbers as to the impact on resources. “It has helped us to have very data-driven conversations,” he says.
Start with clear objectives, but be flexible. “SAP RPM has a lot of capabilities of managing data in different ways, so you don’t want to be marching toward one goal,” says Kevin Moore, business analyst. For one, not everyone needs its capabilities on a global level, but you very well may need those capabilities in the future. Plan for your immediate needs, but keep an eye on possible future expansion as well.
Spend extra time blueprinting your business processes. “SAP RPM’s biggest strength is not as a project planning tool for the individual, but as a portfolio tool,” says Moore.
Start small. “If you recognize you want to make changes, it’s obviously a lot easier to make a change on a small level and then deploy it globally rather than have to re-engineer it,” says Moore.