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Case Study

 

The Power of Advanced Business Planning at Campbell Soup Company

by Dave Hannon | insiderPROFILES

April 1, 2011

Campbell Soup Company may be a well-known manufacturer of soup and other food products, but its behind-the-scenes success with business planning and consolidation warrants attention too. Executives from the company share insights and lessons learned about their atypical but effective decision to integrate SAP BusinessObjects Planning and Consolidation, version for SAP NetWeaver, with non-SAP legacy systems.
 

Campbell project team members (L to R): ROGER WILSON, Vice President of IT; JOE ANDRONOWITZ, Director of Financial Planning and Analysis; and JEFF DERUS, Technical Lead/Development Manager

It’s something of an incontrovertible business tenet: Know which of your business units, products, and customers deserve the most (and least) attention, and modify your business plan accordingly. Yet, hampered by wildly disparate financial processes — and a hodgepodge of IT systems to support those processes — global enterprises often grapple with the simplest of questions: Which business units are excelling or underperforming? What product drives the most value to the bottom line? What customer yields the most earnings? If the answers to these questions were at your fingertips, imagine how much more impactful your next business decision could be.

Campbell Soup Company gained this awareness through an enterprise-wide implementation of a new business planning and consolidation application built on the SAP NetWeaver technology platform.1 With this application, which leverages data coming from Campbell’s SAP ERP system, the company has achieved new levels of visibility into data that is driving many of its business decisions. For example, earnings by business units, by regions, by product lines, and even by specific customers are now appearing on regular reports — and this information is extremely valuable for Campbell executives, who can now make better-informed decisions based on this new data.

“We were pleasantly surprised when we realized we could review not only data for product revenue in one region, but analyze customer data consolidated across regions,” says Anthony DiSilvestro, Vice President of Finance and Controller at Campbell, about the added functionality the new solution brought forth. “This application allows us to measure revenue by customer and take actions to try to improve those that are below average while continuing to concentrate on those that are above average.”

Just how does that information change the way the company operates? For starters, access to customer data such as this changes the way Campbell approaches its promotional activities. “We likely will evaluate the resources we put behind a customer that is not very profitable for us,” says DiSilvestro. “For instance, we might alter the marketing program, such as features or end-of-aisle displays, at that customer location.”

And understanding a specific product’s performance economically can also help the company determine where to put its short-term and long-term resources. For example, in a downturn economy, would consumers be more apt to buy more of Campbell’s ready-made meals or “meal-maker” products, such as broth or condensed soup?

According to DiSilvestro, the company found that the meal-maker business performed better than the ready-made meals business during a recession, which makes sense because the meals tend to be a bit more expensive. He says, “Because business executives now have timely access to this data, they can operate on actual information, not just suspicions, and make smarter and faster business decisions.”

But the journey to realizing these game-changing advantages brought with it a few unexpected twists.

Anthony DiSilvestro

                                                                                                 
 
“Because business executives now have timely access to this data, they can operate on actual information, not just suspicions, and make smarter and faster business decisions.”
Anthony DiSilvestro, Vice President of Finance and Controller, Campbell Soup Company
 

Building a Case for a Planning and Consolidation Application

Campbell’s early ERP plan focused predominantly on replacing its legacy systems. Founded in 1869 as Anderson & Campbell, today’s Campbell Soup Company has expanded around the globe over time through a combination of acquisition and organic growth and now operates plants and sales offices on four continents.

After more than 140 years of global growth that led to a variety of legacy systems working across various regions and business units, Campbell decided to implement SAP ERP (R/3 version 4.7) globally in 2005 — choosing to start with an implementation in Canada, its least complex business unit.

“As Campbell began rolling out the ERP system, the finance organization quickly realized a need for tools to leverage the data that SAP ERP Financials was collecting,” says DiSilvestro.

The IT organization began working with the finance team to review options for addressing the functionality gap. “Once we established we could implement the ERP system and not bring the business to a halt, we identified planning and consolidation as the next area we wanted to move to in terms of incremental functionality,” says Roger Wilson, Vice President of IT at Campbell.

A team of IT and finance representatives assessed the various financial planning and consolidation products that would suit the finance team’s needs, and at the end of the evaluation, the team remained torn between integration and functionality. “The IT folks wanted to stay with an SAP solution because of the integration and standardization benefits,” says DiSilvestro. “But our finance folks were enamored with a specific solution from OutlookSoft.”

Luckily, before the divided team had to compromise, SAP announced it was acquiring OutlookSoft and integrating this product into the SAP solution suite — and consequently naming the integrated application SAP BusinessObjects Planning and Consolidation, version for SAP NetWeaver. Now, Campbell could implement the functionality finance wanted and simultaneously achieve the easier integration IT desired.

Roger Wilson

                                                                                                
 
“Once we implemented the ERP system, we identified planning and consolidation as the next area we wanted to move to in terms of incremental functionality.”
Roger Wilson, Vice President of IT, Campbell Soup Company
 

Defining Processes Globally and Locally

With a new planning and consolidation application in the pipeline, the company gathered all of its regional CFOs together for a series of workshops to better define what its planning process should look like globally and what role this new application should play in that process. Across Campbell’s different business units, financial planning processes and the IT systems used to support them varied significantly based on a specific unit’s history and goals. Therefore, the finance team first needed to outline a set of standard processes before an enterprise-wide planning and consolidation initiative could be successful.

“Planning involves a lot of institutionalized practices of the past,” Wilson says. “So we had to get people in a room together and explain that we’re not continuing to operate in five, six, or seven different ways.”

At the close of the meeting, the regional CFOs decided on a global planning process, which would be implemented at Campbell USA first this time, along with the deployment of the planning and consolidation application, and then the same would follow four months later throughout the other six business units.

Using the Campbell USA planning processes as the model, the regional finance users then held a second round of process definition meetings to convey the vision that the CFOs had laid out. The feedback from these meetings suggested that the business units’ processes differed enough that the global planning strategy may need some tweaks.

“One of our goals with this project was to standardize processes, which is something we found very difficult to do across regions,” says Jeff Derus, Technical Lead/Development Manager for the project. “We showed each business unit the Campbell USA planning model and asked them to follow it as closely as possible. And sure enough, we heard from these businesses that their business model wouldn’t fit that mold exactly.”

So after initially rolling out the application to Campbell USA, the project management team used a localization strategy to cater the implementation to the unique aspects of each business unit. And while this strategy required more up-front work, it has helped specific parts of the business leverage the solution even further.

“Our Pepperidge Farm business, for example, no longer has to plan at the aggregate level, but now has visibility into data down to the SKU [stock-keeping unit] level,” says Joe Andronowitz, Director of Financial Planning and Analysis at Campbell. “We can analyze which product lines or customers are more profitable than others. The sales team can see which customers are driving the P&L and develop strategies based on that data. And that’s powerful.”

Jeff Derus

 
“One of our goals with this project was to standardize processes, which is something we found very difficult to do across regions.”
Jeff Derus, Technical Lead/Development Manager, Campbell Soup Company
                                                                                                      
 

Developing a Unique Solution for Europe

Campbell’s Greater Europe business unit was very disparate in terms of its IT systems, models, and processes, so it presented another business challenge in terms of planning and consolidation. While some products are unique to countries, others are relatively common across the entire region. “In terms of our financial consolidation, we had no mechanism to look at the business on a pan-European basis,” says DiSilvestro. “We wanted to see how our European business was performing by these different product categories, and identify areas of profitability.”

So while the business case for a planning and consolidation application was clear in Europe, there was one hitch — the Greater Europe business hadn’t implemented SAP ERP yet. It was still running a set of disparate legacy systems.

“Because our European business was so hungry to have visibility of information, we decided to design a system that would pull data out of the various legacy systems and bring it into the planning and consolidation application,” says Wilson. “So we gave Europe, in essence, a unique solution across a standard set of guidelines.”

Joe Andronowitz

"Now we can see the profitability of soup in Germany versus their ready-made meals business,"
Joe Andronowitz, Director of Financial Planning and Analysis
       

Today, the Greater Europe business unit can analyze data consolidated at the brand level and analyze earnings for each business within Europe. “In the past, our capability was limited to simply analyzing a country’s performance,” says Andronowitz. “Now, for example, we can see the profitability of soup in Germany versus their ready-made meals business.”

According to Derus, the unique solution created in Europe is one of the project’s true accomplishments. “It was a huge effort between the finance organization and the IT organization to pull all of that disparate data from those different locations, map it to look like the data in our SAP ERP system in terms of structure, and then pull it into the planning and consolidation application,” he says. “And now when our executives are looking at global data, Europe is not missing.”

Expansion Plans

Next, Campbell plans to roll out SAP BusinessObjects Planning and Consolidation, version for SAP NetWeaver, to its Australia/New Zealand market, upgrade its entire global ERP instance to SAP ERP 6.0, and then, after a short hiatus, expand its level of planning and consolidation functionality by upgrading to SAP BusinessObjects Planning and Consolidation 7.5, version for SAP NetWeaver.

From there, the focus likely will turn to disseminating the application’s data to a broader set of users. “Most of those users won’t be able to alter the information, but they could look at it — and slice and dice it — without having to go to someone from finance,” says Wilson. “And we certainly want to do much more with the application, as we still see it as a strategically important, yet evolving, platform for Campbell.”

To learn more about SAP's initiatives around business analytics, read SAP Special Report: Business Analytics in SAPinsider magazine: http://sapinsider.wispubs.com/Article/SAP-Special-Report--Business-Analytics/5756

1 SAP also offers its customers a planning and consolidation application for the Microsoft platform, but because Campbell Soup Company runs SAP NetWeaver technology, the business appropriately chose to implement SAP BusinessObjects Planning and Consolidation, version for SAP NetWeaver. [back]

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