Case of Nestle

Chapter -10
Agenda
◼ Understand the Organization and its
Structure
◼ What are the FORMS of MIS does it
display?
◼ Discuss the
◼ relevance of Enterprise System and its
acquisition process
◼ Effects and Learning --- Refer HBR Article
Nestle-Case - Chapter 10
 Nestle Organization Structure

-13 brands so far

-More than 150 years
Old
-Divisionalized Structure

Nestle-Case - Chapter 10
 FORMS of MIS Pursued….
◼ Enterprise System as it is a MNC, Multi-locational,
multi-brand
◼ ERP Acquisition is the agenda
◼ SAP was selected in the year 2000 ($200 million)
◼ Infrastructure cost $500 million
◼ Nestle USA has already experienced a failed attempt to have
SAP in 1997
◼ Nestle SA reconsidered its acquisition through afresh approach
◼ ERP project estimated life cycle – 3 years

Nestle-Case - Chapter 10
 FORMS of MIS…
◼ As per Prof. Davenport article,
◼ Lession 1: ERP looks for centralized database
◼ Nestle SA (Swiss) is
◼ decentralized in operations
◼ Across 80 countries
◼ Eight / nine autonomous divisions to have common processes/os/ systems
◼ Lession 2: Saving of $325 million
◼ Lession 3: ERP software needs organizational change management,
change in processes
◼ Lession 4: Configuration Table helped (Team: WHO did it? 50
business and 10 IT executive)
◼ Raw material code standardization (earlier 29 brands of Vanila)
◼ Unified 13 brands to one brand

Nestle-Case - Chapter 10
 FORMS of MIS……….
◼ Lession 4 continued:
◼ Unified purchase pricing / contracts

◼ nine different general ledgers / 28 points customer entry

unified
◼ All nine divisions unified across locations

◼ SAP Modules: purchase, finance, sales and distribution,

accounts receivable/payable
◼ Lession 5: if a system is considered first, it may be quick in
installation, but not implementation
◼ Lession 6: SAP centralized database could work after
organizational restructuring

Nestle-Case - Chapter 10
FORMS of MIS……….
◼ DSS: Manugistics --- used for supply
chain optimization

Nestle-Case - Chapter 10