Inside Avon's Failed Order-Management Project

When software projects go bad, it's often the end users who suffer most. That's the case at Avon in Canada, where Karen Edwards, an independent executive sales leader, says she's still struggling to catch up with last year's sales levels due to hardships imposed by a failed new order-management system and website.

The new site, which was launched in Canada in May as part of a Service Model Transformation project, combines SAP ERP and CRM applications with, InformationWeek has learned, a front-end system built on IBM WebSphere e-commerce software. As we reported last week, Avon is now writing off that project to the tune of $100 million to $125 million.

Edwards admits she has little knowledge of the technology involved in what was dubbed the "Promise" project in Canada. She just knows the deployment "annihilated" the business.

[ Want more on this project's failure? Read "Avon Pulls Plug On $125 Million SAP Project." ]

"The whole system did not work when it was launched, and to this day there are glitches and problems," says Edwards. "Many representatives couldn't even get logged into the new website, and once you got in, the system was not accepting orders, it wasn't saving orders properly, and it wasn't reserving inventory."

The result is that more than a third of the 300 independent sales reps who reported to Edwards quit, and she estimates Avon lost as many as 16,000 reps across Canada. Avon uses a multi-level marketing approach (also used by Amway and Tupperware) that relies on many part-time people who sell to friends through in-home networking events.

"With all the trouble they had using this system, the people making $50 or $100 per month per month figured it just wasn't worth their time and effort," Edwards says.

InformationWeek contacted Edwards, who is an independent sales executive for Avon and also owner of Karen's Beauty Studio in Oromocto, New Brunswick, after she commented on our initial article about the Avon project. That article suggested that the deployment was mostly about mobile ordering from iPads, but Edwards says the problems went much deeper. Avon's old website also offered online ordering capabilities, but the new site promised "real-time" inventory information and ordering.

"When I go to the new site it's supposed to show what's available, and when you order, those items are supposed to be reserved and guaranteed to come," Edwards explains. "On the old site you could place orders, but you wouldn't know if the items were in stock and ready to ship."

SAP was a primary vendor in the transformation project, but according to SAP spokesperson James Dever, its contributions were limited to ERP and CRM applications. "Avon selected SAP technology as the back-end engine for its order entry solution," Dever told <i>InformationWeek</i> by email. "Avon did not use an SAP UI for the web front end.  Avon selected and implemented a third party e-commerce solution for that purpose."

Exploring recent Avon job listings and Avon IT personnel profiles dating back to the early stages of the project, it's apparent that IBM WebSphere e-commerce software is the e-commerce software in question. WebSphere is an application and e-commerce server, so it would presumably connect to SAP's ERP and CRM APIs and deliver the front-end application and user interface.

IBM did not respond to a request for comment in time for publication.

According to a source who wished to remain anonymous, the project also involved a third-party integrator. Without an extensive forensic analysis of the project, it's impossible to say which parties or technologies deserve blame for the project's failure.

Edwards says she's disappointed in Avon's third-quarter statement that "the pilot technology platform [in Canada] worked well, [but] the degree of impact or change in the daily processes to the Representative was significant."

"The head office kept insisting that the system was working, but it was not," Edwards says. "The sales leaders here in Canada feel that Avon is trying to portray the representatives as too stupid to use the technology."

Despite the software write off, Dever stated that "SAP continues to maintain a strong relationship with Avon," suggesting that its software is still in use.

It's Edwards' sense that Avon rushed a large-scale project into production before it was proven, and for that, Avon must take the blame. Perhaps Canada was chosen because it's a smaller market that presented less risk to the company, but the project's impact and subsequent writeoff were significant enough to require financial disclosures.

The goals of the transformation project were laudable -- what company wouldn't want better insight into inventory and a better user experience for the sales force? Avon's experience should be a cautionary tale for any enterprise developing "next-generation" functionality. Business applications are now compared to consumer applications.

"The website is complex, it is not streamlined, and they put more steps in it than are needed," Edwards says of Avon's site. "How can a Fortune 500 company like this have such a poor website design?"

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Doug Henschen is executive editor of InformationWeek, where he covers the intersection of enterprise applications with information management, business intelligence, big data, and analytics. He previously served as editor-in-chief of Intelligent Enterprise, editor-in-chief of Transform Magazine, and executive editor at DM News.

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