Inside Avon's Failed Order-Management Project - InformationWeek

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Doug Henschen
Doug Henschen
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Inside Avon's Failed Order-Management Project

Avon representative details how sales force reacted to a failed system using SAP on the back end and IBM WebSphere for e-commerce on the front end.

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?"

How would your employees rate your systems?

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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User Rank: Moderator
12/17/2013 | 11:18:33 PM
Poor custom development and lack of proper process design and acceptance
It sounds like there are definitely some issues with the UI.  So shame on Avon for designing and building a custom UI that still does not meet user needs (the primary reason you would custom build in the first place).  They should have invited some reps to be part of the design team and to be part of the acceptance testing team on the back end.  I don't get companies who always want some excuse to custom develop stuff.  They would have been better off with SAP's vanilla webshop capability and it certainly would have been a lot cheaper.  At least it works.  The ONLY reason to not use the delivered SAP capabilities is to minimize clicks and make the website easier and more intuitive and they certainly missed the boat on that.

I did not hear any mention in the article about process.  Their problems don't all appear to be with the technology.  If you are going to start pegging inventory to orders this requires a change in the way the manufacturing, distribution, and planning functions work.  I have to wonder if part of the issues are arising from a lack of proper process change and acceptance.  If this is the case, then again, shame on Avon for running such a poor project with inadequate business this case you can't point the fingers at the technology or technology providers.
User Rank: Ninja
12/16/2013 | 10:30:21 PM
Avon is Canada's
The amusing part is that for a brief instant I thought this was a piece about as it is suffering from the same epic fail as Avon's site is.
IW Pick
User Rank: Apprentice
12/16/2013 | 7:44:51 PM
Re: A Big More From the Record
I'm in IT and also an Avon rep on the side. This was a new website that has a matching new process. The 2 things together caused major problems for reps. And it is not only reps that sell small amount. Imagine a website that caters to both consumers and their sales force. The first one enter a maximum of 20 items (that's being hopeful) and the latter enters hundreds. A simple item includes multiple clicks. That's when it works. You cannot design a website to work for different audience. And most customers had a hard time with the website. 

People do not quit 'cos they don't know how to work something. Most people asked for help and learn; especially if it is your livelihood. The problem is that there were so many things wrong all at the same time. I swear it feels like they put in fixes on the fly - what works one day no longer works the next.

I don't understand how systems are designed with no thought to how your end users will use it. There was so many assumptions made with this sytem. 
User Rank: Strategist
12/16/2013 | 12:40:17 PM
The revolt of the end users at Avon
Quite interesting to see how the independent sales rep end user feedback doesn't match up to what Avon headquarters and technology provider spokesman say should be happening. If you are in the habit of pointing the finger at the end user when things go wrong, better consult again Ortega y Gassett's "The Revolt of the Masses."
User Rank: Author
12/16/2013 | 10:42:25 AM
Avon's Lessons
"The website is complex, it is not streamlined, and they put more steps in it than are needed," Edwards says of Avon's site.

We have heard this story before: get the project done on time, dev team, and if the users have to put up with some extra steps, so be it. In this case, the users spoke loud and clear. I can see why an Avon rep earning small change per month would not want to put up with the complexity.
D. Henschen
D. Henschen,
User Rank: Author
12/16/2013 | 9:40:25 AM
A Bit More From the Record
Avon did not respond to questions about the use of IBM WebSphere software. SAP's Jim Dever also stated, "The integrated Avon solution has been running as designed for more than seven months without significant technical issues or escalations." This echoes Avon's statement and the word "integrated" suggests it means SAP's back-end software together with an IBM WebSphere front end, but this account certainly runs counter to Edward's report. If "running as designed" led more than 10,000 sales reps to quit, you have to figure something was wrong with the design.   
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