Chiquita Slips, but Does Not Fall

The inside story of a problem-plagued financial system overhaul that just might work.

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Titan seemed to be learning the ins and outs of the new version of the tool set along with the FP&A staff, says Singh, noting that he felt that individuals assigned to the Chiquita project early on lacked an adequate level of expertise. That may have been due in part to the fact that Pinnacle lost some people during the course of the project and during the Titan acquisition, says Ortman.

"Things are still running behind. We are in the process of doing an application redesign, because performance is not acceptable and we do still have some items that have not been completed," Singh said in late June. "Because we're doing an application redesign, it's safe to infer that we are still not that happy with the performance of Titan." (Titan didn't respond to requests for comment.)

At one low point in April of this year, Ortman says, there were "rumblings" that perhaps the project should be moved in-house. "We could eliminate hosting fees and MPLS connections," he says. "Even if we added an internal resource to do the work, I think there still may be some cost savings."

But Mullaney says the deadline issues are largely behind Chiquita now. "Are we on track for delivering in that short-term horizon? Yes," she says.

IT played a key supporting role with the integration work and lived up to the letter of its agreement, but Burket wishes the IT group had helped even more. "I got the support I needed, but we could have done things more quickly if we'd had a little more engagement [from IT]," she says.

But Singh says the project was led by FP&A and its integration partner -- with IT relegated to technical support for the hosted environment and data staging. "It was expected that the implementation partner would perform any and all development work. IT did not allocate development resources for integration activities," he says.

Seeing the Benefits

Chiquita's BPM system went live as planned for budgeting on Sept. 22, 2009, and now serves about 500 users worldwide.

The new system provides financial and operational metrics that benefit not only FP&A but the business units as well. For example, Chiquita's FP&A group previously had no insight into the fact that total volumes for shipments hinged on the assumption that ships were loaded to 95% of capacity. A drop to 80% of capacity increases costs, but no one in FP&A had the information necessary to understand why costs went up. "Those are the types of things that were locked into the Excel files," says Burket.

Individual business units are also seeing benefits. The company's North American transportation organization can now get reports about shipments on a weekly basis, instead of just monthly. And the salad business can now see a rollup of how much product gets discarded each week.

While the new system offers some benefits to each unit, individual lines of business must also give up some control. With the new system, for example, salespeople can no longer create new ship-to addresses for their customers -- they must request that new addresses be created. That eliminates duplicate addresses but also creates delays of up to two days.

But on the whole, the results have been positive, Burket says. "It used to take a month to do a global overhead report," she says. Today, not only can that information be rolled up immediately, but the Hyperion tool set can provide a detailed analysis to find out, for example, why transportation costs went up.

By May, says Burket, individuals who were initially skeptical of the new system were starting to embrace it. "That's been a huge morale-booster for the team," she says.

Overall, the system has been a win for the lines of business and FP&A, according to Burket. "A standardized approach to planning and forecasting is bringing huge benefits to the company," she says. "I'm proud of what we did."

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