Hershey’s Failure

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TO: George Davis, Chief Information Officer FROM: Jon DATE: April 28, 2013 SUBJECT: Hershey’s failure to successfully move to an updated enterprise system. Milton Hershey began his career as a candy maker’s apprentice in Lancaster Pa. In 1894 he founded Hershey Chocolate Company (HCC). Hershey’s has gone on to become an iconic American brand, producing many of America’s most beloved chocolates, with the classic Hershey chocolate bar becoming almost a staple in many American homes. The Hershey Company is now the leading North American manufacturer of chocolate and non-chocolate confectionary and grocery products. They are also known around the world, exporting to over 90 countries. Hershey’s currently employs approximately 13,700 employees and has over $4 billion in net sales. Because Hershey’s retail prices are low, huge quantities must be sold to reach the $4 billion in net sales. This means that a highly efficient logistics and supply chain information system was needed to modernize the company. This would also satisfy retailers who were demanding that Hershey fine-tune their deliveries so they could lower their inventory costs. In 1996, Hershey executives approved a new project called “Enterprise 21” which would modernize hardware and software used by the company. Because Y2K was looming, Hershey’s legacy systems needed to be updated. To satisfy these issues, Hershey decided to completely replace their legacy systems and modernize their information systems. The main goal of the project was to upgrade and standardize the hardware, shift to a client/server environment from the existing mainframe based environment, and move to a more modern TCP/IP network. Management planned to have these new systems in place by early 2000. The main vendor for these systems was SAP AG of Waldorf Germany. SAP’s software was to be complemented by software from

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