One of us works for a multi-billion dollar food distribution company. As a result we see and overhear information regarding our numerous vendors. One of our vendors is Hershey. We cannot divulge inside information, but the following update - which we have not seen posted (other than the preliminary announcement of their troubles) - goes deeper than previous articles regarding the crisis they are having with their SAP system. Readers might be interested in knowing that Lucent Technologies has also bought Germany's SAP software and are experiencing severe problems with some of their systems. A close acquaintance who works at Lucent, and a programmer acquaintance who has been contracted by Lucent, have both described Lucent as being in a "state of crisis." As a result of Hershey's disclosure that they were using SAP, several persons at Lucent are very interested in taking a closer look at the software they have chosen to buy from Germany.

This from Quicken.com - News

HERSHEY FOODS SAYS SYSTEMS WOES WILL HURT 3rd-Quarter, Annual Profit Monday, September 13, 1999

HERSHEY, Pa - (Dow Jones) - Hershey Foods Corp. Monday issued a decidedly bitter forecast, saying that continued problems with a new computer system has hurt its ability to fill orders and will cause third-quarter and full-year earnings to fall below estimates.

The famed chocolate and food-products maker (HSY) siad it expects third-quarter earnings to fall below analysts'estimates and year-end earnings to fall 8% to 10% below the company's earlier projections.

It attributed the shortfall to the July startup of new business systems in customer service, warehousing and order fulfillment.

Hershey is one of a number of companies that recently installed complex enterprise-information systems featuring software from Germany's SAP to link their firms with customers and suppliers. The company has had so much trouble with the new system, however, that it is losing sales and alienating customers, Barron's reported Monday.

"Hershey is missing sales and earnings, but we don't know how much it is hurting them," Craig Albert, food analyst at Sanford Bernstein told Barron's.

THE COMPANY'S STOCK HAS BEEN UNDER PRESSURE SINCE IT DISCLOSED THE SOFTWARE PROBLEMS IN THE LATEST 10Q REPORT LAST MONTH, BARRON'S SAID. LAST WEEK, LEHMAN BROTHERS LOWERED ITS ESTIMATES FOR THE COMPANY DUE TO THE COMPUTER START-UP TROUBLES.

Hershey maintained Monday that its order patterns remain strong, although it has had problems filing orders "in a timely fashion."

-End-

COMMENT: We generally lurk this and other Y2k sites but rarely participate in discussions because most of it has been said before. We "got it" years back and have made appropriate preparations. Most individuals we know don't get it because they have not paid attention. They become absorbed into entertainment reality slipping from one tv show into another, not paying any attention to what's going on around them. They do not do the requisite research necessary to inform themselves of upcoming issues or problems. So many are asleep at the wheel. Martial arts training many years ago taught us to be aware of our surroundings at all times. We were also taught that as adults who are responsible for the lives of others (children, etc.) we need to always watch for signs of oncoming danger. Y2k fits the bill.

-- kalani & katiuska (kalani_hanohano@hotmail.com), September 22, 1999

Answers

Readers might be interested in knowing that Lucent Technologies has also bought Germany's SAP software and are experiencing severe problems with some of their systems. A close acquaintance who works at Lucent, and a programmer acquaintance who has been contracted by Lucent, have both described Lucent as being in a "state of crisis." As a result of Hershey's disclosure that they were using SAP, several persons at Lucent are very interested in taking a closer look at the software they have chosen to buy from Germany.

Hey Hoff, looks like SAP is SH*TWARE, huh? And you're an SAP "expert"? I'm sure we all feel SO much better knowing that about you... (just like people who argue Y2K with me, who have YEARS AND YEARS of "web design" expertise. What a SHAME that PEE-CEES don't make the world go 'round. And neither does SAP, a PEE-CEE (server) based system. Like the joke heard in IT circles: "you don't customize SAP to fit your business, you customize your business to fit SAP.")

-- Dennis (djolson@pressenter.com), September 22, 1999.

all the little IDOLS falling in a row.GOD said it would happen 'don,t you know??

-- it is written. (dogs@zianet.com), September 22, 1999.

SAP R/3 implementation, especially at large companies, can be a complex campaign, especially if done by inexperienced consultants, or in an environment of ignorant or incapable company management.

In essence, an implementation tries to replace within 6 or 12 or 24 (depending upon the site) processes that a company has taken decades to patch together, for reasons which today no one probably remembers.

If the project design is faulty, if the management team is clueless, if the consulting company is inexperienced (too often the case), the project will be delayed, or worse.

Blaming problems on the software per se, without knowing the bigger picture, is like blaming a drunken driver's inevitable accident upon the manufacturer of the auto he was driving.

There are something over 20 thousand R/3 customers worldwide, and some have been live for years and years, in environments as complex, or more so, than Hershey's. How come they're not having problems?

-- Scarecrow (Somewhere@Over.rainbow), September 22, 1999.

>>> ...implementation tries to replace within 6 or 12 or 24 should read: ...implementation tries to replace within 6 or 12 or 24 months

-- Scarecrow (Ooops@Over.rainbow), September 22, 1999.

SAP = Stress Anxiety Panic

That's what I hear, anyway.... :-)

-- Lane Core Jr. (elcore@sgi.net), September 22, 1999.

Stupid-Ass-Politicins

-- D.B (dciinc@aol.com), September 22, 1999.

Scarecrow said, "...Blaming problems on the software per se, without knowing the bigger picture, is like blaming a drunken driver's inevitable accident upon the manufacturer of the auto he was driving..."

Is that somewhat like blaming a shooting on the gun? I guess we should immediately cry for regulation of SAP installations. Only the benovelent (or is that malevolent?) fedgov can help us now. We need laws, laws and more laws (so they can be ignored like the rest of the ones that don't contribute to the movement of wealth to TPTB).

Oh well, Eccl. 9:3.

George

-- George Valentine (GeorgeValentine@usa.net), September 22, 1999.

As scarecrow pointedout, installation and customization is a HUGE projec for a large entity like Hershey. the difficulty lies in the customization. It takes FOREVER to translate "How we do it HERE" to "How SAP does it" or vice versa. Too many horn haired top mgrs have been sold the SAP Bill of Goods which runs like "It's virtually turn- key. we install it, and you get to customize a couple data files and some data relation, a couple calculations and a couple reports and you're up and running in no time."

The truth is that they may or may not know how complex the install will be but they are pretty sure that McAnderson-booz-MG will be OVERJOYED to hear they've sold another one. SOme of my clients are on the same install they started a year and a half ago, and others are trying to install inside their own company and are having the expected headaches.

Scarecrow, the reason those hundreds of other SAP customers are NOT having problems would break down as follows:

Some are totally complete with their install, and have been running for a long time

The rest may NOT have gotten to the testing point or they are managerially clueless.

chuck

-- Chuck, a night driver (rienzoo@en.com), September 27, 1999.