When the goal is to quadruple the size of a $250 million company, a lot has to go right for success. A sound strategy is, of course, crucial. But perhaps just as important is the ability to gear up operations and systems to support such ambitious growth.
Matthew Flood, vice president of IT at Prestige Consumer Healthcare, can attest to that. Flood was instrumental in an effort to devise and implement a drastic revamp of the over-the-counter healthcare company’s business operations and technology platform. Without this complete IT overhaul and reform of order processing, inventory, sales, planning, production, and forecasting, the goal to become a $1 billion company would have been difficult—if not impossible—to achieve.
Step 1: Build
The first step was to build an infrastructure that could support the rapid business growth that was about to occur. Flood and his network team realized the antiquated network infrastructure and facility could not sustain the growth. They moved the company to a larger facility and started to rebuild the entire network infrastructure. Flood converted the infrastructure to the latest technology and implemented SAP’s ERP 6.0 system with their SAP partner, AnswerThink, and went live within one year.
Along with these projects, Flood and his SAP team built a system acquisition plan that laid the groundwork for a rapid expansion of the company. As if that wasn’t complex enough, the retooling included a major upgrade of the Electronic Data Interchange (EDI) system—a necessity for the company to optimize the migration to the new SAP platform.
“Since we could not connect our old EDI system to the new SAP ERP system, both upgrades had to be completed at the same time and within ten months,” Flood says. “It was full-scale implementation of the two major systems at once.”
Step 2: Convert
A conversion to the SAP Integrated Business Planning (IBP) platform was at the core of the next transformation phase. “Everybody knew that we could not continue to manage the company with our existing, very manual sales and operation planning systems,” Flood says.
Prestige’s methods for sales budgeting and planning were manual, slow, and error-prone. “Everything was done in Excel spreadsheets,” Flood says. There were numerous versions of Excel spreadsheets held by multiple people with data that had to be reconciled each time a document was handed off. “It was a cumbersome process to manage the data, and it would have been more difficult as the company grew,” he continues. It took an intense, nine-month, multidisciplinary effort spearheaded by IT, the business, and BizBrain Technologies to get there. By leaping ahead technologically with the IT platform that backbones the business, the company boosted its ability to absorb other organizations and to support rapid growth.
Additionally, the new system had to support approximately 150 employees in 6 countries. Salespeople and support teams had to change the way sales planning was accomplished. Asking for such changes in a company can sometimes provoke resistance from business units impacted, but in this case, representatives from the business side were eager to make the changes because the benefits were clear. Some had SAP experience, Flood says, and all knew a company with the software would not only benefit them in day-to-day operations, but also be beneficial to their careers in the long run.
Step 3: Refine
Over the next four years, Prestige Consumer Healthcare acquired five new businesses. With the new infrastructure, SAP system, and a solid acquisition plan, they were able to complete the onboarding of the new companies within ninety days of each of the closings. Through acquisitions and organic growth, the company behind about seventy-five familiar brands, such as Dramamine, BC Goody’s, Chloraseptic, and Clear Eyes, reached that target in 2017, three years after the technology, systems, and business process overhaul was complete.
After all, the healthcare industry, along with other manufacturing industries, had been moving to SAP. For the same reason, Flood’s IT team was eager to learn the ins and outs of the ERP system. That boded well for the success of the project, and it continues to be a big plus for recruiting and retaining business and IT talent, Flood says.
One of the keys to the system’s ability to scale up with growth and accommodate software and upgrades without extensive recoding is to stay within the bounds of the software of SAP’s modules, Flood says. “The configuration stopped short of customization,” he says, adding that extensive customization raises the risk of project failure. Instead, it’s better to work with the features SAP provides—even if that means changing how you perform certain functions—rather than try to alter the system to conform to them.
Since the SAP implementation was completed, Prestige had another major upgrade, moving to SAP’s new S/4HANA Version 1610 database platform in May 2018. The latest version of the software platform provides more advanced analytics and is more compatible with other databases, hardware, and software. Getting business people to buy into a major upgrade took some more salesmanship on his part, Flood says. His pitch emphasized the advantages of learning and working with the latest technology. Today, Flood and his IT team of ten, augmented by AnswerThink consultants, continue to refine the company’s business planning systems by consolidating applications and eliminating those that are no longer needed.
Intimately involved with strategic planning, Flood tries to ensure that IT capabilities run ahead of business requirements. “Every year, I take a look at the three-year business strategy,” Flood says. “I rethink the IT strategy—is it time to upgrade?”
Crucial to this effort is staying plugged in to business conditions via different lenses: sales, marketing, forecasting, human resources, legal, and other functions. Flood’s industry experience informs valuable insights, he adds. “I’ve been in the pharmaceutical industry for almost thirty years,” he says. “I know the business side better than IT.”
Photo: Ivone Milani
Bizbrain Technologies is proud to have been selected by Prestige Brands to deliver a new sales & operations planning process focused on business value rather than technical metrics. Bizbrain Technologies is the go-to consulting firm for SAP Integrated Business Planning, helping Enterprises achieve organizational growth and success.