Continuous Improvement

By Lori Castle - 10/01/2007

Colgate-Palmolive has implemented its core SAP portfolio in 100 countries

representing more than 99 percent of the business. "Our 12 year strategic
partnership with SAP continues to grow and serves as a key enabler to our
business growth and success. This partnership success has most recently
been highlighted by our joint development work on customer investments
known internally as Colgate Business Planning (SAP Trade Promotion
Management)," says Ed Toben, senior vice president, Global Information
Technology & Business Services .

A core directive the Colgate-Palmolive IT Organization adheres to is

"continuous improvement"; case in point, the Colgate Business Planning
project (CBP). First started as a sales initiative around trade promotion
management (TPM), it has grown into a company-wide platform with
aggressive global implementation goals. The project has challenged
Colgate's IT department to re-design the successful project management
strategy they have been using to develop and implement SAP software
solutions for a decade.

LEVERAGING THE SAP INVESTMENT

Colgate's first SAP Order to Cash (SAP R3) implementation was in 1996.
Today, 100 countries representing more than 99 percent of the business
are on this core system. The full portfolio includes SAP's Supply Chain,
CRM, Business Intelligence, Human Resources and Portals applications.
With this infrastructure in place, emphasis could now shift to trade
promotion effectiveness, leveraging the end-to-end information flow:
Customer Development, Operations and Finance.
MAKING IT HAPPEN
To ensure success and meet aggressive timelines, a global business team
was formed headed by a senior business leader. Key individuals from
customer development, marketing, finance, supply chain and change
management with diverse global backgrounds were chosen for the team.
They were charged with both designing a standard process that could be
implemented globally and working with the IT department to develop the
system solution needed to enable that global process. In addition, each
business region was assigned a senior business sponsor, supported by an
expert champion.

The creation of this senior business team working with regional support has
been a critical factor in the success of this initiative, according to Lou
Schneider, director Global Development, Demand Chain & Commercial
Effectiveness. "This team engaged thought leaders throughout our
company to include both the current best practices, as well as the future
vision in the design of our CBP process. Having the top senior managers in
the company constantly asking 'Are you thinking of everything? What are
you missing?' was the right message to the organization about the high
priority this project has within the company."

While the business owners were the genesis for the project, Colgate's
practice is to treat IT as a business partner as well. In addition, Schneider
says, Colgate's strategic relationship with SAP means they too brought new
concepts to the table. "So, with ideas coming from three sources, we have
an equal partnership in continuously improving processes and application
solutions -- the business, the IT department and SAP," he explains.

INTEGRATED PROCESS AND EXPECTATIONS

The resulting CBP process designed by this team is now rapidly becoming
the new global culture for all subsidiaries around the Colgate world. Simply
put, CBP has four basic steps: "top down" goal setting, "bottom up" account
planning, plan execution, and finally, post-evaluation. All of these steps are
integrated from a process and organization perspective. The challenge for
the global business team and the IT development group was to provide a
user-friendly system solution that would truly support and enable these
processes. From a project management standpoint, the system was
required to be both globally standard plus flexible to local "go to market"
requirements. In addition, the project was being tested concurrently on four
continents. Clearly a new project development and implementation model
was required.

Schneider says because of Colgate's close partnership with SAP and

aggressive strategy to implement all SAP systems applicable to Colgate's
business model, the foundation was there to access all the master and
transactional data needed to support this integrated business process. So
with the core IT systems in place, Colgate was able to design a process
that built improvements from there using SAP's Trade Promotion
Management application as the engine, but using SAP Portal, SNP, R/3
and BW modules as vital components.

OUT OF THE BOX" PLAN

Since the early days with SAP in the mid 90's, Colgate has had two groups
focused on the development and implementation of new applications. The
Global Development Department has been responsible for the evaluation of
new software from SAP, working with the Colgate business "owners" on
choosing the products that best align with their process strategies and then
preparing global implementation bundles so these new products could be
rolled out globally.

Three shared service organizations are in place around the world and
charged with the actual implementation and support of those new
applications in Colgate subsidiaries. One major key to the success of
Colgate's many SAP software applications has been a rigorous approach to
the first implementation in any region. Global development, the shared
service organization for that division, and, many times, SAP work together
to document the detailed specifications and scenarios needed for that first
country. Both Colgate groups then implement and support the pilot through
an agreed "post go-live" period of time. Once that pilot is complete, that
shared service organization begins rolling out the "application bundle" to
the other subsidiaries. Global development then moves to the next region
and shared service organization and begins the joint implementation
process all over again.

According to Schneider, this was a very productive method of implementing

new systems and transferring knowledge of the new applications from
global development to the shared service organizations. However, the
implementation timetable for CBP required a new, faster and even more
rigorous approach.

So, Colgate's IT department decided the best way to approach this

challenge was by re-designing their project methodology to more closely
reflect the way their strategic partner develops and releases applications to
their customers. With the global business team in place to lead the design,
the decision was made to set up a project plan having global development
build the first version system and implementation bundle centrally, pilot in
two subsidiaries at the same time and then have all three shared service
organizations begin roll outs concurrently while global development moved
on to the next cycle of development requirements.

Schneider states, "This cut the overall global plan timeline by almost 35
percent versus the traditional methodology."

Colgate also made the decision to develop its evolving system solution in
"cycles" to accelerate the implementations and identify additional function-
ality requirements for future cycles. As new "work packages" are surfaced
from either the subsidiaries, divisions or the global business team, they
must survive strict scrutiny and prioritization based on their global
applicability. Once there is a substantial work package list that has been
approved and prioritized by the global team, global development groups
these packages into a cycle and, based on resource and timelines
calculations, publishes a release schedule. To maintain the integrity of
requirements and quality of development, the shared service organizations
and selected subsidiary users test and approve the cycles before they are
released for implementation.
In addition to this "cycle" strategy for "add on" developments, Colgate is in
the process of reviewing the upcoming release of SAP's CRM product to
determine the most appropriate opportunity to upgrade. Schneider explains
that since the beginning of the partnership, implementing SAP products
without modification of core code has madeupgrading the existing
applications an easier strategy to follow.

CONTINUOUS IMPROVEMENT
CBP is still in the early stages as a global business process and will
continue to evolve and improve as Colgate subsidiaries around the world
begin to surface best practices and the global business team identifies
additional process opportunities. In a testament to the core IT directive of
"continuous improvement," Colgate's IT global organization is tackling the
challenges of concurrent development and implementations for each cycle.
Subsequent cycle plans are modified to minimize those issues and to
reduce development testing times.

"We are very excited to have established a global standard which will
enable us to quickly layer on any new developments and upgrade our core
SAP applications when appropriate. This gives our business the confidence
that no matter how far out of the box they take the process, we can develop
and implement a global integrated system solution to support it much faster
than ever before," says Schneider.

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COLGATE BY THE NUMBERS

WORLDWIDE SALES IN 2006:
$12,237,700,000, a 7.5 percent increase to an all-time record level.
COUNTRIES OF OPERATION: 200
INTERNATIONAL OPERATIONS: Account for 70 percent of sales
CORE GLOBAL BUSINESSES: Four - Oral Care, Personal Care, Home
Care and Pet Nutrition
FOUNDING YEAR: 1806 - William Colgate starts a starch, soap and candle
business in New York City
MERGER: 1928 with the "Palmolive-Peet Company"
NAME CHANGE: 1953, officially becomes Colgate-Palmolive Company
SELECTED ACQUISITIONS:
1972 Hoyt Laboratories 1976 Hill's Pet Nutrition
1987 Softsoap from the Minnetonka Corporation
1991 Murphy Oil Soap 1992 the Mennen Company 2006 Tom's of Maine

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COLGATE'S CORE DIRECTIVES

According to Colgate's Web site, the company's three "fundamental values"
are - caring, global teamwork and continuous improvement. The company
states that "they are the foundation for our business strategy and are
reflected in every aspect of our work life." The company defines the values
as follows:

Caring
The company cares about people: Colgate people, customers,
shareholders and business partners. Colgate is committed to act with
compassion, integrity and honesty in all situations, to listen with respect to
others and to value differences. The company is also committed to protect
the global environment and to enhance the communities where Colgate
people live and work.

Global Teamwork
All Colgate people are part of a global team, committed to working together
across countries and throughout the world. Only by sharing ideas,
technologies and talents can the company achieve and sustain profitable
growth.

Continuous Improvement
Colgate is committed to getting better every day in all it does, as individuals
and as teams. By better understanding consumers' and customers'
expectations and continuously working to innovate and improve products,
services and processes, Colgate will "become the best".

ON INNOVATION
In Colgate-Palmolive's 2006 Annual Report, President and Chief Executive
Officer Ian Cook talks about the company's innovation strategy.

"Our innovation strategy encompasses initiatives touching all of the

company's business functions and processes. We have established a
Global Innovation Fund that allocates seed money to employees who
recommend innovative ideas in any area of the business. At the same time,
we are continuing to establish partnerships with outside experts, suppliers
that are technical leaders, the academic community and leading research
firms, to develop ideas for new products and processes. We have also
established a new Global Big Hits process that identifies new product
opportunities that are of the highest strategic value for Colgate based on a
combination of criteria including: size of opportunity, which projects have
the most incremental potential to reach new consumers, which are truly
new to the market and which have potential for global expansion. Once
identified, these projects are provided additional resources, including
ongoing senior management involvement, to get them to market faster. The
Ajax Professional line of cleaning products in Europe is just one example of
several successful introductions already nurtured by this process."