Oracle Customer Case Study

Herbalife Standardizes Business Systems Worldwide to Support Continued Growth

Now that weve standardized globally on Oracle, we have a common platform that will allow us to expand and grow our markets. Chris Morris, Vice President of Information Technology, Herbalife Over the last 30 years, Herbalifes focus on changing peoples lives through its nutrition products and business opportunity has propelled the company to global success. The company now has approximately two million independent distributors, who sell its products in more than 70 countries. With this growth came new challenges. The company realized that its legacy enterprise resource planning (ERP) system could no longer support the future growth. Herbalife faced several significant challenges related to the core business systems supporting the companys global operations. While its largest market, the United States, ran on Oracle EBusiness Suite applications, the remaining 78% of its business operated on a legacy application that was more than 18 years old, no longer supported by its vendor, and operating on aging hardware that could not be upgraded or replaced. This reality restricted the companys ability to open operations in new markets and required the IT department to employ system time sharing during peak utilization periods. Even the Oracle system that ran U.S. operations was an old version and difficult to manage due to customizations that the company had made over many years. An overstretched infrastructure was a problem that demanded immediate attention. In addition, because it had a direct impact on the companys independent distributors through key processes, like order management, the replacement had to be executed in a way that was invisible to those distributors. As such, Herbalifes IT department laid out a well-defined, three-step approach. First, it needed to stabilize the legacy environment to reduce the

Herbalife Los Angeles, CA www.herbalife.com

Industry:
Consumer Goods

Annual Revenue:
US$2.3 billion

Employees:
4,000

Oracle Products & Services:

Oracle Order Management Oracle Advanced Pricing Oracle iStore Oracle Financials Oracle Internet Expenses Oracle Project Costing Oracle Purchasing Oracle iProcurement Oracle Human Resources Oracle Self-Service Human Resources Oracle Inventory Management Oracle Mobile Supply Chain Applications Oracle Distribution Management Oracle Advanced Supply Chain Planning Oracle Discrete Manufacturing Oracle Database Oracle Support

Implementor:
Oracle Consulting

Copyright 2010, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published May 2010

Oracle Customer Case Study

Key Benefits:
Completed global rollout in 18 months Standardized on a single global instance of Oracle applications Streamlined order management and deployed a new order entry portal to improve service to distributors Supported more than 600,000 orders per month Provided a single source of the truth for financials for the more than 70 separate legal entities that make up the company Standardized financials while maintaining the flexibility to support country-specific regulations and taxes Supported operations in more than 15 languages and 10 currencies

immediate risk. Then the team would upgrade the Oracle environment to provide a solid foundation for a global rollout. Lastly, IT would deploy the upgraded Oracle environment to replace the legacy application. Herbalife completed the global rollout, dubbed project Herbalife Order Management for the Enterprise (HOME), in just 18 months. It has been incredibly successful and has positioned the company to support continued growth. The success of our global rollout is a testament to the commitment of the Herbalife leadership team, our primary implementation partner, Oracle Consulting, and the hundreds of Herbalife IT and business staff members around the globe that made the personal sacrifices required to make this a reality, said Chris Morris, vice president of information technology, Herbalife. Mitigated System Risk The first goal of the global rollout was a vital onemitigating the risk of system collapse. Herbalife had to move quickly to make this possible. With the help of Oracle Consulting it completed the global rollout and replaced the legacy system in a compressed timeline to quickly eliminate that risk. Herbalife established a strict schedule of overlapping regional rollouts and successfully completed each on time and within budget, with minimal system downtime of less than 24 hours for each deployment, and with an extremely short post-production stabilization period of just two to four weeks for each. This was especially important for the global company because it has people operating on the system at all times of the day. Herbalife now has a stable global system, which has eliminated the need for user time sharing and made it easier for distributors to interact with the company. Standardized Global Business Processes With the global rollout, Herbalife has standardized its core business processes on a single instance of Oracle applications. This has enabled the company to streamline business processes and simplify maintenance while maintaining the flexibility that each country requires, such as the ability to comply with countryspecific regulations or taxes.

Copyright 2010, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published May 2010

Oracle Customer Case Study

Oracle Financials provides a single source of truth for all of our countries around the globe. It is very difficult if you are operating on multiple systems especially in a global environmentto combine data for a unified view. With our companywide migration onto Oracle Financials, we know that the data we're looking at is accurate.
Chris Morris Vice President of Information Technology Herbalife

For example, by standardizing on Oracle Financials, Herbalife has streamlined all financial processesfrom accounts payable and receivable to fixed assets to project cost accountingensuring that countries follow standard procedures and enabling the company to view data on all countries using a single application. This is a particularly significant accomplishment due to the companys structure and diversity, and the volume of financial activity. Herbalife operates as more than 70 separate legal entities, so it has to maintain more than 70 charts of accounts, which use 15 different languages and 10 different currencies. Together, all company units process anywhere from 2 million to 5 million invoice transactions per month. Oracle Financials provides a single source of truth for all of our countries around the globe. It is very difficult if you are operating on multiple systemsespecially in a global environmentto combine that data and get a unified view. By migrating companywide onto Oracle Financials, we know that the data we're looking at is accurate. It is all in the same system, formulated the same way, and tied together, down to transaction-level details, Morris said. Streamlined Order Management The Oracle project also significantly improved order management, which is a top priority for Herbalifes distributors. The company processes more than 600,000 orders per month, and now those orders go through a standardized process and a single instance of Oracle Order Management. In addition to standardizing on Oracle Order Management globally, Herbalife deployed Oracle iStore to create a new orderentry portal. Oracle iStore allows us to mimic our call center call patterns so that data entry is exactly aligned with the questions we ask a distributor. It keeps the calls flowing smoothly and helps reduce average call handling time. We are able to take the distributors order quickly and accurately, which is critical, Morris said. Provided a Stable Foundation for Growth With the new system, Herbalife is well positioned to continue in its growth. The company can now efficiently support expansion

Copyright 2010, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published May 2010

Oracle Customer Case Study

into new markets, which it has done in the last year, moving into seven new countries from 2008 to 2009. Why Oracle? For Herbalife, Oracle has been a strategic partner for many years. When the company realized the need to replace its legacy system, Oracle was a logical choice. It had already seen the scalability Oracle provided and knew this would improve with an upgrade and the deployment of new modules, like Oracle iStore. When we began our global expansion we went to Oracle and asked them how we could get the applications deployed globally as quickly and effectively as possible, to mitigate the risk we faced. Thats when Oracle Consulting began working with us to develop a plan to complete that rollout in record time. Implementation Process In fall 2007, Herbalife completed the necessary legacy stabilization and turned its attention to the Oracle upgrade and global rollout. The global rollout kicked off in January 2008, midway through the upgrade. Migrating to the latest application and database software was certainly complex, and we increased the level of complexity by deploying our new order-entry portal built on the Oracle iStore framework. In addition, kicking off the global rollout while the upgrade was in motion certainly magnified the pressure on both the upgrade and rollout teams. The upgrade and rollout overlap served to reduce the overall program completion timeline, and the team was able to compress the timeline further by pursuing parallel regional execution. Herbalife assembled separate solution design and deployment teams in Mexico, South America, the Asia/Pacific region, and the Europe, Middle East, and Africa regions. Regional teams worked with a core team in California, which served as the central solution coordination point. By moving forward with four overlapping six-month streams, Herbalife reduced its timeline from 24 months to 18 months.

Copyright 2010, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published May 2010

Oracle Customer Case Study

Pursuing and staffing concurrent regional rollouts certainly presented unique complexities. In addition, we had to manage 250 IT staffabout half internal and half externaland more than 300 business staff, who speak 15 different languages and work in numerous time zones. The problems of a standard ERP system rollout were magnified several times over, but, with the help of Oracle Consulting, we were able to make it happen, Morris said.

Herbalife is a global nutrition and direct-selling company. Its products are sold exclusively through a network of independent distributors who conduct business in more than 70 countries.

Copyright 2010, Oracle. All rights reserved. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners.

Published May 2010