After Costly 'Transformation,' Cadbury Schweppes Turns to Outsourcing

Ann All

We're betting that a 12 million (U.S. $24 million) knock on the bottom line wasn't what Cadbury Schweppes had in mind with a "business transformation" project that involved implementing a 200 million (U.S. $401 million) ERP system from SAP.


Cadbury Schweppes ended up with an unwanted oversupply of chocolate bars, reports CEO Todd Stitzer singled out the ineffectual implementation as one of the company's chief difficulties in 2006, along with product recalls, accounting misstatements and rising commodities prices.


Not surprisingly, the company's new plan is to shrink its IT department by up to a third during a four-year cost-cutting initiative. Cadbury's CFO says it hopes to save some 30 million (U.S. $60 million) a year by outsourcing a number of finance, accounting and IT activities.


Cadbury Schweppes is moving 500 F&A jobs to India in a deal with Genpact, and HP is taking over infrastructure management for the confectionery/soft drinks giant.


Nick Carr has pointed to such "rationalization" programs as a sign of the continued downward pressure on IT spending.


It's also more bad news for SAP, which had a rough year of its own.

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