Running Head: AVON’S ORDER MANAGEMENT DISASTER 1

Avon’s Order Management Disaster

Teresa J. Rothaar

Wilmington University

AVON’S ORDER MANAGEMENT DISASTER

Avon’s Order Management Disaster

Introduction

In 2009, cosmetics giant Avon began work on its “Service Model Transformation”

(SMT) project, combining a back-end ERP system with a tablet-enabled front-end ecommerce

system. The goal was to modernize and streamline Avon’s order process, with features such as

real-time inventory checking (Why Projects Fail, 2014). The company envisioned every Avon

sales representative equipped with an iPad, upon which their customers could easily place orders

(Henschen, 2013a), and estimated yearly savings at $40 million (Why Projects Fail).

In May 2013, Avon launched SMT—code name the “Promise Project”—in Canada.

Results were disastrous. Sales representatives complained that the system was clunky, difficult to

use, and filled with bugs, such as login errors, problems with saving orders, and problems with

the real-time inventory function. One executive sales leader told InformationWeek that over a

third of her 300 “downline” representatives quit in disgust over the new system, and estimated

that Avon lost approximately 16,000 representatives across Canada (Henschen, 2013b).

In December 2013, Avon terminated the Promise Project, reporting that the initiative

generated a loss of $100 million to $125 million in an SEC filing that month (Why Projects Fail).

What Went Wrong?

Avon—like Amway, Herbalife, and Mary Kay—sells its products via multi-level

marketing (MLM). Representatives not only sell cosmetics, but attempt to recruit others, usually

family and friends, to sell under them in their “downline.” The “upline” representative gets a

commission for their sales and the sales of each rep in their downline. As is the nature of MLMs,

many representatives earn little or no commissions; they primarily sign up with the MLM

because they enjoy the products, they purchase them regularly, and they want to get a discount

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AVON’S ORDER MANAGEMENT DISASTER

on their own purchases. Those who do sell Avon to others are often small-scale sellers who sell

to family and friends and earn $100.00/month or less (Henschen, 2013b).

With this in mind, it’s no wonder so many of them quit. As the sales executive Henschen

interviewed for InformationWeek points out, “With all the trouble they had using this system, the

people making $50 or $100 per month per month figured it just wasn't worth their time and

effort.”

The biggest problem with this project appears to be that the front-line sales

representatives, including the most prolific “upline” representatives—equivalent to supervisors

of their downlines—were never on board with the Promise Project. According to what was

reported in the news, their input was not solicited at any time; they were simply told that a great

new system was coming and they’d love it. Upper management at Avon should never have

attempted such a wide-scale project without getting input from their field representatives. This

was especially important in Avon’s case, because they do not use a professional sales force; they

depend on independent representatives, with varying levels of education, experience, and

computer literacy levels, many of them part-time and earning very little money for their efforts.

With this end user base, ease of use was imperative. The system should have been so simple that

a child could be taught to operate it.

If upper management had asked the field representatives what they wanted, and solicited

their input and feedback at every step of the process, the Promise Project might have been highly

successful.

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AVON’S ORDER MANAGEMENT DISASTER

References

Henschen, D. (2013a, December 12). Avon Pulls Plug On $125 Million SAP Project.

InformationWeek. Retrieved from http://www.informationweek.com/software/enterprise-

applications/avon-pulls-plug-on-$125-million-sap-project/d/d-id/1113061

Henschen, D. (2013b, December 16). Inside Avon's Failed Order-Management Project.

InformationWeek. Retrieved from

http://www.informationweek.com/software/information-management/inside-avons-

failed-order-management-project/d/d-id/1113100

Why Projects Fail. (2014, January 21). Avon Products. Retrieved from

http://calleam.com/WTPF/?p=6248

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