Avon's catastrophic "promise project" failure, and why it tanked so spectacularly. A paper written for my master's-level course in project management.

1. Running Head: AVON’S ORDER MANAGEMENT DISASTER
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Avon’s Order Management Disaster
Teresa J. Rothaar
Wilmington University

2. AVON’S ORDER MANAGEMENT DISASTER
Avon’s Order Management Disaster
Introduction
In 2009, cosmetics giant Avon began work on its “Service Model Transformation”
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(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

3. 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).
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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.

4. 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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