科尔尼作品--IT企业战略与策略规划
- 1. IT StrategyFebruary 24, 2000Case Study of a Recent Client ExperienceRob Trollinger, Principal, Dallas Chris Wisler, Manager, Alexandria Kimberly Brown, Associate, Alexandria
- 2. Today’s discussion… Background of Company Company IT Overview Cause for Action IT Strategy Approach Application Architecture Technical Architecture Establish the IT Program Office Organizational Effectiveness and IT Alignment Summary
- 3. Background of company
- 4. Began in 1909 as a partnership between an innovative chemist and a businessman Pioneering work in leather tanning Best known for expertise in acrylic chemistry Essential component to detergents, diapers, cell phones, industrial coatings, and more 50 manufacturing, research, and technical facilities worldwide Sales in 100 countries, totaling $4 billion annuallyCompany ACompany BCompany A announced their intended merger with Company B in 19991848, founding Largest and most recognized business for a particular consumer product Major supplier of basic inorganic chemicals derived from salt Essential ingredients in CDs, newspapers, magnetic tapes, sports equipment, and more 36 mining and processing facilities, 68 chemical manufacturing, research, and technical facilities worldwide Sales total $2.5 billion annually
- 5. Drive the short-term value Exceed the market’s expectationsIntegrate the Organizations as Seamlessly as PossibleDevelop and communicate a shared strategic agenda Define organization structures, key business processes and technology platform/architecture Select leaders and staff positions Develop metrics and budgets Integrate the businessIntegrate day-to-day operations Position for the future growthAchieve Business Value Goals as Quickly as PossibleAchieve $200 million of savings within 12-18 months (running rate by 2001) Ensure customer retention Corporate Center rationalization Administrative overhead reduction Sourcing/Procurement savings Product line and operations rationalization Manufacturing productivity and supply chain improvements Reduction in technology costs The focus of the integration was to quickly achieve operational synergies while combining the organizations to support top line revenue growthA.T. Kearney was asked to structure, drive and manage the entire integration process for what would become one of the largest specialty chemical companies
- 6. Latin America and Asia-Pacific Region Operations: 10% of sales 20 manufacturing facilities 10 distribution sitesNorth American Region Operations 60% of sales 60 manufacturing facilities 230 distribution sites(1)While the potential source of the synergies were somewhat clear, smooth and timely integration of the two companies was less assuredChallengesSome manufacturing processes and technologies were incompatible between the two companies Combining two companies with both direct product overlap Acquiring company was more of a “intermediates producer” and the acquired company was more of a “formulator” Significant facilities consolidation opportunities Distribution consolidation and improvement required changing the business model and the mindset Standard lead times Standard service levels Significant customer overlap Significant EH&S issues needed to be addressed, competing away scarce capital resourcesEuropean Region Operations: 30% of sales 40 manufacturing facilities 60 distribution sites
- 7. After an accelerated integration program, the merger was deemed a success by the CEO as well as the analyst community“By the end of 3Q, the new company had achieved cost reductions of $100MM on an annualized basis, three months ahead of schedule.” — Morgan Stanley Dean Witter “Already, the company has achieved a $100MM annual run rate in cost savings ahead of schedule…” — Janney Montgomery Scott “The integration process is running smoothly and in fact better than expected achieving a $100 MM lower run rate…” — J.P. Morgan Securities “The integration efforts continue to track ahead of plan…” — Deutsche Banc Alex Brown “Considering the steep increase in raw material costs, the new company was able to meet expectations with its rapid integration of the acquired company’s operations…” — Brown Brothers Harriman
- 8. PerspectiveExternal FocusInternal FocusIncrementalTransformingValue Creation (P/E Ratio)New Business Model New Segments New Technologies AcquisitionsShare Gain Technology Improvement Geographic Expansion Portfolio ManagementWork Redesign Supply Chain Operating Excellence2-3% Sales Growth4-5% Sales Growth6-8% Sales GrowthFollowing the integration, the CEO’s Agenda is to double the rate of growth while maintaining high levels of profitabilityCost improvement, customer service and retention and e-business have been identified as key areas of focus
- 9. Rapid assimilation of acquisitions with limited additional financial staff Global shared services IT provides a strategic advantage in support of growth initiativesTarget CapabilitiesGlobal processes and metrics Interim information on sales, profitability and cost of operation Automation of routine processes and transactions Financial staff is aligned with the businessContinuous launch of service offerings that cannot be easily matched by competitors Quality built into an automated processes Humans manage the relationship not transactions Integrated supply chain network (S&OP process) across multiple enterprises Inventory commitment using production, sales and balances Ability to reach customers globally without a local presenceGrowth / AgilityStrategic ImperativeCost Improvement Customer Service & Retentione-Business NewCo’s business strategy will place additional demands on the entire organization
- 10. Company IT Overview
- 11. Finance/ Back OfficeDemand PlanningSupply Chain & Customer ServiceHuman ResourcesClient/Server (Windows NT or Unix)High-level ProcessesIntegratorSAPISGeneral LedgerOrder History (Focus DB)Transportation ManagementRailmaxManufacturingPlanningTransport SafetyOrderingTeserac (HR)Infinium HRFinancial ReportingOther HR/Payroll SystemsManufacturingQuality SystemsCurrent transactional systems are complex, reside on multiple platforms and are integrated through a network of interfacesAS/400Mainframe
- 12. Intrinsic manual processes result in a high cost effort that cannot support the speed of today’s e-business environmentGrowth / AgilityStrategic ImperativeLack of automation prohibits additional workforce leverage Systems are running out of physical capacity Incremental improvement mindset limits strategic developmentObserved Key ThemeCost ImprovementCustomer Service and Retentione-BusinessFocus is on reconciling balances and correcting errors and not root cause error prevention Processes (especially billing) are manually intensive Global processes are desirable but difficult to implement consistently Transaction systems are becoming increasingly difficult to maintainSpecial customer requirements and services (e.g.SOMI) are implemented but at a relatively high cost Inspection of errors protects/ masks the customer from errors inherent in the systemManual intervention presents a barrier Business information is not easily assimilated Quality of global customer information is suspect
- 13. Roughly 72% of the IT budget is spent on maintaining current service levels and infrastructureTo maximize business value, we need to shift the spending from maintenance to business development and long term IT support and infrastructurePercent of IT Spending by CategoryIT Support & Infrastructure 2%Maintenance 72%Business Development 19%Non-discretionary 7%
- 14. FunctionsCurrentLimited Point Source SolutionsPoint Source Best of Breed Suite or Legacy SystemsProposedA future vision of the enterprise architecture must seamlessly and efficiently integrate core business processes in an e-business environmentEvolving Strategy: AIM, MicrosoftIBM AS/400, NT, ???CompaqCompaqDigital, IP, ExchangeSAPJDEPeopleSoftStandardized, Low Cost, Mixed after mergerOracleProcesses of Strategic Value and Competitive AdvantageOperations and Transaction Processes (Low Cost)InfrastructureData, MiddlewarePlanningISMOptimizationCRMHR / PayrollMainframeMid-range, Client/ServerDesktopsLaptopsVoice/Data, Networks, EmailApp. InterfaceData Mgmt Customer Facing e-Business SolutionsPRISM / Supply Chain SystemsProcurement LogisticsManufacturing OperationsOrder Billing A/RA/P G/L ReportingMiddleware
- 15. Cause for Action
- 16. Information Technology StrategyExploitation of current product & customer base through geographic expansion, new services & cross selling Extension of the traditional supply chain beyond current customer and supplier base Formation of partnerships and alliances Adoption of new value chain models exploiting today’s technology Global management and measurement processes Continuous cost improvementPossible Business Unit ResponseAcquisitionsShared ServicesGlobalizatione-BusinessContinued industry consolidationSupply Chain Value NetsBusiness Model RevolutionPace of Technology ChangeKey Business Change DriversInformation technology must reinvent itself to develop capabilities that deliver substantial business value at the pace of today’s business environmentAlign and SupportAn updated IT strategy is necessary to align the organization and its service offerings to business unit requirements and operating models
- 17. Corporate AgendaIT Strategy Alignment6–8% Revenue Growth11% Return on Net AssetsAssume leadership role in design & implementation of customer enabled processes to promote scalability Leverage e-business technologies Develop data mining techniques to leverage customer information leading to increased sales Institute a program management approachProfitable & Sustainable GrowthOperational ExcellencePost-Merger IntegrationContinuous design of new processes and service offerings to promote customer intimacy and service excellence Implement low cost high availability infrastructure Simplify company and customer compliance with regulationsContinue migration to Company A’s applications Rapid deployment of new processes and technologies to enable cost initiatives Rapid application development and deploymentE-business strategyCorporate ObjectivesLinking the strategy to the CEO agenda reinforces IT’s commitment to be a high value service partner
- 18. Business StrategyIT StrategyBusiness MissionScopeCompetenciesGovernanceIT MissionArchitectureCompetenciesGovernanceAlignmentAlign the IT organization to meet business unit requirements of the new Company Develop and communicate the application and technical architecture direction Replace the current technical “roadmap” with a comprehensive and specific deployment flight plan depicting timing for replacing applications and technologies and implementing process/ service changes Implement a program management process to determine IT investment priorities & set IT directionThe IT strategy aligns with business strategies to define matching priorities, complementary capabilities, and compatible organization dynamics IT Strategy Outcomes
- 19. IT Strategy Approach
- 20. The IT Strategy is comprised of an IT vision, strategy and deployment plan that will enable rapid delivery of cost effective IT products and servicesGap to CloseCompe-tenciesArchi-tectureGover-nanceIT - Future StateCompe-tenciesArchi-tectureGover-nanceDeployment PlanCompe-tenciesArchi-tectureGover-nanceBusiness StrategyStrategy Development ProcessIT Strategy DeliverableSynthesesIT StrategyIT VisionCore CompetenciesApplication & Tech. Architecture DirectionSelf Funding Investment PlanGovernance ProcessesDeployment Strategy and TimingFilter/PrioritizeCorporate Strategy Business Unit Strategies Boundaries from Executive CouncilA new CIO was brought in to champion the effort while becoming the IT Change AgentIT - Current State
- 21. A set of guiding principles will allow us to “rethink” the current way of doing business as we progress our strategy development processThe applications and technical infrastructure must be aligned with business strategies and create substantial shareholder value IT will focus its energy on competencies that are results driven and add significant business value Our goal should be to deliver project results in half the time and half the cost (time to market is essential) IT budget will be owned and driven by the business for discretionary projects The organization will adopt a virtual and collaborative approach to address business problems The future state will drive our strategy design; how we do things today may influence our future — but there are no sacred cows We must provide significant growth opportunities for our people to attract and retain a highly skilled and motivated staff We will share clear, unified communications at every level led by IT Leadership Team
- 22. Four parallel workstreams will contribute to development of the IT vision, strategy and deployment planOrganizational Effectiveness and IT AlignmentEstablish the IT Program OfficeApplication ArchitectureTechnical ArchitectureHow should the organization be aligned to the businesses? What competencies should be developed to meet the challenges of today’s business climate?What specific application suite will best meet transaction processing requirements?What platform(s) is most effective for the chosen application suite? How should we support the company’s e-business requirements?What process is required to prioritize and manage the IT portfolio? How should IT best involve senior management and the broader organization in the IT process?IT Strategy Project
- 23. Application Architecture
- 24. The applications architecture will result in an ERP “backbone” vendor selection and provide guidance and direction for all other applicationsAll Applications C u s t o m e r s S u p p l i e r sPackage selectedImpact assessmentDirection / value propositionDefine NeedsOverall guiding principles / rules applyTechnicalDecision SupportCustomer Relationship ManagementEnterprise Resource Planning (ERP)Supply ChainCollaborative Computing
- 25. Application Options Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 6 Technical Options Database x,y,z Op System ComputerConsensus with team Publish application architecture solution set Publish impact analysisAlternativesDecision/ ResultThe application architecture team is following a structured analysis process that test vendor solutions against our decision criteriaEvaluation Criteria1Hypotheses/ Criteria Test Questions2Analysis “Leverage / Synergy”3Evaluation and Decision Making4Compile evaluation criteria Define “must meet” criteria Assign criteria weightings Develop test questions and hypotheses Perform option analysis Develop decision treeDevelop fact base to test hypotheses Evaluate results against criteria and decision frameworks Agree decision Project Stage GatesKey Project Check Points
- 26. The vendors will be evaluated against four pre-defined dimensions, each of which will be weighted by business stakeholdersInvestment / ViabilitySoftware and hardware costs Bolt-on and interfaces costs Implementation and conversion costs Training costs Financial status Organizational strength Vendor commitment Embedded base / References Market position Customer support Training Cultural fit Implementation resources Implementation RiskFunctional RequirementsSupports process manufacturing Order to cash Financial Reporting Processing sequence Ease of useStrategicGrowth, agility Customer service and retention E-business Cost containment Vendor and product strategyTechnical EnvironmentTechnical architecture Administration services Interfaces Documentation and vendor support
- 27. Technical Architecture
- 28. The technical architecture workstream will develop a comprehensive environment to take advantage of new technologies and value added applications… Order To Cash Financial HRTransactionalPlanning Forecasting OptimizationSupply ChainManufacturing Quality Control System Manufacturing EH&SLegacyDecision Support RailmaxWindowsLocal PCsIntranet DevicesInternet DevicesCustomer DevicesOperating EnvironmentsDatabasesMiddlewarePresentationPayroll expensesOrders InventoryTBDTBDNumerousOrders Inventory ReceiptsATP Transfer OrdersOrders Inventory TransactionsCarriers OrdersInventory Orders Accounts ReceivablesDB2VendorSQL ServerAdapters for ERP & Legacy Systems (Data Management)Message Management ProductsApplication Programming Interfaces; Remote Procedure Calls; Request BrokersOperational Data StoresOrders InventoryReference data Journal entries
- 29. … to maximize the information exchange internally and externallyWhat is the most viable technical platform(s) for the new Application portfolio? What is the optimal middleware solution: ERP vendor-supplied, third party or both? How much do ERP and middleware solutions minimize the effort of developing / maintaining interfaces? Does the new technical direction adequately address standardization of data across the enterprise? Will the new technical direction align with existing decision support and emerging e-business strategies? What impact do these architecture decisions have on current technical skills and competencies? What new developer tools and platforms will be required to support this technical strategy?DeliverablesERP Technical Architecture Roadmap Outlines the hardware operating system and database platform selected for implementing ERP solutionsMiddleware Tool Strategy Defines the conceptual middleware solution and details the middleware product(s) required to implement the strategyDecision Support Strategy Defines the technical solution required to satisfy business requirements and leverage new related technologies and the company's IT strategyCost Saving Opportunities Details cost savings in IT infrastructure costs and defines the impact on the structure of IT Infrastructure and SupportKey Issues
- 30. Establish the IT Program Office
- 31. ObjectiveAreas of FocusComponentsProgram and Project ManagementCommunicationInvolve business representatives Perform day-to-day resource allocation Program and project management Integrate with capital planning and annual budgeting Develop Vision Statement Develop critical rules of engagement with roles and responsibilities to govern ITDefine communication audiences and what they need to knowDetermine audiences, communication vehicles, timing Develop a plan Develop a program to expand executive awareness of IT initiatives and issues Communicate to all areas and geographies Create a framework for managing and allocating funds and resourcesDefine and deploy a common portfolio management framework Develop metrics for the IT portfolio Develop a procedure for funds and resource allocation Integrate project approval procedures with Governance Revise 2000 budget Create “workbooks” that outline Project and Program management processesDefine metrics Review and adopt tools Establish quality reviews Manage risk, scope and budget Manage issues Track benefits Develop frameworks and checklistsGovernancePortfolio ManagementThe program office workstream will establish processes for portfolio management, governance, communications and program/project management
- 32. The portfolio management process starts with the overall corporate goals translating into portfolios of programsCorporate Goals Revenue Growth RONA Lower Operating Rate High-level IT spend target (CFO)Unit1 GoalsUnit2 GoalsUnit3 GoalsGoals (Targets)Corporate Strategies Unit1 Strategies Unit2 Strategies Unit3 StrategiesStrategies (Initiatives)Portfolios of ProgramsExecutive Council / CFO; Last Year’s Spend; CIO / Guidance Team Adjustments Starting Points for IT Spend by UnitCorporate Portfolio Unit1 Strategies Unit2 Strategies Unit3 Strategies
- 33. Then the portfolios are assessed by corporate, unit and guidance teamDevelop “Proposals”Portfolio Mgmt. / DiscussionDraft PortfolioProgram Proposal OneProgram Proposal TwoProgram Proposal ThreeCorporate (Mandated) Level Portfolio ProcessesUnit Level Portfolio ProcessesPrograms to pursue “Rationalize” Portfolios - Look for: Synergies Timing Resource / Cost ConstraintsCorporateUnit2Unit1Unit LeadershipCIO, ITLTOverall PortfolioGuidance TeamPortfolios will be reassessed quarterlyPrograms to hold Develop “Proposals”Portfolio Mgmt. / DiscussionDraft PortfolioProgram Proposal OneProgram Proposal TwoProgram Proposal ThreePrograms to pursue Programs to hold
- 34. MD 1 WorkplanActivityTask 1Task 1Task 1Task 1Q1Q2Q3Q4Once portfolio decisions are made, detailed program planning and tracking processes will follow Program Risk Management Top 10 Program Risks as of 06/24 Organization announcement timing still unclear IT requirements not fully understood No plans to address cultural misalignment Success of communication not currently planned to be measured IllustrativeInitiative Status ManagementSize = $ Saved61218GreenYellowRedRiskTime to Complete ImplementationInitiativeCurrent QuarterCum. Qrtly. BreakdownJan.Feb.Mar.4Q971Q982Q98Program AchievementImplementation Communication Workplan
- 35. Organizational Effectiveness and IT Alignment
- 36. Leading Practice AssessmentCapability AssessmentFuture State Organization DesignA value-based organization is designed around core competencies, which consist of processes and capabilities that deliver value to the businessSupport and design cost effective and value adding business processes Provide tools and technologies that give the business a competitive edge (e.g. E-business offerings) Deliver business solutions rapidly - half the time at half the cost Provide information and tools for better and faster decision making Manage cost effective infrastructure service that match the needs of businesses IT Core Competency/ Value AddedDevelop Vision and Strategy Design Products Manage Improvement & Change Manage HR and Relationships Administration Support Applications Development Communications Client/ End User Support Data Management Electronic Collaboration Output & Distribution Mgmt. Packaged Solutions Pre-delivery Planning & Alignment Systems Management Manage Financial & Physical Resources CapabilitiesStrategy and Value Realization Governance & Program Management IT Alignment and Organization Effectiveness Project Management BU Service and Support Portfolio Management Data Management Technical Infrastructure Vendor Relationships Performance Metrics Financial Management Processes
- 37. The IT organization model represents the means for delivering services and solutionsCustomer RelationshipsDemand ManagementOrder FulfillmentManufacturingProcurementBusiness Unit AEnterprise-wide ProcessesBusiness Unit BBusiness Unit CBusiness Unit D
- 38. Summary
- 39. Increase revenue from existing and new customers Quicker realization of Return on Investment for future acquisitions Tangible BenefitsReduce functional and business costs Decrease IT support costs Increase accuracy of invoicesImprove customer retention Customized service Accurate and up-to-date order information Decrease order cycle timesDecrease administration costs due to self service nature of web-based systems Strategic ImperativeImplementation of the IT plan will provide substantial bottom line benefits while enabling the company to achieve its strategic imperativesLower incremental cost to serve the next customer Product releases will increase scalability and technical innovation Intangible BenefitsImplement Class A MRP II practices more rapidly and with reduced infrastructure costs Access to global customer information for more effective pricing Support an integrated Customer Relationship Management strategyProvide an infrastructure for deploying the company’s e-business strategy Improve access to e-communities and global customersGrowth/Agility Cost ImprovementCustomer Service and Retention E-business
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