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Information Systems Portfolio Management

March 7, 2002

H:FINNERTY\PRESENTA\03/07/02

2

Kraft FoodsInformationServices

Agenda

• Kraft background– Business– Information Systems

• Some context to help think about Information Systems role

• Aligning Business - Information Systems visions / strategies

• Architecture

• Kraft Portfolio Management Process

• Key principles for successful IS Portfolio Management

• Questions and answers


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Information Systems PortfolioManagement Challenge

• Breadth of the business

• Many people

• Many projects

• Picking the highest value initiatives

• Balancing short term return, longer term / strategic initiatives / and overall risk

• Ensuring the right sequence of initiatives

• Getting things to fit together towards a cohesive future vision


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Aligning Business and IS Strategy

Business Strategy & Direction

Core Business

Processes

Information and

Knowledge

Technology

Catalyst Role

Value


5


Three-Legged Stool of Effective Change Management

ChangePr

oces

s

Peo

ple

Tech

nolo

gy


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KFIS Vision

• VisionInformation Services will support Kraft Food’s vision of Undisputed Leadership and establish information as a source of competitive advantage by transforming the way people work, and harnessing

the collective knowledge and innovation of people throughout the company to out-think and out-perform the competition.


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Our Information Systems Strategiesare Well Aligned to the Kraft Business

Strategies Strategies• Drive growth by enabling superior consumer insight, streamlining revenue producing

activities, providing value added customer services and increasing collective innovation

• Accelerate productivity by eliminating people, paper and time from business processes and providing people with unique insights into their activities and decision processes

• Enable organizational excellence by providing people with instantaneous, relevant, integrated information and knowledge any time and any place in the world

• Provide an information technology infrastructure which is reliable, secure and responsive at top 10% cost efficiency levels

• Develop an integrated, information systems plan to support global food business and deploy solutions which enable global business processes


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Architecture

A set of guidelines and standards detailed enough thatpeople can work independently yet create an envisioned endproduct

– Blueprint for a house

– Sub-division plan

– City highway plan


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An Information TechnologyArchitecture

Infrastructure

Desktop Database O/S Hardware Network Tools

Data Warehouse Knowledge Repositories

Portal

EAI E-Hub Master Files

Applications

Buy Make Deliver Sell Market

Sup

plie

rs

Cus

tom

ers

&C

onsu

mer

s


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Portfolio Process

• Projects > $250,000

• Evaluation criteria aligned to Kraft business / IS strategies– Value to the company– Risk or ability to deliver– Cost to develop and run

• Project write-ups submitted. Value and risk challenged by sub-committee

• Project ranking by combination of value and risk developed

• Senior management steering team with broad representation selected

• Projects reviewed for understanding with steering team

• Forced rank voting by steering team to apply strategic management judgement


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Portfolio Model

Portfolio Model Process Flow

Register project idea

IT investment proposal form (project definition)

Infrastructure review

Scoring of value and risk criteria

Cross-functional review

Senior Management Council review / selection


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The Following Criteria WereUsed to Evaluate the IS Projects

Likelihood ofSuccess Criteria

Wt. Score Business Value Criteria Wt. Score

Technical Standards X1: 10% Financial Return Y1: 30%

Skills Capability &Training

X2: 10% Customer & ConsumerFocus

Y2: 20%

Scope & Complexity X3: 25% Supply Chain BusinessBenefits

Y3: 15%

Business Alignment X4: 22% Technology Efficiency Y4 15%

Risk Factors X5: 21% Knowledge Advantage Y5: 10%

ManagementCapability

X6: 12% Work life Balance Y6: 10%

Dimension Total X 100 Dimension Total Y 100

An independent review committee evaluated all projects and ensured consistency of scoring


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Portfolio Model

Portfolio Application Model

Ability to Succeed

Valu

e to

the

Bus

ines

s

50

100

10050

00


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Portfolio Model

The Following are Key Factors Required for Successof This Process

• Buy-in within IS and our business partners that this is an equitable approach to funding IS development

• Sufficient resources dedicated to perform good project write-ups (scope, benefit, costs, etc.)

• Tailor project rating criteria to link with Kraft business and IS goals

• Review committees that have the confidence of IS and our clients


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So What

• 80% of the IS investments went to the top 50 Kraft wide projects vs. functionally best projects

• Stronger alignment to business, Information Systems objectives and wider support from senior business management

• IRR from 20 to 100+%

• Balance short term value, strategic investments and risk

• Perceived to be fair, objective and equitable. . . rigor to the process and people got their day in court


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Our Strategies and DeliverablesSupport KFNA Strategies

eCRMInternet MarketingCRICIdea to Market RolloutMarketing and Global Brand Management Reengineer

Supply Chain Optimization / CPFRException Based / Real Time Demand / eHubMillenium / Trade SystemseProcurement

Employee Portal Best Practice CollaborationNabisco IntegrationeLearningPlanning and Reporting / eFinance / Virtual Close

Fast Track Deployment of SystemsComponent Based interfacesCentralized Planning and Prioritization

Reliable, Secure, Responsive, Cost Effective InfrastructureNetwork ImprovementsStandardized Employee Productivity Tools and SupportSecurity and Business Continuance InvestmentsData Center Outsourcing

Global Systems PlanGlobal Process Enablement

Drive Growth

Accelerate Productivity

Enable Organizational Excellence

Cost Effective Infrastructure

Support Global Business

Strategies LRP Deliverables

Enable IS Organizational

Excellence


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10 Principles for SuccessfulPortfolio Management

• Communicated direction (vision - strategies - goals)

• Partnership (business process owner and Information Systems)

• Architecture

• Common, integrating processes– Systems development process– Master Files design– Project reviews

• Think programs vs. projects– e.g. inventory reduction vs. new forecasting system

• Alignment to business strategy and direction

• Rigor and balance on priorities

• Project tracking (cascading the top 10)

• Think asset lifecycles (add, maintain, shed)

• Trusted people

Questions and Answers

Documents

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