1. Getting IT Right Presented by: Team DUCKS

2. Introduction The average business wastes 20% of their IT budget on purchases that fail to meet their objectives This translates to $500 billion per year worldwide

3. Costly Mess or Competitive Weapon? IT demands inspired leadership, superb execution, senior management involvement

4. 3 Ps of “Getting IT Right” Long term IT Plan Unifying Platform High Performance Culture Long term IT Plan Unifying Platform High Performance Culture Results: enormous power from IT, with less investment, within 6 months

5. The Three Principles Interdependent, Interrelated & Universally Applicable Principle 1Principle 2Principle 3 A Long-Term IT Renewal Plan Linked to Corporate Strategy A Simplified, Unifying Corporate Technology Platform A Highly Functional, Performance- Oriented IT Organization Keep the entire IT group focused on the company’s overarching goals Clean, horizontally integrated architecture designed to serve the company as a whole A department that works as a team and operates according to corporate standards

6. A long-term, disciplined, strategic view and a square focus on achieving the company’s most fundamental goals Appropriate investments directed toward near-term cost reduction A detailed blueprint for long-term systems rejuvenation and value creation Principle 1: A Long-Term IT Plan

7. Frito Lay – The “Before” Picture  Old batch-based data processing systems driven by paper forms that took 12 weeks to print and distribute  All sales transactions were recorded by hand  Variety of databases and dozens of different functional organizations – none of these communicated with each other This modus operandi made it impossible to: - change prices quickly -develop new regional promotions -streamline production Improve inventory management

8. Frito Lay – The “After” Picture Mike Jordan, CEO, reconstructed the company as a hybrid organization  Centralized platform included purchasing, manufacturing, distribution, systems, accounting and R&D  Sales & marketing decentralized He achieved this by: -Giving salespeople emerging handheld technology devices -Transformed batch accounting to online operational systems supported by databases

9. Frito Lay – The Results  Company saved between 30,000 – 50,000 hours of paperwork per week  Savings of $40 million/year from better control over sales data  Achieved reduction in the number of distribution centers, stale product quantities (by 50%)  Domestic revenues grew from $3 billion in 1986 to $4.2 billion in 1989

10. Build an IT organization that enables a common language across the organization Operate against a simple and well-understood set of principles Create an architecture that includes a common set of hardware, middleware, and data repository Principle 2: A Unifying Platform

11. Delta – The “Before” Picture 30 different IT platforms requiring 100 support specialists each at a cost of $700 million per year Data Middleware Hardware BAGGAGE (Applications) Data Middleware Hardware GATE (Applications) Data Middleware Hardware TOWER (Applications) Data Middleware Hardware FLIGHT OPERATIONS (Applications)

12. Delta – The “After” Picture  Refocus investment on unifying platform – the Delta Nervous System  Upgrade and replace older systems as needed without disruption BAGGAGE (Applications) GATE (Applications) TOWER (Applications) FLIGHT OPERATIONS (Applications) DELTA NERVOUS SYSTEM DATA Hardware Common Middleware Components

13. Delta – The Results IT costs reduced by 30% Full integration with all employee functions

14. IT well integrated with rest of the organization. No silos. IT operates with same corporate values and measured by same performance standards Clear set of expectations including delivering results, leadership competencies and cultural behaviors Principle 3: A High-Performance IT Culture

15. Different corporate cultures Antagonistic teams Merging separate IT systems - Largest integrated real time system in the world Burlington Northern Santa Fe Railway Co. Problem: BN & ATSF merged creating one large company with two legacy systems Challenges:

16. Establish an accountable IT leadership team Set leadership performance targets Updates, reviews, IT board meetings striving for rigor and routine Beat the 24 month target by 3 months, achieved $500 million in cost savings BNSF Management Actions

17. Aligning the Ps Long term IT Plan Unifying Platform High Performance Culture

18. IT will mature from adolescence to adulthood faster than any other business function As technology matures so will the skills, processes & principles Once organizations get IT right, they will get much more for far less Moving Forward…

19. Questions?