An IT Strategy for Sanitarium IT Steering Committee June 10, 2003 David Heise

2 An IT Strategy for Sanitarium 1. Align with corporate strategy 2. Adopt an Enterprise Information Architecture 3. Adopt a formal process for approving IT projects 4. Develop a portfolio of current and planned IT investments 5. Identify key IT initiatives and prioritize them

3 1. Align With Corporate Strategy The role of the IT Steering Committee: 1. Enunciate the role of IT in supporting the corporate strategy. 2. Receive IT project requests. 3. Assess alignment with corporate strategy. 4. Make judgments about cost-benefit and other measures. 5. Approve / Postpone / Reject IT proposals. 1-1

4 An IT Strategy for Sanitarium 1. Align with corporate strategy 2. Adopt an Enterprise Information Architecture 3. Adopt a formal process for approving IT projects 4. Develop a portfolio of current and planned IT investments 5. Identify key IT initiatives and prioritize them *

5 2. Enterprise Architecture Supply Chain Satisfy and manage demand for products and services Demand Chain Create, develop and sustain demand for products and services  R & D  New product development  Marketing  Brand management  Demand Planning  Sales  After sales and services  Customer Relationship Mgmt.  Account management Sapphire ’03 – Andy Powell The Value Chain 2-1  Sourcing and procurement  Production/Operations  Asset optimisation  Plant Maintenance  Demand management  Production planning/scheduling  Distribution/delivery  Warehousing and storage

6 Michael Porter’s Value Chain 2-2

7 Sanitarium Value Chain Supply ChainDemand Chain 2-3 Sanitarium Information Chain

8 Ought to be: Or even: Instead, it’s: And feels like: 2-4

9 Enterprise Architecture Because of the company’s investment in SAP, and in the interests of achieving transparent end-to-end visibility for the correlation and analysis of all processes, Sanitarium has adopted SAP as its Enterprise Architecture. This means that new projects will start with an examination of the solution provided through SAP. If the solution falls short on goodness-of-fit criteria, then build-or-buy alternatives will be considered only if they conform to the SAP information architecture. Approval for research into non-SAP solutions requires an action of the IT Steering Committee. 2-5

10 An IT Strategy for Sanitarium 1. Align with corporate strategy 2. Adopt an Enterprise Information Architecture 3. Adopt a formal process for approving IT projects 4. Develop a portfolio of current and planned IT investments 5. Identify key IT initiatives and prioritize them *

11 3. IT Project Approval MIS (Managing Information Strategies) April 2003 has an article on page 42 with some best practice approaches to approving IT projects. Colonial First State Two stage approval Review it first at the Idea stage Prepare a Business Case only after approval of concept 3-1

12 ClickStream Cross-functional roles in the approval process Identifying need is the responsibility of the business area Alignment with business and IT strategies is assessed Then the project is recommended and approved Includes post-implementation feedback and followup CLICKSTREAM'S BEST PRACTICE I.T. DECISION FLOW Source: ClickStream IT Project Approval

13 3. IT Project Approval 3-3

14 3. IT Project Approval (Summary)

15 An IT Strategy for Sanitarium 1. Align with corporate strategy 2. Adopt an Enterprise Information Architecture 3. Adopt a formal process for approving IT projects 4. Develop a portfolio of current and planned IT investments 5. Identify key IT initiatives and prioritize them *

16 4. IT Portfolio Current IT investments Infrastructure Investments (to be inventoried) Servers Network Plant PCs Hardware Software Printers 4-1

17 4. IT Portfolio Current IT investments Business System Investments SAP FICOFinancials / Costing SDSales & Distribution PPProduction Planning MMMaterials Management BWBusiness Warehouse 4-2

18 4. IT Portfolio Current IT investments Business System Investments (cont) i2 SCPSupply Chain Planning DPDemand Planning RPSRhythm Production Planning 4-3

19 4. IT Portfolio Current IT investments Business System Investments (cont) Other Systems (selected) CHRIS Comprehensive Human Resources Information System KRONOS Time & Attendance LIMSLaboratory Information Management System PM’sThree other Plant Maintenance packages in use PMSPromotions Management System (handles trade spend) CRSConsumer Response System … 150+ others 4-4

20 An IT Strategy for Sanitarium 1. Align with corporate strategy 2. Adopt an Enterprise Information Architecture 3. Adopt a formal process for approving IT projects 4. Develop a portfolio of current and planned IT investments 5. Identify key IT initiatives and prioritize them *

21 5. Key IT Initiatives Infrastructure 1. Network infrastructure upgrade 2. Internet bandwidth upgrade 3. Active Directory migration 4. Exchange migration 5. Standard Operating Environment 5-1

22 5. Key IT Initiatives Business Systems 1. Business Information Warehouse (BW) 2. Business-to-Business (B2B) 3. Customer Relationship Management (CRM) 4. Enterprise Portal (EP) 5. Product Life-Cycle Management (PLM) 6. Supply Chain Management (SCM) 7. Workflow 5-2