Information Systems Portfolio Management

March 7, 2002

Kraft Foods Information Services

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 Portfolio Management 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

Catalyst Role

Business Strategy & Direction

Technology

Core Business Processes

Information and Knowledge

Value
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Three-Legged Stool of Effective Change Management

Change

Pro ces s

y log hno Tec

People

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KFIS Vision

Vision
Information Services will support Kraft Foods 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 Strategies are 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 that people can work independently yet create an envisioned end product
Blueprint for a house Sub-division plan City highway plan

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An Information Technology Architecture

Portal

Data Warehouse

Knowledge Repositories

Applications Buy Make Deliver Sell Market

Infrastructure Desktop Database O/S Hardware Network Tools

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Customers & Consumers

EAI
Suppliers

E-Hub

Master Files

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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 subcommittee Project ranking by combination of value and risk developed Senior management steering team with broad representation selected Projects reviewed for understanding with steering team
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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 Were Used to Evaluate the IS Projects

Likelihood of Success Criteria Technical Standards Skills Capability & Training Scope & Complexity Business Alignment Risk Factors Management Capability Dimension Total

Wt. X1: X2: X3: X4: X5: X6: X 10% 10% 25% 22% 21% 12% 100

Score

Business Value Criteria Financial Return Customer & Consumer Focus Supply Chain Business Benefits Technology Efficiency Knowledge Advantage Work life Balance Dimension Total Y1: Y2: Y3: Y4 Y5: Y6: Y

Wt. 30% 20% 15% 15% 10% 10% 100

Score

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

Portfolio Application Model

100

Value to the Business

50

50 Ability to Succeed

100

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Portfolio Model

The Following are Key Factors Required for Success of 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 Deliverables Support KFNA Strategies

LRP Deliverables
eCRM Internet Marketing CRIC Idea to Market Rollout Marketing and Global Brand Management Reengineer Supply Chain Optimization / CPFR Exception Based / Real Time Demand / eHub Millenium / Trade Systems eProcurement Employee Portal Best Practice Collaboration Nabisco Integration eLearning Planning and Reporting / eFinance / Virtual Close Fast Track Deployment of Systems Component Based interfaces Centralized Planning and Prioritization Reliable, Secure, Responsive, Cost Effective Infrastructure Network Improvements Standardized Employee Productivity Tools and Support Security and Business Continuance Investments Data Center Outsourcing Global Systems Plan Global Process Enablement

Strategies Drive Growth

Accelerate Productivity

Enable Organizational Excellence Enable IS Organizational Excellence

Cost Effective Infrastructure Support Global Business

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10 Principles for Successful Portfolio 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)
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Questions and Answers