IT Strategy,February 24, 2000,Case Study of a Recent Client Experience,Rob Trollinger, Principal, Dallas Chris Wisler, Manager, Alexandria Kimberly Brown, Associate, Alexandria,Todays 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,Background of company,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 annually,Company A,Company B,Company A announced their intended merger with Company B in 1999,1848, 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,Drive the short-term value Exceed the markets expectations,Integrate the Organizations as Seamlessly as Possible,Develop 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 business,Integrate day-to-day operations Position for the future growth,Achieve Business Value Goals as Quickly as Possible,Achieve $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 growth,A.T. Kearney was asked to structure, drive and manage the entire integration process for what would become one of the largest specialty chemical companies,Latin America and Asia-Pacific Region Operations: 10% of sales 20 manufacturing facilities 10 distribution sites,North 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 assured,Challenges,Some 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 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,Four parallel workstreams will contribute to development of the IT vision, strategy and deployment plan,Organizational Effectiveness and IT Alignment,Establish the IT Program Office,Application Architecture,Technical Architecture,How should the organization be aligned to the businesses? What competencies should be developed to meet the challenges of todays 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 companys 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,Application Architecture,The applications architecture will result in an ERP “backbone” vendor selection and provide guidance and direction for all other applications,All Applications,Customers,Suppliers,Package selected,Impact assessment,Direction / value proposition,Define Needs,Overall guiding principles / rules apply,Technical,DecisionSupport,Customer Relationship Management,Enterprise Resource Planning (ERP),Supply Chain,CollaborativeComputing,Application Options Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 6 Technical Options Database x,y,z Op System Computer,Consensus with team Publish application architecture solution set Publish impact analysis,Alternatives,Decision/ Result,The application architecture team is fol