Slide 1IntroductionBackgroundAddressing Market ChangeCont…Building an IT Business PartnershipCompetitive EdgeInformation BackboneCDRMobile PlatformReaping the BenefitsDemand PlanningPower Pre-SellPerfect PalletPursuing Business GrowthMultiple ChoiceAnswerUpdateQuestions?????Pepsi AmericasBuilding an Information Savvy Co.Jessica HerreraIntroductionPepsi Americas was the largest manufactures, seller and distributer who faced 2 challenges•A declining US market for carbonated soft drinks•Increasingly powerful retail customersPepsi had to adapt to change and become more dependent on information and technologyPepsiAmericas was created by mergers of existing Pepsi Cola bottlersA newly combined entity it served 17 states in the USA, 4 countries in Central Europe and several in the CaribbeanBy 2009 PepsiAmericas operated in 19 US States with 2008 net sales of almost $5billion-20% of PepsiCo’s total US beverage saleMain competitor CocaCola Enterprise although from 2002-2008 PepsiAmerica’s common stock was significantly higherPepsiAmerica’s global operations responsibility of Ken Keiser-President and COO.BackgroundPepsiAmericas first served its customers through conventional route salesThey were organized into 13 regional divisions responsible for production, distribution and salesHad a centralized IT groupRegional structure not efficient2001 they initiated a series of IT enabled business changes to address changing market demandsNext Gen-involved redesigning the sales and distribution processAddressing Market ChangeNew platform introduced across 13 regions-handheld devicesThe handheld projectBuilt a call centerAfter Next Gen PepsiAmericas had a common technology platformNational customers became important over timeCustomer alignmentMore standardized pricingSavings of $15-$17 million by 2007Cont…Building an IT Business PartnershipSome difficulties with Next GenCIO Johnsen initiated a number of management changes in the IT unit•Governance BoardFormation of project management organization (PMO)Competitive EdgeIn 2006 PepsiAmericas IT unit worked with an outside consulting firm to develop a strategyCame up with 8 critical future business capabilities2 Major Platforms1) Information backbone2) Mobile PlatformInformation BackboneData•Central data repository (CDR)•Data warehouse (DW)Core of CDR and DW capability was built with $2.5 million in seed funding-now builds on as-needed basisCDRCompetitive advantage-IT owned the project- had two initiatives headed by leaders in financeTim Gorman-SVP and ControllerSandy MathiasMobile PlatformClick icon to add picture•Handheld devices•Reusable partsReaping the Benefits•Customer optimization3 (3rd power = Planning + Selling + Delivery•Series of projects focused on driving business value from the business capabilities the company had been building•Used data to link sales and supply chain activitiesDemand PlanningUsed to be based on field based forecasts for each SKUCO3 used sophisticated algorithms to calculate demand drawing on historical sales and expected retail pricesReduced out of stocks in warehousesPower Pre-SellIntroduced a new handheld device for the firms 1100 frontline selling peopleAlgorithm used to produce “suggested order” that was automatically downloaded to the handheldReduced out of stocks in the stores from 14% to 3.7% by mid 2009Perfect PalletUsed to have trucks checked for pallet stock every morningNow quality assurance staff checked pallets to verify accuracy at point of pickIT created the “voicepick”Reduced headcount and eliminated gate checks=saved time for the driversPursuing Business GrowthCentral and Eastern Europe goals focused on business growthCEE most profitable segment of PepsiAmericas business and reflected a series of acquisitions that characterized their expansionIT strategy for Europe focused on revenue growth-for US focused on securing efficienciesManagement realizes European business could over take US businessPepsiAmericas wants to get IT right in CEE businessMultiple ChoiceWhat is one of the IT changes PepsiAmericas did to create a more standardized business process?A) Creating the handheld deviceB) Creating a Governance BoardC) Creating the CDRD) Creating the data warehouseAnswerB) Creating the Governance Board!!!•Created by CIO Johnsen as a result of not being able to fully understand the capabilities and limitations of IT with the Next Gen business