Pepsi Americas Building an Information Savvy Co Jessica Herrera Introduction Pepsi Americas was the largest manufactures seller and distributer who faced 2 challenges A declining US market for carbonated soft drinks Increasingly powerful retail customers Pepsi had to adapt to change and become more dependent on information and technology Background 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 20022008 PepsiAmerica s common stock was significantly higher PepsiAmerica s global operations responsibility of Ken KeiserPresident and COO Addressing Market Change 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 process Cont 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 2007 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 In 2006 PepsiAmericas IT unit worked with an outside consulting firm to develop a strategy Competiti ve Edge Came up with 8 critical future business capabilities 2 Major Platforms 1 Information backbone 2 Mobile Platform Data Informatio n Backbone Core of CDR and DW capability was built with 2 5 million in seed funding now builds on as needed basis Central data repository CDR Data warehouse DW Competitive advantage IT owned the project had two initiatives headed by leaders in finance Tim Gorman SVP and Controller CDR Sandy Mathias Click icon to add picture Handheld devices Mobile Platfor m Reusable parts 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 activities Reapin g the Benefit s Deman d Plannin g Reduced out of stocks in warehouses 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 prices Power PreSell Reduced out of stocks in the stores from 14 to 3 7 by mid 2009 Introduced a new handheld device for the firms 1100 frontline selling people Algorithm used to produce suggested order that was automatically downloaded to the handheld Used to have trucks checked for pallet stock every morning Perfec t Pallet Reduced headcount and eliminated gate checks saved time for the drivers Now quality assurance staff checked pallets to verify accuracy at point of pick IT created the voicepick Pursuing 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 business Multiple Choice What is one of the IT changes PepsiAmericas did to create a more standardized business process A Creating the handheld device B Creating a Governance Board C Creating the CDR D Creating the data warehouse Answer B 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 change Update http video cnbc com gallery video 3000018528 Questions