ab-inbev -- problem identification and solution

Joanne Louis Nathania Aaron Naisbitt Ouwen GuRoss Simons Matt Marrazzo

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•Company Overview

•Company Tour

*

•Introduce problem

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•Discuss Social Network Analysis•Introduce Microsoft Lync

Presentation Outline

What is ABI?

Mission: “ To Be the Best Beer

Company In a Better

World”””

Anheuser-Busch InBev

114,000 employees23 countries around the world

Top 2 market position in 19 countries

“The best beer company…”

“…in a better world”Responsible

Drinking EnvironmentOur

people

Community

Company

Tour

Inventory is evil!

Milling

Mashing

Straining

Brew- kettle

Fermentation

Beachwood Lagering

Budweiser Brewing Process

InBev Acquisition of 2008

InBev AB

Problems - Merger Conflicts

- Communication- Informal Relationships- Employee Satisfaction- Lack of Mentorship

Management Conflict

Anheuser Busch Values:• Brand• All American Company• Long Term Image• Tradition

InBev Values:• Increasing Profits• Global Leader• Cost Cutting• Production

Efficiency

Anheuser BuschInBev

Jackie Hamel “…they are trying to be more transparent. Not easy with 120,000 employees.”

Jackie Hamel“InBev sets targets which are out of reach and asks you to make them. We perpetually have gaps we can hit…”

Transparency

Jeffrey Sonnenfeld“Companies must take at least as much time as they spend with financial analysts and spend it with their employees. People care about where they work. "

Anheuser-Busch Employee “If you are young and have some sort of degree, you will like the campus like office with no professors to teach and guide you.”

Geert Hofstede Cultural Dimensions

United States vs. Belgium/Brazil

Lacks variety of communication channels

Rigid structure of communication

Multiple platforms and software Collaborates with all

Microsoft office functions

One training program company wide

One program serves all

Current Communication System

Problem: Communication-Rigid Structure

-Multiple Platforms-Loss of informal relationships

Solution: Enterprise 2.0

The evolution

of business

In Numbers

A culture, united

Not Management, separated

not heirarchy

Collaboration

• $772mil return on $82mil• Increased margins by $142 mil• Reduced costs by $251 mil• Employee time savings: $380milQuantitative

• Increased remote collaboration• Better usage of employee skills• Quicker access to knowledgeQualitative

Case Study: Cisco

Source: Mckinsey/Cisco

Enterprise 2.0

SNA

MSFT Lync

Other

Social Network Analysis

1. Conduct Surveys

2. Analyze/Map informal network

3. CreateSolutions

Formal vs. Informal Networks

Business DevelopmentR&D

Strategic Business Unit Other

International Business

Terrible communication

bottlenecksDisintegration

SNA as TOM

-Information = Inventory

-Pull System

-Degrees of Separation=process steps

Case Study: ABI

•1,400 salaried workers fired

•1000 employees took buyouts

Relationship Map

•"They wasted no time," says Juli Niemann, executive vice president of Smith, Moore & Co., a Clayton-based financial advisory firm. "They delivered exactly what they promised. They demolished the executive suite."

Executive

•ABI 14-person executive committee

•Zero people from old AB

Management

Lync is changing the way we communicate today, but it will change the way our business tools work in the future.

“

”

The Skill Search feature in Lync and SharePoint will be easy to use. Employees can view presence information and immediately contact the person they are searching for with one click

“

”Source: Forrester/ATKearney

Problem resolution through IM 70% of time

Help desk call times down from 5 calls per issue to .3 calls

Lowered labor costs and showed an 80% improvement in customer response times

“

”Source: Forrester/Global Crossing

Benefits *(Over 3 Years)

Replacing private telephone systems - $500,000*

Direct Cost Savings from Web and Teleconferencing - $1,000,000*

Reduced IT and Telephony Labor -$1,000,000

Fewer calls to the Help Desk - $190,000

Increased User Productivity - >$12,000,000*

Travel Costs and Carbon Footprint Reduction -$3,800,000

Costs*(Over 3 Years)

Software Licenses and Assurance Costs - $1,200,000*

Server Hardware - <$60,000

Voice Terminal Equipment -$364,000

Internal Labor for Testing -$24,000

Internal Training Labor Opportunity Cost -$1,300,000

Managers spend 2 hours/day looking for information

50% of the information found is of no value

“

”Source: Accenture

Respondents reported benefits that included better access to knowledge and internal experts, greater employee and customer satisfaction, and higher rates of innovation.

“

”Source: Mckinsey

The magnitude of the gains was striking

20%=innovation ratesto35% (access to internal experts).

“

”Source: Mckinsey

Add/Drop Analysis

Assumption: Scalability to Anheuser-Busch Inbev

Strategy MetricFinancial - Zero-Based Budgeting

- Cutting Costs- Number and size of budget requests per project.- COGS as a % of revenue targets.

Customer - Customer Retention Program- Brand Equity

- % increase in sales by distributor.- % market share.

Internal Process

- Voyager Plant Optimization- Implementation of Microsoft Lync

- Comparison of cycle time and capacity utilization by facility.- Degree of separation

Learning and Growth

- Overseas Growth- Prioritization of Focus Brands

- % of revenue earned overseas by region.- % of marketing dollars spent on key brands (Budweiser, Stella Artois, Becks)

Balanced Scorecard

*

•Company Overview

•Company Tour

*

•Introduced problem

*

•Discussed Social Network Analysis•Introduced Microsoft Lync

Presentation Summary

Thank You!!!

Costs Initial Year 1 Year 2 Year 3 TOTAL

Software licenses and assurance $677,695 $169,424 $169,424 $169,424 $1,185,967

Hardware and Maintenance $56,000 $945 $945 $945 $58,853

Voice Terminal Equipment $364,000 $364,000

Pilot and Testing: Internal Labor

$24,000 $24,000

Implementation Costs: Third Party

$90,000 $90,000

Training Cost: Internal Labor $1,300,000 $1,300,000

TOTAL $2,511,695 $170,369 $170,369 $170,369 $3,022,802

Ref. Metric Calculation Year 1 Year 2 Year 3 Total

A No. of Workers 5000

B Hourly Rate $48.00

C Number of Hours Saved Per Week

~70 min per week

1.17

D Weeks 50

E Percent Captured

50%

F Rollout of Lync 25% 50% 100%

Total Incremental Output per Worker

A*B*C*D*E*F $1,700,000 $3,500,000 $7,000,000 $12,250,000

Testimonials:•Nikon Corp.

-“With Lync, communication is much more efficient because people do not have to switch programs to make a call or join a meeting.” -- Michiko Noborisaka General Manager of Information System Planning Department, Nikon Corporation

•ATKearney-“The Skill Search feature in Lync and SharePoint will be easy to use. Employees can view presence information and immediately -contact the person they are searching for with one click.” - Kevin Rice Global Network Architect, A.T. Kearney

•Global Crossing-Problem resolution through IM 70% of time-Help desk call times down from 5 calls per issue to .3 calls-Lowered labor costs and showed an 80% improvement in customer response times

•Fortek-Developed emergency response system-Average response times down from 7 mins to < 2 mins