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© 2009 IBM Corporation1

Conversations for a Smarter Planet

© 2009 IBM Corporation

Globally Integrated Enterprises

How Sara Lee is supported by IBM

Henk Kooiker, Application Services, Distribution Sector

IBM Global Services



Agenda

�Globally Integrated Enterprises

�Sara Lee – the company

�Sara Lee – their challenges

� IBM’s contribution



Globally integrated enterprises are characterized by free flow of work, standardization, componentization and collaboration

“The Globally Integrated Enterprise is one that is operating seamlessly as a single organic entity by

integrating internal operations horizontally and globally, collaborating with external partners, and

operating at the best location in the world, to maximize value creation from a global point of view” -

Sam Palmisano, Chairman & CEO, IBM

Manages Value in a Specialized Ecosystem

Builds a Specialized Enterprise

Serves Distinct Global Markets

Manages Risk & Control

Leverages Global Assets

Enables Collaboration

Globally Integrated Enterprise



5

Operating models have historically adapted to market dynamics, and the globally integrated model is becoming dominant

International

• Independent enterprise emerges and

explores overseas markets

• Wide-spread, protective trade

regulations constrain trade

• Free trade, overseas investments, IT

revolution, open standards

• Imported raw materials, domestic

manufacture, and exported

manufactured goods through

international trade

• Replicated HQ organization and

functions in each region

• Manufactured and sold within region

boundaries

• Focuses on optimizing operation

across regional boundaries

• Shift focus from ‘what to make’ to

‘how to make’

• Operations managed at HQ

• Vertically integrated operations

• Regional centers of operations

• Regionally integrated companies

• Globally integrated

• Globally optimized

Multinational Globally Integrated

Driver

Attributes

Configuration

20th Century 21st Century



Leading companies from many industries are transforming into globally integrated enterprises with much success

Componentized Processes &Consolidated Customer Data

• Consolidated disparate customer records enabling real-time access to customer information. This presents relevant up-sell opportunities increasing revenue and improving customer satisfaction.

• Componentized the dealer interaction process to simplify productsales through a new channel of large dealers. In addition to newsales, the initiative has improved data reliability, reduced costs and extended product reach to end customers.

Globally Integrated Training

• Identified training as a critical competency required to give a consistent customer experience across 1400+ locations

• Created “Smart Service University” which consists of scenario-based electronic training modules available to employees 24x7 and in a self-paced format

• There has been a strong correlation between customer satisfaction and location’s usage of the training and employee adoption has grown from 300K the first year to over 4M.

Globally Integrated Information Systems

• Integrated 15,000 users, 45 countries and 175 legal entities across critical worldwide functions like Finance, HR and supply chain

• Ensures that worldwide management accesses the same trusted source of data & reports. Tight integration with transaction systems ensures that the data and reports are up to date.

• Adopted consistent sets of tools to analyze the data and answer crucial questions around geographies, brands and accounts.

Shared Services & Globally Integrated R&D

• Established global business units with P&L responsibility• Created global shared services that leveraged internal and

external resources to provide quality support at low cost• Transformed R&D to a collaboration network spanning worldwide

locations as well as external partners• Results have been impressive with stock up 50% and non-North

America revenue up 20%

What are other firms doing to globally integrate?

Source: IBM GBS 2008, Chief Learning Officer 2007, Manufacturing Business Technology 2007, Achieving Profitable Growth in Insurance TIBCO 2006



Sara Lee – overview of brands



Fragmentation of Sara Lee’s application landscape and support

SAP – FI, CO, PP, MM, WM, PM, QM, SD, CRM, HR, APO, BW, XI, Portals, Basis, Security etc.

COTS – Ariba, Hyperion, JDE, Maximo, Siebel, Manugistics, COGNOS etc.

Custom – Applications using PowerBuilder, VB, Web technologies (Java), EAI, EDI, Oracle DB etc.

271Web Solutions

267Supply Chain

150R&D

883Marketing & Sales

1532Manufacturing

2111IT

338Integration

3413Human Resources

429Finance

2737ERP

117Document Management

4829Business Intelligence

InternationalNorth AmericaCapability areas

Number of applications

Key applications

231 358



Sara Lee’s IT spend versus the Consumer Products Industry

Sara Lee Compared to CP Industry

AOP 2010

62%

30%

8%

0%

20%

40%

60%

80%

100%

CP Industry Sara Lee

% o

f IT

Sp

en

d f

or

FY

Invest:

Transform

Grow

Run

Gartner - IT Key Metrics Data 2009:, Consumer Products Analysis

?



Product

An ‘application agenda’ has been the traditional approach to addressing these challenges…BUT

““Approximately 30 percent of the trouble tickets Approximately 30 percent of the trouble tickets

a help desk gets from an ERP system can be a help desk gets from an ERP system can be

traced back to problems with master data. traced back to problems with master data.

When you get into supply chain planning, that When you get into supply chain planning, that

number rises to more than 80 percent.number rises to more than 80 percent.””

Bill SwantonBill Swanton

VP of Research for AMR ResearchVP of Research for AMR Research



New and more detailed data sources are making market dynamics and shopper behavior more challenging to assess

Consumer Data

Shopper Data

POS Data

RFID Data

CP Company

Consumer Data

Shopper Data

POS Data

RFID Data

CP Company

Take advantage of new sources of data… …Understand consumer behavior at

a deeper level…

…and accelerate the innovation process

Jane Consumer’sMultiple Shopping Behaviors

Jane Consumer’sMultiple Shopping Behaviors

Accelerated and more sustained revenue

Time compression and greater efficiencies

Time to market

Time

$

Accelerated and more sustained revenue

Time compression and greater efficiencies

Time to market

Time

$

ERP CRM PLM BI



Current and considered initiatives to become smarter and more global

� Integrate external data (customer insights / retail data) into internal product innovation processes

� Defragment Master data management; assignment of business ownership, data management processes and supporting tools

� Corporate standard security and format; data security responsibilities, enterprise-wide authorization/access/security

� Globally integrated Enterprise Performance Management (EPM)

–Cascading Key Performance Indicator (KPI) structure that supports individual BU’s

� Merger & Acquisition – Cookie cutter plan for IT



Knowledge Transfer in a controlled way ensures business continuity

�Migration Tools

�Client Approved Tollgate

�Knowledge Management

�Remote Knowledge Transfer Tools



IBM teams onsite with Sara Lee and achieves economies of scale in India

NL, Utrecht

US, Chicago

Pune

Bangalore

Spain

Brazil



Knowledge Management - Efficiency & Continuous Improvement

Blue Reach & Pelican� Bringing together

SMEs and

Practitioners

� Application owners maintain application information details

Method Web� Bringing IBM

Methods to practitioners

� CMM level 3 to 5 guidance

SAP & CP Industry

Solutions� Global

knowledge sharing

Finance

Information Mgt

Supply Chain

Marketing & Sales

HR

Finance

Information Mgt

Supply Chain

Marketing & Sales

HR

Sara Lee specifics

� Business background per Sara Lee capability area

� Business terminology glossary

� Business process champions

� Innovation workshop� Induction for new

IBM team members� Library for new

Sara Lee employees� Pro-actively advise

Sara Lee on businessimprovements



� “Building blocks” for developinguser interfaces

– We do not provide finished apps

– Target is User Interface Development Team

� 3 sweet spots

– Graphical Modeling

– Real-time Monitoring

– Data Analysis

� Selling points

– These user interfaces are difficult to build

– We provide customizable building blocks

– We can handle “headaches”

•Huge data sets

•Fast screen redraws

– We bring innovation to the interface

16

ILOG – strong in business rules and data presentation



Over a period of 6-8 weeks the GIE assessment explores each of the six competency areas to identify and prioritize opportunities

1.Ensure the firm2.Ensure a clear assessment3.Build innovation 4.Contribute actively

Manage Value in an Ecosystem of Increasingly Specialized entities

1.Assess ecosystem2.Secure adequate3.Develop corporate 4.Identify and mitigate

Manage Risk & Control

1. Develop a collaboration2. Collaborate internally3. Collaborate internally4. Provide a supportive

Enable Collaboration

1. Organize around2. Exploit componentization3. Understand and manage4. Identify and manage

Build a Specialized Enterprise

1.Use global 2.Explore niche 3.Develop deep 4.Leverage a global

Serve Distinct Global Markets

1.Define holistic 2.Identify best 3.Develop and institutionalize4.Manage global

Leverage Global Assets

Key PracticesChallenges Competencies

Tap the Power of

Globalization

Forge Strategy for

Componentization

Deliver Unique Value

1. Review Challenges and Competencies

2A. Review Practice

description

2C. Assess Practice

capabilities and

maturity level

2D. Identify Competence maturity and

goals for each Competency area

3. Prioritize GIE Focus Areas

across all Competencies

& develop business case

GIE Competencies

and Practices

� Tools and technology

� Processes enable

� Continuous improve

� New processes

� Processes standard

� Processes centrally

� Processes document

� Standardization

� Processes vary

� Processes are not well

Practice 4: Manage global resources

� Methods systems of

� Global value

� Global values are

� Global values

� Global values have

� Staff are aware

� Starting to develop

� Employees seeking

� Company-wide

� Company relies on

Practice 3: Common values

� Classification criteria

� Taxonomy is published

� Catalog of capabilities

� Processes are in place

� Taxonomy of skills

� Systems are in place

� Starting to develop

� Evidence� Manual

� Taxonomy of required

� Varying definitions

Practice 2: best of breed

� Organization is sought

� Organization has

� Delineation

� Set of � Opportunity

� Organization begins to

� A dedicated

�No standard criteria

� Individual

Practice 1: holistic criteria

Level 5: World Class

Level 4: Mature

Level 3: Capable

Level 2: Aware

Level 1: Ad Hoc

Practice Capabilities and Maturity

2B. Identify current Practice

capabilities

Level 1

Ad Hoc

Level 2

Aware

Level 3

Capable

Level 4

Mature

Level 5

World-Class

X

Manage Risk and

Control

Manage Value in

Ecosystem

Enable Collaboration

Build a

Specialized Ent.

Serve Distinct

Global Markets

Leverage Global

Assets

Maturity Level

Competencies

X

X

X

X

X

GoalGoal

GoalGoal

GoalGoal

GoalGoal

GoalGoal

GoalGoal

GIE Competency Maturity &

Goals Framework



Tough Economy requires

managing within constraints,

increasing resources efficiency

Rich internet applications require

increasing visualization, graphics

and dashboards

Convergence of

Business Intelligence,

BPM and BRMS

Enterprises need more

agility to adapt to volatile

markets

Most ERP’s and SCM

require optimization design

and planning tools for

improved efficiency &

productivity

Sources: IBM, Forrester, Fortune.com, Gartner, IDC, Summit Strategies

SOA increasingly requires

Rules to manage Decision Services

Regulatory Requirements

(e.g. Sox & Basel 2) driving

greater focus on business

decision making

Marketplace Dynamics

19



An Evolutionary Model for Information MaturityB

usin

ess V

alu

e o

f In

form

ati

on

Information Management Capabilities

• Data: All relevant internal and external information seamless and shared. Additional sources easily added

• Integration: Virtualized Information Services

• Applications: Dynamic Application Assembly

• Infrastructure: Dynamically, re-configurable; Sense & Respond

• Flexible, adaptive business environments across enterprise and extraprise

• Enablement of strategic business innovation• Optimization of Business performance and

operations• Strategic insight

• Data: Seamless & shared; Information separated from process; Full integration of structured and unstructured

• Integration: Information Available as a Service• Applications: Process Integration via Services; in line

bus apps• Infrastructure: Resilient SOA; Technology Neutral

• Role-based, work environments commonplace• Fully embedded capabilities within workflow,

processes & systems• Information-enabled Process innovation • Enhanced Business Process & Operations

Management• Foresight, predictive analytics

• Data: Standards based, structured & some unstructured• Integration: Integration of silos; Virtualization of Information• Applications: Services-based• Infrastructure: Component/Emerging SOA, Platform Specific

• Introduction of contextual, role-based, work environments

• Enhanced levels of automation• Enhancement of existing processes and applications • Integrated business performance management• Single version of truth• Insight thru analytics, real-time

• Data: Structured content; organized• Integration: Some integration; silos still remain• Applications: Component-based applications• Infrastructure: Layered Architecture, Platform

Specific

• Basic search, query, reporting and analytics

• Some automation• Disparate work environments• Limited enterprise visibility• Multiple versions of the truth

• Data: Structured content, static• Integration: Disjointed, Siloed, non-integrated

solutions• Applications: Stand alone modules; application-

dependent• Infrastructure: Monolithic, Platform Specific

• Basic reporting & spreadsheet- based

• Manual, ad hoc dependence• Information overload • No version of truth• Hindsight based

Information as a Competitive Differentiator

Information to Enable Innovation

Information as a Strategic Asset

Information to Manage the

Business

Data to Run the Business

1

2

3

4

5

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