Delivering Value by Delivering Value by Connecting Business and Connecting Business and TechnologyTechnology

Delivering Value by Delivering Value by Connecting Business and Connecting Business and TechnologyTechnologyDarryl WarrenDarryl WarrenCIOCIOLion Nathan LimitedLion Nathan Limited

Today’s agendaToday’s agenda

Who is Lion NathanWho is Lion NathanOur businessesOur businesses

Our vision / our people Our vision / our people

Driving an achievement cultureDriving an achievement culture

Transformation of the business and ITTransformation of the business and IT

Background on ‘Delta’ Background on ‘Delta’ – Lion Nathan IT strategic improvement programme– Lion Nathan IT strategic improvement programme

Delta findings & outcomesDelta findings & outcomes

SummarySummary

Who we areWho we are

2,818 employees (fte’s) primarily across 2,818 employees (fte’s) primarily across

Australia/New ZealandAustralia/New Zealand

11 Breweries 11 Breweries

10 Wineries10 Wineries

LNWS / CBC / Bacardi-Lion / Heineken LionLNWS / CBC / Bacardi-Lion / Heineken Lion

Liquor King stores in NZLiquor King stores in NZ

Yetimo / Maltexo - platformsYetimo / Maltexo - platforms

A$1.84 bn sales revenueA$1.84 bn sales revenue

A$429.2m EBITAA$429.2m EBITA

A$202.7m NPAT A$202.7m NPAT

Our breweriesOur breweries

Castlemaine PerkinsBrisbane

Swan/ Little Creatures

Perth

SABAdelaide

Tooheys & MSB

Sydney

LionAuckland

MacsNelson

SpeightsDunedin

LionWellington

CanterburyChristchurch

CBCAuckland

Our wineriesOur wineriesArgyleOregon

Lion NathanLion Nathan - our vision - our vision - our people - our people

Successful leaders in Lion Nathan not only Successful leaders in Lion Nathan not only deliver consistently strong results but they deliver consistently strong results but they also deliver them in the right way. We are also deliver them in the right way. We are not just interested in "what people deliver" not just interested in "what people deliver" but also "but also "how they deliverhow they deliver". ".

We know this is critical to our ability to plan We know this is critical to our ability to plan for the future growth of our business. for the future growth of our business.

In fact, all IT team members have 1/3rd of In fact, all IT team members have 1/3rd of their bonus based on an improvement in their bonus based on an improvement in the score of an annual customer the score of an annual customer satisfaction survey, against the previous satisfaction survey, against the previous year.year.

Where we are going …Where we are going …

To boldly create the 21st century’s best drinks company, by providing the brands, venues, services and experiences

that make life more sociable.

TRANSFORM LION NATHAN INTO A HIGH GROWTH DRINKS COMPANY

BUILD AN ACHIEVEMENT CULTURE

Our results - culturalOur results - culturalThere is a strong relationship between our culture improvementsThere is a strong relationship between our culture improvements& our improved business results& our improved business results

RE

VE

NU

EE

BIT

AN

PA

T

YAGO

% B/(W)

1996 1997 1998 1999 2000 2001*

* Before significant items

-1

-12

4 5.17.3

11.0

2002*

-0.8 -0.8

1.8 1.26.2

1.0

-26

-16.1

7.5 7.8 6.2

14.0

8.6

5.1

19.6

2003*

6.6

9.1

11.2

Transformation of the business & ITTransformation of the business & IT

FromFrom

Homogenised beer Homogenised beer businessbusiness

Largely H1 focusedLargely H1 focused

Stable market – DuopolyStable market – Duopoly

Country based beer Country based beer businessbusiness

Australasian (90% beer) Australasian (90% beer) focusedfocused

Largely focused on a Largely focused on a singe core transaction singe core transaction system, MFG/PROsystem, MFG/PRO

Custom point-to-point Custom point-to-point interfacesinterfaces

Country based IT modelCountry based IT model

ToTo

Diverse drinks companyDiverse drinks company

Portfolio of H1/H2/H3Portfolio of H1/H2/H3

More competition from More competition from RTDs, Wine and other RTDs, Wine and other beer companiesbeer companies

Beer Beer staticstatic

Wine investmentWine investment

Best of breed apps, e.g. Best of breed apps, e.g. Siebel, MFG/PRO, TibcoSiebel, MFG/PRO, Tibco

EAI/Middleware EAI/Middleware technologytechnology

e-enablemente-enablement focus focus

Global IT model linked to Global IT model linked to business unit strategiesbusiness unit strategies

To determine how we best help the business To determine how we best help the business achieve its goals in line with the changing needsachieve its goals in line with the changing needs

We started with a vision for Lion Nathan We started with a vision for Lion Nathan IT ...IT ...

To help boldly create the 21st century’s best drinks company by To help boldly create the 21st century’s best drinks company by embracing technology to deliver superior value through compelling embracing technology to deliver superior value through compelling business solutions.business solutions.

By 2005 we will have assisted to transform Lion Nathan through By 2005 we will have assisted to transform Lion Nathan through technology. We will lead the industry in customer focused solutions, technology. We will lead the industry in customer focused solutions, consumer insight and procurement. We will drive the business in the consumer insight and procurement. We will drive the business in the transformation of it’s internal processes through e-enablement to free transformation of it’s internal processes through e-enablement to free up our people to achieve and to add value.up our people to achieve and to add value.

We will do this by partnering our internal and external customers and We will do this by partnering our internal and external customers and suppliers, by helping the business embrace change and by investing in suppliers, by helping the business embrace change and by investing in and growing our people. and growing our people.

... and then in late 2002 we began Project ... and then in late 2002 we began Project DeltaDelta

The aim of Delta was to ensure effective links exist between Lion The aim of Delta was to ensure effective links exist between Lion Nathan business goals and IT strategy and investment and that we Nathan business goals and IT strategy and investment and that we have the capability, tools and structure in place to deliver the required have the capability, tools and structure in place to deliver the required levels of service.levels of service.

Through Delta, we wanted to effect lasting change within Through Delta, we wanted to effect lasting change within Lion Nathan IT and it’s relationship with, and effective Lion Nathan IT and it’s relationship with, and effective support for, the businesssupport for, the business

How ?How ?Better alignment of IT and the business unit goals so we can add more Better alignment of IT and the business unit goals so we can add more value from a strategic perspectivevalue from a strategic perspective

Develop and implement processes, procedures, standards and Develop and implement processes, procedures, standards and communication to improve our IT governance communication to improve our IT governance

Better prioritisation of what IT is working on from a systems, Better prioritisation of what IT is working on from a systems, technology and information architecture perspectivetechnology and information architecture perspective

Having clear plans for how IT’s total service delivery model needs to Having clear plans for how IT’s total service delivery model needs to operate to support the new ways of workingoperate to support the new ways of working

Formalising a systems lifecycle method of approach, including many of Formalising a systems lifecycle method of approach, including many of the procedures, checklists and templates already developed in the procedures, checklists and templates already developed in previous Lion Nathan projectsprevious Lion Nathan projects

Project Delta – key findingsProject Delta – key findingsIT needs to continue it’s move to a global management and IT needs to continue it’s move to a global management and operating modeloperating model

IT governance will need senior executive participation in:IT governance will need senior executive participation in:retaining strategic intentretaining strategic intentbalancing intercompany and international prioritiesbalancing intercompany and international prioritiesredirecting efforts and investment as business tactics and strategies change redirecting efforts and investment as business tactics and strategies change

To effectively enable the transformation of Lion Nathan through To effectively enable the transformation of Lion Nathan through technology we must:technology we must:

raise our performance standards and align our personal and financial raise our performance standards and align our personal and financial incentives with business investment objectives jointly with business operations incentives with business investment objectives jointly with business operations management and business project ownersmanagement and business project owners

We will deliver more discipline in how we manage our architecture, We will deliver more discipline in how we manage our architecture, platforms and information and this will need to be applied with platforms and information and this will need to be applied with visibility of global directionsvisibility of global directions

Our management processes need to be augmented with Service Our management processes need to be augmented with Service Level Agreements, and standardised project management methodsLevel Agreements, and standardised project management methods

We need to build a Program office to assist in the management of IT We need to build a Program office to assist in the management of IT investments (projects and priorities)investments (projects and priorities)

IT imperatives were a key input to conceptual architecture IT imperatives were a key input to conceptual architecture development and the identification of required projects.development and the identification of required projects.

Business Driven IT ImperativesBusiness Driven IT Imperatives

IT O

pp

ort

un

itie

s /

Im

pera

tives

IT O

pp

ort

un

itie

s /

Im

pera

tives

Strategy

• Global Leverage of IT staff

• Global Supplier Relationships

• etc.

Delivery

• Corporate/Local Governance

• Project Management Office

• Steering Committees

• etc.

Technology

• Build Global Multi-tiered Architecture

• Deployment in line with business plans

• etc.

Systems

• Global Leverage of Business and Technical Applications

• IT Process Improvements

• etc.

People

• Ongoing Internal IT change process

• Share accountabilities with Business

• etc.

“What needs to

be enabled”

There are always There are always two types of IT two types of IT

imperative:imperative: Those supporting a Those supporting a business initiative business initiative which were determined which were determined based on the IT based on the IT implications of the key implications of the key business strategies business strategies and objectivesand objectives

Those providing Those providing architectural foundations, architectural foundations, mitigation of a critical risk mitigation of a critical risk or facilitation of an IT or facilitation of an IT process / capability process / capability improvement, which improvement, which were identified by were identified by exploring the current exploring the current IT strengths and IT strengths and weaknesses and the weaknesses and the impact of the required impact of the required business initiatives onbusiness initiatives onthe current IT environmentthe current IT environment

Better alignment

to business goals

List per business area

The Lion Nathan IT Guiding Principles The Lion Nathan IT Guiding Principles - to help us in our daily work activities & decision-making- to help us in our daily work activities & decision-making

Principles to guide how we will provide, manage and maintain applications which support business processes and analysis requirements of Lion Nathan

Principles to guide our structure, resourcing and performance management

Strategy and planning

Information management

ApplicationsIT Organisation

& Management

Technical Architecture

IT Governance

Principles to guide how we will provide, manage and maintain hardware, telecommunications networking, operating systems, desktop (SOE), standard server configuration, and tools

Principles to guide how IT will interact with the business and how the other guiding principles will be applied

Principles to guide how we will value, manage, enhance and sustain the information assets of the Lion Nathan

Principles to guide how IT will :• Provide visibility of progress and directions• Participate in decision making • Effectively manage our performance

Improved

procedures and standards

IT Governance ModelIT Governance Model IT Governance encompasses four key areas: steering groups, business and IT planning, IT Governance encompasses four key areas: steering groups, business and IT planning,

prioritisation and funding. prioritisation and funding.

A number of recommendations have been made to guide the development of a business and IT A number of recommendations have been made to guide the development of a business and IT partnership, to ensure IT efforts and investments stay aligned with business unit objectives, retain partnership, to ensure IT efforts and investments stay aligned with business unit objectives, retain the strategic intent of Lion Nathan and flexibly address opportunities and market changes.the strategic intent of Lion Nathan and flexibly address opportunities and market changes.

Steering Committees

Implement a global IT governance process which includes the Top Team, Business Unit Executive Teams and Functional Councils

Provides cross business visibility of current concepts and projects WIP Provides a forum and controlled process to rapidly leverage global

opportunities and resolve priority conflicts Enables the Top Team to have greater visibility and more effectively

participate in direction setting and retaining strategic intent Provides a catalyst to ensure sound management controls, reporting

and business analysis are in place within IT Decision makers would be LN Top Team, Country Executive Teams,

Functional Councils and IT management

Business and IT planning• While IT has its own AOP covering operating costs and capital

requirements for corporate sponsored and IT health projects, it is imperative that IT is involved in the BU AOP development so that IT alternatives are appropriately explored and costed (and maybe prioritised)

• The BU IT Steering Groups (and Corporate IT Steering Group where applicable) need to have a role in reviewing proposed capital expenditure on IT before AOPs are finalised

• On completion of all AOPs, IT needs to develop a consolidated forward plan of IT initiatives for the year

Prioritisation Prioritisation of projects will occur as part of the Lifecycle Prioritisation

phase – and must fit with existing Initiative Brief and Capex processes The objective of prioritisation is to suggest priorities and make

recommendations typically in the following areas: Projects that should be addressed immediately because of a good

cost / benefit outcome and those that you can afford to wait on If existing / planned projects should be re-prioritised Timetabling and resourcing implications

Project priority is dynamic – Project priority will be reviewed against the entire project portfolio on an ongoing basis and recommendations made to the relevant Steering Groups

Suggested project priority will be determined by evaluating the levers associated with effort and benefit for each project

Funding Options to provide greater business unit visibility and

accountability for spend were identified, however the final decision was to not implement any changes to the current cost allocation process

Funding needs will continue to be identified during planning phase and we will continue to adhere to the business policy that there will be no commitment until formally approved (Capex)

Areas that have been further clarified during the IT strategy: There is now formal recognition that the pre-Capex phase

has some steps where we need to plan and identify external $ expenses

Funding for pre-Capex activities should be provided by business project sponsor unless specifically driven by a foundation or cross business opportunity

Governance

and prioritisation

The IT organisational model needed to be enhanced to The IT organisational model needed to be enhanced to facilitate greater business participation and clear IT facilitate greater business participation and clear IT accountabilities throughout the solution lifecycleaccountabilities throughout the solution lifecycle

The diagram below represents the end to end IT organisation model The diagram below represents the end to end IT organisation model proposed to support the delivery of services to the business. It is not proposed to support the delivery of services to the business. It is not an organisation structure diagram – merely a representation of how an organisation structure diagram – merely a representation of how the IT processes will be managed from an end to end perspective.the IT processes will be managed from an end to end perspective.

Acco

un

t

Mg

mt

CustomerCustomer

Prod/Dist

Sales/Mkting

Wine/SB

Acct Mgmt

Program Management Office

Architecture & Planning

Projects Services

Infrastructure

Initiative Management

Finance/HR/Resource Planning

CIO

Suppliers

COE’s

Customer Focus Customer FocusOperational Excellence

Acco

un

t

Mg

mt

CustomerCustomer

Prod/Dist

Sales/Mkting

Wine/SB

Acct Mgmt

Program Management Office

Architecture & Planning

Projects Services

Infrastructure

Initiative Management

Finance/HR/Resource Planning

CIO

Suppliers

COE’s

Customer Focus Customer FocusOperational Excellence

IT’s total service

delivery model

IT organisational structureIT organisational structure

IT’s total service

delivery model

The new Lion Nathan IT structural model is trans Tasman. We The new Lion Nathan IT structural model is trans Tasman. We have IT members based in Auckland, Christchurch, Brisbane, have IT members based in Auckland, Christchurch, Brisbane, Sydney and Lidcombe, Adelaide, Melbourne, and PerthSydney and Lidcombe, Adelaide, Melbourne, and Perth..

Over the past 2 - 3 years IT has ...Over the past 2 - 3 years IT has ...Put out some “Bush Fires”Put out some “Bush Fires”

Gained control of core systems and processesGained control of core systems and processesImproved release process for systems upgradesImproved release process for systems upgrades

Identified key business needs in each of the e-enablement areasIdentified key business needs in each of the e-enablement areasDeveloped F02, F03 & F04 business projects lists and delivered against theseDeveloped F02, F03 & F04 business projects lists and delivered against these

Significantly upgraded the infrastructureSignificantly upgraded the infrastructureUpgraded Networks, servers and pc’sUpgraded Networks, servers and pc’sNetwork bandwidth to sites is upgraded as services become available at Network bandwidth to sites is upgraded as services become available at sustainable pricessustainable prices

Formed/strengthened strategic alliancesFormed/strengthened strategic alliancesMicrosoft, Siebel, Ariba, QAD (MFGPro), O4 Corporation, Real DevelopmentsMicrosoft, Siebel, Ariba, QAD (MFGPro), O4 Corporation, Real Developments

Linked IT more closely with the businessLinked IT more closely with the businessCompleted a strategic review of ITCompleted a strategic review of ITChanged the IT structureChanged the IT structureAssigned Account Managers to partner business functionsAssigned Account Managers to partner business functionsAligned IT around a trans Tasman service offeringAligned IT around a trans Tasman service offering

We have made significant progress ….We have made significant progress ….

Towards becoming the most e-enabled businesses in AustralasiaTowards becoming the most e-enabled businesses in Australasia

However we still have some area’s to further addressHowever we still have some area’s to further address

To the extent that there are other businesses who are interested in To the extent that there are other businesses who are interested in using applications/technologies that we have developedusing applications/technologies that we have developed

We are leveraging most of the leading Microsoft technologiesWe are leveraging most of the leading Microsoft technologies

.Net, Content Management Server, Windows and Office XP, Active .Net, Content Management Server, Windows and Office XP, Active DirectoryDirectory

We have deployed internationally recognised “best of breed” We have deployed internationally recognised “best of breed” solutionssolutions

Siebel in the LNA call centre and for Complaint ManagementSiebel in the LNA call centre and for Complaint Management

Ariba for E-procurementAriba for E-procurement

Tibco as our middleware solutionTibco as our middleware solution

Cisco IP Telephony and audio bridgeCisco IP Telephony and audio bridge

F02: Lion Nathan: All IT Functions; N = 43 F04: Lion Nathan: All IT Functions; N = 57

Healthy improvement in all constructive

styles

H-E remains the primary

style

… … and we continue to improve the Culture and we continue to improve the Culture within Lion Nathan ITwithin Lion Nathan IT

Examples of Business Technologies deliveredExamples of Business Technologies deliveredExamples of Business Technologies deliveredExamples of Business Technologies delivered

SalesMate (Sales)SalesMate (Sales)

IP telephonyIP telephony

Ariba (Finance)Ariba (Finance)

Peopleplanet (HR)Peopleplanet (HR)

Liquor King (Retail)Liquor King (Retail)

Sharepoint SitesSharepoint Sites

XXXX & Tooheys New (Brand Sites)XXXX & Tooheys New (Brand Sites)

Lion Red (Brand Site)Lion Red (Brand Site)

Samples of NZ and Australian TV MediaSamples of NZ and Australian TV MediaSamples of NZ and Australian TV MediaSamples of NZ and Australian TV Media

© 2003-2004 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.