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Bringing IT from the Back Office to the Boardroom

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Marta Foster from Proctor and Gamble gave this presentation. Marta has been at P&G for 30 years and is now in charge of their IT operations. P&G is well known and is the largest consumer products company in the world with over $80B in sales. They have 138,000 employees, 200 brands in 160 countries and 23 “billion dollar brands”. It’s expansion between 1985 and 1999 in led to lots of duplication, structural problems with economies of scale and inefficient staffing and budget processes. They reorganized around product lines (Global Business Units) and local go to market groups (Market Development Organizations) supported by Global Business Services. Initially GBS had IT infrastructure, employee services and finance. Meanwhile technology was becoming a commodity and was seen as a cost while the business need expanded rapidly. But they saw the need for IT to do more and to drive innovation. They see their role now as taking what’s needed in the business and what’s possible in technology and bringing them together. This means transforming IT from back office support to board room strategist. They had four elements:

  • Unite IT and core business services – put all 4,000 IT people into the GBS capability (total now 8,500)
  • Drive synergies across business services and thus the business
  • Shift from thinking about technologies to solutions – a business unit mentality
  • Unleash the potential for back office to drive business

This meant they needed to change things:

  1. Establish the right foundation
    Act global, think holistically and grow partnerships. HP, IBM, Jones Long Lasalle (facilities) are their global partners supporting 3 shared data centers. They reduced 200 providers to 12 strategic providers. They run IT as a business – not a cost center.
    They use the P&G brand business model as much as possible, measuring similar things and creating GBS equivalents e.g. Brand management becomes Service management.
    They also renamed themselves to Information & Decision Solutions (great title – love the focus on decisions) as information is the key asset they have, decisions are what they want to improve and solutions is what they delivered.
    Corporate IT strategy focused on Virtualization, Personalization, Real-time Decision Making (my emphasis, got to love this focus on decision making) – not rear-view but predictive and future-focused. Virtualization includes things like virtual reality for mock-ups and shelf design. Personalization for loyalty and development like pampers.com which now has 26M visitors! Their real-time decision making is focused on dashboards (personalized cockpits).
  2. Measuring for Success
    Client (executive) satisfaction, service levels, user (employees) sensing, employee survey, scorecards, top to top connections. Delivered $600M in cost savings, 16% increase in satisfaction, 80% use of virtualization in new initiatives and 20,000 reports have been replaced with cockpits.
  3. Flow to Work Design
    There are always silos and designing work to avoid this is always hard. The Gillette acquisition used their partners (700 partner staff) and they were able to bring the merger to fruition in 15 months.

Lessons:

  • Top to bottom focus on the mission and top-to-top focus among executives
  • Top management support matters and running as a business is a way to get this
  • Communicate, communicate, communicate as change is constant and rapid
  • Commercialization is critical
  • New models need new skills and capabilities

Great presentation.

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