How Kraft 'Primed the Pump' for Alignment - ' Increased Awareness '

Increased Awareness

Another result of Finnerty's two-day technology boot camp? Regular field trips for the 30-member senior management team to technology vendors such as Cisco Systems and Microsoft Corp. The trips allow the executives to get a firsthand look at how leading-edge technologies like employee portals and e-procurement can change the company. Finnerty and his people then decide how those ideas might be useful at Kraft, assign priority to those with promise and assign someone to pursue them. Says Sneed: "It was clear to us that IT could transform not only what we did, but how we worked internally with suppliers, customers and consumers." Self-service extranets for Kraft's business customers also came about as a result of these meetings. "There's a lot of competition out there, so you have to make sure customer service levels are high," Finnerty says.

But Finnerty doesn't stop there. All new IT initiatives are subject to two alignment reviews. One ensures that capital expenditures are tied not to projects, but to programs. "Instead of looking at a forecasting system, which would be a project, we look at inventory management reduction, a broader business program," Finnerty says. "[Thinking about alignment] focuses us not just on the technology but on the business process change."

Finnerty also uses portfolio management to keep tabs on projects greater than $250,000. The process values and ranks proposed expenditures according to the potential risks and benefits to Kraft companywide. Then the company's operating committee chooses those that promise the greatest value. "In the past, different departments would make decisions on how to spend their resources," Finnerty says. "Now, the company gets a higher rate of return on investment and a bigger bang for the buck, because we're selecting projects that position us best strategically."