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Text:14-point Times New Roman with 70 percent Wingdings square bullet,100 percent Times New Roman round bullet(Alt 0149),100 percent Times New Roman em dash bullet(Alt 0151),100 percent Times New Roman en dash bullet(Alt 0150),A.T.Kearney 1/8510Color/,*,Major(30 Point),IT Strategy,February 24,2000,Case Study of a Recent Client Experience,Rob Trollinger,Principal,Dallas,Chris Wisler,Manager,Alexandria,Kimberly Brown,Associate,Alexandria,IT StrategyFebruary 24,2000Ca,Todays discussion,Background of Company,Company IT Overview,Cause for Action,IT Strategy Approach,Application Architecture,Technical Architecture,Establish the IT Program Office,Organizational Effectiveness and IT Alignment,Summary,Todays discussion Background,Background of company,Background of company,Began in 1909 as a partnership between an innovative chemist and a businessman,Pioneering work in leather tanning,Best known for expertise in acrylic chemistry,Essential component to detergents,diapers,cell phones,industrial coatings,and more,50 manufacturing,research,and technical facilities worldwide,Sales in 100 countries,totaling$4 billion annually,Company A,Company B,Company A announced their intended merger with Company B in 1999,1848,founding,Largest and most recognized business for a particular consumer product,Major supplier of basic inorganic chemicals derived from salt,Essential ingredients in CDs,newspapers,magnetic tapes,sports equipment,and more,36 mining and processing facilities,68 chemical manufacturing,research,and technical facilities worldwide,Sales total$2.5 billion annually,Began in 1909 as a partnership,Drive the short-term value,Exceed the markets expectations,Integrate the Organizations as Seamlessly as Possible,Develop and communicate a shared strategic agenda,Define organization structures,key business processes and technology platform/architecture,Select leaders and staff positions,Develop metrics and budgets,Integrate the business,Integrate day-to-day operations,Position for the future growth,Achieve Business Value Goals as Quickly as Possible,Achieve$200 million of savings within 12-18 months(running rate by 2001),Ensure customer retention,Corporate Center rationalization,Administrative overhead reduction,Sourcing/Procurement savings,Product line and operations rationalization,Manufacturing productivity and supply chain improvements,Reduction in technology costs,The focus of the integration was to quickly achieve operational synergies while combining the organizations to support top line revenue growth,A.T.Kearney was asked to structure,drive and manage the entire integration process for what would become one of the largest specialty chemical companies,Drive the short-term valueInte,Latin America and Asia-Pacific Region Operations:,10%of sales,20 manufacturing facilities,10 distribution sites,North American,Region Operations,60%of sales,60 manufacturing facilities,230 distribution sites,(1),While the potential source of the synergies were somewhat clear,smooth and timely integration of the two companies was less assured,Challenges,Some manufacturing processes and technologies were incompatible between the two companies,Combining two companies with both direct product overlap,Acquiring company was more of a“intermediates producer”and the acquired company was more of a“formulator”,Significant facilities consolidation opportunities,Distribution consolidation and improvement required changing the business model and the mindset,Standard lead times,Standard service levels,Significant customer overlap,Significant EH&S issues needed to be addressed,competing away scarce capital resources,European Region,Operations:,30%of sales,40 manufacturing facilities,60 distribution sites,Latin America and Asia-Pacific,After an accelerated integration program,the merger was deemed a success by the CEO as well as the analyst community,“By the end of 3Q,the new company had achieved cost reductions of$100MM on an annualized basis,three months ahead of schedule.”,Morgan Stanley Dean Witter,“Already,the company has achieved a$100MM annual run rate in cost savings ahead of schedule”,Janney Montgomery Scott,“The integration process is running smoothly and in fact better than expected achieving a$100 MM lower run rate”,J.P.Morgan Securities,“The integration efforts continue to track ahead of plan”,Deutsche Banc Alex Brown,“Considering the steep increase in raw material costs,the new company was able to meet expectations with its rapid integration of the acquired companys operations”,Brown Brothers Harriman,After an accelerated integrati,Perspective,External Focus,Internal Focus,Incremental,Transforming,Value,Creation,(P/E Ratio),New Business ModelNew SegmentsNew TechnologiesAcquisitions,Share GainTechnology ImprovementGeographic ExpansionPortfolio Management,Work RedesignSupply ChainOperating Excellence,2-3%Sales,Growth,4-5%Sales,Growth,6-8%Sales,Growth,Following the integration,the CEOs Agenda is to double the rate of growth while maintaining hi
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