IT as a competitive advantage

at Procter & Gamble

October 28, 2008

Remco Brouwer, Procter & Gamble

Information & Decisions Solutions

Agenda

Introduction to P&GIT: From Commodity to Strategy

Using information to win in the market

Q&A

Agenda

Introduction to P&GIT: From Commodity to Strategy

Using information to win in the market

Q&A

P&G at a Glance • Founded 1837

• HQ in Cincinnati, Ohio• $83.5 Billion annual sales• 138,000 employees• More than 300 brands sold

in 160 countries • Operations in more than 80

countries• “Fast Moving Consumer

Goods” industry

Brands sold in the Netherlands

FMCG: Ariel, Dash, Dreft, Lenor, Swiffer,Antikal, Febreze, Pringles, Pantene, Herbal Essence, Head & Shoulders,Wella, Oil of Olaz, Max Factor, Oral-B, Vicks, Pampers, Kandoo, Always, Alldays, Tampax, Envive, Gillette, Braun, Duracell, IAMS, EukanubaFragrances: Hugo Boss, Lacoste,Laura Biagiotti, Mexx, Gucci, D&G ….

An average supermarket in the Netherlands has over 300 P&G products in its assortment

P&G’s 24 Billion-Dollar Brands

Some of our core values

Consumer in the center of everything we do

Superior products, focus on R&D

High speed to market

Leverage our scale as much as possible

Focus on two key moments

In storewhere the

shopper chooses

First MomentOf Truth

At home where the consumer

uses our products

Second Moment Of Truth

Shopper Understanding“Customer Business Development”

Consumer Understanding“ R&D, Marketing”

Agenda

Introduction to P&GIT: From Commodity to Strategy

Using information to win in the market

Q&A

Innovation in Business Services…P&G’s Challenge

Global expansion, between 1985 and 1999 we had • Entered 55 new markets• Increased operations to 86 countries

We saw…• Duplicated services across regions• Structural inability to take advantage of economies of scale

• Inefficiently allocated staffing and budgets

We Knew:• Much of technology was becoming a commodity…• Often, IT was seen as a cost…• IT had the potential to do so much more…

• And the business need was so much greater…

Innovation in Business Services…The IT Challenge

TechnologicalCapabilityBusiness Needs IT

We set a goal . . .

Transform IT from Back Office Support to

Board Room Strategist and

Offer P&G a strong foundation for growth...

Our Approach

UNITE IT and core Business Services

DRIVE synergies across Business Services

SHIFT THE THINKING from “technologies” to “solutions”

UNLEASH the potential of the back office as a business driver

GBS was born…

Global strategy for products,

Marketing, R&D,& Manufacturing

Customer relationship; local

marketing & consumer

understanding.

Employee & business services, IT infrastructure,

processes & business support

across P&G

Cross-functional support: HR, PS,

Finance and Accounting, CMK, Design, External Relations, R&D,

Legal, CBD

Business Implications:• Duplicated services across regions• Inability to take advantage of scale• Inefficient staffing and budgets

Going Global: BeforeOur Starting Point - A Scattered Structure

In 1999:Brands / Business Units operating “independently”

Business Services:“Localized” and dispersed among business units, brands, geographies

Going Global: AfterGBS Service Centers and Data Centers

Cincinnati

San Jose

NewcastleBrusselsBrussels

SingaporeManila

Business ServicesEmployee Services

Global Service Lines

• Employee Services

• People Management

• Facility Services

• Computers & Communications

• Meeting Services

• Travel Services

• Strategic Sourcing & Procurement

• Financial Services & Solutions

• Product Innovation Solutions

• Supply Network Solutions

• Consumer Solutions

• Customer Solutions

• Initiative Management

• Business Performance Solutions

• After the creation of GBS we needed: Another big step in our business model

• What we realized: Could grow stronger, faster if we tapped into external partners

Growing in Partnership

Leverage our best, with their best . . .

Employee Services

IT Infrastructure + Applications +Transactional Accounts Payable

Facilities Management

• 3 Partnerships$4.2 billion agreements 11 months start-to-finish

• Best-in-class industry leaders

• Strong commitment to partnership

• Clear measures for success

Growing in Partnership

Agility

• Together: 1100 projects

• Completed: in 15 months

• Synergy Savings: $1.2 Billion

Within 2 weeks, our partners added 700 full-time people to the P&G business

GBS Running as a BusinessBorrowing from P&G’s Management Practices

“Total User Experience”Consumer Benefits

Service ManagementBrand Management

Value CreationSales Volume

Service LevelsMarket Share

CostProfit/LossGBS EquivalentsP&G’s Approach

From technology to solutionsFrom what’s needed to what’s

possible

Information Our unique asset Decisions What we want to enableSolutions What we want to deliver

And a new name for our IT organization:

IT Strategies

Business Needs

IDS

GBS Running as a BusinessWhat this transformation meant to IT

Agenda

Introduction to P&GIT: From Commodity to Strategy

Using information to win in the market

Q&A

Replace physical product mock-ups with virtual reality applications

Commercialization:

Consumers: focus-group mock-ups replaced by virtual designs

Customers: increased engagement with virtual shelving

Engineering and Production: modeling

Our Virtual Solutions tools were used on 79% of all P&G initiatives

Example 1

Virtualization at Work

Work with our customers to better understand and serve the shopper

Example 2

Customer CollaborationUse the following data types:

• Point of Sale Data

• Loyalty Card Data

• Household Panel Data

• Market Share Data

We have global systems to load, enrich, store, integrate and analyze these data types. Key theme : From data to information

Decision Cockpits:• Revolutionized

delivery of business information

• Empowers executives to anticipate what is happening in the business

• Available to everyone, based on a common data set

Example 3

Decision Cockpits

Running as a BusinessReal Time Decision Making @ Work

• Revolutionize delivery of business information by anticipation

• Available to everyone

• Eliminate / reduce “standard reports”

• Anticipate what is happing in the business

Example 2

Need image of a cockpit here

Decision Cockpit

My Reports

My CockpitGM Net (RSS Feed)Alerts Shipments - Quick Overview

• LonDarco down 4% thisquarter.

• Shipments 2.25% behindexpectations.

• Action Plan meetingannounced.

View old alerts…

http://decisioncockpit.pg.com/shirley

NA Market Measurement - Control Chart

SRAP

Competitive Intelligence

My Links NA MDO ScorecardConsumer• Media Coverage• Commercial Innovations• Claudia's Design Blog• Marketing Net

Customer• Top Customer Stock Quotes• Retailer Brands• JVC-CDSN

• All Outlet Share - US Market -through Aug 2006P&G (including Gillette)US All Outlet P3M valueshare ending August 2006 is estimated.

• Board of Directors Share Reports - July '06Globally, X of X Categories are flat or growing share in the Past X Months vs. Year Ago.

Choose Region:

Global

NA Daily O&S Report

• CEMEA Monthly –one day ago• NEA Monthly –one day ago• LA Monthly –three days ago• WE Monthly –five days ago

My NewsStand Folders

Fabric Care - Multicompanies - North America - Competitors

• HSBC Investor Global Fixed Income Fund - Class I - Part 1 • Unilever Announces Third Quarter and Nine Month Results 2006 and Interim Dividends • Unilever changes claim 265 suburban jobs

Decision Cockpits

Running as a BusinessReal Time Decision Making @ Work

• Revolutionize delivery of business information by anticipation

• Available to everyone

• Eliminate / reduce “standard reports”

• Anticipate what is happing in the business

Example 2

Need image of a cockpit here

Decision Cockpit

My Reports

My CockpitGM Net (RSS Feed)Alerts Shipments - Quick Overview

• LonDarco down 4% thisquarter.

• Shipments 2.25% behindexpectations.

• Action Plan meetingannounced.

View old alerts…

http://decisioncockpit.pg.com/shirley

NA Market Measurement - Control Chart

SRAP

Competitive Intelligence

My Links NA MDO ScorecardConsumer• Media Coverage• Commercial Innovations• Claudia's Design Blog• Marketing Net

Customer• Top Customer Stock Quotes• Retailer Brands• JVC-CDSN

• All Outlet Share - US Market -through Aug 2006P&G (including Gillette)US All Outlet P3M valueshare ending August 2006 is estimated.

• Board of Directors Share Reports - July '06Globally, X of X Categories are flat or growing share in the Past X Months vs. Year Ago.

Choose Region:

Global

NA Daily O&S Report

• CEMEA Monthly –one day ago• NEA Monthly –one day ago• LA Monthly –three days ago• WE Monthly –five days ago

My NewsStand Folders

Fabric Care - Multicompanies - North America - Competitors

• HSBC Investor Global Fixed Income Fund - Class I - Part 1 • Unilever Announces Third Quarter and Nine Month Results 2006 and Interim Dividends • Unilever changes claim 265 suburban jobs

Real Time Decision-Making at Work

End to End Reporting Services:• Enabling better local decision making

by integrating data from different (global or local) sources

• Turn data into actionable information

• Display the information following local business / market structures, use a “simplified version of the truth”

• Deliver the information through our global decision cockpits

Example 4

Tailored reporting where needed

Began as support for one siteBuilt pampers.cominto the most successful marketing site in the Company49 countries, 50% of world’s population26 million visitors a year

Reapplying customization to advance other brands in the Company.

Example 5

Personalization at Work