How Becton Dickinson Gained Visibility into their Global R&D and IT Portfolios

Scott Cussimano VP and Microsoft EPM Technology Specialist - UMT

Key EPPM Concepts

BD Company Overview

BD Process

BD Portfolio Challenges

BD Portfolio Solution and Strategy

BD Lessons Learned

Q&A2

Ability to Realize Business-Value Potential75% 100%

66%

100%

0%

Portfolio Management

Project Management

50%Value Realized

50% Value Lost

Project Managementhelps ensure organizations successfully deliver the selected investments and realize the business value

Portfolio Management enables organizations to identify and select the investments that will maximize business value

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BD’s Strategy:To serve the world's population as a global leader in developing and applying technologies to solve emerging, important, sometimes underappreciated and fundamental healthcare problems with discipline and committed service to our customers and shareholders.

Headquarters: Franklin Lakes, NJ USASize (2008):

$7.155B annual revenue~28,000 employees in ~50 countries

Organization Structure:Executive Leadership (BDX)3 Segments: Medical (BDM), Diagnostics (BDD), Biosciences (BDB)9 Organizational units

Customers:Healthcare Institutions, Life Science Researchers, Clinical Laboratories, the Pharmaceutical Industry and General Public

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BD: Meeting important, underappreciated healthcare needs

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Concept Definition Develop Qualify Launch

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Cross-Functional Core Teams

Portfolio Decision Team

Business Review Process

PDT Review

PDT Review

PDT Review

PDT Review

GPDS provides a structured, cross-functional development and review process to improve project and portfolio performance

Core Team Leaders managing a project team to deliver a technically and financially successful project

Cross-functional leadership team evaluating project performance within greater project portfolio context.

Multiple technical, commercial and design evaluations.

US Sales &

MktgR&D

Quality

Operations

Global Sales& Mktg

LegalHR

Open

Open

Core Team

Leader

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“’Companies without effective new product portfolio management and project selection face a slippery road downhill.”

-Robert Cooper, creator of Stage-Gate® product development process

Connecting the Capability Silos

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Portfolio management is the nexus of each unit’s management system

Strategy

Development

Revenue Planning &

Budget Development

Portfolio

Management

Project ExecutionFunctional Resource

Management

Strategic Priorities & Current Operations

Strategy Priorities

Project Priorities, Selection, & Decisions

Project Value & Progress

Investment & Performance

Targets

Resource Supply

Master Project List, Performance to

Target

Business Structure

Resource N

eed & Supply

Resource Need & Assignment

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G3 is a multi-phased BDX initiative that will deliver a single, GPDS-based project portfolio management framework, representing both process and technology, to BD’s functions resulting in a new level of:

1. Global Governance over Product Development Investments2. Global Harmonization to drive apples-to-apples comparison3. Global Transparency to ensure all stakeholders have the information

they need make effective project portfolio-related decisions

Global TransparencyGlobal Harmonization

Global GovernanceG Portfolio Initiative3

“Where GPDS Portfolio Management meets World-Class Technology solutions“

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Cross-Functional Project Excellence (Core Team Leaders)

Unit Product Portfolio Management (Portfolio Decision Teams)

Segment Strategy (Segment EVP, CFO)

Corporate Strategy and Budget (Office of CEO, Operating Committee)

BDX

BDB

Unit 1 Unit 2

BDD

Unit 6 Unit 7

Core Team

BDM

Unit 9

Core Team

Core Team

Portfolio management and governance at BD

Operating Committee

BD Diagnostics Segment

BD Medical Segment

BD Biosciences Segment

Portfolio

Portfolio

Portfolio

BDXPortfolio

Manufacturing

Existing Investment Lenses

G3 SystemBreak Break ThroughThrough

New ProductNew Product

Line ExtensionLine Extension

Break Break ThroughThrough

New ProductNew Product

Line ExtensionLine Extension

A single repository, governed by GPDS, for all of BD’s NPD and OE investments!

Enhanced Investment Analysis

(e.g. Strategic Valuation)

IT

Organizational Segments Corporate Functions

Marketing

OE

Regulatory

G3 Environment

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Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

BD

Segm

ents

Operational E

ffectiveness

Operating Committee

Medical Surgical Systems PDT

Diabetes Care PDT

Pharmaceutical Systems PDT

Ophthalmic Systems PDT

Immunocytometry Systems PDT

Pharmingen PDT

Discovery Labware PDT

BDXPortfolio

PreAnalytical Systems PDT

Existing Investment Lenses

G3 SystemBreak Break ThroughThrough

New ProductNew Product

Line ExtensionLine Extension

Break Break ThroughThrough

New ProductNew Product

Line ExtensionLine Extension

A single repository, governed by GPDS, for all of BD’s R&D investments!

Enhanced Investment Analysis

(e.g. Strategic Valuation)

Diagnostic Systems PDT

Organizational Units Organizational Units Organizational Units

G3 Environment (R&D Breakdown)

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BD

Medical S

egment

BD

Diagnostics S

egment

BD

Biosciences S

egment

Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

Portfolio

CapabilityGovernance

Design Review

Commercial Review

PDT Review

WorkflowCONCEPT DEFINITION DEVELOPMENT QUALIFICATION LAUNCH

Project Info & Contract

Process

Project Business Case

Portfolio Analysis

Integrated process and platform to provide actionable information.

G3 Configured to Support GPDS

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0% 5% 10% 15% 20% 25% 30% 35%

Driver 1

Driver 4

Driver 3

Driver 8

Driver 5

Driver 10

Driver 7

Driver 2

Driver 9

Driver 6

Builder is the “Single Sourceof Truth,” where project and portfolio information is stored, such as project type, financials, strategic impact, and project governance (Workflow)

Optimizer is the analytical component that features sophisticated tools such as Analytical Hierarchical Process and Efficient Frontier to help guide your investment decisions. Optimizer provides the ability to force projects in or out, create project dependencies, and optimize based on multiple constraints (strategy, financial, risk, schedule).

Dashboard provides tracking through a quick status view of key project indicators.

- , 2%

52 , 61%

105 , 75%

157 , 85%

210 , 92%262 , 96%

314 , 99%

367 , 101%

419 , 101%

472 , 102%

524 , 102%

0%

20%

40%

60%

80%

100%

0.00 100.00 200.00 300.00 400.00 500.00 600.00

NPV

(%)

R&D FY10 to FY12 ($M)

BDX Efficient Frontier

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Initial Implementation

Expansion & Refinement

Broad Adoption & Deployment

UMT’s Implementation-to-Success Approach

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“Building the Foundation”• Envisioning• Introduction to methodology• Best Fit Configuration• Early Adopters

“Scaling up”• Portfolio Calendar• Process Integration• Knowledge Transfer• Broader Audience

“Sustaining”• Training and on-boarding• Socialization• Continuous improvement• Enterprise capability

Communication and Socialization

Prepare for Change

Execute the Change

Sustain the Change

Q1FY08 Q2FY08 Q3FY08 Q4FY08

Phase IR&D

Phase IIR&D

Phase IIIGlobal IT

30= Go-Live Dates

Phase IVBDT

Build& Deploy

Foundation

Global R&D Roll-Out

Drive Deep Adoption…BDX Portfolio Guidelines & Analytics

G3 Global ITRoll-Out

G3 ProcessAlignment

Excel Based GlobalPortfolio Reviews

Phase IVPlanning

Our Phased Implementation Approach

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• Compliance• Single Source of Truth

• Portfolio Optimization• Complete

There is a wide array and depth of capabilities in the Microsoft EPM System and fully exploitingthese capabilities requires time and resources. As a result, we prioritized the implementation ofthese capabilities based upon our organization’s portfolio needs.

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Improve Visibility

MaximizeValue

Reduce Execution

Risk

Improve Effectiveness

& Agility

•Single Source of Truth•Value/opportunity management•Automation of Stage/Gate Model•Status and Tracking

•Risk Assessment & Re-evaluation•Pipeline vs. Capacity Planning

•Portfolio Scheduling

•Portfolio optimization and selection•Consensus on Strategic Priorities•Align Portfolio to Strategy•Portfolio Balancing

•Develop Standards and Best Practices

•Managing Project Priorities•React to External Forces –

Economic, Competitive, Market, Regulatory

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• Must engage leadership at every level of portfolio review• Stakeholder input ensures that the design and process is robust and

repeatable

Organization

• Need clear definition of roles and responsibilities to coordinate and execute portfolio reviews

• Data quality is critical and standards need to be centralized and enforced

Process

• Platform needs to be flexible to accommodate different project types and functions

• More active users ensures freshness of data

Technology

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scussimano@umt.com

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Step 1 As-Is Process Analysis / CTQ Gathering

Step 2

Industry Research on Topic

Case Studies From EPM Vendors

Step 3

CTQ Refinement / Creation of High-Level To-Be Process

CTQ #1…CTQ #2…

CTQ #1…CTQ #2…

Step 4 Vendor Interviews / Demos

Step 5 RFP Process / Final Vendor Selection

Our CTQs

37Microsoft Confidential

Consulting

Technology Support Training

Why Microsoft and UMT?

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CTQs Microsoft and UMTFlexible Workflow to Support Different Functions within a Single Repository

Met

Granular User Security Controls to Protect Integrity and Confidentiality of “Crown Jewel” Investment Data

Exceeded

Capability to be a long-term Trusted EPM Technology and Process Partner…”Start with Portfolio Mgmt and evolve into an Integrated Portfolio Mgmt and Work Mgmt solution”.

Exceeded

Ability to integrate with and have deep knowledge of Existing Project Management Tools (Project Server 2007)

Exceeded

Top 4 Critical To Quality (CTQ) Requirements of our EPM Partner: