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1/30/2004
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The Golden Age Of IT

P&G looks to business technology for new ways to do business, David says

Back in the mid-1970s, he built his first computer, and in the early 1980s, he introduced Procter & Gamble Co. to some rudimentary sales software that soon was in use throughout the sales organization. Today, oversees the business-technology operations of P&G, one of the world's largest consumer packaged-goods companies, managing a multimillion-dollar budget and guiding projects that leverage some of the most leading-edge technologies around.

As CIO, David is at the top of his game. And a good game it is. "We look at this as almost the golden era of IT," he says. That's because IT has moved well beyond the mundane tasks of data processing, storage, and transmission. "The IT organization is there to create sustainable value for the organization," says David, whose father's passion for building and operating ham radios turned David on to technology. "There's so much of a contribution that IT can make to business, and I'm very optimistic about that contribution."

Stephen David -- Photo by Sacha Lecca

Procter & Gamble is rebuilding its supply chain, David says.

Photo of Stephen David by Sacha Lecca
Technology can improve productivity, boost revenue, and increase speed to market. "We're absolutely 100% focused on what the business units need to succeed in the market," David says. That's why one of the main projects this year is deploying product life-cycle-management software to automate many of the tasks used in bringing products to market. If P&G can eliminate manual processes in product development, collaborate more efficiently among various divisions, improve workflow, and better manage product specifications, it can get new products to market faster.

"If you can get to market one year faster than you used to, that's one year less of investments you have to make and one year more of revenue that will come in from that business process or product," David says. "Speed is an important consideration that is often just not thought of as much as it probably should be."

The company has a goal of a 6% increase in productivity annually, and this year IT is helping to meet that goal with the deployment of internal E-marketplaces and new computer-aided design technologies. Procter & Gamble also is revamping and rebuilding its supply chain. As part of that effort, the company is well into its radio-frequency identification initiative. P&G has to comply with both Wal-Mart Stores Inc.'s and the Department of Defense's RFID mandates, which require top suppliers to put RFID tags on all cases and pallets they ship to the organizations by January 2005. Procter & Gamble has already conducted RFID pilots and expects to be using it commercially by spring.

Another top-level IT objective falls into what David calls "webifying" the company, delivering self-service applications so that employees can keep track of their stock and benefit plans online.

The IT organization is also helping Procter & Gamble develop and launch new business models. For example, Tremor is a project under David's command that uses the Internet as the medium for creating buzz among teens about new products; P&G even markets the service to other companies to promote their brands. It's not the first time IT helped develop business models: IT was involved in P&G's use of its Web site to test-market products virtually, seeing if there's an audience for them and collecting data on who that audience is. Crest White Strips, one of the leading teeth-whitening products around, was sold first on home-shopping channel QVC and then on the Web, and now it's available in most grocery retailers and drugstores.

P&G sold $43.4 billion worth of goods in 2003. IT will make all the difference in keeping P&G a leader in its space, David says, and those that believe different are likely to fail.

"There are some companies that are very much enlightened, are leading, are indeed thinking like we are that IT can create value," David says. "Then there are some companies that really have their heads in the sand and aren't doing anything."

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