INFORMATION SYSTEMS

AT PEPSI CO

PRESENTED BY:
KINSHUK KALIA (501004029)
KUNAL KAPOOR (501004030)
MANISH KAMRA (501004034)
MAYANK KAPOOR (501004038)
 AGENDA
 COMPANY PROFILE.
 INFORMATION SYSTEMS.
 INFORMATION SYSTEMS AT PEPSICO.
 ERP AT PEPSICO.
 IMPLEMENTING ERP.
 PROPOSALS.
 VISION & MISSION
“To be the world's premier consumer products
company, focused on convenient foods and
beverages. We seek to produce healthy financial
rewards to investors as we provide opportunities
for growth and enrichment to our employees, our
business partners and the communities in which
we operate. And in everything we do, we strive for
honesty, fairness and integrity”
 HISTORY & PROFILE
 PepsiCo was founded in 1965 through the merger of
Pepsi-Cola and Frito-Lay.

 They are headquartered in Purchase, New York.

 Pepsi has many products such as Frito-Lay, Quaker Oats , Pepsi

Bottling Group, and has continued to gain acquisitions in recent
years such as Gatorade, Tropicana, Starbucks bottled Frappucino
drinks, SoBe health juices, and Aquafina bottled waters.

 “PepsiCo owns some of the worlds most popular brands including

Pepsi-Cola, Mountain Dew, Diet Pepsi, Lay's, Doritos .”
To support its operations, PepsiCo has 36 bottling plants
in India, of which 13 are company owned and 23 are
franchisee owned. In addition to this, PepsiCo’s Frito
Lay foods division has 3 state-of-the-art plants.
PepsiCo’s business is based on its sustainability vision
of making tomorrow better than today. PepsiCo’s
commitment to living by this vision every day is visible
in its contribution to the country, consumers and
farmers.
 FINANCIAL PERFORMANCE
Pepsi Co brands are available in nearly 200 countries
and territories. It generates revenues of over $43
billion and has over 168,000 employees.
INFORMATION SYSTEMS
ROLE OF INFORMATION SYSTEMS
IN BUSINESS
FIRMS INVEST IN INFORMATION SYSTEMS IN
ORDER TO:
 ACHIEVE OPERATIONAL EXCELLENCE.
 DEVELOP NEW PRODUCTS & SERVICES.
 ATTAIN CUSTOMER INTIMACY & SERVICE.
 IMPROVE DECISION MAKING.
 PROMOTE COMPETITIVE ADVANTAGE.
 ENSURE SURVIVAL.
ORDER FULFILMENT OF PEPSICO
SALES & MARKETING
APEX LEVEL: monitor trends
affecting product & sales, planning
of new products, monitoring
performance of competitors.

OPERATIONAL LEVEL: support

market research, pricing decisions
& sales performance

FUNCTIONAL LEVEL: locating

potential customers, process orders,
provide customer support
 MANUFACTURING &
PRODUCTION SYSTEMS
APEX LEVEL: planning long-term
manufacturing goals, technology
investments & locating new
plants.

OPERATIONAL LEVEL: analyze &

monitor manufacturing &
production costs

FUNCTIONAL LEVEL: manage

status of production tasks, keep
up the requisite inventory level.
FINANCE & ACCOUNTING
SYSTEMS
APEX LEVEL: long term
investment goals, long range
forecasts of firm’s financial
performance.

OPERATIONAL LEVEL: oversee &

control firm’s financial resources.

FUNCTIONAL LEVEL: track flow

of funds in firm through
transactions.
HUMAN RESOURCE SYSTEMS
APEX LEVEL: identify manpower
requirements (skill, education
level, number of positions)

OPERATIONAL LEVEL: monitor

& analyze recruitment, allocation
& compensation of employees.

FUNCTIONAL LEVEL: track

recruitment & placement of
employees.
 TPS in PEPSICO
 It serves operational managers in the sense that it
updates them with the required activities on floor.
 Its principal purpose is to answer routine questions &
to track the flow of transactions through the
organization.
 Monitors status of internal operations & firm’s
relationships with suppliers.
 It is the main source of information for other systems.
 MIS & DSS in PEPSICO
 It provide middle level managers with report on
factory’s performance & monitoring activities & helps
in predicting future performance.
 Summarizes & gives reports on basic operations using
data from TPS.
 It enables drill down facility to check the performance
level.
 It is typically not very flexible system.
 The system uses various modules to gain information
from data.

OBTAINING DATA FROM
ORGANIZATION’S TPS
 EXECUTIVE INFORMATION
SYSTEMS (EIS) in PEPSICO
 This type of information is primarily used by senior
managers.
 It addresses strategic issues & helps in formulating
long term plans.
 Helps in identifying what the consumer’s taste will be
in coming years?
 It uses web portal interface to present the content
RELATIONSHIP OF VARIOUS
SYSTEMS
 ERP systems integrate business processes &
information from entire enterprise . The system helps
in coordinating the operation of business functions.

 ERP systems are software packages that can be used for

the core systems necessary to support enterprise
systems.


ERP systems vendors

ERP vendors into 3 groups :
Tier I, Tier II and Tier III
Tier I Tier II Tier IIII
SAP Epicor ABAS
Oracle Sage Activant Solutions
Oracle eBusiness Infor Inc.
Suite IFS Bowen and Groves
Oracle JD Edwards QAD Compiere
Oracle Peoplesoft Lawson Exact
Misrosoft Dynamics CDC Software NetSuite
Visibility
CGS
Hansa World
Consona
Syspro
MARKET SHARE
ERP – automating business
processes
VALUE OF SYSTEM INTEGRATION

 ONE OF THE VALUES PROVIDED BY AN ERP

SYSTEM IS THE COORDINATION OF VALUE
ACTIVITIES IN THE VALUE CHAIN.

 THE SYSTEM PERFORMS THIS COORDINATION BY

SHARING DATA ACROSS BUSINESS PROCESSES.
Inefficient Customer Service
 Inefficient Customer Service
 Do you think that one can keep the customer on the
phone throughout this process?
 Would you consider this to be good customer service?
 Solution to Inefficient Customer Service
 Enterprise system establishes available to promise
(ATP) by checking warehouses and scheduled
manufacturing
 Price and creditworthiness automatically determined
from database
Before ERP
After implementing ERP
SAP Modules
 PepsiCo Inc. has selected SAP’s full MySAP Business
Suite to streamline its distribution & delivery
processes, improve planning & forecasting & give
better visibility to its global supply chain.
 PepsiCo, which manufactures, distributes & markets
Frito-Lays snacks, Pepsi-Cola beverages, Gatorade
sports drinks, Tropicana juices & Quaker foods, is
aiming to better link its supply chain & inventory data
with its customer data.
 SUPPLY CHAIN MANAGEMENT
(SCM) SYSTEM
 The system manages relationships with suppliers,
purchasing firms, distributors & logistic’s firms.
 It manages shared information about orders,
production, inventory level etc. The goal is to move
correct amount of product from the company to point
of consumption as quickly as possible & at the lowest
cost.
 PEPSICO MAKES SURE THAT ALL OF ITS
SUPPLIERS (WATER, CORN SYRUP, FOOD
COLORINGS, CARBONATION, PLASTICS etc.) Come
into an appropriate plant so as to keep customers
satisfied with no shortages.
 Too much of additional inventory is avoided which
hangs up resources & cash flows.
 Pepsico uses mysap business suite applications
which helps in communicating with its suppliers &
generate forecast of demand.
 GENERALLY A STOCK OF UPTO 12 DAYS IS
MAINTAINED IN THE INVENTORY.
 Sap helps in fine-tuning their supply chains from a
sequential supply chains into adaptive supply chain
networks.
 “Adaptive” refers to the ability to rapidly sense &
respond to changing internal & external conditions.
 “Network” refers to the ability to have real-time
collaboration & coordination across all partners in th
supply chain.
 It is a community of customer-focused companies that
share knowledge & resources to intelligently adjust to
changing market conditions.
 CUSTOMER RELATIONSHIP
MANAGEMENT (CRM) SYSTEM
 The system helps in managing relationship with
customers.
 Deals with customers effectively & efficiently to
optimize their revenue & increase customer
satisfaction.
 The system captures & integrates customer data from
all over the organization, analyze the data & distribute
results to various systems & customer touch points
across the enterprise.
 Pepsico’s CRM application has allowed for conversion
of former dissimilar sales systems into an integrated
application solution, which gives a complete view of
their entire consumer base.
 CRM applications are used in pepsico to determine
profitable customers, discover potential sales
opportunities, improve customer interaction &
relations.
DATA POINTS WHERE SCM, CRM &
ERP INTEGRATE
 MIS AT PEPSICO
 THE STATION COMPUTERS ARE LINKED TO
PEPSICO’S CENTRAL COMPUTER SYSTEM DAILY
TO UPDATE INVENTORY, SALES & PRODUCTION
INFORMATION SYSTEM.
 THE MANAGEMENT BELIEVES THAT THEY SAVE
ANNUALLY OVER Rs. 12,50,000 PER YEAR JUST
BECAUSE OF THIS SYSTEM.
 Mis helps PepsiCo's managers to recognize market
trends, in respect of price, differentiation of products
& timely information of market trend.
 Effective marketing planning is assisted in terms of
product planning, pricing, promotion & distribution.
 It helps in taking quick decisions & also validating
manager’s decisions.
 It provides reliable & relevant information so that
managers can take effective decisions at right time.
 CBIS
ELECTRONIC DATA INTERCHANGE (EDI):
 Information exchange between the companies, its
suppliers & its subsidiaries.

DIRECT EXCHANGE (DEX):

 Information exchange between hand-held computers
& store’s delivery system.
THE DECISION MAKER’S DILEMMA
The administration of pepsico was in dilemma:
 Integrate the new stand alone applications.
 Wait for their existing application upgradation
according to their requirements.

The management at pepsico chose to go with the first

alternative.
The management was dwindling between strategic &
tactical decisions.
 Strategic
In this the entire system have to undergo bpr (business
re-process engineering) which poses a tremendous
challenge for the company & the results can’t be
predicted.
 Tactical
It is more controllable. It is perceived to increase short
term benefits, decrease risk, fast roi.

The tactical strategy is what the company adopted for.

 FISCAL CONCERS REGARDING
IMPLEMENTING APPLICATIONS
 Huge cost involved in product purchase &
implementation.
 Integration of application with one or more other
applications across the enterpirise. It is most time
consuming.
 Data keeps changing with time & it is difficult to
update the system then.
 Timing of the implementation must be sorted out
carefully.
 Cost ofuser training & re-training on addition of
modules.
 COST COMPARISON OF IMPLEMENTING
INTEGRATED BUSINESS SUITE SOLUTION vs.
POINT SOLUTION.
INTEGRATION TO THE SYSTEM –
point solutions vs. suite models
over time
MYSAP ERP: SAP next generation

MySAP ERP

SAP R/3 • EXTENSIBILITY

via SAP
NETWEAVER.
• STANDARD • TRANSPARENCY
BUSINESS & CORPORATE
PROCESS GOVERNANCE.
SAP R/2 • CUSTOMER &
• CLIENT SERVER
BASED HUMAN BASED

• REAL TIME • DISTRIBUTED

ARCHITECTURE.
 Flexibility to incrementally add the right mix of CRM,
SCM & PLM (product life-cycle management) as
business needs evolve.
 If offers a comprehensive business scope & can be the
basis for all industry solutions.
 MYSAP ERP
 MySAP ERP is a software package which combines world’s
best & most complete ERP software functionality &
addresses the core business software requirements of
medium & large organizations.
 SAP NetWeaver is a full suite of enabling software
technologies including functionality for portal
infrastructure, business data warehousing, exchange
integration, web application server, mobile technologies
etc.
 From a modern ERP environment, it is highly
recommended the customers convert the existing license to
MySAP ERP to benefit from additional capabilities.
 MySAP ERP is designed to offer real-time integration with
other SAP products. Third party applications can be
integrated with MySAP ERP through SAP NetWeaver.
 PROPOSED ENTERPRISE
APPLICATIONS
Proposed ERP system
 Outsourcing peripheral activities to external providers
which can be a cost effective alternative.
 Outsourcing non-core business processes, Such as
human resource & procurement, companies can focus
on core competencies & free up valuable resources for
further innovation & growth
 SAP supports BPO services in setting up services that
reduces costs & improving process qualities.
Proposed SCM system
 It is proposed to do things as they are doing it right
now.
 Company needs to keep an information system that
will integrate all their suppliers to the main needs.
 They need to make sure that whatever information
they use in future can accurately predict changing
consumer demands.
Proposed CRM system
 The company’s CRM have greatly improved after
trying new variety of software systems.
 The integration of the CRM application across all
subsidiaries under PEPSICO has helped improve the
system a lot which was not there when they were using
Oracle PeopleSoft.
 CRM applications can be used to develop future
marketing campaigns to meet the needs & desires of
customers in specific areas.
Electronic business applications in
PepsiCo
PepsiCo & Pepsi Bottling Group (PBG) select
MEDSTAT Advantage suite to manage employee
benefits.

This is a multi year licensed software provides PepsiCo &

PBG with a DSS & reporting applications for
proactively managing individual & organizational
health in order to improve productivity & profitability.

The MEDSTAT DSS integrate all of their information

into a single, central source
The MEDSTAT system is used to identify the drivers of
rising healthcare expenditures & ensure all employees
are receiving the quality care available.

MEDSTAT advantage suite integrates data warehousing

capabilities, advanced healthcare analytic
methodologies & business intelligence applications to
provide a powerful decision support system.
 The strategic fit
 Making one stage more responsive allows the other
stages to focus on being more efficient.
 While discussing Pepsi’s supply chain capability, it was
told that Pepsi tends to be more responsive in cities &
a bit less in towns.
 Multiple beverages type contributes to a broader
product portfolio causing the unit to adjust its
strategies accordingly, thus fine tuning the supply
chain for each type of beverage.
Technological factors for PepsiCo
 The competitive advantage will go the company that
can apply technology to areas such as logistics, getting
costs out of the distribution pipeline & getting
products into the stores less expensively while
increasing the availability of sales information.
 Strategic alternatives
 Continue to diversify their beverage selection. The
company needs to ensure that they can properly
manage all of acquired companies & should divest that
shows that show limited potential.
 Increase the use of exclusivity agreements to boost
their sales in key markets. Tie up with restaurants,
food chains, sporting events etc.
 Improvements due to IT
 Executive support system (ESS): ability to closely
monitor sales or market share.
 Decision support system (DSS): reduces cost of raw
materials & supplies.
 Packaging Application Expert (PAX): automates
production & logistical processes.
 Transaction processing system (TPS): saves 30-50
thousand man hours weekly.
 Management reporting system (MRS): improved
product quality, less waste & gives profit-vision.
 PepsiCo software's cost
Software costs includes :
1. Direct cost of materials & services utilized in
developing or obtaining computer software.
2. Compensation & related benefits for employees who
are directly associated with the software project.
3. Interest costs incurred while developing internal-use
computer software.
 Software costs are included in property, plant &
equipment on the balance sheets & amortized on a
straight-line basis when placed into service over the
estimated useful lives of the software, which
approximates 5-10 years.
 Net software & development costs were $1.1 billion as
of December 26, 2009 & $940 million as of December
27, 2008.
 Why SAP?
 PepsiCo Inc. selected SAP's full MySAP Business Suite to
streamline its distribution and delivery processes, improve
planning and forecasting, and give better visibility to its
global supply chain.
 PepsiCo, which manufactures, distributes and markets
Frito-Lay snacks, Pepsi-Cola beverages, Gatorade sports
drinks, Tropicana juices and Quaker foods, is aiming to
better link its supply chain and inventory data with its
customer data.
 PepsiCo was a great competitive win for SAP because some
of PepsiCo's subsidiaries were already running Oracle for
enterprise resource planning (ERP) systems, as well as
PeopleSoft and Siebel CRM systems.
 PepsiCo was probably fed up with Oracle's inability to
execute on the integration of Pepsi's dissimilar
software applications spread across its subsidiaries.
 It's one of the better platforms when data, application
and process integration with other non-SAP
applications and databases is an issue.

 Companies are looking to SAP to displace dissimilar

systems, give geographic locations real-time process
visibility and remove process redundancies.