The Bottom Line Per... Bruce SaugstadBy Anna Maria Virzi | Posted 2003-08-01 Print
The Schwan Food Co.'s CIO on evaluating vendors
The Minnesota company, with an estimated $3 billion in annual revenue, sells frozen pizza including Tony's, Red Baron and Freschetta, and delivers ice cream and other frozen foods to homes and grocery stores. Saugstad, who was recently promoted to CIO and vice president of information systems, has been with the company for 14 years.
Q. CIOs say the expectations for achieving return on investment are getting higher. Has that been your experience?
A. Ideally we'd like to have a less-than-a-year payback. There is nothing written in stone. Things are evaluated project-by-project.
Q. What types of projects have you undertaken recently?
A. Data-warehousing initiatives to empower our business units and users to have better access to information on a more timely manner. Financial projects to help speed up the close of business when a period ends. Some sales-driven projects in support of business unit initiatives around CRM (customer relationship management).
Q. How is the progress of projects evaluated?
A. Our information services department has a project management system, and that allows us to report weekly on the status of a project. We can determine whether we're on track, whether a project is on time and on budget. At the end, we have a project- closure process. We go back to the original and ask the question, 'Did this project meet business expectations and goals?'
Q. How do you decide whether to buy packaged software or build an application?
A. We evaluate different factors. For a project we're working on now, we evaluated functionality. There was price—not only initial cost, but ongoing cost. We evaluated timing of implementation—can a package be installed quicker than building a custom application or not? We also looked at industry experience and vendor viability—is the vendor stable and will it be around? And we looked at the capability to integrate with our current architecture.
Q. Do you assign points to these factors?
A. Yes, we have weights assigned. On this particular project, 50% was based on functionality, 15% on price, 15% on timing of implementation, 10% on vendor viability and 10% integration with current architecture.
Q. What was that project? And what decision did you make?
A. We needed software to manage our promotion (and) trade spending for advertising and marketing of our product portfolio. We bought packaged software.
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