Harry Chapman Principal Bay Area Consulting Group LLC Hchapman@baconsulting.net (415) 971-5746

1. IT Measurement at Intel Harry Chapman Principal Bay Area Consulting Group LLC Hchapman@baconsulting.net (415) 971-5746 11

2. About Intel • Revenues $54B • Employees 82,500 • IT Employees 6,400 • Operations – 164 IT sites in 62 Countries • Ranks 51 in the Fortune 500 - [60 in 2008] One of the 30 Stocks in the Dow Jones Industrial Average - Ranks 28th

3. Intel’s CEO – Andy Grove

4. Intel’s 2011-12 IT Performance Report

5. 2011-12 Vision and Objectives

6. About Intel

7. From the 2011-12 IT Performance Report

8. From the 2011-12 IT Performance Report

9. From the 2011-12 IT Performance Report

10. Strategic Objectives Over the Years

11. Strategic Objectives Over the Years

12. The Mission/Vision over the Years

13. But the Strategic Objectives changed

14. 2006 IT Strategic Objectives • Increase Intel’s Profitability Intel capabilities are a core competitive strength; we contribute to Intel’s profitability • Provide business value that directly impacts Intel’s bottom line • Enable Intel’s Supply Chain • Design and develop new products • Demonstrate IT industry leadership

15. 2006 IT Strategic Objectives • 2. Set the Standard for Operational Excellence Inside Intel and Throughout the IT Industry IT is critical to all of Intel’s business units and we set high standards for how we operate • Increase IT’s cost competitiveness • Evolve and maintain the “right” service level • Consolidate our infrastructure • Simplify the architecture environment • Manage risks to our data, applications and information

16. 2006 IT Strategic Objectives • 3. Make Intel IT a Great Place to Work We support our IT employees – our most valuable asset – by making sure they are challenged in their jobs and can grow professionally • Provide training and education • Reorganize and streamline our IT organization so that our employees are empowered to make strategic decisions more quickly • Give employees the tools and technologies they need to get their jobs done • Provide opportunities to give back to the community

17. Overall Results for 2006 • Increase Intel’s Profitability • Intel capabilities are a core competitive strength; we contribute to Intel’s profitability • $1.3 Billion Total Business Value Delivered by Intel IT • $748 M Business Value from Supply Chain Improvements • $32M Business Value from New IT Innovation Strategic Objectives Results • Provide business value that directly impacts Intel’s bottom line • Enable Intel’s Supply Chain • Design and develop new products • Demonstrate IT industry leadership

18. Overall Results for 2006 • 2. Set the Standard for Operational Excellence Inside Intel and Throughout the IT Industry IT is critical to all of Intel’s business units and we set high standards for how we operate Strategic Objectives Results • Increase IT’s cost competitiveness • Evolve and maintain the “right” service level • Consolidate our infrastructure • Simplify the architecture environment • Manage risks to our data, applications and information • 1.4% IT Headcount Reduction • 87.5% Critical Service Level Agreements Exceeding Goal • 89% Intel Employee Satisfaction with IT Technical Support

19. Overall Results for 2006 • 3. Make Intel IT a Great Place to Work We support our IT employees – our most valuable asset – by making sure they are challenged in their jobs and can grow professionally Results Strategic Objectives • Provide training and education • Reorganize and streamline our IT organization so that our employees are empowered to make strategic decisions more quickly • Give employees the tools and technologies they need to get their jobs done • Provide opportunities to give back to the community • 72% Training and Career Development Participation • 90% IT Employee Satisfaction with Training Programs • 89% IT Employees Satisfaction with Manager’s Communication (goal 85%)

20. 2007 IT Strategic Objectives • Deliver a standardized, cost-effective computing environment that keeps Intel running • Improve Data Center efficiency • Provide the “Right” level of IT service • Transform Intel’s ERP environment • Standardize application development • Increase cost competitiveness • Manage IT spending • Keep Intel IT legal

21. 2007 IT Strategic Objectives • 2. Be an agile, high-performing organization • Increase use of the Capability Maturity Model Integration (CMMI) • Implement IT resource management • Improve Program Lifecycle (PLC) usage • Improve usage of Continuous Improvement • Improve Engineering of business processes • Build our business partnerships • Improve decision-making

22. 2007 IT Strategic Objectives • 3. Influence and deliver solutions that create bottom-line improvements for Intel • Manage Intel’s Supply Chain • Improve our customer orientation • Lead the IT industry

23. Overall Results for 2007 • Deliver a standardized, cost-effective computing environment that keeps Intel running • Expect to achieve a NPV of ~$550 – 650 million and overall cost avoidance of $1B • Transformed independent service desks into one integrated support organization resulting in ~$10M in savings • Completed seven application moves • Reduced 33% of applications in two years • Achieved a $64m in cost savings • Reduced overall IT spending to 3.25% of revenue • Reduced tom to contain cyber events to 2.43 days from 5 days Strategic Objectives Results • Improve Data Center efficiency • Provide the “Right” level of IT service • Transform Intel’s ERP environment • Standardize application environment • Increase cost competitiveness • Manage IT spending • Keep Intel IT legal

24. Overall Results for 2007 • 2. Be an agile, high-performing organization Results Strategic Objectives • 98% of IT projects us CMMI • Introduced Resource Management Capability • Updated Training on PLC • Increased Training and skills development • Saved $65M via process improvement • Added metrics to IT Scorecard • Implemented 240 decision-making forums across IT • Increase use of the Capability Maturity Model Integration (CMMI) • Implement IT resource management • Improve Program Lifecycle (PLC) usage • Improve usage of Continuous Improvement • Improve Engineering of business processes • Build our business partnerships • Improve decision-making

25. Overall Results for 2007 • 3. Influence and deliver solutions that create bottom-line improvements for Intel Strategic Objectives Results • Eliminated 90% of customizations in legacy warehouse system • Implemented “My Sales and Marketing” portal • Shared IT experience with IT professionals via Intel’ Premier Professional program • Manage Intel’s Supply Chain • Improve our customer orientation • Lead the IT industry

26. Plans for 2008 • New Mission • “Deliver competitive I + T” • Intention is to demonstrate the importance of BOTH information and technology. Historically, technology has been primary and information secondary.

27. Let’s Hear from the CIO.. • Intel’s CIO is John “JJ” Johnson

28. Note What He Says… • “Modified” Balanced Scorecard Approach • Financial • Customer • Internal • Organizational and People • Agile – High performance • Standardize, Cost-Effective Infrastructure • Top and Bottom-line growth • In line with Business Plans (aligned) • External Checks – bench marking • Focused – show improvement – aligned to business partners

29. One Key to Intel’s Performance… • Intel’s Business Value Index • Started in 2001: • IT organization challenged to measure the bottom line impact – the business value – ot their IT solutions • The result became Intel’s Business Value Index

30. Elements of the Business Value Index (BVI) • A standard set of financial business measurements of business value – known as “Business Value Dials” • A standard methodology to determine the impact of It solutions • A common valuation process with finance acting as the independent auditors • A business-value portfolio of forecasted and delivered results determined by customer-generated critical success factors • A set of ground rules to define the program’s operations and drive accountability

31. Some Important Elements • Common language • “Dials” were defined • Finance was intermediary • Value defined by customer, not IT

32. Intel’s Business Value Index Overview + 0 IT Efficiency - - + 0 Business Value

33. How BVI Works • BVI works by evaluating IT investments along three factors: • IT business value (impact on Intel’s business) • Impact to IT efficiency • Financial attractiveness of an investment. The factors included are: • Customer need • Business and Technical Risks • Strategic Fit • Revenue Potential • Level of investment required • The innovation and learning that an investment generates

34. Summary • This is a glimpse into how a very large IT organization uses measures to improve performance. • For more, go to http://www.intel.com/it • To find Intel’s IT Annual Performance Reports, Google “Intel IT Performance Reports”