1. Continuity planning
9th April 2013

2. Continuity planning
• Supermarkets must support wide spread operations continuously
– Successful acquisitions spread operations across brands and countries,
with limited management attention to ensure continuity
– Process-by-process effort to identify continuity risks grind to a halt
after mapping a few processes
• Legacy of acquisitions makes it hard to guarantee service levels
– Acquisitions leave a patchwork of legacy systems which complicate
warm backup and other workarounds
– Hard to cost justify rationalizing legacy with synergies
• Supermarkets need to put a value on continuity and propose a
blueprint for legacy systems that makes service levels cost-effective
– Put a value on continuity by identifying which value levers are at risk
– Blueprint a rationalized legacy to make it feasible to buy warm backup
and other workarounds

3. Discontinuity disrupts key value levers,
so you can put a value on continuity
Customer
demand
Basket size
Lost sales due to
Sales
out of stocks
Customer visits
Price/unit from
3rd party
Price/unit
Net operating
profit after tax Cost of Goods Price/unit for
Sold own label
Units sold
Operations
Costs
(stores, logistics)
Economic Value
Added
Taxes Losses/shrinkage
Weighted
Average Cost of Days of inventory
Capital
Cost of capital Inventory
Days of payment
Capital employed
terms to suppliers
Real estate
(stores, logistics)

4. Discontinuities need to be assessed consistently for
consequences and likelihood
Consequences People Safety Partnership Margin
Catastrophic Event Multiple Severe long term NPV > $1BN
attracting fatalities environmental impact
international High level of concern Cash flow >
attention from community and $100M
NGOs # Likelihood
Major Event Single fatality Environment > 3 years NPV $500M-1BN
1 Certain to occur
attracting recovery
national Large complaints from Cash flow $50- 2 Possible in
attention community 100M 1-5 years
Moderate Event Occupational Environment 1-3 NPV $250-500M 3 Possible within life
attracting injury with years recovery of operation
provincial permanent Repeated complaints Cash flow $25-
4 Possible beyond life
attention disability from same area, NGO 50M
operation
interest
5 Practically
Minor Event Treatable lost Minor environmental NPV $100-250M
impossible
attracting time injury or impact onsite
regional occupational Legal compliance Cash flow $10-
attention illness requires reporting 25M
Insignificant Event Minor injury Low environmental NPV < $100M
attracting or illness with impact
company medical Cash flow <$10M
attention attention

5. Continuity planning mitigates risks that
are severe by decreasing their likelihood
he
ft
of
le
eo
s
e
ib
ar
lif
ss
lif
ye
nd
po
r
cu
n
5
io yo
io ithi
im
1-
oc
at be
in
er e w
lly
l
to
ta
le
e
ica
n
n
To
in
op sibl
op sibl
ib
t
rta
at
ss
ac
d
s
s
an
er
Po
Po
Po
Ce
Pr
Gr
D
A
B
C
E
A Catastrophic 4 1 3 8
B Major 22 36 12 1 71
Consequences
C Moderate 11 37 25 1 74
D Minor 1 2 15 1 19
E Insignificant 1 4 3 8
Grand Total 1 40 92 42 5 180
Frequency / Likelihood

6. IT governance for continuity
Strategy goals and objectives of the business
Organization Structure, skills, style, roles and
which define IT capabilities required and the
responsibilities that allow IT to
strategic role of IT in the industry
effectively deliver technology and
information capabilities
Performance Application/data
management architecture
Business context
Processes and Applications and data that
measurements to drive support the business’s execution
efficiency, of core activities
effectiveness, quality
and productivity
throughout IT
Governance & Technical
processes infrastructure
Technology infrastructure that
support development and
production environments for
Key management processes that applications
assure effective delivery and
sustaining a high performing IT
function
Exhibit 6

7. Batch (offline)
Technical infrastructure Online (users)
EXEMPLO
Norte
Daily
batch Nordeste
Core
Satélite
banking São Paulo
End of ATM
month
Transactions growing 15%-26% p.a. due to
Records growing 10%-12% p.a. internet channel & MIS, while current accounts
growing just 11,5% p.a.
50,7M
Outros
SAT-pagtos.
44.000 Serviços
MIS
Poupança
19.000
Online
Carteira
7,9M
Contas Contas
correntes corrente
s
2000 01 02 03 04 2005 2000 01 02 03 04 05 2006
7
Fonte: Exemplo

8. Application/data architecture
Hard to justify strong
Modules with many Modules with few customisation because
records require records can use a PC low visibility and few
scaleability LAN records
Administrative
modules are
Administration invisible to end
users
Produtos
Channel modules
Channels are highly visible to
Easy to justify end users
customisation
because high
volume and visible
8
to customers

9. Application/data architecture – Post Merger
EXEMPLO
Mapa de sistemas de x
COBIS/Sybase/Visual Basic
(número de arquivos 2005, crescimento médio a.a. 2000-2005)
Sybase Solaris/Visual Basic
Recursos humanos (?)
Contabilidade (?) Câmara (?) Remessas (?) SQL NT/Visual Basic
Garantias (?) Cobranças (308) 16% Firmas (?) Digitalização (?) Pagamentos (?) Internet
Administração Intranet (?) Administração (?) Cheques (?) Finanware (?) NT/Oracle
MIS (438.891) 14% Armazenamento de dados (?)
Oracle NT/ Delphi
BPM (?)
Contas correntes (32.126) 10%
Contas poupança (102.990) 7%
Comércio exterior (4.886) 18%
Adm. cartões (166.621) 14%
Transferência de capitais (?)
Administradora fundos (?)
Cartão corporativo (?)
Carteira (12.767) 12%
Mesa de dinheiro (?)
Factoring (88) 14%
Seguros (371) 23%
Leasing (701) 18%
Investimentos (?)
Câmbios (?)
Crédito (?)
Produtos
Canais
Escri- 24 24 SAT 24 Caixa
IVR
tórios online Celular faturam. Telefone autom.
9
Fonte: Entrevistas com desenvolvimento