The beverage company Diageo recently announced a five-year business transformation program in collaboration with tech giants SAP and IBM.
The initiative represents Diageo’s largest investment in technology and services, with the goal of enhancing and streamlining its processes across all the countries in which it operates.
By leveraging more intuitive processes, the company hopes to gain better insights and make faster decisions, improving business resilience, customer service and adapting to evolving consumer trends.
The five-year transformation program will see Diageo implement RISE with SAP S/4HANA Cloud across 180 countries to ensure its IT infrastructure is simple and effective. It will consolidate three SAP Enterprise Resource Planning (ERP) systems into one S/4HANA system, streamlining operations across Diageo’s global business.
Richard Adam, Diageo global financial control director, explains transforming the company’s IT environment and redesigning global business processes was key to meeting their ambitions.
“SAP has been a longstanding partner of ours, and this program will solidify and extend that relationship,” he says. “IBM Consulting was chosen as part of a competitive tender based on its industry experience, dedicated focus on accelerating outcomes and its deep consumer industry expertise.”
He adds the project has a wide-ranging scope covering KPIs related to performance with customers, suppliers, other third parties and employee’s experience.
As well as upgrading the technology, Diageo is looking to simplify and unify its global systems, and Adam notes the company has a dedicated Project Voyager team working on the transformation program.
“We operate in 180 different markets and need a modern, single operating platform with simple and consistent processes, allowing us to measure performance in a way that drives true insight and action,” he says.
Upgrading the infrastructure will allow the company to stay closer to consumers and prioritize customer needs, which he says is crucial for any CPG company.
“The external environment is changing faster than ever,” he says. “Having a strong technology core we can leverage as our priorities and consumer behavior change will be more critical than ever.”
As Diageo’s partnerships indicate, companies are reaching out to digitalization partners with deeper expertise in these areas to fill these gaps and supplement the work they have started or want to undertake.
Jeffrey Fleischman, digital growth partner at Altimetrik, explains companies are often hesitant and worried about cost, disruption to the business, or lacking the right skills and tools to accelerate their digital business capabilities.
Reasons why they seek out a partner include the absence of a single source of truth (SSOT), lack of a business-led approach focused on outcomes, lack of a cloud-based digital business platform (DBP) to manage their tech stack, failing to adopt an agile digital culture, or having the right skills internally.
“Digitalization must start from the business; relying on technology to lead this can be problematic,” he says. “Although technology is a key partner and driver of digitalization, it needs to be grounded in clear business outcomes with associated expectations on deliverables and KPIs.”
He explains digitalization must be focused on solving for business needs, leveraging data and technology to achieve them.
“Companies do tend to develop technology solutions and then try to find a business case for them; success comes from reversing this order,” Fleischman says. “Start with the business case and then develop the technology roadmap to achieve specific outcomes.”
He also cautions partnership risks can arise for a variety of reasons such as vague objectives, lack of role clarity for each partner and being overzealous in the size and scope.
“Taking a ‘boil the ocean’ approach typically leads to over-promising and under-delivering,” he notes. “An essential aspect of mitigating the risk for the partners is to start with very clear objectives that need to be achieved.”
Once the project kicks off, collaboration, communication and measuring progress are critical.
Progress should be measured in achieving specific milestones within expected timeframes and monitoring end-to-end performance to ensure quality and compliance (traceable, auditable) standards are met.
“Responsiveness or agility is a way to mitigate unexpected outcomes and course correct as needed,” he says. “In the end, partners are on the same team and win together.”
Partnering up can result in an exceptional digital business transformation outcome when done correctly.