I'm Gonzalo Esposto, I’m originally from Uruguay and I’ve just ended my career in Unilever after 31 years. All of my professional life has been spent at Unilever working in Information Technology. Every IT role that you can imagine in a global CPG company - I did it. I did local, regional and global roles and most of my time was spent supporting supply chain and sales. That’s a very brief summary of everything I did in the past 31 years of my life.
As the CIO for a large CPG company, we went through three waves. In the early nineties, everything revolved around leaving mainframes and moving to open systems and everything was developed internally. That was later erased because we had to cut costs. Mainframes became too expensive for CPG companies.
The year 2000 was the first wave of SAP implementations - everybody was looking for more efficiency in their processes and integration. SAP was an absolute must otherwise, you would almost be out of business. SAP brought the first on-time, online, end-to-end integration of processes.
In the 2010’s it was more about digital - a move from backend to frontend and understanding how to implement technology. Backend continued to be very important, of course but there was more of a focus on the frontend when it came to consumers. It was all about digital and analytics. How you could use technology to bring more efficiency to your processes, how technology could enhance your relationship with providers and customers, as well as better understanding your consumers and employees. That’s where we are today - the battle to understand and connect with consumers.
Finally, I think that in the next 5 years, we will enter into the fourth wave where people will need to revolutionise the backend again for something more efficient and modern. All of this will need to be hosted in the Cloud and be able to seamlessly integrate with new and existing technologies.. People will not look at SAP as an end-to-end solution but to better integrate with niche solutions. Digital will continue to be a high priority.
I think that the most interesting piece is how technology can change people’s lives. It doesn't matter which wave you are, it happened in the early 90’s, 2000’s and 2010’s. In any big project I worked on, the human part was the most attractive and the most important. Thinking about how to deal with people when you change their day to day routine - what I found most interesting was how to manage that change and how to produce changes in a way that people will accept not reject. That is an art, not a science. As the CIO, you combine technology (the science) but the art of the role is when you understand how to get better results for the people using the technology.
In the past, we were more focused on trying to understand people, today nobody has any patience but people are still people. I think the biggest and the most interesting characteristic of my role was how to understand and help people change habits for the best through technology.
New technologies arrived at an unprecedented speed so the usage of platforms became the way to manage complexity and extract the most from them.One key priority is to keep the number of platforms controlled and use them as often as possible to achieve the best efficiency in the usage of those assets.
Another key technology that has seen a gradual and consistent rise over the past few years is Robotic Process Automation (RPA) - this is having a huge impact. Through it, you can bring a lot of efficiency into your existing processes however it has a significant impact on your labour force as you can automate administrative tasks that are traditionally carried out by humans. So, the challenge here is how to manage your workforce when you implement RPA. How do you train them in other tasks that will add more value to the company?
Finally, there is the aspect around talent. How can CPG companies attract and retain IT talent today? The fight for talent will increase, not only with new technologies but also with former ones. How will companies like Procter & Gamble, Nestlé and Unilever fight for talent against companies like Facebook, Google or Amazon? Why will an IT professional choose Unilever over Amazon? That is a major challenge for any CIO today.
Companies will need to understand where to go for talent. They don't necessarily need to go to the best technical universities because maybe the software engineer students and alumni would prefer to join Facebook, Google or Amazon. However, courses around business systems, the use of technology in the supply chain and technology in finance are likely to be a promising place to find new talent.
If we think about what Unilever did with their Sustainability Living Plan, and how important it was to engage their employees, providers, customers and more importantly, their consumers. In my case it was a reinforcement of my purpose in life. The fact that 2 billion people consume Unilever’s product every day allows you to improve people's lives in a very unique way and ultimately, change the world for the better. That’s unique and a huge differentiating factor for CPG companies when attracting and retaining talent.
I don't think there will be so much of an IT department. I think the CIO will need to be more of a business person. I always disliked it when IT professionals would use language like; “IT and the business”. No! A CIO from a CPG company is part of the business. It’s just another function of the company.
In terms of the way this will be organised, I think there will be a technical team reporting to a CTO who reports to the CIO. I imagine there will be a number of teams embedded in the different functions using technology to better serve the company. Those teams will be part of the IT team. In regards to reporting lines, I think they are irrelevant. Matrix organisations brought the reporting line discussion to an end.
I think the debate is about whether the CIO role will become the Chief Digital Officer or not. Many CIOs are able to move into Chief Digital Officers - they're very well positioned but to do that you need a CIO who understands technology of course but also understand the business that they are immersed in.
The years of a CIO solely talking about technology are over - it's impossible! That would now be the role of the CTO. The CIO is someone who will transform themselves to be the Chief Digital Officer. I would love to see CIO’s moving into Chief Digital Officer or Chief Shared Service Officer roles and I’ve seen this happening already. These are very high-level positions in CPG companies.
That’s a good question because I mentioned big data but I forgot to include Artificial Intelligence and Machine Learning. I think that in CPG, people are battling for data and are challenged with how to transform data into true information and insights. The battle is not between traditional CPG companies such as Nestlé battling with P&G and Unilever, there are new players in the industry such as Amazon and Alibaba. These guys have more data than everybody else and they know their customers better than any other company.
Companies will need to partner to collect data and use Artificial Intelligence as Alibaba and Amazon are doing in order to gain similar insights and fight for the consumer. CPG companies are fighting to understand the consumer better and ideally to go into one-to-one marketing with the consumer.
As a consumer, you need to receive offers from a company that are tailored specifically for you . Today, Amazon and Alibaba are in better positions to do that than CPG companies. The CPG industry needs to move faster and the only way to do that is by utilising Artificial Intelligence or Machine Learning and battle for the data.
Unilever has 2 billion interactions with consumers every day - every day 2 billion people use Unilever's products. Coke has 1.9 billion customers every day. Neither Unilever nor Coke can track those interactions. In contrast, if you go to Amazon or Alibaba, they know exactly who is buying their product at every moment. That's the battle. That is what will define the next few years. So, how can Unilever and Coke begin to understand who these 2 billion people are? Only by collecting data, being present online and using Machine Learning and Artificial Intelligence.
Everything started about 10 years ago when Unilever launched the Unilever Sustainability Living Plan (USLP). It was quite a big part of history in Unilever - it was a privilege to be part of this. I will be honest, I was very skeptical at the beginning. A company that was focused on producing results every three months with a focus on growth whilst simultaneously being sustainable - that was a big challenge but we did it!
I am convinced that Unilever is very special because the USLP is embedded in the strategy and held as the most important objective. I think that consumers are paying for that. People are more and more keen to pay for something that is sustainable rather than a cheaper alternative.
10 years ago, whilst still living in Brazil, I thought that sustainability was more for Europe and America. I thought that sustainability would never be for Brazil. Big mistake. Consumers all around the world are worrying about sustainability and now people are willing to pay a dollar more for that sustainable product instead of the less sustainable alternative. It's not something that’s needed because its fancy - It’s survival. Consumers will buy these products now because everybody's aware that if we don't do something, the world will disappear, as simple as that.
What’s the role of technology in all that? If we think of the supply chain in a traditional CPG company, processes within the company are only 10-20% of the whole chain. So, the only way to have a big impact, is to work with providers, customers and consumers to change everything from the way we collect raw materials right up until we consume the products. To do so we need to track the whole chain. We need to understand it in every part in order to improve each piece of the chain. That is where information technology is critical. It’s essential to track every aspect of the chain, starting with the origin of raw materials, how these are being manipulated and transformed into final products and also how consumers are using your products. An example is that you can track where tea was planted and where it was collected but what about how people are using a detergent that you're producing? What type of packaging does it have? Is it recyclable? It's very difficult to track all of that across the world but if we don't, we will not be able to have a positive impact.
Once you have all of that information, imagine what you could do with it? Once again, everything's about data. Collect, process and transform data into valid information.
Be yourself. Don't try to do something that you don't trust. Starting in a technology department in a CPG company, you need to be passionate about technology but more importantly, you need to like the way that you can apply technology in a CPG company. You need to love how CPG companies act, you need to love the fact that CPG companies are touching 2 billion people and you need to believe that through that you will make a big impact on the world. Because honestly, I don't know how many companies can touch 2 billion people every day in their basic needs - we’re talking about food, drinks, personal care - our basics needs.
If you are convinced that you can make a big change, then you need to help these companies to make good through the application of technology. You need to be very passionate about that. It's not the easiest position in a CPG company - many times when things are not going well the fingers will be pointing to you but if you love what you are doing, everything will work out in a good way. You need to have persistence and resilience of course but what is unique within CPG is the fact that you are able to influence billions of people because they are using your products every day.
I am impressed with Aforza. In a very short period of time, I’ve seen them create a solution that works. They have a great technical team, they know how to develop in the Salesforce ecosystem. They absolutely understands the ecosystem and created a very flexible architecture. I am also impressed with the energy and persistence they have and, finally, their vision and passion.
Aforza can become a key player in solutions for sales in CPG, mainly by developing simple and valuable solutions very fast. Even when using agile development, I think the traditional players take too much time for every release. Aforza can break that if they are able to implement the speed and quality that can follow the dynamics of the market.