Closing the cloud value gap for the consumer products industry

A closer look at cloud and tech trends

Cloud and digital technologies such as artificial intelligence (AI) and machine learning (ML), edge computing and Internet of Things (IoT), and automation are at the forefront of helping companies meet their challenges. Leading CP organizations are leveraging these technologies to address their customer, culture, and talent strategies to achieve profitable, sustained growth. They are:

• Transforming their organization with digital technology.
• Growing market share through identifying new products and markets.
• Making investments to meet changing customer demands and provide a more personalized experience.
• Improving supply chains to drive efficiency, resiliency, and transparency.
• Emphasizing sustainability.¹

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Closing the value gap – leveraging digital technologies and cloud to modernize

So what’s causing the value gap? For decades CP companies enjoyed a brand-centric world with global brands. Their strategy and talent were centered around a “mass” approach: mass marketing, mass production, and mass distribution to large brick-and-mortar stores. They were well served by large global enterprise resource planning (ERP) systems and a command-and-control structure that emphasized globalization, standardization, efficiency, and scale.

This approach fueled growth through acquisition, creating a complex operating environment. It also fueled a slew of acquisitions that left many large CP companies with significant IT complexity and a global ERP surrounded by disparate and aging manufacturing execution systems.

This mass strategy also made it difficult for many large successful CPs to pivot in a new era of frequent consumer and market shifts and increased consumer choice. In response, many leading CP companies are shifting to a “micro” strategy that enables them to pivot more quickly to better meet changes in customers and markets.

A micro strategy leverages cloud and other digital technologies, such as Generative AI, to help CP organizations modernize their processes to become more customer-centric. This modernization strategy focuses on understanding preferences and behavior, increasing personalization, and enabling more direct consumer interactions. The culture is agile and flexible; it’s data-driven; and production is based on regionalized, tailored demand. The talent focus is on recruiting and retaining digitally fluent talent.

Companies that leverage cloud and digital technologies to become more customer-centric and digital-first can align their business and IT strategies and understand and meet their customers’ expectations better. They can also innovate faster to deliver more business value, and they can reduce IT complexity and costs. All of these benefits can help them get more value from their cloud investments.

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