Exploring Mondelēz International’s Digital Transformation Strategy

Mondelēz International’s Digital Transformation: A Cookie Camouflaged Strategy

Mondelēz International, known for its beloved snack brands like Oreo and Chips Ahoy!, is making headlines for an exciting initiative that goes well beyond cookies. In 2024, the company’s board of directors approved a monumental $1.2 billion project aimed at revamping its global Enterprise Resource Planning (ERP) and supply-chain systems. Christopher Hesse, the company’s Chief Technology Officer (CTO), recently discussed this transformative endeavor, which is set to roll out over several years and conclude by the end of 2028.

A Unified Vision

Hesse expressed the pressing need for Mondelēz to unify its fragmented systems, a challenge stemming from its complex global operations. “We have different technical configurations per region, with varying operating systems, databases, and data centers,” he explained, highlighting the disparities that currently exist within the company’s tech landscape.

Laying the Groundwork

The past four years have been critical in laying the groundwork for this ambitious project. Mondelēz has turned its focus to bolstering internal cloud-related capabilities, enhancing documentation, and integrating automation across its systems. "We’ve been working on eliminating our legacy data centers and getting most of our operations into the cloud," Hesse noted, revealing that the company has already exited about half of its older data centers.

This shift isn’t merely about modernization—it’s a necessary evolution following a series of acquisitions that began in 2018. Each acquisition brought unique legacy infrastructures that Mondelēz had to absorb. Additionally, the company came into existence in 2012 after spinning out from Kraft Foods, inheriting various ERP systems from legacy brands like Kraft and Cadbury.

Industry Trends

Mondelēz isn’t alone in this digital renaissance. Numerous consumer packaged goods (CPG) companies are stepping up their digital transformation efforts. For instance, IT Brew recently reported on the Hershey Company and Marzetti Company’s modernization initiatives. According to David Taylor, a managing director at the ERP consulting firm Ultra Consultants, the CPG sector is often more forward-thinking compared to the broader manufacturing industry.

“CPG companies are more willing to invest in strategizing due to factors like food safety and globalization, leading them to spend more than their manufacturing counterparts,” Taylor pointed out.

Confronting Challenges

Despite the advantages that come with a streamlined approach, companies like Mondelēz face challenges in overcoming fragmentation. Untangling disparate systems can be an arduous task. “It’s about putting data controls in place and establishing discipline, which is often a difficult process,” Taylor added, emphasizing the complexity associated with legacy infrastructures.

Bridging Ecosystems

Now that foundational preparations are in place, Hesse indicated it’s time for Mondelēz to migrate its three regional ecosystems—North and Latin America, Europe, and EMEA—into a cohesive operating model and tech stack.

Currently, the company is ramping up its legacy SAP ERP Central Component environments to S/4 while simultaneously moving to SAP RISE. Hesse stated, “Transitioning to RISE has offered us valuable insights into what it’s like to operate under this model.” With the goal of achieving this by 2026 for North and Latin America, Hesse’s team is applying a staggered approach to the transition.

Harnessing Technology

One of the key tenets of the S/4 transformation is to reposition technology as an enabler rather than a source of complexity. “We want to simplify coordination efforts and enhance operational efficiencies,” Hesse remarked.

Anticipating Benefits

Although the digital transformation is still evolving, Hesse indicated that Mondelēz is already witnessing a plethora of benefits. “We’re experiencing a better security posture, increased agility, faster compliance to our standards, and reduced overall costs,” he shared. The potential for cost savings significantly arises from increased automation and a lowered error rate.

As the snack giant continues to embark on this transformative journey, its focus on modernization, efficiency, and reliability might just yield a recipe for not only future-proofing its operations but also enhancing its market competitiveness in an ever-evolving landscape.