P&G plots digital drive

07 December 2010

CINCINNATI: Procter & Gamble, the FMCG giant, is adding digital elements to many more aspects of its operations, in a modernisation scheme covering everything from innovation to focus groups.

The company has identified 98 systems and procedures it hopes to change in this way, chief investment officer Filippo Passerini told Investment Week.

"We're probably 10% there," he revealed. "The risk when we talk about real time and digitisation is that it becomes a fluff thing."

In one example of implementing this programme, P&G's executive conference suite, the "Business Sphere", now houses huge screens providing continuous updates regarding its performance worldwide.

During the next two years, the manufacturer of Tide and Gillette wants to boost the amount of real-time information available seven times over, replacing statistics based on estimates with actual figures.

"We intentionally put the cart before the horse, because it is a way to force change," said Passerini. "[We] use it as a catalyst to drive the right data convergence."

"We believe technology will always be a commodity fundamentally, and information and decisions is what we stand for and what we need to drive."

In 2004, P&G embarked on a plan to create digital "cockpits" giving its knowledge workers all the essential data they required in a single location, but initial tests among 800 employees fell short of this goal.

"Six years ago, no one had a clue how we would achieve that," said Andrea Simone, chief enterprise architect on this project. "The promise was bigger than the actual delivery."

Having redefined this system over 18 months, the revised version is accessed by 38,000 staff, enabling them to target specific products or regions.

"Cockpits let us manage the business by exception," said Passerini.

Equally, in 2002, P&G began to use virtual representations of potential new offerings in focus groups, reducing lead times by gauging possible reactions more quickly than is achievable via physical prototypes.

"We take a lot of risk," said Passerini. "When there's a new idea, rather than talk about it philosophically, we do a pilot for free with one of the business operating units."

In reflecting on its experience, Bernard Eloy, P&G's GBS virtualisation manager, said arguments that this approach seemed "cartoonish" subsided once comparisons with real-life alternatives yielded analogous results.

"People said this saved their product launch," Eloy said, for example by demonstrating where designs fail to stand out against competing brands.

To boost this success still further, the Cincinnati-based firm is building software that can replicate the customers' shopping trip from entering stores to picking between rival products on the shelf.

It has also constructed facilities for eye-tracking research, to see how consumers view websites, product labels and other such material.

Since 2003, P&G has partnered with a number of firms - like HP and IBM - to handle certain core IT tasks, leaving its own staff more time for innovation rather than dealing with technical matters.

Elsewhere, the company changed the title of its IT department to "Information and Decision Solutions", and appoints "service managers" mirroring the attitudes of brand managers.

"It's very clear that within P&G being a brand manager is very cool," Passerini said. "We brought this mind-set to IT."

In encouraging greater use of the digital tools on offer - from videoconferencing to platforms assisting inter-departmental collaboration - P&G has leveraged further marketing ideas internally.

"We manage it like we would the launch of a new brand, a new product," Passerini concluded.

Data sourced from Information Week; additional content by Warc staff