P&G seeks to revolutionise approach to innovation

07 September 2010

CINCINNATI: Procter & Gamble, the consumer goods giant, is revolutionising its approach to innovation by adopting new technologies that will cut lead times, contain costs and improve productivity.

The Cincinnati-based firm has outlined plans to leverage a variety of digital platforms, thereby generating efficiency savings while creating a competitive advantage throughout its internal operations.

"We don't just offer IT, but information that delivers useful systems for the entire company," said Filippo Passerini, P&G's chief information officer, told CIO Insight.

"We want to become change agents for Procter & Gamble and transform the way business is done."

Within this process, the owner of Tide, Gain, Charmin and Pampers is implementing a wide range of far-reaching initiatives, with a unifying dual agenda.

"What is important is to drive costs down and drive innovation," Passerini said.

Recent such programmes include a networked video service enabling the corporation's teams around the world work more effectively during across the NPD cycle.

Cloud computing, a system that makes resources easily accessible by storing them in a common location open to all appropriate staff, is another major area of emphasis.

Passerini argued this latter strategy allows senior executives to accurately assess P&G's performance in their weekly meetings, as they can "look at data in real time".

Procter has also trimmed the number of active decision-making "cockpits" from 100 to 30, and now utilises visual tools like colour coding as well as providing "alerts" when updates become available.

Currently, 16,000 employees are exploiting these properties in order to adapt established practices and enhance their output.

"This makes the business flow much more fluid, much more dynamic, much more in touch," said Passerini.

"Instead of reading what happened yesterday, last week, or a month ago, we are trying to anticipate what is coming, staying in control and staying relevant.

"That is really what excited me, new upstream technologies, which, blended with the business processes, can transform the way we operate."

Turning to marketing, Procter & Gamble has finalised a three-year deal resulting in Accenture, the consultancy, taking responsibility for launching and managing its digital campaigns around the world.

Although Accenture's staff are deployed in sites from Cincinnati and Warsaw to Mumbai, Shanghai and Buenos Aires, constructing formalised procedures and key performance indicators has yielded impressive returns.

Overall, Passerini reported that the broader digitisation push at P&G means it has saved "$800m in costs" thus far, all while "innovating three times as much".

"Our model works," he continued. "It's one of leadership, innovative progress, and business focus."

Looking ahead, Passerini suggested P&G is on the right path when it comes to balancing a reduction in expenses with adding value, both of which are a necessity given the challenging financial climate.

"The future is completely in our hands," he said. "If we become a commodity, we're about cost. If we drive distinct value, life will be very pleasant and interesting."

Despite the obvious obstacles facing the world's biggest advertiser in the US and Western Europe, Passerini stated he was cautiously optimistic regarding Procter & Gamble's outlook going forward.

"I always worry, [but the future] is very, very bright," he said.

Data sourced from CIO Insight; additional content by Warc staff