Henkel To Shift Entire Digital Infrastructure to the Cloud
Henkel has announced plans to migrate fully to the cloud over the upcoming months.
The Germany-based adhesives and sealants company has mapped out the mission with its existing partner, SAP, and the project will take the form of an interaction between its cloud-based ERP and its development platform – a symbiosis the company is calling the “Business Technology Cloud.”
Henkel and SAP have worked together for decades, running many of its processes and applications on its cloud-based software, including its global trade promotion application (SPARC) and digital business platform for marketing and e-commerce.
However, this new initiative will see the company replacing its existing ERP applications with a new S/4HANA software solution, as well as migrating all on-premise, in-memory data centers to the cloud. The company says it hopes the plans will enable faster, data-driven decisions, reduce friction, and help meet its ambitious sustainability goals.
Commenting on the news, Michael Nilles, chief digital and information officer of Henkel, said the company hoped the total cloud migration would simplify business processes and boost overall productivity. Nilles also said Henkel would focus on using the built-out tech stack to “[accelerate] our growth through driving our sustainability agenda, expanding our digital channels, innovating faster, shortening time to market, and building digital business models.”
The "Cloudification" of Consumer Goods
Henkel is one of a number of CG giants to recently stride towards becoming cloud-only. Earlier this month, Unilever completed plans to move its entire business operation to the cloud as part of the company’s planned new organizational structure. At the time, Unilever’s chief enterprise and technology officer, Steve McCrystal, shared with CGT that the company’s cloud initiative would “unlock new opportunities for digital deployment and innovation."
See Also: How Hammitt’s Early Cloud Bet Unleashed Luxury Growth
These announcements track more broadly with recent Gartner research which predicts that by 2026, 75% of organizations will adopt a digital transformation model predicated on cloud as the fundamental underlying platform.
As Gartner researchers point out, enterprises are rapidly adopting technologies such as digital twins, generative AI, and chatbots – all of which require a level of mass processing and storage power that can only be facilitated with a robust cloud-based infrastructure.
Henkel’s Long-term Infrastructure Overhaul
In early 2022, the company underwent a transformative CG merger, consolidating its businesses under one banner – Henkel Consumer Brands — to combine its laundry, home care, and beauty divisions. This immense undertaking kicked off the business’ recent spate of investment in tech innovation
Last year, Henkel laid out plans to overhaul and refurbish elements of its digital infrastructure, with IT systems a key part of this project. On a broader scale, this strategy aimed to construct a single multi-category platform combining Henkel’s consumer brands and businesses, including brands such as Persil and Schwarzkopf.
The company has also made significant, on-the-ground changes, funneling $70 million into expanding a leading-edge, tech-enabled logistics hub in Bowling Green, Kentucky. With this expansion, Henkel has been able to increase its capability to store pallets from 88,000 to 200,000 pallets and increase trucks’ throughput from 200 to 1,000.
