Inside the Kellogg’s Spin-Off: What the Historic Split Meant for Tech Teams
There’s no way around it: A company that operates for over a century is going to accumulate a lot of technical debt.
While tech debt is a perpetual challenge for IT teams, there are times when it becomes even more complicated. For the Kellogg Company, that moment arose when the decision was made to split into independently operated companies: Kellanova and WK Kellogg.
At AWS’s Re:Invent event in Las Vegas last week, Ramesh Kollepara, global chief technology officer of Kellanova, and Bill Rex, CIO of WK Kellogg, shared what the historic split meant for the tech teams, as well as how they’re finding new synergies within their new organizations.
Pre-Spin and Kellanova
A complex business built through acquisitions and containing myriad routes to market and diverse product offerings, Kellogg began its cloud-first journey in 2017 — a time when just about everyone across the industry was thinking about cloud, said Kollepara.
They took a migrate-first, optimize later approach to drive cost and time efficiencies, and were completely on cloud by 2022. In addition to migrating 2,500-plus servers and over 1,000 applications, they also used it as an opportunity to ultimately reduce their application footprint down to about 600.
Not having any data centers is unique to CPG, stressed Kollepara, and they found success through prioritizing change management and leadership buy-in.
The Spin for IT
300+ different systems updated
4,300+ test scripts executed
1,600+ transports migrated
7,800+ user IDs created
1,700 desktops and laptops deployed
They also took steps to remove the single points of failure from both technical infrastructure and people/capability perspectives. This meant focusing on their SD-WAN, cyber, and other key enabling journeys, as well as standing up upskilling programs like Work Smart, Kurosity Klinics, and their AI Council.
What started by Kollepara and Rex as a 25-member team evolved into 500 people working across the globe over 15 months to officially spin off into separate companies on Oct. 2, 2023. More than 300 different systems were updated, all with zero business disruption, he said.
Post-Spin and WK Kellogg
WK Kellogg’s Rex shared insight into what it's been like for the cereal company to operate a smaller, leaner organization rather than trying to replicate the operations of the much larger Kellanova.
By moving into the cloud, they’ve been able to better prioritize their business needs and opportunities, and they’ve essentially created multiple data centers in AWS to run the $3 billion business, he said.
As part of the spin, their "Separate & Unplug” strategy includes seven transitional service agreement (TSA) workstreams. This involves their distribution network; order-to-delivery integration; real estate; SAP and integrated apps; non-SAP apps and foundations; marketing data and technology; and data, insights, and analytics.
Once separated, they then took a hard look at three pockets of work: foundations, applications, and data and analytics.
See also: WK Kellogg reports benefits from its new marketing model
Efforts in foundations centered upon such challenges as separating their own network, building their own collaboration and security platforms, and determining how to drive the separation of all plants’ applications.
Among the early impactful decisions included building their first HR system in their own environment, eliminating the need to depend on Kellanova to drive payroll or run employee records.
They also separated SAP, which enables them to operate in Kellanova's system but provides time to run their transitional service agreements until they can build and migrate them over during their next phase. This next phase, which Rex referred to as “Day Two,” will occur in February 2025.
WK Kellogg has also used the moment to look at the realities of data and reporting. While they were running thousands of reports, due diligence revealed they were only using about 150. Armed with this knowledge, they’ve begun discussing what a rationalization process can look like for the post-February Day Three.
Future Synergies
One meaningful win as a new company has included better unification of their trade promotion management and integrated business planning sides of the house. Even with this greater visibility into their TPM efforts, they’re still only scratching the surface of their new systems, according to Rex.
Looking ahead, they’ll focus on driving awareness back into their sales teams about trade efforts to better integrate the commercial and supply chain teams.
“We want to drive that commercial plan where if something's being promoted or innovated, we need to make sure that we're talking across the aisle with supply chain,” he said. “So we're going back and forth collectively, but also making sure that our retail team … has a seat at the table as well.”
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