Nestlé to Build 'Marketing of the Future' Operating Model
Nestlé has been on a multiyear journey of eliminating siloed systems to stand up a unified IT backbone enabled by an updated SAP S/4 HANA ERP core. As part of this, it is building a new operating model for its marketing function, calling it "marketing of the future."
The approach scales shared services, strengthens the company's content studio, and uses technology to improve marketing quality, ensure consistency and speed up efforts. This includes moving from more than 400 brands with media support in early 2024 to just 150 in 2026.
Additionally, it is supported by an enterprise-wide upskilling program enabled by advanced analytics.
"These changes will connect deeper consumer insights, innovation and marketing," Philipp Navratil, CEO, said during the recent earnings call. "It will also drive a clear financial impact, unlocking resources to be reinvested behind our growth platforms."
Also: Nestlé's business transformation to include digital investments
Navratil said that Nestlé's marketing capabilities have not been unified or driven as a global program. This has led to innovation fragmentation, such as with its U.S. brand Orgain.
"[It's] a power brand when it comes to nutrition, especially protein, but somehow we were not linked the right way, we were not collaborating the right way and we were unable to launch this brand beyond the U.S.," he said. "That is what the new structure will definitely be able to do in a much better way to take great ideas and great brands from one place and bring it to another."
The streamlined approach will allow Nestlé to tap into data that improves overall communication and turns insights into innovation using an R&D backbone supported by science and technology.
A Shift in Strategy
Anna Olive Manz, EVP and CFO, said the marketing initiative is part of an overall plan to "fundamentally change how work gets done across Nestlé."
"Our business runs on nine end-to-end processes, such as procure to pay (the process of procuring goods through to paying suppliers) and hire to retire (which is the process of managing employees through their life cycle with Nestlé)," said Manz. "Each process is made up of a number of activities, underpinned by a largely consistent IT infrastructure and data infrastructure. Today, we still operate many local versions of the same activities and shared services are used unevenly across geographies."
The company is standardizing and automating these processes once they are in a shared service environment, yielding results such as a 75% cost reduction and more than 70% increase in speed of delivery for marketing.
It also allows Nestlé to get better at resource allocation because increased visibility into enterprise data lets the company see where investments are working well and where the ROI just hasn't shown up.
"These levels of efficiency are not unusual and are the power of eliminating fragmentation and automating," Manz said. "With a largely standard group-wide IT backbone and data structure, we're well positioned to deliver a simpler, more agile, more productive operating model."
