Why the business, not IT, must drive digital transformation
Our first Leading lights boardroom featured insight and guidance from Norbert Pinske, the driving force behind Nestlé’s digital transformation.
Our new international knowledge programme, Leading lights boardroom, brings together digital leaders and executives with digital responsibilities to share learning and exchange views.
In our first session, Norbert Pinske joined members to talk about how he successfully managed the digital transformation of multinational company, Nestlé, with a particular focus on the integration of IT and OT. Pinske led many IT renovation and innovation projects at Nestlé between 2010 and 2017, especially in ERP, hybrid cloud, and end-user computing. They nearly always concerned top-down initiatives, due to the corporation’s scale that includes more than 230,000 users, 3,000+ branches, 190,000 desktops and laptops, 130,000 mobile devices and eight datacentres.
There’s no one-size-fits-all for digital transformation
Our CTO, Colin Bannon, set the scene for the discussion about digital transformation by highlighting the two types of customers his teams support. The first set of customers are even busier than usual during the pandemic and don’t want any downtime. The other set have time to transform now, so they’re ready by the time the economy recovers.
Both types of customer face three key challenges. How do they get the underlying infrastructure in place when, conventionally, OT isn’t connected to anything? How do they deal with the cybersecurity risks caused by connecting OT and IT? And how do they collect data from the silos within OT and IT? It’s also important to recognise that a one size fits all approach won’t work because, within large corporations, production sites in various countries can widely vary in terms of digital maturity.
Anticipate change - or be overtaken
Pinske’s experience at Nestlé echoed that of many organisations today – a time of rapid change where new business, behavioural and model strategies emerged, with all new trends based on digital platforms. He made the point that to hold on to your competitive advantage in a market like this, you need to exchange a lot of data so it’s essential that your supply chain is connected. And he warned of the dangers of doing nothing: “If you don’t anticipate and accelerate the digital transformation, you will risk your competitive advantages in the marketplace”.
Pinske led a significant part of the digital transformation in Nestlé IT towards a more product-driven and agile organization. It was clear that Nestlé’s IT needed to start driving digital transformation in all business functions, worldwide. All this with new digital propositions to support speed, agility and modern operating and delivery models.
Nestlé began by working out the digital capabilities it needed across areas such as data, AI/analytics, business models, and solutions to support employee deployment. It prioritised integrating these capabilities and designed them in line with its business strategy and business models. Using a proof of delivery stage, it made sure the proposed digital capabilities would work, gained valuable experience and identified gaps to address.
Achieving transformation that wasn’t “IT for IT’s sake”
Pinske stressed how important it was that Nestlé’s digital transformation programme was driven by the needs of the customer and the business – and not by IT.
A prime example of transformation driven by operational needs not “IT for IT’s sake” was Nestlé’s approach to connectivity. Nestlé needed connectivity and sufficient bandwidth everywhere, particularly in its factories, to support safety, product quality, and employee health - and to prevent blackouts and cyber attacks.
He explained how essential the right governance balance was to achieving this: "Without sponsorship from the top, the change would, with the required merging of IT and OT, be difficult to realise… we needed to see IT and OT as enablers, and not as owners of the transformation. This is why we composed the programme leadership from business stakeholders from all walks of life. We assigned owners of the digital capabilities who had to gather expertise and determine how to achieve the desired goals. On the other hand, owners of the digital big bets (such as a connected supply chain and connected factories) came from the business, so the capabilities could be aligned with the business."
Digital transformation lessons from the frontline
Pinske again emphasises the need to stress the digital transformation is for the business, and not just an IT exercise: "It's important to avoid having the costs borne by IT, but the benefits reaped by the business. Don't think of IT as a cost centre. Conversely, the digital core is no longer owned by IT. Both IT and OT are enablers. It takes a lot of effort to get this realisation across; it certainly doesn't work with just one speech! Don't treat supply chain owners as 'recipients' of an IT strategy but enable them to score with the help of IT".
Norbert Pinske’s key lessons from his work at Nestlé:
- Avoid a multi-year rollout: plan aggressively.
- Defining personas helps to make innovations effective.
- Plan for preventing incidents and downtime.
- Involve local decisionmakers in your plans.
- Involve headquarters for the right governance.
- Sponsorship from the top can prevent internal competition and shadow IT.
- Education, training and communication are essential.
- Deal with legacy islands in a nuanced manner - they are sometimes irreplaceable.
- Go for Choose Your Own Device (from an employer-selected list) rather than Bring Your Own Device.
- Improve identity management and associated tools.
For help in achieving a digital transformation led by your organisation’s needs, please get in touch with your account manager.