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CLIENT CASE STUDY


Mondelēz International: Delivering savings with zero-based budgeting

Accenture helps embed cost-consciousness at Mondelēz International, saving $1 billion over three years to reinvest in growth.

Overview

Accenture helped Mondelēz International establish an incremental zero-based budgeting system, new global operating model and supporting global business services. The improved visibility into spending, new budgeting processes, accountability for cost management and change management program helped Mondelēz International make rapid savings of $350 million in 2014, with $1 billion expected over three years. By embedding cost consciousness into its culture, Mondelēz International’s ongoing efficiency savings can be reinvested into growth initiatives.

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Client profile

Mondelēz International is a global snack food powerhouse with billion-dollar brands like OREO®, LU®, NABISCO®, CADBURY®, MILKA®, TRIDENT® and TANG®. It serves consumers in 165 countries and reported $34 billion in revenue in 2014.

Opportunity

Although Mondelēz International experienced high growth, it needed to improve operating margins, which were lower than its peers. Mondelēz International asked Accenture to establish a zero-based budgeting system that would help it compete more effectively in an increasingly challenging economic environment. Mondelēz International and Accenture collaborated to drive companywide cultural change that would help control indirect costs to improve margins and reinvest for growth.

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Solution

But delivering one-time savings wasn’t enough—Mondelēz International wanted those savings to be sustainable over time. Similarly, while Mondelēz International sought to streamline operations, it also wanted to preserve key ingredients that made it a successful company. Accenture and Mondelēz International’s leadership, therefore, took a measured approach to zero-based budgeting, reducing costs in all areas of the business. The team focused on taking cost out of low-value areas like travel and other overheads so Mondelēz International could reinvest the money in areas that create a competitive advantage, such as product development and marketing. Together, Accenture and Mondelēz International created new budgeting processes and embarked on a far-reaching change management program to establish accountability for cost management.

As part of the work, Accenture helped design a new global operating model and supporting global business services unit that delivers cost-effective and efficient finance, HR and procurement services. Accenture is also providing finance and accounting and order-to-cash BPO services.

“We needed to quickly become more agile and improve our profitability within our unique culture. The approach we took with Accenture delivered tailored tools that balance short- and long-term value, enabling us to turn cost management into a competitive advantage.”

BRIAN GLADDEN
Mondelēz International, EVP and CFO

Results

In only three months, Mondelēz International’s new operating model was up and running. In the first year, the company delivered savings of $350 million. Over three years, the company aims to save $1 billion. The savings have also helped increase operating margins. More importantly, the new budgeting processes and change management program have helped embed cost consciousness in the company’s day-to-day operations and culture. Mondelēz International employees are equipped with the processes and tracking tools to meet their budgetary targets. This cultural change is delivering ongoing efficiency savings that can be reinvested into growth initiatives.





MONDELĒZ INTERNATIONAL, OREO, the OREO Wafer Design, the OREO Milk Splash, LU, NABISCO, CADBURY, MILKA, TRIDENT and TANG are trademarks of Mondelēz International group, used with permission.