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January 13, 2018
When it comes to cloud, who’s got the goods?

Consumer goods and services companies are moving to the cloud. In this part of our blog on the Consumer Goods and Services industry and cloud, we’ll answer the question, “Why cloud?” In part 2, we’ll examine the overall cloud journey and how to create a roadmap for change.

Part 1 of 2: Four cloud-based disruptions

Consumers aren’t buying the status quo.

If you’re an incumbent, you see smaller, nimbler consumer packaged goods players capturing consumers’ hearts and minds—reinvent­ing core experiences such as home dining, delivery, grocery shopping and health.

As CG&S companies from beverages to cosmetics redesign their business model, many are turning to cloud solu­tions as a way to deliver new capabilities at speed. Their CIOs see cloud as not only a way to reinvent and streamline massive IT estates but, more broadly, signifi­cantly improve overall business performance.

In an era where the options to expand prof­itability through cost control have mostly been exhausted, CG&S businesses are beginning to focus more urgently on growth and on taking advantage of digital technologies and a more consumer-cen­tric approach, powered by cloud.

Why cloud?

Early adopters in CG&S are becoming increasingly comfortable with the cloud. They are realizing the value cloud delivers in providing rapid access to new technologies to support direct-to-consumer business models, and to transform sales and marketing as well as a range of other business processes and functions—from HR and knowledge man­agement to the back office.

Among other benefits, cloud offers CG&S companies the means to:

  • Decrease existing ERP solutions to a compact core, while cloud solutions are exploited to manage growing market diversity and adapt to volatility.

  • Unify processes—either within a business unit or functional area or across the entire enterprise.

  • Improve procure-to-pay processes.

  • Improve knowledge management capabilities.

  • Streamline recruitment and HR processes to help attract and retain talent.

Beyond ERP CG&S com­panies have a great opportunity to embrace cloud as a wider business-enabling tool. Rather than simply managing business functions and processes, cloud can set the pathway to real growth.

Consider a leading French clothing company that quickly established a digital presence in China with a cloud-en­abled, multichannel e-commerce solution. Or a global manufacturer that migrated its inventory and warehouse processes to cloud, vastly improving data loading and execution performance.

Four disruptions

We see four areas in particular that have potential for positive disruption in the CG&S space—all facilitated by cloud.

1. Sales and marketing

  • Real-time, in-store responses from field sales reps

  • Cloud-enabled product placement and visibility through monitored promotional compliance

  • Data set comparisons

  • Geo-spatial recognition for offers

  • Many-to-many connectivity (omni-channel, seamless experiences)

  • Help to improve visibility into performance at store level

  • Brand asset management (digital decoupling)

  • Broadening of direct-to-consumer engagement through advanced software-as-a-service (SaaS) solutions

2. New product and process innovation

  • Cloud-based enterprise innovation management platforms to capture and connect employees and customers, and to glean consumer insights

  • Online platforms for crowdsourcing innovation and capturing feedback from consumers to inform future product design

  • Product testing and iterative experimentation

3. Forecasting and planning

  • Cloud-hosted store intelligence to help identify the need for product variants that match consumer preferences

  • Cloud-enabled platform for order automation

  • Cloud-based information management systems that help companies access consumer information across all touch points

4. Manufacturing and supply chain

  • Production, capacity and logistics management

  • Automated field-manufacturing processes

  • Post-merger manufacturing synergies

  • In-store intelligence to recognize gaps in supply chain and prompt action

  • Mobile solutions for distribution

  • Product lifecycle management solutions

Today we see CG&S companies largely adopting low-risk, as-a-service models in the form of SaaS, IaaS or PaaS or archiving data in public cloud—all used at the fringe. However, we’re also seeing market leaders trying to understand the business case for cloud (private vs. pub­lic, among other debates) and how cloud can generate value other than merely driving cost reduction.

In part 2 of this blog series, we’ll look at how to turn that business case into a concrete roadmap.


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