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CIO Profile: Growing a new business environment at Unilever

CIO Profile: Growing a new business environment at Unilever

An interview with Willem Eelman, CIO for consumer goods manufacturer Unilever is a discussion on a macro-economic scale.

Eelman confidently strides across the state of the economy to talk about how climate change is affecting Unilever, advertising, society and developing markets.

This is not to say he has no interest in technology, the opposite in fact, because it is Eelman's wide-ranging view of the world that feeds his enthusiasm for the important role which technology plays at Unilever and in the wider world.

Unilever is one of top 20 largest companies in the world and the third largest consumer goods manufacturer behind Procter & Gamble and Nestlé, but the largest global ice cream maker.

The Anglo-Dutch giant produces a massive range of goods you've probably got lodged in the Regulars section of your online shopping order, including Marmite, Dove soap, Lynx and Sure deodorants, Persil, Magnum and Ben & Jerry's ice cream, Cif, PG Tips, Bertolli olive oil products and Flora margarine.

Eelman became CIO of Unilever in April 2010 having moved over from the finance division.

His remit was to bring IT closer to the business, and the business closer to IT.

"I don't like to talk about the IT transformation, it's a Unilever transformation under CEO Paul Polman," he explains. Eelman, happy to be interviewed without PR handlers, is clear: business and technology transformation are the same thing.

"When we talk about transformation it is about being digital to win. Digitise the brands, the value chain, the routes to market and how we work as an organisation. So for me technology has to contribute to the value of the business.

"They asked me to take on this challenge to embed IT into the business. Unilever sees significant opportunity to drive competitive advantage through integrated business solutions in which technology is embedded.

"Technology is a cost in its own right, but it can help and underpin the business to make us better," he says. Unilever's values essentially involve making things, marketing and selling them and having a valued relationship with the customer.

"The brands are the lifeblood of Unilever and that is what drives the business value."

Unilever has publicly stated that it plans to disconnect the impact that producing their products has on the environment with the clear business aims of making a profit.

It says it will halve the environmental footprint of its products, help one billion people improve their health and source its raw materials sustainably.

Weathering the storm

These are praiseworthy aims and a lesson to corporations and governments alike, but in 2012 they are a real challenge.

Droughts in the US and Spain, and horrendously wet summers in the UK and across Europe have cut harvest yields and pushed up the price of raw materials such as wheat, barley and olives.

"The environmental footprint is a core component of our business values, but only 20 per cent of the footprint of our products takes place within our own company. A vast amount of it is with the supplier and the customer.

"Take water consumption: our products drive water consumption and we clearly see water scarcity as one of the future challenges. The impact on our business is if people have to make a choice between water to drink or water to wash their clothes with, it will limit our sales volumes."

Trying to make a difference, he says, to the environment is not merely marketing flannel, but real business sense.

"IT's role is to be more efficient in a direct way as IT is pivotal to understanding where our footprint is and be able to report on it."

Eelman says the environment has had an impact on Unilever this year, but that the scale of the company helps keep the commercial damage to a minimum.

"We procure globally and have put in a commodity value volatility framework so that we can hedge commodities to control the risk profile and reduce that risk. So when oil prices went very high this year we were able to be agile," Eelman explains.

Austerity measures

That agility isn't just about procurement. Unilever has also begun to monitor and react to customer behaviour as austerity measures impact on shopping patterns and therefore on Unilever itself.

"We know that in certain European countries consumers have ¬25 to ¬35 to spend in a weekly shop, so if a box of washing powder is ¬10 they will not buy it. It is very similar in developing markets where we sell by the sachet, so we are articulating what we have done in emerging markets to a much broader market. We are seeing some deceleration in the developing markets too.

"Technology's role is creating a more flexible supply chain so we can tailor products to demands. Despite all this, we are winning market share.

"Innovation like that gives you cost savings, so that some of the profit is invested in innovation. That is the business circle of growth and we in IT are all contributing to that."

Eelman explains how Unilever has studied the future and likely market trends as economic power heads east, and also examined how the digital revolution will impact on the company.

He identified six core digital trends:

- Smart environments

- Connected machines

- Digital retail

- Big data

- Collaboration

- Everywhere connected

"Digital retail is already 25 per cent of revenues for some major retailers, we are in the second year of a data and real-time decision-making strategy and working on the impact of social media on brands and connectivity," he says.

Internally Eelman's team have also already made significant strides improving productivity, he says. "Research and development historically was not a core IT user, it did a lot of wet science in the laboratory. But now our Chief R&D Officer would say they are moving from wet science to web science. As a result, technology is now seen as a core component in our R&D strategy.

"The contribution that R&D can now make is a higher speed to market at a lot lower cost as a result. They are now using IT to unlock science to speed up the innovation with better data consistency."

R&D and IT worked together to create scientific analysis suites on Amazon Web Services to analyse complex data, using tools including a three-dimensional DNA analysis.

"We are helping them automate where we can, using robots that can perform multitudes of experiments," he explains.

A global village

Outside of the laboratory, Eelman's team are working with the retail customers of Unilever to co-develop sales plans, promotions and the execution in their stores of digital marketing.

This is particularly important in developing markets such as India where there is still a culture of small local stores rather than supermarkets, so Unilever developed a mini-ERP that is provided by the suppliers to the local stores and which is providing village-by-village data that is matched to Indian census data to see which villages could be selling more Unilever products.

Eelman says Unilever has gone from supplying two million stores to four million.

Stories like this have more than a hint of the East India Company about them as this global giant straddles the planet matching population data to distribution data in order to sell more goods.

But then, if this same company is doing its best to prevent ecological damage, and if it is using a CIO and technology to grow sustainably, that is to be supported.

Unilever is developing an Enterprise Data Warehouse in a relationship with Capgemini to provide real-time global, customer and operational data.

"This programme is one of our top strategic initiatives, not just for IT but for the Unilever business worldwide. It will transform the way our businesses around the world access and use information, bringing enhanced insight and consistency," Eelman explains.

"We are putting significant investment into real time-information management with Teradata. The vision is to have one place for all internal and external data. I expect external data to outweigh internal. Internally we had a lot of silos, but with the new strategy we will see our information on a competitive basis. We will have a globally aligned master data showing vendors, markets and products.

"SAP PeopleSoft plays an important role in our system of record for the business and we are already seeing massive rewards from this investment. The next challenge is getting data exposed to the devices and then feeding back into SAP."

Eelman's team was busy working on data synchronisation to ensure Unilever has one set of master data.

"Any data error that triggers an incorrect business transaction to happen is a cost," he says.

Campaign control

Centralising the control of information to the benefit of Unilever is nothing new to this business. Unilever has rationalised its usage of advertising agencies, and taken control of its digital assets and a great deal of the customer interactions.

"In the past to communicate to our customers we'd shoot a film and splash it on TV, but we had no direct relationship with our customers, it was all a push model," Eelman admits.

"Digital opens up amazing opportunities to build an intimacy with our customers. A launch will have TV ads, but there will be versions on YouTube, Facebook and we use these to re-engage with our customers," he says of the control Unilever has taken back in-house with its own platform.

"Traditionally a marketing manager would go to an agency and they would talk about a campaign and the agency would create a silo around a campaign."

Now that another Amazon-hosted platform hosts all Unilever sites, agencies still have some involvement creating content, but the management of the platform and therefore the relationship with the customer belongs to Unilever.

Using Amazon means the company has the ability to scale up or down according to where in a cycle a campaign is.

A series of business benefits include closer analysis of the data around a campaign as Unilever has the real data itself rather than from a third party with a vested interest.

Consistent look and feel to all campaigns around the globe and significant cost savings.

"We know the cost to produce a campaign now, we have halved our spending and are able to do more marketing in volume," says Eelman.

This level of disruption is usually considered something that happens to CIOs, yet as we can see, CIOs can also be the disrupters to sectors that take a lot of cost out of your organisation.

But none of this change has happened without Unilever realising that it had to invest in its technology infrastructure.

"Every company has its baggage to clean up. Our desktop estate was under-invested. We will be completely on Windows 7 in Q1 or Q2 of next year and be one of the largest Microsoft Sharepoint installations around.

Eelman says these moves carried risks, but will deliver soon.

"Your reputation always lags by six months," he jokes.

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