Anglo-Dutch consumer goods giant Unilever had to issue a profits warning for the first time in its history back in September 2004, but global CIO Neil Cameron says that it made the company take a careful look at its strategy, regroup, and focus on growth again. “Having achieved that and consolidated the organisation, for 2006 the agenda is execution,” he says.
‘One Unilever’ was the company’s plan to cut €700 million from costs through streamlining and simplification by this year. For example, in Europe there used to be two systems for food and personal systems, but now the organisation operates as one, not as a series of federations, according to Cameron. IT is now closely aligned to the business both globally and regionally, and business processes and information have to run as a single entity, as part of One Unilever. “We have worked very hard over the last two years to get the basics right, and now they are we can look at execution and delivering benefits,” he says.
“The success of the systems convergence programme means we are now using the things we invested in, and have achieved ‘One Unilever’. This has meant company-wide changes, and the IT organisation has changed significantly too. We are now driving efficiencies and implementing programmes to unify the businesses geographically.”
Unilever produces 400 brands in 14 categories of food, home and personal care products. It operates in nearly 100 countries, has 365 manufacturing sites and employs around 223,000 people. So any efficiencies it can gain from its convergence programme will have significant benefits to the bottom line. Cameron says the company is looking at information and back to business programmes centred around its global customers, for example Wal-Mart, and also at improving customer centred systems at regional and local levels for customers like Sainsbury, which only have a local presence.
"“We have worked very hard over the last two years to get the basics right, and now they are we can look at execution and delivering benefits”"
Neil Cameron, CIO, Unilever
“Business and technology innovations which provide things like improvements in our supply chain, reductions in cost and speeding up customer response times are fundamentally changing our business,” says Cameron. “In the UK there have been a huge number of changes to systems, including manufacturing, basic HR and supporting accounts over the past year. This has brought lots of opportunities for Unilever UK. But we must make sure we support that.” But Cameron says there is still a lot of work to be done. For example Unilever is selling the majority of its European frozen food business, including its Bird’s Eye branded business. This could throw up complex requirements for IT, according to Cameron. “If it is a trade sale, then we just have to support the buyer until they are ready to move to their own systems. But if it is bought by a private equity business we have to provide the services for it, and work out charges as well as segregating it from the rest of the business.”
The sale is part of Unilever’s focus on growth, says Cameron. “We have to focus on the business and where the growth is going to come from. The sale will be better for the business in the long term.”
Cameron says IT is continuing to standardise and consolidate systems and suppliers, and will always look at the business case for its decisions. In the UK for example, desktop supply, implementation and support are part of a standardised global deal with Dell and its services partner, Unisys. “These are good people to work with. Unisys handles Dell’s services, and we will be transferring support to there. Global deals like this put us in great shape for execution, as well as improving efficiency and reducing costs,” he says. Another regional deal Unilever struck recently is for a seven-year contract with IBM to outsource financial transactional services. The contract covers more than 20 European countries and is part of the One Unilever streamlining programme. IBM will provide financial services including general accounting from its centres in Portugal, Poland and India.
On the other side of the business, IT continues to support Unilever’s scientific research and product innovation. “We are supporting product R&D from an IT perspective,” says Cameron. “It is very interesting and challenging working with the scientists, and trying to add something. The process goes the whole way from research and innovation concepts all the way through to product launch. Trying to get the balance right is important and the support comes from IT.”
He adds: “We are working very hard at innovation and science at the molecular level – for example V-shots have to taste of something – and there are huge scientific issues. We are doing some grid computing work on this, but frankly some of the scientists we have are much better at doing this than we are.”