Nick Pike, VP UK & Ireland for Outsystems, explains why many FMCG businesses are slow to adopt digital transformation.
The fast-moving consumer goods (FMCG) market is highly competitive, with digital technologies reshaping consumer demand, changing how people shop, how they decide what to buy and how they even receive their goods and parcels. While businesses in this sector are often the early adopters of innovation as they need to stay ahead, remain competitive, and look to cut their bottom line, the industry still faces challenges with digital transformation.
In particular, FMCG businesses are daunted by lead times and delays, as well as the cost for IT and business departments (who are not always aligned) to deliver on their digital transformation strategies.
A 2017 survey undertaken by PwC, ‘CEO Viewpoint 2017: The Transformation of Retail’, found that while digital transformation is viewed by many FMCG companies as critical, their strategy, planning and implementation is much slower than desired. The survey found the three biggest barriers to digital transformation were the IT team’s ability to deliver on the strategy (69 per cent); a lack of leadership to define a digital transformation strategy (67 per cent); and a lack of the pre-requisite skills to execute on the strategy (64 per cent).
So how can FMCG companies overcome these barriers? There are three key parts of the process, outlined below.
As more and more organisations are looking to deliver their digital transformation initiatives, so they are also now utilising low code platforms in order to do this quickly and easily. Low code enables them to not only develop with speed but also to make changes just as quickly. This means that they can adopt an iterative approach to development, getting end-user feedback and then tweaking and changing the solution in line with that feedback.
At OutSystems, we have a strong history and enviable track record of working with FMCG businesses such as Safeway, Bacardi, and Jeronimo Martins to name but a few. One company in particular who successfully implemented a digital initiative last year was FTSE 250-listed Total Produce. Total Produce is the largest fruit and vegetable producer in Europe and the fourth largest worldwide. In 2016 it won a large UK government-funded contract, Fruit4Schools, to provide fruit to every child attending UK state primary schools. In order to do this efficiently, it needed an application that would capture an electronic signature of delivery. Total Produce partnered with OutSystems to implement this application.
Not only was the new app developed rapidly, but using OutSystems, Total Produce found that it didn’t need to hire any more developers to deliver the project. The solution has been rolled out across 25 drivers servicing the UK schools, and now, Total Produce is looking at further digital deployments across other parts of the business in the UK, Ireland and other locations.
The value in embracing digital technology for business transformation is clear. Successful transformation, however, is much harder to achieve, especially as demands constantly evolve. As organisations look to put digital at the heart of the business, this often also requires significant cultural change. This type of cultural and technological shift may seem a large undertaking for some traditional FMCG brands, but in today’s digital age, it is the difference between staying competitive in an ever-evolving landscape or the risk of disappearing all together.