Digital Strategy of Procter & Gamble: Becoming More Agile and Efficient

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"It is the ability to operate in real time, rather than analyzing what happened yesterday, last week, last month, last quarter - trying to see what is happening now as we speak, and the ability to intervene immediately if we need to make an adjustment. The ability to control, to track, to monitor what is happening in-store, whether displays [or] promotions in store, and the ability to then adjust on the fly. There's a real timeliness to what we do that is going to be incredibly transformational"

-Filippo Passerini, President, Global Business Services, and, CIO, Procter & Gamble, in April 2011.

"The future of the industry will go to the innovators - the brands and retailers that take onboard solutions that enable speed, flexibility and efficiency. P&G is clearly positioning itself to be at the forefront of those innovators"

-Mark Harrop, Founder and Managing Director, PDP Group¹, in October 2011.

The Procter & Gamble Company (P&G), the world's largest consumer packaged goods company, was regarded as a trailblazer in applying information technology (IT) extensively to run its operations. All its activities - internal communications, creation of molecules, consumer research, product development, production systems, supply chains, marketing and promotions, and customer relationship management - were on their way to being fully digitized. According to experts, this digitization drive had resulted in P&G becoming more nimble and efficient. The individuals mainly credited for this feat were the company’s Chairman and CEO, Bob McDonald (McDonald), and its Chief Information Officer, Filippo Passerini (Passerini2).

According to P&G's top management, IT had helped the company save billions of dollars over the years and was key to its quick launch of products. But some experts were skeptical about P&G's obsession with automating its activities, however well-intentioned it might be. They felt that the company might lose touch with its consumers, despite its use of digitization to track them.

As of October 2011, Passerini was proud that the digitization of operations and the resultant standardization had achieved total expense reduction of US$900 million since 2003. At the same time, he was concerned about the probable damage to the company's operations and its reputation in the event of its digital system crashing. The question to be asked was: Was P&G capable of striking a balance between being efficient and ensuring the security and reliability of its systems?

Background Note - Next Page>>

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1] PDP Group provides product lifecycle management (PLM) software and related consulting services to companies operating in the retail, footwear, and apparel industries. PLM relates to the process of handling product-connected design, manufacturing, and sustenance information.
2] Passerini was also the Group President of Global Business Services, one of P&G's divisions.

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