Mr. Vodotyka, you’ve been a driving force behind the digital transformation of Coca-Cola Hellenic’s procurement processes. How did this come about?

Our CPO and the leadership team, who brought me to the company, gave the go-ahead for restructuring procurement in 2015. Companywide, we’d set ourselves the goal of  optimizing the costs, working more closely with our stakeholders, and making our supply chain agile and secure. We wanted to establish consistent standards. It was clear to us  that we could only achieve these strategic ambitions in conjunction with optimized and digitalized procurement.

Your functional transformation has started as far back as six years ago; how far have you already come with the program?

Every transformation has a concrete starting point, but it never really ends. Our program had three phases. The first phase was all about achieving transparency for all our spend  areas. We also made the strategic decision that procurement would take responsibility for every Euro that leaves the company. Before that, traditionally, different  departments were responsible for negotiating and reviewing agreements with suppliers as part of their regular operations. It was also important to define the specific  requirements, to find new ways of working together, and to use them to achieve a new service level within the organization.

What did the second and third phases focus on?

The second phase was probably the most challenging one. We had to completely redefine our operating model in procurement; it was all about more streamlined processes, a  customized organizational structure and, of course, implementing new technologies. In some cases, we first had to utilize better those procurement tools, which were already in place but were not used to the full potential for our transformation (like e-sourcing and e-auction portal). In the third phase, that’s where we’re now, our focus is on accelerating the function for the business even further. We want to continue to automate our processes end-to-end. An important milestone of this ambition is our decision to roll out the corporate source-to-pay integrated suit for upstream and downstream procurement across all countries during the upcoming years. We also redefine the ways how we approach  and automate the tale spend at the company, where we provide integrated solutions to our internal customers for easier order management through internal and external  catalogs and marketplaces. This leads to new and exciting experiences for internal customers and provide procurement with more space for strategic initiatives and continuous  improvements with our suppliers.

The coronavirus crisis has put many companies to the test. How robust has Coca-Cola Hellenic’s procurement proved to be, in the midst of its transformation?

The pandemic appeared to be a crash test for our improvement journey. In many areas, we could see that we were already in good shape, but in some, there was room for  improvement. We were able to maintain production in Austria throughout the entire crisis, for example, thanks to our earlier implemented contingency and business continuity  measures together with the functional partners. The COVID-19 situation also suggested that in some areas we had to make decisions faster. For example, the lockdown back in  April last year helped us move to e-signature internally and with external partners as one of the critical means to continue our operations.

What’s been the biggest challenge so far in the transformation?

I’ve learned that you can’t just shut yourself away in your ivory tower to draw up a plan on your own. You might have developed the best strategy and have good analysis at hand,  but if you don’t coordinate with other departments, you’ll never achieve the desired excellence.
From the start, we had to convince all our stakeholders that we needed to change our ways of working and that a professionally organized procurement function could become a  source of greater longer-term value. We were organizing multiple cross-disciplinary workshops together for all areas of the company spend (both direct and indirect spend). We  wanted to bring together all our talents to look for the best common solutions around costs, services, and the speed of execution. It was crucial to support our departments’ functional expertise with the structured data analysis and modelling to help us discuss and agree on business cases for the benefiting departments. We followed a detailed  project plan, with shared responsibilities and defined timelines. For more complex initiatives, we also allowed us to pilot them on a smaller scale before expanding to full functionality and scope.

What role did your procurement team have?

Our procurement team probably played one of the most crucial roles. Especially at the beginning, we positioned ourselves as a piloting laboratory, where we tried new  approaches, best practices, methods, and tools. That was made possible by the large number of committed and enthusiastic colleagues we had who wanted to join and drive the  pilot projects. It was also important to work closely with everyone during implementation and to build on their skills and awareness. They’re now even prouder that  procurement is completely tailored to our company’s needs. They now feel they’re really driving value creation and are tracking it through the available tools, and they’ve also  contributed to building new organizational capabilities and improving our engagement with internal customers.

You have invested a lot of energy in the transformation over the last few years. Was it worth it?

Yes, without a doubt. We are now completely clear about the strategic, tactical, and operational roles that procurement plays for the company. We’ve managed to standardize  our processes across departments, and now, for example, in every business unit, we use the same procedure to place and manage orders. New ways of working and source-to- pay processes supported by modern technologies provide greater opportunities for our international talent development across multiple locations. For example, our new  procurement support lead in Austria, who’s responsible for the effective system processes, compliance, and analytics, has started her career at our procurement service center in  Bulgaria. I am hopeful we will witness even more examples like this in the future as a part of our functional excellence journey!

Mr. Jeitschko, big data has been a trend for years. Is it now more than just a buzzword?

It is certainly more than just a buzzword. However, “big” implies that we are talking about large volumes of data. But most companies don’t have a volume problem, they have a  data complexity problem. For this reason, the term “Big Data” is misleading in the vast majority of cases.

What does it mean in concrete terms?

Companies usually do not have a central data repository, but instead many different data sources in various formats, from which it is necessary to generate added value for  organizations. We are not necessarily talking about huge amounts of data. Data quality, scalable data platforms, and user-friendly analysis tools are essential to tap into this treasure trove of data.

Is that unlikely to change in the future?

That’s right. For one thing, new data formats are being added all the time. In many cases, it’s audio or video files that need to be combined with structured information from  databases. Cloud applications are then added to the in-house on-premise databases. This, in turn, increases the complexity of data integration and data analysis.

Could new technologies, like machine learning and artificial intelligence, help?

We clearly see that the trend is moving in this direction. After all, the concepts behind machine learning and AI are not new but are based on thinking that dates back, in part, to  the 1970s and 1980s. What has changed is the computing power and the price of processing data. Today, this enables new opportunities: for example, AI and the right analytical  tools can be used to analyze machine noise and detect early on when a machine is about to fail. These use cases fall into the category of “predictive maintenance”. Other use  cases in image and video recognition go in the direction of security. For example, AI can be used to automatically detect whether someone is smoking at a petrol station, or  whether someone is wearing appropriate safety clothing at a construction site to trigger an alarm if necessary. In the future, we will see more and more use cases like this.

Which organisations find it particularly difficult to deal with complex data?

I’ve had the privilege of working on projects at listed corporations, as well as smaller mid-sized companies and start-ups. In data projects, the size of an organization plays a  subordinate role in dealing with data complexity. However, there are cultural differences when dealing with data. In Anglo-American areas, data is handled differently than in  Austria, Germany or Switzerland, for example.
The justified desire for data protection is often used as an excuse for not tackling data projects in the first place. Particularly those organizations that in some cases have invested  decades in building up their IT infrastructure and are now suffering from “digital legacy”. In the banking and insurance sector, for example, it is not uncommon to find  systems that were introduced 40 years ago. However, it must be clear: The problems of 2021 cannot be solved with the methods and infrastructures of 1970. Other industries  such as retail, telecoms and logistics have already recognized this and are leading the way.

How can problems with such legacy issues be solved?

It is important that organizations have a digitalization strategy and, derived from this, also a data strategy. This strategy must be supported and driven by top management and  consistently implemented by a “Centre of Excellence,” or similar. This also means that you have to throw the traditional frameworks overboard and possibly set up completely  new IT structures. From a risk perspective, however, this is not possible in every case, so it is important that new technologies in the cloud area integrate as well as possible with  the existing IT infrastructure – complementing each other. These hybrid cloud application scenarios will be with us for a long time to come.

What is your advice to organisations when tackling data projects?

It’s no use building a costly data infrastructure if it doesn’t ultimately solve the problem in question. So first you need a concretely defined problem or question, then a solution idea, and only then the individual technical components to be able to solve the respective use case in a meaningful way.

Why do most data projects fail today?

Data projects fail for two main reasons: The first is the appropriate skill set of the company’s own employees. Management must understand the opportunities offered by digital  business models and provide employees with the opportunity for targeted training. Microsoft supports organizations in this area, for example, with the “Enterprise Skills  Initiative” – an education and training program tailored to the organization’s individual needs.

And the second reason?

The second reason is a lack of a digitalization strategy or one that exists only on paper and is not lived out in the company. It is essential that the employees are closely involved  in the implementation of the strategy. It is important to remember that digitalization and data projects are not purely IT projects. The respective experts from the business  departments must work closely with their IT colleagues and specialists, such as data scientists. Otherwise, experience shows that data projects are doomed to failure.