Seizing Technology Opportunities: A Recipe for Food and Beverage IT
As the pace of technological change continues to rapidly accelerate, Chief Information Officers (CIOs) of food and beverage manufacturers and retailers are facing intense pressure to prepare their organizations to drive growth, mitigate risk and seize emerging opportunities. A new wave of technologies just over the horizon promises to forever alter buyer behavior, thereby either disrupting the traditional relationship between consumers and food and beverage companies or providing the opportunity to strengthen that relationship.
“Hiring data scientists who can provide insight to company business leaders will be a key point of differentiation in the food and drink industry”
Wearables, ingestibles, 3-D printing, connected devices, artificial intelligence, and other peripheral technology are all concepts that food and beverage companies must understand – and company leaders will look to CIOs to make sense of it all. Many of these technologies are really not that far off into the future. Some are in use today in pilot form. And they are all likely to have an impact on food and beverage companies.
Fortunately, food and beverage CIOs are already on the right track in directing IT activities today. With the buying power of millennials surpassing $1.3 trillion in 2015 and continuing to skyrocket, most CIOs will not be shocked by the revelation that 20th century consumption is changing forever, and that tomorrow’s marketplace will only be more consumer-driven. Seventy-seven percent of the respondents in our recent Food, Drink, and Consumer Goods Industry Outlook Survey said consumer empowerment is having a significant impact on their business–far more than any other technology trend.
We have seen food and beverage companies begin to benefit from today’s more digital, personal, convenient and collaborative model of consumption, oftentimes led by the CIO. By investing in mobile and social technologies, data and analytics, and supporting technologies, they are driving to advance technology systems, platforms and processes in order to leverage available data to deliver powerful consumer insights that can inform better decision-making and power stronger performance.
To seek competitive advantage from technology disruption, rather than be blindsided by it, food and beverage CIOs also need to look ahead of the current technology market to innovations that are just beginning to gain traction in the sector–innovations such as wearables or ingestibles. Adopting a future-focused mindset is only a first step. To achieve their objectives, they need to spur internal change to enable new strategies and new technologies to take hold.
Here are some steps that food and beverage CIOs can take to seize opportunities offered by rapidly advancing technology.
1. Create an innovation think tank: By studying emerging technologies, CIOs can effectively engage with colleagues from R&D, sales and marketing to not only strengthen innovation, but also investigate activity within the startup and venture capital community and the IPO market. By pinpointing possible disruptive innovations before they mature, organizations will be better prepared to strategically pivot their business and operating models to adapt to change. The most forward-thinking organizations could even take early advantage of the next big thing by entering into joint ventures with high-potential startups and VCs.
2. Enable ‘Big Data’: The coming wave of consumer technologies will offer significant opportunities for organizations to glean ever more targeted, real-time information about consumers and their consumption habits. Food and beverage companies will need to invest in the resources that can turn information into insights. Already, we see leading food and beverage companies hiring teams of data scientists to conduct constant, in-depth analysis on volumes upon volumes of data. Hiring data scientists who can provide insight to company business leaders will be a key point of differentiation in the food and drink industry.
3. Adopt a flexible operating model: As food and beverage companies strive for greater sophistication in data analytics, a more flexible, adaptable and connected IT organization will be crucial to success. Companies may never uncover the insights they need to help boost business performance with disconnected business units looking at disjointed data. Changing the way they approach data analytics may necessitate that organizations change the IT operating model. For example, they may need to alter the design and structure of IT group to facilitate the sharing of insights across the organization or evolve processes and infrastructure to support new service delivery capabilities. CIOs can manage change and promote transformation success through a systematic approach to organizational change management.
4. Shrink barriers to the business: Equally important is establishing communication processes to share analysis back with every part of the business that can benefit from it– and vice versa. Capitalizing on external technology changes that affect the food and beverage sector will require close collaboration across the organization, which means knocking down walls between IT and the business. IT should serve as a partner that listens closely to the data needs of the business and shares critical insights that enable the customer-facing organization to find niche areas of growth and strengthen the relationship with the consumer.
5. Become cloud capable: As technology innovations put more power into the hands of consumers and create new demands on the business, IT will need to react more quickly and nimbly than ever before. Cloud computing should be a powerful driver in this evolution, giving IT more speed, flexibility, agility and scale in delivering services across the business. Food and beverage IT organizations should either implement a cloud model internally, or closely manage networks of outside cloud service providers.
Ensuring the business leverages newly emerging technologies to its best advantage will require substantial effort and steadfast commitment on the part of food and beverage CIOs, and tackling uncharted territory is likely to come with a few surprises. But, when technological disruption transitions from challenge to opportunity, the payoff will be worth it– today and long into the future.