What Heineken’s CIO is brewing for better connectivity
As
a
159-year-old
family
business,
Dutch
brewing
company
Heineken
owes
its
longevity
to
a
steady
stream
of
innovation.
As
a
159-year-old
family
business,
Dutch
brewing
company
Heineken
owes
its
longevity
to
a
steady
stream
of
innovation.
Founded
by
entrepreneur
Gerard
Adriaan
Heineken
in
1864,
who
sought
to
renovate
an
old
brewery
in
the
center
of
Amsterdam,
the
beer
company
that
would
later
bear
his
name
has
become
synonymous
with
Dutch
beer,
readily
recognizable
from
its
green
bottle
with
red
star
label.
Heineken
owns
its
piece
of
history,
too,
from
becoming
the
first
brewer
to
introduce
quality
control
laboratories
to
the
first
legally
sold
beer
in
the
US
after
prohibition
was
revoked
in
1933.
Today,
it
owns
over
300
brands,
and
is
sold
in
more
than
190
countries.
Yet
in
2023,
the
brewer
faces
new
constraints,
such
as
an
expected
recession,
rising
barley
and
energy
prices,
and
aluminum
supply
chain
shortages.
The
firm
must
also
attract
younger
customers
amid
growing
competition
from
microbreweries,
higher
market
prices
and
new
attitudes
to
alcohol
consumption.
For
Heineken’s
global
CIO
Ing
Yan
Ong,
the
journey
to
keep
a
historic
beer
brand
relevant
starts
with
simplifying
ERP,
adopting
agile
methodologies
and
rethinking
customer
and
supplier
relationships
in
an
age
of
digital
analytics
and
personalized
communications.
Heineken’s
ambition
to
become
best
in
class
with
connectivity
Heineken
has
historically
excelled
at
building
strong
connections
with
consumers,
customers,
suppliers
and
employees,
but
there’s
an
understanding
that
relationships
are
changing
where
physical
and
digital
experiences
intersect.
As
part
of
Heineken’s
2021
EverGreen
strategy
to
commit
to
future-proof
the
organization,
adapt
to
market
dynamics,
and
emerge
stronger
from
the
pandemic,
there’s
the
objective
to
digitally
transform
the
business
and
its
relations
with
stakeholders.
It’s
this
intention
to
become
the
“best-connected
brewer”
that’s
a
priority
in
Heineken’s
digital
and
technology
(D&T)
organization,
and
with
Ing
Yan.
“Becoming
the
best
connected
brewer
is
making
sure
we
strengthen
the
relationships
with
our
customers,
consumers,
suppliers
and
employees
in
a
context
that’s
fully
digital,”
he
says,
who
reports
into
the
CDO
and
was
previously
senior
director
for
global
information
services.
Historically,
the
firm’s
route
to
the
consumer
was
sales
representatives
going
from
bar
to
bar
selling
orders
through
paper-based
forms.
Digital
technologies
have
improved
this
process,
allowing
for
online
and
predictive
ordering,
which
would,
in
turn,
offer
bars
insights
and
recommendations
on
what
drinks
were
popular
with
customers
and
what
other
local
outlets
were
ordering.
Such
is
the
proliferation
of
digital
technologies
that
Heineken
sees
it
as
a
business
in
its
own
right,
and
is
targeting
at
least
€10
billion
(USD$10.7
billion)
of
business
through
digital
channels
over
the
next
three
years.
As
of
its
Q3
2022
trading
update,
the
company
achieved
€4.3
billion
in
digital
sales
value,
more
than
two-and-a-half
times
against
the
comparable
period
the
previous
year.
Ing
Yan
says
that
platforms
like
SAP,
Salesforce
and
Microsoft
are
powering
such
growth,
but
adds
that
Heineken
has
also
tapped
emerging
technologies
to
derive
better
insights.
The
firm’s
connected
brewery
IoT
platform,
for
instance,
is
being
used
for
data
ingestion
and
edge
computing
in
breweries,
enabling
local
teams
to
analyze,
adjust,
test
and
optimize
production
processes,
with
this
in-turn
allowing
operations
to
leverage
real-time
and
historical
data
to
support
the
workers
on
the
shop
floor.
Meanwhile,
the
new
AI
platform
AIDDA
(artificial
intelligence,
data
driven
advisor,
dynamic
advisor)
gives
sales
representatives
better
insight
on
pricing,
stock
and
promotions.
Ing
Yan
says
it’s
already
helped
detect
and
resolve
customer
churn,
and
improve
sustainability
by
reducing
sales
travel
by
30%
through
optimal
routing.
Separately,
it’s
been
reported
that
Heineken
has
also
used
AI
technologies
to
optimize
the
color
of
the
beer
to
Heineken
gold.
“It’s
really
shifting
from
a
more
traditional
way
of
doing
business
engaging,
to
making
sure
we’re
now
steering
the
conversation
[with
customers]
and
in
that
way,
actually
helping
the
outlets,”
says
Ing
Yan.
“Our
role
is
to
make
sure
the
outlets
are
successful,
and
that
works
back
to
our
success
as
well.”
Agility
in
a
federated
organization,
plus
ERP
modernisation
Heineken’s
size
presents
opportunity
and
challenge
in
equal
measure
for
a
digital
and
technology
function
tasked
with
everything
from
supporting
designing
new
smart
fridges,
to
workshopping
with
the
robotics
team
and
modernising
some
45
ERPs
and
3,500
applications
across
85
operating
companies.
Agility
has
become
critical,
top-down
and
bottom-up.
Strategically,
Ing
Yan
says
there’s
board
alignment
with
the
launch
of
a
new
digital
strategy,
and
close
collaboration
with
his
CDO,
who
sits
on
the
board.
There’s
also
a
growing
emphasis
on
improving
team
performance.
Heineken
has
embraced
flexible
working
in
teams,
adopting
agile
methodologies
and
introducing
two
products
teams
for
more
than
80
experimentations
where
people
can
learn
to
apply
scrum
and
agile
ways
of
working.
Now
proclaiming
to
be
an
agile
organization,
Heineken’s
next
endeavor
is
ERP
harmonisation,
which
represents
an
opportunity
to
bring
together
a
fragmented
IT
estate.
This
new
digital
backbone
consists
of
a
lean
SAP
S/4HANA
Core
with
a
set
of
cloud-based
business
platforms,
replacing
the
existing
wall-to-wall
ERPs
across
80
of
Heineken’s
operating
companies.
This
backbone,
says
Ing
Yan,
will
allow
the
operating
companies
to
provide
seamless
customer
experiences,
drive
efficient
end-to-end
processes,
and
ensure
scalability
across
markets.
“It
will
allow
us
to
deploy
new
capabilities
across
Heineken
at
speed
and
maximize
the
value
of
data
within
and
across
the
operating
companies,”
says
Ing
Yan.
“In
2022,
we
finished
the
design
and
build
phase
and
will
pilot
the
digital
backbone
in
selected
[operating
companies]
this
year,
and
we’ll
start
industrial
deployment
in
2024
with
the
intent
to
complete
the
roll-out
in
the
next
six
years.”
Upskilling
teams
and
balancing
the
future
Heineken’s
growth
does,
however,
require
new
skills
and
a
change
in
business
ethos.
Ing
Yan
talks
about
the
power
of
taking
people
on
a
journey,
and
making
sure
they’re
future-fit
for
the
digital
age.
The
Digifit
learning
platform,
available
to
D&T
teams
and
external
parties,
has
played
an
important
role
to
help
colleagues
understand
Heineken’s
new
direction.
Ing
Yan
says
28,000
training
modules
were
completed
in
2022,
varying
from
basic
principles
of
digital
to
more
complex
topics.
“Our
role
is
to
upskill
Heineken
on
what
digital
is
going
to
bring,”
says
Ing
Yan.
“Digifit
is
a
basic
understanding
of
what
digital
is,
some
of
the
terminology,
what
it’s
going
to
be
and
some
of
the
consequences.
We
also
do
multiple
sessions
with
the
upper
management
teams,
or
even
regional
management
teams,
to
take
them
on
board
about
how
the
world
is
going
to
be
different.
I
think
it
helps
get
the
support
[for
IT]
as
well.”
The
future,
he
adds,
is
about
balance.
On
the
one
hand,
Heineken
must
implement
the
digital
backbone,
and
navigate
the
considerable
integration
and
orchestration
work.
But
on
the
other,
it’s
approaching
a
complicated
talent
market.
“From
a
technology
point
of
view,
getting
[the
digital
backbone]
to
work
is
one
achievement,
but
then
implementing
it
in
our
operating
company,
changing
the
ways
of
working,
and
changing
the
task
and
roles
around
it
to
make
sure
it’s
fully
operated—that’s
huge,”
he
says.
“The
focus
for
me
over
the
next
12
months
is
to
make
sure
we
get
live
with
our
first
pilot
adopters
and
capture
learnings,
because
we’ll
scale
this
across
85
markets
in
the
next
six
years.”
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