Inside Mondelēz International’s digital transformation strategy

Mondelēz International, the company behind popular brands like Oreo and Chips Ahoy!, is baking up something new…and we aren’t talking about cookies.

In 2024, Mondelēz’s board of directors greenlit a $1.2 billion multi-year project to revamp its global ERP and supply-chain systems. Mondelēz CTO Chris Hesse told IT Brew the project, which is expected to wrap by the end of 2028, is intended to unify the company’s fragmented systems across its global operations.

“We have different technical configurations per region. We have different operating systems, different databases, different data centers or clouds,” Hesse said. “There’s a lot of disparity.”

Preparing for takeoff. IT Brew caught up with Hesse to learn about Mondelēz’s ongoing digital transformation project. He said the past four years have been spent investing in cloud-related internal engineering capabilities, improving documentation within it, and embracing automation.

“We’ve been focused on eliminating our legacy data centers and really getting everything to the cloud,” Hesse said. He estimated the company has exited roughly half of its legacy data centers.

This “housekeeping” was crucial following a string of acquisitions that started in 2018, which left Mondelēz with the task of absorbing other companies’ legacy infrastructure. In addition, Mondelēz itself was spun out from Kraft Foods in 2012 and inherited ERP systems from several brands as part of that, including Kraft and Cadbury.

Not the only one. Mondelēz joins several consumer packaged goods (CPG) companies that have ramped up their digital transformation efforts. IT Brew spoke with the CISO of the Hershey Company last year about its multi-year modernization work, as well as the Marzetti Company about its recent master data project.

David Taylor, managing director at ERP and digital transformation consulting firm Ultra Consultants, told IT Brew that the CPG industry tends to be more “forward thinking” in its modernization efforts and spending compared to the overall manufacturing sector, adding that these companies often take inspiration from the automotive industry’s lean processes and efficient ways of work.

“We see a lot more investment in strategizing, whether it be because of food safety, because of globalization, whatever the reasons are, they’ll spend more than a lot of their manufacturing peers,” Taylor said.

He added that companies with large fragmented systems, as experienced by Mondelēz, may have trouble with systems not being flexible enough to evolve with business needs, causing employees to work around established practices: “It goes back to the data, putting controls in place, putting [in] discipline, which is, it’s just difficult.”

Now, on to the good stuff! After years of preparation, Hesse said it’s time for Mondelēz to actually migrate its three regional ecosystems (North and Latin America, Europe, and EMEA) to a shared operating model and tech stack.

“We’re upgrading our legacy [SAP ERP Central Component] environments to S/4 and then moving to SAP RISE at the same time,” Hesse said, adding that it has already transitioned its enterprise warehouse management system to RISE.

“It’s been good because it’s given us at least a flavor or a taste of what it’s like working in the RISE operating model, and what works well and what doesn’t,” he said.

Hesse said the company has been taking a “staggered approach” for the transition and that he expects the North and Latin America region to go live sometime in 2026.

“Part of the S/4 transformation is partly around making sure that we can make technology more an enabler and less of a source of complexity, and maybe coordination efforts,” Hesse added.

A glimpse into the future. While the snack company’s digital transformation is still a work in progress, Hesse said the company has and will continue to reap several benefits.

“We’re seeing better security posture, better agility, speed, compliance to our standards, and reduction in cost,” Hesse said, adding that observed cost savings come from the company’s ability to automate more and reduce its error rate.