Ing Yan Ong has been the CIO at Heineken for nine years, operating in 80 countries through operating companies that have always operated relatively autonomously. This changed a few years ago with a major movement toward standardization and harmonization, of which Ing Yan is one of the main initiators.
What is currently the biggest challenge facing your organization?
“Heineken has grown in 160 years because we have very good connections with our consumers, customers, suppliers, and employees. The biggest challenge we see, across the board, is that the nature of those connections is changing substantially because of “digital.” One example: for our consumers, we used to create big media campaigns, with big billboards and film-quality commercials. How we pitch our brands now is substantially different. Fewer people watch live TV and there are more opportunities to advertise.
Here’s another example. Our sales reps used to go to customers every day or every week. They knew the owners of bars and pubs personally. Based on those relationships, we did good business. But everything is becoming digital, so our challenge is how to stay relevant. Which involves building on past connections, and using data to serve our customers even better.
We have grown a lot over the last 20 years through many acquisitions, and are present in 80 countries with a full operating company (“OpCo”). However, we have not fully harmonized our processes, data, or technologies. Therefore, we have a high degree of fragmentation. We have allowed countries to remain autonomous as much as possible all along, to maintain a closeness to the market. However, we did bring in marketing knowledge, for example, or supply chain knowledge.
If we want speed for rolling out new solutions, access to data, and, very importantly, learning from each other, we need to speak the same language, have the same processes, and often even the same technology combined with access to data. What we build in analytics in Mexico could be relevant to Vietnam. But if you don’t have the same process on the data stack, it doesn’t scale.
Our sales reps used to go to customers every day or every week. They knew the owners of bars and pubs personally. Based on those relationships, we did good business.
Developments in marketing and sales are moving so fast today that we need to make fundamental changes right now. We need to ask ourselves: How do we build our brands? How do we execute digital marketing? How do we do sales? These activities need to take place much more online. However, we still operate within a relatively fragmented landscape, which slows us down.
Therefore, our ambition is to become the best-connected brewer, in which we simultaneously accelerate on the commercial side and standardize our processes worldwide through the digital backbone.”
What role do IT, data, and digitization play in the organization, and what is your approach as a leader?
“We have built a digital backbone based on end-to-end processes, standard data definitions, and a modern technology architecture. We are rolling that out across eighty countries over the next few years.
We use the fit-to-standard philosophy and have standard end-to-end processes and data defined centrally, together with the Supply Chain, Commerce, Finance, and Procurement functions. This is the new standard that we go to the countries with, and then we discuss how they will align their processes with it.
I also fully have the functions at headquarters involved. Although I don’t define the complete end-to-end process, as the person responsible for the digital backbone, I ensure that functions such as Commerce and Supply Chain come together in a demand-to-warehouse process. My question then is: How are we going to define this process? The ultimate goal is to arrive at a global standard.
Two years ago, the question was, “Why do we need to change? We’re past that now. The question now is how best to prepare in the countries. And of course, Dolf van den Brink, our CEO, helps with that. He and the executive team are fully committed to this. Our Digital Backbone Steering Committee, which meets every six weeks, includes all the functional chiefs, such as for Supply Chain, Commerce, People and Finance. That gives it enough weight; this is not an IT project but a business transformation. It is identified as one of the company’s top priorities.
My role is first: to explain the need for change, but it has now landed, and second: to make sure we keep the functions together, also toward the countries. Making sure the changes are really embraced.”
What have you achieved so far, and what are you proud of?
“Four years ago, we made a few hundred million in online sales to hospitality companies worldwide. Now, it’s more than 11 billion. We’ve gotten customers to order through our websites. The shift we’ve made to online and the scalability of our solutions to handle that is huge.
We’re doing this in parallel to working on the digital backbone. That’s what I’m most proud of. Three months back, we went live for the first time, in Rwanda. We spent 2.5 years defining a lot of end-to-end processes and data and building tech. The tech consists of 35 solutions working together. That went super well in terms of going live, with the complexity we built. Having a record number in sales and production in the two months after.
I was in Rwanda recently. If you talk to the end users and ask them how the system is now, whether they actually experience the benefits, and what grade they would give it, almost all of them say somewhere between 7.5 and 9 on a 10-point scale. They no longer have to deal with all kinds of reconciliations. Data goes end-to-end in a flow. Each user uses only one or two systems, and they are very user-friendly.
In addition, we can demonstrate that we have built the digital backbone in a way that really works in a live situation. The users are positive and it generates business value. That is essential for the years to come when we roll this out further.”
What challenges do you still face as a leader and how will you try to solve them?
“How will we ensure that we are well equipped in the near future? In Analytics, we’ve gone from a handful of people to 150 employees. We are insourcing certain capabilities, we are building more and more in hubs that we have put in place to make sure that we have the right people, in the right region. So that we have scale, but also skills. That’s a big challenge in all the domains we’re in now.
“I find that in IT, we are generally quite inward-looking.”
We are now live with the digital backbone at one OpCo. That is still relatively simple. Two more OpCos should be live by the end of this year, and next year we’ll start with the next fourteen. How are we going to support the entire digital backbone? What that will look like organizationally and how we include people is one of the biggest challenges.
On top of that, of course, we still have the digital backbone program itself. How do we make sure it keeps the momentum? With programs that last five or six years, sometimes fatigue creeps in or there will be a realignment. We will have to keep investing in convincing, in telling why we are doing this so that we keep the support to keep it going in the years to come.”
What is your motto? Do you have any recommendations for your peers?
“There is no road to happiness, the road is happiness. I use that quite a lot, also among my team, because many people talk about the final destination. Even with the digital backbone we’re designing and building now … it’s really going to look different in three years. So stop believing the illusion that there is an endpoint definition. We will never be finished. But what’s most important is the path we take and the learnings. But also celebrate successes. And whatever doesn’t go well, take it to the next step.
I don’t know the context in which my peers perform their jobs. If you look at the changeability of digital and IT … I think one has to let go of the notion that one has a fixed goal. You must set milestones while ensuring you can move them along the way without losing sight of where you want to go.”
This year we celebrate 20 years of the CIO community. Looking back, what has been an inflection point for you?
“I find that in IT we are generally quite inward-looking. When I was in this role for a year, I went to Silicon Valley with my MT for inspiration. My inflection point was the realization that we needed to start working in a fundamentally different way. Our strategy and positioning as IT then changed substantially by starting to work agile, which did not exist within Heineken, and not very much in the Netherlands at that point. The waterfall method was the default. The second realization was that analytics has a lot of potential. We talk about tech, but actually, we need to talk much more about the value of data.”