Diageo taps IBM Consulting for global SAP transformation

15 June 2023 Consultancy.uk 4 min. read

IBM Consulting has been selected to deliver a major SAP transformation for one of the world’s largest alcoholic beverage conglomerates. The five-year project is Diageo’s most significant ever investment in technology and services, overhauling its IT infrastructure in every country it is present.

With annual revenues of €20 billion and 27,000 global employees, Diageo is one of the world’s largest drinks companies. The British multinational company is headquartered in London, but operates across 180 other countries around the world – distributing many famous spirits, including Johnnie Walker whiskey, Tanqueray gin, Smirnoff vodka, and Guinness stout.

Like any firm with massive global operations, Diageo has faced increasingly complex demands across its supply chain in recent years, making the streamlining of its operations – and particularly its IT environment – crucial, if it is to adapt to changes in the market effectively.

Diageo taps IBM Consulting for global SAP transformation

To that end, the firm has announced a new five-year programme, moving its enterprise resource planning (ERP) mechanisms to the cloud.

In a programme which will be delivered with the support of IBM Consulting, Diageo will move its IT environment to RISE with SAP S/4 HANA Cloud – a product which focuses on shifting customers into the SAP cloud product infrastructure, evaluating current processes to optimise them for updated cloud-based infrastructure.

Scott Russell, executive board member for customer success at SAP, commented, “In today's disruptive consumer goods industry, success lies in navigating unpredictable supply chains, managing ongoing macro-economic volatility and staying one step ahead of ever-shifting customer demands. Through our continued partnership with Diageo, we’re proud to support them in building a more resilient business that is enhancing the customer experience and can adapt to rapidly changing market pressures, realising its vision to revolutionise the consumer goods industry.”

The transformation programme aims to help Diageo ensure its IT infrastructure is simplified and supported in a unified way across all its international facets. This will enhance Diageo’s business resilience in a constantly evolving external landscape, improve its customer service offering and help the company adapt to a fast-changing consumer base.

Trusted partner

The initiative is Diageo’s most significant ever investment in technology and services ever – something which has proven a risky strategy for other global brands previously.

SAP transformations can incur huge financial losses when they go wrong. One example saw supermarket chain Lidl have to cancel its SAP introduction after sinking €500 million into it – while another saw a failed SAP roll-out cost rental car firm Leaseplan more than €100 million.

Turning to a trusted partner like IBM Consulting for an effective SAP transformation is especially important in this context.

Rahul Kalia, managing partner for IBM Consulting in the UK and Ireland, remarked, “The consumer goods industry is striving to address the challenges posed by inflationary pressures and supply chain disruptions, while staying focused on delivering exceptional products and services for its customers and consumers. IBM is proud to partner with Diageo and SAP to bring our global business and digital transformation experience on this exciting journey.”

In its role leading the project, IBM Consulting will draw on a long-standing reputation for supporting client transformations and migrations to the SAP S/4 HANA Cloud platform – having recently been cited as one of the strongest performing consulting firms in the space by Equiteq research. The firm will now work together with SAP and Diageo to apply the latest technology to help make Diageo’s business more efficient.

Lavanya Chandrashekar, Chief Financial Officer, Diageo, added, “This partnership with IBM and SAP demonstrates our continued investment in digital transformation. It will enable greater agility in how we respond to our global consumer and customer needs. It will provide us with world-class actionable insights and enhanced data capabilities to support growth whilst allowing us to be more efficient in our day-to-day operations.”