By Alex Chan | July 2021
For a complex, global company like Kraft Heinz, taking bold approaches to solving problems is key to its success. Trying and testing new ideas—from a new flavor to a promotional idea to back-office applications—is central to its culture.
That bold culture runs through every department, including finance. In fact, one of the company’s goals is to be the best finance organization of any food and beverage company, as Kraft Heinz strives for efficiency in how it runs its business. One of the world’s largest food and beverage companies since the 2015 merger of the iconic Kraft and Heinz businesses, this $26 billion-a-year company includes beloved products such as Kraft Macaroni & Cheese, Heinz Tomato Ketchup, Oscar Mayer meats, Maxwell House coffee, and Grey Poupon mustard.
“I think we have some of the best products in the food and beverage industry,” says Eric Mendez, The Kraft Heinz Company’s director of IT finance. “There’s a lot of change at Kraft Heinz, and sometimes that’s hard to shepherd in, but it’s that culture that I think is what separates us.”
The company’s finance team needed better—and faster—insights and a greater understanding of business performance. Decentralization, to a certain extent, was one of the biggest challenges. Having deeper insights into the effectiveness of the company’s trade promotions or marketing spend, for example, provides visibility into what products they should be selling and which products customers are gravitating toward.
Kraft Heinz turned to Oracle Fusion Cloud EPM to quickly understand how their market was changing and reacting. With Oracle Cloud EPM in place, the finance team can provide faster and more granular insights on sales forecasts, actual results, and the costs of logistics and manufacturing, all of which paint a picture about product-level profitability and cost management that the company never had before.
“We now have visibility of our entire P&L down to the SKU level,” Mendez says. “We can allocate our costs globally down to the SKU level for the first time. That’s exciting.”
Standardizing processes with EPM
Kraft Heinz had already been using Oracle on-premises applications, including Hyperion, but as the business evolved, the team looked to cloud solutions. Kraft Heinz relied on its longtime support partner,
Kraft Heinz embraces a zero-based budgeting strategy, and the team chose that process as a first step in applying Oracle Cloud EPM capabilities, explains Frank Tagoe, the company’s senior manager of IT finance. “We started with Cloud EPM Planning in North America with zero-based budgeting and expanded the planning footprint to link our global operations,” he says. “We wanted to better incorporate financial reports and forecasts, do strategic planning, and implement proper processes.”
To get the level of insight they wanted, finance team members needed a single source of truth as well as standardized processes, rather than 10 different tools that did more or less the same thing. Moving to Oracle Cloud EPM helped accomplish that.
“It gave us a better vision as to how we can increase revenue, reduce costs within the plants, look more deeply into our industrial costs, and see where we could innovate,” Tagoe says. “We were just trying to keep up with the times to be more strategic in the future.”
Oracle’s integration with Kraft Heinz’s SAP ERP system was another critical factor in data harmonization, since there was no single source of truth without that data. Oracle Cloud EPM simplified that work. “We needed to make sure we could check the box on integrating with SAP, and that’s something that was seamless and that has been working tremendously well,” Mendez says.
Confidence in the face of change
Even with all these benefits in mind, the transition to cloud-based technologies brought forth some unknowns. “But as you get into it and you start getting comfortable with the tools, you get some sort of confidence within that,” Tagoe says. Oracle Advanced Customer Services’ designated support team was by their side throughout the process and has proven to be a crucial success factor.
Mendez says there’s still work to do to improve efficiency in finance operations, and to use the planning tools to draw out the most critical insights. But he knows the whole company, and partners like Oracle Advanced Customer Services, have the same goal, so the new direction they’re moving toward fills him with confidence. “The question is no longer ‘Should we?’” Mendez says. ”It’s ‘How can we do it most effectively?’ ”