Procter and Gamble Company with consumer goods

1.0 INTRODUCTION

The Procter & Gamble Company (P&G) is one of the top makers of consumer goods companies in the world. Among the famous billion dollars brands are Duracell, Oral-B, Gillette, Head & Shoulder, Olay, Pampers, Pantene, and Wella. P&G has three major categories of products, mainly beauty and grooming, health and well-being, and household care products. The organization’s corporate mission is to touch and improve lives of the world’s consumers, now and for generations to come by providing branded products and services of superior quality and value (Procter & Gamble 2011).

P&G has a unique corporate structure that is very different from major market leaders in the world. Its structure is one of the main pillars for its growing capability. P&G has combined both the global scale benefit organization with the local focus of each particular country where its products are sold (Procter & Gamble 2011).

The corporate structure of P&G consists of three major parts which are Global Business Units (GBUs), Market Development Organizations (MDOs), and Global Business Services (GBS). The GBUs focus mainly on branding, competitors and consumers. They are responsible for the shareholder returns and profitability of the company. MDOs are to know the consumers and retailers in the markets P&G is competing and combine new ideas from GBUs into business plans that work in each country. The GBS in another hand is one of the four major pillars of the organization to support 127000 employees and 300 brands sold. GBS provide over 170 employee and business services including IT, finance, facilities, purchasing and employee services as well as business building solutions (Procter & Gamble 2011).

P&G established five business strategies for its own (Procter & Gamble 2011). The first strategy is to develop sustainable innovative products which are environmental friendly. Second strategy is to improve P&G’s operation to be more environmental friendly. Third strategy is to improve children’s lives via the organization’s social responsibility programs. Fourth strategy is to engage and equip the employees of P&G to build sustainability thinking and practices into their everyday work. Fifth strategy is to work transparently with the stakeholders.

P&G major business processes focuses on consumer production innovation and brand management. In order to achieve both of these, P&G has its own intranet called Innovation Net (INET) to connect different departments ranging from R&D, Engineering, Purchasing, Consumer & Market knowledge, Patent/Legal and Business Information Systems. With the integration of AskMe Enterprise tools, P&G will be able to leverage the information from each department to better monetize it (Realcom 2009). Knowledge workers of P&G would be able to share their knowledge and collaborate to solve same problems encountered via INET.

P&G has strong relationship with Wal-Mart since 1980s because of the business process automation between the two and the collaboration carried out to work together better (Christopher Koch, 2002). P&G is establishing efficient relationship between the industry and academia with research universities (Nathan 2011).

2.0 INFORMATION TECHNOLOGY (IT) INFRASTRUCTURE

In year 2003, Procter and Gamble (P&G) has signed a 10 years contract, worth $3 billion with Hewlett-Packard (HP) to outsource her overall IT infrastructure. HP will run P&G’s data centers and information technology infrastructure, and also provide desktop and end-user support, and to oversee network management (Sandeep Junnarkar 2003).

2.1 Computer hardware platform

P&G has selected Hewlett-Packard (HP) as her IT infrastructure provider. Desktops and end-user support in P&G’s global operations over 180 countries are provided by HP.

HP was selected for its global IT expertise, services quality and cost, and collaborative approach, as most importantly shared a same vision and values with P&G, which P&G strongly believe this will be able to accelerate innovation in P&G (Palo Alto 2003).

2.2 Operating system.

P&G has started to get involved in high performance computing (HPC) to run simulations in research, design and testing before production since early of 1980s to increase productivity and reduce the production cost of company. However due to wide variety of products, and large number of researchers, product designer and test engineers in P&G, the IT organization needs a more user friendly computer cluster. P&G also faced difficulties in integrating software from different vendors as no any vendors can offer P&G all the software they need in traditional (Microsoft Corporation 2008).

In mid 2007, P&G replaces its UNIX operating system with Microsoft Windows Server 2003 Standard x64 Edition operating system. P&G employed Windows Compute Cluster Server 2003 to support its high performance technical and scientific applications with parallel processing to improve their performance. Windows Compute Cluster Server 2003 not only improved the use of HPC and productivity in P&G, but also improved cluster deployment and management by 20% (Microsoft Corporation 2008)

2.3 Enterprise software applications (SAP)

P&G runs its business using SAP® software (SAP AG 2009). The key challenge faced by P&G is, she has wide range of products and has a very complex sales order process. Emerging as a world’s premier consumer product company, P&G puts her customer as priority and would like to give satisfaction to her customers by on-time-delivery (OTD).

P&G uses community definition groups (CDGs) from the Enterprise Services Community (ES Community) program provided by SAP, which create the sales order cockpit – a single monitor that supports the everyday activities related to sales orders (SAP AG 2009). Through CDG and ES Community, productivity of P&G improved by integrating functionality that required many scattered transactions into a single cockpit.

2.4 Networking and telecommunications

The visionary stance of P&G on product innovation and development to be a company that collaborates-inside and out-better than any other company in the world (Cisco Systems, Inc. 2008). Videoconferencing rooms were used for P&G teams to collaborate internally and externally, but greater challenges are faced by P&G due to unreliable technology which cause poor video and audio quality, and thus prevented effective collaboration.

The problem is then solved when GBS work with CISCO to develop a video collaboration strategy based on the TelePresence solution. In mid of 2007, P&G has expanded to more 40 Cisco CTS3000 TelePresence studios, also known as Video Collaboration Studios which enable team members in P&G exchange idea and even have meetings in minutes (Cisco Systems, Inc. 2008). Through these, team members in P&G are able to collaborate innovatively and smarter without travelling anywhere, decisions making are also accelerated.

2.5 Consultants and system integrators

P&G commits herself to achieve the goals of making the company more efficient while running it cost effectively and to have breakthrough opportunities in innovation by moving toward a digitized and visualized environment. P&G’s GBS created a network of customized workspace portals (decision cockpits) which stored latest business intelligence which benefits thousands of her employees who can access information to make real-time business decisions. The number of portals grew to 160 over time and had different platforms, technologies which increased the difficulty to manage and costly to maintain. Different user interface of cockpits made it hard for other users when using other cockpits. There were too many legacy reports generated from all these cockpits which slowed down the process of accessing needed information for the executives’ level.

P&G needed a new cockpit platform to be standardized and streamlined, provide easy access to a single source of accurate, real-time business information, enhance user experience, reduce the cost and inefficiencies related with cockpit development and maintenance, improve data integrity and the delivery of reports, accommodate web 2.0 features. P&G turned to Accenture for help to develop and manage the new cockpit platform. Accenture together with P&G’s GBS redefined P&G’s Vision for enterprise information management, standardized and integrated systems for a simpler and faster organization. By this, the cockpits are delivered 5 times faster than before and 35 percent less development cost and 50 percent reusability (Accenture 2010).

2.6 Data management and storage

Procter and Gamble selects SAND/DNA for SAP NLS Pilot Project in March 2008. SAND Technology Inc. is an international provider of intelligent enterprise information software.

P&G emerged as one of the world biggest consumer’s products company, has wide range of products with approximately135, 000 people in more than 180 countries (Procter & Gamble 2011). Too many data to be stored and managed efficiently and cost effectively is the key challenge of P&G (SAND 2008).

SAND/DNA enables highly efficient data storage, with minimal administration requirement and integration with P&G Enterprise Software Applications, SAP. Data stored are easily accessed from SAP NetWeaver BI 7.0 (SAND 2008). SAND also provides lower cost data storage over a long term (Yazdi Bagli).

2.7 Internet platform

Key challenge in P&G in internet platform is reaching out to consumers through digital world. P&G sees digital world as an opportunity to reach out their brand to consumers, and build up connections with their consumers (Angelica Mari 2009)

Microsoft.NET has interactive features and like touch, gestures, rich UI, and location awareness, enable P&G to attract and connect with consumers. Besides being technically impressive, Microsoft.NET is cost effective and efficient development platform (Microsoft 2009).

3.0 CLOUD COMPUTING AND ITS BUSINESS BENEFITS AND COSTS

3.1 Cloud computing and its current trend

Cloud refers to the Internet. Cloud computing is a model of computing where firms and individuals obtain computing power and software applications over the Internet, rather than purchasing their own hardware and software. (Laudon, K.C. & Laudon, J.P.,2010). The hardware and software capabilities are provided as a service over the Internet by vendors such as salesforce.com. Through cloud computing, hardware and software are managed by vendors, including installations, configurations, testing, running, security, and updates (Salesforce.com 2011).

In traditional way, different types of right software are needed in each and every computer in company to make sure all the staffs are able to carry out their work. The operational cost will be very high due to buying new software and providing license for software. However, this problem can be solved using cloud computing. Users are just required to log in to one application, which allows users to log into a Web-based service which hosts all the programs the user would need for his or her job. This made scaling up and down of software easier. In this way, cloud computing allows a company to increase their capacity or add capabilities on computing without investing in new infrastructure, training new personnel, or licensing new software (Eric Knorr & Galen Gruman, n.d.).

Currently in cloud computing, users are able to access to the application as long as an electronic device (i.e. PCs, netbooks, Smartphones) has access to the web. Users are able to keep up their work everywhere and easily.

3.2 Cloud computing solutions

Salesforces.com Sales Cloud and Service Cloud are applicable to P&G sales team and customer support team. Sales Cloud Enterprise edition with $125 per user a month will be applicable to the entire organization with features such as storing customer contacts, tracking customer interactions, integrating with Google apps, reports and analytics, sales forecasting and many more features which will be benefiting the sales team(Salesforce.com 2011). The Service Cloud Enterprise edition with US$135 per user a month will be able to improve P&G customer support whether it is offline or online with web customization and integration. Web 2.0 integrations such as Twitter and Facebook will further enhance the productivity of P&G’s customer service by interacting with the customers in real time (Salesforce.com 2011).

3.3 B usiness benefits and cost of cloud computing

Many organizations have changed their IT infrastructure to cloud computing due to cost and time effective. In cloud computing infrastructure, no hardware or software need to be installed, but all the business activities, includes customer relationship management (CRM), HR, accounting are able to be carried out by opening a browser, log in, customize the app, and start using it (Salesforce.com 2011). Other than that, IT teams will not be wasting their time on installations, maintenances and upgrading their software because all the updates are performed by vendors.

Cloud computing enables a fast access to own data from different remote devices and able transfer and sharing file between users rapidly.All the changes made also will be synchronized in PCs and mobile devices (Rivka Tadjer 2010). Other than that, cloud computing allows easy and fast integration of applications, both traditional software and cloud computing infrastructure (Salesforce.com 2011). Thus, all co-workers are able to keep up their works easily. Business activities are not restricted in office workplace, but every worker can access and perform their work with any internet devices they have.

Other benefit of cloud computing is we do not face the risk of loss of data as all the data and files are stored in the cloud. Complete disaster recovery is available and data will not lost during upgrades. Customizations and integrations of all the works and data are automatically preserved during an upgrade (Salesforce.com, 2011).

By implementing cloud computing infrastructure, less man power needed to manage and update the hardware and software. This allows man power in IT department to focus on strategic activities with greater impact on the business.

4.0 RECOMMENDATION OF CLOUD COMPUTING ADOPTION

It is recommended that P&G to adopt the cloud computing for better business process and efficiency. Salesforces.com is recommended for P&G’s sales and customer service team for the sales order process while HP cloud solution is recommended for the company’s IT infrastructure. Below are the reasons of why such recommendations are made.

4.1 Customer and supplier services: integrating SAP into Salesforce.com

The sales order cockpit by SAP is important for P&G sales order process. The limitation of the current situation is that the sales team and customer service team has to be in office in order to access to the cockpit and the teams have to go back and forth for pulling information from different platforms. By integrating the sales order cockpit into Salesforce.com, P&G’s employees would be able to access to sales process by SAP, CRM and other sales tracking in one platform at anywhere, anytime as long as they have the internet access. Upon applying such integration, P&G will be able to save more on maintaining cost, integration cost, and time to have more productive sales process, better customer satisfaction as the employees are able to see the problems and solve them in the shortest time possible. The sales team is able to save more time in getting information and spending more time with the customers.

4.2 Achieving business strategy

One of the business strategy P&G has is to improve P&G’s operation to be more environmental friendly. Adopting cloud computing can help the company to achieve this strategy. It is said that many companies will move to cloud computing to consume 90% of the electricity from public utilizes instead of generating the same amount of their own electricity (Consero Insights 2010).

4.3 IT infrastructure and cost

P&G outsourced its IT Infrastructure to HP with $3billion over 10 years. HP will manage overall infrastructure in P&G from data centers, general network management to desktop and end-user supports.

In term of cost, cloud computing  can reduce the cost of IT hardware and services over the time as in cloud computing, payment are based on byte of usage (Cloud Computing IT 2010). Traditional IT Infrastructure is restricted to the limit of licensed user, which will cause inelasticity in scaling up the company (Zemanta 2009).

Key component in cloud computing – software as a service (SaaS) which enables company access on applications and large amount of computing power without purchasing it. SaaS can be operated by multiple computers at the same time yet no upgrades and contract renewal required ( Carey 2008)

4.4 Information Technology

P&G realize the importance of digital world, as a medium to touch the life of people. P&G also implementing “cultural revolution” to train and develop IT staff with the skills necessary to “blend” IT with P&G’s businesses and provide IT innovation. P&G’s IT organization play a vital role in shaping the company’s future and P&G uses IT technology to identify market trends, anticipate business needs and create programs globally (Thomas Hoffman 2006). Key feature in cloud computing which is accessibility, availability and scalability (Tony Chung 2008) enable P&G to obtain data to carry out market analysis conveniently. On the other hand, cloud computing is said to be limitless, flexible to scale up and down without affecting its performance and operational cost.

4.5 Competitor Firm’s IT Services

Unilever, one of the strong competitors of P&G boost their sales by focusing on the consumers rather than advertising and promotions (Russell Parsons, 2010). Unilever focus on one-to-one basis on respective group to ensure effective approach (Unilever 2011). Unilever partnership with BT to perform high quality and cost effective global network by delivering managed networks and communications solutions to customers around the world (Unilever 2002).

4.6 Competitor Firm: Unilever IT investment

Unilever has an annual IT budget at about USD1128 million (Natasha 2010). Unilever invested into its global network which provides advanced messaging and security services in 2002 (Unilever 2002). Unilever also employed Business Objects data integration products by SAP to quickly integrate its numerous data sources to continue its growth strategy to consolidate brands, simplify processes, streamline supply chains, and increase revenues (Business Objects 2008).

Compared to Unilever, investment of P&G in IT is much lower. However, one good thing in Unilever’s IT is Business object, which is able to load data, transform into useful data and load in data warehouse in short time where P&G can consider in IT infrastructure.

5.0 CONCLUSION

The findings in this report show that cloud computing is beneficial to P&G in terms of cost saving, productivity, and efficiency. Salesforce.com SaaS will better help the sales and customer relationship management in P&G through real time data anywhere as long as the employees have the internet connection. HP IaaS will be save more money in IT infrastructure as P&G only pay for what is being used and will be able to scale up or down according to the usage anytime in future. It is strongly recommended that P&G to adopt cloud computing solutions to help the company achieve better results.