Digital is no longer a fancy idea: it’s a ‘must-have’ for big companies in today’s day and age. But what can digital deliver and how can digital add value?
“The word digital is maybe the most used in the lexicon of business today, with so many different ways to interpret and describe it,” said John Murphy, president and CFO, The Coca-Cola Company, as he unpacked the company’s digital strategy during The Redburn CEO Conference last week.
“I think about digital in three ways. One as a capability; and number two, as a medium; and, then number three, as a disruptor.”
Digital as a capability
Digital is a must-have in this day and age, said Murphy. That means starting with a functional base – ensuring that the technical nitty-gritty is in place and delivering - before building on that base to explore the wider potential of digital.
“We're just in the final stages of a very, very large upgrade in our ERP [enterprise resource planning] system to SAP S/4HANA,” said Murphy, referring to the system which boasts built-in intelligent technologies including AI, machine learning and advanced analytics. “We have migrated our entire business to the cloud over the last three or four years. We have standardized our technology platforms.
“These are all, what I would call, foundational capabilities that are a must have. There's no alternative - to be effective in today's world - than to have those in place, integrated and wired in the right way.
“On top of that comes what I would call it, the next phase of more and more advanced set of capabilities that, in the area of marketing, for example, allows us to have the data sets, the tools in place in order to actually leverage the investments that we're making in the foundational level.
"There was a time when we thought that we could do software better than the software companies!"
"And I put the whole cyber capabilities into that next stack given the importance for companies like ours to be able to run a business inside a safe environment.”
Being top-of-class in digital also means drawing on top-of-class expertise.
“There was a time when we used to do our own software, and I think it's just crazy to think about a beverage company thinking that we could do a software better than the software companies!" said Murphy.
"But there was a point in time when that was the thinking.
“Today we have tremendous partnerships with some of the well-known players and that allows us to leverage what they're doing; and through the partnership model get access to level of capabilities, otherwise, we would not be able to.”
Next Gen AI
The fun part of digital is the opportunity to play with next-generation capabilities and push the digital boundaries.
Take, for example, Coca-Cola’s AI-powered holiday card generator, which has been launched for this year’s festive season.
Using the combined capabilities of GPT-4 and Dall-E 2, people can experiment with holiday-themed content: selecting images and personalising holiday greetings, before sharing the creation across social platforms and WhatsApp.
“It's a really nice example of what some of these new capabilities are allowing us to democratize, too, and build a different kind of engagement with people of all generations around the world,” said Murphy.
Digital has been forefront in marketing new ideas such as Coca-Cola Creations: Coca-Cola’s series of futuristic drinks designed to appeal to the next generation of consumers. The latest launch – Coca-Cola Y3000 (year 3000) – was designed with AI: and comes with a customized Y3000 AI lens allowing consumers to ‘see what a version of your future looks like’.
Digital as a medium
In fact, digital now makes up more than 60% of Coca-Cola's media spend. Compare that to 2019, when less than 30% was spent on digital.
Countries in Asia may have been quicker to catch on to the digital revolution than others - but now it's transforming marketing globally.
“The degree to which we can and should engage with our consumers, with our customers around the world through digital media is exponential today versus not that long ago,” said Murphy.
“So I think of it as a really important medium in which companies like ours have got to be right at the forefront of."
But this comes with a word of warning: "The next part of it then is to make sure that the shift is effective, there's no point in going from one bad medium to another and call it digital.”
Digital as a disruptor
Digital can (and should) completely revolutionize the way companies work.
It’s a particular advantage for large companies such as Coca-Cola, which face the challenge of communicating effectively across departments and divisions and markets.
“There's nothing, I think, more disruptive to the effect of running of an organization in today's world than the role that technology plays,” said Murphy.
That can help companies become faster, more efficient and better.
Look at it that way and 'disruption' is inevitable: either a company leverages the opportunities it provides - or is left behind.