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How Mondelēz laid the groundwork for a major digital overhaul

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Mondelēz International is rewriting its technology playbook by way of a $1.2 billion multiyear transformation that seeks to help the snack maker grow its market share and boost revenue.

Kostas Georgakopoulos, CTO and CISO at Mondelēz.

Kostas Georgakopoulos, CTO and CISO at Mondelēz.

Permission granted by Mondelēz

 

Getting partners, technology teams, the board of directors, regional CEOs, and members of the C-suite in alignment and ready to execute called for careful orchestration.

The snack maker spent 18 months gearing up for the sizable undertaking, which includes data center exits, workload migrations, generative AI exploration and an ERP upgrade. The preparation efforts resulted in vendor partnerships, shared timelines and strengthened governance, according to Kostas Georgakopoulos, CTO and CISO at Mondelēz

“The conversation around our strategy really centered around making sure that the investment … would bear fruit and have an ROI that we can concretely share with the business,” Georgakopoulos told CIO Dive. 

Mondelēz, maker of Oreo, Ritz, and Chips Ahoy, among other brands, operates an on-premise SAP ERP system nearing its end of life. Transitioning to a cloud-based ERP has its perks but upgrading can also prove to be a long, grueling process. 

SAP has added financial incentives and technical support services to encourage customer migrations off on-prem systems as support cliffs loom. More than half of SAP’s customers using on-prem solutions risk running out of maintenance support by its 2027 deadline, Basis Technologies CTO David Lees said last year.

Strategically, Mondelēz wanted to be closer to the start of the incoming wave of upgrades. 

“SAP has been pretty clear about their support model and the cost structure,” Georgakopoulos said. “We felt we needed to be on the front end of the opportunity because it affords us greater visibility with SAP and more resources available versus going at the latter part and competing with more organizations for scarce resources to transition.”

Georgakopoulos said the company has worked with SAP as a strategic partner, ensuring access to adequate staffing and a “significant” level of support. The company spent around $9 million on preliminary planning for the ERP implementation in the six months ending June 30, 2024. 

The snack maker also tapped AWS in December as its strategic cloud provider. 

“One of the key considerations for us was cost efficiency,” Georgakopoulos said. “The ability to transform our operations was another.”

Mondelēz took all three hyperscalers into consideration and spent countless hours poring over the details, comparing feature sets, levels of innovation and potential to co-innovate, Georgakopoulos said. 

The company has an internal engineering team made up of 35 workers. The chosen cloud provider needed to be able to maximize that team’s work and unlock efficiencies, such as through AI.  

“We calculated total cost of ownership had we stayed with one cloud or another, and we felt the better package presented was offered by AWS and it was material,” Georgakopoulos said. 

With AWS, Georgakopoulos said Mondelēz would be able to access capabilities on SAP S/4 at least a year earlier than they would if they had chosen to go with one of the other providers. 

“The team is empowered and enabled not only for the digital transformation with AWS, but we are re-platforming Google, we are exiting four data centers from DXC at the same time and migrating hundreds of workloads from Azure,” Georgakopoulos said. “We couldn’t do that if we didn’t have a highly experienced team of outstanding engineers.”

2025 priorities and beyond

As Mondelēz navigates its digital transformation, the food manufacturer is also facing micro and macroeconomic headwinds. 

Mondelēz executives estimated higher cocoa prices and inflation would lower its adjusted earnings per share this year by approximately 10% during its Q4 2024 earnings results Tuesday

“This is a very challenging year with the market and with cocoa pricing,” Georgakopoulos said. “The impact is substantial.”


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