Every digital transformation in FMCG is unique and requires an enormous amount of effort. Not only should business and IT work as one to find the right path, but also a number of technical, business, and related challenges arise along the way. If these issues are tackled separately, they can lead to fragmented solutions and inefficiencies. That’s why a solid digital strategy is key.
A well-thought-out digital transformation in FMCG helps set the right focus, use resources wisely, and reduce risks. It also positively affects change management, so the adoption rate of each technology implemented is high, and businesses see a boost in productivity. However, before diving into the approach itself, let’s review the big picture first.
Key Challenges of Digital Transformation in FMCG
The typical starting point is an organization having a variety of vendors delivering different solutions to address various challenges in different ways.
As a result, this fragmented IT infrastructure leads to significant challenges, including:
1. Data Silos and Integration
First of all, the main challenge is that disconnected vendor solutions don’t communicate, creating data silos, which means data gained in one solution exist in its own unique format, and without heavy lifting, it might be hard to feed this data to any other system within the organization.
Such inconsistencies in data formats and system structures lead to the inability to have a single source of truth, low user adoption rate, security bridges, increased costs, and overall complications of usage for different business processes.
In addition, data silos cause limitations for the future growth of the business, making it almost impossible to access certain advanced technologies. For example, businesses can’t adopt advanced Machine Learning (ML) if clear and structured data management is not in place.
2. High-Quality Data
These days, collecting data is just the beginning. Ensuring high-quality data is crucial for effective digital transformation. High-quality means that the data is structured, cleaned, and ready to be processed across the entire software ecosystem. However, it cannot be done if no single party is responsible for data management.
In a fragmented IT infrastructure, different teams work with the data, so mistakes and data loss become routine. Without a clear plan for standardizing and managing data, businesses struggle to make informed decisions.
3. Rising Development and Maintenance Costs
As digital ecosystems grow, businesses need more internal resources to manage operations, investments, and expenses. These rising costs can create inefficiencies and budget challenges, making digital transformation even more complex.
What’s often overlooked is that adding more solutions increases the Total Cost of Ownership (TCO). Over time, some digital technologies become outdated, further driving up costs to keep them running.
Check out our What is Route to Market in FMCG guide for practical strategies to improve user experience and technology adoption.
4. User Experience and Adoption
Employees are used to traditional processes and may not want to switch to digital. Once a digital toolset is introduced, another set of challenges appears. Now, a sales representative who is overwhelmed with tons of daily tasks needs to switch between 3 applications to perform a set of routine actions. Or even more, what if none of those solutions are designed to be simple and practical?
Instead of simplifying work, technology can become a burden, leading employees to avoid using it or find inefficient workarounds. In such cases, even training isn’t always enough. Without proper guidance, adoption rates will remain low.
5. ML/AI Readiness
Being ready for Artificial Intelligence (AI) always means a few things. On the foundation level, it all starts with data. Data has to have a proper quality level, meaning that it can be fed to algorithms to analyze hidden trends or suggest some actions.
Next comes a gap in skills and understanding; teams may not fully trust AI-driven insights or know how to use them in decision-making. On top of that, legacy systems and rigid processes often slow down adoption, making it difficult to move from small AI experiments to large-scale impact. Without a strong foundation in data and a culture that embraces AI, even the most advanced technology won’t bring meaningful change.
Our Digital Transformation Strategy (DTS)
As we defined above, digital transformation in the FMCG industry is not a one-size-fits-all process. Each company has a unique technological infrastructure, business models, and transformation priorities. While some focus on sales force automation and AI product recognition, others prioritize supply chain efficiency or trade promotion optimization.
A Single Vendor Ecosystem
To overcome the majority of Digital Transformation challenges, we believe that a single vendor approach is key. A single vendor doesn’t mean that the entire tech stack should come from one source; it means that there’s a single source of expertise for core business processes.
As a vendor, we aim to integrate our bespoke digital solutions, other modern off-the-shelf solutions and existing client software into one flawless business platform. This agility eliminates technical diversity and makes the IT infrastructure solid and well-thought-out.
For the business, a single vendor approach unlocks a variety of impactful benefits, such as real-time visibility, maximized sales and promo execution, enabling true dynamic ways of working, and advanced analytics. For an IT team, the list goes even further; having a fully integrated AI-Driven EcoSystem means establishing a high-quality, reliable data flow, lower TCO, less vendor management, and ML/AI readiness at some stage.
Anyway, having only a toolset is not enough. It’s much more important to apply them properly, and that’s where our unique Digital Transformation Strategy framework comes into play.
A Graduate Digital Transformation in FCMG
Since 2003, we have helped hundreds of companies navigate digital transformation. Through this experience, we’ve developed a customizable, step-by-step framework, the Digital Transformation Strategy, designed for a fast and efficient digitalization process. Tailored specifically for CPG and FMCG businesses, DTS focuses on supporting field teams, managers, and back-office operations.
Our approach enables us to address each challenge systematically, solving them one at a time while continuously analyzing performance and ensuring every technology delivers the highest possible ROI. As a result, the entire commercial business process achieves excellence from top-down planning and execution to analytics, forecasting, and beyond.
To illustrate how DTS can be applied in real-world business scenarios, it’s essential to first highlight a few key details:
- The Digital Transformation Strategy is a completely customizable framework that originates from the existing software ecosystem of the given Fast-moving consumer goods (FMCG) business. The number of steps and solutions involved could be completely different for your organization.
- It’s always up to a customer to decide how far their business is ready to go. Some organizations achieve their goals by reaching only the first stage, while others want to move further and further every year.
- To achieve fast results, we apply Agile SCRUM methodology, which means that each stage is delivered via a defined set of Sprints.
Without further ado, the Digital Transformation Strategy for a theoretical FMCG firm could look like this:
Phase 1: Base
Before attacking more advanced DT challenges, our goal is to set up the basics. This means infusing FMCG automation into the three most labor-intensive processes within commercial departments: filed sales, in-store data, and trade promotions management.
Whether we face some existing solution in place, or we’ll implement our own Sales Force Automation for FMCG, Image Recognition, and Trade Promotion Management, the goal is to make all of those communicate easily, making basic sales and promo flow reliable and manageable while avoiding data silos.
Read next: Computer Vision in FMCG Industry: What Goes Wrong Before It Goes Right
Moreover, this face is crucial setting up a reliable data flow. By allowing the team to collect high-quality structured in-store data early, we’ll be able to have advanced reporting next, which boosts the decision-making process by a mile.
Phase 2: Automation
Next, we work closely on overcoming data silos, integration and user adoption challenges. We enhance integration level by making the sales and promo processes even more seamless to achieve maximum execution. The exact set of tools or features will depend on the overall client’s needs and strategy, but usually, we aim to check the following boxes: enable pricing recognition, allow more in-depth promo optimization and trade spend control, and make basic recommendations across solutions.
At the same time, when it comes to user adoption, we work not only with internal users but also with external ones. For internal sales and promo teams, we continue to have regular training sessions, detailed documentation, and support. For customers (or external users), we aim not only to provide the best UX but also to help the business automate the entire route-to-market. The Automation phase is commonly when a B2B FMCG eCommerce platform is introduced, ensuring that every single customer is covered with the same level of care and motivation.
Phase 3: Data
The Data Phase is where a single vendor approach starts to benefit in terms of overall IT TCO. All the tools introduced before are evolving gradually; some are more in maintenance, leading to cost reductions.
On top of that, more advanced and custom technologies and approaches are starting to appear, First, we take all established data flows and build the Data Platform – a central data repository where all information from the existing ERP, internal, and external systems is collected.
The technology stack for this repository, whether based on AWS, Google, or Microsoft is unique and always defined by the company’s structure and requirements. The Data Platform completely resolves data inconsistencies and, most importantly, makes the firm ready for future ML/AI projects.
Read more: Case Study: How we Build a Data Platform for AB InBev
In addition, we’ll continue to grow the existing solutions stack based on further defined steps. These improvements could include: Augmented Reality FMCG Image Recognition solution, D2C application, B2B eCommerce platform enhancement, and other advanced features.
Phase 4: Full ML/AI
With a solid Data platform in place, the FMCG organization is fully ready for ML/AI excellence. We empower businesses with dynamic workflows, integrating smart recommendations and AI-based suggestions/predictions across all solutions. AI-powered recommendations and predictive analytics enhance operational workflows, automate complex decision-making, and help find hidden trends to ensure that every profitable opportunity is found.
On this level of cooperation, SSBS plays the role of a partner who enables AI and machine learning in FMCG opportunities, but how to utilize them and ensure their success is fully on the business.
When choosing a Digital Transformation partner, make sure that they are ready to support all of your future needs and requirements. This usually means having a partner who can present a long-term vision from day one, making your business secure in the future.
We’ve enabled the best-in-class Digital Transformation experience with our CPG software solutions for many clients across the globe, and we are ready to support your journey; just drop us a message.
