Dive Brief:
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Every company is a technology company, even the cheese and ketchup makers. Kraft Heinz has focused technology spending on robotics and artificial intelligence, according to company CIO Francesco Tinto at the Gartner Symposium/ITxpo in Orlando and reported by the Wall Street Journal. The technologies have been key to implementing automation and reducing inefficiencies over the last two years.
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When Kraft Foods Group and the H.J. Heinz Company merged in 2015, both sides embraced modern tech to smooth the transition, leveraging Office 365 and the cloud for communication and collaboration, according to a Microsoft post.
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Kraft Heinz reported second-quarter revenue decrease, so the company is using technology to minimize costs and turn around profit. AI applications in sales, marketing, supply chain, manufacturing and performance analysis and robotics in the production pipeline have steadily replaced legacy systems, according to the Wall Street Journal.
Dive Insight:
The average CIO spends 18% of the company's budget on digitization, and this number is expected to rise 10% by 2018. Executives have to play a hard juggling act between immediate necessities and long-term benefits, and the move from legacy and status quo systems to digitizations and modern tech is no easy feat.
For non-tech companies, IT budgets are often not the first priority, and large investments in new technologies must often take a backseat to immediate operation and production costs. Even the airline industry has suffered from underinvestment in IT, but is slowly turning this around with investments in blockchain, machine learning and advanced cybersecurity tools.
Kraft Heinz offers an important case study on why IT and AI should be a priority for long term cost savings and streamlining of processes for all companies. AI can quickly evaluate a large variety of production and operation factors and pinpoint pipeline inefficiencies and problems, saving companies time and money.
The company's investment in automation — a process which instills fear and uncertainty into the hearts of many workers — is another important step in digitization which goes hand-in-hand with AI. Studies have repeatedly shown AI and robots create new jobs and take away fewer than most people believe, and companies can use the opportunity of new technology to retrain current employees and bring them into new roles.
