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Seizing Opportunities in Disruption to Drive Innovation

Mark Sunday and Jaime Montemayor

A Face-to-Face Discussion

Oracle CIO Mark Sunday spoke with Jaime Montemayor, CIO at Frito-Lay, about how IT drives innovation in a diverse, global organization. Frito-Lay North America is the division of PepsiCo that manufactures, markets, and sells corn chips, potato chips, and other snack foods.

Sunday: What's the strategic focus of your IT department as you move beyond ERP to other technology endeavors?

Montemayor: For the last 20 to 25 years, we've been focused on transaction systems and planning systems as we automate a complex supply chain. We are now fully integrated from "seed to shelf"-from growing seeds to manufacturing potato chips to stocking shelves in the stores. Over the last three to four years, we have broadened our perspective. We are now focused on digitizing the business. The ERP system remains the core foundation that we need to run the business and support the business. It handles the "make, move, sell" functions. With that as a foundation, we are also working on building out several other planks in our IT strategy.

Sunday: Tell us about some of these new endeavors.

Montemayor: PepsiCo decided to get serious about innovation and drive innovation through the creation of an innovation lab a few years ago. The innovation agenda included:

  • Data, with attention to big data and analytics
  • Mobility and the new opportunities that mobile computing presented to us
  • Social media, especially our role in making digital connections with customers
  • Collaboration within our organization

 For the last four years, we have been squarely focused on building out those key spaces.

Sunday: How did you organize your staff to take advantage of these opportunities?

Montemayor: PepsiCo has historically been a highly decentralized organization. We have multiple businesses that are quite independent. However, the IT organization is on a journey toward becoming a global organization. When we decided to build out the innovation center, we made senior leaders across the organization responsible for driving change. I was responsible for driving innovation in mobility. For the last several years, I have been focused on creating innovative mobile opportunities for our workforce. This has ranged from making simple operational changes to spearheading collaborative efforts as we leverage the strong matrix that exists within the organization.

Sunday: Give us an example of how social media is helping you interact with your customers.

Montemayor: We are using crowdsourcing to drive customer engagement through a couple of big campaigns. For example, we are repeating the "Crash the Super Bowl" campaign (now in its seventh season), whereby customers are asked to create their own Doritos commercials. Frito-Lay airs the best ones during the Super Bowl, offering participants the chance to win a cash prize for the top ad. It's a new way to interact with consumers, and it gives us the chance to capture the brand and mirror it back to the company. Some of the commercials really capture what the Doritos brand is all about.

Another project is the "Do Us A Flavor" campaign, in which we leverage Facebook to ask consumers to submit new flavors for Lay's potato chips. This is another great example of crowdsourcing, where you have millions of people collaborating. We initially expected to receive about 1 million submissions, but ended up with about close to 4 million. Now we have a big data problem: How do we process all of that information to mine the golden nuggets out of that crowdsourcing exercise?

Sunday: Tell us more about the other planks in your innovation strategy.

Montemayor: The first plank is real-time analytics, which is taking us beyond the traditional data warehouse as we embrace advanced analytics that not only help us internally, but also enable better collaboration with our customers.

The second plank is mobility, which is changing everything. Executives are having fantastic experiences as users of mobile technology. Meanwhile, end users are bringing their personal excitement and energy to our strategy. We are thinking out of the box as far as how we are leveraging mobility in the future.

The third plank is all about collaboration. We are facing challenges with a multigenerational user base. We also must acknowledge the "haves and have-nots" in terms of differing levels of engagement with technology. This is a critical distinction as we learn how to drive adoption and usage. It's a great opportunity for the future and we are putting a lot of energy into driving adoption of collaborative technologies.

The fourth plank concerns how to enhance productivity through automation. We are engaged in a multiyear program that is dramatically changing the shape of our supply chain. We are bringing in robots and automating complex tasks such as picking and packing orders in an effort to better serve customers. This type of automation is much different than what we did 20 years ago. We no longer just talk about ERP. We talk about digitizing the business in a much broader sense. Our executive team is much more engaged in the conversation than they ever were before.