Managing Strategic use of IT at Nestle

Contents
Chapter 1.0: Managing Strategic Use of IT: Nestle....................................2
1.1 Introduction....................................................................................................... 2
1.2 Workforce Management.................................................................................... 2
1.2.1 Recruitment................................................................................................ 2
1.2.2 Collaboration............................................................................................... 3
1.2.3 Training and Development..........................................................................4
1.3 Product Development........................................................................................ 5
1.3.1 Research and Development........................................................................5
1.3.2 E-Supply Chain Management......................................................................5
1.4 Enterprise Resource Planning (ERP)..................................................................7
1.5 The Nestle Online Store..................................................................................... 7
1.6 Conclusion......................................................................................................... 8
References............................................................................................9

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Managing Strategic use of IT at Nestle

Chapter 1.0: Managing Strategic Use of IT: Nestle

1.1 Introduction
Strategic management; a terminology so ancient, it cuts across the business and military worlds.
Birnbaum (1984), Hoskin et al. (1997) and Fergerson (2012) explain that the word strategy roots
from the greek work Strategos, which refers to a general who leads an army. They furthermore
mention that stratego is planning the destruction of enemies via the effective use of resources.
The interesting aspect of information technology (IT) is that it is on its own a strategic
management tool which business leaders use to attain a competitive advantage. To attain the
yearned for competitive advantage, business leaders have to manage the use of IT strategically;
which means using it effectively, efficiently to discover what is advantageous and capitalize on
it. In this section of the document, researchers discuss how Nestle strategically manages the use
of Information Technology on different aspects of the Companys operation;

1.2 Workforce Management

Coffman (2000), Breitfelfer and Dowling (2008) as well as Duncan (2013) agree that people are
a Companys greatest asset. This of course is factual to some extent, however researchers of this
document agree with Drucker (2002) who states that people can be both a liability and an asset.
Meaning to say that skilled and committed employees are assets while poor performing
employees are definitely a liability; this explains the importance of Companies using farreaching approaches to attract, select, hire, manage and retain their best talent;
1.2.1 Recruitment
In order to attract best talent, like other macro Companies, Nestle uses their website to recruit.
Nestle uses their website http://www.nestle.com/jobs to reach out to graduates at entry level and
experienced professionals. The website consists of information pertaining to why work at Nestle,
opportunities for career growth and vacant positions. The website also provides Frequently
Asked Questions (FAQ) on how to apply and get a job at Nestle. The advantage of this is that
Nestle broadens the scope of applicants such that they are not limited to a particular geographic
location and as thus the Company receives a significant number of applications to select the best
talent from;

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Figure 1.0 shows the http://www.nestle.com/jobs website;

Figure 1.0; shows the http://www.nestle.com/jobs website; Source; Nestle (2013)

Plessis and Frederick (2012) states that; the era of electronic recruitment (e-recruitment) is upon
us.

Not only does this eliminate the issue of geographic limitations, it is time saving,

applications are accessible 24/7; it is cheaper and allows easy storage of applicants information.
1.2.2 Collaboration
Nestle (2006) states that people are the Companys greatest asset, it is mentioned that Nestle is a
human company which even though operates internationally remains close-knit. Having such a
united Company is attained via different methods, one which would be discussed later; Ecollaboration. E-collaboration connects Nestle with its stakeholders via the web and within this
application; Nestle has implemented MyCollaboration which allows employees to make EManaging Strategic Use of IT

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Collaboration even stronger. The point researchers are making is that Nestle uses Information
Systems to recruitment and also hear from their employees which is motivational to employees.
1.2.3 Training and Development
According to Nestle (2002), not only does the Company use information systems for recruitment,
Nestle also uses the company for training and development of their employees. It is stated that
using information technology, Nestle

appoints corporate training specialists in distance e-

learning, allowing staff to tailor their learning to their specific needs and time constraints.
Nestle uses WebAula, the largest e-learning systems provider in Brazil. As shown by Nestle
(2006), the Company integrates this system with its internal systems to provide training to its
staff members across the globe. This is a co-sourcing approach. Many companies today
outsource Information Systems; it is advantageous that Nestle co-sources some of its information
systems. As shown by Weald IT Professional Services (2011), Co-sourcing minimizes risks and
brings in transparency, clarity and better control over processes. It is important to understand that
Nestle is a food and Beverages Company, Co-sourcing e-learning allows for Nestle to specialize
on the food and beverages while controlling the training and development of their employees.
Derouin et al. (2011) argues that e-learning makes training programs accessible to macro
Organizations employees across the globe; this means that Nestle saves money as opposed to
transporting their employees or trainers. This also contributes to saving the environment via
reduced carbon-print. Schlichter (2013), states that one of the aspects of going green is travelling
when necessary as the carbon-dioxide from planes and cars contribute to global warming.
In a nutshell, Nestle uses information system to recruit, train and develop their employees. This
broadens horizons for attaining the best talent and developing the talent, furthermore Nestle uses
information system to hear from their employees which is quite motivational to the employees.

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1.3 Product Development

1.3.1 Research and Development
As a quality centric Company, Nestle focuses a lot on producing outstanding and healthy foods
and beverages. As shown at Nestle (2013), Quality assurance and product safety is one of
Nestls 10 Corporate Principles. In order to attain quality, Nestle invests quite a lot on Research
and Development. Nestle has opened a System Technology Center (STC) in Switzerland that
consolidates in one website the expertise used to combine products, capsules and machines such
as those used in its Nespresso and Nescaf Dolce Gusto beverage systems. This information
system serves as a guide to Nestle operations across the globe on manufacturing products; the
raw materials required making those products and the recipes.
Having this information system allows for standardized Nestle products across the globe. This of
course ensures quality and as thus attains new customers and keeps current customers loyal, this
generates more income and as thus increased profits.
In a nutshell, information systems aid Nestle from idea generation, to manufacturing as well as
distribution. Research attains Nestle a competitive advantage such that their products are
standardized and up to consumers standard. As shown at Nestle (2013), Nestl Product
Technology Centres (PTC) develop innovative technologies and manufacturing processes that
are the basis of new product development, and implement these technologies to the companys
operations. The website is somewhat an Expert Information System in the sense that Nestle
researchers formulates ways of manufacturing the product and share that with other departments
of the Company.
1.3.2 E-Supply Chain Management
According to Handfield (2011), supply chain management refers to the entire chain of activities
involved in delivering products to the final consumer. Organizations in a supply chain are linked
together via physical flows as well as communication flows. Electronic Supply Chain
Management (E-Supply chain management) is the involvement of information systems in the
supply chain. According to the Times (100), Nestle requires a first class supply chain
management, with high quality linkages from the suppliers to the consumers.

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According to Nestle (2013), the Companys supply chain management includes the following;

Procureme
nt

Logistics

Customer
Service

Figure 1.1; shows an abstract of Nestls supply chain management website; Source; Nestle
(2013)
Procurement includes the attainment of raw materials from suppliers; for example in making
Nescafe, coffee is procured from farmers via different media. After the delivery of the Nescafe
raw materials, they are delivered to plants where they are transformed to Nescafe following the
standards outlined on the System Technology Center (STC) web information system. After
Nescafe is manufactured, it is then transported to customers across the globe and then the
Company is liable to provide post sales customer service. At Nestle (2013), supply chain
management is explained as the heart of the Company, this shows how critical it is for all
stakeholders to actually be acquainted with the status quo pertaining to the product.
In order to achieve this, Nestle uses information systems such as the E-collaboration which
connects all stakeholders and gives employees the opportunity to point out improvement
suggestions.
Another supply chain management software used by Nestle as shown at Powersim (2012) is a
development by SAP and Powersim. This is business simulation software that allows Nestle to
make more intelligent decisions about allocation of resources in smoothing out the supply chain
process.

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Capturing the researchers discussion thus far, Nestle uses information system to attain the best
talents who would use other information systems to manufacture quality products after which
other information systems are used to disperse of the finished products.

1.4 Enterprise Resource Planning (ERP)

As mentioned earlier, Nestle is about standardization; which is why the Company setup training
and development programs for their staff across the globe and also consolidates Research and
development center. As a global power, it is important for Nestle to manage its operation across
the globe. To achieve this, the Company signed a contract with SAP solutions to create and
maintain an ERP for its global enterprise. As shown by Worthen (2002), this information system
helps Nestle centralize a conglomerate that owns 200 operating companies and subsidiaries in 80
countries. This ERP system helps Nestle to monitor and measure its global power.

1.5 The Nestle Online Store

Aside the above discussed information systems; Nestle also has the online store which sells a
variety of Nestle products.

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Managing Strategic use of IT at Nestle

Figure 1.1; shows the Nestle online store; Source; Nestle (2013)
As aforementioned, Nestle is a global super power, and as a result is only makes sense that the
Company has an online store as well as the brick and mortar operations. As a click and mortar,
Nestle is able to reach out to consumers across the globe; this also includes aspects of supply
chain management discussed above. The Nestle online store is one of the factors of the Company
that attains Nestle a competitive advantage; the store eliminates the geographic limitations faced
by the brick and mortar operations; online customers can be located from anywhere across the
globe. Furthermore, brick and mortar stores have strict operations hours while the online store is
24*7, this increases sales and as thus generation of income. The online store also benefits
customers in the sense that there is no need for travel in order to get their Nestle products;
customers can just order the products from the convenience of their own homes!
The Nestle online store is an information system in 2 aspects; it is a transaction processing
system (TPS). To buy online, a customer selects the wanted products and the TPS computes the
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transaction from calculation of the price to payment. Also, the online system consists of a
database which stores customers information, this allows for the Company to generate reports
that helps management make decisions; this also serves a decision support system used by
management to make strategic business decisions.

1.6 Conclusion
After the conducted research, it is no surprise to the developer that Nestle is a global super
power. This is because the Company has managed to strategically use Information Technology to
exhaust the use of its resource and capitalize on their global stature. Nestle has made a
realization, that total quality management roots from attaining the best people for the job to
running the operations. Nestle uses information system to attract, train and develop talent as well
as to collaborate stakeholders of the company. Furthermore, Nestle capitalizes on the information
technology by investing on research and development; this birthed the Enterprise Resource
planning system to conglomerate its operations across the globe. Another information system
that is dear to Nestle is the online store.
In a nutshell, Nestle uses information systems to manage workforce, to develop and sell their
products as well as to manage its global operations; this attains Nestle the best brains to run the
Company, the right standards to ensure quality as well as its maintenance of being a global giant.

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Rosebank business cluster in Auckland, New Zealand, 2012 (126), pp 1-19
Derouin, E, R, Fritzsche, B, A and Salas, E., 2011 JOURNAL OF MANAGEMENT,
E-Learning in Organizations, 31 (920), pp 921-940
Birnbaum, P, H.., 1984 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT,
Strategic Management of Industrial Technology: A Review of the Issues, EM31 (4), pp 186-191

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