New year, new commitment to digital innovation at Heineken

A true transformation journey for Heineken started in 2019, when Ralph Ostertag, director of digital and technology for Asia Pacific, joined after coming from Mercedes Benz, and years before that in other industries. Originally from Germany, Ostertag spent most of his career outside his home country in a mix of international roles covering a range of business, digital, and technology leadership roles. And all of this experience has enabled him to not only get a clear perspective on enacting strategies that yield measurable results, but broad access to people and departments to effect influence.

“Maybe you can’t have all capabilities in house, so you need to continuously review and see what the best opportunities for you are,” he says. In practice, I can organize external companies, and people from the Singapore Government and Silicon Valley to discuss different points of view and various experiments at Heineken.”

Gen AI is one of these ongoing opportunities going into 2025 and something Ostertag considers a priority to focus on with his team. And within the Asia Pacific region itself, his wheelhouse as a leader, another key is to continue to create value, but take it to the next level.

“If you look at our route to consumer at Heineken, we’ve already established a strong digital ecosystem for our partners and customers,” he says. “We have different tools and platforms in place, and now it’s really about fully leveraging them.” To fully realize their potential to establish that route to consumer, Ostertag says, it’s important to collaborate cross functionally. “It’s our commercial team where we act like one family,” he adds. “We have shared common targets for value creation.”

Continuing the journey from a people perspective by moving more into digital product hubs that have global reach is another key pillar. One such hub is made up of a team of digital natives who can build products and innovate at high speed, and at low cost, for global corporate functions and markets all over the world. “And we own the solution, and we don’t pay license fees,” he says. “This very a big topic for us.”

Another in-house hub underway to build capabilities surrounding data analytics, data management, and AI. So in a nutshell, people and hubs constitute what Ostertag calls Heineken’s digital backbone. “This is the modernization of our overall technology landscape, which includes our ERP solution and all the standard business platforms around it,” he says. “It’s a big program for us and we’re getting ready now.”

Two-time CIO 100 winner Ostertag also details Heineken’s unique interpretation of digital transformation, and how it’ll shape the strategy in 2025 and beyond. Watch the full video below for more insights.

On a fundamental tech fix: When I joined Heineken in 2019, it was clear that big changes were needed, starting with the positioning and understanding of the tech function at the time. Like in many other companies, it was seen as a cost factor. The technology function was under finance, and we weren’t at the same table with the other key leaders in the company, on a global, regional, or even a local level. And that had an impact because the IT strategy wasn’t fully integrated and connected to the overall enterprise business strategy of the company. Another key reason why a change was needed was we were coming from a very fragmented technology landscape. We had 3,500 business platforms and solutions in the company, 45 ERP solutions globally, and we had no real consistent standardized view on where we were, or tech landscape where we wanted to be. So based on that, a lot of things have happened since 2019. For instance, we have a new corporate function called the digital technology function where we’re now at the table, and we’re represented with leaders like myself and those in the operating companies. The strategy is now fully connected and integrated to the business strategy.

On a digital framework: The number-one priority is about people and having the right people with the right capabilities in place. We really put a lot of effort in digital upscaling not only within the digital tech function, but also in the business on all levels, inclusive of senior leaders. And then there’s quite a shift in the company toward hubs, where we leverage the power of them for different purposes. If you continue in this vein, other things we’re doing are digitizing our route to consumer, and creating value for the business by leveraging data and data analytics. And then we’re simplifying and automating our processes with AI. So we’re focusing on establishing what we call a secure digital backbone, which is a full modernization of our technology landscape that’s geared to our focus on our customers and value creation.

On building customer value: We have both customers and consumers and we put both in the center of our activities. In Asia Pacific, we have fragmented markets and we create value there with our digital tech activities. In Vietnam, for instance, bar or store owners can use a B2B app to order our products at any time. In the past, these kinds of ordering processes were very manual like text messages or even on paper, and then mistakes can happen because it’s not standardized. Now it is because of the app. And there you can also benefit from online promotions and loyalty programs, which can add customer value. There’s also our product recommender, an AI empowered feature in the app, where you can get recommendations on how, when, and what to order in a more efficient manner, and we can view shelves in real time. Then we can measure the direct positive impact on your business. This is highly appreciated by our customers.

On self reliance: I’m very engaged outside of Heineken in various organizations to get an outside view, and collaborate and exchange thoughts with other leaders in the digital and tech community. I can see across companies, even across industries, that they’re overwhelmed and struggle with the speed and dynamics of what I call exponential technologies like AI, robotics, IoT, and the metaverse creating disruption. They move quickly and this can be very overwhelming for companies or for leaders in companies. This is a common theme. So my recommendation is don’t panic about news and stories from a number of channels influencing changes of direction. First of all, stay calm and then demystify these exponential technologies by gaining your own understanding and opinion about them. I wouldn’t recommend to only listen to others or to so called experts or consulting companies. It’s important to take time on your own, as a company, to understand what these exponential technologies mean in general, and what can they mean for your business. And then, based on your business strategy and the impact these technologies can make, prioritize your big bets and focus on those. Then you need to think about capabilities, which can be tools or people skills, so you need to think about what partners you want to work on it.