'Fragmented' Microsoft tools undercut efficiency at Amazon and Whole Foods, internal Deloitte review found

It's been more than eight years since Amazon bought Whole Foods, but the two companies still haven't aligned their setup for the Microsoft software their employees use.

That disconnect was flagged in an 8-week Deloitte review of Whole Foods' use of Microsoft 365 apps earlier this year, according to an internal document obtained by Business Insider.

Deloitte found that Whole Foods relies on "fragmented" Microsoft toolsets, has loose security and data-retention practices, and employs a complex user-management setup — all of which contribute to inefficiencies and lower productivity when working with Amazon employees.

The consulting firm recommended a 24-month integration plan that would first move Whole Foods' corporate employees onto Amazon's backend system, followed by its frontline workers. The phased approach would ensure a "smooth transition for users and minimal disruption to business processes," while generating cost savings, the document said.

The review, completed in May, highlights Amazon's ongoing challenges in integrating Whole Foods. Since acquiring the chain in 2017, the company has struggled to scale the business and integrate operations, resulting in frequent reorganizations and shifting strategic priorities.

Now, under new grocery chief Jason Buechel, Amazon is making a renewed push to knit Whole Foods more closely with its Amazon Fresh division. Buechel, who is both Whole Foods' CEO and Amazon's VP of grocery, has been championing a unified "One Grocery" strategy and a "flying formation" model aimed at bringing the two organizations into tighter alignment.

It also underscores Amazon's dependence on cloud rival Microsoft for core productivity software such as word processing and spreadsheets. In 2023, Amazon committed to spending at least $1 billion over five years on Microsoft 365, Business Insider previously reported. The company has long struggled to develop its own business applications and, earlier this year, formally adopted Zoom in place of its Chime meeting app.

Amazon's spokesperson, Jamie Forrest, told Business Insider that Amazon has a "successful and growing" grocery business with more than 150 million customers. Over the years, the company has made changes to "simplify ways of working and better collaborate across teams," Forrest added.

"We're bringing our corporate grocery teams closer together with a consistent employee experience, including aligning to the same technology systems and tools, to make it easier to collaborate and innovate on behalf of our customers," Forrest said in a statement.

Whole Foods CEO Jason Buechel. Riccardo Savi/Getty Images

'Key themes'

The Deloitte team collaborated with Whole Foods employees to evaluate the current landscape and develop a future roadmap for the company's use of Microsoft 365.

Ultimately, Deloitte identified six "key themes" that must be addressed to streamline the business, including:

• Fragmented tools when collaborating with Amazonian team members: Employees routinely toggle between Slack, Teams, and other applications depending on which Amazon counterpart they're working with. That "increases complexity and inefficiency" and affects "productivity and collaboration" between Whole Foods and Amazon employees, Deloitte found.
• Data Retention & Data Policies: Whole Foods lacks formal data retention policies for email and documents, aside from limited retention windows for Teams. This gap complicates compliance and data management, making it difficult to manage multiple servers.
• Security Maturity: Several teams are eager to bridge the gap between Amazon and Whole Foods' "security postures," Deloitte found. The consulting firm identified several opportunities to strengthen Whole Foods' security, including enforcing stronger device registration and blocking unauthenticated emails.
• Dual Identity Management: Employees currently manage both Whole Foods and Amazon accounts, which is "cumbersome" but necessary to bridge operations between the two organizations. Whole Foods' Microsoft 365 access is restricted to Whole Foods identities and Amazon guest accounts.
• External Access/ Collaboration: Microsoft 365's restrictive external-sharing policies require users to seek approval for any external access, prompting many Whole Foods teams to adopt alternative collaboration tools that bypass these policies, Deloitte found. OneDrive sharing is no longer permitted and SharePoint is being further secured.
• Third-Party Tool Integration: Whole Foods currently hosts 314 registered applications, with routine access reviews conducted to retire those no longer in use. Some teams noted that there is limited governance over applications that send email using Whole Foods' domains, complicating efforts to strengthen email security.

'Fostering streamlined interactions'

Deloitte recommended a phased integration plan that first migrates Whole Foods' corporate staff to Amazon's backend technology, followed by frontline workers.

Under the plan, corporate workers would transition early to Amazon's tenant for email and OneDrive, while more complex systems, such as SharePoint and Teams, would shift gradually to allow for testing and re-permissioning involving both Whole Foods and Amazon identities. All workloads would eventually be consolidated under Amazon, enabling Whole Foods to cut duplicative licensing costs and align with Amazon's security standards.

"As applications and services transition, they will seamlessly integrate under a unified tenant, fostering streamlined interactions between WFM and Amazon employees," the document stated. "Aligning with Amazon's security protocols and guidelines will significantly enhance WFM's organizational security posture, ensuring adherence to superior industry standards."

It's unclear whether Amazon and Whole Foods adopted the full set of recommendations. But the gradual shift that Deloitte recommended mirrors Amazon's broader workforce consolidation effort with Whole Foods.

As Business Insider previously reported, Amazon began moving Whole Foods' corporate employees onto its own systems earlier this year. Now, under an internal project codenamed "Cremini," Amazon plans to absorb the entire 100,000-plus workforce of Whole Foods, including frontline employees.

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