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Insights 01/2016 Contents

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Editorial

These days, companies can boost customer satisfaction to a whole new level through extensively customized products and services – and secure the buyer’s unshakable loyalty in the process. But this requires the willingness and ability to completely rethink things. Digitization is about more than just using digital technologies: It requires a fundamental rethinking from the top management level, right down to each individual department within the organization. After all, sensors, transmitters and software are only means to an end – with that end being the implementation of a carefully considered digital business model that is understood and accepted throughout the entire company.

Businesses that want to be a permanent companion to their customers – providing personalized offers that are tailored precisely to suit their needs or changing life situations – need to involve their employees and get their buy-in throughout this effort. Firstly, those employees need to understand why individual customers will be addressed constantly across all 

channels in the future, when just a few standard products were deemed to be sufficient in the past. But above all, they then need to receive ongoing training to enable them to fulfill the customer’s needs in a flexible way – whether in service, where companies engage in an intensive dialogue with a target group through social media, or in production, where employees will, in the future, work hand-in-hand with new types of robots to create truly customized products.

To strike a chord with customers, products and services should always be conceived from their perspective. In this regard, digital technologies make developing offers much easier, because they provide a great deal of information about wants, needs and expectations. However, the use of these technologies is inextricably linked with data protection and security. And companies should also consider security expectations from the customer’s perspective. Digital trust, meaning the trust that customers have in a company’s technological and 

organizational capabilities, as well as its fundamental ability to protect data, is becoming increasingly important in many purchasing decisions. Rethinking is also necessary at the top management level – and not just the CIO, who used to hoard masses of data in silos and now has to fulfill customers’ data protection expectations, as well as departments’ needs for personalized evaluation of information through analytics. Everyone at the executive level needs to collaborate on overcoming digital hurdles that leave many businesses stranded along the road to digitization.

Thinking outside the box often helps. Although people need to find their own solutions, there is nothing wrong with being inspired by others. For example, Deutsche Bahn is investing in an innovation lab as an in-house incubator to develop new business ideas. OMV is reducing the complexity of its IT and processes to become more powerful, while simultaneously cutting costs. And Kärcher is outsourcing routine activities to a third-party service provider, so that its 

own employees can concentrate on growing the organization and developing products. These success stories show the direction in which a well-thought-out digitization initiative can take a company. And that's why Living Services should also be a challenge that forward-thinking businesses can solve.

Living Services | Business Model Custom mix

The next wave of digital transformation is rolling in:
As people and machines become increasingly
networked, Living Services are becoming crucial
for success – offerings that constantly adapt to
customers’ changing wants and needs as
automatically as possible. The key here is
to master the evaluation of data
like a virtuoso.

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An automotive company provides mobility. It’s in the nature of things. But from a competitive perspective, how the company moves is just as important. At Daimler, the entire organization is setting course for the future. “We are pursuing digital transformation, full speed ahead,” says CEO Dieter Zetsche. “Mercedes-Benz is transitioning from an auto manufacturer to a networked mobility provider, where people take center stage – both as customers and employees.” Like its competitors, the company is augmenting vehicles with new types of mobility and digital platforms that customers can use to access a range of services, from finance to entertainment and beyond. The aim is to help customers in exactly the right way at any particular moment.

Living Services change constantly

The best way to achieve this – within companies and across industries – is with Living Services, which 

develop through a close, continuous exchange with users, and adapt quickly to changing needs and life situations. “Living Services respond by wrapping around us, constantly learning more about our needs, intents and preferences, so that they can flex and adapt to make themselves more relevant, engaging and useful,” says Mark Curtis, Chief Client Officer at Fjord, the design and innovation specialist at Accenture Interactive.

Fjord’s trend study “The Era of Living Services” illustrates the scale of the change. Since potentially everything in the Internet of Things can share information via mini-sensors, a combination of cloud computing, mobile devices and analytics creates a data goldmine for anyone who wants to develop new custom offerings – in every aspect of life. Homes are just as affected as the workplace and city.

It’s about health and leisure time, family and work, learning and shopping, financial matters and mobility.

 

The growing importance of speed

Structures and business models are needed that can deliver cutting-edge products and services for the future. The Accenture study “Fjord Trends 2016: 10 Trends That Will Influence Design and Innovation in the Digital World” describes what shapes them. Using technological innovations and improving customer service are not enough. It’s about understanding new social frameworks that affect customers’ needs and employee engagement. Business culture also needs to be scrutinized and potentially given new life through design-thinking methods that can help companies survive disruptive upheavals caused by digitization. “The days of PowerPoint battles are over,” says Frank Riemensperger, Country Managing Director at Accenture Germany, whose “Future Camp – Workshop & Factory” offers customers a space for digital innovation, design thinking and implementing ideas in prototype form. 

“A certain normalcy will set in again after the current phase of major change, but things will never return to the way they were.” For example, when it comes to body sensors and customized health offerings, sports equipment manufacturer Nike enabled runners to display, evaluate and compare running routes very early on. That grew into the FuelBand, worn on the wrist, which uses an app to make its information available anytime, anywhere. It has made Nike a player in the entertainment electronics industry and a leader in the “quantified self” movement. Meanwhile, body monitoring – whether out of health concerns or for fun, in terms of comparing sporting performance – has become a billion-dollar business. Above all, however, wearables provide big data that can be used: Insurance company Generali offers customers discounts for athletic activity and a healthy diet through its Vitality program, using a digital fitness tracker. “When customers change their lifestyle, they are healthier,” notes Giovanni Liverani, Managing Director for Germany. 

Other wearables support medical treatment: A Swiss research team has developed a mini-sensor that is implanted in patients and sends blood values to their doctor. This could give rise to treatment concepts in which medication doses are customized based on the patient’s data. The changes that lie behind the “luxury for all” concept are similarly profound. Patient treatment is not the only area that’s improving. Companies are increasingly offering high-quality, customized products or services at prices that are within reach for ordinary people. For example, Credit Suisse is offering wealth management customers in Asia a platform that gives them access to account data around the clock, as well as sophisticated trading and analytics tools. Moreover, the digital interface is making contact between advisors and customers easier. “My children will rarely go to a bank for everyday business,” expects Urs Rohner, president of the Board of Directors. He knows that customer loyalty is determined primarily through digital channels, and that high-quality customized offerings 

will tip the scales when deciding on a service provider – simply put, luxury for all.

Always-on offerings

Apps will remain the foundation of such offerings – as mainstays of the digitized business world – but in a new form. These days, when people use a service, they activate the app, which is often an isolated solution. In the future, these programs will be integrated into a wide variety of networked platforms, services and environments so users automatically receive the service they want – instead of being an app administrator. Customers use the music streaming service Spotify, for example, through different platforms in the living room, car or office without interruption. Data and app-based services that make decisions for the user are even more convenient. Apple offers this in the form of customized playlists that are compiled based on personal listening habits, as well 

as tips from music experts. The result is diverse enough to be stimulating, without scaring listeners away. Many customers are already giving up their purchasing decisions. In the USA, they can ask Amazon’s digital assistant to order yogurt, for example. “Alexa” orders the previously purchased brand. That’s good for users who don’t want to worry about details. After all, the yogurt was tasty. It’s bad for those producers who miss out on the ranking – the digital assistant’s ordering routine puts them out of the running in the race for customer preference.

But for users, the point is that having fewer decisions to make improves their quality of life. However, these mechanisms affect more than just direct contact with consumers. The Living Services trend will also change business-to-business interactions: Client companies expect their partners to develop customized offerings as well. For example, Siemens does not sell trains – it sells reliable mobility. The surcharge for the regional Madrid-Barcelona route came in exchange for the 

guarantee that the trains will be 99 percent operational and reliable for 32 years. Siemens manages this through Industry 4.0 and digitization, with concepts like predictive maintenance. These types of offers are becoming more popular with customers, leading a growing number of industrial companies to transition their business models. “In the past, a machine manufacturer just delivered the machine,” Riemensperger says. “But in the future, the company will win over potential customers by guaranteeing productivity through cutting-edge digital technologies.”

That will of course change industrial work: for example, using business apps that digitally network a growing number of employees – from maintenance technicians to assembly line workers. Working Services, analogous to Living Services, will emerge and constantly improve themselves in accordance with user requirements. “The number of devices that are worn on the body and provide support for daily 

workflows is skyrocketing,” notes Riemensperger. “Digitally networked ‘smart workers’ promise higher productivity – but only if the information and instructions they receive are customized.”

Data protection is a must

When developing Living Services or Working Services, one challenge should not be underestimated: The collection, storage, evaluation and distribution of data with partners plays a major role in all of these offerings and concepts. A great deal of personal, sensitive information is being collected about people and groups – and they must be protected from its misuse. These business models necessarily involve a high degree of responsibility: Ethical principles must be followed when using such vast quantities of data. Many countries are establishing laws on how to handle information. But in the end, it’s companies that must comply with data protection and data 

security on a daily basis. For example, Fitbit – a US-based fitness-tracker manufacturer – advertises its compliance with the Health Insurance Portability and Accountability Act regarding the protection of personal health data. “We prioritize protecting our customers’ privacy and keeping their data secure,” says CEO James Park. The concept of “privacy by design” is also growing in popularity. This concept makes data protection standards an integral component of technology and product design. Companies such as Microsoft already implement comprehensive data protection programs. The security of customer data should be a topic of great strategic importance at the top management level. Otherwise, data breaches and other mishaps cause customers to quickly lose trust, which can undermine new business models before they even get started.

 

These trends are changing business and society

Devices are learning to listen: Sensors constantly record user behavior. Businesses that develop suitable offerings will become the customer’s constant companion.

The importance of data protection is growing: Major companies need to establish etiquette for big data. According to the privacy by design concept, data protection takes a high priority in product development.

Employees are more autonomous: Employees want to have a greater say in the business and in shaping their lives. Therefore, businesses need a meaningful culture. 

 

Living Services replace apps: Applications activate themselves in learned correlations. They offer the service the user wants at that moment – anytime, anywhere.

Luxury for all: Digital technology makes exclusive services available to more people. Customized products become affordable, and people get enthusiastic about personalized customer experiences.

Government agencies become more citizen-oriented: Agencies use easy, customeroriented digital solutions. This is opening up new ways to meet social challenges.

Smart healthcare: Digital technologies enable precise self-monitoring and personalized medical care. Companies can use this trend to address a growing target group.

Virtual reality is reality: Customers receive an unforgettable consultation experience; employees can be given quick, structured guidance through work processes.

Making decisions becomes easier: The key is to evaluate the data collected and narrow it down to one offer – an offer that customers can get excited about, and which removes the burden of decision-making.

Design thinking decides: Technology-oriented and business-oriented innovations are not enough to achieve differentiation. Company culture must be communicated through design-thinking methods to make it come alive.

Source: Fjord Trends 2016: 10 Trends That Will Influence Design and Innovation in the Digital World

 

 

Human Resources Development | Work 4.0 Engaged, dynamic, flexible

In the age of digitization, companies can score big with adaptability and agility. A “Liquid Workforce” is the key to success: highly qualified employees who are connected through cutting-edge technologies and adjust quickly to new tasks.

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Manfred Bornewasser, a professor of organizational and work psychology at the University of Greifswald, knows that digitizing business and making work flexible are two sides of the same coin. “Digitized industrial and service production requires changing how work is organized, which creates entirely new challenges,” he says, addressing company executives who invest in modern technologies, but forget to adapt processes and procedures or improve their employees’ qualifications. “As a result, people don’t just talk about Industry 4.0, they also talk about Work 4.0. ”

While this sounds logical, it poses a major challenge for many companies, because mastering it means significantly changing their approach to employee recruitment, development and qualification across the board. It’s about meeting the specific expectations of employees in light of the changing technological framework surrounding their jobs. After all, regardless of the importance of digitization for keeping a business competitive, employees deliver an absolutely crucial contribution to a company’s success.

Businesses need more flexibility

Viewing it in this context explains what the report “Accenture Technology Vision 2016 – People First: The Primacy of People in a Digital Age” calls one of the key trends of the “Liquid Workforce”: In the future, individual employees, as well as the staff as a whole, will assume a higher priority within a company. People need to be enabled to grow flexibly in any direction they choose. This requires investment in employees. It is not enough to use tools and technologies that ease the transition in the era of digitization – a company needs its own people who are trained on these tools and technologies. They can then act as transformation partners who are capable of change. Their commitment makes all the difference from a competitive perspective.

Leadership styles will change

People, projects and departments must be adaptable and able to react quickly as flexibly as a liquid, in fact. 

Siemens is going in this direction, for example. “We have to take hierarchical thinking out of our work and engage in an open dialogue,” says HR Director Janina Kugel. Supervisors need to open up new channels through social networks and involve employees in decisions. This corresponds with the work and leadership style preferred by the generation of digital natives now entering the workforce in droves. 

Open communication and ongoing education form the foundation that enables businesses to take full advantage of the opportunities of smart automation. Only those who are enabled in this way – to network and share experiences with each other, to continue to develop skills and fulfill their responsibilities with independence and flexibility – will understand the importance of autonomous production, mobile robots and artificial intelligence, and support their use. 

The Accenture study “Machine Dreams – Making the Most of the Connected Industrial Workforce” goes into greater detail on this subject. 

For example, assembly line workers equipped with smart glasses displays can literally receive information about their next move right in front of their eyes. Collaborative robots will soon have a place on production lines, working side-by-side with specially trained employees. Trucks can deliver parts without a driver; software and sensors can control most processes on their own. For that reason, Jörg Vollmer, CEO of BPO provider Swiss Post Solutions, a Swiss Post company, notes: “Intelligent automation is a disruptive technology that is comparable to the rise of smartphones.”

What does the future of HR look like?

Data-based human resources development that uses predictive analytics in advance to plan for employee needs and their qualification.

Project-oriented work groups that enable highly agile problem-solving through intensive collaboration and complementary skills.

Intelligent task distribution to permanent employees within the company, specialized third-party service providers or crowd platforms.

Continuing education and qualification as an organizational core competency of the HR department and/or the entire company.

A high tolerance of mistakes and the ability to learn that encourages employees to think innovatively and work using a trial-and-error approach.

Source: Accenture Technology Vision 2016 – People First: The Primacy of People in a Digital Age

 

 

 

Digital Innovation Lab | Deutsche Bahn Polishing brilliant ideas

Deutsche Bahn wants to use digitization and new technologies
to enhance traveling comfort and delight customers.
Accenture supported the company in developing and
implementing a bespoke Digital Innovation Lab (d.lab)
and Innovation Playbook to achieve exactly that.

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Mobility 4.0, Infrastructure 4.0, Logistics 4.0, Workplace 4.0, IT 4.0 – the names already signal the direction in which Rüdiger Grube is leading the company. “Practically every area of the company is focusing on digitization,” says the Chairman and CEO of Deutsche Bahn. “Right now we’re working on more than 150 projects, ranging from passenger transport to freight traffic and logistics, to infrastructure, production and IT.” Each of these initiatives aims to increase the appeal of the company’s offerings, while also making them more efficient and cost-effective. This includes keeping customers better informed and delivering them to their destination more easily and in greater comfort. Deutsche Bahn wants to take full advantage of the opportunities digitization offers, and drive the market.

Taking unconventional routes

To achieve this, the company is increasingly taking unconventional routes toward its objectives. 

One prime example: a think tank in the Passenger Transport business unit that operates like a startup. The Digital Innovation Lab (d.lab) has three responsibilities: As a development partner, it helps transform ideas from customers and employees into prototypes that can be developed into new products and services if they find strong customer acceptance. It serves as a coach and source of inspiration by bringing new agile methodologies and customer-centric ways of working into the organization. Examples include the “d.frame” innovation framework and the “Frühsport” (English: early exercise) knowledge transfer system.

Connect with entrepreneurs

And finally, d.lab networks with the entrepreneurial community to identify opportunities quickly and launch collaborations with startups, universities and initiatives. Internally, networking with different business areas at Deutsche Bahn helps bring cross-functional initiatives to the starting line. 

One good example of this is the “Ideenschmiede” (English: think tank) co-creation platform, hosted online at bahn.de/ideenschmiede, where new products and services are developed together with customers. “I consider us a platform for free thinking and experimenting, discarding and adapting – a kind of digital transformation accelerator,” notes d.lab Director Kerstin Hartmann, summarizing the importance of her little speedboat for the massive tanker that is Deutsche Bahn.

Support internal trendsetters

But even a speedboat needs a keel before it can go anywhere, and Deutsche Bahn selected Accenture to provide it. When visiting Accenture’s Technology Innovation Labs in Sophia Antipolis and San Jose, Simon Daum, who is responsible for setting up the d.lab as part of corporate strategy, learned that a think tank cannot be set up like a traditional corporate department. 

“Our internal source of inspiration and change driver must master innovation processes, scout trends and drive the development of prototypes so that we can try out additional dimensions of the customer journey.” An Accenture team is guiding d.lab as it develops these skills. “We have designed the Innovation Playbook, which defines the tasks, content and success measurement for the project,” says Nicole Göbel, the responsible Accenture partner and Global Client Account Lead. The experience gathered in designing and establishing many other innovation labs was crucial in this regard.

Freedom of thought and action

Accenture also supported Deutsche Bahn in the setup of practical elements, including the workspace, which is intentionally located away from corporate headquarters. This enables employees to think and act outside of existing structures. In addition, the Accenture experts suggested ideas for technical 

equipment and other aids to inspire and facilitate the creative process. Likewise, they drafted a blueprint for the d.lab team’s roster that initially includes around a dozen specialists from the different business areas. It defines the profile and skills that these individuals need to complement one another and maximize their performance. Their roles were also clearly defined – all in close collaboration with the Deutsche Bahn project team, where the experience and knowledge from the Long Distance, Strategy, In-House Consulting and Sales units, as well as the company’s own IT service provider, Systel, converge.

The Accenture experts also focused on making the new team familiar with creative methodologies, notes project lead Frank Maier: “We also worked intensively with service design approaches from Fjord, the Accenture Service Design Agency.” Above all, the employees on this initial team should know how to refine and try out their ideas with employees from other departments, while at the same time generating enthusiasm for the content, thought processes and 

technologies from the internal think tank. It should temporarily turn the colleagues working here into ambassadors who provide inspiration for a new culture of innovation in other areas of the company.

A more enjoyable journey

One project in Munich shows the results that have been achieved within just a few months. With the help of video analytics, the solution identifies how many people are in a subway car at any given time. This type of real-time information provides a basis for offerings that make it easier for travelers to find a seat in a different car. Furthermore, it improves internal planning and management, and can help people find lost property faster – and optimize customer service in the process. All of Deutsche Bahn’s digitization projects are designed to make the customer journey as enjoyable as possible, and to help the company enhance its competitive advantage. Because ultimately, d.lab’s mission is to improve the travel experience for Deutsche Bahn customers.

Profile 
Deutsche Bahn

Headquarters: Berlin, Germany
Executive management: Rüdiger Grube, Chairman and CEO
Employees: around 308,000 worldwide (2015) 
Revenue: approximately 40.5 billion euros (2015)
Industry: transport and logistics
Websitewww.deutschebahn.com

 

Digital Hurdles | Strategy Overcoming hurdles

Companies need to make overcoming digital hurdles a
top management priority to keep up with the competition.
It’s all about utilizing modern technologies to develop
new business models – but it’s also about winning your
customers’ trust through consistent data protection.

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How does the old saying go? All roads lead to Rome. Auto manufacturer VW has hired an ex-Apple manager to lead its new Digitization Strategy unit. Insurance giant Allianz has adopted a digital accelerator for product development, such as the concept used for SeasWien, a website for Austria’s capital city that defines policies tailored to the needs of Viennese citizens. And energy company RWE is seeking new ideas via partners and platforms for converting its core business to digital offerings, for example at CeBIT’s utility-industry day, where Internet of Things solutions are presented – think smart homes and smart meters. From people to partners or platforms, there are many ways companies can drive their digitization initiatives, or even combine several approaches. The strategy has to be appropriate, of course. But the main thing is to ensure the organization is moving in the right direction. Accenture’s Top500/ Top100 studies for Germany, Switzerland and Austria on growth champions bear this out. Growth champions are companies that grow faster and stronger than their direct competitors, 

and better than the average of leading companies. “By surveying these and other large Swiss companies, we have found that growth champions, compared with other companies, have more advanced digital strategies, attribute larger proportions of their sales and profits to digital activities, and have better governance structures in place to benefit more from digital,” says Thomas D. Meyer, Country Managing Director Accenture Switzerland and Director of the Digital ASG business unit. That includes embedding the responsibility for digitization at the top management level, generally with the CEO or CIO.

Customers want added value

CEOs whose companies are not yet that far along the digitization path should look to the title of the German study: “Demystifying Digitization – How the Top 500 Overcome Digital Hurdles.” The key is making digital business models consistently customer-centric. 

The focus should be on the benefits for current or new target groups, as exemplified by new electronic banking services at the Graubündner Kantonalbank (GKB). “There has been a need for anytime, anywhere banking services for several years now,” explains CEO Alois Vinzens. “I think the key topic is how to apply theories in practice when it comes to meaningful digitization.” For that reason, the GKB mobile banking app not only allows account access on the go – customers can also scan in deposit slips. Customers are enthusiastic about this because it makes handling payments easy and efficient.

Recognizing opportunities

Many companies need to rethink their approach in order to get digitization efforts moving. They need to take action instead of endlessly polishing their strategy. They need sophisticated early warning systems to recognize competitive threats and 

opportunities. They need to make structures lean, and simplify processes to remain competitive. And they should utilize digital technologies to collect and evaluate more data in order to develop appealing custom offerings, instead of just thinking about cutting costs and boosting efficiency. Why? Because social media, big data and analytics offer an opportunity for deeper insights into customers’ behavior, and their wants and needs. For example, electronics giant Samsung gathers a great deal of data through wearables and intelligent devices.

Intensive exchange and sharing

Other companies maintain an intensive dialogue with their target groups. “Companies like Red Bull have a great deal of innovative ability and know how to win new customers with fresh products and services,” explains Michael Zettel, Country Managing Director of Accenture Austria, about the growth champion. Red Bull runs a number of different channels for trend 

sports in social media, where fans introduce themselves and share their experiences – this strengthens brand loyalty and provides detailed information.

The importance of data protection and security is growing as data processing becomes the basis for customized offers and personalized customer interaction. According to the “Accenture Technology Vision 2016 – People First: The Primacy of People in a Digital Age,” digital trust – meaning people’s trust in a company’s digital expertise – is one of the key topics for the future of business. Among other things, customers want every contact channel to offer a high level of security, and they want their privacy protected so that no one can gain unauthorized access to their data. When providing information, they make a cost-benefit calculation, and are more willing to divulge data if doing so offers them advantages. They also expect businesses to be very conscientious when dealing with data leaks, taking responsibility for the potential consequences and correcting errors 

immediately. Businesses that fulfill these customer requirements have already overcome a key hurdle on the road to successful digitization.

Data protection is all

One aspect of the Accenture study “Digital Trust in the IoT Era” is very interesting when it comes to developing a strategy: Traditional industry boundaries could become blurred because customers have different levels of trust in individual companies with regard to digitization. For example, 40 percent of people believe their telecom service provider could enable remote-control functionality between linked devices. But only 28 percent believe their power company can implement a smart thermostat, even though this should be considered a core competency of an energy provider. So, businesses that want to take part in digitization need a suitable (i.e., credible) partner and also need to invest heavily in their own credibility. This means appointing a Chief Security 

Officer, conducting a comprehensive analysis of the threat situation, continuously testing and developing security measures – and informing customers reliably about all of these activities. 

This is how companies overcome their digital hurdles

Get started instead of overplanning: There is no hard-and-fast rule for digitization. In Germany, it’s often about digital processes, while the USA tends to focus on customercentric business models. The key: Move quickly in the right direction, but in small steps. 

Optimize customer experiences: Businesses that improve the customer experience win customers as multipliers. They need to copy the strengths of US Internet companies and adapt them regionally, using digital technologies to understand and meet customers’ wants and needs.

 

Master how data is used: Companies need to collect data at every opportunity and use it widely. However, it is only valuable if you can analyze and understand it. That’s why data scientists are in such high demand in the digital age.

Reduce complexity: Young businesses that only know digital structures and business models can be a threat to established companies. Anyone competing with them needs to reduce process complexity, as well as digitize and streamline structures.

Establish an early warning system: Companies need to recognize competitors and new business opportunities early on to defend their own position and drive expansion. Having their own incubators and accelerators in the startup scene helps with these efforts.

Source: “Demystifying Digitization: How Germany’s Top500 overcome digital hurdles“

Managed Services | OMV Bundled strengths

Greater IT efficiency, speed and flexibility while reducing costs:
For generic applications, the OMV Group is relying on a few
strategic partners, rather than many small-scale specialists.
Accenture is one of these partners, delivering
comprehensive managed services and
helping develop digital solutions
for the future.

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The oil and gas industry embraced digitization some time ago – the only way to find and process raw materials costeffectively today is with high-performance hardware and sophisticated software. For that reason, leading companies like the OMV Group invest constantly in their IT landscape. Efficiency, speed and flexibility in handling data are improved, while costs are kept as low as possible. “Strategic consolidation plays a key role – it’s vital for the successful ongoing growth of our Group,” emphasizes Marcus Frantz, Chief Information Officer (CIO) at OMV Group.

Recognize important trends faster

At its core, the goal of this project was to significantly reduce the number of IT service providers in application management and development from around 70 experts in comparatively small specialized fields, down to two or three strategic partners. Drivers for this initiative included: fewer interfaces,

less friction and lower costs on the one hand, with stable quality, greater speed and more profitable investments in promising digital solutions and technologies on the other. A convincing consolidation and service concept, experience with managed services, solid knowledge of the oil and gas industry, and appropriate conditions all led to the selection of Accenture as one of the strategic partners. “In addition, we help customers recognize important IT and management trends early on, and implement them in a sophisticated way to suit their own purposes,” notes Accenture Managing Director Hans-Peter Schmid. “Our track record of successful management consulting collaborations with OMV in the past was also important.” 

Accenture analyzed the existing service provider structure, as well as the software solutions currently in use. Collaboration with a few highly specialized providers – of geographical information systems, for example – will be managed by Accenture in the future. Then a precise schedule was drafted for 

transitioning the tasks to Accenture Delivery Centers in Slovakia and Romania. The deployment of numerous automation tools that had proven effective in similar projects helped in realizing OMV’s objective. This simplified the status controlling of software releases and made it easier to recognize and correct plan deviations earlier on. Transparency in the transition phase, and the ability of Accenture experts to understand the partner’s culture and processes, as well as develop suitable solutions, were all important for OMV.

Reduce complexity and costs

Careful preparation and consistent implementation enabled Accenture to complete the consolidation project in just five months without any delays or interruptions to IT operations. The development of numerous SAP applications, in areas such as HR management and the fuel station business, is currently on schedule. Non-SAP-based applications 

are also supported, including the geographical information system and downstream fuel station and billing software. The combination of lower complexity and the delivery of IT services from a single source will bring OMV significant savings. “Reducing cost is a top priority for us, and the savings generated will be double-digit in percentage terms,” says Karina Berger, OMV’s head of operational vendor management. But for this international integrated oil and gas company, the opportunity to collaborate on long-term IT projects with experienced service providers is just as important as reducing costs.

“We are more than just a technology partner for OMV, we’re a business partner as well,” emphasizes Accenture Managing Director Michael Büttner. “We can integrate these two areas optimally and work with them to deliver jointly developed ideas and possible digitization projects.” Potential IT developments – utilizing cloud computing or analytics, for example – will also be discussed in the future.

 

Develop new digital solutions

CIO Frantz hopes to gain valuable impetus for innovation and everyday business from this collaboration and the managed services being provided: “With the support of our partner, we have strategically positioned ourselves to drive standardization and productivity in every area of our business. Moreover, greater agility has laid the foundation for future investments in exciting new technologies such as digital oil-field solutions.”

Profile 
OMV

Headquarters: Vienna, Austria
Executive management: Rainer Seele, Chairman and CEO
Employees: approximately 24,000 (2015) 

Group revenues: 22.5 billion euros (2015) 
Industry: oil and gas
Websitewww.omv.com


 

 

Social Media | Point of View A way to each other

A social media presence makes establishing and maintaining direct contact to customers easier for companies. But Facebook pages, Twitter accounts or corporate blogs don’t ensure success on their own. It takes a sophisticated strategy, qualified personnel and the appropriate technical equipment to enable a profitable dialogue.

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An adidas online video spot shows top soccer players Messi, Bale and Müller playing – 27 million fans have viewed the clip on Facebook, and 47 million on YouTube. Dell optimizes service in the virtual world: Customer questions are answered in video tutorials, forums and blogs, and direct interaction in live presentations is enabled through microblogging and chats. Kickstarter is revolutionizing startup financing with digital crowdfunding: Private individuals have already invested around US$2.5 billion in 100,000 innovative projects through the web-based platform. These examples show social media channels have become key to the Internet economy. A growing number of people network through Facebook or follow each other on Twitter. They organize parties with Doodle, order online from the shop around the corner, or find jobs on Xing and LinkedIn. Companies have more contacts through Facebook than they have visitors to their home page. Social media has become a hot topic for good reason, not least due to functions such as file sharing, social commerce and review portals. 

The Harvard Business Manager concludes social media “supports users via digital channels in communicating with each other and sharing information.”

Meanwhile, almost every company has a social media presence – often comprising many different activities. However, that media presence often seems unsophisticated or uncoordinated. Practices and thought patterns from the real world are often transferred to the digital world without consideration for the unique features of social media. If it doesn’t achieve the desired outcome, it’s usually because similar errors have been made that result from misunderstandings and poor preparation. Only companies that completely embrace social media can fully utilize its potential. For that reason, the Accenture Point of View “Thinking ahead – debunking myths: Why social media takes customer contact to a whole new level” clears up common prejudices against social media channels and gives tips on how to best utilize them.

Respect the dynamic of social media

It’s often said that a presence can be managed as a side activity. However, a successful operating model requires appropriate functions, processes and governance elements. Strategic and organizational challenges affecting areas other than IT need to be mastered, including marketing and communications, as well as HR. Managing the media presence takes the right structure, and personnel need the right knowledge. Social media strategy begins with answering three questions. How do I reach the target group with credibility? How do I measure different success factors? And how do I adapt to the high dynamics of social media? After all, managing critical reactions online is challenging. Businesses that see a customer’s complaint as an isolated incident often learn overnight about thousands of similar cases – and reputation damage can be right around the corner.

A well-thought-out social media operating model with sophisticated functions and processes can prevent this. Investments in social media are often justified by assuming that users will replace the internal support function, and less effort in customer care will be required. However, analyses of online help culture show that social media does not replace support. Instead, it primarily changes the type of interactions with customers. The invested budget thus finances value-adding projects for improving support quality.

New channels for establishing contact, such as forums and chats, need to be comprehensively integrated and require other qualifications and processes. They need to be managed by specialized social media managers who offer customized solutions to problems. As a result, the payoff for using social media in customer support is actually increased customer satisfaction, not lower costs.

 

The personal approach

People who are critical of social media deny its relevance for customer care. That is simply misguided, because it’s about more than supplementing the CRM system with additional customer data. Information from social networks opens up deep insights into the preferences of existing partners. It helps identify new potential customers. And it delivers important input on adapting future dialogue strategy. However, this only works when the appropriate data analysis solutions are in place, and the right questions are asked. The potential for winning new customers should not be underestimated: Businesses that want to be customer-centric and success-oriented integrate social media into their marketing activities. Through social media, companies can address large groups that indicate their interest with a “like.” That initial contact can then be built into a customer relationship, one step at a time. Businesses that pursue a broad 

spectrum and cover all the relevant channels are especially successful. For companies, the challenge lies in having their finger on the pulse of the target group. The key is to offer potential customers real added value through a mix of entertainment and information – while consistently adhering to data protection requirements. Then social media can open up new, direct paths to the customer.

This is important when utilizing social media

Flexible operating model: Social media is not a simple expansion of existing marketing and communication strategy. Businesses that want to use it successfully need to define functions, processes and governance mechanisms specifically designed for that purpose. That includes evaluating the business benefit for each engagement, monitoring the effects, and adapting the social media operating model to new developments. 

Willingness to engage in dialogue: Social media isn’t just for mass communication. It works best when there is an intensive exchange with the target group. It enables deep insights into the interests of customers and increases their loyalty. Those who create the impression that they simply broadcast any message at the top of their lungs will at best have no audience, and at worst generate negativity.

Understanding the dynamic: The Internet changes at breakneck speed – social media even more so. New framework conditions give different meanings to already-known usage opportunities. Platforms change their orientation or fail – and providers that emerge suddenly can make unexpected functions and application areas popular very quickly. The key here is to recognize opportunities early on and seize them with coordinated activities. 

Source: “Thinking ahead – debunking myths: Why social media takes customer contact to a whole new level”

Capacity Solutions | Kärcher The right solution

Business process outsourcing is standard practice for many large companies.
But small and midsized enterprises can also bene t if the project is
tailored to their needs. With support from Accenture,
the Financial Shared Service Center at Kärcher,
a hidden champion, now operates with
more focus at a lower cost.

Read article

In everyday language, pain relief tablets are called aspirin, adhesive strips are referred to as Scotch tape, and tissues are known as Kleenex. Very few companies manage to establish their brand as a synonym for an entire product category in this way. But one midsized German company has even succeeded in turning its name into a verb (in German). “Kärchern” now means “to clean buildings or equipment, usually with a pressure washer,” and refers to the Alfred Kärcher GmbH & Co. KG company in Winnenden, a producer of high-performance cleaning systems for professional and home use. Within 10 years, revenues have doubled to more than 2 billion euros, primarily due to a targeted internationalization campaign. Today, the company’s products are sold globally through subsidiaries in 60 countries.

Outsourcing for greater efficiency

This success has increased the burden on the company’s internal organization. The internal Financial Shared Service Center (FSSC) was created as a service 

provider to the company’s European subsidiaries, in order to process increasing sales in Germany and abroad. Its areas of responsibility include Procure-to-Pay (processing incoming invoices), Order-to-Cash (capturing/processing open accounts receivables) and Record-to-Report (accounting, monthly and annual financial statements). However, Thomas Elsner, Director of Finances and Services at Kärcher, realized that even a “highly efficient international figures factory” can reach its limits. Kärcher was hardly able to find enough specialized staff who understood the bookkeeping processes for handling growing sales volumes efficiently, while maintaining a high level of quality. Kärcher selected Accenture to help it prevent backlogs and delays with invoices and billing in daily business transactions, and to enable the strategic development of the organization’s finance operations.

Measurably lower costs

Recognizing that traditional structures could no longer handle such rapid growth, this traditional, 

family-owned company became interested in a solution normally used by international corporations: business process outsourcing. “Working with Kärcher, we quickly developed an approach in which Accenture provides the support,” explains Simon Haller, Accenture Operation Capacity Solutions Lead ASG. “The high-volume transactional tasks of Kärcher’s FSSC, a technologically and organizationally sophisticated service center, were transferred one-to-one from Winnenden to Warsaw, where experts at the Accenture Delivery Center took over the processing of incoming and outgoing invoices, and the preparation of reporting figures.” Compared with other FSSCs, Kärcher’s organization is considered a benchmark because it delivers such high-quality data.

The company’s already high degree of digitization established a very good basis for collaboration with Accenture, and simplified the migration to the delivery center in Warsaw. For Kärcher, the approach delivers three advantages: Order spikes, for example when equipment is in high demand for spring cleaning, can be absorbed easily because the Accenture team in 

Warsaw can quickly scale up to handle increasing invoice volumes. The costs can also be calculated and are lower overall because Accenture provides the service at the agreed-upon price, and takes care of selecting or training qualified employees. And Kärcher’s bookkeeping experts in Winnenden can focus on higher-value activities. “Outsourcing has freed up capacity to drive the integration and concentration of all Kärcher entities worldwide,” says Thorsten Binkert, Division Manager and Procurist at FSSC. “Because Accenture takes everyday business off our hands, we can move forward with the necessary standardization and integration of accounting processes in all our global subsidiaries.”

Project expansion planned

It was more than just Accenture’s expertise that convinced Kärcher’s top management about the outsourcing concept. The rapid response and quick launch of the joint project were particularly compelling. And another important point:

the physical and cultural proximity of the external specialists. Meetings in Warsaw only cost one day. Furthermore, many of the employees speak perfect German and know the country well, which makes communication easier. Kärcher employees were able to see this for themselves during their visit and in a quasi-pilot project: Before the outsourcing project launched, Accenture helped the company prepare its 2014 annual financial statement on time. The experts who worked on that project now form the core of the team in Warsaw. This enabled them to get to know their future German partners and get used to their processes, procedures and way of working. All the transactions are processed from Poland through a secure, direct connection to Kärcher’s IT system. “I’m surprised how quickly the project proved itself in our everyday business, and it is already delivering high quality at significantly lower costs,” notes FSSC Division Manager Binkert. In fact, the collaboration is going so well that Kärcher is already considering outsourcing additional finance and accounting activities to its partner. The team in Warsaw is also 

growing faster than initially planned. The project was a unique experience for Haller. “With a traditional business process outsourcing project, the setup can take 18 months,” explains the Accenture consultant. “But with the right understanding of the client and the Accenture Capacity Solutions approach, we were able to develop and implement the right solution with a flexible and powerful midsized company like Kärcher within six months.”

Profile
Alfred Kärcher GmbH & Co. KG

Headquarters: Winnenden, Germany Executive management: Hartmut Jenner (CEO and Chairman of the Management Board), Markus Asch, Dieter Grajer, Thomas Elsner, Christian May
Employees: more than 11,300 (2015) 
Revenue: 2.22 billion euros (2015)
Industry: industrial
Website
www.kaercher.com/de

About Accenture

Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With approximately 375,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives.

Its home page is www.accenture.com

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