Home

Insights 02/2015 Contents

Read article

Editorial

Competitiveness, innovative strength and a progressive approach: Germany, Austria and Switzerland have the potential for long-term economic success.

Several studies confirm that these countries are very well positioned as they wade into international competition for market share in an increasingly digitized economy. Switzerland was ranked first in the World Economic Forum’s Global Competitiveness Report, as well as in the United Nations’ Global Innovation Index. Germany follows some distance behind eternal rivals such as the USA, while Austria leads the middle range of performers.

The NAC Index developed by Accenture also verifies that Switzerland and Germany could benefit enormously from the opportunities generated by the Industrial Internet of Things, as illustrated in the company’s “The Growth Game-Changer” study. CeBIT, the world’s leading IT trade show, also made a good decision in selecting Switzerland as its partner 

country for 2016, since the event’s motto, “d!conomy: join – create – succeed,” is all about the different facets of digital transformation. Although discussions about Industry 4.0 are often limited in scope, automotive and machinery manufacturers are not the only businesses affected. Digitization is shaking up every industry and every company – from Internet giants like Google and innovative startups called fintechs, to banks and insurance companies, to name just a few.

Here in particular, many managers are recognizing the opportunities created by disruptive technologies and the changes they generate in terms of customer wants and needs, and ways of working. But they are also aware of the risks involved if they do not succeed in restructuring their own business models appropriately. That’s why this issue of Insights includes three different examples of how companies can get fit for the future in their industries with the help of digital technology and a range of unconventional approaches. 

Switzerland’s UBS Bank is improving its market communication and beoming more responsive by managing its many campaigns through the Digital Factory operated by strategic partner Accenture. Germany’s ERGO Insurance Group is updating its IT using an innovative migration tool and thereby enhancing its flexibility. And Austria’s BAWAG P.S.K.
is supplementing its core banking system with a Facebook-oriented big-data platform, offering customers a completely new mobile banking experience while significantly reducing costs.

These success stories are not industryspecific. Every business is better off with a digital marketing factory, flexible IT and a modern customer experience. But many companies are still moving too slowly. No matter how good the basic conditions are in Germany, Austria and Switzerland, only courageous businesses that take fast and unconventional action will benefit from digitization opportunities.

Of course, no company can adopt the thought patterns and structures of a startup from one day to the next. Nor should they, because other important qualities required for business success would be lost. But they should seek out collaboration with entrepreneurs to benefit from their innovative ideas and refreshing lack of respect for industry rules that are allegedly set in stone. This isn’t easy. Sometimes they need a bridgemaker to close the gap between speedboats and tankers. That is yet another reason why Accenture is involved in TEDx conferences – to act as an interpreter between hungry young entrepreneurs and established players.

Digital Innovation | Business Transformation Fresh momentum on solid ground

Fast, courageous startups are reshaping many industries with
disruptive ideas. Large companies need to invest in technologies
such as big data, analytics and the cloud – and join forces with
visionary entrepreneurs. Their promising innovations can then
be brought to market together.

Read article

Fast, courageous startups are reshaping many industries with disruptive ideas. Large companies need to invest in technologies such as big data, analytics and the cloud – and join forces with visionary entrepreneurs. Their promising innovations can then be brought to market together.

At a recent trade show in Hannover, household appliance manufacturer Miele showcased a stove with a built-in cookbook and the guarantee of a successful result. The user selects a recipe from Miele’s website on his or her smartphone, and the oven automatically downloads the right settings from the cloud via Microsoft Azure. The temperature, usage setting, cooking time and other factors are predefined. “A user who doesn’t know much about risotto might just be happy to download a basic recipe and learn how to prepare it step by step,” says Executive Director Markus Miele, explaining this innovative idea.

A mobile device, a sensor, cloud and an app to run it – few business models or product ideas driven by 

digitization are successful without these ingredients. This summer, a smart bikini that warns its wearer about potential sunburn caused a stir in the media. Its UV sensor sends an alarm to the wearer's smartphone if conditions get dangerous. Apps like these make life easier. BMW drivers select the service they want in the ConnectedDrive Store. The Lufthansa app simplifies flight searching, booking and checking in.

These programs also help in business environments. Machines are operated via tablets at Trumpf. Agricultural equipment manufacturer Claas uses an app to optimize documentation in crop cultivation. Dialysis specialist Fresenius Medical Care offers calculators for the iPhone and iPad for acute renal replacement therapy. A look at the numbers explains why apps are synonymous with digital technologies:

There were 1.5 million mini-programs available in Apple’s App Store in 2015. Experts expect 270 billion downloads worldwide in 2017.

Apps as a synonym for digitization

For Frank Riemensperger, the importance of apps in digitization is very clear. “The user interface reflects the four major trends – social, mobile, analytics and cloud – that support customer-oriented functions as well as the evaluation of user behavior,” says the Country Managing Director of Accenture Germany. However, apps are not an end in themselves: “First and foremost, it’s about Internet-based business models called smart services, and every digital technology must be used correctly – not just apps.”

Accenture’s Digital Acceleration Center in Bonn shows how. It offers a detailed vision of the digital future, from apps to smart homes and Industry 4.0. “Every firm needs a digital vision to stimulate growth,” says Riemensperger. “With the latest technologies and our employees’ industry expertise, we help businesses develop and implement the right digitization strategy for them.”

Enormous growth with big data

Ideas and infrastructure are essential, but the technology environment within companies often leaves much to be desired. Cloud, big data and analytics should be part of every CIO’s agenda: They are already enormously important. “Revenues from big data and associated services should reach $17 billion in 2015,” says Roberto V. Zicari, Director of the Big Data Lab at Frankfurt’s Goethe University. “At 40 percent, growth will be seven times higher than the average for the ICT industry.” 

But as Accenture’s NACIndex shows, the potential is even greater. The study “The Growth Game-Changer” examines how an economy profits from the Industrial Internet of Things. While Switzerland is only slightly behind the leader – the USA – Germany comes in 10th place. Leading companies have positioned themselves better, according to the study “Mut, anders zu denken: Digitalisierungsstrategien der deutschen Top500” 

(“Courage to think outside the box: digitization strategies of Germany’s Top500”). On average, they improved by 10 percent in the digitization index that assesses digital strategy, digital offerings and digital processes – although the overall digitization level is still considered “average.” Wirtschaftswoche magazine recently reported that banks are pulling pensioners out of retirement as experts for 2,000 euros a day because only they know the Cobol programming language from the 1980s, which still forms the basis of many IT systems. Forward-thinking companies are modernizing their IT infrastructure, often by combining consolidation and migration to the cloud.

For example, ThyssenKrupp is spending a nine-digit figure to migrate approximately 80,000 computer workstations and 10,000 server systems in 34 countries into the cloud, to simplify daily collaboration through the use of the same applications and standardized platforms with consistent data and analyses. 

Lufthansa is investing in cuttingedge systems for analytics and mobile solutions. “We will provide everyone in the company with access to the latest technologies,” emphasizes CFO Simone Menne. “Not just to save money, but to continue driving the digitization of our business processes and to design them even more efficiently.”

In Austria, one in four major companies already has a cloud provider, and in Switzerland at least half of them will utilize cloud-based server capacity in 2016. Solutions such as Accenture’s Hybrid Cloud Solution for Microsoft Azure make this easier. The hybrid cloud platform enables businesses to benefit from the cloud and manage it like a traditional IT environment. Companies can incorporate cloud apps and deliver them “as a service.” This enables them to bring innovations to market faster, opening up new business opportunities.

Too little digital innovation

Herein lies the second challenge of the search for digital innovations and business models: New markets can only be conquered and market share gained in existing ones with good ideas. According to the Top500 study, many companies are finding this difficult. They are investing primarily in digitizing their internal processes and client interactions. Only 16 percent consider digitizing their business model a high priority, and only one in five is focused on digitizing research and development. “Just about every area of our business is working on digitization,” notes Deutsche Bahn CEO Rüdiger Grube. “We’re working on over 150 projects, ranging from passenger transport, to freight traffic and logistics, infrastructure, production, and our IT.” The strategic direction: Customers should receive better information and be able to complete tasks more easily with, for example, the help of new functions in the DB Navigator smartphone app, which provides a door-to-door route to the right train and departure platform. 

And systems should communicate digitally with the central monitoring office at the train station to report operational disruptions.

Pressure through new competitors

That’s important, but every industry has leaders who – without ongoing innovation processes – are vulnerable to attack by disruptive challengers. “With new digital business models, energy market innovators add value for consumers,” explains Robert Busch, CEO of the Association of Energy Market Innovators (BNE). “This is the only way we can prevent established players in the digital economy from passing us left and right.” This happens often: Banks are coming under pressure from online companies like Google or small fintechs with practical apps for financial services. Travel firms and transport businesses are suffering from app-based exchanges such as Airbnb or Uber, which are replacing traditional agencies and service providers. Retailers are competing with online marketplaces for specialty 

products as well as with Internet giant Amazon, which is always generating new ideas: selling fresh groceries, delivery by drone, sameday delivery, etc. More and more companies are responding to these threats by seeking ideas outside their own organization, especially from startups or the universities that foster them. According to a study by the Forsa Institute, one in five major industrial companies is investing in startups to promote innovations and cultivate them for their business to use. Deutsche Telekom utilizes the Hubraum Accelerator Program, Allianz uses the Digital Accelerator, and Otto uses the venture-capital specialists e.ventures. Companies such as EnBW, Airbus and Deutsche Bahn support the Berlin Startup Bootcamp.

These collaborations don’t always run smoothly. Corporate cultures and thought processes are often incompatible. That's why, when companies look for smaller partners, it makes sense to use an external service provider with experience in this area and rely 

on its support for collaboration on daily business activities. The Accenture study “Bridgemakers: Guiding Enterprise Disruption through Open Innovation” explains how these service providers can build cooperative partnerships, defuse conflicts, mitigate risks and support pilot projects. Furthermore, companies should be more open to unconventional types of brainstorming. TEDx meetings are an excellent example of this. Instead of overwhelming their own organization by demanding a new culture of innovation, managers should enable committed employees to develop their own ideas in discussion groups with no hierarchy. They can gain new perspectives and make contact with promising startups at events like the recent TEDx RheinMain’s Datanauts Pitchday, which focused on big data with the slogan “Decoding the Future.” The keynote speech was given by Jörg Besier, Managing Director and Business Analytics expert at Accenture. He emphasizes: “You need talent behind the tools – people who can do the math and translate it into a business context.” 

Companies should not only invest in technology, but also make contact with entrepreneurs who understand how to apply new ideas to make the technology profitable.

How companies strengthen their innovative power

Potential collaboration partners: Joining forces with startups and universities is a great opportunity. Startups with good business ideas often emerge around the development of innovative materials or applications, particularly at technical universities.

Individual characteristics: Startups seek disruptive ideas and are more willing to take risks, and act quickly. Rapid profitability is less important. By contrast, companies focus more on the return, are more risk-averse and act with greater caution overall. Partners need to be aware of these differences.

 

External support: So-called bridgemakers help with the search for partners. They serve as buffers to minimize or even resolve disagreements generated by conflicting corporate cultures and help reduce the risks of joint initiatives. They also offer technical support and other types of support during pilot projects.

Source: Bridgemakers: Guiding Enterprise Disruption through Open Innovation

Every digital technology must be used in a targeted way to develop new smart services.

Interview | Open Innovation “Not the packaging, but the content”

More and more companies are betting on open innovation.
Wolfgang Weicht explains what makes this TEDx concept
unique and how businesses can benefit from it.

Read article

Wolfgang Weicht is the Executive Producer of TEDxRheinMain. He considers himself a curator of ideas. To this end, he brings people together in relaxed environments who want to dedicate themselves to the topic of innovation and are open to new ways of thinking – from entrepreneurs and managers to artists and politicians. Under the heading “Datanauts – Decoding the Future,” for example, 10 teams worked on the question of how Big Data can make the world better.

INSIGHTS: For the last 25 years, conferences have been held all over the world under the acronym TED (Technology, Entertainment & Design). Managers, entrepreneurs, politicians, artists and innovative thinkers give short presentations and discuss ideas on the widest variety of topics. TEDx events like the one held at Campus Kronberg in September enable this type of exchange, free of any hierarchy, also at a regional level. Why should managers or regular employees take part? 

Weicht: Because they’ll experience something there that many of them won’t have seen since childhood: a wow effect. First they attend brief presentations and hear about a topic that’s new to them or get a different perspective about something they know. Whatever particularly interests the attendees is then discussed in small groups, where they express thoughts no-holds-barred and off the beaten path. this type of exchange helps people to  nally think outside the box and discover totally different possibilities or ideas – for business models or products, for example – that would never occur to them in their daily routines and usual structures. Sometimes you can almost see the light bulb go on in someone’s eyes because the wow effect has caused inspiration to strike.

Who attends these sessions – entrepreneurs, R&D experts, professors?

In principle, everyone is capable of having good ideas. A specific technical background isn’t necessary. 

You need to get excited about a topic and be open to thinking about it creatively from every aspect. That’s why TED conferences mediate between different worlds, bringing together technicians and artists, managers and entrepreneurs, or universities and businesses. Having the right mixture is important for stimulating discussions.

And how do you achieve that?

By ensuring that half the guests are familiar with the TED principle while the others are new to it. Then they meet in a relaxed environment. One time, we built a carrot piano, and veteran managers started playing it excitedly like small children. interesting presentations are important as well, of course. In our experience, two or three inspired presentations are sufficient to launch attendees into active discussion. It’s crucial that all participants treat each other as equals and take each other seriously, whether they’re wearing a suit or patched jeans and a sweater. The principle here: there are no stupid questions. 

The future of innovation lies in open innovation, not shut away in research and development departments.

But this type of free exchange is still unthinkable in most companies today.

TED’s influence could change that. Managers learn here that open and honest discussion pays off and the business benefits when unconventional thinking is given more leeway and a supposedly crazy idea is given a chance. At TEDxRheinMain’s Datanauts Pitchday, which Accenture took part in, many guests were surprised by the convincing presentations given by young entrepreneurs who focused on the motto “Decoding the Future.” even global companies with their strategy and development departments full of experts can gain valuable stimulus there.

The first big companies are recognizing this and want to establish similarly structured innovation events in-house or create incubator models to boost organizational creativity. 

The idea may be right in principle, but you can’t just copy the packaging: You have to understand the content. Anyone who wants to compel an entire company to adopt the open innovation concept overnight will fail. If people see their company as a living organism and focus on the question of where and with whom this type of unconventional thought and development process can bear fruit, then they can achieve great things.

Digital Marketing Operations | UBS Variety in scalable services

UBS is boosting its effectiveness. Accenture experts implement the bank’s marketing campaigns on digital channels and generate marketing collaterals upon request. The end-to-end service is making digital communications faster and better.

Read article

How can one tap the benefits offered by digitalization in marketing and communications? “Advanced technology, effectiveness and speed are key to serving the new digital reality,” says Liv Brahin, Head of Group Marketing & Communication Services at the leading Swiss bank UBS, answering a question that marketing managers in all sectors face. “A scalable operating model paired with an industryleading platform is crucial for futureoriented marketing operations,” she adds confidently. To benefit from the changes that digitalization has set in motion, companies need to re-orient themselves in terms of organization and technology, instead of relying on the evolution of existing systems and processes.

More performance, less cost

At UBS, this transformation is in full swing. The marketing and communication departments have established an entirely new type of social and editorial media monitoring system, which Accenture is delivering as a managed service provider. 

Specialists analyze online opinions and news pertaining to UBS, its peers and general industry-related topics – regardless of whether the material originates from newspapers, magazines, blogs, paid content or social media, such as Facebook. With the use of analytics, Accenture’s media analysts determine which sentiments and topics are being circulated, and what effects these can have on public relations, marketing and product development. Up-to-date reports help UBS employees make decisions, and the executive summary is forwarded to the uppermost management level. “Print, online and social media are analyzed worldwide quickly and effectively based on standardized specifications,” says Brahin.

To make this possible, it made sense to assign content analysis, the required responses and operation of the digital communications platforms to a service provider. In this case, the combination of specialization, scalability and flexibility can provide many benefits. As one of the Swiss bank’s critical channels for digital interactions with clients and the 

public, ubs.com comprises about 50,000 pages that need to be maintained, while its intranet consists of at least 100,000 pages that are used as an essential digital collaboration tool by employees. All told, they account for approximately 200 million hits per year. Fewer costs in this virtual sphere pay off as quickly as enhanced service and performance that impress clients and employees alike.

Together with telecommunications provider Swisscom and application developer Netcentric, Accenture developed a digital marketing concept that was impressive in regard to its content and technology. It meets both UBS’ corporate-specific security requirements as well as FINMA (Swiss financial market supervisory authority) specifications. The solution operates on Swisscom’s infrastructure, with UBS’ digital marketing processed by a private data cloud network. The servers are located in Switzerland. Marketing data, corporate figures and programs are stored under high security. Bank employees have access only via secure procedures developed in-house. 

Access times, availability and performance regarding the exchange of information are optimized with wisely chosen technology, thereby improving customer satisfaction.

UBS managers were very impressed with Swisscom’s technical services, provided at the highest security level, as well as Accenture’s operating model for digital marketing. About 150 experts from various specialized fields can respond quickly and precisely to customer requests to implement digital channels.

“Accenture’s Concierge Service Desk serves as the contact point for UBS divisions, ranging from Investment Banking to Wealth Management, and helps the powerful organization behind it to run smoothly,” explains Alexander Kettenbach, Managing Director of Management Consulting Financial Services at Accenture. “This centralized contact point can answer questions 24/7/365, and prompts specialists to implement projects in our digital factory.”

 

Flexible end-to-end service

In Mumbai, Accenture employees refine the client-requested concept and deliver a complete solution. Their in-depth expertise and experience in all aspects of digital marketing enable UBS to respond in a faster and more flexible manner, while process standardization, for example, helps to decrease costs. “Our end-to-end service significantly strengthens the customer’s ability to run marketing campaigns,” says Kettenbach. One of the reasons why all of this works so well is that UBS manager Brahin opted to consolidate the application environment as a basis for digital marketing, thereby allowing 18 different systems to be consolidated into one platform.

Accenture does not run all of UBS’ digital marketing plan, however. While Swisscom supplies the entire infrastructure, and Accenture provides many services, the bank still generates confidential documents, and thus produces 25 percent of the content, internally. 

Research and quarterly reports are so sensitive that the information must remain inside the company, accessible to only a few employees. 

 

“Technology, effectiveness, and speed are key to serving the new digital reality.”

 

However, everything else is supplied by Accenture as the service provider, with whom Brahin is very pleased, saying, “We put our publishing on one strategic platform and standardized it.” Now the bank can focus even more on growth-driving factors, such as information campaigns oriented to narrowly defined target groups.

 

Tailored marketing messages are available faster, simpler and at a lower cost. In addition, the digital factory offers more creative solutions – almost like the Group’s own sharedservice agency that can function flexibly and efficiently on the basis of one of the most technologically sophisticated IT platforms available.

Profile
UBS

Headquarters: Zurich/Basel, Switzerland 
Executive management: Sergio P. Ermotti, Group CEO
Employees: approx. 60,000 (2014)
Business revenues: approx. CHF 28 billion (2014) 
Industry: banking
Website: www.ubs.com

 

Chief Financial Officer | New Challenges Success with new engagement

The era of bookkeepers is over: CFOs not only need to keep costs under
control and master increasing complexity, but also need to drive
valuable growth. Digital technologies are an effective tool
for supporting these efforts.

Read article

Joe Kaeser at Siemens, Michael Mueller at Valora, Wolfgang Leitner at Andritz – in German-speaking countries, Chief Financial Officers (CFOs) are increasingly being appointed to the role of CEO. This is in line with a significant trend: According to a study by Michael Page Personnel Consulting, one in five CFOs worldwide anticipates succeeding the current CEO. For Ervin Schellenberg, founder of EquityGate Corporate Finance Consulting, one thing is certain: “The CFO is the CEO’s copilot.”

Since the 1980s, CFOs have evolved from financial bookkeepers into controllers of cost discipline, financiers of expansion and diversification, drivers of organizational restructuring toward a shared service center, and promoters of investment in digital technology. Not only are CFOs internal service providers for the company, but they are also active entre- preneurs working closely with the CEOs – and perhaps only a short step away from the CEOs’ desks themselves.

Influencing strategy development

Accenture’s High Performance Finance Study, “The CFO as Architect of Business Value: Delivering Growth and Managing Complexity,” verifies the importance of the role. At the same time, it identifies five key areas in which CFOs need to be active in order to boost the long-term success of an organization – from defining overall corporate strategy, to specific personnel development activities within their own department (see right).

Now more than ever, the issue of profitable growth is paramount. The era of CFOs focusing on controlling and cost reduction ended with the easing of the recent financial crisis. “As the economic climate continues to improve, CFOs have the opportunity to show themselves able to support growth while managing complexity and keeping costs in check. Those who succeed in becoming architects of business value will help drive the success of their companies,” 

says Dr. Christian Campagna, Managing Director Accenture Strategy, Finance & Enterprise Performance Lead.

Enormous interest in digitization

The Accenture study shows that high- performance businesses have influential CFOs. Such companies are characterized by high satisfaction with the quality of their finance departments, which are involved in the evaluation of technology investments, and such companies also understand digitization and consider it an important platform for better processes and new products.

“We have a wealth of data in our system. Being able to take that data, convert it to information, glean insights and make recommendations to improve business performance is key and critical,” comments Ronald Dissinger, CFO at Kellogg Company. 

That’s why 20 percent of CFOs want to start using analytics and big data soon – only about 4 percent have already done so. Investments in cloud computing and software-as-a-service are also considered important. This type of “outside the box” thinking in the financial department is also encouraged by top management. “Less progressive CFOs used to be in demand as a counterpoint to the CEO,” recalls Dieter Unterharnscheidt, a partner at Spencer Stuart Deutschland recruitment consulting. “These days, supervisory boards are specifically looking for generalists with the potential to lead an entire company.”

Without digital strategies and business models, there will be no more growth

The future responsibilities of Chief Financial Officers

Strategies for new challenges: Cost control is not enough. CFOs must evaluate which growth areas the company will invest in, which risks are acceptable and which individual assessment benchmarks are suitable for regions or products.

Organizational transformation: Agility and flexibility support rapid changes in volatile markets. CFOs need to promote a process architecture with shared services or business process outsourcing, one that supports local business models.

Evaluate decisions sooner: CFOs will set a course earlier than before. In the past, they evaluated and financed decisions that had already been made. In the future, they will draft financial scenarios for products in advance and deliver information to support better decision-making.

Utilize the potential of digitization: On the one hand, new technology will enable CFOs to evaluate their data more effectively. On the other, the entire company will benefit from investments in big data and analytics. CFOs must assess those investments from a strategic business perspective.

Strengthen expertise in the financial department: Supporting expansion in regions, business areas and product groups requires specialization. CFOs will provide their experts with access to knowledge about industries and regions as well as digital technology. 

Source: Accenture 2014 High Performance Finance Study

 

 

Growth Strategy | Growth Champions Landing in digital future markets

Many successful companies are taking a break from
growth, according to findings in Accenture’s
Top500/Top100 studies. But companies that
invest consistently in digital technology,
strategies and business models can
recapture past profitability.

Read article

Three countries, one challenge: After several strong years, the growth drivers in Germany, Switzerland and Austria – the Top500 and Top100 – have recently slowed, as demonstrated by the figures coming from the leading German companies that Accenture analyzes every year. “Roughly speaking, one in 10 companies in the Top500 has been growing strongly, then comes an upper middle range,” says Frank Riemensperger, Country Managing Director for Accenture Germany. “But the majority are only managing minor growth, or even declining.”

The reasons for this lull vary. Many German companies focus on exports and are therefore suffering from weaker demand from trading partners like Russia or Brazil. Dependence on China and the USA also has its risks. While North America is proving to be a stable market, experts are watching the weakening economic momentum in China with concern. India remains a challenge, with 1.3 billion people and 6 percent 

growth forecast for 2015 – no less interesting than China, but the Top500 has not penetrated the market in India nearly as well.

Digitization increasingly important

The strong franc is an ongoing problem for Switzerland, because it makes exports more difficult. Companies are deciding whether to retain their Swiss headquarters or relocate. Financial service providers also need to focus more on regulatory topics such as Basel III, which requires more defensive management. “Successful Swiss companies rarely drive comprehensive transformation projects now,” comments Thomas D. Meyer, Country Managing Director for Accenture Switzerland. “Instead, they focus on emphasizing their strengths in responding to market challenges.” Austria is suffering not only from weaker trade partners in Eastern Europe, but also from delayed reforms. 

While unit labor costs in Germany and Switzerland have increased by about 10 percent since 2005, they have risen by almost 20 percent in Austria. For that reason, Klaus Malle is relying on growth momentum through digital transformation. “New digital technologies give Austrian companies the chance to penetrate new markets,” says Malle, the Country Managing Director for Accenture Austria. “Without a digital strategy and business models, there will be no growth and no new market share.”

This applies to every region and industry according to the NACIndex developed by Accenture. In the study “The Growth Game-Changer,” the index shows how a national economy can take advantage of the significant opportunities presented by the Industrial Internet of Things. Here Switzerland is only slightly behind the USA, which is in the lead. Germany ranks 10th. For Riemensperger, it is essential that board members work together to determine the digitization 

strategy and lay a solid foundation for profitable growth, focusing on one topic above all others: “With many ideas for new services or business models, the question arises of how best to monetize them.”

Internationalization pays off

Determining the consumer’s willingness to pay plays a key role, as does testing cross-industry cooperative agreements or technology platforms. But Riemensperger believes growth champions that perform more successfully than other companies exhibit other important behavior patterns: “They entered fast-growing international markets early enough and very steadily, establishing and optimizing scalable business models that enabled them to conquer new markets,” he says. Consistent digitization provides a solid foundation for these capabilities.

Workplace Transformation | ERGO Change on a silver platter

Transitioning to a new operating system is challenging. In tandem with a migration to Windows 7 and Office 2013, the ERGO Insurance Group also deployed the ERGO New Enterprise Officeworkplace (ENEO), which delivers fast and reliable IT services. Experts from Accenture and Avanade supported the process.

Read article

Transitioning to a new operating system is challenging. In tandem with a migration to Windows 7 and Office 2013, the ERGO Insurance Group also deployed the ERGO New Enterprise Officeworkplace (ENEO), which delivers fast and reliable IT services. Experts from Accenture and Avanade supported the process.

The fruit gums probably weren’t essential for success. But they were a nice addition to the ENEO starter package for everyone involved with the IT transition at ERGO Insurance Group in Germany – neatly packaged next to the quick-start guide and the USB stick that would launch the migration to the new client. The sweets were there to help calm the nerves of all the in-house staff and those at agencies in the field who may know their way around insurance policies, but have never installed an operating system. “With the starter package, accompanied by individual support by telephone and in person, we were able to simplify the transition from Windows XP to Windows 7 and Office 2013, and explain the changes in an

easy-to-understand way,” says Christian Kreimer, Senior Manager at Accenture, about this unconven-tional approach to information and training. “Taking the most user friendly approach possible was important for the launch of ENEO, the ERGO New Enterprise Officeworkplace.”

Real-time tool for the transition

In principle, the situation at the beginning of the project in early 2013 was similar to that of many other companies: The end of support for Windows XP prompted a migration to Windows 7. However, there was one peculiarity that also needed to be taken into consideration: Many of the 26,000 IT workstations affected were located in various insurance agencies throughout the country. This decentralized IT infrastructure made it technically impossible to install an operating system on every computer from one central location simultaneously. “The network could never have handled that due to the huge volume of 

data involved, so on-site installation was the only option,” notes Kreimer. In addition, the installation procedure had to be foolproof, as it would be executed by non-expert staff within each agency. This led to the idea of a USBstick-based migration, including intensive training and installation support, which also convinced Jens Fornfeist. “The realtime migration tool recognized problems instantly and solved some of them before users even noticed, enabling a smooth transition to Windows 7,” says the manager from ITERGO, ERGO's IT service provider. “After the installation, general training materials and individual briefings ensured that users were able to find their way around the new environment quickly.”

Training and videos for users

The project progressed as planned. First, users were informed by phone, and technical details were verified. Then users received the ENEO starter package in the mail, followed by an automated message from

the computer to insert the USB stick. At peak periods, this allowed up to 350 computers a day to be migrated. The USB stick saved the user’s data, installed Windows 7 and Office 2013, logged itself in, accepted settings for programs and peripheral devices, and restored the previously saved user data. At the same time, videos were provided to guide users through the visual and usage changes introduced with the update. The beforeand-after view that explained the updates provided an additional migration aid. Furthermore, ENEO floorwalkers in the ERGO subsidiaries contacted agency users either in person or by phone to help with potential problems. “But everything went so smoothly and was so self-explanatory, there weren’t many questions,” says a satisfied Fornfeist.

Flawless technical content is just as important as a perfect organizational transition. After all, 80 operational business requirements had to be fulfilled for ERGO, 500 applications had to be adapted for the 

new IT platform, and existing applications needed ongoing support. An agile development approach ensured a rapid and smooth development process. “It was especially challenging to develop the ENEO workstation in a short period of time, as well as adapting and testing so many different applications,” explains Andreas Stocker, Group Manager at Avanade, a subsidiary of Accenture and Microsoft. “After the six-week design phase, we executed the project in several small steps. In addition, every four to eight weeks we extended and tested new functionalities with a new release.”

In contrast to a comprehensive test of all programming at the end of the development phase, this approach has the advantage of enabling developers to respond immediately to the results of these trial runs. The accompanying modernization of the IT infrastructure also played an important role – 90 percent of programs are now provided as terminal server applications, which are associated with flexible user groups instead of rigid business profiles. 

Greater flexibility for developers

Everyone uses the same client, and the administrator provides access to programs dynamically when roles and responsibilities change. This increases flexibility because more cumbersome configurations no longer need to be modified on different clients. System management was also modernized as part of the project, enabling centralized management of all ENEO client components. This includes the monitoring and distribution of current software updates as well as the encryption of company data. In fact, a great deal more is now being done for IT security in general. For example, a centrally managed harddrive encryption policy was introduced for all clients, in addition to the strong protective measures already in place. Security configurations were also optimized by introducing client certificates, in addition to an expanded firewall configuration. A new antivirus solution integrated into the system management tool completed the improved security package.

Moreover, the ITERGO software developers now utilize a high-performance virtual desktop infrastructure (VDI), which enables faster working while reducing effort. For that reason, Fornfeist has nothing but praise for the workplace transformation: “The collaboration was characterized
by a high degree of professionalism, reliability and expertise throughout the entire project – and Accenture as a partner made a decisive contribution to our success.”

 

“The collaboration was characterized by a high degree of professionalism, reliability and expertise.”

Profile
ERGO Insurance Group

Headquarters: Düsseldorf
Executive management: Dr. Markus Rieß, Chairman of the Board of Management 
Employees: 43,000 (2014)
Revenue from premiums: 18 billion euros (2014)
Industry: insurance
Website: www.ergo.com

Human Resources | Shortage of Skilled Professionals Revealing new routes to the future

Only half of all workers are happy with their jobs. Digital technologies can strengthen employee loyalty through better work-life balance and custom training opportunities – and this will help counter the shortage of skilled professionals.

Read article

Digitizing production is challenging from a technical perspective – but Klaus Bauer is already thinking ahead to the Industry 4.0 factory. “People should be directing operations and making the decisions, but they shouldn't be worrying about the complexity of controlling,” says the Director of Base Technology Development at mechanical engineering company Trumpf.

Today, many jobs require a basic understanding of digital technologies, from the office to the production line and service provision. Working on a computer at a desk is the norm, but machines can also be controlled by a tablet, and service providers rely on databases and recommendation software during consultations. Only a few employees really understand programming, but many need to use software in their daily work.

That's why it would be beneficial for management to get their employees excited about the digital challenge and prepare them to face it. 

According to the Accenture study “Being digital: Embrace the future of work and your people will embrace it with you,” employees in the EU generally welcome new technologies. In fact, 57 percent say digital technologies would improve daily work, and around half expect them to improve their job prospects. Despite this openness, only half of businesses invest in their employees’ digital skills – and two-thirds of them cannot find enough specialist professionals in the job market.

The solution? An HR culture that focuses more on employees’ strengths and qualifications, because the digital transformation can help different employee groups leverage them. New recruits from Generation Y and experienced professionals complement each other when talent promotion and training are geared toward these target groups, making the workforce as a whole fit for the digital future. This approach could also help boost employee loyalty, which is important in the context of the Accenture “#ListenLearnLead Global Research 2015” study, which revealed that only about 

half of employees are satisfied with their jobs. Moreover, 14 percent are looking for a new challenge within the company, and 32 percent are actively trying to leave. Training opportunities can help slow this brain drain: 85 percent of respondents value training opportunities highly, 65 percent see them as an opportunity, and 59 percent believe they could lead to a promotion or help them in their work.

Using every employee’s knowledge

Above all, a better work-life balance would help Generation Y go to work in a more motivated frame of mind. Implementing digital technologies would enable businesses to offer flexible work schedules and models, which would significantly increase employee satisfaction and loyalty. Walter Hagemeier – Managing Director and head of Accenture Strategy in Austria, Switzerland and Germany – believes it is crucial to develop innovative ideas quickly, so businesses don’t lose even more hard-toreplace specialists. 

“Demographic change and a shortage of skilled professionals are starting to impact companies,” warns Hagemeier. “We need the cumulative knowledge of experienced employees.”

Essential steps in changing HR culture

Align HR strategy with the business model: HR planning and employee qualifications must fit the company’s overriding digital strategy.

Try out flexible, agile ways of working: Employees can use analytics, collaboration or the Internet of Things to design and test new processes.

Identify digital qualification requirements: The type and scope of the digital skills required must be determined for each task and position.

Promote employees’ digital expertise: New ways of learning, such as social learning platforms or online forums, enable continuous development.

Develop leadership through digital culture: Clear guidelines, closer contact via collaboration tools and encouraging innovative thinking make employees more decisive.

Quelle: Being digital – Embrace the future of work and your people will embrace it with you

Digitization of the Procurement Process | Procurement Setting the direction consistently

Procurement guidelines are often ignored when it comes
to non-production materials and services. Smart purchasing
platforms help influence ordering behavior through clear
processes, sensible business rules and supplier agreements.

Read article

It’s a rhetorical question. “Do people need training on Amazon or eBay?” asks Markus Hoppe, with reference to the user-friendliness of these much-loved online consumer retail platforms. No, because they are characterized by easy search functions, clearly arranged search results and intuitive navigation, as well as comprehensive and precisely customized product suggestions, as the Principal Director of Accenture Strategy Operations Consulting knows all too well. He’s concerned about something completely different. “Why are many companies’ traditional purchasing systems so difficult to work with, when we can learn to use modern B2C systems in just a few minutes?”

Overcoming old habits

According to this procurement expert, implementing modern digital technology in purchasing drives significant improvements. In his experience, businesses are able to control production material costs pretty well. 

However, old habits often override company-wide purchasing rules in everyday administrative work at the departmental level. Despite guidelines dictating otherwise, orders for nonproduction materials and services often follow old processes and go to the suppliers that have been used in the past. “In day-to-day business, negotiated conditions are rarely implemented throughout the company as intended by purchasing, because either the willingness or the knowledge is lacking,” says Hoppe. “Digitization of the procurement process that is well-thought-out both technically and organizationally can change this over the long term, and save most companies
a lot of money.”

Such a procurement platform is characterized primarily by four elements inspired by successful B2C retail platforms: It has to be easy to use so people will like using it. It must contain suppliers that have proven they can supply the relevant products and services at the right quality and cost, so users don’t need any additional offers. 

It must allow offerings to be supplemented, so that new technical features and price changes can be taken into account. And it must allow procurement to guide and control purchasing behavior in order to enforce procurement guidelines in terms of adhering to contracts and using preferred suppliers.

One initial step could selectively allow ordering via Amazon, eBay, etc., and integrate the provider into the company’s own procurement platform. Some companies already do this – and Amazon wants to make it even easier with the Amazon Business marketplace. Nevertheless, it is important for a company to have its own platform, possibly running in the cloud.

This is the only way it can anchor comprehensive business rules that steer users specifically toward consumables that are listed in master agreements, or inform them that a supplier's other offerings have passed quality inspections and can be ordered.

Implement rules company-wide

Hoppe believes that in addition to a purchasing portal and intelligent business rules, smart digitization of procurement should include assisted buying – not a traditional helpdesk, but individual consulting on complex issues relating to quantities and combining offers from several suppliers. “The purchasing behavior of employees can then be guided through the procurement platform so that they broadly adhere to purchasing rules, ensuring that savings opportunities are actually utilized,” says Hoppe.

How to guide purchasing behavior successfully

Concentrate: Agreements can be signed with one or more suppliers for multiple products and services. Precisely defined conditions and supplier requirements enable each company department to find what it needs quickly and inexpensively, according to a standardized process.

Control: Without clear instructions and simple steps, employees find it difficult to adhere to broad company-wide purchasing guidelines. For this reason, the procurement platform needs business rules to automatically guide users to preferred suppliers for each order. These can also be external marketplaces.

Complement: In procurement, framework agreements alone are not enough. Conditions can change, and new needs can arise. That's why offerings from existing suppliers should constantly be compared with market developments, and new products and services should be added to the program.

 

Data Lake | BAWAG P.S.K. Elegant reflection of data

BAWAG P.S.K. is working with Accenture to implement a Big Data platform based on Hadoop. The Austrian bank will be able to reduce its infrastructure costs and lay the technological foundation to take full advantage of the opportunities of digitalization. Technologies from Facebook, Google and Twitter provide efficiency and scalability.

Read article

Online, mobile, omnichannel or digital wallet – bank managers certainly cannot complain about a lack of challenges since digitalization entered their industry. In addition to new business areas, new competitors are emerging with their own offerings. Experts see Internet giants like Facebook, Apple and Google, as well as startups with innovative technologies, as disruptors that with their own services for payment transactions could drive traditional banks out of the market.

Bernhard Kainz recognized some time ago that a mixture of innovative technologies, changing customer needs and new competitors will endanger many traditional business models. The CIO of BAWAG P.S.K. is making targeted efforts to counter this trend by redefining the role of IT: In the past, IT employees provided colleagues as well as customers with functioning hardware and software or stable network connections. Now his team collaborates heavily on strategic decisions.

The “Data Lake” is relatively inexpensive

“By precisely planning our use of digital technologies for improved service quality and lower costs, we can modernize in a way that allows us to compete with old and new competitors,” says Kainz. For that reason, the CIO has launched projects that fundamentally change the bank’s IT structure as well as its processes and procedures. Striking a balance between low financial cost and high innovative power for customers is important to him. A good example is the Data Lake developed jointly with experts from Accenture: This Big Data platform ensures that not every transaction made by account holders immediately burdens the traditional, comparatively expensive infrastructure. “More and more people are using online banking and mobile devices to check their account balance, often several times a day,” states Daniel Baur, the project partner at Accenture. “Sixty percent of the mainframe load comes from actions triggered directly by customers. 

Reduced workload for mainframe IT

Without an alternative, we will see a massive increase in these costs because the bank’s digital services are being utilized more often and future developments, like the Internet of Things, will significantly increase digital access.” The solution developed jointly with Accenture combines cost-effective standard hardware with innovative technologies and is comparable to the principle of a Google data center. It allows many transactions to be processed outside the bank’s core system and enables the comprehensive analysis of complex issues in parallel to daily business activities.

The inspiration comes from Twitter

The data is replicated when an entry is made in the mainframe table, which barely adds any cost. Rather than landing in a traditional database, it ends up in a Big Data cluster based on Hadoop. This open-source software framework manages the computing 

performance of the servers, which run on the Linux operating system. “Here we’re dealing with disruptive technologies that are already being used by Twitter and Facebook,” according to Accenture expert Baur. “Now traditional companies have the opportunity to digitally transform their business models by having the new technologies customized for their individual requirements.”

An Accenture team took on that task for BAWAG P.S.K. It used Amazon’s cloud services for programming the application and extensively testing it for the development project. Based on the results, the bank installed the necessary hardware and software in its own data center. It cleverly combines the advantages of both worlds. An on-premise solution was selected for the production system, where the load is predictable and relatively constant. The development environment, by contrast, utilizes the strengths of the cloud: elasticity and scalability. This way the project could be implemented in weeks rather than months. 

It is a key part of the transformation to a “digital” bank, which is an important differentiating characteristic for BAWAG P.S.K.

Costs reduced by 90 percent

Implementing the Big Data platform allows internal processes and analytical methods to be optimized. In addition, there are many opportunities to pitch innovative, personalized offers and services to end customers. This enables information about bank transactions to be sent to smartphones in real time, according to customer requirements. Further data analyses – especially in combination with unstructured data – allow even more pinpointed offers and service improvements. Data from social media could potentially be included as well. On top of all that, the technologies being used reduce IT costs: The hardware is inexpensive and the software is based on open source, which eliminates costly maintenance contracts and licensing fees. 

“Compared with custom systems in a high-availability setup, the costs for the same performance are as much as 90 percent lower,” says Accenture expert Baur. For that reason too CIO Kainz is very happy with the “Data Lake” project and with Accenture: “In the long run, a strong result is the only thing that counts for the customer. Accenture provides quality here that we can rely on.”

 

For BAWAG P.S.K. the project is an important part of its transformation to a “digital bank.”

Profile 
BAWAG P.S.K. AG

Headquarters: Vienna, Austria
Executive management: Byron Haynes, CEO 
Employees: approximately 3,200 (2014) 
Revenue: 34.6 billion euros (2014) 
Industry: banking
Website: www.bawagpsk.com

 

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 358,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$31.0 billion for the fiscal year ended Aug. 31, 2015.

Its home page is www.accenture.com

Navigation