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Insights 01/2015 Contents

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Editorial

On the road to the Industrial Internet of Things, companies that invest in innovative startups, digital platforms and sophisticated IT security have a competitive advantage.

BMW has the “Startup Garage,” ABB has “Start-up and Tech Company Day” with startup companies in Switzerland, and A1 Telekom Austria has “Start-up Campus.” A single idea lies behind all of these different names: Companies that want to do business successfully in the Internet of Things need ideas – especially in the area of Industry 4.0, which is heavily trending. Switzerland and Germany are generally well-positioned in the NAC Index developed by Accenture. In the study “The Growth Game-Changer,” the index shows how a national economy can take advantage of the opportunities presented by the Industrial Internet of Things. Nevertheless, collaborating with startups makes sense because they could recognize trends sooner and be able to develop promising products or services faster than established companies struggling with less-flexible structures. Therefore, companies 

working on digitalization are seeking out the startup scene and investing in young businesses.

The wealth of ideas from entrepreneurs at CeBIT was impressive: Many participants in the CODE_n innovation competition had the potential to pulverize currently successful business models. At the Accenture Innovation Forum and the German Innovation Awards in Munich, startups have been causing a sensation – like Relayr and its “Wunder Bar” that makes objects communication-capable. This type of innovation is making the Internet-based platform economy a reality. The advantage here goes to companies and partnerships that gather data on the status of their products and individual customer usage – and use it to develop services or send interested users on a convincing customer journey. Businesses that keep their platforms open and customer-oriented can incorporate small startups as easily as heavyweights in other industries and benefit from joint offerings that are diverse and allow a high degree of customization.

Companies like Siemens – and its Totally Integrated approach – are going in this direction. The Totally Integrated Automation Portal should reduce development time by up to 30 percent.

Digital platforms require trust. To be accepted by partners and customers, IT security must take top priority – as with all digitalization projects, by the way. According to BITKOM (Germany’s federal IT association), half of all German companies have been victims of digital attacks in the last two years. “IT Security and Data Protection 2015,” a study by the National Initiative for Information and Internet Security, states that three- quarters of those surveyed fear hacker attacks and the loss of control over their data due to the cloud. However, the Accenture study “The Cyber Security Leap: From Laggard to Leader” confirms that a great deal can be done about the problem: Early-recognition strategies help prevent attacks from occurring in the first place. But companies that do nothing to actively defend themselves are just treading water when it comes to cyber security.

Generally speaking, other topics should not be neglected when building a platform – for example, modernizing the ERP environment at Styrolution or optimizing project management at Raiffeisen Bank International. But businesses that bring an experienced service provider on board for support can focus on the top strategic priority: their digital platform. And they can seek out the best partners for technology and products.

Cover Story | Digital Platform Economy Make proper contact

The Industrial Internet of Things connects
products and systems with each other and
with the manufacturer. Offerings and
business models can be developed from
data on usage and customer desires.
For companies to stay competitive, it is
crucial that they quickly establish their
own platforms and collaborate with
the right partners.

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It used to be quite obvious: If the manager of an automotive company was talking about platform strategy, he meant the technical basis that several models share. VW was considered the top company here with its modular longitudinal matrix (MLB) and the modular transverse matrix (MQB). “In the future, all vehicles from our Group in the Polo, Golf and Passat segments will be based on the MQB,” stated VW CEO Martin Winterkorn at the rollout in Wolfs-burg. “That’s more than 40 models and 3.5 million units annually.” This created cross-brand siblings such as the VW Polo, Audi A1, Seat Ibiza and Skoda Fabia, or the VW Touareg, Audi Q7 and Porsche Cayenne. Other manufacturers use similar production methods.

Data is the new gold

Although this concept is a key to agile, cost-effective manufacturing, platforms of the future are about digitization, cross-industry services and disruptive business models – also in the auto industry. For example, Audi is integrating the Google Android Auto

and Apple CarPlay software platforms into its Multi Media Interface (MMI). “Our customers want to be always on and use services they know from their smartphone in their car,” says Audi Board Member Ulrich Hackenberg. BMW is going even further with its Business Integration Platform (BIP). Drivers can find car-related apps and services in the ConnectedDrive Store, usable in real time. This increases customer loyalty, revenue and profits. In addition to data generated from routes, driving behavior and technical status of the vehicle, BMW is receiving information about driver preferences that can be developed into new offerings together with partners. Such Internet-based, often cross-industry platforms for services and products are springing up everywhere at the moment, from the healthcare industry to agriculture – commonly organized with the support of innovative startups.

Frank Riemensperger considers this the most important trend in business right now. “We are currently seeing an unbelievable race for the operating data from our intelligent products being 

used all over the world, from X-ray equipment to sheet-metal-bending machines to vehicles,” states the Country Managing Director of Accenture Germany. It is about more than manufacturing smart products in smart factories: “Internet-based service-business models are creating huge opportunities – here it depends on who is running the platforms linked to the intelligent products and who has access to the data.” Businesses that score and move forward the right way with imaginative concepts and suitable partners will secure lucrative key positions in the digital value chain of the future. Companies that give away data carelessly or miss out on digitization will be marginalized by innovative market leaders or invaders from other industries.

At the center of this scenario is the Industrial Internet of Things (IIoT), in which products and systems communicate with each other and with platforms in the cloud to share details about their own properties or functions as well as gather data about purchasers and users. Half of the communication on the Internet is already between autonomous items equipped with

with sensors and transmitters. Soon even successful companies will no longer run as isolated organi-zations: They will operate as part of the digital “we economy.” The “we economy” is based on digital platforms and network systems that blur the lines between different industry segments and create large digital ecosystems in which products, services and business models are often developed as a group.

Five trends shape the business world

The Accenture Technology Vision 2015 entitled “Digital Business Era: Stretch Your Boundaries” identifies five megatrends that must be taken into consideration when developing a digital strategy for the future: 

  • Internet of Me: Networked products provide comprehensive data about the user’s personal world of experience that can be used to develop highly customized offerings.
  • Outcome Economy: Intelligent hardware closes gaps between the digital and real worlds. It can determine what the customer wants to achieve with a product and configure it to yield a specific result.

  • Platform (R)evolution: Digital industry platforms become the basis for innovations and disruptive growth. Cross-industry collaboration creates major competitive advantages for the partners.

  • Intelligent Enterprise: Big data, computing power, data science and cognitive technologies enable machines to make decisions without guidance from humans. Production becomes more agile and customized.

  • Workforce Reimagined: Human-machine interfaces in the form of smart machines and wearables enable new types of cooperation between people and machines.

Businesses need to act more quickly

A comparison by Ian Goldin shows how massively IIoT will impact and shape businesses and companies. “The rise of the Internet of Things echoes the emergence of electricity – not in terms of depth or breadth, but rather in the scale of transformation that was achieved by electrification,” says the director of the Oxford Martin School at the University of Oxford.

The Accenture study, “Winning with the Industrial Internet of Things,” captures this in numbers: The IIoT could add up to US$7.1 trillion to the USA’s gross domestic product by 2030, and around US$700 billion to Germany’s GDP. But only if governments and businesses make targeted investments in the necessary infrastructure and innovation campaign. Precisely here is where German companies threaten to lose touch, while Switzerland is at the top of the so-called NAC Index. According to the Accenture study “Mut, anders zu denken: Digitalisierungsstrategien der deutschen Top500" ("Courage to think differently

Digitization strategies of Germany’s Top500”), almost 80 percent of managers see the fundamental effects of digitization. But less than 20 percent make digitization a top priority in their business models, and 40 percent don’t invest at all in digitization in their research and development.

Yet the opportunities that owned platforms offer for digital ecosystems with intelligent services, far beyond the actual product, are apparent. In the automotive industry, manufacturers are already collecting data about users from their vehicles and utilizing it as described in Technology Vision 2015. They evaluate individual profiles so that a car delivers better results such as calculating routes more precisely and reserving a parking space at the destination. Or they enable mobility independent from a person’s own car via carsharing. Collaboration partners can create custom offers using data from the platform. Insurance companies calculate cheaper rates based on driving style. Home technology specialists offer apps that let users adjust the heat at home from the car.

Financial service providers enable cashless fueling at gas stations and deduct the bill at the end of the month. Cars linked with each other and the cloud work autonomously to improve traffic flow by constantly comparing routes. Cars are even becoming humanmachine interfaces with sensors and apps for checking the driver’s health at the wheel. Manufacturers that invest too little here – or too late – will likely end up a junior partner on another platform instead of taking the key position on their own platform.

Digital ecosystems are the future

Such platforms also function in B2B activities via IIoT. Agricultural equipment manufacturer Claas offers 365FarmNet, software to make farmers’ work easier. Since tractors and combine harvesters can hardly be improved, they make them intelligent. Claas already has a dozen cooperation partners for the platform, including suppliers of specialty equipment, seed 

companies, Allianz and the European Global Navigation Satellite Systems Agency. Farmers decide which services they will use and pay to perfect the use of seed and fertilizer or harvesting methods. In a Claas combine harvester, the Cemos driver assistance system can receive information from an affiliated weather partner that it might rain. Then it automatically speeds up to harvest the grain faster. The increased fuel consumption costs less than the drying that would otherwise be necessary.

The system not only receives data, it also uses sensors to send information about soil condition, for example, to the platform so that the optimal amount of fertilizer and pesticides can be used next season. Users can receive recommendations on seed varieties via an app from KWS, a seed company. Supplier Amazone, a producer of fertilizer spreaders, uses this information to determine the correct setting for its equipment. The system’s diverse functionalities and the opportunity to learn from others’ information made it a logical choice for KWS Manager Christoph Bollmann to join this 

platform: “We are an innovative company and want to join in as a pioneer.” Frank Riemensperger advises every manager to think this way – coupled with
the recommendation to go beyond seemingly natural boundaries between industries in the future: “Successful decision-makers don’t just concentrate on the internal potential of their company. They also look outside to become part of a digital ecosystem with the right partners.”

www.accenture.com/techvision 
www.accenture.de/wachstum

 

“We are currently seeing an unbelievable race for the operating data from intelligent products used all over the world.”

This is how you create new growth

Transcend boundaries: Ask which service would benefit customers for which product: Nothing is off-limits. Determine how far your company is and how it can develop the necessary capabilities.

Observe your environment: Follow your business partners’ developments. That’s how you see where opportunities open up and whether other associates of your supplier are becoming dangerous to you.

Develop a platform: Determine which services you’ll offer via which channel. Establish the technical basis and regulate the access through developers, suppliers and customers. 

Calculate opportunities: Calculate revenues realistically. Costs of the transformation as well as determining prices and margins for your new products belong in this consideration. 

Sell your offerings: Convince sales partners of the advantages of the new products. Conflicts may arise if you offer services online, for example, that were previously only available through partners.

Comply with data protection: Respect your customers’ needs for data protection and security. Emerging legal questions may need to be clarified at product launch.

Bring employees along: Give them extensive information and offer training for new responsibilities. Digital services require major changes for many employees. 


www.accenture.com/GrowththroughIIoT


 

Startups | Innovation Management Innovative collaboration

Many ideas for digital products, platforms and
business models came from startups – that’s
how Google, Facebook and eBay got their
start. If established companies want to help
shape the Industrial Internet of Things, they
should collaborate with inventive startups to
develop groundbreaking offerings.

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Few big companies consistently shed old activities on the road to new business markets: Two years ago, Axel Springer sold the majority of its newspapers and magazines to focus on developing digital platforms and products – for its own industry and far beyond. “Our company has undergone significant structural and cultural change,” explained CEO Mathias Döpfner as he presented the numbers for 2014. “We will continue to invest in our digital expansion in the coming year.”

Finance interesting startups ...

Changing course to the Internet economy accelerates an innovation strategy that can capture impetus arising from digitalization. Ideas for new business models and products are provided by employees, as well as by an accelerator program with the startup investor Plug and Play Tech Center in Silicon Valley, which can support 30 startups a year. They receive funds, can use investors as a bridge to the Silicon Valley ecosystem or to Berlin, and benefit from comprehensive mentoring, workshops and 

access to the partner’s network. Springer is gaining insight into the current trends in digitalization and company shareholding. The innovation strategy is rounded out with acquisitions such as Runtastic, the successful Austrian startup, which develops apps for measuring athletic performance.

But even though digitalization and the Internet of Things are new territory for them, many companies do not allow themselves to be inspired enough by outsiders who have a sense for rising new technologies. The Accenture study “Mut, anders zu denken: Digitalisierungsstrategien der deutschen Top500” (“Courage to think differently: Digitization strategies of Germany’s Top500”) found that, as a result, they miss out on the opportunities that the Industrial Internet of Things (IIoT) can offer industrial companies in particular. This study found that 28 percent of such companies collaborate with traditional research institutions and think tanks, but only 15 percent with startups. And only 6 percent launch independent business areas as offshoots to unleash the creative energy of employees. 

The rethinking process is slowly beginning. For example, RWE wants to transition its core business to digital offerings and gather impetus and inspiration from outside through an innovation hub. In its startup pitch at CeBIT’s Utility Industry Day, the energy company was looking for young entrepreneurs to collaborate on developing solutions for the Internet of Things, for example, starting with keywords like “smart meter” and “smart home” – but happily going farther afield as well.

... and profit from their ideas

“The goal is to find products and services that offer our customers added value and have the potential to shake up existing markets,” states Stefanie Kemp, director of the Disruptive Digitisation project. “The innovation hub is the interface for internal and external experts in a variety of areas. We use it to identify interesting projects and can quickly develop real products or services.”

CeBIT was a good starting point for this effort. Under the motto “Into the Internet of Things,” the CODE_n innovation competition targeted entrepreneurs and companies that are ushering in the era of the Internet of Things. Ulrich Dietz is convinced that the value of stimulus from outside cannot be overestimated. “Anyone who ignores the ideas of entrepreneurs has not recognized the potential of the startup scene,” notes the initiator of CODE_n and CEO of the GFT Group. Many companies still have difficulty identifying promising startups and starting a dialogue with their founders. Specialists who understand what drives digitalization and can classify new developments provide support to help these companies. “Our experts act as trend scouts. They keep an eye on the technologies, innovations and people that could become important,” emphasizes Frank Riemensperger, Country Managing Director of Accenture Germany. “We build bridges between companies searching for innovations and startups with promising ideas.”

Sources of digital innovation for big companies

Research institution/think tank 

In-house R&D department

External startups

Internal startups

Quelle: Accenture
www.accenture.de/wachstum

Project Control Service | Raiffeisen Bank International AG On a clear path to the goal

Project management can be improved when processes are comparable and experiences can be transferred from project to project. Accenture helps Raiffeisen Bank International to standardize its project management and achieve transparency while providing cost-effective, efficient project controlling as a third-party service provider.

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We all know the problem of unequal standards of measure from watching soccer matches on TV: When two players collide in the penalty area, the impartial referee calls a foul and awards the attacker a penalty kick. But other referees analyzing the play later in the TV studio don’t see a violation of the rules in this scene. They wouldn’t have blown the whistle, but allowed play to continue.

No standard for comparison

Similarly, management at the Raiffeisen Bank International AG (RBI) in Vienna was struggling with widely varying assessments. Project managers at the leading commercial and investment bank in Austria and Central and Eastern Europe were using their own schedules and plans, and they evaluated the status of each project according to their own “yardstick,” often rendering projects scarcely comparable even within the same department. “Since there were no objective and standardized criteria, no one could get an overview of several projects at the press of a button. 

They had to ask about each individual case,” says Stephan Taborsky, RBI Project Director, Group Program Management Office. “This individualized aspect not only made it difficult to hand off projects to another employee, it made it impossible to centrally evaluate experiences and automatically implement the resulting obligatory suggestions for improvement.”

Meanwhile, a largely standardized set of measures is now in place at RBI. A mixed team, with Taborsky at its head, ensured within six months that large and midsized projects can run within a standardized project-controlling framework. Not only does this allow comparison through standardized reports, it also provides an earned value analysis that enables the evaluation of a project’s progress and its performance – according to objective criteria as well as in relation to other projects. This way, managers can quickly see when something is threatening to go off the rails and countermeasures are needed. Many project managers use the voluntary Project Control Service (PCS) to reduce their administrative effort and receive precise 

numbers more quickly. Generally, only small projects run outside the PCS.

Stephan Taborsky firmly believed that Accenture was the ideal partner, because the bank has its own project management office for its largest programs – which Accenture had already led successfully. Three specialists each from RBI and Accenture established the basis for the standardized project control for the PCS development project: They defined what optimized processes should look like and how standardized reporting would work. Standards that had proven successful in Accenture’s experience were adapted to meet the financial institution’s special needs. The focus was on the preparation and review of plans as well as financial tracking and reporting. Some processes were exempted because they are closely integrated with other bank processes, so that adjusting and standardizing them as part of the project controlling initiative would bring few advantages.

Accenture delivers the data now

Accenture experts in Slovakia's capital city, Bratislava, subsequently took over the ongoing project controlling as a full service for RBI. The bank’s project managers would be free of the daily mountain of paperwork in order to concentrate on higher-value activities instead of analyzing endless series of numbers. Now, Accenture employees in Bratislava take care of that at a fixed rate per project schedule being evaluated. Every week, they deliver information on the current project status to RBI decision-makers – information that has been comprehensively prepared and standardized across all projects to allow comparison. This enables serious decision-making on how to proceed based on a solid factual foundation. The implementation ran smoothly because Accenture’s experts in Vienna and Bratislava stayed in close contact with the RBI specialists. They quickly found solutions this way, from an arrangement about service level agreements to adjusting individual tools to meet RBI’s needs. “For example, we quickly agreed on the 

golden rule for what project plans should look like and developed standards that make the different projects very comparable,” comments Accenture project manager Franzeska Papargyropoulou. The monthly status meeting, in which current topics are discussed and meaningful developments for the Project Control Service as well as individual content are proposed, also contributes to the high level of satisfaction. What's more, direct communication between RBI project managers and their individual contacts in Bratislava enables them to work fast and in a goal-oriented manner.

Better processes reduce costs

So it is only logical that Stephan Taborsky praises the cooperation. “The standardization and comparability through the Project Control Service is so valuable that we would have done it anyway even without major cost savings just to learn more about goal-oriented project management,” says the Project Director of the Group Program Management Office at RBI. 

“But not only have we achieved substantial process improvements, we’re also seeing significant cost savings and a positive effect among the project managers.”

Profile
Raiffeisen Bank International AG

Headquarters: Vienna, Austria
Executive management: Dr. Karl Sevelda, CEO
Employees: approximately 55,000 (2014) 
Customers: approximately 14.8 million (2014) 
Revenue: approximately 122 billion euros (2014)
Industry: finance
Website: www.rbinternational.com

“The compara­bility the Project Control Service provides is very valuable.”

Procurement | Virtually Integrated Enterprise Autonomous software in the future

Programs and sensors handle the routine
tasks in procurement: They automatically
negotiate quantities and prices or check
delivery status and quality. So procurement
experts now contribute more subject-matter
knowledge to product development.

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A businessperson’s rule of thumb states: “The profits are in procurement.” Cost savings have long been achieved through better processes and conditions. Meanwhile, operating costs for procurement organizations average 0.8 percent of spend under management. To optimize them further, digital concepts are now coming into focus. “Pioneers utilize the advantages of social media in procurement,” says Daniel Vollath, Accenture’s Managing Director Strategy – Sourcing & Procurement. “They recognize their potential for boosting productivity and enabling better decisions, which in turn strengthens innovativeness and reduces risk.”

Social media is just one aspect of digitalization that is changing procurement – operational activities as well as strategic positioning. The Accenture study "Procurement’s Next Frontier – The Future will Give Rise to an Organization of One" explains the influence of Industry 4.0, the Internet of Things and analytics, which has a greater impact than just cost reductions. Kai Nowosel, Accenture’s Sourcing & Procurement 

Lead for Europe, Africa, Latin & South America, summarizes the essence: “We are seeing the rise of the virtually integrated enterprise, the growing importance of cognitive computing and new responsibilities for employees.” Nowosel is certain that key suppliers will be integrated more closely in their customers’ development, production and service processes, and take over some tasks entirely.

Cognitive computing will be vital

This requires transparency, trust and integration. However, contacts will be automated with simple suppliers that present themselves in a digital procurement center. These virtual company malls offer access to many potential business partners or offerings, for instance through industry marketplaces online. Cognitive computing will be key. Specific programs will use analyses of big data to negotiate prices and quantities independently. The software must be able to recognize issues and circumstances, understand them and trigger the right action. 

For example, if increased demand indicates higher prices, it concludes additional contracts with good conditions. Employees check transactions randomly. In the Internet of Things, everything is equipped with sensors. Products report to machines during processing that they are ready on time in the agreed-upon quality and that the full purchase price is due.

Paper documents will become as passé as triggering payments manually. Relieved of these routine tasks, procurement employees fulfill two responsibilities. With the help of technologies such as cognitive computing and analytics based on real-time information, these highly qualified experts throughout the company can focus on cross-departmental aspects of procurement. And procurement people embedded in different departments contribute their knowledge to the development of new products and business models. The faster employees can be trained for this, the better companies can take advantage of the opportunities that procurement of the future offers. 

How social media shapes procurement

Collaboration rooms: In the supplier room, procurement employees communicate and negotiate with suppliers. In the category room, clients and contractors define profiles for parts and services, which simplifies bidding events, partner selection and ordering. Coordinating demand across the company reduces the number of variations and the price. 

Open innovation: Customers use a special platform to inform suppliers what they need and encourage suppliers to collaborate either with the customers or among themselves to find better solutions. Suggestions can be made through protected channels. Products are developed faster this way – and often from unconventional ideas that never could have come from the company itself.

 

Social networks: Evaluating posts on public platforms such as Twitter, Facebook and LinkedIn shows how people talk about suppliers and products, and whether developments arise that require a response. If a supplier is accused of child labor, for example, it would damage the customer’s image.

Social analytics portal: The platforms and functions are bundled here so that procurement can use them quickly and easily for their daily work.

www.accenture.com/Procurementgoessocial

www.accenture.de/insightprocurement

Human Resources 4.0 | HR Management Soon everyone can help with finding

In the future, teams will increasingly search for,
qualify and motivate their members themselves.
The human resources department must use new
technologies and concepts to enable every area
to identify suitable talents and deploy them in
the best possible way.

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Whether it’s big data, digitalization, Industry 4.0, new business models or smart service – the business world is changing rapidly and profoundly. Companies are facing major challenges. People are discussing the future of production, sales and service concepts as well as the IT structures that are needed to realize them. However, concentrating on technical and organizational issues threatens to shift focus from another key success factor: employees.

HR managers need to digitalize

“We need to embark on a journey through every part of the company,” says Katharina Heuer, Management Board Chairperson of the German Society for Human Resources Management (DGFP). “HR managers need to get involved in this transformation process: They play a key role in many areas.” There is still a great deal to do in deploying digital technologies in human resources, according to “The Digital Transformation of People Management,” a study by the Oxford Economics Research Institute. 

Although 84 percent of HR managers surveyed say that business analytics will influence their work longterm over the next few years, only one-third provide other departments with strategically valuable knowledge for selecting and qualifying employees.

Thomas Sattelberger, Chairman of the association HR Alliance, is calling for HR 4.0 hand in hand with Industry 4.0. “Many HR departments know too little about the technological and social forces of digitization in the business world,” notes the former CEO of Deutsche Telekom. “They are stabilizing conditions at the moment instead of discovering the creative potential for people.” Yet the time for centralized control is coming to an end. This conclusion was also reached by the study “Digital Radically Disrupts HR,” a new analysis in the Accenture series “Trends Reshaping the Future of HR.” The essence of its findings: Through the use of digital technologies, many decisions that affect employees are being shifted from the central HR department to individual departments, teams or the employees themselves. For example, if information about an 

employee’s strengths and weaknesses as well as experience and potential are stored in a database and can be evaluated in a meaningful way with analytics, then that person can plan her career directly with her supervisor without detouring through the HR department. Any additional training that may be necessary can be triggered automatically.

Training becomes customized

Modern technologies enable employees to study with mobile devices whenever and wherever they want. The result – learning new knowledge and skills – ultimately counts for more than their presence in a seminar room at a given time. Especially for Generation Y, who grew up with social media, tablets and smartphones, motivation and training concepts based on mechanisms from computer games are very effective. There is no way around gamification in HR activities either. If the knowledge gained this way is processed in a wellmaintained database, self-organizing teams working on specific tasks can 

use it to autonomously identify talents that they need to successfully realize their project. Even employee salaries or additional bonuses can be influenced by supply and demand in such databases.

Fewer experts accomplish more

However, circumventing the central HR department does not mean it will become obsolete. Quite the opposite. “Talent practices will become more integral to the business’s strategic capability, because they are data-driven, and talent data is better integrated with an organization’s business data,” says David Gartside, Accenture’s Managing Director Strategy, Talent & Organization. “The HR function may become smaller as digital more efficiently enables transactional processes, and line managers and employees adopt consumerlike applications to handle HR processes themselves. What remains in HR may become more project-oriented and aimed at improving organizational effectiveness – such as helping to integrate a new acquisition. Already, in some leading 

companies, HR analytics groups have been established to analyze data and determine drivers of workforce performance.” 

www.accenture.com/DigitalDisruptsHR

IT Consolidation | Styrolution Streamlined solution

Implementing a single shared ERP platform is one of the most important topics in post-merger management. With its Advanced Enterprise Services, Accenture helped Styrolution, a chemicals company, to replace seven legacy systems with one cutting-edge, standardized solution and establish harmonized business processes.

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It sounds so easy after the fact: “We transitioned from legacy systems in record time,” notes Christoph de la Camp, CFO of the Styrolution chemicals company in Frankfurt, regarding the installation of a single uni-form ERP platform for – at that time – 17 production locations in 10 countries. “Our new integrated ERP system now enables us to work more efficiently and to gain greater transparency into key financial and performance data.” In fact, creating an IT environment that bundles the business activities, processes and key indicators of the world’s largest supplier of styrenics was a Herculean task. With Accenture’s help, the company’s own IT team mastered the challenge in a record 22 months – right on schedule.

Exactly according to plan

The transition to a standardized ERP system was necessary because when partners Ineos and BASF formed Styrolution as a joint venture in 2011, they created one company with seven different SAP systems. 

The fast and efficient integration of these IT landscapes was extremely challenging because the legacy systems reflected very different ways of operating in the areas of finance, cost accounting and procurement.

There were no standardized business processes, and no harmonization of global master data. Therefore, the situation called for a comprehensive ERP solution that consistently supports business processes and enables their cost-effective operation – and it was needed as soon as possible because the economic advantages of the merger could only be exploited with a smoothly functioning ERP system during the post-merger phase.

At the same time, certain localization requirements had to be considered as the project encompassed 38 legal entities in 25 countries with quite a few important regional characteristics. Transitional Service Agreements for some of the legacy platforms, which required an exit within two years, put additional pressure on the timeline.

 

Closely networking all locations

It was clear to Styrolution CIO Tony Maddock that the existing legacy platforms should ideally be replaced with a single, global, integrated ERP platform that’s customized to meet the needs of the new company, thereby improving its agility. Due to the decentralized geographical structure, the individual production sites would need to accommodate extensive and fully auto-mated integration regarding production, logistics, plant maintenance and quality management. To meet the tight timeline of 22 months, Accenture was chosen to support the project team with the develop-ment and rollout at all locations. A global presence, extensive experience with SAP projects and strong references for similar ERP implementations in  the chemical industry were not the only reasons why this partner was selected. “With Accenture Advanced Enterprise Services, we already have an industrialized solution for creating ERP processes, which signifi-cantly accelerates the implementation,” explains 

Martin Hösler, Managing Director Accenture. “This enabled us to stay within the strict timeframe for implementing the new ERP system.”

Styrolution selected a hub-based delivery model for the rollout. A central team controlled the processes and functionalities worldwide, supported by small
local teams of experts covering local requirements in key regional locations. Accenture’s SAP Delivery Center in Mumbai enabled the efficient delivery of SAP configuration, documentation, data conversions, and the development of reports, interfaces, extensions and forms. The data conversion required even more attention than in many other ERP projects. For Styrolution, around 90 data objects from seven different legacy systems needed to be harmonized, recoded and loaded, including data pertaining to chemical materials, customers and assets. Because data is extremely interdependent and changing the key for one attribute leads to changes in other attributes, Styrolution and Accenture worked together closely to confirm that more than one million data 

records remained consistent during the implementation. This also ensured that 350 development objects were built and tested as well as more than 20 peripheral systems established and connected to the ERP system using SAP Process Integration (PI).

Full transparency for the numbers

Having a clear representation of cost structures as well as full transparency on costs and profitability were fundamental prerequisites for the new ERP system in order for Styrolution to benefit immediately from strict financial management. Inter-company and cross-regional business activities made this difficult, so Accenture helped implement SAP Material Ledger and SAP Profitability Analysis to provide the required transparency and complete cost control. Working together, Styrolution and Accenture established a state-of-the-art, well-documented process model and ERP solution that provides a reliable platform for future growth. As such, the result after 22 months of 

intensive collaboration was very positive. “I’m proud that we have delivered this project together with Accenture. We had a clear mandate of requirements, which we delivered to a very aggressive timeline whilst also coming in on budget,” stated Styrolution’s CIO Maddock, emphasizing an aspect that is not a certainty with every company on a project of this kind.

Profile
Styrolution Group GmbH

Headquarters: Frankfurt am Main, Germany 
Executive management: Kevin McQuade, CEO 
Employees: approximately 3,200 (2013) 
Revenue: 5.8 billion euros (2013)
Industry: chemicals
Website: www.styrolution.com

Customer Focus | Customer Journey Unforgettable experience

Digital customers are an enormous challenge. In Germany
particularly, businesses need to adapt far more to these
customers’ unique characteristics. Strategic decisions need
to focus on the new desires and behaviors of digital customers
rather than the technical infrastructure.

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Some marketing campaigns are torpedoed by sales: Not long ago, one mobile phone service provider offered a smartphone at a good price – with or without a contract. The home page informed customers about nearby stores, but not the availability of the phones. Calls and visits to store locations with the goal of just purchasing the hardware often ended with the seller informing customers the phones were only available with a contract. And orders placed with the company’s own online shop were also canceled within a few days because the devices were sold out.

Develop a clear digital strategy

This accumulation of mishaps is unusual. But similar mistakes often happen when companies take their business online. For sales and service, they want to reach customers through more than just the traditional channels such as brick-andmortar stores, advertising mailers and call centers. They want to use digital channels such as online shops, e-newsletters and social networks. But many strategies are not well thought out. 

They reveal technical and organizational short-comings, or sales partners are not involved when they should be. Messaging, processes and channels are not aligned, and sometimes even contradictory. “Businesses are well advised to align their marketing, information and sales channels as much as possible to win customers and secure their loyalty. They need to integrate them into the channels used by their target groups,” says Kai Hudetz, Director of the IFH Institute for Commercial Research in Cologne, Germany.

Ninety percent of consumers tend toward multi-channeling, meaning they use a variety of channels for information and purchases. But instead of increasing loyalty with an exceptional customer journey that demonstrates capability and reliability at every point of contact, many businesses disappoint potential customers. “Time and again, we see international companies fine-tuning their digital activities at version 2.0 or 3.0 in some regions, while here they’re still in the introductory phase with version 0.5,” says Jürgen Morath, Managing Director at Accenture for Telecommunications and Media.

 

The “Accenture Digital Consumer Survey – German Edition” illustrates the unique features of the German market. This continuation of the Mobile Web Watch reveals the peculiarities of customer behavior. “The Digital Consumer Survey delivers key approaches for a digital strategy that achieves greater customer focus and is more than just an extension of existing ways of thinking and activities into the Internet,” emphasizes Morath. This includes taking into account a low degree of willingness to pay for additional services and a disproportionately high use of smartphones with small screens that require mobile offerings to be adapted to their display requirements. “Digital sales and service need to be developed from the customer’s perspective instead of just redeploying standard solutions online,” says Morath. “Customers need to be offered a convincing customer journey as well as tangible added value.”

Trend researcher David Bosshart, Director of the GDI Gottlieb Duttweiler Institute for Economic and Social Studies in Zurich, Switzerland, boils it down to a precise formula: “Move away from being 

infrastructure-oriented to being customercentric.“ However, concentrating on customers does not mean ignoring the IT infrastructure. Hardware and software need to be seen again for what they are: a means to an end for implementing a well-designed digital strategy integrating all channels
and areas of a company to the customer’s benefit. The starting point for every consideration should be what digital consumers want or what helps them – without them needing to formulate it themselves. That needs to be established as a value-adding activity with design and user-friendliness aligned with the unique features of the channels – and without media gaps or an insufficient flow of information. “To achieve this, online shops need to be linked with existing inventory and supply chain systems to provide real-time information on availability and delivery dates,” notes Morath. Electronics retailers such as Saturn and Media Markt allow customers to research a product in the online store and look up at which physical store it can be reserved and picked up. The combination of channels also has to work with returns and repairs, and the company needs to achieve it without creating 

new separate IT data silos with duplicates. Often, different people in charge of the individual channels fail to look beyond their immediate environments.

Also think about customer advice

Advice is also vital in the customer journey. Henkel, a chemicals company, offers a website for its Adhesive Technologies division, giving dealers and auto workshops information on vehicle repair materials and tips for using its Teroson and Loctite brands. “We’ve had a very positive response at trade shows,” states Marketing Communications Manager Friederike Pietsch. “It was nice to see even the older generation – who aren’t generally as Internet-savvy – using the work instructions in our portal as teaching materials for their apprentices.” For Accenture expert Morath, these are good examples of working with digital customers. But he still sees great need for action: “In all industries, many companies still don't fully appreciate the opportunity of digital business.” 

 

How to turn the customer journey into an experience

Perfect travel planning: Analyze via which channels, and with what desires and needs, customers are already contacting the company, and how they might like things in the future. Then open up the fastest, most convenient ways to get there.

Reliable transportation: Define processes for every type of communication and make sure they focus on customer needs. Create the technical and organizational conditions that will ensure this exchange runs smoothly.

Comprehensive service: Ensure that customers receive the information that is important to them from every department across all channels. For online requests, the inventory system must automatically provide information on availability and delivery dates.
 

Fast help: Use big data and analytics to respond to wants and needs before customers express them. Smart response systems take note of customer behavior on the website in real time to anticipate what the customer might be interested in and offer possible answers.

www.accenture.de/digitalconsumer

 

Corporate Citizenship | Career Moves Matching skills to jobs

The Career Moves Initiative in Vienna helps people with disabilities find employment. It is financed by the Austrian Ministry of Social Services, through consulting services for businesses and, in the future, with social franchising of its concept abroad. Accenture provides strategic development support in a pro bono project.

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Blind people with perfect pitch tune pianos at a factory. Autistic people with enormous concentration abilities find the tiniest errors in long program codes with recurring character combinations. People with Down syndrome become a walking advertisement for hotels and restaurants because of their friendliness and reliability. And yet many consider all of these people disabled: the perception is that they should be helped, but aren’t capable of holding jobs. These prejudices arise because of their special needs, while their individual skills and strengths are dismissed, much less specifically sought after. Gregor Demblin and his team want to change this attitude. A social entrepreneur who has been quadriplegic since a swimming accident, Demblin founded the Career Moves Initiative in Vienna to achieve this goal.

People with disabilities become top performers in many companies.

 

The job platform brings people with disabilities together with employers so that both benefit. “People with disabilities can be top performers and service providers. They have earned a chance in the labor market,” says Demblin. With over 14,000 job postings since 2009 and steadily growing interest from the business community, the initiative shows that an increasing number of Austrian companies recognize the potential of these employees – partly because it would be irresponsible to disregard 15 percent of the population just because of a disability, in light of the approaching shortage of skilled workers. “People with disabilities are full-fledged, valuable members of our society. They don’t want sympathy; they just want to play an active role in life, in society. And we want to offer them that,” emphasizes Willibald Cernko, the CEO of Unicredit Bank Austria AG, which has long supported Career Moves.

For Gregor Demblin, independence is also an integral part of actively shaping his own life. That’s why he is keeping the initiative on an expansion program – to 

spread his idea and be less dependent on government funding in the future, which is currently still essential for its survival. Accenture is providing support. Austria’s Managing Director Klaus Malle was so enthusiastic about the concept that a comprehensive pro bono project was set up as part of Accenture’s Corporate Citizen Program Skills-2-Succeed. “To stay competitive, we need entrepreneurs who use their capabilities to solve social problems sustainably. Gregor Demblin is tackling this specific challenge with his Career Moves job platform,” notes Malle. “By passing on our core competencies, we are supporting him with the strategic orientation of his business model and in opening up new markets.”

Expansion plans move ahead

Accenture experts have volunteered around 90 project days thus far, providing Career Moves and Demblin with free support in developing two business concepts so that the project will soon be self-sustaining. A franchise model was identified as a good approach 

for the international expansion. A handbook is currently being drafted that precisely documents how to build a job marketplace for people with disabilities. This will enable franchisees to implement the Austrian success model in their own country. The program is currently in talks with interested parties in the UK and Germany, among others. Like the Austrian model, where Career Moves runs on the technical platform of the Careesma online job portal, the international model envisions two active partners via social franchising – one with credibility in assisting people with disabilities, the other with the necessary technical infrastructure. The majority of necessary funds should be earned privately within two years. Then the franchisor in Austria would receive a fee for the expertise provided as well as ongoing joint development.

Many firms are open to the idea

Additionally, the experts from Career Moves and Accenture developed the idea for a business forum in 

which top and second-tier managers can share experiences and questions about employing people with disabilities, as well as success stories. Accenture opened a few doors here. “Many companies are open to the idea, but don’t know how to implement the changes they want in a practical way,” reports Demblin. “So it seemed natural to create a discussion platform for top managers as well as offer detailed solution proposals for problems big and small.”

A growing number of companies utilize consulting services from Career Moves because the issue is about more than making an accessible environment for employees with physical limitations. Accessibility is also becoming more important to making sales. Necessary changes include improving access to a business location for people who use wheelchairs, creating the opportunity for blind people to order online, and developing new products for special target groups. Klaus Malle is certain: “Companies that take advantage of consulting by Career Moves will enjoy a long-term competitive advantage.”

Profile 
Career Moves

Headquarters: Wien
Founders: Mag. Gregor Demblin,
Mag. Wolfgang Kowatsch
Job postings: mehr als 14 000
Industry: Dienstleistungen
Website:
www.careermoves.at

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 323,000 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$30.0 billion for the fiscal year ended Aug. 31, 2014.

Its home page is 
www.accenture.com

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