Digital IQ: focus on the human experience and technology integration

This is the tenth year running we’ve conducted PwC’s Global Digital IQ® Survey. The findings are sobering: enterprises all over the world are struggling to unlock the desired value. In most cases they’re overlooking fundamental integration of technology with the human experience of customers and employees. Compared with previous years there has been a decline in corporate digital IQ.

For the last ten years we and our colleagues at PwC all over the world have been polling the digital intelligence quotient of enterprises. For the 2017 edition, from September to November 2016 we asked more than 2,200 executives in 53 countries about digitisation trends and their impact on their organisation. In Switzerland 53 people took part, most of them chief information officers (CIOs) or heads of IT.

What makes a champion?

The so-called top performers, in other words organisations with sales and margin growth of more than 5%, consider the definition of ‘digital’ to be broader. They’re engaged in far-sighted, customer-oriented technology activities that go beyond mere digital technology to take in other aspects of business. When these companies run digital projects they involve cross-disciplinary teams with representatives from various fields of expertise and technology to revolutionize the human experience (employee & customer experience). They also use agile methods for the majority of projects, even those not involving software development.

Where do Swiss companies stand out?

Executives at Swiss companies rate the digital IQ of their CIO by international standards higher than their counterparts abroad (89% in Switzerland versus 83% worldwide). But the figure for CEOs is lower than the global average (54% versus 62%).

When it comes to innovativeness, Swiss companies do less well by international standards, with only 54% systematically venturing to take on new technologies (versus 76% in other countries). Swiss organisations take a different approach to exploring new technologies than their counterparts abroad, and are more likely to join forces with other industry leaders or technology vendors.

What determines digital success?

Digital initiatives are successful when aligned with a digital strategy that’s clear and understandable for all the stakeholders involved and that brings about changes in corporate culture. Transformation always has to take account of the perspectives of employees and partners such as suppliers and customers.

Digitally ambitious enterprises are able to draw together different aspects to enable harmonious, value-adding transformation. By integrating the business, the customer and employee experience, and the relevant technologies, they’re able to achieve lasting competitive advantage.

Want to know more about our study? You’ll find a summary of the Swiss findings here. You can also download the international edition of the Global Digital IQ® Survey:

Global Digital IQ Survey

Contact

Christoph Müller
Senior Manager, CIO Advisory
+41 58 792 27 86
christoph.mueller@ch.pwc.com

Axel Timm
Partner, Business Technology
+41 58 792 27 22
axel.timm@ch.pwc.com

Holger Greif
Partner, Advisory
+41 58 792 13 86
holger.greif@ch.pwc.com

Assess your organisation’s Diversity & Inclusion program with PwC

We know that Diversity and Inclusion (D&I) is good for business. Organisations that invest in D&I report seeing a number of advantages, such as an increased ability to attract talent, greater innovation and improved financial performance.

At PwC, we’ve found that the most effective D&I programs are comprised of four dimensions:

  • Understanding the Facts of Today
  • Building an Inspirational Strategy
  • Equipping Leaders for success
  • Creating Sustainable Movement

Take our short survey to assess your organisation’s Diversity & Inclusion program

Our new survey enables you to self-assess your maturity across those dimensions.

Click here to take our short survey and get your personnal Inclusion & Diversity assessment

The survey is short and easy to use, and when you finish the survey, you’ll receive an assessment of where your program is strongest and where there are areas of opportunity, as well as providing a benchmark of how you compare to others in your region and industry.

Take our short survey and get your personnal Diversity & Inclusion assessment

For more information on interpreting the results for your organisation or advice on how to become more Diverse and Inclusive, please contact Sue Johnson:

Sue Johnson
Senior Manager, Inclusion & Diversity, PwC Geneva
sue.johnson@ch.pwc.com / +41 58 792 90 98

Insights: Football leagues 2.0

The last two decades have seen a significant increase in the global appeal of sports leagues and teams which have broken national and continental boundaries. Some leagues, most notably the Premier League and the NBA, have been pioneers in taking their sports to new markets, with others following suit by leveraging their brand and sporting achievements in pursuit of the commercial opportunities presented by new markets.

As an example, the recent launch of a new brand identity by Juventus FC, who swapped the Torino crest for a sleeker and more neutral logo, was welcomed by sports marketers as a bold move to establish the team as an ambitious sports brand that is not confined within the limited geographical and commercial borders of Italian football. On the other hand, Juve fans in Torino were more sceptical about the move, expressing their fear that the club is losing its roots and affiliation with its home city.

Another interesting trend is the rise in new football leagues in the US and Far East paying hefty sums to attract talent to the top of their game from established European leagues, such as Shanghai International Port Group F.C.’s acquisition of Brazilian stars Hulk and Oscar, while at the same time trying to nurture home-grown talent. Although perhaps not sustainable, for sports brands the commercial attractiveness of these markets is undeniable.

Based on these developments, what are some of the scenarios we might see play out in the future?

1. Geographical expansion of leagues and clubs 
With leagues and clubs generally not being able to scale their business internationally at the desired pace, a potential geographical expansion to new territories could start with early regular season games being played abroad (similar to the NBA). This could pave the way for the creation of new inter-continental league formats with the participation of teams from multiple continents.

2. Creation of a new closed league system in Europe with guaranteed spots for top teams based on their commercial and sporting performance
Euroleague Basketball pioneered the first closed league system in Europe, and although it is embroiled in an ongoing dispute with the FIBA, football clubs and governing bodies can draw many lessons from its experience. So far, the UEFA has managed to stave off any breakaway efforts to create a European Super League by working closely with the ECA and conceding more privileges to the elite clubs. Nevertheless, top European clubs may well continue to seek to increase their popularity and revenues across borders by developing a more attractive competition format with guaranteed spots and a match schedule suitable for their international fan base.

3. Proliferation of new leagues and formats leveraging existing sports brands, such as e-sports or women’s leagues
Paris St-Germain, Manchester City FC and FC Schalke 04 are some of the latest clubs to create e-sports franchises in the hope of tapping into new demographics and geographies. Additionally, women’s football has gained significant popularity in mature sports markets through the performance of their national teams (e.g. USA, Japan, Australia, Canada, UK), representing fertile ground for the expansion of women’s football leagues.

In sum, as big football clubs shift their focus to new fan bases to sustain their growth, the commercial appeal of scenarios such as those mentioned above will become increasingly difficult to ignore. Keep an eye on our site for all the latest developments.

Contacts:

David Dellea
Advisory Director
+41 58 792 2406
david.dellea@ch.pwc.com

Ioannis Meletiadis
Advisory Manager
+41 58 792 1462
ioannis.meletiadis@ch.pwc.com

 

The end of trust? Balancing privacy with profits in the digital world

Over the past 20 years, technology has penetrated our business and personal lives at a speed and on a scale that few would have predicted. Yet while technology creates enormous opportunities, it also exposes us to significant risks. We can now source goods and services from across the world with a couple of mouse clicks, but that convenience comes at a price. Many of us, myself included, worry that we’re unintentionally compromising our privacy and the security of our personal data by shopping online.

As our markets leader in Switzerland, I had the good fortune to be in Davos last month where we launched our 20th CEO survey to the global media. I can’t remember a time when trust has been more prominent than it is today. Although it wasn’t a focus area in the earlier years of our CEO research, it’s been steadily climbing up the agenda. And most, the financial crisis and the political focus on the tax affairs of multinationals have eroded both customers’ and other stakeholders’ trust in businesses. Our survey shows how heavily this erosion is weighing on CEOs. More than half (58%) were worried that a lack of trust in business would harm their business, a significant jump from 37% in 2013.

In some respects, technology has made us more trusting than before. This is best demonstrated by the sharing economy, where digital platforms connect strangers who are willing to share cars and homes. Overall, however, technology is acting as a drain on trust, especially where people believe they are dealing with ‘faceless corporations’ instead of someone like themselves. A never-ending stream of cyber attacks, system disruptions and phishing scams creates the impression – accurately, in many respects – that the internet is not a safe place. We increasingly have to differentiate ‘real news’ from ‘fake news’ and we fear that governments and companies are abusing our personal information. No wonder more than two-thirds (69%) of CEOs are firmly convinced that it’s getting harder for businesses to gain – and retain – people’s trust.

Customer data is a great asset to companies, which use it to influence purchasing behaviour. It will be an even greater asset still once the Internet of Things has expanded to include host of devices ranging from smart watches and heart monitors to refrigerators and cars. Understandably then, customer data is probably the most pressing trust issue for CEOs, with 91% saying that breaches of data privacy and ethics will have a negative impact on stakeholder trust in the next five years. Our research suggests they are right to hold this view since 84% of people we spoke to at the same time as we surveyed the CEOs confirmed that breaches do indeed undermine their trust in companies.

Of course, companies will want to use data generated by the Internet of Things to serve their customers better, but they must also avoid intruding on their customers’ privacy or allowing their customers’ data to fall into the wrong hands (and indeed new EU regulations in the form of the General Data Protection Regulation will come into force next year to help further protect individual’s personal data).

Another major challenge to businesses is cyber espionage, the modern-day equivalent of industrial espionage. This is the practice of using computers to gain access to confidential information held by another organisation. Furthermore, more than half (53%) of CEOs are afraid that trust will be undermined by global cyber warfare – where government-backed hackers target another nation’s crucial energy or security infrastructure, commercial assets or mass transport system.

CEOs recognise that trust is an opportunity as well as a risk. Significantly, 64% of those surveyed believe that how their firm manages data will be a differentiating factor in future. The businesses that flourish will balance getting and using data with the social consequences of those actions. They will actively engage with stakeholders and invest heavily in their IT security, risk and governance strategies. Ultimately, in an environment where the line of acceptability regarding data usage will be constantly moving, the ability to earn trust will be one of the greatest determinants of business success. Read more about what’s on the mind of the CEO in our 20th CEO Survey.

New report: PwC’s 20th Global CEO Survey – Harnessing the power of human skills in the machine age

The talent challenge: Harnessing the power of human skills in the machine age

pwc_ceo survey_2017

With the rise of automation, we’ve reached a point where we’re questioning the role people play in the workplace. How to achieve the right mix of people and machines in the workplace is the critical talent question of our age.

Fifty-two percent of CEOs say that they’re exploring the benefits of humans and machine working together and 39% are considering the impact of Artificial Intelligence on future skills needs. This is a delicate balancing act for CEOs in every sector and region.

However, you can’t have a machine age without humans and 52% are planning to increase headcount over the next 12 months. They are focused on obtaining the skills that they need to create a world where humans and machines work alongside each other.

Different skills will be needed, roles will disappear and others will evolve. Some organisations will need fewer people, but others will need more. There will be a rebalancing of human capital as organisations adjust.

Exceptional skills and leadership will be needed, and yet 77% of CEOs say they see the availability of key skills as the biggest business threat. Todays in demand skills are exclusively human capabilities – adaptability, problem solving, creativity and leadership. Software cannot imitate passion, character or collaborative spirit. By marrying these skills with technology, innovation can thrive and organisations can succeed in competitive market places.

CEOs have an enormous challenge ahead of them; it is the role of business leaders to protect and nurture their people to show that in the technological age, humans are their priority.

Our new report – The talent challenge: Harnessing the power of human skills in the machine age – looks at the dilemmas facing CEOs and their HR teams in today’s environment and how their businesses can stay ahead.

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Download the full report here.

 

Contacts:

Hans Geene
Partner
+41 58 792 9124
hans.h.geene@ch.pwc.com

Charles Donkor
Partner
+41 58 792 4554
charles.donkor@ch.pwc.com

Insurance CEOs embrace disruption

CaptureInsurance CEOs are more concerned than those in any other sector about the combined threats to their growth prospects from over-regulation, the speed of technological change, changing customer behaviour, and competition from new entrants. But while this indicates that insurance is an industry most affected by disruptive change, insurance CEOs are fairly confident their companies can Continue reading Insurance CEOs embrace disruption

Illustrative Financial Statements of Private Equity Fund holding an Investment Entity subsidiary

This publication provides illustrative disclosures which are considered best practice disclosures to be made by an Investment Entity (as a result of the Investment Entities Applying the Consolidation Exception: Amendments to IFRS 10 – Consolidated Financial Statements, IFRS 12 – Disclosure of Interests in Other Entities and IAS 28 – Investments in Associates and Joint Ventures) (the “Amendments”) which has a controlled subsidiary, that itself meets the definition of an “Investment Entity”, and which had previously consolidated that subsidiary.

 

Read more >>

Illustrative IFRS financial statements 2016 – Private equity funds

image_ifrs_financial_statements_2016_final

This publication provides an illustrative set of financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional private equity limited partnership, ABC Private Equity LP. This is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2016.

ABC Private Equity LP is not traded in a public market. ABC Private Equity LP’s investment objectives are to seek medium- to long-term growth by investing directly in private unlisted companies with high growth potential. It classifies all of its investments as ‘fair value through profit or loss’ (FVTPL) and does not apply hedge accounting.

The Partnership is presented as an Investment Entity in accordance with IFRS 10. As a result, the Partnership does not consolidate any subsidiaries unless they provide investment related services. No portfolio companies are consolidated, regardless of the level of holding as the Partnership meets the definition of an Investment Entity and instead, fair values these portfolio companies through its holdings in its investment holding subsidiary companies. There is only one controlled portfolio company (‘controlled subsidiary investment’) as at the period-end date of these financial statements.

The illustrative disclosures should not be considered the only acceptable form of presentation. The form and content of each reporting entity’s financial statements are the responsibility of the entity’s management. Alternative presentations to those proposed in this publication may be equally acceptable if they comply with the specific disclosure requirements prescribed in IFRS. These illustrative financial statements are not a substitute for reading the standards and interpretations themselves or for professional judgement as to fairness of presentation. They do not cover all possible disclosures that IFRS requires, nor do they take account of any specific legal framework. We recommend that readers also refer to the most recent IFRS disclosure checklist publication.

 

Read more >>

SMEs – Digital Champions?

Most SMEs are focusing on the digitisation of their internal processes. The change is largely driven by individuals. Digital champions are making this transformation a priority of senior management. They are bold and they are adapting their entire business strategy to the digital age. These are the results of a study by PwC Switzerland, Google Switzerland GmbH and «digitalswitzerland».

The level of digitisation at Swiss SMEs varies. The bigger the company and the younger the senior management, the more a company has done to embrace the digital age. It also depends on the industry: companies in the telecommunications and media sectors are – not surprisingly – leaders in the area of digitisation. 80 percent of the study respondents expect that the market will undergo a fundamental change in the next five years due to digitisation. These are the results of the survey of 300 Swiss SMEs.

Digital, but not everywhere
The companies that took part in the study are focusing on the digitisation of internal processes as well as on websites and e-commerce solutions. Clients and their experience are seldom the point of focus. Only 42 percent of the SMEs surveyed include clients in their business processes. Companies that have embraced the digital transition believe that the financial commitment was worth it.

Prioritise digitisation in senior Management
“The success stories coming out of Swiss companies show that digitisation fundamentally changes a company. It’s a topic that should be on the agenda of the managing director, CEO and members of the board,” said Patrick Warnking, Country Director of Google Switzerland. “Human resources are a major factor in the success of digitisation. You need people who can make your plan come alive every day,” added Holger Greif, Leader Digital Transformation at PwC Switzerland. 2

A plan for champions
Based on findings from the study, Norbert Kühnis, Leader Family Businesses and SMEs, PwC Switzerland, recommends that business leaders be bold and take a careful look at their market: “It often takes a courageous decision for a successful major step. I recommend that Swiss SMEs observe the market and look at digital possibilities as opportunities. A champion uses digitisation to expand their relationship with clients and to doggedly go after client needs.”

More information
Download the study

P&O global research: ‘The Ethics of Incentives’

PwC is working with Professor Alexander Pepper and Dr Susanne Burri of The London School of Economics on a ground-breaking global study into the ethics of incentives and the fair distribution of income in society.

As a senior business leader, we would very much value your contribution to this piece of work. Our survey takes a maximum of 20 minutes and includes questions which are designed to investigate the complex views we all have about pay fairness. Please click on the link below:

Survey

Please submit the survey by Friday 20th January 2017.

All responses will remain confidential – but there is an option to sign-up for an advance copy of the findings if you so wish.
I hope you will find the time to contribute.

Contact:
Dr. Robert W. Kuipers
PricewaterhouseCoopers AG
Birchstrasse 160, 8050 Zurich
Switzerland

Email: robert.kuipers@ch.pwc.com
Phone: +41 58 792 4530

If you have any questions, please write to us at SurveyAdmin@us.pwc.com