Doing business with Latin America: Coping with the realities of ‘free’ trade with the Pacific Alliance

 

Nora Zs. Bartos was one of the speakers at a recent seminar held by the Latin American Chamber of Commerce. Her presentation was about the considerable tax and legal challenges of doing business in the Pacific Alliance. The fact that it got such a great response suggests that this is a highly topical issue for companies in Switzerland. We would therefore like to summarise the main points as a resource for organisations seeking to harness the opportunities in this region of Latin America.

With around 230 million inhabitants and a combined GDP of almost USD 1.9 trillion, the four member states of the Pacific Alliance (PA) – Chile, Colombia, Mexico and Peru – are a hugely attractive market committed to free trade. Since its inception in 2011, the PA has removed numerous obstacles to trade. More than 90% of trading in goods is already tariff-free, and the goal is to reach 100% within a few years. From a distance, it is an unclouded success story. However, if you are a Swiss company looking to do business with the PA, the reality is more complicated. Obstacles remain. It pays to be aware of them and what to do about them. A state-of-the-art enterprise resource planning (ERP) system is necessary.

In addition to removing tariffs on practically all trading in goods, the Pacific Alliance has already simplified customs processes, enhanced cooperation between sanitary and health authorities, and created a common platform for trading the shares of the four countries’ stock exchanges. In the long term it aims to achieve the ‘four freedoms’ that characterise the European Single Market: the uninhibited movement of goods, capital, services, and people.

The problem is that actual integration lags behind the ambition. While there is a free trade agreement between EFTA (of which Switzerland is a member) and the PA, it is difficult to work out what regulation applies for a particular transaction and whether your company can actually benefit from the agreement. Straightforward exports from Switzerland to an alliance member are relatively simple. Nevertheless, when a transaction involves several countries, things get tricky – exacerbated by the fact that rules of origin are not streamlined.

If you want to capitalise on the opportunities, state-of-the-art enterprise resource planning (ERP) software is necessary. A functioning ERP system enables you to collect, process and eventually present all the data needed to comply with regulation. It serves as a basis for reorganising your international supply chain to be more cost-efficient. Evaluating the probable total costs of different supply chains is a challenge when your business takes in a complex and unpredictable environment like the Pacific Alliance, but the right ERP system will give you greater clarity and understanding of what is actually involved.

At PwC, we specialise in helping clients find the most suitable ERP solution, implement the software, and interpret the results. Ultimately, we want to avoid a situation where you fail to see or misunderstand a regulation and realise in hindsight that you have lost part of the cost savings owing to administrative fees and obstacles. Our aim is to empower you to do profitable business with Latin America.

Contact Us

Dr. Nora Bartos
TLS Senior Manager
VAT, Customs and Excise
+41 58 792 51 14
nora.bartos@ch.pwc.com

Swiss Entertainment and Media Outlook 2017: Stay ahead of the game!

Dramatic shifts are underway in how entertainment and media (E&M) companies compete and generate value. To thrive in this highly contested yet slower growing market, companies need to develop strategies and build capabilities to engage and monetise their most loyal and passionate users — their fans. It’s all about user experience. Discover what we’re talking about in PwC’s Swiss Entertainment and Media Outlook 2017-2021.

Just a quick taste: Four shifts in entertainment and media

Shift 1: User experience is taking the lead
E&M companies have been accustomed to competing and differentiating themselves mainly via two avenues: content and distribution. Today, they need to focus more intently on a third dimension: What is it that truly engages users? Simply taking existing approaches to capture the natural growth in consumers is no longer sufficient.

Shift 2: Changing behaviour of the millennials
Advanced technology has caused the consumer behaviour of youths to change; hence, the industry must adapt its business models and monetisation strategies. Given today’s effortless access to free content through a variety of channels, the competition for attention will become even more intense. For a business to be successful in future, it is imperative that the needs and lifestyle of Gen Zs be taken into account.

Shift 3: Personalised content is still king
Overwhelmed by content choices, consumers fall back on the familiar; they rely on recommendations from friends, algorithms and rankings. The result: content that is popular becomes more popular. But to get closer to consumers and reach that level of popularity, service offerings must be personalised and adapted to individual needs.

Shift 4: Data is evolving into a kind of currency
Any buyer/seller transaction or relationship involves an exchange of value. Historically, that value has been measured in currencies. But it is increasingly likely that for E&M companies, value will eventually become measured in the monetisable currency called ‘data’.

The bottom line:
Read about these trends, visualise the hard facts, and prepare yourself for the future by signing up for PwC’s Swiss Entertainment and Media Outlook 2017-2021.

Register for Full Report

Contact Us

Patrick Balkanyi
Partner, Assurance
Leader Technology, Communications, Entertainment and Media Industries
+41 58 792 26 76
patrick.balkanyi@ch.pwc.com

Bogdan Sutter
Director, Advisory
Leader Telecommunication, Media and Technology Consulting
+41 58 792 77 51
bogdan.sutter@ch.pwc.com

Enterprise Performance Management (Budgeting, Planning and Reporting)

 Leverage Innovations and fix the Basics

The latest edition of PwC’s Finance Effectiveness Benchmark report shows that many finance functions are trailing in their adoption of latest technologies, and in most businesses finance struggles to find the optimal model to deliver real commercial impact effectively.

PwC Study: Stepping up: How finance functions are transforming to drive business results

How to adapt to the rapidly succeeding technological breakthroughs and how to treat them as opportunities?

How to navigate best through the turbulence resp. how helps an up-to-date enterprise performance management (EPM)?

We will discuss latest trends and developments. We will do so together with our clients and expert network to share real experience and challenges:

  • Key note speech: “Top Trends in Business Intelligence and Analytics 2018”, Herbert Stauffer, CEO Business Application Research Center (BARC), Switzerland
  • Key findings of the latest PwC report: “Stepping up: How finance functions are transforming to drive results”
  • Case 1: EPM at UEFA, Fabian Egli, Head of Corporate Controlling
  • Case 2: Driver-based Planning at an international Pharma Company (Tillotts Pharma), Oliver Isch, Corporate Controlling

The floor will be open for any questions, comments and contributions from your side. Following, you will have the opportunity to explore the potential of leading technological solutions and connect with people in person during an apéro.

We are looking forward to welcoming you to this event

Register online

Date and Time

9th November 2017
Start of the event will be 16:30

Venue

Mariott Courtyard
Max-Bill-Platz 19
8050 Zürich

Contact

Jana Moser
PwC
Tel.+41 58 792 4360
jana.moser@ch.pwc.com

 

Anaplan vs. Excel: the fight for the financial modelling crown

After more than 30 years of good and loyal service, the hegemony of Excel in the financial modelling space is facing its most serious challenge yet. Anaplan – a leading cloud-based forecasting tools in two of Gartner’s Quadrants – has already won many famous clients, seeing its revenue increase by a whopping 75% in 2016. In the first quarter of 2017 PwC Switzerland and Anaplan joined forces, signing a collaboration agreement. After reigning supreme for decades, could Excel lose its crown to Anaplan?

When do you know you pushed Excel too far?

With more than 650 million customers around the world, Excel is used for an incredibly wide spectrum of purposes. However, many financial analysts familiar with complex models spanning over numerous worksheets will be surprised to know that only 4% of Excel workbooks created globally contain formulae.

In fact, few professionals push Excel as far as financial modellers do and it’s no secret that Excel sometimes struggles to cope. We’ve all heard horror spreadsheet stories involving input files sent out to tens of controllers (then having to be manually consolidated), errors in strategic models or templates, the struggle of reporting analysts to get their data in the right format or more generally, the dreadful amount of time spreadsheet management requires.

From a modelling perspective, one of Excel’s most significant shortcomings is its scalability. Imagine a retailer developing a business plan model to forecast the performance of its 50 stores against their budgets. This simple example would already translate into a rather large Excel model including more than 150 positions (50 stores times 3 versions for the budget, the actuals and the variance). And once the model is built, changing the calculation logic of any given line item can soon turn into a nightmare, as it will need to be amended for every single store.

Leaving the constraints of Excel’s two-dimensional world and moving to Anaplan’s cube, building and maintaining the same model becomes a walk in the park. Since stores and versions can be defined as dimensions, profit and loss calculations need to be entered once only. The result is a single profit and loss account, which can be viewed for any given store (or on a consolidated basis) and for any given version. Amending the calculations in the entire model is as easy as updating a single Excel formula and is reflected throughout the whole model in real time. All that’s required to add a new store is typing its name in the store list, plus there’s no need to manually replicate and link the inputs or to adjust the consolidation and the outputs. Wait a minute, could this be the answer to spreadsheet chaos?

The cloud’s advantages

In addition to its scalability, Anaplan offers great advantages in a corporate environment. As it’s a cloud-based solution, input providers can fill out the assumptions fields directly in the master version, making Excel input sheets sent per email and manual consolidation redundant.

Moreover, Anaplan provides a single, real time source of truth as its connectors and import functions ensure that parameters are always up-to-date. Even better, the access rights can be tailored so that each user only sees the sections of the model relevant to them. So goodbye data security problems.

Finally, reporting analysts will love that Anaplan’s cube works like a giant pivot table, where switching dimensions and changing the way information is presented can be dusted in a matter of seconds.

Flexibility is king

But let’s not burry Excel just yet. It’s still got some very strong assets to play. To start with, Excel is readily available in most companies and many professionals are familiar with it. In fact, it’s the only programming language many people know. But the real key to Excel’s success in controlling divisions and the financial modelling space is its flexibility.

In the world of Corporate Performance Management though, Anaplan is arguably the most flexible tool available on the market. Similarly to Excel, Anaplan relies on formulae and users start from a blank page, offering an extensive range of applications, such as budgeting, supply chain management, compensation planning, … the list goes on.

A technology-agnostic approach to modelling

For the first time in 30 years, financial modellers and controllers do have a genuine alternative to Excel. To us, this marks the beginning of technology-agnostic forecasting, where we’re able to choose the best-suited tool to solve the problems our clients are facing.

When switching from Excel’s two dimensions to Anaplan’s n-dimensional world, utilising a tested modelling approach and applying clear design principles becomes even more crucial. Regardless of the chosen technology, we always rely on PwC’s Modelling Methodology – a structured project management process based on more than 15 years of experience – to translate complex situations into insightful financial models. Similarly, our Design Best Practices and Rules enable us to ensure that all our models are transparent, flexible and user-friendly.

So who deserves the modelling crown? In a business-as-usual environment, Anaplan’s many advantages, combined with its easily changeable model structure are a true revolution. But Excel still hits the mark as it is better suited to deal with the fast-changing conditions and the short timeframe associated with M&A transactions. As Excel certainly won’t give up, the fight goes on…

Contacts

Marc Schmidli
Leader Valuation and Business Modelling
+41 58 792 1564
marc.schmidli@ch.pwc.com

Maxence Lüthi
Valuation and Business Modelling
+41 58 792 1164
maxence.luethi@ch.pwc.com

Blockchain, a catalyst for new approaches in insurance

Thought up as the underlying architecture for the Bitcoin cryptocurrency in 2008, blockchain technology is currently a hot topic and the subject of numerous studies in sectors outside the payments industry to which it has often been confined in the past. Blockchain is considered by some to represent the next technological revolution after the Internet.

In fact, the idea of a decentralised, secure and transparent ledger distributed among users can be relevant to many different fields. The insurance industry, with its highly complex processes, could be a major beneficiary of the technology.

By removing intermediaries in a new type of arrangement, blockchain technology could completely upend the insurance value chain:

  • Development/acceleration of new products/markets for which business models were difficult to define until now.
  • New approaches to underwriting, contracts and claims management, particularly through a combination of smart contracts and the Internet of Things (IoT).
  • Overhaul of the modus operandi of insurance agreements.
  • New reinsurance approaches, particularly internal reinsurance via smart contracts.
  • Transformation of asset management with automated settlement and delivery of intangibles.

PwC’s recent study on the topic (“Chain Reaction: How Blockchain Technology Might Transform Wholesale Insurance”) shows that while 56% of insurance firms recognise the importance of blockchains, 57% still do not know how to respond and capitalise on this opportunity.

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How SAP’s release 17/09 (S/4 HANA) will affect the authorization management

In September 2017, SAP released the latest S/4 HANA version 1709. While such a new release is more than just a technical upgrade, our GRC technology team analysed the influence of the new release on authorization management.

Generally speaking, the analysis revealed that there are two changes of technology compared to previous versions as Fiori 2.0 and HANA 2.0 is required. Additionally, it could be seen that SAP continuous the move of functionality into the core and more and more using Fiori as UI. This means, that the complexity of cross-system authorization management is reducing (e.g. CRM and GTS integration into core system) but increase the importance and criticality of authorization management with Fiori.

Authorization Architecture

Speaking about the authorization architecture, there is not much change with release 1709 expected. There are clearly some changes regarding functionality such as application transactions / apps with 1709 or changes coming along with HANA 2.0. Nevertheless, the architecture itself compared to 1610 or 1511 did not changed significantly. A SAP user will need to have a user master record on Fiori level as well as on the application level S/4 HANA to get access to the functionality. Some of the new apps make use of CDS views where the data is streamed to the end user directly from the HANA database, while the authentication as well as the authorization checks is performed by the application layer.

 

Read the full article

 

Contacts

Dominik Götz
Senior Manager GRC Technology
dominik.goetz@ch.pwc.com
+41 58 792 28 93

Thomas Kümmerle
Manager GRC Technology
thomas.kuemmerle@ch.pwc.com
+41 58 792 17 08

Erik Trouillet
Manager GRC Technology
erik.trouillet@ch.pwc.com
+41 58 792 23 64

Is the (re)insurance industry fit for growth?

As disruption mounts, insurers and reinsurers are facing huge strategic challenges in maintaining competitiveness, driving change and delivering all-important growth. Perceived wisdom has been that these are mutually exclusive goals, but in this report PwC Strategy& sets out why they can coexist if organisations are committed to being fit for growth

The industry will undergo significant, disruptive change
The insurance industry globally continues to be the most disrupted of any sector3. In our work with (re)insurers, we’ve noticed anxiety about
the technological changes coming from current competitors, start-ups, and Silicon Valley that are reshaping the industry. When asked them
what posed the greatest threat to their operating models, the most popular response (44% of all Fit for growth survey respondents), was “market disruption or the use of new technology.” Second on the list was “changing customer needs and offerings from new market entrants” (24%). These responses outweighed concerns about lack of customer insight, availability of talent, regulatory change, and the economic environment combined.

Need to grow
Most companies know that growth is critical to long-term success. Most are somewhat or very confident in their ability to grow, with many having growth targets that far outpace those being achieved in the industry as a whole. We therefore expect there to be haves and havenots. The haves include companies that believe they can outperform competitors through better execution of the tried-and-true strategies that are common in the industry. We expect have-nots to have the self-awareness to know that they are not out in front of the market and are therefore waiting for the storm to pass. As we expected, not all carriers are pursuing growth at all costs. Only 30% of FFG survey respondents said that top line growth was their primary strategic focus. However, only 9% were willing to admit that growth was of minimal focus, while the remaining 60% of carriers took a more balanced view.

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InsurTech The new normal for (re)insurance

(Re)insurers are coming to see InsurTech as a transformational rather than disruptive force and embracing the innovative potential within their businesses. How can you make the most of this ‘new normal’?

The disruptive impact of InsurTechs has been mentioned in a multitude
of publications. But are InsurTechs really as disruptive as commonly
claimed? Will they make incumbents obsolete? With the first wave
of InsurTech well established and a second wave coming, we believe
that CEOs have become well aware of how InsurTechs can impact their
business. And we observe a change: Fear is turning into bullishness and
scepticism into collaboration. The new norm is to embrace digital natives and open up for collaboration. Are InsurTechs truly disruptive?

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Insurance’s new normal: Driving innovation with InsurTech

The pace of change in the Financial Services industry is accelerating, and while the insurance world won’t change overnight, many have begun to look outside their own organisations in order to respond to challenges and take opportunities. New products and services are developing which meet the needs of an expanding and changing customer base. Costs will begin to decrease as new ways of doing business evolve and emerging technologies, such as artificial intelligence
(AI) and the Internet of Things (IoT), not only provide customers with a better experience, but also streamline back office operations. InsurTech is reshaping the insurance industry. Previously viewed as a disruptive force, it is now driving innovation across the sector.

The insights in this report are based on the responses of 189 senior Insurance Sector executives from 40 countries who participated in PwC’s Global FinTech Survey 2017. With an editorial board made up of specialists from around the world we complemented the report with our own insights and analysis into how InsurTech and Insurance are moving closer together and how insurance is innovating in response to InsurTech. The report is also fuelled by proprietary research from PwC’s DeNovo, focused on InsurTech innovation and its impact on business.

Global InsurTech Report – 2017

Contact:

Patrick Mäder
Advisory Partner
Tel. +41 58 792 4590
maeder.patrick@ch.pwc.com
https://ch.linkedin.com/in/pmaeder/de

PwC’s Quarterly Sports Industry Q&A

 

PwC’s Sports Business Advisory practice sat down with David Lampitt, Sportradar AG’s Managing Director for Group Operations, to talk about the company’s exponential growth, bright future, and all things sports technology.

What has been keeping you busy lately?
In one word: opportunity. Sportradar has huge ambition to realise the full impact of sports content, either by itself or in partnership with other leading businesses. This ambition is showing no sign of abating any time soon. I’m excited about what that opportunity means: new markets like eSports; new products like our work on Next Gen Stats with the NFL; new partners such as the EPFL; and new inspiring colleagues to work with and learn from. Of course, this opportunity also brings intricate challenges. Three years ago, we were 750 employees. Today, we’re closer to 1,850. Working with my colleagues to find the systems and initiatives to effectively handle that growth and keep everyone aligned is a daily challenge. Plenty to think about, and of course, plenty to celebrate.

Sportradar has been making headlines in recent times. How have you experienced the last six to nine months and how would you describe the atmosphere in your camp?
On a local level, around a year ago, we moved offices from leafy Richmond in outer London to a new location at the heart of London’s City. We gave ourselves what I thought was ample room for growth – 12 months on, we are already approaching full capacity! For me, this is an everyday reminder of what is happening across the company, from our new office in New York to our new premises in Manila. It allows me to maintain a keen sense of our pace of growth and integration. I think the exciting work we are doing, be it our integrity partnerships with FIFA, data partnerships with the likes of the NFL and NBA, providing statistical solutions to Google, Twitter and Facebook, is really energising our teams around the world. That said, we aren’t resting on our laurels here. Growth and recruitment may be driven by that kind of showreel; but long-term employee and partner retention comes from cultivating and maintaining the right culture and values.

What are the main services that you offer and where do you see growth opportunities?
This is a tougher question than it seems because we offer a huge range of products and services. Historically, we are best known as the leading solutions provider to the sports betting industry. We’re capable of providing a bookmaker with almost everything it needs to offer a top-quality service to sports bettors from data, to odds suggestions, to risk management, with some virtual games for good measure. On the back of that, in 2005, we launched our Integrity Services, which leveraged our betting expertise and data into what today is recognised as the best and most reliable betting fraud monitoring system. Through this powerful solution, we are able to monitor over 180,000 sporting events a year for match fixing. In more recent years, we have developed our Digital Sport offering, which provides sports data and data-related products to a whole range of business sectors: major media companies, digital publishers, app developers and fantasy sport providers, among others. And then there is our audiovisual business, where we supply streaming content to betting companies as well as having our own OTT platform.
Ultimately, wherever sports data and content is being put to work for the benefit of growing revenues, driving fan engagement, delivering insights or attracting eyeballs, we are there, providing the raw materials to power that process. Being at the confluence of these growth areas – sport, entertainment and betting – means that we are surrounded by growth opportunities. We just need to make sure we pick the right ones.

What do you perceive as your biggest challenges in achieving your potential?
I think that the pace of change in technology, and its uses in society, means that we are only scratching the surface of the many exciting opportunities to drive sports data and content-driven solutions. There are certain tech developments that we already see on the horizon: smart glasses, augmented reality, virtual reality and weara­bles, all of which are already pointing to new data collection and data display opportunities. As a tech-driven business, keeping up with this changing landscape to ensure that our products are not overtaken by the pace of change is a constant challenge. As a result, we’ve set ourselves up to remain agile, even as we increase in size, so that we can be as responsive as possible to these and other developments.

To wrap up, what would be the one sport industry development beyond Sportradar’s immediate areas of interest that you think consumers should look out for over the next 12 months and why?
Since most fans cannot attend actual games in person, how to replicate that experience has always been a consideration for the sports and media industries. Live venues have always worried about the impact of remote consumption, whether at the dawn of radio, or TV. But virtual reality could genuinely be a game changer. The conditions are aligning as competitions and clubs have created a huge amount of engagement from those who cannot be there but are increasingly demanding an authentic experience. Virtual reality could come to create a personalised experience that could end up being better than the real one. Want to get the “best view in the house”? Virtual reality could provide the solution. Want to share the experience with your dad in Australia and your mate in South Africa in a “virtual living room”? You got it. Personally, I am excited to see how this virtual experience unfolds – and I think it will principally unfold through the shared social experience because social interaction and communication has underwritten almost all the major tech advances in recent years, from mobile technology to social media. Having said all that, I do still hope the live stadium experience answers the challenge and makes sure that seeing live sport remains a uniquely attractive proposition.

Contacts:

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

Lefteris Coroyannakis
Senior Associate
Tel. +41 58 792 1578
lefteris.coroyannakis@ch.pwc.com