The beta blog

Showing all posts tagged with Innovation and the future

< The beta blog | Nov 25, 2014

Using Google Glass to fight crime

Wearable technology is set to impact industries of all kind and recent PwC research found that sales of wearable devices will hit 19 million by the end of this year. While it's still early days wearables will become part of the workplace much like the laptop, smartphone and tablet has over the years. 

Forward-thinking organisations of all kinds are embracing and experimenting with wearable technology in many ways. One of which is Dubai Police Force who have been testing Google's head-mounted wearable device, Glass, to help fight crime. We spoke with the CIO and director of smart services at Dubai Police, Colonel Khalid Nasser Alrazooqi on his experiences on using Glass and on wearable technology in general. 

PwC UK: Can you please explain your role in the Dubai Police Force and what it entails?

Khalid: I am a general director of the smart services at Dubai Police where we have 4 strategic goals: 

1.The prevention and reduction of crime rates

2.Detection of crimes and the arrest of criminals

3.Readiness to deal with crises and disasters effectively

4.To control the roads securely 

The General Department of Smart Services supports the above by providing all necessary means of technological infrastructure, systems, software and electronic services.

How did the idea of using Glass to fight crime come about?

Dubai Police has a long history of embracing advanced technologies and is the first, at Arab World level, to introduce "Electronic Services” and use GPS in police patrol. We have a dedicated team that studies and acquires the latest technology for test use and pilots case studies in our environment of which Google Glass is one of them.

What have been the results of using Glass so far?

Google Glass is still not officially available on the market as a production wearable device and thus it has its strengths and weakness. We have found in our testing that Glass communication with a server is impressive and it is very easy to capture an incident instantly and send it to the server for analysis. On the other hand, the battery life of Glass is weak and does not stand the Dubai heat very well.

The jury is still out as to whether Glass will gain mass market among consumers but we're increasingly seeing more valid uses for it in a commercial/government setting. What are your thoughts on this?

The City of Dubai has set a strategy to become the smartest city in the world and this strategy will reflect on all government entities to utilise the latest technology. However, it is very early to judge how well Glass will gain market share especially since it is yet to have an official consumer release and the device we have today is a developer version. In addition, we still haven’t seen its implication on laws and policy in the country.

What's your view on the wearable technology space in general? Room for growth or a passing fad? 

I think Smartphone devices have reached their max, this is the time and maybe the era of wearable technology.

Find Khalid on Twitter @KhalidAlrazooqi

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< The beta blog | Nov 10, 2014

10 ways drones will impact society

Last week I wrote a blog on world in beta asking if society is ready for the oncoming use of commercial drones in numerous industries from retail to manufacturing. While still early days, the use of unmanned flying objects is set to change the world in which we live. Here we look at 10 ways drones will impact society. 

1.Drone Traffic Regulations –Gone are the days of being able to fly a drone at will, even now, you have to follow the law of the land. Moving forward authorities will be turning their attention to drones specifically and the space will become increasingly regulated.

2.Drone Hijacking – With Amazon and Dominoes looking at using Drones in their SCM cycle, it is feasible that soon there will be large amounts of goods being moved by drone. It’s only a matter of time before someone tries to hijack your drone for a free pizza or a free Ipad.

3.Employment – Drones have the potential to supersede large amounts of courier roles, and there is the possibility that there will be many redundancies. Conversely there will be a need for more technically skilled people to manage and maintain an efficient drone delivery network. Whether the UK has the labour pool for this type of work is up for debate.

4. The end of the “We have something for you” card –With a drone’s ability to deliver day or night, at a time of your convenience, gone are the days of having to re-arrange a courier or visit your local Royal Mail depot with a “we have something for you” card.

5.Last mile disruption: Last mile courier companies, who deliver from final transport hub to final destination, will be massively affected by drones, with short deliveries now made even easier by drones.

6.No more clear skies – Our skies are no longer going to be empty wide spaces of blue or grey (in the case of London), they are going to be a chockablock ‘droneways’.

7.Make room for drone stations – With the widespread use of drones, we should expect the introduction of drone docking station in our cities and towns. These are places to for drones to refuel/recharge, as well as pick up and drop off goods.

8.Drone terrorism – Cyber terrorism and crime is on the rise, and with more and more drones in the air, there is potential for these to be hijacked for terrorist use. The payload doesn’t even need to be explosive, fast and heavy flying objects can do enough damage by themselves. 

9.Drone economics – The economics of drones is going to govern and affect a lot of decisions in the retail market. This will in turn have an impact on the price of commodities.

10.Drone throne – A more light hearted possibility is the idea of drone wars and drone gaming, pitting drones against each other as a sport.

The applications and possibilities engendered by drones are endless, and merely limited by our own imagination. How do you think drones will impact society? 

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< The beta blog | Nov 4, 2014

Four ways big data is transforming the finance industry

If you are a finance professional, should you care about ‘big data’ and will it have any impact on how you do your job?

Not surprisingly the short answer is ‘yes’. The advent of big data – an umbrella term which includes new sources of detailed data on all aspects of enterprise activity – is already transforming the role of the finance function and how it goes about supporting the business.

Why? Because big data allows finance teams to build a much more holistic view of how the business is performing, and provide more complete, better insights to support strategic decision making.

Here are four examples:

1. Evaluating performance and return on investment: In a big data world, an evaluation of a new product launch includes not only the sales numbers and development costs, but which customers purchased the new product, the knock-on impact on other products, what consumers and the market thought about the product via social media, what operational issues affected the launch, even whether external factors such as the weather impacted on sales. The net result: finance can provide insight into why the product launch performed as it did, not just what happened. And this could have a huge impact on whether the launch was seen as a success (or failure).

2. More proactive risk management: big data can transform finance’s understanding of risks. For example, through collating a wide range of external data sources (media reports, sanctions lists, company reports, social media feeds etc) some Finance teams have started to continuously monitoring supplier and counter parties, enabling them to react much faster to emerging issues. Internal audits are becoming more effective through joining up data to understand the whole context behind a series of transactions and building a better picture of compliance risks in real time, utilising detailed transaction data, internal documents and communications history, external market data and so on. Hence finance teams are becoming proactive risk managers, staying ahead of risks instead of reacting to them.

3. Safeguarding data asset values: Businesses are increasingly recognising that their data is a strategic asset and has value. finance is well placed to become the overall custodian of the organisation's data asset, both to evaluate its monetary value, and to ensure data across whole organisation meets quality standards to support this valuation. This latter role will become increasingly important in the big data world, particularly as the provenance and reliability of data coming from a much wider range of sources will need to be rigorously tested and assured.

4. Better models: One side effect of the explosion in data has been the proliferation of tools that are able to cope with analysing such volumes. It is now possible for finance teams to run much more extensive and granular modelling scenarios across their data, to improve the quality of decision making. We are seeing finance functions moving away from a traditional approach to testing worst, expected and best case scenarios and instead, running simulations across all possible scenarios to get a much more accurate view on the spread of risk, enabling a more informed debate about where the business should be investing its money.

So big data is driving change in the world of finance. Underpinning this change in approach is a change in skill sets and capabilities. Are we near the point where data science skills could become as important to a finance professional as financial qualifications?

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< The beta blog | Nov 3, 2014

Drones are coming but are we ready?

In recent years and months there has been a lot of hype around drones and their possible application. Numerous companies, from Amazon to Disney, have filed patents and are conducting research, with a view to commercialising this technology. Drones are no longer confined to the military, and the question now is when, rather than if, they will become widespread in the consumer market.

Moore’s law dictates:

“Over the history of computing hardware, the number of transistors in a dense integrated circuit doubles approximately every two years”

This exponential prediction of technological advancement is particularly apparent when we look at drones, and the leaps that have been made in recent years. Paired with the millennial generation’s seemingly exponential ability to accommodate and adapt themselves to the ever changing and evolving nature of devices, especially around computing, form factor and applicability, we can see an interesting dynamic forming.

Given the above, it’s only natural that we would expect this tech hungry, e-savvy generation to adapt to this new entity which is going to be introduced into their day-to-day lives. Amazon seems to have taken the lead by releasing their testing plans to deliver packages, and have even gone as far to say, regulation dependent, they are ready to deliver packages with drones. Introduction of a disruptive technology, in this case commercial use of drones, creates a ripple effect of sorts. With Amazon leading the way, and others forced to follow or fall, we can expect to see a complete upheaval of the logistics and SCM industry.

Standing in the way of widespread use of drones, is firstly the cultural status quo and its attitude to the use of drones, and secondly stringent Air traffic regulations. The public are no strangers to the concept of automated flight, with numerous works of fiction in the media portraying such a reality, and they are now more than ever open to new technology. In regards to regulation that stifles technological innovation, we need only look to the music industry to see that burying your head in the sand is the road to ruin. The scene is set for a massive cultural and technological shock, and the norm could soon be that every individual will have personal control of their own drone.

In enabling this change, lies a multitude of challenges. NASA has started to tackle the problem of drone traffic, and is developing a DTC (Drone Traffic Controller). This though, is probably one of the easier problems to tackle. Other more poignant challenges that will require some thought are around the issues of privacy, safety and terrorism. Increasingly sophisticated cyber-crime, and the implications of this for drones, is also cause for concern.

In conclusion, the immense amount of value that drones could potentially add, to industries from agriculture to retail, as well as to consumers, mean that any challenges or potential pitfalls are surely worth overcoming. The technology is here, however, the key challenge is going to be shifting our current perception around drones, and accepting them as a part of our day to day lives. If we are indeed ready for drones, then the sky is the limit to where this can take us. 

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< The beta blog | Oct 28, 2014

The Internet of Things means business

The Internet of Things refers to the internet-enabled network of physical objects that can connect and interact with one another. Sensors, networks, objects, and even humans can produce data that is picked up by connected devices and converted into one or more of a diverse range of actions and impulses.

They can close the gap between digital and physical, making the world ‘smart’ and lives simpler than before by automating decision-making and removing unnecessary human action. Devices can be coordinated and optimised in real-time, and the possibilities for usage are endless. Industry predictions on the total number of connected devices by 2020 range between 20 and 40 billion, and Cisco have valued the potential economic benefit of the IoT at $19 trillion over the coming decade alone. 

The Internet of Things can and will have an enormous impact on businesses – from how they interact and understand their customers through to how they gather, capture, and manage their data effectively. Sensors and analytics can help businesses better know their customers and themselves, and differentiate themselves and their business model. Yet, as with many consequences of the digital age, success is reliant on data and its associated infrastructure: potential issues include data ownership, security, ethics, and standardisation of technology. The Internet of Things presents both a great challenge and an incredible opportunity for businesses to seize upon.

What does it mean for businesses?

As with the most well-known examples so far, the Internet of Things has huge potential for revolutionising how businesses interact with their customers – digitally and otherwise. By giving devices the ability to interact and make decisions depending on data received, the Internet of Things can join up previously unconnected processes and create a connected, seamless customer experience. Gathering data directly from customer action using sensors rather than slower and less reliable manual measurement ensures far higher data integrity, and can allow businesses to create an integrated business model that focusses on creating the best possible individual customer experience, as well as the ability to constantly re-evaluate and change near-instantly. 

Customers can be individually measured, quantified, and catered for in a tailored manner and in return will invest their trust capital in brands that provide a relevant, differentiated service. Integration opportunities with other businesses can be identified and realised – and much more.

However, the Internet of Things is by no means a solely consumer-focussed phenomenon. Connected devices can be used to improve business process, with internal gathering of information from devices and people giving a richer degree of management information than ever before. Industrial products and processes can be harvested for data that can drive innovation, improvement, and quality assurance – an example being the use of sensors to monitor effectiveness and efficiency of water usage in agriculture. 

Device and people issues can be identified, mitigated and resolved earlier than before, and process can be improved rapidly. A great example of the full-scale effect of this measurement is the use of sensors on players at various US Major League Soccer teams during training is used to build a physical profile of players, assess individual workload and performance, and provide early identification of injury risk – the data gathered influences strategy, people management, and performance quality.

Yet with all these impressive opportunities there are a number of key pressures for businesses to address. Despite the obvious wealth of “big data” that can be gathered internally and from customers, it is vital to focus on what you are gathering, and why you are gathering it. Just because data is available does not mean it is useful – data collection must be constrained to the necessary, and should be fully aligned with strategic priorities and relevant connected devices to deliver the most value. Businesses will need to align their business strategy with their IT infrastructure to identify and gather the right data, and ask the right questions of it if they are to achieve the best results.

Security concerns are also a key issue to address. Consumers are more sensitive than ever about data loss, particularly in light of recent public breaches of privacy. In giving up data to businesses, consumers invest a very fragile trust, which can be quickly and near-irreparably shattered. This threat is magnified when considering an enormous interconnected network – it is truly imperative that this is handled with the most care possible. With individual data already sufficiently possessed that Europol has predicted the first murder via IoT before 2015, it is crucial to prioritise robust cyber security and data governance.

As can be seen, the Internet of Things, and its associated connected devices, is wide-ranging beyond belief, and as a result has been seen as a somewhat nebulous buzz-word – a long-identified trend that never truly arrives. But this is not the case. With Google’s $3.2bn acquisition of home automation company Nest fresh in mind, and with technology and telecoms giants currently battling to establish a dominant standard to operate through, it is clear that the IoT’s dots are really starting to join up. There can be no doubt that the Internet of Things means business.

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< The beta blog | Oct 15, 2014

A new way of funding visionaries?

The technology sector has had its ups and downs. With every boom there has been a bust. But tech is still the VC darling. Why?

It’s an important why. Because many chattering techies have been questioning whether the current tech boom/bubble is sustainable.

Tech is having a crisis because the current valuation hike seems to be sustained – to some extent at least - by mega IPOs or trade sales that cause huge ripples right down to seed funding. In short, mega-deal IPOs (like Facebook and Twitter) also result in mega-deal acquisitions, like the eye-watering WhatsApp valuation of £19Bn (by Facebook). In short, the value placed on businesses (that have some desirable IP) by mega-rich corporations, is very different to the valuations we might see in a more normal market. So people are beginning to ask if the market is about to normalise.

The other feature of the current tech market is a relative lack of real innovation – akin to the types of innovation we saw after the launch of various flavours of micro-computer in the 1980s. The three decades after Bill Gates did his DOS-deal with IBM created a phenomenal increase in computing power, a transformation of data storage, the creation of the World Wide Web and the arrival of true, pervasive connected computing with the dawning of the smart phone. The organisations and individuals behind these innovations focused on very difficult tech – requiring new methods of computing, electronics and data transmission. The companies that grew fastest during this period were extraordinarily innovative – companies like Intel, IBM, and Seagate – as evidenced by patent filings and PhDs employed.

However the current big valuation wave is dominated by companies that have, by comparison, less obviously ‘difficult’ intellectual property – companies like Facebook, Twitter, and WhatsApp. Indeed some would argue that these companies’ fixations on user generated content results in companies that are little more than aggregators of trivia. Moreover, they have inspired a sub-generation of entrepreneurs dazzled more by the valuations associated with these firms than by the underlying tech that drives them. Hence we’re seeing absurd valuations again for firms that create ever more niche social networks or ‘communities’. In short, it’s beginning to feel a bit like how it felt before the dot-com bust.

There’s another consequence arising from the current strange valuation wave. The expectation, on the part of some VCs, for quick win exits, has also created a phenomenon known as the A-round crunch. Many of the most prominent Sand Hill Road VCs are more likely, these days, to invest at the seed round rather than at later rounds. There’s an expectation that if a company hasn’t developed a community of tens of millions of users within months of seed-round there’s little hope of a valuable exit. Big social networks need to augment their communities more than they need tech. This mind-set potentially stifles the types of businesses that take time to develop game-changing technologies.

Hence we’re seeing the emergence of a new breed of entrepreneur that relies less on venture capital than on innovation. Indeed, historically, some of the world’s most successful tech companies were boot-strapped – companies like Microsoft and Qualcomm.

In the UK we’re seeing significant growth in alternative funding sources that support these types of entrepreneur who may, indeed, be more technically brilliant, and more focused on creating compelling and sustainable businesses based on intellectual property. PwC works with Funding Circle – a new type of funding market for businesses (and not just technology businesses) that need money but have chosen to take a route other than venture capital. To date, Funding Circle has helped more than 5,500 businesses borrow £370 million through its marketplace. Funding Circle is now the sixth largest net lender to small businesses in the UK. PwC’s My Financepartner will refer small business clients seeking alternative sources of finance to Funding Circle.

These and other alternative funding sources show that venture capital is not the only way. For many business owners the alternatives also represent a means of financing the business that also creates more self-reliance and a greater sense of independence. These are two things that some of the most visionary entrepreneurs need to retain.

This article was written by Suzanne Houghton of My Financepartner – PwC’s new accounting service for growing private companies.

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< The beta blog | Sep 15, 2014

The last private equity value creation lever: digital advantage

Last week I led a meeting with the operating partners at a global private equity firm. The firm in question is a market leader whose portfolio spans industries and geographies, ranging from high-growth businesses to mature ones.

In many ways, this firm represents the epitome of what one expects from a generalist private equity firm: smart individuals investing in and transforming a diverse group of companies.

The operators in the room had more years of experience at the ‘coalface’ of operational improvement than I would care to count, but the discussion we were having was about a value creation lever that most of them had yet to grasp: digital advantage.

The word ‘disruption’ is overused and, frankly, abused. However, there is no denying that the rapid advancement of the Digital Age – the confluence of social media, smart devices, big data and cloud computing – represents both a massive opportunity for value creation in portfolio companies, as well a huge threat to existing value for those who ignore its threats and potential.

We view the advance of digital business as coming in three waves. Operating partners, management and entrepreneurs that understand these three waves will be better equipped to defend and create advantage in the Digital Age.

First digital wave

The first digital wave, that of Digital Commerce, has been with us for some time and is typified by previously offline businesses opening up digital channels alongside existing routes to market. This can be extremely valuable for both cost efficiency and top-line growth. But even if Digital Commerce has been with us for many years now, smart devices and an emerging generation of Digital Natives are changing the dynamics and creating new opportunities.

Non Digital Natives typically look at Digital as a channel on which they can transact, implicitly valuing usability and simplicity. Digital Natives typically look at Digital as some sort of “natural language”, and as an opportunity to engage with their own lives and goals in a visual, interactive and engaging way.

That’s why – for example in the retail sector - Digital Natives value not only bringing the store on an online channel, but also bringing digital into a store. They use great digital experiences as their benchmark; they almost want to walk into a website when they shop in the physical world; they want the option to double tap on things, online or not. So even if a company has been online for many years, it is very likely that a great deal of opportunities exist to create additional performance and advantage.

In our view this first digital wave is all about the Economy of Products and Services.

Second digital wave

If the first digital wave is all about advertising, marketing, selling and supporting products and services, the second digital wave is all about helping people achieve goals they care about. Simple goals can be delivered by well-engineered products (to the extreme the goal of opening a bottle of wine can be perfectly “delivered” by the product called “cork opener”).

But as goals become more valuable and more complex, engineering products and services that deliver these goals becomes increasingly hard. A few examples ? Personal fitness, healthy eating, cleaner home, safer driving, greener/cheaper household heating, listening to music that I really like, etc. These outcomes are not for sale per se, because they are not easy to engineer into a specific product or service.

Why not ? Mainly because in order to achieve these outcomes the customer will need three things that are hard to get:

1.They need understanding their own behaviour better

2.They need some help with their discipline and will power

3.They need their partner/supplier to understand their individual needs and wishes really well.

And that’s exactly what Digital technology can help brands and customers achieve today. Sensor technology (e.g. a Fitbit wristband) can help us see what we do. Social media and peer-to-peer comparison can help us stay focused. Platforms as Spotify can capture the unique way in which we listen to music (what, when, how often, etc.) and use this wealth of consumption data to learn and shape our unique music taste. In-car telematics can give us sharper premiums if we are consistently considerate drivers, and even help us drive in a safer or greener way.

The possibilities are endless. And there is also an additional bonus. In this second digital wave we are not transacting; we are playing a “life videogame” that is fun, interactive, engaging and real, because the goals we are going after are real. .

In our view this second digital wave is all about the Economy of Outcomes.

Third digital wave

The third digital wave, that of Digital Identity, will turn the idea of consumption on its head. Consumers’ data, collected by smartphones, fitness wrist bands, smart gas and electricity meters, car insurance monitors and all manner of other sensor devices, is there to be interrogated by trusted businesses, who can then tailor their offers to the individuals, or broker offers from other players in the ecosystem, like for example a reverse auction.

As a consumer, I will release my energy usage data and receive tailored offers from suppliers. I will release data from my music streaming account and it is up to music streaming suppliers to tailor an offer for me based on how expensive my musical taste is.

Of course there are non-trivial privacy issues, and we are squarely in Big Data territory here. But let’s think about this. The Big Data that the customer fears is a scary entity to which you surrender your data, which will do with your data things you are un-aware of for purposes that you have not approved, and which will give you neither ‘editing’ nor ‘deleting’ rights. We call this the “Selling Big Data”. The “Selling Big Data” does exactly what it says on the tin: it harvests and hoards customer data of all sorts, and crunches this data behind the customer’s back with the objective of selling more things and making more money.

“The Selling Big Data” invokes relevance as an honourable justification, but very often it erodes trust. Relevance or not, the “Selling Big Data” works for the seller.

But there is also another version of the story. We call this the “Buying Big Data”.

In this version of the story the customer does not surrender his/her data, but volunteers it. Why ?

Because it helps the customer achieve valuable goals; because the status of the customer as the legal owner of his/her data is recognised and respected; because the customer has full “editing” and “deleting” rights on this data, no questions asked. In this world of “Buying Big Data” the customer is in control, and his/her data is like a currency. That’s the key: in the digital age personal data is not a product to be sold for a bit of money, but a currency in its own right that can be spent to get to things that money alone can’t buy.

The “Buying Big Data” is where the Digital Economy meets the Trust Economy. The “Buying Big Data” is the 4D image of the customer in this digital world, and it works for the customer.

In our view this third digital wave is all about the Customer’s Digital Identity, and a fundamental enabler of the Economy of Wishes.

Implications for PE firms

For private equity firms, financial engineering has been a diminished part of the toolkit for some time now. The industry today works hard to drive operational improvement within its portfolio companies. For the private equity operating partners with whom I talked through these ideas last week, the value creation opportunity presented by the digital revolution is now undeniable. Efficiencies and opportunities abound from the back office, to the front office all the way into to the customers’ homes.

We anticipate that programmes to optimise portfolio companies’ digital fitness will become as important a value creation lever for private equity firms as programmes to reduce costs, improve working capital management and optimise the supply chain. Private equity firms that can demonstrate a positive digital track record will become more attractive business partners and a more compelling investment prospect.

We have helped a number of private equity firms by assessing digital opportunities across their portfolios and undertaking specific digital interventions, as well as supporting deal sourcing and digital due diligence. If you would like to have an exploratory discussion about the digital fitness opportunities within your portfolio, then please contact me on carlo.gagliardi@uk.pwc.com

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< The beta blog | Sep 12, 2014

Guts and Gigabytes : Capitalising on the art & science in decision making

The growth in use of data analytics in modern businesses is having a profound effect on all aspects of decision making. At all levels in an organisation, managers and leaders have an every increasing wealth of analytics available to inform the decisions which they need to make.

But there is an ongoing tension between those who follow the advice of the data scientists, the analysts and the statisticians and those who prefer to rely on personal options, informed more by experience and advice from colleagues. The difference between the Guts and the Gigabytes.

Jack Welch, the iconic former chief executive officer of GE, said that good decisions are made “straight from the gut”. Since Mr Welch’s retirement in 2001, an era of big data and advanced analysis has been ushered in. Most companies now have lots of data available to them and, increasingly, this big data is being used to provide new insights. So should executives still cleave to Mr Welch’s advice, or has big data changed big decision making into a more scientific process?

An Economist Intelligence Unit's report into the role of data analytics in corporate decision making explores the agenda for big decisions in 2014-15 and the process that business leaders will go through in making these decisions.

This report considers the agenda for big decisions over the next 12 months and examines the role that big data and enhanced data analysis are set to play in guiding the decision making process. The report draws on a global survey of 1,135 senior executives and in-depth interviews with more than 25 senior executives, consultants and academics. Some of the key findings include:

The quality of big decision making is improving. British business leaders are more likely to report an improvement in the quality of decision making in the past two years than the global average, with 83% reporting an improvement and a third (32%) a significant one. Highly data-driven companies are more likely to report improvements in big decision making.

Experience and intuition are the main inputs into the big decision making process. Although all aspects of data and data analysis are rated highly in the UK, data and analysis are only the third most important input into the decision making process, after own experience/intuition and advice/experience of others internally

Concerns about data quality and overload are the main barriers to the greater use of data. Despite the generally positive attitude towards data and analysis, many UK business leaders remain concerned about data quality, alongside data overload. Moreover, more than half of UK respondents (61%) feel that “relying on data analysis has been detrimental to our business in the past”. By contrast, there are few concerns about sufficient talent or skills to make the most of the data that organisations collect.

More people are involved in big decision making at UK organisations than before.The rise in more democratic decision making is not unrelated to the rise in the availability of data, which has encouraged a kind of evidence-driven, and more democratic, approach to big decisions.

Growth is top of the agenda, but cost pressures drive UK businesses to collaborate with competitors.Growing the business is regarded by senior executives in the UK as the single most important area for big decisions in the year ahead. However, because costs and margin pressure are identified as the main strategic motivations for big decisions, executives are looking for more creative ways to build their business without a large monetary investment. More than half of respondents (52%) expect to make big decisions in the next year that involve competitive collaboration, making this a much stronger trend in the UK than elsewhere.

The full report is available here.

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< The beta blog | Sep 10, 2014

Apple has changed payments, how will you react?

For the last three years, I have waxed lyrical about the effect of new mobile technology on retailers, restaurants, banks, brands, and anyone who would listen. During this time we have of course seen a huge rise in mobile commerce, mobile advertising and the growth of tablets. However one area has failed to take off in a meaningful way – and that has been mobile payments and wallets.

There are many reasons why it has failed to take off. In my opinion we have not seen a service that brings together payments, advertising and user experience in a compelling enough way for consumers to adopt en masse.

So the announcement by Apple last night to introduce Apple Pay using NFC (contactless technology) into both the iPhone 6, and the Apple Watch, is likely to be the catalyst we have all been waiting for. I know the initial payment and retail partners are for the US at launch, but I would expect the UK and other markets to be pretty close behind. Bringing payments and retail together is the final piece of the jigsaw that turns our devices into something we used both online and offline, and completely crosses the line between digital and physical channels.

This will mean that we will finally see mass adoption of mobile payments and contactless technology across a range of industries. Let’s face it, Apple do have a talent for really changing the way we live through their products (iPods, iTunes, iPhones, iPads…..need I say more). Of course Apple is not the only service out there, but they are likely to be the ones who will drive market adoption,

The big thing to remember is that this is about much more than just payments. This is about mobile devices continuing to change the way in which we browse, shop and interact with brands and products. Retailers, in particularly, will be able to gain new insights, deliver personalised and contextual communications, and create new shopping experiences.

If you think back to the early naughties, eCommerce really didn't take off until we had payment mechanisms online that we felt were secure and easy to use. With eCommerce those who got it right became winners, and those who did not are simply not around anymore. The same is happening here in mobile.

So my advice would be to take this announcement as a chance to rethink how mobile currently fits into your growth strategy. More importantly, it is not about creating new apps or the mobile web; the implications of this reach into customer experience, analytics, marketing, sales, service and operations.

This is not about digital or mobile strategy, but about creating a strategy which is fit for a mobile digital age.

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< The beta blog | Aug 22, 2014

The rise of multichannel networks in a world in beta

Video viewing habits are evolving rapidly, not just in mature markets, but globally, and especially among younger audiences. The rise of digital video has been nothing short of spectacular, and most of it is attributable to one player: YouTube. The Google-owned firm now attracts 1 billion unique monthly visitors — equal to 40 percent of the online population worldwide — who watch more than 6 billion hours per month.

New ecosystem, new players

The numbers are staggering and have attracted a new kind of player to the media and entertainment industry — so-called multichannel networks (MCNs), which are quickly building a nascent business on top of YouTube’s massive user base.

MCNs are outfits that curate their own video content and partner with video websites like YouTube to syndicate, monetise, and manage content they curate from digital video talent. Now, traditional media companies are trying to get in on the action, by buying stakes in these new networks or acquiring them outright. Some MCNs have also started to produce their own original content as well. The tone, voice, and production style of their short-form videos typically emphasize an unfiltered “authenticity” that appeals to a millennial or even younger-skewing demographic, as can be seen through the videos of MCN-based YouTube stars like teenage fashion sensation Bethany Mota, video-game critic PewDiePie, and Truth Mashup, an online comedy show.

Challenges to traditional media companies

The advent of MCNs has attracted considerable M&A attention from larger media companies looking to expand their participation in digital video, and more deals can be expected going forward. But because they are so new, and because their business models are not yet established, MCNs present real challenges to media companies when it comes to their integration and evolution toward long-term sustainability and value creation. The playbook for the traditional network and pay-TV ecosystem is not the right one for MCNs.

Although traditional companies can leverage their experience and scale in building up their new acquisitions, they must be very careful not to break them in the process. MCNs have succeeded by moving very fast, developing edgy content, and being willing to experiment — not exactly key capabilities among most big media firms.

Through the lens of MCNs, media companies can master the digital video ecosystem, while at the same time using their own capabilities (e.g. in packaging, brand integration, and monetization) to improve the MCN business model. If the companies now buying these MCNs are to help them grow, they must work with them to produce more of their own content, seek out global audiences, and diversify their distribution and revenue streams beyond YouTube.

Most important, they must foster the capabilities that have enabled MCNs to grow as fast as they have so far.

For Strategy&’s full analysis of multichannel networks click here 

Blog post written by:

Christopher Vollmer | +1-212-551-6794 | @chrisvollmerLinkedIn 

Kristina Bennin | +1-212-551-6140 | @kristinavLinkedIn

Sebastian Blum | +1-212-551-6109 | LinkedIn


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