Data & Analytics as an integral part of today’s business

Are the D&A capabilities of Finnish companies sufficient? I claim they are far from it, and the “Building Trust in Analytics” survey commissioned by KPMG may support this statement.  From a strategic and efficiency-enhancing perspective, it may be worthwhile to have a look at what D&A has to offer your company.

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The Building Trust in Analytics survey was carried out in 10 countries on all continents, and the 2165 respondents were all directors and C-level executives fully or partly responsible for data & analytics. Although the majority of companies interviewed for the survey deem D&A important for their businesses, only 34% are confident in the business operations insights generated by using D&A. Furthermore, just 21% trust the analysis/modelling they conduct. I find these numbers somewhat incomprehensible, and I’m left wondering why the trust in D&A is so low, regardless of its widely recognized significance. One possible reason is inadequate competence, combined with outdated and unsuitable tools.

D&A provides a myriad of possibilities

I’ve personally participated in projects focusing on cost and process efficiency, where D&A has been utilized and even heavily relied on. Even though I was familiar with D&A prior to joining KPMG, I’ve been astonished by the vastness of its application possibilities, as it can be applied within virtually any activity where data is available.  The only limits are essentially your own creativity and skills and the features of the software you’re using. More often than not, the finiteness of the software isn’t an issue.

So why not invest in D&A?

As the survey presented above does not include Finnish companies, it isn’t an indication of the D&A capabilities in them. Be that as it may, I know from personal experience that the use of a few Excel spreadsheets is still the most advanced form of “D&A” in many Finnish companies. Obviously I’m generalizing, but the truth is that I’m yet to be blown away by the D&A skills of a Finnish company!

Upgrading your D&A is surprisingly easy

Taking your D&A to the next level, so to speak, can be anything but cumbersome, and not quite the nuisance you might think. Licenses for extract, transform & load tools aren’t all that expensive, and some ETL and business intelligence software is even available for free. Using them is generally not all that tricky, and with just a bit of practice and the will to learn, you can make impressive visuals and save time with smart commands in your ETL software.

I’m very much inclined to recommend the use of D&A. There are clear efficiency-related upsides, as well as numerous other benefits, and the use of D&A in companies will most likely increase exponentially in the future. So, why not invest in D&A in the form of proper tools and skilled employees? We’ll be happy to help you, and you’ll most likely thank yourself for it later.

 


I am Erik Mustonen, a member of the KPMG Global Strategy Group. Ever since I was little, I’ve been interested in numbers and calculus. D&A is, in a way, another outlet for my passion for numeric analysis, and an exciting means to explore and learn new things. At KPMG I’ve been fortunate to be involved in D&A-related assignments. KPMG has clearly made progress within the field and a strong D&A community has developed here, which I’m happy to be part of.

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Kansainvälinen liikkuvuus vaatii venymistä ja ketteryyttä

Osallistuin KPMG:n Global Mobility Forumiin Barcelonassa – yhdessä yli 400 eri yhtiöissä työskentelevän asiantuntijan kanssa. Edustimme yli 40 eri kansallisuutta. Yhteinen puheenaiheemme oli, mitkä asiat vaativat venymistä kansainvälisesti liikkuvien työntekijöiden parissa työskenteleville – ”What is stretching Global Mobility”.

Mitä ratkaisuja Global Mobility Forumin osallistujilla ja panelisteilla oli venymistä vaativiin tilanteisiin?

# 1 / Miten hallita kasvavat kustannuspaineet?

Miten yhtiö voi selvitä tilanteesta, jossa komennuslaisten määrä kasvaa rajusti, mutta asian hoitamista varten annettu budjetti ei muutu? Asiaa kommentoi erään ison hotelliketjun edustaja, jossa erinäisten toiminnan uudelleen järjestelyjen myötä komennuslaisten määrä suureni. Tässä tapauksessa sisäisiä prosesseja uudistettiin. Lisäksi pyrittiin automatisoimaan sekä yksinkertaistamaan mahdollisimman monia prosessin vaiheita.

Automatisoinnin ja prosessien selkeyttämisen puolesta puhui myös toisen yhtiön edustaja, jossa seurattavien työmatkojen määrä vuosittain on sadoissa tuhansissa. Näiden seurannassa yhtiö on pyrkinyt mahdollisimman automatisoituun seurantaan. Automaatio ei toki ollut ainoa tekijä, vaan kyseisessä yhtiössä kustannuksia on myös pidetty kurissa jatkuvan ja ennakoivan bisneksen kanssa käytävän keskustelun avulla.

Vaikuttaisi kuitenkin siltä, että yhä useammassa yhtiössä pyritään pois manuaalisesta työstä ja pyritään hakemaan ratkaisuja, joissa komennuksiin liittyviä yksinkertaisia työvaiheita voidaan toteuttaa vähemmällä työllä.

# 2 / Miten saadaan siirrettyä työntekijät nopeasti pois katastrofialueilta?

Työmatkalaisten seurantaan ja näihin liittyvien riskien hallitsemiseksi on tärkeää tietää, missä yrityksen työntekijät ovat matkustelleet ja toki myös se, mihin heidän tulevat matkat ovat suuntautumassa.

Teknologia voi auttaa myös poikkeustilanteissa. Työntekijöiden paikallistamistietojen helppo saatavuus oli auttanut erästä paneelikeskusteluun osallistunutta yritystä merkittävästi luonnonkatastrofien yhteydessä. Kansainväliseen liikkumiseen erikoistunut tiimi yrityksessä pystyi nopeasti reagoimaan ja siirtämään pois työntekijöitä riskialueilta. Asian sujuvaa hoitamista auttoivat tarkat tiedot työntekijöiden oleskelupaikasta, sujuva prosessi ja selkeät roolit työntekijöiden siirrossa.

# 3 / Miten hallita yleistyvään etätyöhön liittyvät riskit?

Erään suuren IT-alalla toimivan yrityksen edustaja totesi, että yhä useammin esiin nouseva haaste on etätyön yleistyminen. Kaikki tietävät, että etätyö etenkin rajoja ylittävinä on omiaan aiheuttamaan viranomaisvelvoitteita työskentelyvaltiossa.

Vaikka viranomaisvelvoitteiden selvittäminen saattaakin olla työlästä, on se kuitenkin hoidettavissa. Vielä haastavampaa on hallita ja saada tietoon nämä elävässä elämässä syntyvät, rajoja ylittävät etätyötilanteet. Keskusteluun osallistuneiden sekä yleisöstä tulleet mielipiteet tukivat kaikki samaa ratkaisua: asiasta informointi sisäisesti ja selkeä prosessi etätyösopimuksille.

Monet esiin nousseet ulkomaankomennushallintaa venyttävät asiat voidaan ratkaista automaatiolla ja työntekijöiden liikkeitä seuraavalla teknologialla, mutta etätyön hallinta on astetta vaativampi haaste — ei kuitenkaan mahdoton ratkaistavaksi.

Jutellaan lisää venyvistä kansainvälisistä työtilanteista! Mikä teillä aiheuttaa eniten haasteita?

Tax Partner Paula Holmström vastaa KPMG People Services -ryhmässä monien KPMG:n asiakkaiden ulkomaankomennuksiin liittyvistä tukipalvelusta. Ulkomaankomennuksiin liittyvien vero- ja sosiaaliturvakysymysten parissa Paula on työskennellyt KPMG:lla vuosituhannen alusta.

Vapaa-aika kuluu juoksuharrastuksen sekä lasten harrastusten parissa, mutta myös jooga tasapainoittaa hektistä arkea.

Three key challenges slowing down growth in the smart home market

The Nordic smart home market is on the verge of explosive growth. Yet, no firm has successfully penetrated the market. The industry faces three key challenges that must be met before broader household penetration can be achieved. The company that first overcomes these three key challenges will gain a strong foothold in the market.

When away from home, many people begin to worry about whether they left the doors locked, the windows open or the water pipes closed. These worries are unnecessary since smart home technology is already available for most of these common everyday problems. In addition to increasing convenience and bringing peace of mind, the solutions offer various other benefits such as cost savings, and a higher degree of automation and environmental friendliness. But despite these benefits, consumer awareness and penetration have remained low. In my recent work, I have concluded that there are three key challenges to overcome:

1. The integration and interoperability of smart home solutions have remained low

A significant hindrance to growth has been the low level of integration between the solutions offered by different providers. Many of the current smart home products have their own apps. However, consumers would rather have only one master app to control all home functions – from heating and lighting to entertainment. The reason why product integration has remained low is the prevalence of multiple competing standards and ecosystems. Companies from various backgrounds have rushed onto the market without sufficiently considering the benefits of cooperation and interoperable solutions. This has led to a situation where the smart home market lacks industry-wide technological standards. Whoever succeeds in creating an industry-wide ecosystem will experience high growth.

2. Finding winning business models has been difficult

Many smart home companies have been content with excessively traditional models. The choice of business model is crucial in differentiating the company from its competition and determining the role it wants to play in the value chain. The right business model can also ensure seamless customer experience at all customer touchpoints. Today, business models based around a pricing margin such as a monthly subscription are common. However, other business models with simple value propositions may be even more attractive for the customer. For example, companies with backgrounds in traditional industries may benefit more from business models such as service bundles, the-product-as-a-service, loyalty-based and insurance-based systems, and gamification. Loyalty-based models may provide tools to keep customers and lower churn in the company’s core business, whereas service bundles are ideal for cross-selling opportunities.

3. Data protection poses a challenge, particularly in the European market

Smart home companies face various challenges when it comes to data collection, storage and use, particularly in the European market. When the EU’s General Data Protection Regulation will start to apply from May 2018, companies must be able to tell consumers what data they have on them. Furthermore, companies must be able to erase all information collected on a customer if the customer so desires. The regulation also poses a brand risk for companies, since consumer trust will be easily lost if data is mishandled. Being as transparent as possible on data security will help companies to mitigate private data concerns and the fear of misuse. One concrete step will be to set clear rules on how the data is to be stored, and where and how it is to be used.

Sami Ali-Mattila has worked for the KPMG Global Strategy Group since March 2017 and has recently worked on several projects related to disruptive technologies. Sami holds a Master’s degree in Finance at the Aalto University School of Business. He has two years of advisory experience, particularly in growth strategies, commercial due diligence and M&A. In his free time, Sami enjoys various sports activities and travelling.

Do your sustainability work and reporting provide value?

I hear many clients say: “We have a sustainable business but have been bad at reporting about all the great things we do!” I respond: “We have to do something about that, because if you do not tell your stakeholders what you do, how could they value your efforts?”

Sustainability reporting has entered a new era as the business impact of sustainability is more apparent and stakeholder expectations drive legislation, reporting frameworks and practices. If you already contribute to sustainability reporting – congratulations!

I believe that those who are starting their sustainability reporting journey with the sole target to be compliant with the EU Non-Financial Reporting Directive (NFRD), will find more business case in it than they thought.

Most companies are working on making their reporting governance, processes and practices more efficient, less error prone and easier to control and audit. Reporting is not only driven by demand but also by active supply, as it is crucial to equip stakeholders with relevant and credible information.

What should you consider in your supply of sustainability actions and reporting?

— Do you work with material topics? A materiality analysis guides what to include in reporting and supports business in focusing sustainability efforts on what matters the most for business and stakeholders.
— Do you analyze changes in your company’s operative environment and how you contribute to change? Consider how your company is contributing to the UN’s SDGs and the Paris climate agreement.
— What value does your company create for society? You can measure and monetize the societal value of sus-tainable business, investment, programs, partnerships or products using credible methodologies. This enables you to communicate a more comprehensive value creation story to investors
— Is sustainability integrated in your company’s business strategy process and other key business processes? Show how sustainability drivers are considered in shaping your future business and how sustainability is integrated on a strategic and operative level.

Be active, relevant and creative. The ways of reporting and providing value to stakeholders are countless!

What do the stakeholders expect?

During the past couple of years, there has been much discussion about the form, context and contents of corporate sustainability reporting. This discussion is flavored by three important developments.

1. Information on key ESG topics. Investors are increasingly interested in ESG-related investment relevant information for their decision-making. Investors have e.g. realized that the impact of climate change and the Paris climate agreement on risk and return in their investment portfolio is significant. Simultaneously responsible investment practices have become more mature.

2. Compliance with both legislation and sound guidance-based schemes. The demand for sustainability reporting has led to the launch of a multitude of mandatory and voluntary reporting schemes and in particular the implementation of the NFRD, which has made reporting mandatory for thousands of European companies which have not reported on corporate sustainability before.

3. Enhanced integrated reporting. The Secretariat of the Global Reporting Initiative launched the GRI Standards in 2016. The International Integrated Reporting Council launched its reporting framework which responds to the demand for integrating reporting of financial and non-financial information. Guidelines such as the Financial Stability Board’s Task Force recommendations on climate-related financial risk disclosures adds to these.

Results from the KPMG Reporting Survey reveal that reporting on sustainability is increasingly an integral part of annual financial reporting. Nordic companies have room for improvement as concerns climate disclosures, supply chain management, approach on human rights and reporting on value creation. I am, however, pleased to note that Swedish and Finnish companies are among the world’s top 6 countries in reporting on how they contribute to the SDGs.

Whether you are a new entrant on the market for sustainability reporting or an experienced master of disclosures, know that you have an important job. Use your influence wisely!

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Partner Tomas Otterström vastaa Suomen ja Ruotsin KPMG:n vastuullisen sijoittamisen ja yritysvastuun palveluista. Hänellä on parinkymmenen vuoden kokemus liikkeenjohdon konsultoinnin, sijoitus- ja varainhoitotoiminnan sekä yritysvastuun johtotehtävistä.

Vapaa-aikaansa Tomas viettää perheensä kanssa sekä sulkapalloa jahdaten, johtamiskirjoja lukien että elämysmatkailua harrastaen. Hän on myös hyvän ruuan ystävä.

Scaling agile portfolio management for large enterprises

Everybody seems to agree that agile methodologies are best practice. Pretty much all the customers I work with are agile to at least some degree, and typically have a multi-speed (or “bi-modal”) operating model consisting of entirely new businesses that have been built agile from ground-up and older legacy businesses that work with more traditional, slower clock speeds.

Agile portfolio management

However, after the initial enthusiastic wave of adopting agile methodologies is over, most companies seem to hit a stone wall. Agile just doesn’t seem to fit big businesses. And I’m not talking only about old giants, encumbered by legacy systems and large organizations. I see this even in new school technology companies.
There’s a gap between business strategy and what the agile teams are doing. Nobody seems to be able to link individual teams’ activities to the big picture of enterprise strategy. IT struggles to prove its alignment with business goals.

Interdependencies start creeping in and coordination between different, self-contained teams becomes difficult. For example, although your CRM development may be agile, its progress may be blocked by issues with the ERP – which has a one-year release cycle. The legal department may want a cumbersome regulatory acceptance process before go-live, which thus forms a waterfall gate in the process.

How do you scale agile from a bunch of small teams to larger, strategic projects and an enterprise-wide way of working – without losing agility?

Agile portfolio management

The answer is clear. You need a comprehensive agile portfolio management system reaching all the way from the company’s strategy to individual agile teams:

– The corporate strategy process clock cycle needs to be intensified (e.g. a rolling 3-month cycle), and there needs to be more constant feedback from both customers and operations back to decision-making.

– There needs to be a process for cascading the strategy to a portfolio of themes, within given financial and resource constraints, as well as a governance structure and portfolio-related ownership.

– If it doesn’t already exist, a clear program management layer must be built for the purpose of prioritizing projects arising from large, strategic initiatives into more operational projects, and bundling groups of e.g. 5-10 project teams under unified management (e.g. those with a shared vision and backlog, as well as common coordination).

The changes may be significant, but the benefits will be tangible. You’ll get more innovations and shorter lead times for testing new ideas. Employees will be happier, because they’ll understand the big picture and find purpose in what they’re doing. You’ll increase the alignment between IT and business. Due to the continuous updating of business cases, it will be easier to kill projects that aren’t delivering, or are no longer strategic. You’ll get more trust and transparency throughout the enterprise.

Many customers have adopted the Scalable Agile Framework (SAFe). It’s a robust approach, but only a part of the solution. It does not cover the full scope of changes required for an agile enterprise – in other words, how to make a high-level corporate strategy process more agile. And ultimately, all frameworks and governance systems require tailoring to your organization. You need a comprehensive system without gaps that fits the purpose and suits your needs. And that’s something you can’t just buy off-the-shelf.

Toni Heinonen works as a Senior Manager in KPMG’s Global Strategy Group. He has 17 years of experience in management consulting, ranging from growth strategies and M&A to large-scale transformation projects. Toni has worked extensively with technology, media, telecoms, consumer services and other industries that have been heavily disrupted by digitalization.

Outside of his work, Toni enjoys jogging, outdoor activities with his dog, playing musical instruments, and photography.

Understanding organizations’ unwritten rules in post-merger integrations

Post-Merger Integration (PMI) has been a challenge for many companies, as is amply testified by the countless articles and books written on this subject around the world. Global research indicates that, in most cases, a clash of corporate cultures or incompatible cultures are among the top five reasons why PMIs have not been successful.

post-merger integration

Companies are very seldom really interested in understanding cultural issues during the pre-deal phase. In most cases, resources are focused on the negotiations, and on financial and legal Due Diligence (DD) for the purpose of closing the deal. In some cases, companies spend time on operational DD, but very rarely from the perspective of corporate culture.  Even those companies that claim to take cultural issues into consideration during the pre-deal phase often face just as many challenges during the post-merger integration as those that neglect this area entirely.

In my opinion, one of the major failures related to culture is that companies are unable to identify the unwritten rules of their organizations. What companies see and observe during the negotiation, the interviews they conduct with key individuals and the various kinds of DD carried out, relate to what I call the written rules – policies, procedures, descriptions, codes of conduct, etc.  After closing, when the sweet talk about the deal is over and the integration process starts, the unwritten rules slowly make their presence felt through simple expressions such as “yes, but” or “however”.

These caveats tell us what drives each individual’s day-to-day behavior and reveal the existence of “unwritten rules”, or what I call it “The internal politics of the business”, – the honest advice one would give to a friend about how to get on in the organization.

These unwritten rules are neither good nor bad, only appropriate or inappropriate for what you want to achieve from the integration. You must be aware of them, and plan well in advance on how to tackle them.

But where do the unwritten rules of companies actually come from? They typically start with top management. On the one hand, they derive from the way top management thinks and acts, and, on the other hand from what can be conceived of as the “written” rules that they establish or maintain.

The unwritten rules are what help people survive and thrive. They are a set of highly sensible coping skills adopted by all employees – not just by those destined for the top.

Bozorg Amiri is Partner and Head of the Global Strategy Group in KPMG Finland.

Building a bridge for strategy implementation

Over and over we hear the importance of strategy implementation. You can have a great strategy, but if you are unable to put it into practice, it is worthless. So if it is already old news that implementation is the key to success, why do we still see many companies failing at this stage? Well, simply because the complexity of implementation is underestimated.

Though many rely on external support to develop a new strategy, people consider implementation more of an internal activity or separate task. I met a client who told me “Strategy is developed in the ivory tower, and then it’s up to us to figure out how to make it work”. That got me thinking what had gone wrong in that particular case. In my experience, development and implementation go hand-in-hand. So how can we help to build a bridge between strategy development and implementation?

Here are three key points:

Involve key stakeholders from different organizational levels

If you involve different organizational levels at the development stage, not only will you develop a strategy that addresses the points that are important to your team and has a practical approach, but you will also get easier buy-in to the strategy.  Selecting the right people to involve will also take you one step further when it’s time to execute the strategy. In this respect, it’s not only expertise that is important, but leadership skills and the ability to influence others will also be key to ensuring successful implementation.

Make your strategy implementable

Make a robust plan that considers funding, phases, tasks, timetabling, resources, and well-defined roles and responsibilities. Furthermore, be realistic about the resources you need to implement the strategy and how daily work will be affected by the additional tasks. Getting an extra pair of hands and expert advice at this stage can pay off, if it paves the way to a smoother transition.

Communicate and manage change

Unfortunately, this is many times overlooked. Clear, timely communication doesn’t just happen. Spend time thinking exactly what needs to be communicated, when it should happen, and who will do it. This will benefit by getting your organization onboard faster and avoiding negative feelings due to people not knowing what’s going on. Remember, the larger the scale of change, the more effort you need to exert in order to make it happen. A proper change management plan will make your life easier by accelerating the pace at which changes are adopted in the organization.

What’s your view? Can you think of any other points to add to the list?


Claudia Salto
is an Assistant Manager at the KPMG Global Strategy Group. She has experience in Operations Planning, Procurement, Change Management and Process Improvement. She has worked for several international companies in industries such as Telecommunications, Retail, Consumer Durables and FMCG. In her free time, she enjoys being with her family and friends and travelling to sunny places that remind her of home.