Volume 5 Issue 3

Providing insight and analysis for business professionals

Balancing challenge
Organizational strategy
Agility wins

Optimizing the suboptimum

Or true transformation?

Welcome

No one can deny that we are living in a data-rich world. A wealth of knowledge and
information is at our fingertips. Never has it been easier to source opinions, solutions
and innovations on issues that affect how we work, shop and live our lives. The
opportunities presented by the quantity and quality of available data are immense,
especially in a competitive business environment where companies constantly seek to
differentiate themselves and profit from a first-mover advantage.
But as with every opportunity, there is always a flipside. The risks around data for
companies are many and varied. From those that can have a massive impact on
reputation, such as data security, privacy and compliance, to those that are less
headline-grabbing but can have an equivalent effect in the long term. Information
management, for example, which can be incredibly complex, particularly in an
increasingly globalized world. Even identifying exactly what data you need from the
plethora of information available can be a substantial challenge.
Many of the articles in this edition of Performance explore some of these issues. For
example, Enterprise Intelligence: aligning information needs with strategic goals,
gives some guidance on how to navigate through the massive amounts of data
available. As the authors note, A staggering 90% of the worlds data has been created
in the last two years, so understandably companies are looking for guidance on how
to identify whats important.
And having identified what data is relevant to your business processes, there is then
the issue of how best to manage it. A smart approach for the integration of master
data systems into the cloud outlines how to make the most of the opportunities for
storing data via the cloud while still being confident that data security, privacy and
compliance are properly addressed.
From an industry perspective, Under the radar: what are power and utility companies
overlooking? explores the impact of big data and decentralized generation, as many
utilities are still struggling to grasp the implications of both these issues and, as a
result, are missing out on potential opportunities.
Other sector views come from life sciences and banking. Managing risk in the digital
world: meeting the challenge in the life sciences industry asks how companies should
identify and monitor digital content and e-channel risks. Excellence in Operations:
helping banks regain customer trust gives advice on how banks can build a loyal
customer base by concentrating on the basics and making sure service levels are high.
For many companies looking to achieve operational excellence, the question is often
whether to outsource or insource. We have two articles that examine aspects of
both. Are companies optimizing the suboptimum? looks at the interdependencies
between addressing the finance operating model and migrating activities to shared
service centers. How insourcing rather than outsourcing gave substantial savings
and improvements explains how Oslo University Hospital maximized efficiency and
motivation while still slashing costs. An important question about how to be elastic
in the back office needs to be answered correctly.
I hope the articles in this edition of Performance provide valuable insight and
information to help your business innovate, grow, optimize and protect.
Enjoy reading this issue!

Markus Heinen
Chief Patron, Performance

Volume 5 Issue 3

12

20
24

Contents
02

A smart approach for the integration of

master data systems into the cloud

12

Are companies optimizing the

suboptimum?

02

20

How insourcing rather than

outsourcing gave substantial savings
and improvements

24

Under the radar: what are power and

utility companies overlooking?

36

30

Excellence in Operations: helping banks

regain customer trust

36

Empowering the low carbon future of

export processing zones in Bangladesh

30

48

42

Enterprise Intelligence: aligning

information needs with strategic goals

48

42

Managing risk in the digital world:

meeting the challenge in the life
sciences industry

01

A smart approach
for the integration of
master data systems
into the cloud
The unstoppable globalization and networking of organizations
that goes along with it, are demanding higher requirements of
current and prospective master data systems. We outline how
master data systems can be successfully integrated into the
cloud on the basis of service-oriented architecture while data
security, data privacy and compliance are guaranteed.

02

Volume 5 Issue 3

Authors
Andr Wiedenhofer, MBA Manager
Advisory Services
EY, Germany
Alexander Reddehase Senior Consultant
Advisory Services
EY, Germany
Vincent Schwarz Senior Consultant
Advisory Services
EY, Germany
Sren Leder Consultant
Advisory Services
EY, Germany

03

A smart approach for the integration of master data systems into the cloud

hanges in data privacy policies,

security requirements and
international regulations (e.g.,
Sarbanes-Oxley Act, Basel
II, Basel III and IFRS) call for
adjustments to be made to
existing master data systems.
Data integration is crucial to business
success but decentralized, redundant,
poor quality and heterogenic data poses a
big barrier to making progress. Effective
and efficient handling of master data is
made challenging due to the commonly
observed IT landscapes comprising a
variety of different technologies, beside
the differences in data itself. An additional
challenge is ever-expanding data volume.1
Conventional master data systems are
unable to cope with the above challenges
and, hence, a fresh perspective is required
on devising new strategies to handle todays
master data.

The challenge of data

management
Nowadays, there are various requirements
for the administration and provision of data.
On the one hand, data has to be accessible
and easily available to different users, but
on the other hand, it has to be of a good
enough quality taking into account time
restrictions. In particular, if master data is
used transnationally, the challenges in data
management rise because aspects such
as data privacy and compliance have to be
taken into consideration.
For a better understanding of the
classification types of master data,
see Figure 1.
The approach described in this article
focuses primarily on the handling of master
data. Where applicable, however, other
types of data are also considered.

Figure 1. Different data types

Focus

04

Property
oriented

Master data
Client data (name, address, account
number, etc.)
Contractor data (company, address,
etc.)
Product data (number, name, size,
weight, etc.)
Account data (account number,
account type, etc.)

Variable data
Address change of clients
Address change of contractors
Changes in size or weight of a product
Account number change

Quantity
oriented

Inventory data
Account inventory
Stock of products
Warehouse stock

Dynamic data
Accounting
Increase in stock of products
Reduction in warehouse stock

Volume 5 Issue 3

Types of master data systems:

an overview
There are four main architecture types for
master data systems:
Leading system: the architecture
of a leading system consists of
individual components that take over
specific tasks (e.g., administration
of products, clients or contractors).
Users can connect to the components
of the system to read and write data
using defined interfaces. The degree
of harmonization of data is low in a
leading system.
Central repository: in this case, the
central repository does not have its
own master data, but instead, it refers
to appropriate sources. This means
that the user receives a reference to
the searched data through the central
repository. Again, for this type of
architecture, harmonization of data is
only partly possible.

Figure 2. Enterprise business processes supported by services, with SOA

Business process
Business service

IT
service

IT infrastructure

IT
service

Database

harmonization of data is realized by

adapters in front of their respective
components. The adapters take over
the role of a translator.

Peer-to-peer (P2P): with this

approach the individual communicating
components of systems are mostly
independent of each other. The

Central master data management

system: the architecture of this system
allows an integral service. All operations
on master data are executed over
the same interface. Through these
interfaces, applications without proper
data holding reach indirectly for data,
whereas applications with proper
data holding regularly synchronize
their data.

1. R
 .L.Villars and L. Borovick, Big Data and the Network, White
Paper, IDC, 2011.

Master data systems and

service-oriented architecture
(SOA)

2. T
 rend Report: IAM und SOA 2008, Eine Studie zum
Verhltnis zwischen Identity Management und
serviceorientierten Architekturen, EY, 2008.
3. G
 . Engels, A. Hess, B. Humm, O. Juwig, M. Lohmann, J. P.
Richter, M. Vo, and J. Willkomm, Quasar Enterprise:
Anwendungslandschaften serviceorientiert gestalten, dpunkt
Verlag, 2008.
4. W
 . Dostal, M. Jeckle, I. Melzer and B. Zengler,
Serviceorientierte Architekturen mit Web Services: Konzepte
Standards Praxis, Spektrum Akademischer Verlag,
Mnchen, 2005.

SOA fosters seamless interaction between

business processes and the supporting IT
systems.2 The introduction of SOA moves
a company away from a technical, siloorientated IT view to a functional, processorientated IT view. By doing so, the entire
company is ultimately affected.3

Business service

IT
service

Enterprise network

IT
service

Server

Core elements of an SOA are reusable

services, which encapsulate the logic and
functionality of an IT system behind an
interface. Through service operations,
service capabilities can be used and
become visible to the outside.4 Figure 2
shows how SOA allows IT based business
process activities to be supported via
services rather than being directly linked via
IT systems.
Operationally, business processes are
supported by business services (e.g., human
resource management), which are offering
certain functionalities (e.g., creating a
new personal profile). Business services
use IT services, which provide the IT
infrastructures technical capabilities (e.g.,
authorization service). IT infrastructure also
includes central master data (e.g., employee
data), which is made readily available by IT
services at any time. The advantage of SOA
is that it enables a transparent platform and
development environment for its service
users. In this way, it is easy to integrate
legacy applications into the IT landscape.

05

A smart approach for the integration of master data systems into the cloud

Businesses can reach

their full potential in
an environment where
services are faster and
better connected.

SOA differentiates between three

participating roles: service provider,
service user and service repository.5 A
service provider sets a service description
in machine readable form into a service
repository. Then service users search for
this service description in the repository.
If successful, a service user will receive
a reference to the service provider
from which they can query the service
description. The service description
comprises information about provided
service functionalities and how to access
them.6 Subsequently, the service user is
able to use the service.

The main benefit of SOA is that it better

allows IT support to improve business
processes.7 Adaption or expansion of
business processes is more easily achieved
in an SOA-oriented IT landscape. Businesses
can reach their full potential in an
environment where services are faster and
better connected. Moreover, standardized
interfaces reduce the complexity of the IT
landscape thus reducing resources needed
for maintenance and operation of systems.

5. W. Dostal, M. Jeckle, I. Melzer and B. Zengler,

Serviceorientierte Architekturen mit Web Services: Konzepte
Standards Praxis, Spektrum Akademischer Verlag,
Mnchen, 2005.
6. OASIS SOA-RM Technical Committee, Service Oriented
Architecture Reference Model, http://docs.oasis-open.org/
soa-rm/v1.0/ (dated June 2013), OASIS, 2006.
7. W. Dostal, M. Jeckle, I. Melzer and B. Zengler,
Serviceorientierte Architekturen mit Web Services: Konzepte
Standards Praxis, Spektrum Akademischer Verlag,
Mnchen, 2005.
8. P. Mell, T. Grance, The NIST Definition of Cloud Computing,
http://csrc.nist.gov/publications/nistpubs/800-145/
SP800-145.pdf (dated June 2013), National Institute of
Standards and Technology, 2011.
9. C. Boos, Cloud Computing: Die Herausforderung fr
etablierte Unternehmen, http://clouduser.de/ meinungen/
cloud-computing-die-herausforderung-fur-etablierteunternehmen-6472, (dated June 2013), 2012.
10. M
 . Hoffman, Top Cloud Computing Benefits for Your Small
Business, http:// smallbusinessblog.infostreet.
com/2011/04/top-10-list-top-cloud-computingbenefitsfor-your-small-business/ (dated June 2013), 2011.
11. IT Business Breakfast: How can a customer trust that the
service offered by a cloud service provider is secure, EY,
2011.

06

Volume 5 Issue 3

Cloud computing as a concept

for contemporary
IT landscapes
The USs National Institute of Standards and
Technology (NIST) defines cloud computing
as enabling ubiquitous, convenient, ondemand network access to a shared pool
of configurable computing resources (e.g.,
networks, servers, storage applications
and services) that can be accessed with

minimal management effort or service

provider interaction.8
Figure 3 shows the five characteristics,
three service models and four operating
models that comprise cloud computing.
Different accounting models enable
the use of cloud computing. As a result,
there is a sensible cost reduction realizable
for the service user without any loss of
performance (a reduction of investment in
IT assets of more than 80% is possible).9

In addition to the potential for cost

reduction through cloud computing, there
are other advantages, such as better
scalability of IT systems and the possibility
of remote access.
Moreover, success-critical IT processes
can be shifted into the cloud and, by doing
so, are centralized.10
Accordingly, the concept of cloud
computing suits perfectly the integration of
master data.

Integration of master data

systems into the cloud
We recommend an SOA as a basis for the
transformation of master data systems
into the cloud (see Figure 4). With this
approach, the cloud service provider
(CSP) would make various services
available (e.g., application, business and
orchestration services) instead of classical
software applications.

Figure 3. Characteristics, service and operating models of cloud computing11

On-demand self-service
Broad network access

Service model
XaaS
(everything
as a service)

Business service
Information service

Resource pooling

SaaS
(software as a service)

Application service

Rapid elasticity

PaaS
(platform as a service)

Application infrastructure
service

Measured service
Measured service: resources are
automatically optimized by the
cloud service and usage can be
monitored, providing transparency
for provider and user.
Rapid elasticity: resources are
exible in their availability, scaling
up and down depending on
demand and giving the impression
of being unlimited.
Resource pooling: resources are
pooled and accessible by multiple
users. Generally, the physical location
of a resource is not known to users.
Broad network access: enables
access via different platforms (e.g.,
smartphones, tablets, laptops).
On-demand self-service: resources
can be used as much as the
individual needs without having to
interact with the service provider.

IaaS
(infrastructure as a service)

System infrastructure
service

IaaS is abstracted from the hardware

system. Users individually decide on
the required computing power and
storage, which can be drawn out of
the cloud, if necessary.
PaaS enables the user to dene the
programming environment or
runtime environment. Capacities of
computer and data can be exibly
adapted depending on demand.
SaaS cloud is accessed via the
providers applications (e.g.,
Microsoft Ofce products). User
exibility decides which cloud
software to use.

Operating model
Management and security

Characteristics

Private cloud
Community cloud
Public cloud
Hybrid cloud
Hybrid cloud is a mix of the above
models. Here, different clouds are
bundled through standard or
proprietary technologies, enabling
data and application exchange.
Public cloud is not limited to a specic user
group. Typical examples are email services,
where every person can have their own
email account without the need for a
proper email server.
Community cloud is limited to a certain user
group but this group is larger than in private
clouds. Community clouds are mostly used by
a group of companies with similar goals (e.g.,
security and compliance requirements).
Private cloud is limited to an
exclusive group of users, e.g., only
company employees. Cloud
administration can be regulated by
the company, a third party or both.

07

A smart approach for the integration of master data systems into the cloud

In addition to the
potential for cost
reduction through
cloud computing, there
are other advantages,
such as better
scalability of IT systems
and the possibility of
remote access.

Figure 4: Master data systems in the cloud

Order processing

Production

Acquisition

Product development

Service

Service

Service

Service

Business process

Software as a service (SaaS)

Orchestration services
Business services
Application services

Infrastructure as a service (IaaS)

Virtual database entities

Products

Suppliers

Clients

The advantage of this approach is

the benefits won from the SOAs agility
together with high scalability and cost
efficiency. And because charges billed
for the use of cloud services can be
directly linked to the relevant business
processes, there will also be increased cost
transparency. Furthermore, redundancies
can be avoided and data quality improved.
However, the integration of master data
systems into the cloud using an SOA is
complex. Beside technical issues, there are
organizational and procedural challenges
to manage. The involvement of business
departments early on in the process is
recommended as, often, IT departments
cannot convince business departments of a
reasonable master data usage.12
In addition, factors such as industry
drivers, size and IT assets of the

organization as well as business

requirements and safety directives will have
a huge impact.13
Legal challenges, especially privacy
regulations, also play a vital role when
outsourcing into the cloud and are
considered in the next section.
It requires a well-thought-out plan to face
the challenges and take appropriate actions
(see Figure 5).

08

Volume 5 Issue 3

Privacy challenges in
outsourcing to the cloud
According to the European Data Protection
Directive, legal permission is required for
collection, processing and usage as well
as the transmission of personal data. This
permission is provided by the law for some
activities, and for other activities has to

be obtained directly from the affected

person. Therefore, outsourcing into
the cloud always raises the question of
whether legitimacy is ensured. There are
two forms of outsourced data processing:
data processing on behalf of a client
(commissioned data processing (CDP)) and
transmission to third parties.
Under CDP, which is regulated in
Directive 95/46/EC article 16, the
contractor solely acts bound by instructions
from the principal. This kind of data flow
is not classified as a transmission to third

12. R
 . Scheuch, Datenqualitt sichern: StammdatenManagement braucht Ordnung, http://www.
computerwoche.de/software/bi-ecm/2516260/, (dated
June 2013), 2012.
13. B
 usiness briefing: insights on IT risk. Ready for takeoff:
preparing for your journey into the cloud, EY, 2012.

Figure 5. Challenges and recommendations for an SOA approach

Challenges

Recommendations

Strategy alignment

Operationalization of the IT strategy

IT business alignment

Compliance and risks

Identification and analysis of legal risk

Benchmarking

Involvement of business
departments

Stakeholder management
Coaching and training

Reorganization of the master data

management system

Definition of new master data management processes

Determination of solid competences

Integration of the master data

system into the existing IT
landscape

Analysis of existing IT landscapes including interfaces

and services
Planning and implementation of integration projects

parties and the principal remains solely

legally responsible for the processing
of data.
To realize a CDP contract, the provisions
according to Directive 95/46/EC article
17(3) have to be stipulated. The CDP
privilege does not apply for recipients
outside the European Economic Area
(EEA). This constitutes an obstacle for the
applicability of CDP and cloud computing,
as there are no reasons for sticking to
territorial borders from a technical point of
view. Quite the contrary, services are being
relocated to non-European countries to take
advantage of cost savings.
If the provisions for CDP cannot be
fulfilled, a transmission of data to third
parties in terms of the Data Protection
Directive is executed and has to be tested
on legitimacy. The recipient of the data
becomes accountable and is responsible for
checking and minding all regulations of the
directive.
The Data Protection Directive offers
multiple approaches to legitimately transfer
data abroad to non-EEA countries. The
European Commission has determined an
appropriate standard for data protection
and data privacy for several states, namely
Canada, Argentina, Switzerland, Guernsey,
Isle of Man and Israel. Data may be
transferred to these countries within the
scope of the directive.
A further important aspect of cloud
computing is the access to data by third
parties. While this is usually a data security
concern about illegal access by third
parties, people often forget that there
also exists a legal access by third parties.
Especially in cases of outsourcing to

09

A smart approach for the integration of master data systems into the cloud

If a company plans to outsource parts

of its IT organization to the cloud, a
risk analysis marks a crucial step in
the early planning phase.

foreign countries, government bodies, as

law enforcement agencies or intelligence
services, can obtain wide-ranging access
possibilities. Encryption of data would
not be helpful, since certain laws exist
that oblige service providers to surrender
private keys if authorities request access to
encrypted data.

Identify, assess and respond to

privacy risks

10

Volume 5 Issue 3

If a company plans to outsource parts

of its IT organization to the cloud, a risk
analysis marks a crucial step in the early
planning phase. It is necessary to identify
existing risks, how they are to be assessed

from a business point of view and how to

face them. Legal questions that have to
be addressed are what kind of data will be
processed in the cloud, which regulatory
framework conditions apply and what
measures have to be taken to legitimately
outsource the data.

This approach is integrated in different

analysis methods to help the company
make a more holistic decision. There are
standardized tools, for example the Cloud
Controls Matrix14 (CCM), developed by the
Cloud Security Alliance (CSA), which is
tailored closely to industry standards such
as ISO 27001 and COBIT.
Supplementary security can be achieved
by external auditing and certification of
cloud providers. For example, an SOC
2 Report, that includes coverage of IT
security and compliance issues, can be
used. This report evaluates internal controls
of a service organization and creates
transparency and trust between provider
and user. According to the Office of the
Data Protection Commissioner SchleswigHolstein, however, attention should be
paid to the fact that such a report alone is
insufficient to meet the requirements of the
Data Protection Directive.15

Privacy challenges: conclusion

and outlook

The European legal and regulatory

environment strictly regulates the
outsourcing of personal data into the
cloud. Cloud computing has to face
this challenge if it is to prove itself as a
solution to cost and efficiency pressure. To
assure quality and mitigate risks, auditing
and certifications of cloud solutions are
inevitable. In the context of data protection,

14. C
 loud Security Alliance, Cloud Controls Matrix, https://
cloudsecurityalliance.org/cm.html (dated June 2013),
2013.
15. T
 . Weichert, Cloud Computing und Datenschutz, https://
www.datenschutzzentrum.de/cloud-computing/ (dated
June 2013), 2010.

One thing is certain,

master data is
fundamental to the
success of a company
and its management,
therefore, needs to be
a serious, strategic
consideration.

requirements regulating what kind of data

can be moved into the cloud and what
additional measures have to be taken.
Therefore, master data management is
a far-reaching, interdisciplinary crosscutting issue, in which relevant business
departments have to be involved.

legal consultation should be obtained

before a shift of data into the cloud is
conducted. These arrangements can
smooth the way, allowing master data to
take advantage of the cloud.

Conclusion
The advantages of the changes to master
data management discussed here, can
only be realized if influencing factors
and risks to successful transformation
are fully taken into account. One thing is
certain, master data is fundamental to the
success of a company and its management,
therefore, needs to be a serious,
strategic consideration.
In addition, there are factors such as
risk management, compliance, integration
and standardization of business processes,
which all require a strategic approach when
it comes to data management.
Depending on the legal environment
a company is subject to, there are strict

11

Are companies
optimizing the
suboptimum?
What are the interdependencies between
addressing the financial operating model
to reduce complexity and the migration
of controlling activities to shared service
centers? Are companies optimizing the suboptimum or are they taking an important step
on a real transformation journey?

12

Volume 5 Issue 3

Authors
Bart Meussen VP Finance,
Head of (Finance) Process Transformation
Philips Finance Operations
Philips, Netherlands

Jan-Willem Sanders Executive Director

Performance Improvement
EY, Netherlands

13

Are companies optimizing the suboptimum?

The outcome of the

assessment and the
willingness to change
will determine the
approach: a full scope
blueprint program or
a bottom-up, isolated
RBC project.

blueprint and to what extent is it beneficial

to do it from a central perspective?
This article discusses the benefits
and costs of streamlining and migrating
rule-based controlling (RBC) activities in a
project to SSCs before formally redesigning
the FOM. Is this RBC project just a good
opportunity? Is it a step on a road map
to draft and implement a broader finance
blueprint? Or is it, in order to maximize
the business case, necessary to implement
the desired, broader FOM first before
streamlining RBC activities?

any companies look for

ways to increase the
efficiency and quality of
their finance function.
An upcoming trend is to
streamline and migrate
routine and lower value add controlling
activities (referred to as rule-based
controlling activities) to shared service
centers (SSCs)1 within the controllers
domain. Controlling activities are normally
less standardized in a company. Does it
make sense to dictate from headquarters
what kind of controlling activities are
expected in the operating companies? The
setup of the finance operating model (FOM)
and content of the controlling function are
heavily interrelated. An effective program
to implement a new FOM will look for
ways to reduce complexity and improve
accountability. What kind of detailed insight
is required to draw and implement such a

14

Volume 5 Issue 3

Figure 1. B
 alancing priorities in the
finance function
The design of the nance operating
model should make clear how nance
function adds value

Efciency of
nance
operations

Effectiveness
of controls

Quality and
timeliness of
business
support

This article focuses on two approaches

to balance these priorities

A new economic reality, what

does this mean for finance?

Leveraging finance shared

service centers

The economic and global structures of the

21st century, which have been shaped
by the global financial crises, produce
a challenging new environment for
controlling. Tougher competition, higher
market volatility, shorter innovation cycles
and strong pressure on margins force
companies today to act faster and more
strategically in order to be successful.
These trends have consequences for
companies finance functions. Firstly, there
is increased pressure on reducing the total
cost of finance (normally benchmarked
on an aggregated level as percentages
of sales). Secondly, there is an increased
need to better fulfill the business partner
role. Shifting to a more proactive, strategic
and business-oriented controlling, the
modern controller builds on traditional
management accounting, and offers a
more strategic function that can help meet
these challenges. The key challenge of the
modern day finance function is to balance
three priorities (see Figure 1):
1. Providing effective support to the
business strategic decision-making

Many companies have established shared

services to standardize, streamline and
consolidate supporting functions to
improve efficiency and reduce costs.
Generic motives for setting up shared
services include an increased focus on
the core business, service improvement,
elimination of redundant functions and
more control and transparency of costs.2
Typically, shared service centers execute
standard accounting in accordance with
group policies and standards regarding
data definitions, reporting contents
and processes. These are classified as
pure transactional activities. Recently,
companies have been looking to broaden
this scope, thereby also changing the role

sh
ar
ed
en
vir
on
me
nt
Po
te
nt
ial
to
tra
ns
fe
ri
nt
oa

Decision
support
Risk, controls
and specialist

Planning and reporting

ain
ch

2. R
 . Minnaar and E. Vosselman, Shared service centers and
management control structure change: exploring the scope
and limitations of a transaction cost economics approach,
2011.

Figure 2. Extending the scope of SSCs up the value chain

e
alu
ev
th
up

1. A
 lthough the risk profile is different we will consider
migration of RBC activities to captive SSCs the same as
outsourcing to an external service provider (BPO).

Eliminating non-value add tasks helps

controllers focus on the business
partner role.

C
SS

3. Demonstrating operational efficiency

Migrating RBC activities to low wage

countries results in labor arbitrage.

nd
te
Ex

2. Promoting strong governance and

control within the organization

these SSCs play in the total spectrum.

The next step for shared services could be
the (partial) migration of the rule-based
activities within controlling processes (for
example, part of the planning process,
reporting and controls execution). See
Figure 2.
The objectives for increasing the scope
in SSCs or central functions are quality and
cost related:
Harmonizing and standardizing the
finance and controlling processes
eliminates waste and reduces errors in
the process.

Transaction processing

Roles of the nance function in the value chain

15

Are companies optimizing the suboptimum?

The workload is
reduced because RBC
and financial control
activities previously
done by the controller
are migrated, enabling
the controller to
concentrate on more
business-oriented
activities.

Rule-based controlling,
an insight
RBC activities are those activities in the
process that are routine by nature and do
not require deep business knowledge. They
can be described (i.e., defined in a work
instruction) and do not require frequent
face-to-face contact with the business
functions. RBC is the opposite of judgmentbased controlling, which includes activities
that are more complex, are not recurring
and, therefore, difficult to operate from an
SSC. Judgment-based controlling (which
could also be viewed as part of the business
partner role) requires good knowledge of
the (local) business and interaction with the
business functions.
The transfer of reporting, as a business
process, to SSCs signals the first move in a
shift in focus for shared services. It contains
both rule-based (e.g., gathering data,

running queries and preparing reports) and

judgment-based activities (e.g., analyzing
and commenting). Prior to the automation
and migration of reporting, local controllers
could spend up to 20% of their time
preparing, often un-harmonized, reports.
This makes migration of RBC reporting
activities an interesting candidate for
migration to SSCs.
When moving the first category of
activities to a shared services environment,
a business controller is best helped by
focusing increasingly on the value-added
activities, such as analysis and strategic
decision support. Secondly, harmonized
standard reports provide guidance for
controllers, encouraging them to prioritize
important areas for the company and to
be more strategically aligned. Automation,
reduction of reports and centralization of
preparation will all contribute to a more

Figure 3. O
 rganization of accounting and controlling activities

Complexity of activities

Higher

Judgmentbased
controlling

Remains with division and

operating companies

Rule-based
ontrolling

Can be migrated
to SSCs

Accounting

Present
scope of
SSC

Lower

16

Volume 5 Issue 3

efficient reporting process. This will reduce

the time a controller spends on creating
the report, time which can be spent on
analyzing and commenting instead.

But how to identify these

RBC activities?

RBC activities can be identified by following

a bottom-up approach (see Figure 4) using
a limited number of internal reference sites
per type of business model (e.g., sales,
production, research and development)
that serve as best practice. Using time
writing, the time spent on both rulebased and judgment-based activities
can be estimated. The judgmental part
of the controlling function becomes the
blueprint for what the controller will
focus on going forward. In this way, the
workload is reduced because RBC and
financial control activities previously done
by the controller are migrated, enabling
the controller to concentrate on more
business-oriented activities.

Implementing an RBC project in

isolation: the pros and cons

One of the work products of an RBC

project is to define a standard per function
or type of business model, i.e., service
offerings. A typical service offering for a
controlling process contains standardized
process flows, definitions, guidelines and
work instructions. Not infrequently, an
RBC project is executed via a bottomup approach with the following benefits
and disadvantages:
Benefits
Approach allows for a short design
phase (three to six months) and

Figure 4. Examples of rule-based controlling activities

Controlling

Rule-based activities

Standard reporting

Gather data, make report, perform technical analysis

Ad hoc reporting

Prepare ad hoc analyses, trend analyses or pricing consequences based on

big data

Planning

Prepare plan model, populate model with actual

Cost control

Analytical cost control, factory analysis, relevant cost prices, internal cost
recharges

Sales rebates

Perform complex rebate calculations and accruals

Internal control

Prepare control documentation

Cost of non-quality

Reporting, provision calculation and reconciliation

Project control

Exception reporting toward milestones as input for local business partner

subsequent migrations; benefits are,

therefore, realized quickly
Solid estimate of time spent on
controlling work
Labor arbitrage on migrated activities
Reduction of work by gaining insight
into unnecessary activities performed in
local controlling functions
Scalable approach and, therefore, low
risk of business disruption
Disadvantages
Organizational complexity (many legal
entities, management reporting layers,
number of organizational units) and a
potential lack of accountability for the
companys financials are both issues
that are not directly addressed. This
means the related complexity is moved
to the SSC. Consequently, only labor

arbitrage benefits are achieved, instead

of the potential wider benefits from
reducing the workload.
Changes in the IT ERP (enterprise
resource planning) landscape could
lead to adjustments to standard finance
processes and, therefore, lead to
deviation from the RBC service offering.

A broader context to consider first

With good project management, sufficient
resources and dedication lasting up until
full implementation, an RBC project can be
successful. The real breakthroughs in the
effectiveness and efficiency of the finance
function are only realized when it has clear
top-down, empowered goals and when
the total system of enablers is mature
and in balance. This is visible by having
good governance and high accountability
standards, a strict compliance and control

framework, focus on good quality and

development of staffing and a close linked
cooperation between finance and the other
functional pillars.
Other important considerations are:
Research by EY shows that companies
perform better if functions (e.g.,
finance) have clear strategic goals and
review their achievements frequently.
Companies that are able to balance
their resource allocation and
management attention on outsourcing
as well as simplification and automation
of processes, are more effective.
The more mature a shared service
organization becomes, the more the
focus shifts from cost-down to value-up.
This requires a totally different way of
cooperating with the SSC or outsourced
party (other contracts, innovation
boards, end-to-end thinking, etc.), other
people and a more agile IT structure. In
other words, the building blocks from
the total system do change and evolve
into a more mature organization with
capabilities to handle this higher value
and complex type of work.
Strong central governance to which
(local) controllers adhere and realistic
top-down target setting based on
insights from the time writing data.

The redesign of the FOM

There are various reasons why the FOM
may not be supporting the business
strategy as required. Most common is
the fast changing business environment
whereby finance as a supporting function is

17

Are companies optimizing the suboptimum?

RBC is the opposite

of judgment-based
controlling, which
includes activities that
are more complex,
are not recurring and,
therefore, difficult to
operate from a SSC.

Figure 5. Redefining the FOM

Figure 6. Building blocks of the FOM

Strategy

Technology

Processes

Execution layer

cy

Process

mePerf
as or
u

ce
an nt
m eme
r

Organization and structure

Po
li

Strategy

Organization and structure

Technology
Service levels

Resource layer

at
a

Service levels

Organization

Organizational layer

Processes

People

People

ol
og

People

c
Te

hn

Align FOM

not adjusting quickly enough. Organizations

evolve organically over time or with a focus
on responding to issues and improving
each element individually. The result is
misalignment, often driven by technology
or personality-based structures.
A comprehensive program to redefine
the FOM normally includes an extensive
analysis to reduce complexity and effort for
the finance function and increase quality.
Policies, processes and performance
measures are addressed in combination
with a clearly defined split of activities
for the different roles and responsibilities
relevant to the companys various
organizational layers. All supported by
data structures, employees with the right
competences and technology.
The advantages of redefining the FOM do
vary from company to company and range
from addressing organizational complexity
to increasing finances focus on business

18

support and improving governance within

the finance organization of the company.
However, experience has taught us that the
throughput time for such a program can
be quite extensive and, for an international
company, can last for several years.
Consequently, benefits are only realized
after a considerable amount of time.

Optimizing the suboptimum?

There are benefits to migrating RBC
activities without completely redesigning
the operating model or finance blueprint.
With this approach, however, organizational
complexity, among other issues, is
not addressed. Obviously, eliminating
management layers or the number of
business units will significantly reduce
the effort of migration and realize a
much bigger opportunity in terms of cost
reduction, process improvement and value.
This opportunity can become even larger,

Volume 5 Issue 3

if the relevant changes in IT infrastructure

are made at the same time. As a result, are
we optimizing the suboptimum in order
to realize a relatively limited business case,
or are we taking an important step on a real
transformation journey?
We recommend assessing the complexity
of the current finance organization before
starting an RBC project. The outcome and

The next step for

shared services could
be the migration
of the rule-based
activities within
controlling processes.

Assessment areas

FOM redesign

RBC project

Organizational
setup

Finance function is primarily a

loose federation of decentralized
teams that lack alignment with
overall business objectives.

Finance function is centrally organized

and aligned to strategy across the
enterprise.

People

Finance skills and competencies

are more traditional. Strong
accounting skills but with
limited business acumen and
advisory skills.

Finance people are viewed as the next

generation of business leaders. Formal
programs exist to recruit, hire and
retain strong finance competencies.

Policy

Finance policies and procedures

are complex and have been
accumulated over time.

Finance takes the lead in simplifying and

streamlining global policies.

Technology

Systems are non-integrated

and locally developed for each
business unit.

More common global reporting and

transactional systems are in place
throughout the enterprise.

Performance
measurement4

Performance measures are

defined by each business unit
(and may conflict).

Performance measures are

coordinated and consistent across the
whole organization, drive business
performance and enable the creation of
enterprise value.

Controlling
processes4

There is little process

orientation. Global controlling
process standards are limited.

There is clear global ownership for all

core controlling processes.

3. In this article, we wont

elaborate further on the
role culture plays as this
would require another
article!
4. C
 ontrolling processes are
centered around the
right performance
measures. If
performance
measurement is
coordinated and
consistently aligned to
the related processes
(e.g., a highly
standardized planning
process) an RBC project
could start straightaway.
If, however, these
activities are immature,
an approach combining
bottom-up views per
business model from an
RBC project and centrally
cascaded performance
management is, in our
opinion, the most
effective.

the willingness to change will determine the

approach: a full scope blueprint program or
a bottom-up, isolated RBC project.
In both cases, the culture of the group
or company plays a crucial role.3 Is there
sufficient change management capability
and persistence available to bring this
change initiative to a successful closure?
We could also ask ourselves if it is
possible to define the controllers blueprint
or streamline automation without

detailed bottom-up insights. Changes

to the organizational and IT structure
normally have a long implementation time.
Therefore, redesigning processes to reduce
inefficiency for controllers in the field,
without touching the broader IT landscape
adds value and could be seen as a good first
step on a longer-term road map.
By taking these steps, the endgame
of that FOM road map is continuously
adjusted and improved, using all the

learning from the completed phases along

the way. This could also prevent the pitfall
of a project that turns into a lengthy and
theoretical exercise, producing nice looking
finance function organizational charts but
forgetting to address what controllers are
supposed to be doing on Monday morning
when the workweek starts!

19

How insourcing
rather than
outsourcing
gave substantial
savings and
improvements
Getting the balance right between reducing
costs, and improving productivity and
efficiency is a tough task in any economic
climate. But with a little outside help, Oslo
University Hospitals bosses managed to do
just that with its cleaning services department.

20

Volume 5 Issue 3

Authors
Brd Hyland Karlsen Executive Director
Advisory
EY, Norway
Kjetil Helle Senior Manager
Advisory Performance Improvement
EY, Norway

21

How insourcing rather than outsourcing gave substantial savings and improvements

astering the art of cost

cutting while boosting
productivity is never easy.
Since the onset of the
global economic crisis in
2008, organizations have
had to make difficult decisions to keep
their businesses going. Unemployment
has risen the world over, with investment
in new products and services dropping,
and business leaders slashing prices to
retain customers.
Given the difficult conditions they face,
it is easy to see why many management
teams in the public and private sectors
consider reducing outgoings while
attempting to retain their strategic agility,
quality and service levels. But slashing
budgets and cutting expenditure without
disrupting the business or harming its
growth potential is a big challenge.
One approach that some businesses
take is to outsource non-core activities a
strategy that the bosses of Oslo University
Hospital (OUH) implemented between 2000
and 2010 when looking to cut their textile
cleaning facilitys costs. With some 11
tonnes of cleaning still done internally, staff
were struggling to hit their daily targets.
To address the issue and lighten the load,
the management considered outsourcing
the rest of the cleaning services. But
while working with EY two years ago,
management decided to try something
new: insourcing.
In 2011, a team of EY specialists that
included Kjetil Helle, Aleksander Haug
Laache and Bard Karlsen, worked with
OUHs management to assess efficiency
throughout the hospital. The aim was to
improve productivity, raise staff morale and

make savings without having to outsource

services to external partners.
We see politicians trying to drive and
improve performance by outsourcing and
introducing various structural, governance
and cost-cutting measures. Less common is
to engage, develop and use the competence
of existing employees to improve their
own processes, Helle says. They should
think about how physicians and nurses
can help improve their hospitals, or how
headmasters and teachers can boost
their schools performance. People who
work in a hospital or school should be
empowered and responsible for their
departments performance, and have the
opportunity, authority and skills to improve
things themselves.
The EY teams experience of working
with several large organizations to improve
performance was applied to the OUH
project. Helle and his team understood that
by improving the cleaning service teams
productivity, management could cut the
workload, relieve the pressure on staff and
boost morale. This approach would also
give the cleaners more time to complete
their work, removing any need to outsource
services to third parties.
From the outset, the EY team focused on
boosting productivity, making cost savings
and giving staff morale a much-needed
boost. If productivity could be significantly
improved, then the resulting spare capacity
could be used to insource what was being
done by external providers, without adding
any resources. To achieve this, it was going
to be necessary to breathe new life into an
institute that had struggled since forming a
year earlier.

22

Volume 5 Issue 3

In bad shape
The merger of three Oslo medical facilities
in 2009 gave birth to OUH, Northern
Europes biggest hospital, with 22,000
employees and around 3,000 beds. The
alliances goal was to consolidate medical
services in the city, improve efficiency by
treating patients at one facility instead of
several, and slash the costs associated with
operating three hospitals.
In theory, the plan to consolidate
the hospitals and reduce expenditure
was sound. But in practice, standards
throughout the merged organization
dropped sharply.
After years of substandard maintenance,
the facilities, pipes and electricity systems
in each OUH building were below par.
Working in such conditions took its toll on
the staff, many of whom were frustrated
by the lack of investment and their
increasing workloads.
The situation was particularly bad for
the 74 employees in the cleaning services
team, who were tasked with washing bed
sheets, pillows, garments and clothing for
doctors, nurses and patients. Aside from
the poor working conditions, the staff had
to contend with a crippling workload and
send the textiles to about 250 delivery
locations throughout OUH.
Trying to keep up with customer
demand was always an everyday struggle,
Helle says. The backlog was big and
they had frequent stock outs. They were
basically just trying to push as much
textile as possible through the production
facility, having little or no idea of the
actual customer demand. The staff were
disengaged because they never managed

20%

22%

53%

costs were slashed

sick leave dropped

productivity increased

to get their work done. They very rarely

experienced a good working day.
In addition to outsourcing, the hospitals
management briefly considered investing
in a new cleaning services facility. But that
would take many years and lots of money,
Karlsen says. Generally, business leaders
want to know how they can cut costs and
achieve the same, or even better, results
with fewer resources, but no one can really
answer that.
Once the idea to build a new facility
had been scrapped, the bosses decided
to give insourcing a go. Ours and the
managements thinking was not to focus
on having fewer resources, because we
knew we could cut costs by doing the right
things. Quality costs less, not more. Instead
of focusing on cutting costs, we and the
directors looked at how they could improve
their service using existing resources.

Nursing OUH back to health

With a strategy in place, EY and OUHs
management set about creating a costeffective system that would improve
efficiency, help the cleaning services team
to hit its daily targets and, in turn, boost
morale within the department.
The blueprint focused on three areas:
cleaning operations, logistics and customer
needs, and leadership and engagement.
The first involved making sure there was a
continuous flow of clothing and bed linen
going in and out of the cleaning services
department, including improving the overall
equipment effectiveness of the machines.
The second was achieved by introducing
a simple, yet effective, schedule showing
when garments were arriving, whose

job it was to unload and clean them, and

daily deadlines for completing the work.
An inventory was posted on the wall with
details of the type and amount of clothing
that needed cleaning, and the clothing and
bed linen that each hospital department
required at any one time. Based on the
inventory, the staff could see how large
or small the workload was, and the type
and amount of cleaning they needed to do
each day.
For the third task, EY trained and
coached the managers of the cleaning
services team. It was important to look
at the whole structure of the division and
make sure there were people on the ground
to manage the operation effectively, Helle
says. OUHs management introduced daily
targets and early morning meetings to
ensure everyone knew what was expected
of them.
The hospitals leaders worked with
the team to get each member engaged
and address the problems in the cleaning
services department. Theyre now
encouraging employees to identify the
problems and work as a team to solve
them, permanently.
From start to finish, it took about
six months to implement the strategy.
During that time, OUHs management
identified inefficiencies in the cleaning
services department, introduced a system
whereby all staff understood the needs
of all divisions, and helped forge greater
collaboration between the management
and workers.
They also increased productivity, with
the team cleaning 53% more clothing each
hour, equating to about 13.5 tonnes a day.

Sick leave dropped by 22%, costs were

slashed by 15% to 20% and staff morale
received a much-needed boost. Motivating
the staff and improving the mood within the
division was one of the biggest challenges,
Laache says.
The hospitals management worked
with the staff to get them focused on the
operation and make sure they ran the
department properly. It was tough, because
they had basically been neglected over
a long period of time, but the directors
overcame this by engaging them, making
them responsible for their performance and
getting them to focus on the job in hand.
Once the six-month operation was
complete, EY asked each member of
the cleaning services team to fill out a
questionnaire. Of the 90% who responded,
74% said they were more motivated than
before the project started.
The bosses managed to cut outgoings
by not concentrating on costs, Helle
explains. Their focus was on satisfying
customer demand, quality improvement
and getting the best out of the workforce,
because its difficult to motivate people
or engage with employees by slashing
budgets. Making their working life easier
and less stressful, and removing waste
and inefficiency makes them happier and
more engaged.
The strategy clearly paid off. Motivation
is high, the staff are happy, efficiency has
improved and productivity is up, while costs
are down. What would most companies, in
todays challenging global market, give to
achieve similar results?

23

Under the radar: what

are power and utility
companies overlooking?
Power and utility companies may think they are on top of the
big risks and opportunities regulation, rapid-growth markets
and infrastructure upgrades but two key issues are flying
under the radar. Will big data and decentralized generation
change everything?

24

Volume 5 Issue 3

Author
Alain Bollack Director
Global Power and Utility Center
EY, UK & Ireland

25

What are power and utility companies overlooking?

It appears many utilities are

struggling to grasp the implications
of big data, as they underestimate its
impact both as an opportunity and
as a potential risk.

hile the findings in our

recent report1 may grab
the headlines and
top the boardroom
agenda we found
that many utilities may
be overlooking the possible impact of
two key issues that bring both risks and
opportunities. Together, big data and the
decentralization of generation may change
the entire landscape of the power and
utilities (P&U) sector.

Deluge of big data

Big data is here, and its changing the way
we do business and live our lives or so we
are told. But what exactly is it and how is it
impacting the P&U sector?
Big data describes the anticipated
massive increase in the volume and
complexity of data under management.

1. Business Pulse: exploring the dual perspectives on the top

10 risks and opportunities in 2013 and beyond, power and
utilities report, EY, 2013.
2. Business Pulse: exploring the dual perspectives on the top
10 risks and opportunities in 2013 and beyond, power and
utilities report, EY, 2013.
3. Turn risks and opportunities into results: exploring the top
10 risks and opportunities for global organizations, power
and utilities sector, EY, 2011.

26

Volume 5 Issue 3

Within utilities, it is directly associated

with major changes to business models
or operations.
The deluge of big data will touch on
every aspect of a utilitys business model.
But despite its far-reaching impact, the
issue came a surprising 15th on our list of
risks. It appears many utilities are struggling
to grasp the implications of big data, as
they underestimate its impact both as an
opportunity and as a potential risk.
It may help to understand the main
reasons behind the swell of big data in the
P&U sector. The rollout of smart metering
is a big driver, escalating meter readings
from once a month or once a quarter
to, for example, every six seconds. Each
reading generates data for time and
demand management processes. The
potential opportunities are immense from
the ability to better manage supply to
tailoring products and services to specific
customer needs but only if this mountain
of complex data is adequately captured,
analyzed and exploited.
Another driver is todays customer,
empowered with the information from
smart meters and other technology and
wanting more and better services, as well
as the power to engage with their energy
providers when and how it suits them.
But undoubtedly the biggest driver of
big data in the P&U sector is the rise of
decentralized generation, which, while
not replacing centralized generation, is
increasingly seen as complementing it. This
trend brings both risks and opportunities
but, surprisingly, did not make the top 10
for the utilities we surveyed.

Top risks and opportunities

Every two years, we take the pulse of the worlds power and utility
companies in an attempt to understand what the sector sees as
its biggest risks and opportunities now, and into the future. Our
most recent report2 revealed a clear shift in the industrys mindset
since 2011.3 It is clear that utilities recognize that their traditional
business model is under threat and that new approaches are
needed to ensure future success. The risks and opportunities
identified fell into four key themes:
Economic volatility: the new normal

Top 10 business risks and opportunities as ranked

by respondents
Top 10 risks

Top 10 opportunities

Compliance and regulations

Rising emerging markets energy

demand

Commodity price volatility

Acquisitions or alliances to gain new
and access to competitively
capabilities
priced long-term fuel supplies

Political intervention in
power and utilities markets

Growth in energy and ancillary

services markets

Compliance and stakeholder confidence: tightening regulation

Business model evolution: striving for reinvention

Uncertainty in climate policy

and carbon pricing

Enhancing relationships with external

regulatory and compliance bodies

Significant shifts in the cost

and accessibility of capital

Improving public perceptions

Capital project execution

Increased focus on investor relations

programs and communications

Economic shocks and

resulting short-term energy
demand shocks

Integration of distributed energy

resources

War for talent

Increased investment in generation

capacity and delivery infrastructure in
emerging markets

Aging generation and

network infrastructure

Rising energy innovation in emerging

markets

Operational challenges: large-scale and high risk

The top risks show that disruptive energy policies, regulation
and compliance demands are very much front-of-mind for utility
executives in most regions. In addition, economic volatility and
unprecedented infrastructure investment continue to remain major
concerns. Opportunities are, perhaps predictably, dominated by
emerging markets, although acquisitions, alliances and ancillary
services are becoming more important for many power and
utility companies.
While utilities face the prospect of value erosion in some areas,
a robust forward view recognizes that these risks, as well as
opportunities, are key to future success.

10 Managing planning and

public acceptance

Improving onshore and offshore wind

supply chain efficiency

27

What are power and utility companies overlooking?

Those utilities that use

this data to ensure the
stability and security
of supply can reap
its benefits.

Decentralized generation
Largely driven by the rise of renewables,
power generation is undergoing a
fundamental change to its operational
model. Instead of a few large-scale thermal
or nuclear power plants, we now see many
smaller renewable assets. In Germany, for
example, there are more than one million
separate solar installations, accounting
for in excess of 24 gigawatts of installed
capacity,4 more than that of the worlds
largest single power plant, the Three Gorges
Dam in China.
More installations mean more data, each
one bringing its own metering and data
management issues.

What could possibly go wrong?

4. BSW-Solar, the German Solar Industry Association.

Failure to manage big data can hinder or

misinform the decision-making that governs
almost all aspects of the value chain, from
generation to transmission and distribution
and retail.
For example, mismanaged data can
create serious consequences in generation.
As the sector increases its decentralized
capacity, utilities that do not master the
huge amounts of data coming from each
installation will risk unreliable supply, or
even blackouts.
In transmission and distribution
businesses, the pressure to connect and
manage new capacity is huge. Data on
asset performance and maintenance
is essential as utilities make decisions
regarding plant retirements and investment
priorities. Inaccurate information or the
inability to properly analyze it could cause
costly mistakes.

28

Volume 5 Issue 3

Together, big data and

the decentralization
of generation may
change the entire
landscape of the
P&U sector.

On the trading floor, power transactions

that are inadequately hedged due to poor
data analysis or management could result
in massive trading losses and, potentially,
enormous exposure for the business.
On the retail front, data errors in
billing and metering will create serious
dissatisfaction among todays empowered
customers. Utilities risk a loss of
consumer confidence and ultimately
customer desertion.

Dont panic
We sense some fairly significant anxiety in
the sector regarding big data, particularly
that driven by decentralized generation, but
our key message to utilities is not to panic.
While there is no doubt the challenges
ahead are large, with the right support
and a well-considered plan, companies can
gain control of these issues and turn risks
into opportunities.
Big data, including that from smart
meters, offers great tools to address the
challenge of todays empowered customer.
While utilities already have huge volumes of
available data and will soon have more as
the global rollout of smart meters gathers
pace it is the accuracy, accessibility
and ability to interpret this data that will
determine how quickly and successfully
companies can bring to market the
solutions, products and services customers
want and need. Utilities that master this
data can identify the new services most
likely to address the emerging needs of
specific (current and potential) customers
in different markets. This data can
also be used to drive performance and
service improvement.

While decentralized generation appears

to be a fixture on the future energy scene,
its success will depend on utilities getting
to grips with the huge amounts of resulting
data. Those utilities that use this data to
ensure the stability and security of supply
can reap its benefits including potentially
reduced operating and capital expenditure
and the ability to meet low-carbon targets.

No quick fixes
It is important to remember that all parts
of the industry are facing these issues and
that solutions are still being developed as
the issue evolves. There will be no quick
fixes. Acting now and taking a holistic
approach that acknowledges that the
challenge of big data extends beyond IT,
and that decentralization is about more
than engineering, is the best way forward.
The utilities that are already working with
us to master big data are the ones creating
a competitive advantage in a tight market.
Their early action is turning what could be
considered risks into giant opportunities
that bring new customers, reduce costs
and put them at the forefront of the
industrys transformation.

Find out more

For further information about the suvey
referred to in this article, visit www.ey.com/
powerandutilities/business-pulse.

29

Excellence in
Operations:
helping
banks regain
customer trust
Opening a new account or transferring money
with minimal fuss should be easy for the
public, but banks often struggle to perform
these simple tasks much to their customers
dismay. The good news is that banks can
address the issue and build a loyal customer
base by concentrating on the basic services
that really matter most to clients.

30

Volume 5 Issue 3

Authors
Robert-Jan Hagens Partner
EMEIA Financial Services
EY, Netherlands

Armin Eiber Director

EMEIA Financial Services
EY, UK & Ireland

Ulrich Trinkaus Partner

EMEIA Financial Services
EY, Germany

31

Excellence in Operations: helping banks regain customer trust

Banks run the risk

of disenfranchizing
customers and
losing valuable
revenue streams.

n order to differentiate themselves,

banks have to focus first on the basic
services that customers expect. People
want new accounts opened quickly and
efficiently without complications when
making payment instructions. This is
according to recent EY research1 of 28,560
banking customers in 35 countries (see
Figure 1).
Excellence in Operations can only be
achieved when operations are linked with
the basic services customers expect. This
approach will address some of the basic
banking processes that matter most to
customers, creating a foundation for more
strategic improvements that will also allow
more innovative changes thereby achieving
greater benefits.
The following outlines what that actually
means in practice:
1. Cost and efficiency remain the main
focus but EY is arguing that a customer
focus helps to optimize benefits,
especially over a medium- to long-term
horizon. If banks do not consider the
critical customer interactions outlined
in Figure 1, when implementing cost
reduction initiatives or efficiency
improvements, they run the risk of
disenfranchizing their customers and
losing valuable revenue streams. These
interactions may seem trivial but it is
precisely these that cause customers to
complain and ultimately leave.
2. Banks need to look at true end-to-end
processes across organizational and
functional boundaries to achieve full
Excellence in Operations. This spans
across front and back office and
includes all channels used to interact

32

with customers. Prioritizing around

critical customer interactions will help
define end-to-end processes that really
matter to customers. Any automation,
streamlining and sourcing activities, as
well as regulatory changes, affecting
these processes will require technology
investments that can only achieve full
benefits if they help to reduce errors
and improve service levels. This means
business changes will drive technology
and not the other way round.
3. The following are just a few examples
of where focus on critical customer
interactions is
essential:
a. 
Changes to
fees and pricing
structure.
Pricing is critical
to customer
satisfaction,
however,
customers are
most dissatisfied
with changes
in fees and
pricing structure
that are not
transparent
Organizational layer
and not
communicated
appropriately.
This makes
it difficult to
compare the
overall price
of products
and services

Volume 5 Issue 3

and changes often come as a surprise.

Transparency over changes to fees and
charging structure is vital if banks are to
deliver something customers value. This
is one of the most complained about
areas. Leading banks, for example,
are proactively seeking feedback
about changes to fees and have a
formal annual plan as part of their
communications strategy. Some also
leverage new technology such as social
media to gather such feedback.
b. 
Account opening. Banks often have
different processes for different
products and channels. Nowadays,

Figure 1. Critical customer interactions

Account
opening
Account
closure

Account
switching

Changes
to fees and
charging
structure

Complaints

Critical
customer
interactions
Change of
account
details

Life
events

Setting
up a
payment

First time
in
collections

Lost or
stolen
cards

Banks should aim

to recruit their
satisfied customers
as advocates.

these are heavily impacted by

regulations such as FATCA, AML
and KYC2 requiring different change
programs to ensure regulatory
compliance. The end customer is
impacted several times over a relatively
short period of time and customers do
not buy the story from banks that
they have to do this for regulatory
compliance. Leading banks have a
full end-to-end view of this process
and coordinate any regulatory impact
carefully. In addition, they monitor
colleague effectiveness with regard
to account opening through robust
methods of assessment, focusing on the
whole customer relationship rather than
product silos.
c. 
First time in collections. Errors and
inappropriate collections processes are
likely to further distress the customer,
resulting in their leaving the bank.
It is critical to apply the appropriate
treatment especially when customers
trigger collections events for the first
time. Leading banks establish the facts
first as part of their pre-delinquency
across the entire relationship to ensure
customers do not receive a collections
call when they are entirely able to repay
the debt.
In summary, there are a number of bank
interactions that are particularly important
to customers. Banks should, therefore,
focus on operational improvements that are

1. Global consumer banking survey, EY, 2012.

2. F
 oreign Account Tax Compliance Act (FATCA ), Anti Money
Laundering (AML), know your customer (KYC).
3. E
 uropean Retail Banking Survey, Economist Intelligence Unit
and EY, 2011.

targeted specifically at these processes so

that they can optimize the benefits of cost
reduction and efficiency improvements as
well as reduce customer complaints and
attrition and boost revenue. Banks that
recognize this will have a real competitive
advantage in the market.

Customers want a flexible

relationship with their bank
Failing to get the basics right will lead to
more complaints and loss of revenue from
customers who switch banks. Indeed, a
study by EY with the Economist Intelligence
Unit3 shows that nearly a quarter of
European banks lose over 10% of their
customers. Additional EY research reveals
that over 60% of customers in Europe, who
have switched their main bank recently,
quoted poor service quality as a reason.
This was far more of an issue than price.
Globally, the number of people looking to
change banks has increased from 7% to 12%
since 2011. People want more than a better
deal, they want their bank to provide basic
services correctly and consistently via all
chosen channels.
The challenge for banks is to retain
customers in a market filled with
alternatives. Regulation and new payment
platforms such as the Single Euro Payments
Area, which simplifies cross-border bank
transfers by allowing individuals and
businesses to make and receive card
payments across the Eurozone, will give
people even more banking options. The
upshot is that banks need to do more than
reduce costs and improve efficiency to
avoid losing customers to other banking
service providers. They need to ensure that

future revenue is guaranteed and address

both sides of profitability. Operations and
customer services should be linked and not
addressed in isolation. Only then can banks
address the key operational challenges they
currently face, as summarized in Figure 2.
To assist the banking industry, EY
has developed a framework and tools
that will help banks achieve Excellence
in Operations by addressing operational
challenges, customer needs and regulatory
impact, simultaneously.

Why should banks consider

Excellence in Operations?
The key benefits of applying Excellence in
Operations are:
1. The customer is at the center of
operations. EY research has shown
that customers are most upset
about poor service and operational
errors. Excellence in Operations puts
customers first by focusing on their
needs. Doing this, cuts the volume of
complaints and reduces the number of
people wishing to leave the bank. The
customer benefits also strengthen the
business case for operational change.
2. Regulatory changes and regulatory
compliance are considered
simultaneously with business
changes. This is an integral part of the
Excellence in Operations approach as
implementing regulatory changes is
often done separately, which is not only
more costly but, when not coordinated
properly, can lead to delays and
confused customers.
3. EY can help banks achieve Excellence

33

Excellence in Operations: helping banks regain customer trust

Figure 2. How to regain customers trust: the challenges

Customer service

Retail banks are struggling to get basic services right. Complaints are rising sharply and customers are already moving elsewhere due to poor service
quality or operational errors, e.g., delayed payments, errors in the account-switching process, frustration with interactive voice recognition (IVR)
technology applied at most contact centers.

Risk, tax and

regulatory

Banks often have separate projects to consider risk and regulatory compliance as well as tax implications. This is costly and frequently leads to delays of
related change programs and, in some cases, all of the operational benefits are eliminated by the huge tax impact. The challenge is to consider risk, tax
and compliance at the same time when changing operating models and related processes and considering customer service impacts.

Cost and
efficiency

Cost and efficiency is often addressed in a tactical fashion in a particular organizational unit. The challenge is to address cost and efficiency strategically
across the organization and prioritize those areas that are important to clients.

IT implementation
and enablement

IT implementation and enablement is very costly. The challenge is to implement cost-effective and efficient technology across the front and back end of
an organization, prioritizing relevant critical customer interactions so that the business can drive technology and not the other way around.

People and
change

Significant change across all or most of an organization impacts mainly the people and culture. The challenge is to create the
right environment and incentives to ensure that people will behave in the desired way and people and change issues are dealt
with effectively. Benefits are quickly eroded if employees are not behind the changes.

in Operations across the entire life

cycle of transformational changes via
specific tools and methods, ranging
from assessing a banks maturity
against critical customer interactions,
to designing and implementing a
new operating model, and applying
business process management tools to
optimize costs and similar. These can be
applied across the whole organization
or within a specific function such
as complaints, collections and
recoveries. Our approach is sufficiently
flexible to allow it to suit particular
business requirements.

Putting Excellence in
Operations into practice
Achieving Excellence in Operations is a
journey for most banks. It will involve
having to make changes to their current
operating model, streamlining processes,
considering control enhancements and
employing the latest technology. The key
is that all of this will have sub-optimal
benefits if the impact on the end customer
is not considered. EY has developed a tool
that allows banks to initially assess and
monitor their maturity against the critical
customer interactions. This way, cost and
efficiency benefits are measured against
customer benefits specifically relating to
improved service quality and operational
error reduction.
For example, when acquiring or selling
off part of its operation, a bank needs to
develop transitional and target-operating
models. The right operating model is the
one that considers the customer and

34

prevents operational benefits from being

eroded by revenue losses. We can also
focus on specific operational areas, such
as complaints, collections and payments so
that they work correctly and efficiently to
make sure customer interaction continues
smoothly. For instance, the Mortgage
Market Review is due to take effect in April
2014 and many mortgage providers are
getting ready to change processes and
controls to meet with the new regulations,
when providing mortgage-related advice.
Banks need to consider not only
regulatory requirements but also the impact
changes may have on their customers,
especially from a mortgage servicing point
of view. Meeting the customers needs is
heavily dependent on operational capacity
and capabilities, and new processes and

Figure 3. W
 hat are the key
considerations when seeking
to achieve Excellence
in Operations?
Align your
operating model
with the overall
strategy

Use technology
tools to
automate
and manage
operational
capacity

Consider
cultural and
people change
aspects

Aim for
strategic cost
optimization
rather than
tactical cost
reduction

Consider the
real impact of
your business
and changes on
customers

Align your
organization
to the new
strategy

Apply business
process
management
tools to true
end-to-end
processes

Review and
adjust your
IT capability
alongside
your business
changes

Use PMOs
effectively and
align structure
when necessary

Volume 5 Issue 3

controls need to be implemented at the

front and back end of the operation. A
holistic end-to-end approach across all
relevant critical customer interactions is key
to achieving efficient processes, regulatory
compliance and customer satisfaction.
Figure 3 provides an overview of
considerations that banks need to go
through en route during the Excellence in
Operations journey. At the center is the
customer. It is essential that banks are able
to identify the best and worst aspects of
their products and services. This will help
to address any shortcomings. Carrying
out a maturity assessment using the new
MAP10 tool (see the final section of this
article) can help banks improve in the areas
that are most important to their customers.
This boosts confidence and reduces the
number of frustrated people who might
consider leaving.
At a time when people are giving short
shrift to financial institutes, banks simply
cannot afford to lose sight of the basics.
Get those right and they will be in a strong
position to not only retain customers, but
also attract new ones from other banks that
fail to deliver.

Figure 4. S
 ample screen shots from MAP10 the
assessment tool

Maturity assessment profile

Figure 5. Critical customer interaction assessment results
Operational strategy
4
3
2

Process
and policy

People and
organization

Performance
management

Technology and
data

Level 4
Level 3
Level 2
Level 1

Leading

Established

Basic

Underdeveloped
The organization
does not have
an adequate
plan to address
challenges.
Usually reactive
and on an ad hoc
basis only.

The organization
has a basic or
fundamental
approach to
addressing
the issues and
concerns in this
area.

The organization
has a formal plan
or approach to
deal with the
issues, problems
and risks in the
challenge area.

The organization
is a leader
among its peer
group in this area
and leverages
leading practices
to create value,
manage risks and
rationalize costs.

The MAP10 tool is unique in the market, as it assesses the maturity

of each of the 10 critical customer interactions across 5 key
operating model dimensions, i.e., strategy, people and organization,
performance management, policy and processes, technology
and data.
The tool allows banks to identify their current maturity against
the critical customer interactions and benchmark this to EYs
leading practices from the industry. This will then help to determine
a target model and prioritize on areas that really matter to
their customers.
Figure 4 shows an online demo of the tool. The questions are
aligned to four different maturity levels, from underdeveloped
to leading. The levels are based on EYs benchmarks and will be
updated as and when more up to date information is available.
The example shown in Figure 5 shows the assessment
results of a bank that had recently introduced a state-of-the-art
account opening system and aligned all relevant processes to
it. The initial assessment shown in the spider diagram clearly
shows the technology and data dimension as leading whereas
other dimensions have been assessed more as basic or
underdeveloped.
Based on this assessment, it became clear that more work
was required in setting transparent KPIs to measure and control
the performance of the business to drive the right behavior. Also,
staff needed to be reorganized and retrained to avoid errors
and duplications.
The MAP10 tool is essential for any major bank that is
embarking on significant changes across its organization. The tool
can be applied at the beginning and again at various checkpoints.
However, if a bank has already started its changes, it is never too
late to consider the customer impact. By using the tool, banks
will have a clear understanding of their maturity against relevant
critical customer interactions and this will help develop their change
strategy and prioritize as to what they need to address within the
business to maintain or improve customer satisfaction.

35

Empowering
the low carbon
future of export
processing zones
in Bangladesh
Bangladeshs Chittagong is one of the
most successful industrial zones in Asia
and has been instrumental in attracting
foreign investment to the country. However,
Bangladesh faces multiple challenges that
could not only impede its projected growth
potential but also reduce the profitability of
the enterprises in these zones.

36

Volume 5 Issue 3

Authors
Sudipta Das Partner
Climate Change & Sustainability Services
EY, India

Amrita Ganguly Senior Consultant

Climate Change & Sustainability Services
EY, India

Ajeya Bandyopadhyay Manager

Climate Change & Sustainability Services
EY, India

37

Empowering the low carbon future of export processing zones in Bangladesh

Transformation is not
limited to EPZs it
is a template that
can be applied in the
wider business world
and beyond.

n todays increasingly competitive world

economy, a tool that can stimulate
employment, diversify exports, generate
investment and deliver growth is prized
by all countries. And among rapidly
growing markets such as Bangladesh,
India, China and Vietnam, such benefits
are being provided by export processing
zones (EPZs). EPZs are economic enclaves

in which goods can be manufactured,

imported and reshipped with reduced
duties and minimal intervention by customs
officials. Chittagong, in Bangladesh,
is home to one of the most successful
EPZs in Asia and has been instrumental
in attracting foreign investment to the
country. The Chittagong EPZ is one of eight
zones that are making a critical contribution

38

Volume 5 Issue 3

to Bangladeshs economic growth. And,

along with its counterpart in Dhaka, it is one
of the most significant.
The medium-term economic outlook for
Bangladesh is optimistic. GDP growth rate
is forecast to rise to 6.6% in 2017, while
income per capita is projected to grow at
3.6% per annum over the 2010s. And the
economic significance of Bangladeshs

The medium-term economic

outlook for Bangladesh

US$2.9b

level of exports reached by 2010

EPZs is clear. They have been key to the

rapid rise of exports over the last 20 years.
Since 1993, average annual growth in
exports has been 23%. Exports reached
nearly US$2.9b by 2010. However, the
profitability of the enterprises that operate
in these EPZs and, indeed, the countrys
growth potential, are under threat. Lack of
power supply, the high cost of generating
power, the phasing out of energy subsidies
and frequent hikes in power tariffs all risk
undermining the effectiveness of EPZs.

Threats to growth
At present, power supply to EPZs can
only meet 75% of demand. Unless new
sources of gas which is the primary fuel
for power generation are established,
the gap between demand and supply could
widen in the near future. Limited new gas
connections and frequent power outages
are forcing enterprises to use diesel- or
oil-based power generation, which is
three times more expensive than gas.
Therefore, their operating costs are rising.
Due to increasing oil prices, electricity
prices are also on the up. However, to
keep power prices down, the Government
is providing huge subsidies to this sector.
Subsidies, which amount to around 2%
of GDP, are crippling public finances and
are not sustainable. The power tariff has
been hiked a number of times in recent
years. The Government proposes a tariff of
BDT14.49/kWh for uninterrupted power.
This also adds to the cost base of the
enterprises that operate in EPZs.

Meeting the challenge

So, what is being done to address these
challenges? In 2012, the International
Finance Corporation (IFC) launched a
low-carbon initiative in Chittagong. The
IFC conducted a technical assistance
(TA) program to identify ways to reduce
greenhouse gas (GHG) emissions
significantly in the Chittagong EPZ (CEPZ)
and do so in a cost-effective way.
The TA program consisted of two main
components designing a low-carbon EPZ
development strategy and framework,
and providing support to implement
the strategy.
The framework was based on taking
the existing tools that are available to
policy-makers, developers and businesses
and adapting them for use in EPZs,
while ensuring a good fit with the local
context. The CEPZs carbon footprint was
assessed and the potential for reducing
GHG emissions was analyzed. This analysis
led to the drawing of a road map that is
replicable across other EPZs and targeted
the following areas:
Changes in process that the enterprises
operating in EPZs can make to reduce
their carbon footprint.

23%

average annual growth in exports

28,000

people employed

6.6%

forecasted rise in GDP in 2017

3.6%

expected growth rate of income per

capita over the 2010s

Opportunities for enterprises to

mitigate their emissions.
Policy reforms that can open
up the market for low-carbon
EPZ development and promote
green investment.
Recommendations of ways to boost
energy efficiency and improve the
management of waste and water.

Once the road map is approved by

Government, businesses operating in
the EPZs will get help to mitigate their
GHG emissions. An investment strategy
is required, alongside a campaign to
encourage investors who are interested
in sustainable investment to get involved
with EPZs.

39

Empowering the low carbon future of export processing zones in Bangladesh

In parallel, the Government will also

establish a new legal and regulatory
framework. This will be done through
collaboration with relevant authorities
and the private sector. Advice will also
be provided by the IFC on institutional
structures and terms of reference and it
will organize seminars, training sessions
and study tours.

Findings and recommendations

Because the study can be replicated and
scaled-up across Bangladesh, its findings
have significance for a wide range of public,
private and community stakeholders. The
study identified three categories of GHG
mitigation opportunities in the CEPZ, which
could be replicated in other industrial zones
across the country.
First, retrofit opportunities were
suggested as quick-fix solutions. These
opportunities involve small measures to
improve existing processes. They include
optimizing combustion air input in the
boiler by measuring excess oxygen flow;
optimizing the revolutions-per-minute of
the boiler-forced draft fan; introducing
a compressed air recycling system; and
installing a waste heat recovery-type preheater for combustion air in the boiler.
Typically, these opportunities have payback
periods from six months to three-and-a-half
years and are relatively easy to implement.
The second set of opportunities is
in the field of energy renovation and
modernization. These opportunities involve
replacing existing equipment with modern
technology to produce significant efficiency
gains. They include replacing existing fire
tube boilers with high-efficiency inverter-

40

type boilers and introducing a low-liquor

ratio dyeing system. These opportunities
involve relatively higher capital costs and
payback periods range from 5 to10 years.
Unlike retrofit measures, they may require
the plant to shut down for a few days.
The third set of opportunities involves
high capital expenditure but they have the
potential to deliver large-scale reductions
in GHGs. The first of these opportunities
is recovering steam from the exhaust
waste gases of the gas engines run by the
central power generator (cogeneration).
The second is installing photovoltaic (PV)
solar panels on rooftops to generate power
and hot water. The third is sludge-based
power generation from the central effluent
treatment plant. And the fourth is replacing
light fittings to reduce the lighting load of
factories.
The cogeneration project was identified
as one of the most promising and
commercially viable options. The study
found that it has wide scale-up potential and
could achieve an internal rate of return in
the range of 18% to 20%. It estimated that
if cogeneration projects were implemented
in all of Bangladeshs EPZs, about 0.4% of
the present national gas supply would be
saved, and the businesses that operate in
them would save around BDT0.5b. Some of
the projects, such as installing solar panels
and generating power from sludge, are not
commercially viable unless the Government
or other agencies provide tax incentives.

that produce benefits quickest within

three years appear on the negative side
of the curve,1 indicating that they are
financially profitable projects that should
be implemented immediately. They include
some retrofit opportunities. Others, such as
generating solar power using PV panels, are
not commercially viable in Bangladesh and
so appear on the positive side of the curve.
Once the mitigation opportunities
were identified, the next task was to
assess the possible financing mechanisms
that could promote low carbon growth
in Bangladesh. It was proposed that a
climate fund from the Central Bank should
be established and channeled to the
enterprises through BEPZA the governing
body of Bangladeshi EPZs. On a national
level, proposals include a feed-in tariff for
solar power and cogeneration, vendor
financing for renovation and modernization
opportunities, bank lending to priority
sectors and incentives for environmentally
friendly projects.

Driving change
BEPZA acts as a one-stop shop for
facilitating investment and as the authority
that resolves disputes among enterprises
in EPZs. For low-carbon development of
the economic zones to become a reality,
BEPZA will also have to play a pivotal
role in coordinating policy and promoting
private sector investment. However, at
present, it lacks the ability to tackle both

Making sense of the findings

To set priorities and facilitate policy-making,
each opportunity was plotted on a marginal
abatement cost curve (MACC). Those

Volume 5 Issue 3

1. A
 ppearing on the negative side of a marginal abatement
cost curve implies negative cash outflow and, hence, a
profitable project.

of these tasks effectively and, according

to the study, requires restructuring. The
study recommends developing a green
cell that is responsible for executing the
low-carbon transformation of EPZs. The cell
should consist of technologists, engineers,
consultants and finance specialists, and
their responsibilities should include:
Raising awareness about energyefficient practices in EPZs
Introducing focused energy efficiency
improvement programs
Partnering with donor agencies to
help enterprises conduct detailed
energy audits

Developing new standards, protocols

and guidelines to improve performance.
Helping businesses to establish energy
efficiency improvement plans, select
appropriate vendors, implement
technical measures and review postimplementation performance.

Conclusion
EPZs are set to play a crucial role in
Bangladeshs economic development. But
they face an energy crisis that, unless
tackled effectively, will limit their ability
to develop the exports that will contribute
to growth. This study outlines new and

innovative ways to reduce energy use

in EPZs, and sets out how government,
regulatory bodies and the private sector can
work together to provide the funding and
organization to make change happen. And
transformation is not limited to EPZs it is
a template that can be applied in the wider
business world and beyond. As such, it sets
a path that Bangladesh can follow to reach
a low-carbon future.

41

Enterprise Intelligence:
aligning information
needs with strategic
goals
In todays world, information is just a click away. But while it
has never been easier to access data, in many ways, it has
never been harder to identify and find what you really need.

42

Volume 5 Issue 3

Authors
Drazen Nikolic Partner
Advisory Services
EY, Germany
Robert Hirt Director
Advisory Services Enterprise Intelligence
EY, UK & Ireland
Torsten Kiewert Executive Director
Advisory Services
EY, Germany

43

Enterprise Intelligence: aligning information needs with strategic goals

The task of tracking,

organizing, sifting and
analyzing this data
in short, deriving value
from it is huge and
the road to getting
there is a rocky one.

he march of big data is getting

faster. A staggering 90% of the
worlds data has been created
in the last two years. And the
volume of digital information
is forecast to double every
two years for the rest of this decade.
Over the next 10 years, the growth of
data volumes will outperform the everdecreasing cost of storage technology. This
means that businesses will find they are
in the position of having to make a choice
between what data to keep and what to
ignore by a process of evaluation. Among
these seemingly endless fields of data are
golden nuggets of information that can help
businesses to deepen their understanding
of factors that are critical to success such
as customers, markets, products, supply
chains, competitors and risk.
Social media is one example of how
peoples choices, preferences and activities
are recorded in high volumes of typically
unstructured data. Businesses have to
be able to distinguish and select the right
signal from all the background white
noise before then applying intelligent
models to generate relevant customer
insight from such data. For some time
now, retailers have already been sorting
smartly through reams of digital customer
data to conduct personalized and focused
marketing campaigns, going as far as
predicting whether a woman is pregnant
or not. Their data-backed conclusions are
usually correct.
Although businesses worldwide
have increased their digital investment
significantly over the past decade, the
task of tracking, organizing, sifting and

44

Volume 5 Issue 3

analyzing this data in short, deriving value

from it is huge and the road to getting
there is a rocky one. Applying analytics to
data without understanding the individual
business benefit is a pointless exercise
and leads to a series of unsatisfactory
results from investments into building such
capabilities. An intelligent enterprise will
build up a portfolio of information analytics
components tailored around achieving a
certain business objective.
In the past, many organizations focused
heavily on the T (=technology) part in IT by
enabling business processes and decreasing
cost of operations. Nowadays organizations
need to deal also with the I (=information)
available internally and externally, in a
more intelligent way, in order to survive and
differentiate in the current volatile market.

What is Enterprise
Intelligence?
The sheer mountain of information that
is available can make this challenge seem
insurmountable. But Enterprise Intelligence
can help to ease the ascent.
We define Enterprise Intelligence as
an organizations ability to optimize its
performance by:
Identifying relevant information
Analyzing it in such a way that produces
insights that are deeper than their
competitors
Being able to act upon these insights
Our approach to Enterprise Intelligence
enables an organization to enrich
information which we define as data set
into context by moving beyond its mere

accessing and management. By following

an Enterprise Intelligence approach,
businesses align their information needs
with their business strategy and objectives.
They focus on a model that aligns business
value around, for example, growth,
efficiency, risk and engagement, with the
value of information separating what
is relevant from what is not and drawing
insights from it. They integrate internal
and external data sources, identify new
information, develop fresh insights and
respond better to unexpected changes in
the market and within their organization.
Ultimately, Enterprise Intelligence offers an
approach to look at the whole information
value chain from planning and forecasting,
capturing, management and processing
of information through to delivering
actionable insights on interconnected

Figure 1. EYs Enterprise Intelligence approach

industry solu
tical
tion
aly
s
An
e
b
h
e
a
l
v
p
i
o
or
Pe

h
Tec

ci
c

at
ion

pr
n
oc Information
tio
ess
ing and interac
m
or
na
Inf
ly
pe
tic
t-s
s
en
i
l
C

y
log
no
a
n
tio
nc

Information processing
and interaction

s fu
Busines

Enterprise performance
management

Enterprise
Intelligence
strategy

pro
cessi
ng
an
aly
tica
l solutions

Enterprise
mana perf
ge o
m

Risk, compliance and

performance analytics

R
perf isk,
or c
m

nce and
plia nalytics
om nce a
a

ce
an
rm t
en

Information strategy and

information management

external and internal information to support

business performance.
Basing decisions on a complete view
of information improves a companys
management of risk. The value of this
information is defined and measured by its
relevance to decision-making. In this way,
Enterprise Intelligence is a strategic weapon
in a companys armory.

The four components of

Enterprise Intelligence
Information has an impact on business
performance and decision-making. But
what information is relevant and how
should it be interpreted and used? Our
Enterprise Intelligence model combines all
the disciplines needed to help companies

45

Enterprise Intelligence: aligning information needs with strategic goals

2. Risk and performance analytics

Enabling and providing companies with a
means to turn data into actionable insight
to make informed decisions and undertake
activities to improve control, reduce risk,
optimize performance and enable growth.

drive value from information and improve

their ability to gain sustainable competitive
advantage, preserve and accelerate
business performance and make strategic
decisions with certainty by driving insight
and value from information.
At the highest level, we split Enterprise
Intelligence into four major focus areas:

3. Information processing and interaction

Enabling the journey from a data
processing, managing and operating
business to becoming a knowledge-driven
organization or even a social business,
where connected information enables a
mutually beneficial ecosystem between
data source providers, data regulators and
refineries and data consumers.

1. Enterprise performance management

Helping organizations to fix or improve
challenges they have with planning,
budgeting and forecasting, management
reporting and consolidation, using
bespoke or best-of-breed technology
solutions and a driver-based approach to
performance management.

Figure 2. Big data: new requirements, more data, better supporting technologies

Op
er

ce
an

fety, impr
ov
s, sa
em
ion
at Infrastructure

Context

Industrial

46

Legal

Transactio
n

Political

Data

People

ca

Relevance

Governance

ti o n

Clickst

Friend
Worker

rea

Investigative

Pe

Supervise
implementation

and com
ance
pli
rm
an
o
f
r

Cost

Process
Lo

So
c

Privacy

Customer

Citizen
Criminal
Patient

Administrative

sonal benet
Per

Personal

Technology
Design

Financial

Service

Things

log
Ana

Benets

ce

or
ns
Se

l
ia

Quality

Security

Retail

IT

Identify gaps

Data sources

Health
Utilities

Safety

Value

People or skills

Consumer

Travel

Analyze

Integrity

ts
en

Educate

Legality

Ofcial

Compliance

Supporting technical architecture

Volume 5 Issue 3

4. Information strategy and management

Helping organizations to identify and
quantify the relevant areas of information
within and outside the business and aligning
it to business value drivers while improving
information processing, operations and
people behavior. Supporting businesses
in incorporating information as an
additional production factor into day-to-day
business operations.
A typical Enterprise Intelligence
journey might start with a business-driven
enterprise performance management (EPM)
activity, identifying business priorities and
drivers. This could then lead into a series of
capabilities such as analytics or information
processing components to drive value from
information alongside business priorities.
An alternative approach would be an
information-driven initiative through, for
example, an information assessment or
information strategy. This could identify
areas of lesser maturity or efficiency and,
from there, it would be possible to derive
the business impact and any opportunities
for improvement by delivering better
information access, quality or insight,
integrated into business processes.

Why Enterprise
Intelligence now?
Similarities in production technology,
material or service quality are making it
increasingly difficult to differentiate purely
through products and services. In the digital
age, the pressures of consumerization
increase the challenge to drive rather than
just follow market trends through research
and development investments. Businesses
manage to differentiate within their

By following
an Enterprise
Intelligence approach
organizations can
use information to
understand the past
and to predict the
future in order to
make decisions today.

competitive environment primarily through

high performance business processes,
fully integrating the whole information
value chain.
A car manufacturer might develop a
customer experience within its dealerships
that resembles the experience of an online
amazon.com-style shopping environment
within our physical world. Through
intelligent integration and actionable
exploitation of available customer and
market information, such a personalized
experience might not only contribute to
an up-sell opportunity, but also provide a
personalized customer experience leading
to higher levels of brand loyalty and
predictability of customer buying behavior.
In order to be a high performing business
in todays often commoditized environment,
one has to find ways to gain value from
information in a smart and intelligent way
over and above the actual cost of operating
it. Therefore, organizations now need to
treat data as a fourth factor of production,
alongside capital, people and materials.
The technologies to help organizations
make sense of existing data have been
available for quite some time. The majority
of these approaches enabled decisionmakers and managers to look at past
performance or, at best, real-time data
but this is like driving a car by looking only
in the rear view mirror. However, with
modern technology approaches and
performance improvements established
fairly recently, businesses are now able
to look through the windshield as well
as the rear view extrapolating from
past experience, simulating evolution
from real-time data and even predicting

events to help drive their business faster,

more efficiently and more safely. Using
information in such ways helps sharpen
their performance, differentiate their
offerings, identify new revenue and
innovation opportunities, minimize their
exposure to risk, improve organizational
efficiency, and facilitate the uncertainty of a
volatile global economy.
A police department might combine
its criminal records database with a
national crime database created by, for
example, a research unit. To support the
departments primary business imperative
i.e., preventing crime and ensuring public
safety the combination and integration
of national trends, local crime-related data,
and predictive analytics methods would
enable the police department to allocate
its law enforcement assets more effectively
and reduce crime rates.
In short, by following an Enterprise
Intelligence approach, organizations can
use information to understand the past
and to predict the future in order to make
decisions today. This will help companies
identify areas of competitive advantage and
take proactive actions, thereby enhancing
business outcomes.

Why EY?
EYs insight as a business advisor
means that it helps ensure that
information needs and technologies
are aligned with business strategy
and objectives. EYs Enterprise
Intelligence practice professionals
understand the information challenge
from the business owners point
of view. They are business-led and
technology-enabled.
EY combines finance, customer,
supply chain and risk competencies
with industry expertise and deep
technology skills to provide value.
And its structure means that all
of its business and technological
capabilities and delivery models are
globally integrated. With over 1,000
Enterprise Intelligence professionals
worldwide, EY covers all the
disciplines needed to help businesses
drive value from information.

47

Managing risk in the

digital world: meeting
the challenge in the life
sciences industry
What risks does the digital world present for life sciences
companies? As patients, physicians and pharma companies
increasingly rely on e-channels for information and
communication, how should life sciences companies identify
and monitor digital content and e-channel risks?

48

Volume 5 Issue 3

Authors
Dr. Frank Kumli Senior Manager
Global Life Sciences Center
EY, Switzerland
Adlai Goldberg Partner
Advisory Services
EY, Switzerland
Dr. Hicham Naim Senior Manager
Advisory Services
EY, Switzerland
Dr. Caroline Falciola Manager
Advisory Services
EY, Switzerland

49

Meeting the digital challenge in life sciences

The borderless nature

of the internet and
access to information
no longer easily fits
into a regional or
country regulatory
structure.

ithout debate, digital

technologies have
profoundly transformed
how we exchange
information. The internet
and smartphones
provide unparalleled access to information
through a variety of electronic channels

50

Volume 5 Issue 3

(e-channels), from websites to blogs,

podcasts and apps to social media. Such
companies as Twitter, YouTube and
Facebook, coupled with the widespread
distribution of wireless and mobile
technologies, are rewriting the rules for
how, and how often, we interact. People not
only retrieve information but, ever more

often, instantly share personal commentary

with legions of people around the globe,
from a feeling in the moment, to a routine
everyday task, or reference, good or bad,
for a product, service or experience. There
is no evidence that the complexities and
risks of a digital world will be decreasing
anytime soon.

One could also argue that managing

overall health has become one of the
biggest beneficiaries of this digital
revolution. E-channels have become
established means for disease awareness,
treatment alternatives, clinical enrollment,
research, sharing experience and so much
more. The demand for reliable, healthrelated information grows unabated.
Some life sciences companies have
embraced this robust world of online
exchange; others have not. Irrespective
of digital engagement, these channels
provide ways to reach and connect with
people, health consumers and other
stakeholders, communicate marketing
messages, enhance disease awareness, as
well as driving competition through data
mining and better understanding of their
stakeholder needs.
Unfortunately, for life sciences
organizations, the complexities of risk to
provide information in this digital world are
intensifying particularly from regulatory
and legal perspectives. Risks arise when
a life sciences companys e-channel
content is in violation of regulations that
govern marketing and post-marketing
surveillance. The question which standard
or regulation? The borderless nature of
the internet and access to information no
longer easily fits into a regional or country
regulatory structure.
Current regulations did not anticipate
social media and comprehensive rules
from regulatory bodies have been slow
to emerge. Some guidance has come in
the form of warning letters from the US
Food and Drug Administration (FDA),
as well as guidance from industry trade

associations, such as the European

Federation of Pharmaceutical Industries and
Associations, the Prescription Medicines
Code of Practice Authority (PMCPA), the
Association of the British Pharmaceutical
Industry and the Swedish Association of the
Pharmaceutical Industry.
The cost of marketing non-compliance
is potentially steep. According to Socit
Gnrale, from 2007 to 2012, the
cumulative amount of marketing-related
litigation costs paid out by a panel of 21
pharma companies soared in the last year
by nearly 60%, from US$16b to US$26b.
Beyond penalties for non-compliance,
e-channels expose companies to other
business risks, such as potential damage
to brand and reputation and leakage of
sensitive and confidential information.

Opportunity is not
without risk. Life
sciences companies
will need to holistically
address the risks
e-channels pose to all
parts of their business.

51

Meeting the digital challenge in life sciences

Figure 1.
Statistics tell
the story of the
e-channel surge
Recent surveys of
patients, physicians
and pharma
companies reflect
an increased
reliance on
e-channels for
information and
communication:

Understanding the drivers of

risk complexity
For life sciences companies in the e-channel
world, risk complexity is driven by
four factors:

1. The internet has become

the global town square for
exchanging information.

In health care, the internet is now the first

port of call for key industry stakeholders
patients, physicians and companies in
seeking, or disseminating, tracking and
storing health- and drug-related information
(see Figure 1). Payers, employers and
regulators are also using e-channels to learn
about industry developments. This influx
of users and activity brings an increase in
risk to an industry that is strictly regulated
both in the kinds of information that can be
dispensed to patients and stakeholders and
the nature and extent of those interactions.
For many drugmakers, the explosion in
e-channel use, internally and externally,
has outpaced the ability to develop policies,
adjust strategies and train staff.

2. Regulations vary from country

to country, and region to region.

Because online content has no borders,

all postings must be carefully evaluated
for their country implications. Some of
the major differences will lie in a products
approved label uses, which may vary
considerably from one country to the
next opening venues for inappropriate
communication of unapproved off-label
uses for a product. A similar case can be
made for prescription product direct-toconsumer advertising, which is suitable only

52

Patients

73%

of US adults (aged 18
and older) use online
health information
and tools, and new
research finds that
these resources are
shaping consumers
choices of health
products and services.

72%

of European online
consumers (aged 18
and older) are social
health users (having
conducted any of the
following activities
online for health: used
a community, group
or social networking
website, or conducted
any social-related
activity online such as
reading or posting on
health blogs, message
boards or health
ratings websites).

in some parts of the physical world.

The complexity of these variations is
compounded by the scarcity of high-level
guidance from major regulatory bodies.
To fill the void, smaller-market trade
associations have taken the lead in defining
the appropriateness of behaviors and use of
new social media platforms. A second layer
of complexity is the pervasiveness of the
internet, which raises the question of how
a company applies the boundaries and the
sovereign country regulations to internet
communications.
However, concern is warranted that
regulations may always be chasing
e-channel activities and by the time
regulators catch up, guidance might
already be outdated. One might argue
that complete regulatory reform may be
required for this new digital paradigm.

3. Types of e-channel content are

rapidly multiplying and evolving.
Over the last decade, the types of
information and means of exchange on
e-channels has expanded beyond companygenerated content and company-governed
distribution, to include online dialogues and
user-generated postings. For life sciences
companies, managing this information
and getting it to the right person at
the right time, in the right format and
through the appropriate channels is a
formidable challenge.
The forms, sources, accessibility and
interconnections of e-channel content are
many (see Figure 2). A company needs
to understand what types of media are
being produced, what information is being
discussed in each of these types and who is

Volume 5 Issue 3

35%

of US adults are
online diagnosers;
they have gone
online to try to figure
out what medical
condition they or
someone else might
have.

20%

of internet users
have consulted online
reviews of particular
drugs or medical
treatments, doctors or
other providers, and
hospitals or medical
facilities.

producing the information. An organization

may create and own its content, may have
content created on its behalf, or may have
content that links directly to its website,
for example, from disease management
websites. If a company sponsors an
organization, links to the organization
on the web could be interpreted as an
endorsement. Also, conversations that
happen on the web may be relevant to the
company and must be closely monitored.
In the spectrum of content, companies
have the greatest control over content they
own, contract for and manage. On the other
side of the spectrum is user-generated
content shared on such social media
platforms as Facebook and Twitter, along
with blogs and forums. The company does
not own the platform but can manage the
channel of communication with different
levels of responsibility and control.

Some organizations
have created the
equivalent of an
e-channel czar, who
serves as the central
clearinghouse for all
e-channel postings
and accounts.

Physicians

67%+ 22%
of US physicians
use online videos to
learn and keep up
to date with clinical
information.

of European physicians
use physician-only
social networks, up
from 13% adoption in
2011.

Pharma companies

80%+ Top 10 91%

of European
physicians who use
or are interested in
using physician-only
social networks are
open to interacting
with pharma on these
networks.

drugmakers have
invested into digital
marketing groups,
and have, on average,
more than 23 full-time
equivalents (FTEs)
dedicated to these
new media activities.

of the companies
maintain internal
resources to
perform or manage
e-marketing activities.

Sources: Health Online

2013, Pew Internet and
American Life Project;
Cybercitizen Health U.S.
2012, Manhattan Research;
Taking the Pulse Europe
2012, Manhattan Research;
Cybercitizen Health Europe
2012, Manhattan Research;
Taking the Pulse US
2012, Manhattan Research;
Pharmaceutical Digital
Marketing and Social Media,
Cutting Edge Information,
2012.

Figure 2. Forms and sources of e-channel content along risk continuum

Most control

Least control

Owned by
the company

Contracted by
the company

Sponsored or contributed
by the company

Linked to
the company

Relevant to
the company

Owned or contracted
content
Company-generated
Static

Static with
contact
infomation

Regulatory and compliance

User-generated
Dynamically
updated

Private content
Invitation only;
static or dynamic
Risk continuum

Identiable user
Invitation only

Identiable user
Registered

Unidentiable
user
Brand and reputation

Source: EY, 2013.

53

Meeting the digital challenge in life sciences

4. Life sciences companies have

not invested adequately in
managing this information.

Given the complexity of navigating the

regulatory environment and of managing
this content for different products,
countries and stakeholders, life sciences
companies are often not structured to
accommodate the e-channel area. Most do
not have a developed risk framework for
digital content, are surprised to learn how
much content they have actually created,
and cannot gauge their current level
of exposure.
Along with monitoring the information
they create, or that is created on their
behalf, companies need to listen online to
what customers and potential customers
are saying about them throughout the
e-channel universe. This requires keeping
up with their blogs and community forums,
as well as checking their Facebook and
Twitter feeds regularly.
Lapses in process and control can
typically occur at each step of the e-channel
information pathway, compounding and

Life sciences
companies are often
not structured to
accommodate the
e-channel area.

54

exacerbating the likelihood and impact

of risks (see Figure 3). For example,
content may be non-compliant, distorted,
mistranslated, incomplete or outdated.
Material may be posted before it is
reviewed and granted appropriate approval.
Online dialogues may not be monitored
systematically where consumer inquiries
may not be answered or information for
signal detection collected in a timely way.

Addressing digital content and

e-channel risks
To take fuller advantage of e-channel
communications and, at the same time,
mitigate the associated risks, life sciences
companies will need to invest in and develop
comprehensive governance programs, and
rigorous content management processes,
systems and approaches to identifying and
monitoring risk.

Properly govern and assign

clear ownership

A governing body, typically an

interdepartmental team, should be
charged with developing e-channel policy,
as well as overseeing and periodically
evaluating risk. Because social media cuts
across many areas of an organization,
from marketing and communications to
human resources and legal, any policy
surrounding its use should result in a
multidisciplinary approach.
Also, an executive should be charged
with owning the effort and driving
and managing awareness throughout
the organization. In some companies,
this person is the global head of
communications; in others, it is the chief

Volume 5 Issue 3

The demand for

reliable, health-related
information grows
unabated.

Figure 3. Stages of risk in the e-channel pathway

Posting
u Approval not
received

Increasing levels of risk

Updating or
maintaining
Content not
up to date

Posting
Approval not
received

Dialoguing
Adverse event
non-reporting
Non-compliant
response

Analyzing
Lack of transparency
in listening mode
Usage of patient
statement
Data condentiality
issues

Receiving or answering
Poor response time
Information
escalation issue
Non-compliant
answer

Transposing
Content distorted,
mistranslated,
incomplete
Editing
Non-compliant
content

Source: EY, 2013.

risk officer or chief information officer.

Some organizations have created the
equivalent of an e-channel czar, a position
that typically resides in the compliance
department and serves as the central
clearinghouse for all e-channel postings
and accounts.

Understand your actual digital

footprint and track it
Companies need to see how far their

presence on e-channels extends. Use

tools such as web crawlers to search
the internet and return relevant posts
based on specified criteria. Prepare a raw
inventory of your internet-based channels,
mapping all the channels and content your
company has created or contributes to.
From there, you can assess each form of
content from a risk perspective and identify
and analyze your most critical channels
and vulnerabilities.

55

Meeting the digital challenge in life sciences

Figure 4. Sample heat map

PCV
Domain type

Periodically create a heat map

of suspicious company- and usergenerated content, by channel
and risk

In the absence of clear regulatory

guidelines, each company needs to assess
its acceptable level of risk. The heat map
can help you determine where there may be
weaknesses in your governance strategy,
process and the skills of your people, and
whether the right technology systems are
in place to manage information on the web.
Figure 4 provides a sample heat map.

Develop a robust content

management system

Devise a detailed process for curating

content writing, editing, approving,
publishing, updating and removing it when
it is inaccurate or outdated along with a
digital asset library for tracking information
and ensuring it is delivered at the right time
to the right market.

Actively train, monitor and invest

in risk management programs for
your employees

As regulatory guidelines continue to

evolve, clear policies and procedures are
needed that will help staff understand the
importance of e-channel use and share
accountability for avoiding risk. An oftencited study (Altimeter, 2011) found that
76% of social media crises could have been
prevented or diminished had the company
had in place the proper training, staff and
processes to avert these crises. Ensure
you have enough human capital to respond
online at any moment, in any time zone, on
any channel.

56

Geography

Safety

IA_10

IA_15

IA_18

.es

0%

87%

47%

13%

0%

Disease

.nz

0%

75%

50%

88%

0%

Disease

.cz

0%

80%

0%

0%

0%

Disease

.com

0%

80%

40%

60%

50%

Product

.hk

5%

50%

5%

45%

0%

Product

.es

3%

62%

3%

50%

0%

Corporate

.uy

21%

40%

0%

1%

0%

Corporate

.com

1%

39%

5%

32%

0%

Disease

.ba

0%

100%

0%

100%

0%

Disease

.com

0%

50%

12%

43%

0%

Disease

.br

0%

50%

12%

43%

0%

Disease

.com

0%

50%

0%

50%

0%

Disease

.cz

0%

96%

17%

17%

0%

Product

.com

0%

63%

0%

94%

0%

Disease

.com

0%

4%

0%

0%

0%

Product

.uk

0%

4%

0%

4%

0%

Corporate

.md

0%

38%

13%

38%

0%

Product

.com

0%

0%

0%

0%

100%

Product

.com

0%

94%

12%

71%

0%

Disease

.uk

0%

94%

47%

94%

0%

Corporate

.com

0%

70%

40%

28%

0%

Disease

.cz

0%

60%

40%

40%

0%

Disease

.com

0%

100%

0%

100%

0%

Disease

.com

0%

100%

0%

0%

100%

Corporate

.com

1%

90%

8%

80%

0%

Product

.com

0%

100%

0%

0%

0%

Disease

.rs

0%

0%

0%

0%

0%

Disease

.dk

0%

0%

0%

0%

0%

Corporate

.br

0%

0%

0%

0%

0%

Clinical

.com

0%

0%

0%

0%

0%

Product

.cl

0%

0%

0%

0%

0%

Product

.au

0%

0%

0%

0%

0%

Product

.ar

0%

0%

0%

0%

0%

Product

.hu

0%

0%

0%

0%

0%

Corporate

.ee

0%

0%

0%

0%

0%

Corporate

.cz

0%

0%

0%

0%

0%

Corporate

.am

0%

0%

0%

0%

0%

Product

.au

0%

0%

0%

0%

0%

Product

.au

0%

0%

0%

0%

0%

Product

.nz

0%

0%

0%

0%

0%

Clinical

.com

0%

0%

0%

0%

0%

Product

.com

0%

0%

0%

0%

50%

Product

.com

0%

0%

0%

0%

50%

Product

.com

0%

0%

0%

0%

50%

Disease

.com

0%

0%

100%

0%

0%

Volume 5 Issue 3

PV_1

IA_7

Accuracy

Disease

Note: Red = high risk

Orange = medium risk
Yellow = low risk
Gray = minimal risk
Green = zero risk

Overall risk rating

There is no evidence
that the complexities
and risks of a digital
world will be decreasing
anytime soon.
Promotion
IA_19

IA_22

IA_23

IA_24

0%

100%

0%

0%

Promo_29 Promo_35 Promo_37 Promo_38

100%

38%

43%

0%

100%

100%

0%

0%

75%

13%

13%

13%

0%

0%

0%

0%

0%

0%

30%

80%

0%

0%

0%

0%

80%

0%

40%

40%

0%

0%

0%

0%

60%

5%

10%

55%

0%

0%

0%

0%

29%

3%

76%

44%

50%

0%

0%

0%

41%

0%

0%

40%

0%

0%

0%

0%

38%

2%

5%

30%

0%

0%

100%

0%

100%

0%

0%

100%

0%

100%

100%

0%

45%

1%

13%

26%

0%

100%

0%

0%

45%

1%

13%

27%

0%

100%

100%

0%

0%

0%

0%

50%

0%

0%

0%

100%

74%

0%

22%

13%

0%

0%

0%

0%

94%

0%

0%

94%

0%

0%

0%

0%

100%

0%

0%

4%

0%

0%

50%

0%

100%

0%

0%

4%

50%

0%

0%

0%

100%

0%

13%

13%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

99%

1%

1%

95%

0%

0%

0%

0%

18%

6%

12%

94%

0%

0%

100%

0%

84%

13%

13%

17%

0%

0%

0%

100%

100%

0%

40%

0%

100%

0%

0%

0%

0%

0%

100%

100%

0%

0%

0%

0%

100%

0%

0%

100%

0%

0%

0%

0%

86%

4%

9%

79%

0%

0%

0%

0%

47%

22%

22%

91%

0%

0%

100%

0%

7%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

20%

100%

0%

0%

0%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

50%

50%

0%

0%

0%

0%

0%

50%

0%

0%

0%

0%

0%

0%

0%

50%

0%

0%

0%

0%

0%

0%

0%

50%

0%

0%

0%

0%

0%

0%

0%

0%

50%

0%

0%

0%

0%

0%

0%

0%

50%

0%

0%

0%

0%

0%

0%

100%

0%

0%

0%

0%

0%

0%

0%

0%

20%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

Moving forward
When thoughtfully used, e-channels
are powerful media that simplify
human connections and present prime
opportunities for adding value to
the customer experience. As online
conversations continue to proliferate, life
sciences companies can help shape the
dialogue focusing on and addressing
consumer needs, extending market reach
and building long-term relationships.
Opportunity, however, is not without
risk. Life sciences companies will need
to holistically address the risks these
channels pose to all parts of their business.
They must methodically assess their
danger zones, assign clear ownership
and implement a comprehensive plan
that will safeguard their organizations,
today and tomorrow, throughout the
e-channel universe. Only by taking the risk
of engaging online can companies reap
the rewards becoming a trusted partner
in the health care journey of patients and
other stakeholders.

57

Chief Patron

Markus Heinen
Chief Editor and Coordinator of EYs Think Tank for Global Business
Performance & Innovation

Anna di Mattia
Editor

Darryl Eliston
Design, layout and style

Henri Yan
Marketing

Ilka Hckert, Barbara Aukema, Nicole Jppner

If you wish to contribute to

Performance or comment on the
articles published, please contact
us via one of the following emails:
performance@de.ey.com
anna.di.mattia@de.ey.com

58

Volume 5 Issue 3

Argentina

Japan

Australia

Mexico, Central America

Mithran Doraisamy
mithran.doraisamy@au.ey.com

Middle East

Roberto Osvaldo Fraga

roberto.fraga@ar.ey.com
Neil Plumridge
neil.plumridge@au.ey.com

Baltics

Junji Suzuki
junji.suzuki@jp.ey.com
Gilberto Lozano
gilberto.lozano@mx.ey.com
Ahmad Ahmad
ahmad.ahmad@sa.ey.com

Nauris Klava
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Ahmed Taher
ahmed.taher@sa.ey.com

Brazil

Netherlands

Carlos Bremer
carlos.bremer@br.ey.com

Norway

Cristiane Amaral
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Canada

Julie Bourgault
julie.bourgault@ca.ey.com
Jean-Francois Tremblay
jean-francois.tremblay@ca.ey.com

Chile

Diego Luis Balestra

diego.balestra@cl.ey.com

Colombia

Javier Macchi
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Eric Gallardo
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Marcus Schreiner
marcus.schreiner@de.ey.com

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Alex Viale
alex.viale@hk.ey.com

India

Rohan Malik
rohan.malik@in.ey.com

Ireland

Brian OReilly
brian.oreilly@ie.ey.com

Fenna Wegman
fenna.wegman@nl.ey.com
Brd Hyland Karlsen
bard.karlsen@no.ey.com

Peru

Paulo Cesar Pantigoso

paulo.pantigoso@pe.ey.com

Poland

Robert Dziedzic
robert.dziedzic@pl.ey.com

Republic of Serbia

Natasa Vuksic
natasa.vuksic@rs.ey.com

Russia

Sergey Zaborov
sergey.zaborov@ru.ey.com

South Africa

Gareth Bladon
gareth.bladon@za.ey.com

Sweden

Per Skallefell
per.skallefell@se.ey.com

Switzerland

Heiko Schikor
heiko.schikor@ch.ey.com

Turkey

Bulent Ozan
bulent.ozan@tr.ey.com

United States of America

Sven Krause
sven.krause@ey.com

Michael S. Schmansky
michael.schmansky@ey.com

Venezuela

Carmen Milagros Bandres

carmen.bandres@ve.ey.com

Italy

Andrea Bassanino
andrea.bassanino@it.ey.com

59

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