Connect with us

Reports

Through Digital Upskilling FS Firms are Working to Move their Workforce from Analogue to Digital

Published

on

PwC’s Fit to compete: Accelerating digital workforce transformation in financial services report, which is part of our New world, New skills series, highlights the need for digital upskilling across FS sectors (insurance, banking and capital markets, and asset management) and in different regions across the globe.

FS firms are modernising their technology systems, boosting innovation, automating to drive down costs and adapting the user experience to meet the rapidly changing expectations of their customers. Yet no amount of digital investment can help them fully attain their new financial and productivity goals when the workforce is stuck in analogue.

“There is a great opportunity right now for a number of companies to control the narrative, direct the message, and communicate both inside and outside their organization on how they’re thinking about the future of work and where they stand on upskilling,” said Bhushan Sethi, Joint Global Leader, People and Organisation.

With banks and funds no longer holding an edge in graduate recruiting, a sharper focus on employee experience and the organisation’s professed purpose is required. The technical skills, data analytics proficiency and design thinking that FS firms need right now all call for highly skilled people. These individuals, whether long-standing employees or new recruits, tend to be impatient with legacy infrastructure and increasingly want to work for companies that incorporate high-tech values — companies that are agile and digital.

While no one region has solved the problems of finding and training skilled workers; each region has their own areas of focus such as: increased investing in startups and training of skilled workers in the Asia-Pacific region, upskilling the existing workforce in North America, and Europe’s strong technical education system.

Six Foundational Steps to Workforce Transformation

In the early years of digital workforce transformation, development costs will be high. The ROI might not be as compelling as it will be in later years. Managing these expectations with key stakeholders is an important part of the process. Our research found the six steps that are common among all FS organizations as they transition from an analog to a digital workforce.

Determine clear digital workforce goals – Explicitly articulate the business benefits you expect to achieve through your digital upskilling investments. For many firms, the primary goal is to optimise the value of these investments by equipping the workforce with the skills needed to effectively engage with and apply digital tools.

Tell a powerful story about the value of digital upskilling – All levels of the organisation should understand the vision and the benefits of digital transformation. The narrative about the purpose and efforts of your transformation is critical to its success. When employees fully grasp ‘what’s in it for me,’ an organisation can better establish a culture of digital curiosity, self-learning and innovation.

Choose a focussed launch point – Most firms select a limited segment of the workforce to pilot digital upskilling initiatives. Consider assembling a pilot group that reflects appropriate levels of diversity across the organisation in terms of, for example, gender, age, tenure, seniority, skill set and location. Additionally, consider alternative models to segment stakeholders beyond seniority, demographics or other common behaviours and traits.

Connect the programme with the rest of the organisation – It’s critical to connect the digital upskilling effort with existing learning and development and talent programmes across the organisation to help drive employee participation.

Prepare for headwinds – Launching a successful programme can prove challenging, and obstacles will inevitably arise. Look in advance at the concerns people may have, and at other possible unintended consequences of your efforts. Put in place thoughtful contingency plans so that you can deal with these ‘side effects’ and challenges in a timely way when necessary. Open lines of communication are key to employee adoption.

Measure your progress and drive towards sustainable results – It is key to establish a long-term digital workforce strategy with interim milestones and success measures. Also key to this is having employee involvement communicating progress early and often.

Continue Reading
Comments

Reports

Capabilities fit is a winning formula for M&A: PwC’s “Doing the right deals” study

Published

on

city business

Ensuring there is a capabilities fit between buyer and target is key to delivering a high-performing deal, according to a new PwC study of 800 corporate acquisitions. . The study finds that capabilities-driven deals generated a significant annual total shareholder return (TSR) premium (equal to 14.2% points) over deals lacking a capabilities fit.

The “Doing the right deals” study looks at the 50 largest deals with publicly-listed buyers in each of 16 industries and evaluates the characteristics that delivered superior financial outcomes for the buyers, as measured by annual TSR.

A capability is defined as the specific combination of processes, tools, technologies, skills, and behaviours that allows the company to deliver unique value to its customers.

Two types of deals were found to outperform the market: capabilities enhancement deals – in which the buyer acquires a target for a capability it needs — and capabilities leverage deals – in which the buyer uses its capabilities to generate value from the target. These represent a true engine of value creation, delivering average annual TSR that was 3.3% points above local market indices. Deals without these characteristics – limited-fit deals – had an average annual TSR of -10.9% points compared to the local market indices.

While 73% of the largest 800 deals analysed sought to combine businesses that did fit from a capabilities perspective, 27% were limited-fit deals. The analysis shows that for every dollar spent on M&A, roughly 25 cents were spent on such limited-fit deals that in many cases destroyed shareholder value.

Alastair Rimmer, Global Deals Strategy Leader, PwC UK said: “Our analysis confirms that deals where the buyer is focused on enhancing its own capabilities or leveraging its capabilities to improve the target can result in a substantial TSR premium. Whether a deal creates value depends less on whether it is aimed at consolidation, diversification or entering new markets. What matters is whether there is a solid capabilities rationale between the buyer and the target.”

Capabilities fit delivers shareholder value across industries

The capabilities premium was found to be positive across all of the 16 industries studied. The share of capabilities-driven deals was highest in pharma & life sciences (92%), an industry where deals often combine one company’s innovation capabilities with another’s strength in distribution.  Other leading industries in capabilities fit deals were health services and telecommunications (both with 90% capabilities-driven deals) and automotive (86%).  Limited fit deals were found to be most prevalent in the oil & gas industry (62%), where asset acquisition can play an important role in addition to capabilities fit.

The analysis shows that the stated strategic intent of a deal, as defined in corporate announcements and regulatory filings, has little to no impact on value creation. Whether a deal fits or not depends less on stated goals of consolidation, diversification or entering new markets. What matters is whether there is a capabilities fit between the buyer and the target.  Deals aiming for geographic expansion notably stood out as performing less well than others, largely because many of them (34%) were limited-fit deals.

The M&A playing field has shifted due to COVID-19

More than ever, companies must be clear in defining which capabilities they can leverage to succeed, and which capabilities gaps they need to fill.

Hein Marais, Global Value Creation Leader, PwC UK added: “Deal rationales have shifted in a COVID context, reflecting the heightened need for new and different capabilities if an enterprise is to generate value and create sustained outcomes.  The need to move quickly increases the pressure to do deals at pace – and thereby the risk of failing to evaluate capabilities fit with enough care. Ensuring such capabilities fit, however, dramatically increases the chances of your deal creating value.”

Continue Reading

Reports

Companies may be overlooking the riskiest cyber threats of all

Published

on

A majority of companies don’t have a handle on their third-party cyber risks  – risks obscured by the complexity of their business relationships and vendor/supplier networks.  This is the finding of the PwC 2022 Global Digital Trust Insights Survey.  The survey of 3,600 CEOs and other C-suite executives globally found that 60% have less than a thorough understanding of the risk of data breaches through third parties, while 20% have little or no understanding at all of these risks.

The findings are a red flag in an environment where 60% of the C-suite respondents anticipate an increase in cyber crime in 2022. They also reflect the challenges organizations face in building trust in their data — making sure it is accurate, verified and secure, so customers and other stakeholders can trust that their information will be protected.

Notably, 56% of respondents say their organizations expect a rise in breaches via their software supply chain, yet only 34% have formally assessed their enterprise’s exposure to this risk. Similarly, 58% expect a jump in attacks on their cloud services, but only 37% profess to have an understanding of cloud risks based on formal assessments.

Sean Joyce, Global & US Cybersecurity & Privacy Leader, PwC United States said: “Organizations can be vulnerable to an attack even when their own cyber defenses are good; a sophisticated attacker searches for the weakest link – sometimes through the organization’s suppliers.  Gaining visibility and managing your organization’s web of third-party relationships and dependencies is a must.  Yet, in our research, fewer than half of respondents say they have responded to the escalating threats that complex business ecosystems pose.”

Asked how their companies are minimizing third-party risks, the most common answers were auditing or verifying their suppliers’ compliance (46%), sharing information with third parties or helping them in some other way to improve their cyber stance (42%), and addressing cost- or time-related challenges to cyber resilience (40%). But a majority have not refined their third-party criteria (58%), not rewritten contracts (60%), nor increased the rigor of their due diligence (62%) to identify third-party threats.

Simplifying the way to cybersecurity

Nearly three quarters of respondents said the complexity of their organization poses “concerning” cyber and privacy risks. Data governance and data infrastructure (77% each) ranked highest among areas of unnecessary and avoidable complexity.

Simplification is a challenge, but there is ample evidence that it is worthwhile.  While three in 10 respondents overall said their organizations had streamlined operations over the past two years, the “most improved” in our survey (the top 10% in cyber outcomes) were five times more likely to have streamlined operations enterprise-wide.  These top 10% organizations are also 10 times more likely to have implemented formal data trust practices and 11 times more likely to have a high level of understanding of third party cyber and privacy risks.

CEO engagement can make a difference

Executive and CEO respondents differ on how much the support the CEO provides on cyber, with CEOs seeing themselves as more involved in, and supportive of, setting and achieving cyber goals than their teams do. But there is no disagreement that proactive CEO engagement in setting and achieving cyber goals makes a difference.  Executives in the “most improved” group, reporting the most progress in cybersecurity outcomes, were 12x more likely to have broad and deep support on cyber from their CEOs.  Most executives also believe that educating CEOs and boards so they can better fulfill their cyber responsibilities is the most important act for realizing a more secure digital society by 2030.

Sean Joyce concluded: “Our survey shows that the most advanced organizations see cybersecurity as more than defense and controls, but as a means to drive sustained business outcomes and build trust with their customers.  As leaders of organizations, CEOs set the tone for focusing their cyber teams on bigger-picture, growth-related objectives rather than narrower, short-term expectations.”

Continue Reading

Reports

Are we on track to meet the SDG9 industry-related targets by 2030?

Published

on

A new report published by the United Nations Industrial Development Organization (UNIDO), Statistical Indicators of Inclusive and Sustainable Industrialization, looks at the progress made towards achieving the industry-related targets of Sustainable Development Goal (SDG) 9 of the UN 2030 Agenda for Sustainable Development. The report is primarily based on the SDG9 indicators related to inclusive and sustainable industrialization, for which UNIDO is designated as a custodian agency, showing the patterns of the recent changes in different country groups.

Six years after the adoption of the 2030 Agenda for Sustainable Development and its 17 SDGs, there has been increasing demand for information on whether the SDG targets could be reached, and what actions should governments take to accelerate progress. The UNIDO report introduces two new tools developed by UNIDO to help countries measuring performance and progress towards SDG9 industry-related targets: the SDG9 Industry Index and SDG9 progress and outlook indicators. The SDG9 Industry Index benchmarks countries’ performance on SDG-9 targets over 2000-2018 for 131 economies. In addition, the report develops two measures to answer the main questions:

  • Progress: how much progress has been made since 2000?
  • Outlook: how likely is it that the target will be achieved by 2030?

The global COVID-19 pandemic has inevitably had a negative toll on the progress towards reaching the SDG9 indicators, but the extent of the long-term impact remains to be seen. Industrialized countries continue to dominate global manufacturing industry, but their relative share has gradually declined over the past decade. In 2010, industrialized economies made up 60.3% of global production, which has decreased to 50.5% in 2020. China has been the largest manufacturer, now accounting for 31.7% of global production. This is a trend that has been reinforced by the pandemic.

Progress for the least developed countries (LDCs), at the heart of the 2030 Agenda, is a different story. While economic theory and countries’ experiences across the world have established that industrialization is an engine of sustainable growth, progress among LDCs remains very diverse. Asian LDCs are poised to double their share of manufacturing in GDP and thus meet SDG target 9.2, but African LDCs have stagnated.

SDG9 Industry Index

The SDG-9 Industry Index, consisting of five dimensions, covers three targets and five indicators and assigns a final score to countries. In 2018, the top ten consisted of exclusively industrialized economies, with Taiwan, Province of China, Ireland, Switzerland, the Republic of Korea and Germany making up the top five. In general, industrialized economies perform best in all dimensions of the Index.

The countries at the bottom of the ranking are LDCs, in particular those located in sub-Saharan Africa. Although some African countries have been displaying impressive growth rates, growth has been driven by an extended commodity boom and foreign capital inflows, while industrialization and structural transformation have stagnated. Additionally, substantial data is lacking for a significant amount of the countries. In the SDG9 Industry Index, only 24 out of 54 African countries are included, from which only eight are LDCs. It is clear that national statistics offices need strengthening, as data availability helps countries formulate, review and evaluate their development plans and programmes.

Continue Reading

Publications

Latest

Science & Technology5 mins ago

U.S. Sanctions Push Huawei to Re-Invent Itself and Look Far into the Future

There is no doubt that the return of Huawei’s CFO Meng Wanzhou to Beijing marks a historic event for the...

Tech News2 hours ago

Why cybersecurity in the EU should matter to you

From stolen data to blocked hospital systems: cyberattacks can have perilous consequences. Learn more about cybersecurity and its importance. The...

city business city business
Reports4 hours ago

Capabilities fit is a winning formula for M&A: PwC’s “Doing the right deals” study

Ensuring there is a capabilities fit between buyer and target is key to delivering a high-performing deal, according to a...

Intelligence6 hours ago

A More Diverse Force: The Need for Diversity in the U.S. Intelligence Community

As part of a hiring initiative meant to attract new and diverse hires, the Central Intelligence Agency (CIA) released a...

Tourism8 hours ago

UNWTO and NEOM Launch ‘Tourism Experiences of the Future’ Challenge

The ‘Tourism Experiences of the Future’ challenge will source innovative ideas and disruptive business models related to the tourism needs...

East Asia10 hours ago

Shared Territorial Concern, Opposition to US Intervention Prompt Russia’s Support to China on Taiwan Question

The situation around the island of Taiwan is raising concerns not only in Chinese mainland, Taiwan island or in the...

New Social Compact12 hours ago

KP’s Education Reforms – Heading Towards Right Path

The first word revealed in the holy Quran was “Iqra” which means “to read”. This first verse of Holy Quran...

Trending