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IT als breekijzer voor digitalisering bij financiële instellingen

Het hart van de IT binnen de financiële dienstverlening is in veel gevallen vele jaren oud, bestaat uit veel maatwerk en dateert van ruim voor het internettijdperk. Nieuwe toetreders konden opnieuw beginnen. Hierdoor hebben ze minder last van complexe organisaties en kunnen ze vanaf de start gebruikmaken van technologie die wel voor het internettijdperk is ontworpen. De klanten van financiële dienstverleners zijn nog erg honkvast. Door de grote aantallen klanten zijn de bestaande organisaties ook nog steeds winstgevend. Maar hoe lang duurt het nog voordat klanten de digitale proposities van de nieuwe toetreders massaal omarmen en een retailachtige ‘disruption’ veroorzaken? De software is gewoon op de markt beschikbaar. Dit artikel gaat in op de mogelijkheden die de implementatie van een standaardsoftwarepakket biedt voor het standaardiseren en harmoniseren van de business.

Inleiding

Honderden banen weg bij ABN AMRO, ING schrapt extra banen, vierduizend banen weg bij Achmea. Deze banen vervallen niet door tegenvallende inkomsten (ING heeft zelfs de staatssteun versneld afbetaald). Vooral de ongekende digitaliseringsslag die de branche momenteel doormaakt heeft impact. Wie ontvangt er tegenwoordig nog bankafschriften of gaat naar een verzekeringsadviseur voor een autoverzekering?

Dit is echter nog maar het begin. Zoals ook door [Koot15] onderkend, ondergaan we een digitale informatierevolutie waarin geïntegreerde waardeketens op dagbasis kunnen worden gedefinieerd. Klanten verwachten steeds meer functionaliteit online en realtime. Dit vereist informatiegedreven, flexibele organisaties die zich snel kunnen aanpassen aan een veranderende omgeving. IT is in deze organisaties een commodity geworden.

Het hart van de IT binnen de financiële dienstverlening is in veel gevallen vele jaren oud, bestaat uit veel maatwerk en dateert van ruim voor het internettijdperk. Er was toen nog geen 24/7 dienstverlening of selfservice. In de financiële dienstverlening is de digitalisering van de laatste jaren vooral gericht geweest op het digitaliseren van de front end rondom het klantcontact. Aan de achterkant zijn er nog veel op papier gebaseerde processen die worden uitgevoerd in een organisch gegroeide complexe organisatie. In informatiegedreven en flexibele organisaties zijn ook deze processen vergaand gedigitaliseerd.

Nieuwe toetreders, zoals diverse spaarbanken en online verzekeraars, konden opnieuw beginnen. Hierdoor hebben ze minder last van bovengenoemde complexe organisaties en kunnen ze vanaf de start gebruikmaken van moderne technologie. Technologie die wél is ontworpen voor een digitale samenleving, vaak in samenwerking met jonge (Nederlandse) IT-leveranciers. Dit betreft grotendeels standaardsoftwarepakketten die draaien op algemeen beschikbare infrastructuur voor een stabiele administratie en een flexibele voorkant. Deze (combinatie van) pakketten (stelt) stellen nieuwe toetreders in staat om klanten voor veel lagere kosten een veel meer digitale propositie aan te bieden. Bijvoorbeeld het volledig online klant worden, (near) realtime producten afsluiten of wijzigen, location-based services en diensten als gevolg van een betere ontsluiting van gegevens (zoals tools om klanten financieel zelfredzaam te maken).

De klanten van financiële dienstverleners zijn nog erg honkvast. Door de grote aantallen klanten zijn de bestaande organisaties ook nog steeds winstgevend. Maar hoe lang duurt het nog voordat klanten de digitale proposities van de nieuwe toetreders massaal omarmen en een retailachtige ‘disruption’ veroorzaken? 

De nieuwe toetreders kunnen een stormloop hoogstwaarschijnlijk probleemloos aan; het is immers een kwestie van ‘een server erbij’ om de capaciteit te verhogen.

De standaardsoftwarepakketten die de nieuwe toetreders gebruiken zijn gewoon op de markt beschikbaar. Maar hoe is een dergelijk standaardsoftwarepakket passend te maken in een tientallen jaren oude en complexe organisatie met duizenden of zelfs miljoenen lopende contracten? Of is het andersom? Digitalisering is veel meer dan alleen een nieuw systeem implementeren. [Koot15]  gaf al aan dat de huidige demand-supplymodellen op spanning staan met de verandering naar steeds meer IT-commodity, waarbij de manier van transactieverwerking niet langer onderscheidend is voor de dienstverlening en gebruikers met behulp van Big Data, cloud, web- en mobiele technologie steeds meer zelf vorm kunnen geven. Er is een radicaal andere werkwijze nodig ([Koot15]).

Verandering in IT vereist complexiteitsreductie van de business

In hun artikel over One Company en One IT stellen Koot en Pasman [Koot14] dat “het reduceren van de IT-complexiteit (…) een belangrijk onderdeel” is bij het invoeren van eenvoud en consistentie. Daarnaast stellen zij dat het niet de oplossing is om complexiteit te reduceren tot een IT-vraagstuk, omdat “de complexiteit in IT slechts een symptoom is van de problemen op een veel dieper niveau in de organisatie”. “Standaardisatie van gegevens, de werkwijzen en processen” is een randvoorwaarde voor “een omgeving (…) waarin de stroomlijning van IT succesvol kan zijn.” “Het gezamenlijk bepalen van de functionaliteit leidt nogal eens tot het vaststellen van de ‘grootste gemene deler’. (…) Daadwerkelijke harmonisatie vraagt om (harde) keuzes en versimpeling. Niet om gepolder.” IT kan echter wel als breekijzer dienen om bestaande patronen en denkwijzen binnen de organisatie te doorbreken. Dit geldt voornamelijk voor het standaardiseren van mid- en backoffice(transactie)processen met grote volumes die de kern van een onderneming vormen.

Een standaardsoftwarepakket als breekijzer

Een standaardsoftwarepakket biedt functionaliteit ‘out-of-the-box’. De kans is echter groot dat de volledige functionaliteit van een pakket niet een op een aansluit bij de bestaande functionaliteit in een legacysysteem dat vervangen moet worden. Om het softwarepakket passend te maken én zo veel mogelijk out-of-the-box te houden zijn keuzes nodig. Precies de harde keuzes die Koot en Pasman benoemen komen met een standaardsoftwarepakket boven tafel. Een standaardsoftwarepakket met de juiste aanpak kan hierdoor als breekijzer dienen om de organisatie te standaardiseren en harmonisatie te forceren.

In veel markten zijn dergelijke standaardpakketten beschikbaar, bijvoorbeeld voor ERP, boekhouding of debiteurenbeheer. Ook op het gebied van Core Banking of Core Insurance zijn vele bewezen alternatieven aanwezig. Doordat dergelijke pakketten bij concurrenten al in gebruik zijn, is er de zekerheid dat tijdens de implementatie technische problemen het bereiken van de beoogde standaardisatie niet zullen frustreren. Hoe meer implementaties van de standaardoplossing zijn gedaan, hoe meer zekerheid er bestaat over de bruikbaarheid van het pakket. Dit voorkomt ‘gepolder’ over de huidige werkwijze versus het standaardpakket. Tijdens de implementatie kan de aandacht volledig uitgaan naar de versimpeling en standaardisatie van de organisatie. Maatwerk moet daarbij zo veel mogelijk vermeden worden. Hoe meer maatwerk, hoe meer een pakketimplementatie op klassieke softwareontwikkeling gaat lijken. Bovendien leidt maatwerk in beheer tot hogere onderhoudskosten en wordt de uitrol van nieuwe releases complexer, doordat extra testwerk van het maatwerk noodzakelijk is.

Leveranciers van standaardpakketten hebben ervaring met de implementatie bij andere partijen én hebben baat bij een succesvolle referentie. Deze ervaring en hun kritische blik zijn waardevol bij een zo optimaal mogelijke implementatie van het pakket en de verandering van werkwijzen, ondanks dat geen implementatie hetzelfde zal zijn. Immers, niet de implementatie is het doel, maar juist de harmonisatie, productrationalisatie en digitalisering die mogelijk gemaakt worden.

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Casestudy’s

Opgenomen casestudy’s zijn voorbeelden van praktijksituaties waarin KPMG de aanpak om met behulp van een standaardsoftwarepakket de complexiteit te reduceren is tegengekomen. De eerste casestudy betreft een middelgrote verzekeraar met een sterk verouderd administratiesysteem. In de huidige verzekeringsmarkt is het aanbieden van online producten voor een lage prijs een randvoorwaarde. Dit was voor de verzekeraar onmogelijk, vanwege hoge interne kosten als gevolg van enerzijds een kostbaar en verouderd IT-landschap en anderzijds hoge administratieve kosten als gevolg van diversiteit in werk. Meerdere pogingen om het systeem te vervangen waren eerder gestrand als gevolg van de complexiteit in zowel organisatie als IT.

Enkele jaren geleden nam de organisatie het besluit om een bewezen standaardsoftwarepakket in te zetten als hefboom voor het reduceren van organisatorische complexiteit. Veel detail requirements werden aan de kant geschoven en het budget voor maatwerk was minimaal. Bovendien kwam er een duidelijke scheiding tussen ‘oud’ en ‘nieuw’, het pakket werd minimaal gekoppeld aan de bestaande IT en er werd een ‘greenfield’-afdeling ingericht. Eigenlijk werd de verzekeraar vanaf de basis opnieuw opgebouwd. Met behulp van het pakket is in negen maanden gelukt wat eerder in drie jaar niet lukte, namelijk de migratie van een groot deel van de verzekeringsportefeuille.

De sleutel tot succes van dit project zat in de standaardisatie van producten en processen met behulp van het softwarepakket. Dit dwong de organisatie ertoe om te veranderen, hoewel dit niet altijd eenvoudig was. Aan de bestuurstafel zijn meerdere discussies gevoerd over het wel of niet aanpassen van het pakket of het inzetten van een ander systeem, omdat er qua functionaliteit betere alternatieven noodzakelijk of beschikbaar waren. Steeds werd voor de werkwijze van het pakket (als best of suite) gekozen. Het bestuur voelde zich gesteund door de wetenschap dat het softwarepakket bij vergelijkbare verzekeraars naar tevredenheid in gebruik was. De aanpassingen die wél werden doorgevoerd, hadden vaak te maken met de onderscheidende propositie van de verzekeraar. Het belangrijkste doel bleef standaardiseren om digitalisering mogelijk te maken en kosten te verlagen. De verzekeraar koos ervoor om eerst het nieuwe systeem naar productie te brengen, ook al had dit in extreme gevallen tot gevolg dat een stap(je) terug werd gezet.

De tweede casestudy betreft een pakketimplementatie bij een internationale bank, die gewend was om systemen zelf te ontwikkelen. Bij wijze van pilotproject besloot de bank een standaardpakket te implementeren. De argumenten voor deze aanpak waren onder meer de snelheid van productontwikkeling en marktontsluiting. Ook de integratiemogelijkheden van het standaardpakket versus zelfbouw speelden een belangrijke rol.

De ambitie van het programma was beperkt, het was immers een pilotproject. Slechts een gedeelte van de ondersteunde standaardfunctionaliteit van het pakket werd in gebruik genomen. Het systeem moest in een complex landschap geïntegreerd worden met vele interfaces en systeemlogica die buiten het standaardpakket uitgevoerd werd. Toch slaagde het programma erin om aan te tonen dat het standaardpakket kan functioneren in een landschap van maatwerkproducten en leverde het een nieuw ‘long-term liability’-product op dat via de online banking-kanalen aan retailklanten kon worden aangeboden. Als proof of concept was het programma daarom succesvol, maar de werkelijke kracht van de standaardoplossing zou pas ten volle benut kunnen worden als meer functionaliteit van het pakket gebruikt zou worden. Technisch waren de doelstellingen echter blijvend ambitieus, waarbij de noodzaak om aan te tonen dat vervanging van legacymaatwerksystemen door een dergelijk standaardpakket een goede oplossing is.

Vaker werd besloten om de organisatie en werkwijzen aan te passen aan de wijze waarop deze werden ondersteund door het systeem in plaats van andersom. Ook koos de bank er bij voorbaat voor om een goed gedocumenteerd algemeen beschikbaar banking framework voor standaardprocessen te hanteren als blauwdruk voor haar processen. Hierdoor konden discussies over organisatie- en procesverandering eenvoudiger worden kortgesloten.

Harde keuzes

Beide cases zijn voorbeelden van een succesvolle pakketimplementatie. Er vallen echter enkele keuzes op die, los van het standaardpakket, het succes van de standaardisatie mede hebben bepaald. Allereerst de keuze om de nieuwe IT wel of niet te integreren met de legacy-IT-omgeving. Ondanks de huidige vraag naar geïntegreerde klantbeelden en systemen heeft de verzekeraar ervoor gekozen om de nieuwe IT zo veel mogelijk te isoleren. Deze keuze zorgde voor veel weerstand vanuit de business, doordat management- en salesinformatie gedurende het project niet geïntegreerd voorhanden waren. Door een dergelijke lastige keuze te maken werd tijdelijk een stap teruggezet om het eindresultaat dichterbij te brengen, want de keuze voorkwam complexe interfacing en versnelde het project.

Het tweede punt betreft de keuze voor een ‘best of breed’ of ‘best of suite’. Zeker wanneer voor een breed backofficepakket wordt gekozen, zijn er op losse onderdelen (bijvoorbeeld informatievoorziening, CRM, CMS) betere gespecialiseerde alternatieven te vinden. Tijdens de implementatie is het beste gespecialiseerde alternatief verleidelijk vanuit een beperkt inhoudelijk perspectief. Een dergelijk alternatief kan echter tot complexiteitverhoging leiden met mogelijk dubbele functionaliteit tot gevolg. De organisatie dient zich de vraag te stellen of de grotere complexiteit als gevolg van meerdere systemen opweegt tegen de geboden toegevoegde waarde van de extra complexiteit.

Het derde en belangrijkste leerpunt uit de casestudy’s is de impact die standaardisatie op de organisatie heeft. Deze is fors en vereist een sterke verandercapaciteit. Dit wordt niet eens zozeer door de IT veroorzaakt, want standaardsoftwarepakketten zorgen meestal juist voor een versimpeling op dit vlak doordat ze draaien op basis van gangbare standaarden. Juist de organisatie zal moeten veranderen, enerzijds doordat het pakket een andere werkwijze vereist, anderzijds om de noodzakelijke digitaliseringsslag te maken. Deze digitaliseringsslag wordt niet alleen gemaakt door een nieuw pakket in te voeren, maar vereist een compleet nieuwe manier van werken, waarbij klanten meer processen zelf gaan uitvoeren en de organisatie zich richt op data-analyse waarmee echt het verschil kan worden gemaakt. Dit vraagt om herinrichting, opleidingen en zelfs werving van personeel met nieuwe vaardigheden. Om innovatie echt de ruimte te geven is het bovendien te overwegen om, net als de verzekeraar in onze case, niet alleen de IT, maar de gehele organisatie vanaf de grond opnieuw op te bouwen. Een vergelijkbare overweging heeft bij BMW tot de vernieuwende i-serie (hybride aangedreven auto’s) geleid. Bovendien wordt op deze manier de draaiende organisatie niet opgezadeld met de kinderziektes van een nieuw systeem, kan de nieuwe wereld met klein volume worden uitontwikkeld en vormt de nieuwe wereld de basis om de oude wereld naartoe te migreren.

Het is dus andersom. Voor vergaande standaardisatie en harmonisatie met behulp van een standaardsoftwarepakket moet de organisatie passend worden gemaakt voor IT.

Morgen mee beginnen:

  • Ga kijken wat de concurrentie doet en sluit producten af bij digitale (kleine) spelers.
  • Bepaal welke standaard-IT-systemen deze spelers gebruiken en analyseer deze oplossingen.
  • Voer een eerste grove rationalisering uit van bestaande producten en processen.
  • Neem maatregelen ter compensatie van bekende valkuilen binnen de organisatie.
  • Houd het klein en experimenteer, ‘it will be a bumpy ride anyway’.

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Literatuur

[Koot14] William J.D. Koot en Jochem Pasman MSc, ‘One IT’ volgt uit ‘One Company’; en niet andersom, 2014, http://www.it-executive.nl/content/redactioneel/one-it-volgt-uit-one-company-en-niet-andersom.

[Koot15] W.J.D. Koot, E.J. Mutsaers en I.E. Veen RE, Het demand-supplymodel voorbij!?, Compact 2015/1, https://www.compact.nl/artikelen/C-2015-1-Koot.htm.

Game Maturity Model for healthcare

All over the world we are seeing the growing importance of technology in healthcare organizations, the changing ways in which people interact and the rise of the use of gaming. At this moment healthcare institutions are only starting to use serious or applied games. The current market of applied gaming is estimated at $10 billion worldwide. Analysts predict that this market will boom, and similar assumptions can be made with regards to the healthcare component of this market. Within 5 years it could exceed the entertainment game market, which is estimated at $70 billion. Our forecast is that within 5 years the use and development of applied games will have a role in our daily lives and the way we organize healthcare that will be similar to the role social media has today.

Introduction

Gaming can be seen as the next step in the application of information technology to healthcare, because gaming improves interaction and has a direct impact on human behavior. “By the age of 21, the average young American has spent somewhere between two and three thousand hours reading books and ten thousand hours on playing computer and video games” (McGonigal, 2011). The younger generations are no longer learning and working in the same way as we do, through books. They are not only playing games for fun and entertainment, but using gaming technology in many ways, which is driving this emerging market. This is and can also be the case for healthcare professionals and patients.

This article introduces the Game Maturity Model for healthcare organizations, which can be seen as an extension and elaboration of the general Game Maturity Model that was introduced by KPMG in 2013. In the current healthcare market, organizations constantly face more and more pressure to gain and retain a competitive advantage, identify ways to cut costs, improve quality and reduce (the risk of) errors. Gamification and a framework tailored to healthcare institutions can help organizations to address and resolve these problems. We have adapted the Game Maturity Model to help healthcare organizations introduce and improve their use of gaming. This adapted Game Maturity Model can help healthcare organizations quickly determine their target position and develop a roadmap for moving from their current to their target position.

First, the meaning of the term “applied or serious games” is briefly discussed, after which the theory of maturity models is presented. Secondly, this article shows the design of the Game Maturity Model and the way it can be used by healthcare organizations. Lastly, two case studies of health games are presented as examples of the successful use of games in healthcare.

Applied games and gamification

Serious or applied games are models or simulations of real-world events or processes, designed for the purposes of problem-solving and learning. Although applied or serious games are entertaining, their main purpose, in our opinion, is to change the behavior of organizations and human beings (such as patients, medical students or professionals). For the purpose of this article we use the term “applied gaming” instead of “serious gaming.” The reason is that, in our opinion, “serious gaming” is a contradiction in terms. “Serious” typically means no fun at all. Fun is a characteristic of all games, although some games have serious applications. “Serious gaming” also implies that some games are not serious. This is not the case.

Applied games are very often used in the context of gamification. Gamification is the use of game mechanics and game design in non-game scenarios (such as healthcare environments) in order to change behaviors and increase motivation to change. Typically, gamification includes developing processes and applications to first entice users to participate, then engage them so they will share and interact in an activity or community. Gamification is a method for engaging medical personnel and clients in desired behaviors, while their involvement and pursuit of these behaviors works to solve (their) problems. Essentially, it takes advantage of humans’ psychological predisposition to engage in gaming.

Gamification applications can have a wide variety of possible objectives, areas of application, complexity and levels of voluntariness, depending on the goal of the game. Internal gamification, for instance, focuses on processes inside the organization, such as training medical students to perform complex diagnosis and treatment. Internal gamification focuses on finding fun in the things an employee has to do, to increase motivation and performance. Fun is a result of learning, and learning can be seen as pattern recognition. By recognizing patterns, our brain produces endorphins and dopamine, and we experience ”fun.” External gamification focuses on things outside the organization, such as patient-related gamification. The focus here is trying to enhance the patient’s user experience. Ideally, the end goal of gamification is incorporating games into the entire ecosystem of the health organization. Some gaming applications may incorporate multiple complex tasks, such as a game that helps surgeons practice surgeries, but may also be related to more common tasks, such as compliance training. For all these processes, gamification can be applied effectively.

Using games or applying game elements is not a new concept. Military officers have been using war games in order to train strategic skills for a long time. Also, there are a lot of games focused on policy and management issues. More focused sub-groups have appeared, including Games for Change which focuses on social issues and social change, and Games for Health which addresses healthcare applications (Wikipedia, 2013).

Current gamification applications in healthcare often focus either on treatment for patients or on training for medical students and personnel (possibly including professionals). There are very advanced forms of gamification that stretch our imagination. For example, there are games that aim at fighting cancer or changing the way we build cities. There are prominent gamification techniques such as achievement badges, achievement levels, leader boards, progress bars (indicating how far the user is from completing the task), virtual currency, systems for awarding and exchanging, challenges between users, etc. (Wikipedia, 2013).

Table 1. General gamification applications & techniques

Common Gamification Applications Common Gamification Techniques
Training Achievement badges
Sales Achievement levels
Project management Leader boards
Employee reward and recognition programs Progress bars
Knowledge collaboration Virtual currencies
Innovation management System for awarding and exchanging
Marketing and customer interaction Challenges between users

Table 1. General gamification applications & techniques

Maturity modeling

A maturity model basically indicates what level an organization is at within a specific domain. “Maturity models are used as an evaluative and comparative basis for improvement in order to derive an informed approach for increasing capability of a specific domain within the organization” (De Bruin & Freeze, 2005). A maturity model evaluates an organization only in one specific domain, and ranks the organization according to the levels of maturity defined. The scope of a maturity model includes the norms and goals in the entity being mapped by the model. Often these are organizational entities. The model presented in this article has been adapted to gaming for healthcare institutions.

As outlined, maturity models typically include a sequence of levels (or stages) that form an anticipated, desired, or logical path from an initial state to maturity. Basically, maturity models consist of several maturity levels or stages, with a typical evolutionary path through these stages. The first stage, normally called the bottom or initial stage, indicates an organization (or process) with few capabilities in the domain the model is covering. Low maturity can in general be described as uncoordinated, reactive, internally focused, ineffectively resourced, naïve and static. In contrast, the highest stage represents an organization with total maturity in the specific domain. High maturity can be described as having an organization-wide focus, proactive innovation, efficient resourcing and comprehensive understanding. A maturity model functions as a scale for assessing an organization’s position on the evolution path. Often, these models provide characteristics that need to be in place for an organization to be described as being at a particular maturity level. A maturity model provides different characteristics for each specific level. In between the initial and mature phase are growth phases. It is important that these phases logically follow.

In management, maturity models have proven to be a helpful instrument, because these models allow for better positioning of the organization and help to stimulate continuous improvement. A maturity model can help health organizations to quickly assess their current position and develop a roadmap for improving their domain position from the current to the desired level.

Maturity models and applied gaming

We saw that there was a need for a maturity model that focuses on the subject of applied gaming. The need for a game maturity model that addresses gaming is growing rapidly as organizations relentlessly step up the pace and size of investments in applied games, but lack experience in organizing their gaming capability. As a result, the dependence on reliable, continuous and competitive applied games is mounting. We predict that within 5 years healthcare organizations will be coming under increasing pressure to achieve above-average performance using applied games, as they are a cost-effective method to train and maintain the skills of students and personnel (even professionals). The various stakeholders (including top management and leading medical professionals insist on direct, increasingly transparent insight into whether applied games and incorporating these games into institutional operations yields added value that justifies the investment required.

In developing a maturity model, we compared the model with other relevant maturity models in terms of the pre-determined problem, target and demand. A good example of the concept of measuring the maturity of an organization was introduced in 1991 with the Capability Maturity Model (CMM) by Carnegie Mellon University. This widely used model focuses on the domain software development and maintenance of an organization. The model pinpoints what level an organization’s software development capability is at. The model distinguishes five levels: the initial, repeatable, defined, managed and optimizing levels (see Figure 1).

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Figure 1. The Capability Maturity Model [Click on the image for a larger image]

The Game Maturity Model

As outlined, gamification can have either or both an internal or external focus. An organization can implement several focused gaming solutions to discrete problems, or can integrate gamification into its overall strategy. Games can focus on general training or behavioral change, and can even teach medical knowledge and skills. Each of these approaches helps identify the maturity of an organization in regards to gamification. We believe that maturity modeling can help identify the position of a healthcare institution in regard to gamification and help the organization identify steps to proceed to the next maturity level. For instance, gamification can be applied to make a task more fun for employees, without necessarily achieving benefits like behavioral change or learning. This would indicate a lower level of maturity in comparison to an organization that implemented gamification in its organization while achieving these benefits. In the more mature organization, gamification contributes to actual healthcare execution.

The model distinguishes four perspectives, each with five maturity levels (see Figure 2). We designed the model with five levels, because this is in line with the CMM model, which is the basis of many maturity models. The four perspectives are related to, first, the value that is produced with gamification; second, the process that is in place in the organization to support the gamification strategy; third, the company-wide coverage that is applied to gamification, and, fourth, the technology that is used for gamification to be a success. We propose that organizations rank themselves according to each of the four perspectives in order to assess the level of gamification and the contribution of gamification to their strategic goals.

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Figure 2. The Game Maturity Model [Click on the image for a larger image]

The first perspective of the model is related to the value generated through gamification.

Value:

  1. Non-existent – No value seen in using games, or no gamification in place.
  2. Pleasure – Using games for pleasure but not yet for results. Games have no real purpose.
  3. Passion – Games promote flow and engagement, and stimulate learning and healthcare simulation.
  4. Purpose – The goal is to advance and innovate using games. Actual healthcare execution and treatments are done through gamified processes.
  5. Healthcare profit – Quality of healthcare is increased and costs are lowered due to use of gamification.

Clearly, the lowest level of value generated through gamification applies to organizations where there is no gamification at all. Healthcare organizations that do not use game techniques in their treatments or services would be scored in this level.
The next level applies to organizations that use games solely for pleasure, and not yet for actual healthcare results. The benefit is short-term and focused on getting a dopamine effect (a rush). These games do not have a real business purpose (yet), as in the case where an organization lets its employees or patients play games just for entertainment, without expecting results or improvements from the activity.
In the next level, called “passion”, flow and engagement are central. A healthcare organization that is scored in this level uses game techniques to improve their employees or patients through a certain activity, encouraging them to spend more time than they would have previously spent on this activity. An organization that uses gaming techniques for learning and healthcare simulation would be scored in this level. When people are in the state of “flow” they can concentrate on a subject intensely, for a long time, without distraction (Hsieh, 2010). Gaming techniques can enhance this state, and can therefore help organizations to engage their customers or teach their employees.
The fourth level, “purpose” applies where there is a higher purpose to playing games. It is part of achieving something bigger than presently exists. For instance, the gaming relates to strategic business goals, such as a hospital that uses game techniques to change the mindset of its employees, or a game that can cure or save the lives of patients.
The last maturity level, “healthcare profit,” describes game initiatives that actually succeed in meeting this higher purpose. You can measure and validate the outcome. This can be financial profit or non-monetary benefit: for example, improving the quality of life for a patient with Parkinson’s disease; or improving compliance with regulations in a financial institution thanks to behavioral change achieved by playing a “Compliance Game.”

The second perspective of the Game Maturity Model is related to the process that is in place to support gamification.

Process:

  1. Ad hoc – Gamification processes are unpredictable, poorly controlled and reactive.
  2. Repeatable – Processes are matched to projects and are often reactive.
  3. Defined – Gamification processes are developed organization-wide and are proactive.
  4. Managed – The gamification process is measured and controlled.
  5. Optimized – There is a focus on continuous monitoring and improvement.

This “process” perspective is marked by evolutionary levels that are adopted from the CMM model (Carnegie Mellon University, 1991). The difference is that the Game Maturity Model only focuses on the processes in place to support gamification. In the initial “ad hoc” level, gamification processes are unpredictable, one-off, poorly controlled and reactive. Problems in the game processes are only solved after they appear.
In the next level, repeatable processes for gamification projects are developed, but the organization still acts reactively towards gamification. It is an improvement over the lower level in that knowledge already gained will not be lost, at least because a project-management capability has been developed.
In the “defined” level, a healthcare organization starts to act proactively towards gamification processes. Gamification processes are well known throughout the organization.
In the fourth level, the gamification processes are structured as part of the healthcare procedures, so the outcomes of gamification initiatives are measured and controlled.
In the highest level of this perspective, “optimized” processes around gamification are organized, managed and well known. The focus has shifted towards continuous improvements by empowering employees of an organization to generate long-term benefits through applying processes around gamification.

The third perspective of the model is related to coverage, or the ways in which gamification and games are applied by organizations.

Coverage:

  1. None – No gamification in place.
  2. Individual – Gamification is applied by individuals.
  3. Entity – Gamification is applied within functional groups or healthcare departments.
  4. Institution – Gamification is applied across the healthcare level.
  5. Ecosystem – Gamification is applied in complete horizontal and vertical integration throughout the ecosystem of the users and providers of healthcare.

At the initial level of this perspective, gamification is non-existing.
The second level indicates that some individuals within the organization apply gaming techniques, but there is no widespread implementation of games throughout the organization.
The next level, “entity,” indicates that games are used by some groups or departments. Currently, education and training departments in healthcare institutions are the early adopters of gamification techniques. For instance, healthcare educators may use games to simulate emergency situations; they can increase patient safety by providing students and healthcare professionals with a safe learning environment to practice emergency medical skills, as in abcdeSIM created at Erasmus University Medical Centre (abcdeSIM, 2012). Another example of this outside the healthcare world is Starbucks, which offers a mobile app having a rewards section in which game elements are embedded (Starbucks, 2013). In such a case gamification has been applied by the marketing department, but it may not have spread throughout other parts of the organization.
At the fourth level, the application of games is spread throughout the whole institution. Gamification is an important topic on the board level, and is used in many different ways (e.g., education and training purposes, patient interaction and healthcare treatments).
The highest level is where the whole ecosystem of which the healthcare institution is a part is involved in the application of games. Not only employees of the health organization itself, but also patients, suppliers and other stakeholders are involved in game techniques. Gamification is applied externally. An example is the airline KLM, which involves customers of their loyalty program in optimizing their company processes through playing a game called “Aviation Empire” (KLM, 2013).

The fourth perspective of the model is related to the different types of games that are used by organizations.

Type:

  1. Off-line – Non-internet, non-network components, such as traditional board games, are used.
  2. Single-player – Online single-player techniques are used.
  3. Multi-player – Online multi-player techniques are used.
  4. Group playing – Online group playing techniques are used.
  5. MMO – Mass multi-player techniques are used.

There are many types of games and many ways to categorize them. We have chosen the types described above as benchmarks for this categorization because they chart an evolutionary development. As the levels rise, techniques enable the game to be played by more and more users. In the first level, traditional off-line games are played within an organization. In many cases these are traditional board games. A healthcare organization at this level sees the benefits of games and therefore plays games, but does not have the technology in-house to support this. Board games or paper-based games (e.g., traditional management games) are played off-line and without the use of technology. It is important to mention that there is nothing wrong with a board game or any other off-line game. These kinds of games have proven to be very effective, and they are still effective in many ways. In the maturity model our focus is on digital games.
In the next level “single-player” games are digital and realized through the use of technology. In this level an organization uses online single-player techniques to support its gamification strategy. A single-player game is a game where input from only one player is expected and no collaboration between other players is in place, as there are no other players who play the game in the same environment.
In the next level of maturity, an organization would use multi-player game techniques. A multi-player game is designed to let more than one player play in the same game environment at the same time. Other players in the game are real-life people: for instance, healthcare co-workers. This enhances interaction between the players. Interaction could take the form of partnership, competition or collaboration. All are relevant if you look at the real-life situation an organization and its employees are in daily. Such a multi-player game can help an organization understand the social context in which situations happen.
The fourth level is a type of group game: specific groups of people are playing the game together in a virtual environment. The Dutch Ministry of Defense, for example, is using this kind of game to train groups of a hundred or more soldiers to prepare them for their international missions.
The highest level of maturity is applicable when we talk about mass multi-player online games. These are very often web browser or console based, in which a very large number of players interact with one another within a virtual game world. The most famous and popular pure entertainment MMO-RPG game is “World of Warcraft,” with more than 8 million players. In an MMO game the players are all real people who interact in the online game environment. Mass multi-player online games are distinguished from single-player and multi-player games by the number of players. When the player is offline the game environment still exists, and it evolves as other game players continue to play in the online environment. The development of an MMO-game is very time-consuming and, in many cases, expensive. Massive multi-player online games are building the ultimate collaboration. They can also generate insights by making use of the behavior of real-life people who play the game. Such a game could, for instance, be used to test a new healthcare campaign to prevent obesity. This type of game enables healthcare organizations to experiment with new strategies in a close-to-real-life setting. Promoting collaboration can result in new and innovative solutions to problems. “Very big games represent the future of collaboration. They are the best solution we have for solving the most complex problems of our time. They are giving more people than ever before in human history the opportunity to do work that really matters, and to participate directly in changing the whole world” (McGonigal, 2011).

Case studies

There are many examples of applied games in healthcare. For the sake of this article we have picked two examples to demonstrate the strength of the Game Maturity Model in the healthcare domain:

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Figure 3 abcdeSIM [Click on the image for a larger image]

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Figure 4 Geriatrix [Click on the image for a larger image]

  abcdeSIM by Erasmus University Medical Centre (2012) Geriatrix by Radboud University (2013)
Perspective The goal behind the development of the abcdeSIM emergency medical simulation program is to increase patient safety by providing students and healthcare professionals with a safe learning environment where they can practice emergency medical skills without any risk to patient health. AbcdeSIM is based on a high-fidelity physiological model that contains more than 200 parameters for circulation, respiration and consciousness. This model creates a very realistic and immersive experience in which the trainees can see the direct results of their chosen diagnostics and treatment. In this game medical students practice providing care to elderly patients. Complex medical reasoning is taught to the students by putting them in a situation where they are the “real” doctors. Students are shown patient cases and have to choose what steps to take. Students are given points based on three factors: patient preferences, costs and medical usefulness.
Value The game is ranked at the levels both of “purpose” and “healthcare profit.” abcdeSIM increases the knowledge and skills of emergency medicine through simulation of various types of acute injuries while at the same time taking the risk of errors involved in real-life cases out of the equation. Moving beyond achieving its institutional purpose, abcdeSIM also reduces the cost of training by partially replacing lengthy face-to-face training sessions with virtual training online, which does not require instructors. Preliminary research results show improved emergency skills among the trainees. The game can be categorized at the level of “purpose” as the students learn reasoning that is hard to learn out of a book. In a book, students learn the medical protocol, but in the game ethical choices are also important. The game can develop these behaviors. Furthermore, the game can be categorized within the category “pleasure” as the game makes the course of elder care more fun.
Process Gaming is “optimized” within the Erasmus University Medical Centre. A spin-off company has been created to manage the development and usage of applied games both within the hospital and by third parties. The game is continuously improved by introducing additional patient scenarios. The usage of applied games influences the training process positively by reducing time and financial expenses Currently the game is still played on an ad hoc basis. The students play three cases in one course, but do not use this game during other courses in medical school. The game does give students a platform where they can add their own developed patient cases. This platform could be used by other medical school curricula as well. The basics could be easily copied. The goal is to make a licensing system behind the game for others to use.
Coverage The scope of coverage is wide, encompassing the entire ecosystem. Over 1,000 doctors in The Netherlands are currently using the abcdeSIM game. At the moment, abcdeSIM is being introduced abroad with contracts in medical institutions in two other countries. Erasmus University Medical Centre is investigating the introduction of applied gaming outside the domain of acute healthcare, in various other academic fields at Erasmus University. The game is limited in its scope of coverage, limited to the geriatric care program of Radboud University. Around 200-300 students play the game each year. There is potential for greater coverage throughout this and other healthcare institutions or even throughout the larger ecosystem, as the game can be easily copied to other courses at Radboud or other universities.
Type The game uses single-player techniques and some multi-player features. The simulated treatments are single-player challenges. However, game competitions have been held at four academic conferences between doctors and nurses, which is a multi-player characteristic. These competitions were very engaging and enjoyed by the players. The game uses single-player techniques. Each student plays the game in a solitary environment and cannot affect the games played by other users. There are no real plans to change this at this time. The first goal is to implement the game at other universities and in other courses, so as to change the way students think and behave.

Conclusion

In implementing games in a healthcare environment, the Game Maturity Model proves to be an excellent tool. It links the vision and strategic plan into concrete objectives for applying gamification in healthcare situations and processes. In our opinion these objectives must be organized along the lines of the four different perspectives: value, process, coverage and type.

The essence of applying games in organizations is to follow calculated steps that correspond to the growth in the organization’s maturity. As an organization becomes more mature, the maturity levels go up and a better equilibrium is established between the different perspectives. In addition, the integration throughout the organization as a whole becomes clear. Healthcare institutions are ideally suited to maximize healthcare training and delivery with the use of gamification, like the abcdeSIM case study shows.

During the first growth level, gamification is managed in the short-term, mostly by individual front runners. In the second and third levels, more emphasis is placed on the strategy of how to apply games specific to a healthcare institution. The focus, however, will be internally driven. The relationship between the different perspectives (value, process, coverage and type) are not in place in the lower levels. In level four, the focus on the different perspectives is tight and predominantly externally driven. In level five, there is a genuine balance between the different perspectives, with the cause-and-effect relationships being included in management on a structural basis. Also, there are safeguards to ensure that the Game Maturity Levels are linking up to the healthcare strategy and to the ecosystem of healthcare delivery as a whole.

Practice has shown that the maturity of an organization is indeed a determining factor for the way in which gamification develops. It can provide good support to managers, doctors and healthcare workers, to help them make better, more insightful decisions for achieving care objectives.

To conclude this article, we list a number of “do’s and don’ts” in implementing the Game Maturity Model:

Implementation Game Maturity Model  
Do’s Don’ts
  1. Is the Game Maturity Model in line with the organizational strategy:
    Use the Game Maturity Model as a platform for implementing the game strategy (ensure alignment with strategic and operational plans). Avoid the perception that the Game Maturity Model is a control instrument. The results must be oriented towards the future and not towards the past.
  2. Secure sufficient commitment:
    All stakeholders must be involved in the use of the Game Maturity Model. A model that is purely conceived from the perspective of some enthusiastic individuals will have only limited added value. The Game Maturity Model should be embraced by all stakeholders. Ideally, top management must fully endorse the ideas behind this model and the goals of applying games in a healthcare context. It would be best if gamification objectives and norms were connected to the individual aims of healthcare workers and doctors.
  3. Adjust the Game Maturity Model to the maturity of the organization:
    not every organization must seek to develop each of the four different perspectives and strive to reach level four or five. To ensure successful application, the content of the Game Maturity Model must be in balance with the strategy of the organization. Naturally, the costs of applying games must also be weighed against the added value.
  1. Do not strive for too much perfection from the beginning:
    Not all aspects of gamification can be measured quantitatively (not everything can be calculated exactly). Even when using the Game Maturity Model, interpretation and estimates remain necessary. Try to combine different game initiatives that are already used within the organization.
  2. Do not strive to achieve too many levels and perspectives:
    Restrict attention to the relevant levels and focus, as a start, on the value perspective. It is not difficult to imagine many ways to apply games in your organization. A lack of focus is often labor-intensive, complex and not effective. Also avoid the situation in which attention becomes too focused on technical issues of gamification and the larger aims are forgotten. Use and apply games, while continually evaluating what works well for your organization.
  3. Do not underestimate the efforts and costs of applying games:
    For many people, applying games in a healthcare context is new. This includes healthcare workers but also patients. Also, people are used to playing well-developed entertainment games at home. Therefore do not start with developing a multi-million-dollar, mass media game. Start small, and make use of the games and the knowledge available in the market. Always make a good cost/benefit analysis before you invest.

It will be clear to the reader that applying games in a healthcare context is not a one-off event. We believe that the Game Maturity Model can be genuinely used as a start and as a model for ongoing reference. We truly believe that healthcare institutions can no longer afford to see games as an activity limited to leisure time or that is something for kids. Games are dominant throughout our lives and they can often lead us to new forms of collaboration and innovation. As mentioned in the book Reality is Broken, How Games Make Us Better and How They Can Change the World, the real challenge for us today is how to integrate games more closely into our everyday lives, and how to embrace them as a platform for collaboration on our most important efforts. We as authors of this article believe that healthcare opportunities are immense, and that now is the time to take applied games seriously.

Literature

abcdeSIM (2012). “Applied games for healthcare professionals.” http://www.abcdesim.nl

Boer, J. de, A. Geert & P. Adriani, “Game Maturity Model.” Compact Magazine, 2013.

Coonradt, C. A. & L. Nelson (1985). The Game of Work: How to Enjoy Work as Much as Play. 1st ed. Deseret Book.

Defensie (2013). http://www.defensie.nl/actueel/nieuws/2013/04/12/46204671/Wereldwijde_training_via_Serious_Gaming

Hsieh, T. (2010). Delivering Happiness: A Path to Profits, Passion, and Purpose. New York: Business Plus.

KLM (2013). “The KLM Game.” http://game.klm.com/

Lee, J., D. Lee & S. Kang (2007). “An Overview of the Business Process Maturity Model (BPMM).” In Advances in Web and Network Technologies, and Information Management. Pp. 384-395. Springer Berlin Heidelberg.

McGonigal, J. (2011). Reality is Broken: Why Games Make Us Better and How They Can Change the World. New York: Penguin Press.

PWC, Global entertainment and media outlook 2013.

Reeves, B. & J. Leighton Read (2009). Total Engagement: Using Games and Virtual Worlds to Change the Way People Work and Businesses Compete. Harvard Business Press. 

Team, C. P. (2002). Capability Maturity Model® Integration (CMMI SM), Version 1.1. Software Engineering Institute, Carnegie Mellon University/SEI-2002-TR-012. Pittsburgh, PA.

Wikipedia (2013). “Gamification.” http://en.wikipedia.org/wiki/Gamification

The fast changing learning landscape

The world is facing unprecedent disruptions such as the COVID-19 pandemic, the energy crisis, increasing labor market shortages, and AI revolutions such as ChatGTP. Disruptions that have a lasting impact on the way we work – and will continue to do so in the future. There is a growing urgency for Learning & Development (L&D) professionals to address these challenges and navigate their workforce through uncertain times.

Introduction

KPMG’s previous research (2020) reported a shift toward a learning ecosystem perspective, taking a more holistic approach on learning as part of the overall business strategy. The report showed that in order to create an effective learning ecosystem (see Figure 1), L&D professionals should be able to provide “the right learning, at the right time, in the right format”, and deliver “highly curated, customized learning experiences” for employees. As such, L&D professionals play a pivotal role in contributing to “a culture of learning throughout the organization”.

With our world continuously and rapidly changing, we see the “people agenda” in organizations becoming more important than ever before. We also notice that L&D is highly contextualized in terms of geographies, cultures, market sectors, and the size of organizations. At KPMG Netherlands, we are particularly interested in what this means for the Dutch context – how learning is organized in Dutch organizations and how these organizations address the unprecedented challenges of today.

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Figure 1. The learning ecosystem ([KPMG20]). [Click on the image for a larger image]

Market research 2023

The whitepaper this article is based on (see [KPMG23]), addresses the experiences and challenges of L&D professionals in a wide range of organizations and provides insights in their unique differences. Through interviews with 36 L&D professionals from 29 organizations – ranging from public to private organizations, and from scale-ups to large multinationals based in the Netherlands – we identified five overarching challenges that L&D professionals are facing today.

The following overarching research questions guided our market research:

  1. What challenges do L&D professionals experience and how do they address these challenges?
  2. To what extent does context (in particular market sector and size of the organization) play a role in how L&D is organized in organizations?

Major learning challenges in 2023

Although each organization has its own unique Learning challenges related to their specific context, five overarching challenges were repeatedly mentioned by the interviewees. We stress that some of these challenges are not new and already mentioned in various L&D trend reports. Yet, we also see how every unique context is faced with its own challenges.

Technology as an enabler for learning

Most of the learning challenges that organizations face today are related to rapid technological change and an increasing dependence on technology. As a result of AI and related technologies, organizations have the ability to perform advanced analytics that can drive skill development of employees and lead to better organizational performance.

The participants in this market research1 state that the use of advanced learning technology could enhance a more tailored learning offer to each learner, focusing on the skills they need now and in the future. The L&D professionals see potential for technology as an enabler for learning in the flow of work, making learning a seamless endeavor. In addition, advanced use of data allows for better business reporting, which could support L&D professionals in demonstrating the added value of learning to the business.

Despite the possibilities technology has to offer, L&D professionals are challenged to fully utilize these opportunities and bring them from paper to practice. This technology challenge can be seen as an overarching challenge as it directly links to the various challenges we will address in the following sections.

1 Being a strategic partner of the business

Learning receives increasing attention in organizations and the L&D professionals argue that continuous learning is a prerequisite for a future-proof organization. This is reflected by growing L&D functions in organizations, the presence of learning leaders in the board (CLOs), and the exponential market spending on digital learning platforms.

Given the current disruptive environment, most L&D professionals stress their strategic role in terms of envisioning where the organization wants to be in a few years’ time and identifying the skills required to enable this vision. As such, L&D professionals increasingly becoming sparring partners for the business, engaging in discussions and steering the strategic direction of the organization in relation to the people agenda. However, despite this positive trend for L&D professionals, fulfilling this strategic role is often experienced as a challenge, especially when L&D is not represented in the board (by a CLO or L&D director).

Some L&D professionals argue that becoming a strategic partner of the business requires a shift in their role: from a predominantly operational role –focusing on delivering and coordinating learning offerings –to a strategic role in which they guide the people agenda in their organization and align their L&D offerings with the business needs. This means that L&D professionals need to continuously work on their own professional development as well.

A visionary yet hands-on L&D leader is necessary to realize this shift. According to the L&D professionals, this is someone who:

  1. is aware of the strategic direction and how the business operates;
  2. knows how employees learn and what is necessary to gain insight in the required skills and learning needs;
  3. knows how to use learning analytics to translate data into concrete learning interventions and output;
  4. knows how to communicate the importance of continuous learning throughout the organization;
  5. drives innovation and who is able to realize a culture shift in the organization if this is required.

2 Attracting and retaining talent

The effects of the current tight labor market in the Netherlands are impacting most organizations. The labor market shortage is partly a result of an aging population and – according to the L&D professionals – partly a result of a skills mismatch. This particularly applies to sectors where certain skills (such as technical skills) are essential but hard to find, or where employees lack the necessary skills to perform their jobs effectively. This skills mismatch refers to a discrepancy between the current skills of employees and what organizations are looking for.

Attracting and retaining talent is often perceived as a recruiting and HR responsibility. However, the L&D professionals argue that this becomes increasingly important for L&D functions as well. Previous research (e.g., Gartner, 2022) has shown that a lack of career development and opportunities to learn are main reasons for employees to resign.

Therefore, the L&D professionals stress that they have an important role in employer branding and offering plenty of learning opportunities. This contributes to the attractiveness of the organization and enables employees to stay motivated, innovative and vital. However, this is not an easy process and requires a good understanding of the learning needs of (future) employees and how these needs can be aligned with the business needs.

Attracting and retaining talent is a challenge for the L&D profesisonials as they:

  1. struggle to create a learning culture where all employees want to be part of;
  2. they often do not have the tools to focus on employer branding or don’t know how to set this up;
  3. are faced with new generations of employees who tend to have a higher job mobility;
  4. find it difficult to provide a balanced and tailored set of personalized, formal, informal and social learning;
  5. do not always have the right systems in place to systematically collect data about the learning needs.

3 Reskilling and upskilling the workforce

The role of L&D professionals is increasingly concerned with making data-informed predictions about the skills their employees will need in the (near) future, assessing the current skills employees possess, and bridging the skills gap. Although a skills gap analysis is something that was repeatedly mentioned by the L&D professionals as a conditional step before deciding which L&D offerings to bring forward, conducting such an analysis is perceived as extremely challenging. This challenge entails more than using the right data and systems to gain a comprehensive understanding of the required skills at present, but also requires predictive analysis of future skills required.

To determine the future skills, some L&D professionals have started building skills frameworks or taxonomies in that integrate both current and future required skills. Other organizations are making the shift to become a skills-based organization.2 Regardless of the progress made by each organization, the majority of L&D professionals argue that this is a highly complex and challenging journey. One of the L&D professionals framed this as a transition to a new learning ecosystem that requires a fundamentally different perspective on L&D.

A prerequisite for closing the skills gap is for L&D professionals to truly understand the business and direction in which their organization is heading. This is not a “one shot” analysis that they can conduct on their own. On the contrary, it is an ongoing process as the business strategy is continuously changing as well.

Reskilling and upskilling is a challenge for the L&D professional as:

  1. they do not always fully understand the business and where their organization is heading toward;
  2. they do not have the right (digitally supported) instruments to conduct a skills gap analysis;
  3. they find it difficult to close the skills gap with suitable and personalized L&D offerings;
  4. there is a lack of a good definition of “skills”, which is necessary to determine how to address these skill gaps;
  5. reskilling and upskilling is a continuous process that requires times, resources, and commitment.

4 Creating a learning organization

Although L&D is taken more seriously in the organizations of the L&D professionals, there are large differences between organizations in terms of the extent to which learning is ingrained in the organizational culture. In some organizations, learning is perceived as something you have to do “to check boxes” (e.g., compliance and mandatory for career advancement), whereas in other organizations, a shift in mindset is observed from a more traditional view of learning (“follow courses to check boxes”) to a holistic view of learning (“learning happens every day, either formally or informally”).

However, changing the organization to a learning organization is a difficult and time-consuming process. Most of the L&D professionals argue that to create a learning organization, it is important to facilitate learning in the flow of work and focus on inclusion. This involves integrating learning in the daily work of employees and ensuring that knowledge is available and easily accessible when employees need it. One L&D professional expresses the ambition to make the L&D function invisible in the coming years, so that learning becomes fully integrated in the daily work of employees.

Creating a learning organization requires learning to be encouraged, facilitated, and crafted to the learner’s needs, rather than being imposed by the manager. L&D professionals realize that creating a learning organization is largely depending on good leadership throughout the organization. Yet, they experience that leaders do not always have the necessary skills and mindsets to take on this important role.

Creating a learning organization is a challenge for the L&D professionals as:

  1. learning is still often perceived by employees as mandatory trainings for compliance purposes;
  2. it relies on many elements such as motivation, mindset, leadership, a shared language, and resources;
  3. learning can not be imposed by managers or L&D professionals, but should be facilitated and encouraged;
  4. a learning organization is not a fixed “thing”, but requires continuous attention and encouragement;
  5. it depends heavily on leadership throughout the organization who are not always aware of its benefits.

5 Collaborating across organizations

Whereas the majority of L&D professionals work in an internal role focusing on the L&D offerings for employees in their organization, some L&D professionals stress the need to work across the boundaries of their organizations. This, for instance, is mentioned by L&D professionals who work in sectors with high labor market shortages such as the context of high tech, the energy transition or large public organizations. L&D professionals who work in these sectors argue that they are not able to address the challenges around attracting and retaining talent on their own.

This requires a regional approach where companies work closely together with universities and vocational schools. This, for example, is done to promote technical education and allows students to experience what it is like to work in a technical company. However, setting up and managing such an inter-organizational governance is extremely difficult, as organizations have different interests and different ways of working.

For L&D professionals, this is a challenge as they increasingly have to operate as a linking pin between business and education. They also have to consider employer branding and, in some cases, develop materials and courses for different target groups other than their own employees. This role of being a linking pin is sometimes allocated to a program manager who is not part of the L&D function, whereas this role requires close alignment with the L&D function.

Collaborating across organizations is a challenge for the L&D professionals as:

  1. they have to deal with different organizational interests and ways of working;
  2. they have to act as a linking pin between their own and other organizations, which is highly complex;
  3. there is often no formal leader since multiple organizations and leaders are involved;
  4. it is often not clear how these collaborations impact the learning of employees within one organization;
  5. a change of leadership in one organization can immediately impact the inter-organizational collaboration.

The importance of the context in L&D

As it becomes clear in the previous examples, context matters when it comes to learning. The L&D professionals argue that large companies have their own learning academies and have access to advanced and expensive learning platforms (e.g., LMS/LXP), whereas small companies often not even have an L&D function. In addition, a CLO role becomes more common in large organizations whereas small companies generally have one person responsible for all HR processes, including L&D. As a result, L&D professionals who are part of large organizations face different challenges than L&D professionals in small(er) organizations.

In small organizations, learning is often outsourced, whereas learning academies in large organization can develop their own L&D offerings tailored to the needs of their employees. It is argued that this leads to a situation where learning is small organizations requires more coordinating tasks, while learning in large organizations increasingly requires a strategic role. This makes it more difficult for small organizations to create a learning culture.

Other differences are found between sectors. For example, the (high) tech and energy sector as well as public organizations experience tremendous challenges with attracting and retaining employees, whereas in other sectors this is less of an issue. For L&D professionals, this impacts the predominant focus of their work: in sectors where jobs are rapidly changing due to technological disruptions, their predominant focus is on upskilling and reskilling, whereas in sectors with high shortages, the main focus is on attracting and reskilling employees.

How learning is perceived can also differ between organizations. The L&D professionals argue that in innovative sectors such as banking, L&D professionals are increasingly focused on using data and advanced systems to address the business strategy and the learner needs. In other sectors, learning is still often perceived as following mandatory trainings for compliance purposes or learning is largely outsourced. This has a tremendous impact on the work of L&D professionals.

Market research approach

Organizations

As we aim to get a good understanding of what the current learning landscape looks like in the Netherlands, we approached a large variety or organizations from our own network.

This resulted in interviews with 36 experienced professionals from 29 organizations. The organizations can be divided into 18 private companies (12 operating in multiple countries) and 11 (semi-) public organizations (universities, research institutes, (local) governments and public-private partnerships).

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Figure 2. Market research participant distribution. [Click on the image for a larger image]

Participants

The majority of the interviewees have an internal leadership role in the L&D or HR function of their organization. This could be a local or global role (e.g., Head of Talent and Leadership Development, Global head of Talent and Learning, HR director). We also interviewed CEOs working in learning companies, researchers, a Sales Director and program managers focusing on public-private collaboration, all working in the context of L&D. Given this variety in the sample, the interviews could be either focused on the interviewees’ own organizations or more on a aggregated level (i.e., what trends do they see in other organizations).

Interviews

We conducted semi-structured interviews focusing on the major challenges organizations face and how these challenges are addressed. We also focused on context-specific differences between the organizations, such as the size of the organization or the market sector in which they operate. We analyzed and compared the interview results which allowed us to extract main challenges from the interviews. All interviewees were given the opportunity to give feedback on a concept version of the whitepaper.

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Figure 3. Participants’ roles. [Click on the image for a larger image]

Participating organizations

For an overview of the participating organizations, see: The Learning Landscape in 2023.

Conclusion

The learning landscape is rapidly changing due to technological and societal developments. In this article we highlighted the major challenges that we see in the Learning & Development (L&D) field based on market research that KPMG conducted in 2023. These challenges relate to the increasing strategic role of L&D professionals, attracting and retaining talent, reskilling and upskilling the workforce, creating a learning organization and collaborating across organizations. Despite large differences between organizations in terms of their L&D maturity and how they address these challenges, all organizations emphasize the need of having good supportive L&D systems.

Notes

  1. We refer to the participants in our market research as “the L&D professionals”.
  2. Dr. Joost van Genabeek and dr. Paul Preenen, who we interviewed, give more in-depth insights about skills-based organizations/labor market at https://symbus.nl/tno-podcastserie-skills-based-arbeidsmarkt/.

References

[KPMG20] KPMG LLP (2020). The Future of Learning. Cultivating an innovative learning experience for the modern worker.

[KPMG23] KPMG Netherlands (2023). The Learning Landscape in 2023. Whitepaper KPMG Netherlands. Retrieved from: https://kpmg.com/nl/en/home/insights/2023/05/the-learning-landscape-in-2023.html

Transforming the workplace: an evolutionary perspective of human resources and technology

This article dives into the changes over the last fifty years, exploring the current trends and practices, and predicting the coming years. Highlighting the impact of technology in the field, the article guides the reader from the personnel management approach to the emergence of people analytics.

Introduction

The evolution of HR and IT: from personnel administration to people analytics

A significant evolution has been happening in human resources and processes included in the employee lifecycle such as recruitment and selection, onboarding, training and development, performance management, compensation, and benefits. Technology is one of the key factors that accelerated the transformation of this field.

With an initial focus on personnel administration, record-keeping, payroll processing, and administrative tasks, human resources has evolved and developed into a more mature area that provides employees with much more than just a salary.

Based on a study by [Ongo08], technology has been the platform that enabled the change from administrative tasks to a focus on strategic planning and decision-making. The introduction of Human Resources Information Systems (HRIS) has been a game changer, expanding the approach to employee data with its detailed records and processes, and understanding the need to analyze it properly.

Due to talent shortage, high competition, time and resources and cost implications, one of the most affected areas is recruitment, an area that operates as a main pain point for all human resources departments. With the advancement of technology, new functionalities are now available such as online video interviews, online assessments and screening, and job postings, which not only makes human resources work easier but also enables the creation of an employer branding throughout the social platforms ([Parr11]).

Performance and development have always been a central point of attention when it comes to workforce management. According to a research report from [Smit11], the ability to collect and analyze performance data allows organizations to identify hidden talent and areas of improvement as well as provide targeted feedback. This approach supports inner growth for existing talent, a sustainable and healthy approach to improve organizations, employee experience and career development.

Recently it became clear that there is a need to go above and beyond with data analytics and do much more with the information that is gathered. Analyzing how an organization performs is one of the clearest examples, collecting performance metrics and feedback, productivity measures can lead an organization to identify high performers, recognize them and determine which factors contribute to productivity. Data analysis helps organizations to make better decisions and to measure results. Companies cannot improve and control what is not measured. Luckily, business intelligence has become part of daily activities within human resources departments, which enables a new methodology towards decision-making in every step of the employee lifecycle as information can be gathered and analyzed anytime.

From employee records to automated processes going through enhanced employee information management, improved collaboration and efficiency, using cost- and time-saving technology has been substantial and an enabler of organizational growth in the last fifty years and will continue to grow in a better, smarter, and sustainable way in the years to come.

The intersection of technology and workplace management

With a significant impact on how the business operates, as well as how employees work, the intersection of technology and workplace management has become increasingly important for human resources operations.

One of the most evident areas where this collaboration can be noticed is collaborative work, specifically remote working. The International Workplace Group has identified that 85% of businesses increased productivity standards as a consequence of providing flexibility. Stanford University delivered results on research about remote work, and the results report that compared to office-based organizations, remote culture and remote working reduces the levels of stress and increases job satisfaction ([Bloo15]).

Sophisticated methods have become mandatory for employee communication and collaboration ([Bosu18]). The use of platforms and tools such as Teams or Slack has made it easier for distributed teams across the world, supporting asynchronous work and providing a central point for the organization’s results.

Nevertheless, challenges have also appeared in the intersection of technology and human resources, mainly in terms of data privacy and security. The permanent use of technology for data gathering, collection, and analysis of employee data has become an issue to address, as it has become increasingly important for organizations, workers, and candidates. Ethical implications of the use of technology in human resources have been on the agenda for some time, [Wood19] emphasize the importance of ethical guidelines and standards that enables trust while addressing the topic of responsible use of workers’ data.

The past

Workplace management practices in the last fifty years

The combination between emerging technologies and the changes in workplace demographics has impacted significantly over the last fifty years. The focus shifted from personnel administration to a more strategic approach to managing people in organizations, which represents a major achievement.

[Pfef06] defined that evidence-based management leads to better and healthier organizations, improving performance and decision-making. The rise of evidence-based management practices is undeniable and represents one of the biggest achievements over the last fifty years in this field, as it enables the use of real information in decision making within organizations, avoiding intuition, bias or personal opinions. One of the biggest examples includes personnel changes. Some years ago, there were no HR analytics in place. Information was not measured; therefore, organizations weren’t able to either detect or analyze high turnover rates.

Microsoft serves as a compelling case study in the transformative power of data-driven decision-making, steering the company toward resounding success. Beyond traditional human resources functions like talent acquisition and employee performance, Microsoft has harnessed data to navigate intricate territories such as diversity and inclusion, employee engagement, and the evolving landscape of remote work. In this data-driven journey, Microsoft exemplifies how organizations can seamlessly integrate data into their core operations, elevating their capacity to attract top talent, optimize workforce performance, foster inclusivity, enhance employee engagement, and adapt to the demands of an ever-evolving work environment. Microsoft’s story underscores the pivotal role data plays in propelling organizations towards excellence and innovation.

Employee well-being has been on the agenda as well, as organizations started to understand that is not only salary that keeps workers happy. Well-being includes physical and mental health toward job satisfaction, a term that is defined as activities oriented towards the work being a non-observable construct that can be measured through productivity ([Urru17]). Mental health can have a huge impact on productivity, World Health Organization found that a lack of mental health in the workplace can cost the global economy a huge amount mainly in lost productivity ([WHO17]). This is where the need for a well-being strategy – including both mental and physical health – is mandatory for any modern organization that aims to thrive.

From the workers’ side, organizations have experienced changes in the demographics of employees, mainly in terms of Diversity. Age, gender, race, sexual orientation, and neurodiversity are just some of the factors which obligate companies to approach the topic and create policies that include every worker in the organization, to achieve the major goals that drive the business. Diversity enables a creative workplace and leads to better decision-making ([Cox91]).

Human resources practices have evolved significantly in the last fifty years, shifting from a personnel management approach to an employee-centered experience, including elements such as diversity and inclusion, employee well-being, and technology as main factors that challenged, and keep challenging, the practices in the workplace.

Major milestones in HR and IT during the last fifty years

From the introduction of personal computers in the workplace to automation and artificial intelligence, innovation has transformed human resources practices in organizations. It is difficult to create an exhaustive list of all achievements in the last fifty years, so we will only focus on the major ones.

The shift from a transactional to a strategic approach is one of the most important achievements that has improved the position of human resources departments in organizations. Using data analytics as a support, HR practices have experienced a revolution since the emergence of business intelligence which enables an evidence-based decision-making process.

The need for specific talent has created what some specialists like to call a war of talent, a concept that leads close to no space for organizations to avoid a talent management strategy. From leadership development programs, employee engagement policies, and performance management strategies, companies are obligated to put this topic on the agenda, if the goal is to thrive.

Employer branding and talent management have also been a challenge, which now relies on social media strategies to attract and retain candidates and workers. On the other hand, several services have appeared where employees are able to rate the companies and write a review about organizations’ policies, salary, culture, and job satisfaction, such as Glassdoor. Transparency from both sides has become mandatory.

The role of technology in transforming human resources

Technology has played a big role in human resources. Some of the trends include new platforms to support streamlined processes, reduction of administrative tasks, and improvement of employee engagement.

One of the main examples that revolutionized the field is the adoption software, enabling employees and human resources to manage information and processes in an organized and coherent way. The impact is much more than just employee experience, it also reduces the number of administrative tasks for HR staff.

Artificial intelligence is also transforming workforce management, mainly in recruitment processes. Recruitment processes, including the attraction of new candidates, screening resumes, and scheduling interviews are just a few simple examples of the many things that new technology has to offer. IBM has implemented automated interview scheduling solutions to enhance efficiency in its hiring processes. The company uses technology to automate various aspects of candidate scheduling, such as sending interview invitations, coordinating interview panels, and managing candidate availability. This not only saves time for HR professionals but also provides a more seamless and convenient experience for job candidates.

Once again, by taking advantage of technology, companies can reduce costs, and time, and improve the quality of new hires. One clear example is predictive analysis: organizations are taking advantage of data analytics to predict employee behavior and identify issues before they occur. Predictive analytics in HR is a valuable tool widely adopted across various industries. The technology sector harnesses predictive analysis to forecast talent requirements and identify high-potential employees, improving talent acquisition and development strategies. In healthcare, predictive analytics optimizes staffing levels, ensuring healthcare facilities are adequately staffed to handle fluctuating patient volumes. In finance, predictive analytics aids in risk assessment and talent acquisition by analyzing employee performance data. The retail industry relies on predictive analytics to forecast workforce needs during peak seasons, enhancing customer service. Similarly, manufacturing utilizes predictive analysis for predicting equipment maintenance and optimizing production scheduling, thereby reducing costs and improving employee productivity.

To name another example, gamification and Virtual Reality have become mandatory for organizations that want to thrive in hiring and retaining new – mainly younger – talent. By using these tools, companies are engaging and empowering the workers, practices such as points, leaderboards, and points motivate and reward the user. Virtual Reality has also taken protagonism, as it can provide on-the-job experience without being physically present. It’s commonly used for onboarding purposes but can also be applied for recruitment. Using gamification techniques make work more interesting and enjoyable for employees, increasing motivation and productivity ([Werb12]).

By infusing gamified elements into Microsoft Learn, Microsoft transformed the learning experience. Learners can embark on their educational journeys while earning badges and accumulating points. This not only makes learning more engaging but also provides a tangible sense of achievement. The results speak volumes, with a significant increase in learner engagement and completion rates. In fact, Microsoft has reported a success rate of over 80% in terms of learners completing their courses and earning certifications when gamified elements are incorporated into the learning process.

The present

Overview of the current state of HR and IT

The integration of technology and innovation in human resources has become more than necessary and luckily, it’s been a good match for both sides. Payroll has always been the core pain point for all organizations. Now that this challenge is sorted, a new one emerges and the need to address them is undeniable. The war on talent demands organizations to keep up with a good recruitment strategy including but not limited to Applicant Tracking Systems (ATS) and onboarding platforms.

Another area that has been on the agenda is learning and development. Employees want to grow and learn, and an organization providing both will always stand out from the rest. Learning management systems are always in demand for customers who want to provide workers with good desktop and mobile platforms that help them stay updated with the latest resources.

Performance management is one of the most significant areas in human resources, as it accompanies the employee in the complete lifecycle, providing opportunities for promotions, and transfers and creating a healthy space for improvement. Supporting these processes with technology is a reality, by keeping track of goals and progress and providing feedback employees feel more engaged in the organization which has a direct positive impact on job satisfaction and productivity.

The introduction of data analytics is taking a central role, as it leverages existing data and provides insights about employee behavior, engagement levels, and overall job satisfaction, allowing organizations to make data-driven decisions about the company’s journey.

The future

Emerging technologies that will transform the workplace

The combination of new emerging technologies will enable new ways of working and change the nature of work itself. These challenges also represent a major need for organizations to adapt, stay updated, and be prepared to incorporate them into workplace management strategies. When technology and human resources merge in the future, what are possible scenarios? From automated processes, to revolutionized onboarding and learning, some of the examples include:

  • Artificial Intelligence (AI) is already used in a wide range of HR processes, such as screening resumes, conducting initial interviews, and analyzing employee engagement data to identify and predict challenges. Leading technology companies have embraced AI-driven innovations in their HR processes. Microsoft exemplifies this trend by using AI to enhance its talent acquisition efforts. Microsoft’s AI-powered chatbots assist in recruitment by managing initial candidate interactions, answering inquiries, and providing updates on application statuses. This not only streamlines the hiring process but also ensures a smoother experience for job applicants. Microsoft has reported significant success, with AI-driven HR practices leading to remarkable increases in candidate conversion rates, underscoring the positive impact of AI on talent acquisition.
  • Internet of Things (IoT) will also shift the workplace regarding employee productivity, tracking inventory, and managing energy consumption. They might look like disconnected topics but are all linked to the organization’s success. The manufacturing industry has already embraced IoT for HR practices. Companies like General Electric (GE) have implemented wearable IoT devices to enhance employee safety. These devices monitor employees’ movements and provide real-time alerts and guidance to prevent accidents in industrial settings. Additionally, IoT technology is used in smart office solutions, particularly in the tech sector, where companies like Microsoft and Cisco have developed IoT-enabled office environments. These systems adjust lighting, temperature, and workspace configurations based on employees’ preferences, fostering a more comfortable and productive workplace and showcasing the IoT’s potential for employee well-being and engagement.
  • Augmented and Virtual Reality will revolutionize the way work gets done through immersive training experiences, remote collaboration, and a unique way to create and prototype processes. As it is already happening in the aerospace and aviation industry, companies have been at the forefront of AR adoption for HR purposes utilizing AR for employee training, where technicians use AR headsets to receive real-time instructions and visual aids during complex maintenance tasks. This not only accelerates training but also improves task accuracy and safety.

These are just some of the scenarios where both worlds merge to achieve something bigger: enable a simplified and smarter way to work and support a better digital experience for organizations.

Predictions for workplace management

The future of the workplace will be shaped by combining technology and changing workforce demographics and expectations. Companies should adapt to ongoing changes and put the employee at the center. Some of the predictions for the coming years are:

  • Rise of Artificial Intelligence (AI): automating routine tasks and improving decision-making processes.
  • Importance of data analytics: as already mentioned, data analytics plays a huge part in HR practices and will continue to develop, helping organizations to identify areas of improvement.
  • Emphasis in Employee Experience (EX): creating an attractive employer branding, focusing on creating positive experiences to attract and retain employees. This topic will also include flexible work arrangements, asynchronous, and remote work.
  • Focus on Diversity, Equity, and Inclusion (DEI): it is expected to take much more space in the coming years, representing a priority for most successful organizations.
  • Remote work for the win: after the accelerated trend towards remote work, it is expected for the coming years to keep adopting a flexible workplace that fulfills every employee’s needs.

The role of human resources in the future of work

As technology pushes human resources practices forward, the need for HR staff to keep up will also be required. Workers performing HR roles will need to upskill and reskill in the necessary areas that will ensure organizational, professional, and personal success. Training programs will play a major role in the HR agenda in the coming years for workers in every area of the organization.

One area that has not been developed to the fullest is Diversity, Equity, and Inclusion (DEI), as it is one of the latest trends in the market, there are not that many organizations with guidelines to create a safer workspace for everyone regardless of gender, race, sexual orientation, and other preferences or beliefs. Developing a good strategy to conquer DEI practices will engage a diverse workforce and create a safe space for everyone to feel safe.

Employee experience is one of the concepts that emerged over the last years and some organizations are still trying to create the right environment and journey for the workforce. From managing employee engagement, providing interesting well-being programs, and creating a culture of growth, all these elements contribute to employee experience and will reduce turnover.

Conclusions

Over the last five decades, the realms of Human Resources (HR) and Information Technology (IT) have undergone remarkable transformations, reshaping the landscape of workplace management. What began as traditional personnel management has evolved into a dynamic domain driven by people analytics and data-driven decision-making. This intersection of HR and IT has become the breeding ground for innovative practices such as remote work, seamless collaboration, and sweeping digital transformations, all of which are poised to continue evolving.

The future of work stands at the precipice of profound change, guided by an array of transformative technologies. From Artificial Intelligence’s ability to automate routine tasks to machine learning’s prowess in data analysis and the Internet of Things’ power to connect the digital and physical worlds, these innovations are redefining roles, jobs, and entire organizations. The evolving workplace demands a commitment to adaptation and the development of new skills, with digital literacy, data analysis, and strategic thinking emerging as non-negotiable competencies.

Among this transformative landscape, the role of HR remains pivotal. It transcends traditional boundaries and focuses on complex and vital aspects such as Diversity, Equity, and Inclusion, shaping not only the workforce but also the ethos of organizations. This vision of the future workplace isn’t a distant dream; it’s a reality that we’re actively shaping today.

This vision aligns closely with the forward-thinking ethos embodied by KPMG. In collaboration with our clients, we are dedicated to helping them not only anticipate but visualize the future that awaits them in the coming years. It’s not merely about thriving in this transformative era; it’s about flourishing and embracing change as a catalyst for progress. As the future of work unfolds, the partnership between HR, IT, and KPMG paves the way for a future that is innovative, inclusive, and full of possibilities. Together, we are co-architects of a tomorrow that transcends boundaries and redefines success.

References

[Bloo15] Bloom, N., Liang, J., Roberts, J., & Ying, Z. J. (2015). Does working from home work? Evidence from a Chinese experiment. The Quarterly Journal of Economics, 130(1), 165-218.

[Bosu18] Bosua, R., Venkitachalam, K., & Lechner, U. (2018). Collaboration in the digital workplace: A review and synthesis of the literature. Journal of Information Technology, 33(3), 233-250.

[Cox91] Cox, T., Lobel, S. A., & McLeod, P. L. (1991). Effects of ethnic group cultural differences on cooperative and competitive behavior on a group task. Academy of Management Journal, 34(4), 827-847.

[Ongo08] Ongori, H. & Agolla, J. E. (2008). The impact of technology on HRM practices: A review of literature. Journal of Human Resource Management, 6(1), 26-33.

[Parr11] Parry, E. & Tyson, S. (2011). An analysis of the use and success of online recruitment methods in the UK. Human Resource Management Journal, 21(3), 249-266.

[Pfef06] Pfeffer, J. & Sutton, R. I. (2006). Evidence-based management. Harvard Business Review, 84(1), 62-74.

[Smit11] Smither, J. W., London, M., & Reilly, R. R. (2011). Introduction to performance management: History, evolution, and applications. In J. W. Smither & M. London (Eds.), Performance management: Putting research into action (pp. 1-22). John Wiley and Sons.

[Urru17] Urrutia, A. I. (2017). Clima Organizacional y Satisfacción Laboral. Estudio de un caso. Proyecto de Evaluación final de la Carrera. Departamento de Psicología Social y Organizacional, Universidad de Montevideo, Uruguay.

[Werb12] Werbach, K. & Hunter, D. (2012). For the Win: How Game Thinking Can Revolutionize Your Business. Wharton Digital Press.

[WHO17] World Health Organization. (2017). Mental health at work. Retrieved from https://www.who.int/news-room/fact-sheets/detail/mental-health-at-work

[Wood19] Wood, G. & Pirola-Merlo, A. (2019). Technology and human resource management: Ethical considerations in a digital era. Human Resource Management Review, 29(4), 385-398.

Measuring circularity: how to gain insights with Circular Transition Indicators

An emerging regulatory and reporting environment is increasingly forcing companies to integrate circular economy. This process poses both challenges and opportunities. The Circular Transition Indicators (CTI) gives companies an opportunity to measure their circular performance, enabling strategic choices and alignment with reporting requirements.

See also Compact 2022/1 “ESG & GRC: how to maneuver?”.

Introduction

Circular economy has emerged as a strategic lens to operationalize sustainability ambitions. In our current economic system, linear production methods of “take-make-dispose” are still prevailing ([Kirc17]). The circular economy is an economic model combining three principles: eliminating waste and pollution, retaining the value of circulating resources, and regenerative nature by design ([EMF22]). The 2022 Circularity Gap Report showed that the world is only 8.6% circular ([CiEc22]) which is insufficient to maintain a livable and thriving world.

To address the need for action, policy makers have reacted by pulling out the carrot and waving the stick, increasing the pressure on companies to incorporate circular principles but also to transparently show progress to the world. Emerging regulatory developments and directives create both challenges and opportunities for businesses, for example through the European Green Deal. We have arrived at the point where it is time for companies to develop a clear circular economy strategy to turn these compliance risks into new opportunities.

Transitioning towards circularity is not a simple task. Not only do companies need to develop and set circular economy targets; they also need a metric system that supports the reporting and decision-making processes. In 2018, KPMG and World Business Council for Sustainable Development (WBCSD) collaborated to develop the Circular Transition Indicator (CTI) framework, a circular metric framework developed with businesses and for businesses. This was an answer to a need for more uniform definitions and a consistent way of measuring circular performance. This development already started before the larger and speedier uptake of circular economy related regulations began. In this article, an overview of regulatory developments relevant to the circular economy is provided, together with details on the mechanism and benefits of the CTI framework.

Definition of circular economy

The circular economy is an economic model that is regenerative by design.

The goal is to retain the value of the circulating resources, products, parts and materials by creating a system with innovative business models that allow for renewability, long life, optimal (re)use, refurbishment, remanufacturing, recycling and biodegradation.

By applying these principles, organizations can collaborate to design out waste, increase material resource productivity and maintain resource use within planetary boundaries ([WBCS22]).

Embedding circular economy in business is becoming the new necessity through emerging regulatory trends

In December 2019, the EU announced its ambition to become climate neutral by 2050. To reach this ambition, the EU has mapped out a variety of policy initiatives which provide a clear message to industries to transition towards a circular economy. These initiatives have led to the development of new regulations of reporting standards, directives on resource efficiency and fiscal incentives and funding opportunities for circular innovations. See Table 1 for an overview of some of the key ESG reporting standards, directive & tax measures and investment programs. Hence, constant regulatory pressures and decarbonization challenges are increasingly driving companies to consider incorporating circularity into their operation on a greater scale.

Stringent disclosure requirements on material use are on the horizon

Increased attention towards ESG performance via more stringent reporting requirements and regulations has resulted in societal and corporate awareness to be at an all-time high. Due to new regulatory developments, circular economy is becoming mandatory disclosure for companies. The upcoming European Corporate Sustainability Reporting Directive (CSRD) will amend the current Non-Financial Reporting Directive (NFRD). This amendment has made “resource use and circular economy” one of the key reporting topics and classified as “likely to be material” for all reporting entities ([EFRA22]). This regulation will apply to all large public interest entities (PIEs) subject to NFRD, all large companies meeting at least two out of the three criteria: 250 employees, €40 million turnover, and €20 million total assets. The scope also includes listed SMEs and non-European companies which generate €150 million turnover and have at least one subsidiary or branch in the EU.1 Another regulation being developed in tandem with, and a requirement under the CSRD is the EU Taxonomy, a classification system for defining sustainable economic activities ([EuCo22a]). The EU Taxonomy is based on six environmental objectives that an activity can contribute to, including “the transition to a circular economy”. Next to a quickly changing regulatory environment for circularity, major reporting frameworks are following suit. This is for instance the case for the Global Reporting Initiative (GRI) that recently updated its reporting standard on waste via GRI 306 which requires companies to disclose their waste management ([GRI21]). Additionally, there are efforts to further standardize circular economy practices. A representative example is the ongoing development of ISO TC/323, a new ISO standard aimed at establishing internationally agreed frameworks for implementing circular economy practices. These developments build the case for companies to address circularity through measurement ([Issa18]).

Circularity is the missing piece of the puzzle of decarbonization

Circular economy is being recognized as an essential piece in the global quest for decarbonization. With global climate targets and the European 2050 net-zero commitment, institutions and companies are desperately looking for ways to decarbonize their current economic activities. While today’s emission reduction efforts mainly focus on energy transition and energy efficiency measures, these approaches pose two potential challenges. First, moving towards renewable energy systems will significantly increase the demand of relevant materials. The pace at which energy transition enabling resources need to become available to meet the 2 °C scenario will require circular solutions ([HEAD21]). Second, although such approaches can reduce emissions that are related to energy use, a 45% segment of total emissions remains that are associated with producing goods, as indicated in Figure 1. It is estimated that by applying circular economy strategies, almost half of the remaining emissions associated with production of goods can be avoided ([EMF19]). These estimates do not take into account developing insights, which show that the proportion of emissions related to material use is even higher ([CiEc22]). At the same time, tax levied on embodied carbon will become more stringent according to EU’s upcoming regulation on Carbon Border Adjustment Mechanism (CBAM). As additional tax will be applied for a range of imported goods to reflect their carbon content, companies need to put in extra efforts to build a more circular and domestic supply chain.

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Figure 1. Total emissions breakdown and emissions reduction potential of circular economy strategies (source: Ellen MacArthur Foundation). [Click on the image for a larger image]

Emerging regulations are addressing waste and there are vast opportunities for frontrunners

The Circular Economy Action Plan was drawn up as one of the main pillars of the European Green Deal. Detailing 35 action plans across eight policy areas, the initiative has been a fuel that drives the development of directives that push the circular transition forward.

Examples include directives to significantly reduce waste, such as the Single Use Plastics Directive. The directive prohibits the use of single-use plastic products that can be easily substituted and sets clear targets for the collection and incorporation of recycled content. Similarly, the Waste and Packaging Waste Directive follows, which sets targets for the % of waste and waste per material that should be recyclable ([EuCo22b]). It also stipulates clear % recycling targets for packaging materials. A tax scheme on plastics has been introduced to further such efforts. Under the Plastic Tax, Member States need to make a contribution to the EU budget based on the amount of their non-recycled plastic packaging waste. Each Member State has autonomy in how it wishes to impose the tax, however it is up to companies in finding ways to address additional financial burden. Efforts to minimize waste are ongoing in other sectors as well, for example a directive for Waste from Electrical and Electronic Equipment (WEEE) ([EuCo22d]). The WEEE Directive, with recent updates, requires companies to ensure responsible e-waste disposal and efficient recovery and recycling of valuable materials.

Another part of directives focuses on the lifetime extension of products. Right to Repair is a movement which is gaining traction and local regulations have emerged to make retailers and producers responsible beyond the point of sale. Right to Repair Directive of the EU ensures that the repair is possible during and after the legal guarantee, and that the right is ensured for consumers to repair products themselves. A proposal for new Ecodesign for Sustainable Products Directive was presented in March, which will broaden the scope of existing Ecodesign Directive and address various sustainability and circularity aspects of products. This will include requirements on product durability, reusability, upgradability and reparability.

The uncertainty posed by a developing regulatory landscape can be burdensome on companies. However, the increasing awareness of policy makers does not only pose compliance risk to companies but offers clear opportunities for those that take active steps towards improving. Funds to finance the green deal will be mobilized through the EU’s long-term budget Multiannual Financial Framework (MFF), coupled with NextGenerationEU (NGEU) the temporary instrument designed to boost the recovery. With a value of €2.018 trillion in current prices, this will constitute one of the most significant stimulus packages ever in Europe. The aim is to strengthen a post-COVID-19 Europe ([EuCo22c]). Next to improving the future of Europe, these developments create a clear business case for circularity.

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Table 1. Regulatory developments in Europe relevant to circular economy. [Click on the image for a larger image]

While such initiatives drive companies to put circularity higher on the agenda, the adverse effects of recent supply chain disruptions make that companies even further realize the benefits of implementing circular economy strategies. The supply of resources can face unpredictable disruptions in their supply chain due to a variety of factors, such as geopolitical issues, natural disasters and disease. The ongoing global supply chain disruptions during the COVID pandemic is an evident example of this. These risks become highly relevant to critical materials which are common and crucial ingredients for strategic technologies such as renewables, e-mobility, and ICT. Often, these materials only have few supplier countries and hold high economic value, increasing the impact of potential risks. Acknowledging these supply risks, companies can benefit from incorporating circular economy strategies to build a more resilient supply chain.

Witnessing the clear benefits, more companies are gearing up to incorporate circularity into existing business models. Along with the trend, the demand for measuring and tracking companies’ circular progress emerged. As an answer to the demand, the Circular Transition Indicators (CTI), a circular metric framework was developed by WBCSD with the support of KPMG in 2018. The framework has been updated on a regular basis since its initial introduction, with CTI version 3.0 launched in May 2022. The framework is developed with a large number of companies across different sectors with the aim to provide a comprehensive, consistent methodology for circular performance measurement and insight for improvement.

Through CTI, companies can lay the foundation for a clear metric to track circular progress

CTI allows companies across all sectors and industries to measure their circular performance in a consistent way, giving insights into their capability to optimize resource use and reduce waste generation. Within the framework, the inflow and outflow of a company are assessed for circularity and the result depends on three key intervention points: circular inflow, recovery potential, and actual recovery as shown in Figure 2. The circular inflow indicates the circularity of sourced resources, materials, and products, for example because these are non-virgin (secondary) or renewable (biobased and sustainably grown). The recovery potential shows to what extent the company designs its products to ensure the recovery of the components and materials. For non-manufacturing companies this can be assessed based on supplier information. Lastly, the actual recovery implies how much of the outflow is collected and recovered in practice. Together, these intervention points provide insights necessary for a circular transition to different parts of business. Circular inflow provides insight for procurement; potential recovery can inspire design innovations such as design for disassembly or biodegradability. Information on the actual recovery can motivate business model innovation and drive new partnerships that incentivize return logistics and recovery.

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Figure 2. Illustration of material flows used in CTI. [Click on the image for a larger image]

CTI provides four modules of indicators for extensive insights

CTI 2.0 had three modules consisting of a set of indicators: Close the Loop, Optimize the Loop and Value the Loop. In May 2022, CTI 3.0 was launched which introduced a fourth module called Impact of the Loop. The four modules of indicators enable companies to gain in-depth insight into their circular performance, the added value of adopting circular economy strategies, and the strategies’ potential impact on the companies’ climate and sustainability goals.

The Close the Loop indicators aim to gain a first insight into the circularity of the selected scope. The material circularity is determined based on the weighted average of the circular inflow and circular outflow. Next to these two required indicators, the module also provides insight into water circularity and renewable energy.

The Optimize the Loop indicators give a deeper layer of insights into the company’s use of critical materials and type of its resource recovery methods. With the percentage of critical inflow, it provides insight into the company’s dependency on materials that have been identified as critical. In addition, the module provides a breakdown of recovery types in the following categories: reuse or repair, refurbish, remanufacture, recycle or biodegrade. Indicators on actual lifetime can be utilized to understand a product’s average lifetime beyond the design life or warranty period. Companies can use these indicators to optimize and refine their circular economy strategies.

The Value the Loop indicators inform about the business value added by the company’s circular material flows. The circular material productivity indicator gives insights into the decoupling of linear material use from the revenue generated by companies. The CTI revenue indicator can be calculated to measure the financial benefits associated with circular performance and can be used for portfolio steering to drive towards more circular sales.

While the forementioned modules focus on quantifying a company’s circular performance, the newly introduced Impact of the Loop module aims to indicate the impact of a change in circular performance on sustainability objectives such as climate, nature, and social equity. The GHG impact indicator was recently introduced, and helps companies understand the potential GHG emission savings that can be achieved through adopting circular economy strategies. The analysis is conducted by comparing the emissions associated with the current material composition and the scenario of using recycled content. The indicator can provide a high-level indication on how a company can tackle emissions associated with material use thereby being an important piece in completing the decarbonization puzzle.

CTI utilizes a clear methodology consisting of seven steps

Applying CTI is a seven-step process depicted in Figure 3. KPMG groups the seven steps in three phases that companies can go through to start their journey on this continuous improvement cycle.

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Figure 3. Seven-step process of CTI framework (adapted from CTI report ([WBCS22]). [Click on the image for a larger image]

Phase 1: Scope & Selection

In the first phase, the scope of the measurement and the selection of indicators to be included is determined. The company begins by clarifying the objective for measuring circularity, considering the desired type of insights and audiences to serve with these insights. Based on the intent, a more specific scope is determined, for example defining to which business level (i.e., product, portfolio, business unit, site, company) the process will be applied.

Phase 2: Collect & Calculate

The second phase consists of data collection and calculation. Close collaboration across the company’s value chain and various data owners is key in this step to obtain the data as accurate as possible. The calculation using the collected data can be implemented via both a software dedicated to CTI (CTI Tool) or performed offline, depending on the company’s preference.

Phase 3: Analyze, Prioritize, & Apply

In the final stage, CTI supports companies in analyzing the outcomes, enabling them to build concrete future steps for improving their circular performance. First, the outcomes on each of the indicators are analyzed to identify areas of improvements. Risks and opportunities related to the transition towards a more circular economy are assessed and steer the prioritization of the potential improvement. In the application phase this is translated in target setting and a concrete action plan for improving circular performance.

What gets measured, gets managed

The CTI framework has been widely adopted by companies in a variety of sectors. Their testimonies are a vote of confidence for the framework’s ability to measure and steer circular performance. Developed with and for businesses, the experience of companies prove how CTI effectively supports the corporate circular transition process both internally and externally.

“Acknowledging their key role in tackling today’s most pressing sustainability challenges of climate change, nature loss and growing inequality, companies around the world are escalating efforts to measure and improve their circular performance. The CTI framework serves as precious resource for companies in understanding circularity; how it can help them build resilience, while developing critical insights about their business and improving their sustainability performance.”

– Irene Martinetti, Manager Circular Economy at WBCSD

The CTI framework empowers companies to make informed decisions on circularity. By gaining a holistic overview of material and product inflow and outflow, companies can make strategic choices to achieve circular targets as the CTI assessments provide insight into the most important levers. Through applying circular economy strategies for materials critical to their business, they can build a more resilient and secure supply chain. CTI does not only allow companies to measure and track their progress; it can also support identifying strategic choices that can bring companies closer to their circular ambitions.

The CTI framework also contributes to accelerating the circular transition of companies by easing the communication and decision-making processes. By having a clear set of indicators, CTI helps companies to effectively communicate across the firm with a common language, from business unit to operational level. The enhanced communication can also help steer circular decision-making, for example during procurement processes.

The framework will also effectively support companies in communicating their progress externally. With a firm metric system to measure circular performance, companies can easily track their progress and have the figures ready for external communication. CTI is updated annually to stay aligned with the emerging regulatory environment and developments in reporting standards. Having figures ready which align with reporting standards will allow companies to become frontrunners in the race to meet new disclosure requirements in the coming years.

Conclusion

The need to embed circularity in the core of business is becoming apparent through an emerging regulatory environment, changing reporting standards and an ambitious EU long-term budget.

When starting your circular journey, you need to take various factors into consideration, including “how” to measure and track your circular progress. Circular metric frameworks such as CTI can effectively support companies as the ruler and the compass in your journey. Using a unified set of indicators, the framework will ease the communication between different business units and speed up the transition.

The developing regulatory environment regarding circularity and increasing material criticality indicates that the need for circular transition will only intensify in the coming years. CTI offers the means for business to measure and steer upon their circularity, thereby future-proofing the business. This will allow you to make informed decisions and communicate progress externally in line with developments in reporting standards. Additionally, it will allow you to align your circular decisions with broader aspects related to your corporate sustainability initiatives which marks an important step on your road towards becoming a frontrunner in sustainability. Now is the time to embark on your circularity measurement journey with CTI.

Notes

  1. In June the agreement has been reached, including reporting deadlines for entities to be set at: FY24 for companies covered by NFRD, FY25 for other large listed and non-listed companies, and FY26 for listed SMEs.

References

[CiEc22] Circle Economy (2022). The Circularity Gap Report 2022. Retrieved 6 May 2022, from: https://www.circularity-gap.world/2022

[EFRA22] EFRAG (2022). Sustainability reporting standards interim draft. Retrieved 6 May 2022, from: https://www.efrag.org/Activities/2105191406363055/Sustainability-reporting-standards-interim-draft?AspxAutoDetectCookieSupport=1

[EMF19] Ellen MacArthur Foundation (2019, 26 September). Completing the Picture: How the Circular Economy Tackles Climate Change. Retrieved 6 May 2022, from: https://emf.thirdlight.com/link/rl0yth77pffc-jqkp5d/@/preview/1?o

[EMF22] Ellen MacArthur Foundation (2022). Finding a common language – the circular economy glossary. Retrieved 6 May 2022, from: https://ellenmacarthurfoundation.org/topics/circular-economy-introduction/glossary

[EuCo22a] European Commission (2022). EU taxonomy for sustainable activities. Retrieved 6 May 2022, from: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance/eu-taxonomy-sustainable-activities_en#what

[EuCo22b] European Commission (2022). Packaging waste. Retrieved 6 May 2022, from: https://ec.europa.eu/environment/topics/waste-and-recycling/packaging-waste_en

[EuCo22c] European Commission (2022). The 2021-2027 EU budget – What’s new? Retrieved 6 May 2022, from: https://ec.europa.eu/info/strategy/eu-budget/long-term-eu-budget/2021-2027/whats-new_en

[EuCo22d] European Commission (2022). Waste from Electrical and Electronic Equipment (WEEE). Retrieved 6 May 2022, from: https://ec.europa.eu/environment/topics/waste-and-recycling/waste-electrical-and-electronic-equipment-weee_en

[GRI21] GRI (2021, 8 February). Help for companies on circular economy progress. Retrieved 6 May 2022, from: https://www.globalreporting.org/about-gri/news-center/help-for-companies-on-circular-economy-progress/

[Head21] Heading, S., Walrecht, A., Dhawan, R. & Hasdell, J. (2021). Resourcing the Energy Transition: Making the World Go Round. KPMG International. Retrieved 6 May 2022, from: https://assets.kpmg/content/dam/kpmg/xx/pdf/2021/03/resourcing-the-energy-transition.pdf

[Issa18] Issanes, M., Chevauche, M., Korter, M., & Perou, M. (2018). ISO/TC 323: Circular economy. Retrieved 6 May 2022, from: https://www.iso.org/committee/7203984.html

[Kirc17] Kirchherr, J., Reike, D. & Hekkert, M. (2017, December). Conceptualizing the Circular Economy: An Analysis of 114 Definitions. Resources, Conservation and Recycling, 127 (December 2017), 221-232. Retrieved 6 May 2022, from: https://www.sciencedirect.com/science/article/pii/S0921344917302835

[WBCS22] WBCSD (2022). Circular Transition Indicators v2.0. Retrieved 6 May 2022, from: https://www.wbcsd.org/contentwbc/download/11256/166026/1

Strategizing an approach for effective innovation within your entire organization

Introduction

In the Compact 2019/4 article “Digital Auditors, the workforce of the future” ([Lijd19]), audit professionals from KPMG touched upon the topic of digital excellence in the KPMG Financial Statement audit segment, and what would be needed to achieve the status of a “Digital Auditor”. An auditor with the ability to provide relevant insights with enhanced analytics and statistics based on the data of audit clients and maximizes efficiency and quality by innovating their own audit engagements. In this article, we want to reflect on that vision, and we want to make auditors a promise that will make the Digital Auditor, the workforce of the future, a reality.

Innovation governance: top-down or bottom-up?

The agile way of working, machine learning and robotic process automation have been making their mark in the past 10 years. It is no surprise that with the appearance of these buzzwords, innovation departments at all kinds of corporates have started to appear as well. Most companies have an innovation department as the core “ideation station” for innovative solutions within their business. These departments work top down by visualizing need for change and actioning that with initiatives for research and development. This stimulates innovation, that’s for sure, but is it the only choice for a company that wants to closely follow the state of the art? It doesn’t have to be.

The top-down approach is based on the principle of induction. Management sets a goal, a budget, a set of KPIs and a timeline, and their employees use the resources they get appointed to identify potential solutions to reach that goal. This innovation model drives innovation with a focus on business model, company strategy, a vision for the future, the company’s KPIs and therefore has a more strategic angle, although there is less room for the voice of every employee. This makes it a dominant archetype business model, but it also stimulates coherency. Many companies with the top-down approach choose to place their innovations in a sandbox setting, which means that they are developed within an entity separate from the rest of the business.

Top-down innovation models have very clear upsides. These models improve the likelihood that innovative ideas become solutions that are implemented in a business. They also align with the company’s long-term strategy, and are therefore on the roadmap of the board of management. A top-down innovation model is always focused on big changes with a limited number of individuals in charge. It is aimed at long-term, (most of the time) high-cost investments and defined by formal processes and a hierarchical structure.

Bottom-up innovation models are the direct opposite of the top-down models. In these models, innovative ideas are generated by many employees in all kinds of roles in the company at all levels of experience. In bottom-up models, board members do not state the name of the game. They leave that to their employees. Leaders in bottom-up innovative companies focus on aspiring innovation champions who collaboratively detect and define ideas to capture value within the business, stimulating design thinking and a start-up mentality. The management board acts as a funnel that selects the right ideas to pursue, but in theory they are willing to try (almost) everything to make things better within their company. This creates empowered employees and high-speed innovation possibilities. It also drives focus on customers instead of on the business as a whole. To do that effectively and efficiently, certain systems need to be in place.

For example: the priorities of the company are to be clearly understood by its employees. Priorities that need to match the business strategy and business roadmap. However, the most important thing is time and resources ([Baum14]). Time to investigate and try, and resources to decide if it is better to buy or build. The pitfall in this model is that there is so much innovative ideation going on all of the time, that it is hard to funnel all of these ideas into actions. And how do we cancel certain initiatives if misaligned with the company’s goals? These concepts need to be crystal clear for a bottom-up approach to work effectively.

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Figure 1. Innovation business model (source: [DeMe22]). [Click on the image for a larger image]

Tesla is a real top-down innovator. This is a company that drives innovation, initiated and fueled by the vision of the founder and senior leaders in the company. The pure ambition of Musk and the employees who buy into his grand ideas make the vision of innovation a reality. It is also a company that is very focused on one thing: building the best electric cars in the world, with “focus” being the keyword to remember. Most of Tesla’s innovations are focused on that specific goal and product line.

Google is a good example of a company with a bottom-up model, where employees are empowered to innovate. They are even rewarded for failing ([John17]), because Google stimulates them trying something and learning from it. This increases competitiveness for Google because it saves them money, improves efficiency, and helps their employees develop new skillsets. A side effect is that it prevents employees to feel the fear of failure. A bottom-up model creates an environment that drives disruptive innovations. Google even made it one of their trademarks: “Fail fast” which is presented as a given fact in any respected Scrum team.

The difference between Google and Tesla is that Google is much less focused on one product. It is a range of products and services, which means that they work in decentralized teams for every product or service, making it harder to generalize innovations for the company as a whole.

Both the bottom-up and the top-down approach have advantages and shortcomings. However, research by the independent market agency Savanta in 2020 shows that 88% of innovation leaders agree that successful organizations encourage innovation at every level and within every team ([Kasp20]). But what do companies specifically do to create a culture and set of values that support innovation? “A nurturing culture where ‘no idea is a bad idea’ is what is essential to flourish” according to this research paper.

Anastasia Priklonskaya:

“As an audit partner, I work with a lot of different clients in various industries. Every client is on its own innovation journey these days, leveraging technology and data to create valuable insights and process improvements. Digital auditors are able to maximize the effective use of this increasing amount of available data to optimize our audit efforts. Tech-savvy auditors of the Digital Audit track deliver analyses and findings that bring our conversations with clients to a new level. We provide insights that the clients do not have, because they are enriched with industry knowledge and best practices. Data & analytics help auditors to understand clients and their risks better. For me, there is no doubt that smarter use of technology combined with client and industry understanding leads to higher audit quality, which benefits not only our clients, but society as a whole.”

How to radically innovate the audit practice?

Within KPMG Audit we work in decentralized teams, which makes top-down innovation a bit more complicated when creating a solution for every single identified need in every audit engagement. We need tailor-made, customer-focused and efficiently developed innovations. Mainly due to the fact audit engagements have a very limited span of time in which to innovate (they are staffed and planned on a yearly basis) and every engagement team works for different clients with different innovation needs. Therefore, the answer for any audit firm to the above question would be bottom-up innovation. To stimulate innovation within every engagement team KPMG started the traineeship called “The Digital Audit Track”.

The Digital Auditor will become a master in auditing, both literally and figuratively. They will be focused on becoming a certified auditor in the first place. The innovation lies in the fact that they will also become generalists in data science. By encouraging auditors to learn more about data science, we can potentially bridge the gap between data science and auditing, enabling multidisciplinary teams to work together on innovative solutions. As was stated in the Compact 2019/4 article: “To truly understand an auditor, you must have audit experience. To become a good programmer, you must understand the basics of computer science.” This statement proves to be true, since the first batch of digital auditors have shown the promise of many great new innovations to come.

Jeroen Vlek:

“Companies face an ever-increasing dynamic business environment. Simultaneously, their stakeholders want to be better, and timelier, informed about financial and non-financial indicators of the organization. This creates new challenges for our clients and society at large, and also different expectations towards the role the auditor plays. The workforce of the future will be a multi-disciplinary team, consisting of for example digitally native auditors, experts such as data scientists, but also specialists from other domains such as ESG. Managing the transition to the future of audit is essential to stay relevant as ‘stewards of trust’, and to decrease the expectation gap we face as auditors.”

“Approach that led to success stories” – by Aram Falticeanu

Since last year, we have seen wonderful use cases, however, we want to focus on one that shows the power of this track. To quote Johan Cruijff: “You’ll only see it once you get it.” As mentioned in the Compact 2019/4 article, we couldn’t imagine a workday without Excel a few years ago. The new era in which we created a culture in which fast innovation is possible, made a significant difference, especially for frontrunners like digital auditors. There are days that we don’t use Excel at all, but programming languages like Python and SQL that automate our manual work so that we can spend our time more effectively.

Accessing data from our clients’ administrative systems with a real-time secure connection (called an application programming interface, or API) makes it possible for us to audit financial administrative systems 24/7. Last year, digital auditors set up such a connection together with our internal IT experts and our clients IT departments to “mine” data for a specific process that happens at our client. We were able to find movements in journal entries that could potentially indicate risks at the moment that they occurred. This gave our digital auditors the chance to act on these risks within a noticeably shorter timeframe than they would have been able to if they used traditional auditing methods. Using process mining solutions, and uncovering the findings that we never identified before, the added benefit of a digital auditor is evident. Their skillset makes it possible to liaise with our clients’ IT department and the financial department at the same time. This is how knowledge is combined to optimize procedures that analyze both the financial and IT systems of clients, with which workflows can be generated to audit those joint datasets using the IT to the auditors’ advantage.

Aram Falticeanu:

“We didn’t only want to facilitate more early adopters. For KPMG it is about enabling the early majority. But we didn’t always have a tech-savvy auditor in our teams, so we decided to broaden the knowledge about digital tools to enable more auditors to achieve that digital spike. With at least one digital auditor in every engagement team, we can ensure that our clients will get the best experience possible. Additionally, we will be able to further improve our audit quality, audit efficiency and provide better insights to our clients. And maybe we can shape the future of the audit practice, using a multi-disciplinary approach when it comes to innovation. Spotting opportunities for innovation and making real innovation tangible in every auditor’s day-to-day work activities. We believe this will make the workforce of the future a reality and opens up the door for more multidisciplinarity in our audit teams.”

Normally, the pressure of the audit is focused on our busy season but by using a more digital approach, we can spread out our work over a longer period with lower pressure, making sure we can focus on the right procedures at the right moment. This is how risk-based auditing should work.

Besides the hardcore data skills, our digital auditors also expand their skills in “data visualization”. Using business intelligence software, they find ways to present findings in an attractive and simple way to make the conversations with our clients easier.

Using software like PowerBI, we can walk our clients through highly complex data analyses in understandable ways. In other words, we make presenting our findings very simple. Our clients receive valuable insights and spend less time on analyzing the digital auditors’ findings. This allows the conversation to get to the core of our findings much quicker compared to when we only used traditional methods for presentation.

We aim to incorporate data-analytics skills and dashboarding skills as a default in the toolkit of the modern auditor by training them from the first day they start within KPMG. In addition to this digital foundation, we want to create the flexibility for auditors to pivot to the needs of our clients with a fit-for-purpose approach. We believe this can be a significant contributor to the successes of our innovations, which will help our clients in the end.

When you are trained in data-analytics capabilities, you see opportunities. And when you see these opportunities, you understand that it doesn’t have to be rocket science to use D&A to your advantage. In other words (borrowed from Johan Cruijff): “You’ll only see it once you get it.”

End note

If you read this article and you imagine your own digital workforce, know that there are many opportunities to make a significant difference. The digital way of working is already part of the new normal for many companies in the Netherlands. Building expertise with respect to that way of working, from the lower levels in the organization and upwards, is something that we see as an important step to drive the agility and customer focus with which a company can innovate. Therefore, we want to encourage you to take a moment and reflect. And make the commitment to start with innovation today!

References

[Baum14] Baumann, O. & Stieglitz, N. (2014, June 12). Don’t Offer Employees Big Rewards for Innovation. Harvard Business Review.

[DeMe22] De Mey, N. (2022). Retrieved from: https://www.pinterest.com/pin/528539706262555165/

[Hall70] Hall, J. & Watson, W.H. (1970). The effects of a normative intervention on group decision-making performance. Human Relations, 23(4), 299-317.

[John17] Johnson, R. (2017, December 15). Why Google rewards its employees for failing. Retrieved from: https://www.linkedin.com/pulse/why-google-rewards-its-employees-failing-ron-johnson/

[Kasp20] Kaspersky (2020, November 16). Bottom-up innovation is near the bottom of modern corporate values. Retrieved from: https://www.kaspersky.com/about/press-releases/2020_bottom-up-innovation-is-near-the-bottom-of-modern-corporate-values

[Lijd19] Lijdsman, A., Hulman, I. & Falticeanu, A. (2019). Digital auditors, the workforce of the future. Compact, 2019(4). Retrieved from: https://www.compact.nl/articles/digital-auditors-the-workforce-of-the-future/

[Mesl13] Meslec, N. & Curşeu, P.L. (2013). Too close or too far hurts cognitive distance and group cognitive synergy. Small Group Research, 44(5), 471-497.

[Pale10] Paletz, S.B.F. & Schunn, C.D. (2010). A social‐cognitive framework of multidisciplinary team innovation. Topics in Cognitive Science, 2(1), 73-95.

Why organizational agility starts with HR

Why do we need organizational agility and how does HR fit in?

In Reinventing Organizations, Frederic Laloux briefly examines human evolution. According to him “… for some reason, humanity evolves not continuously, but by sudden leaps” ([Lalo16]). We do not grow gradually, like a tree, but transform “overnight” into something else. He is not the only one who sees the world this way. According to [Pere10] we are currently living during the turning point of one of those leaps, or, as she calls them, “great surges”. Other researchers, academics, organizational architects and management innovators are also recognizing the seismic shift happening in organizations and are calling for change – a change towards more agile, people-centric organizations, operating under agile principles. The timeline in Figure 1 shows a selection of works discussing this organizational change and the new ways of working; it is by no means exhaustive, but merely an illustration of how long visionaries have been urging to embrace the change and prepare for the work of the future.

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Figure 1. The case for organizational change embracing agility and its principles, a brief timeline. [Click on the image for a larger image]

What has made this transformation urgent? While not entirely novel, organizational transformation towards agility has been accelerated by a number of factors, such as a multi-generational workforce, digitalization and globalization of organizations, social media, shift to knowledge work, the sharing economy, and most recently, the COVID-19 global pandemic. There is even an acronym to describe some of those economic factors at play – VUCA (volatility, uncertainty, complexity and ambiguity).

What should change? And why is HR best positioned to lead this transformation?

In order to achieve organizational agility, all parts of an organization have to be transformed. We can start by transforming the IT department, for example, but unless the rest of the organization follows, they will soon hit the limits of what they can achieve in isolation. There is one department, however, that spans across departmental boundaries and can affect the entire organization, and that is the HR function. HR owns processes which make the organization what it is, so without HR becoming agile first, an organization cannot truly transform. Once the HR function has embraced agile values and principles and restructured their processes to adopt agile practices, they can start reshaping the organization. Once agile, HR becomes the fertile soil where the seeds of organizational agility can grow further.

What is VUCA and why does it matter?

[Horn10] explain the new nature of the world by four characteristics: volatility, uncertainty, complexity and ambiguity (VUCA).

  • Volatility – the speed, volume and the nature of change are different now, than they used to be.
  • Uncertainty – the decreased predictability within the market.
  • Complexity – the increased chaos around organizations and their issues.
  • Ambiguity – the vagueness of reality and the mixed meaning things can have.

These four factors together describe what characterizes the current markets of many businesses. These markets influence the business externally through these changing VUCA characteristics, which results in leaders having to respond to this and change their daily activities and decisions.

VUCA are the characteristics of the new business reality that companies need to deal with. Those characteristics, coupled with the other factors such as multi-generational workforce, digitalization, the shared economy, globalization and knowledge work, have forced a re-evaluation of how companies organize themselves. Organizations are rethinking leadership, culture and structures and how to engage and grow employees, so they, in turn, can serve their customers best.

Multi-generational workforce

A multi-generational workface is characterized by different generations working together. For the first time ever, we are seeing potentially up to five different generations working in the same workplace ([Wind21]). Each of these generations have their own unique personality traits and values ([Wald21]). The differences between these generations are creating an interesting workplace culture and lead to tension if not addressed properly.

Organizational agility needs HR agility to start the transformation and to sustain the new organization

In 2001, a group of software engineers created the Agile Manifesto to change the way they build software. Years later Modern Agile was created in an effort to extend agility outside software development into the organizations themselves. Then, the Agile HR Manifesto addressed agility in workplace culture. While all of these contribute to increased agility, let’s not forget the most important element that has to be transformed – the organization itself! As Edward Deming said almost 30 years ago: “A bad system will beat a good person every time. So fix the system.”

How do we fix the system that is today’s organizations? While “the organization as a machine” dominated the management world for decades, it is no longer relevant in today’s complex reality ([Lalo16]). The organizational processes designed for efficiency and control in the last century cannot serve us well anymore. We have to shift from an enterprise (inherently oriented towards profit) to an organization (inherently oriented towards a goal). A more fitting metaphor today would be “the organization as an organism or social system”. As such, rigid, pre-defined structures and functions are no longer useful and instead organizations should look towards nature for more apt models – schools of fish or flocks of birds, or even a forest’s ecosystem ([Lalo16]). All of these teach us how to quickly respond to change as one complex organism.

It is no longer enough to have a powerful leader with a strong vision that pushes their agenda down the ranks. It is no longer enough to strive for efficiency and control. The only way to deal with a VUCA context is to utilize the power of the collective group and to engage every employee, to coach them (instead of managing them), so they can grow and reach their full potential, in order to best serve their customers. Becoming nimble and regrouping on the go, responding to an ever-changing environment is going to differentiate thriving organizations from those merely surviving.

Organizational change requires participation from the whole organization and cannot be forced top-down. According to [Such11], it takes reflection and discussion to see the patterns of thinking and interaction we are implementing and the new behaviors that might interrupt old patterns or give rise to new ones. To be able to interrupt old patterns, organizations need a new type of leadership to lead this transformation, accompanied by new types of HR processes to enable the culture change required to become an organization of the future. Can we transform HR by applying agile principles and values to create the basis for organizational agility and fix the broken system of today’s organizations? We believe so.

History of agile

The tension that exists between traditional waterfall methods and the rapidly changing complex environments of organizations has led to the adoption of more “lightweight” methodologies ([High01]). A group of researchers came together in 2001 to develop a manifesto that entailed the values and principles of a “lightweight” methodology called agile ([Beck01]). Agile Software Development has allowed organizations to become more responsive and deliver results faster by being able to react more quickly to changes in the business environment ([Meso06]).

The values and principles of the manifesto form the foundation for the several agile methods (e.g. Scrum, KanBan, Lean, XP, DSM, …) that are applied for different reasons and contexts ([Camp15]). While agile and these methods were at first mainly used for software development, there is increased attention for using it in a broader scope ([Rigb16]). According to [Fern09], the contemporary economy is increasingly characterized by uncertain and complex projects for which agile is used to be more adaptable and flexible to face the challenges of these projects.

The concept of business agility and the agile organization itself has recently become popular as people are exploring agility beyond software development and project management alone ([Rigb16]). Often these agile transformations start in IT, the roots of agile software development, but this does not always seem to succeed ([Shei21]). Becoming agile on an organizational level means going through a cultural transformation ([Denn16]).

Agile leadership

Agile leadership is a management style, characterized by prioritizing people over processes, with a focus on customer needs, seeing change as inevitable and value-adding, inspiring and involving employees. It is the management style that can adapt quickly enough to lead an organization operating in a VUCA context and delivering value to customers (who change their mind more often than ever before). Agile leaders are compared to gardeners, instead of the visionaries of the 1980s-1990s, because they nurture and coach their employees, they push decisions closer to the people doing the work and they are aware of their own biases and mind traps, thereby actively avoiding them. To promote motivation, agile leadership is informal and communication flows freely between everyone ([Thor17]). Typically, these leaders embrace the principles of agile (HR), embedding their organization at its core with the ingredients of becoming an agile organization.

How HR becomes agile

Agile HR is a term that has been around for a few years now and can be traced back to the Agile HR Manifesto, signed by 27 professionals in 2017. Like Modern Agile, the Agile HR Manifesto and principles are built on the original Agile Manifesto, reimagined for HR (Figure 2). Also in 2017, Pia-Maria Thoren’s book Agile People, A Radical Approach for HR & Managers describes how to apply agile principles and tools to the world of HR. Since then, a lot has been written on how HR can adopt agile principles and practices to transform the organization from within ([Cappi18]).

Many companies have adopted agile HR practices either from the start of the organization (Buurtzorg, Morning Star) or included HR as part of an agile transformation (ING). When considering traditional HR processes, each one of those processes can or should be reimagined to support the entirety of an agile organization. What these could possibly look like from an agile point of view, is illustrated in Figure 3. Parallel to transforming core HR processes, agility in HR also means a cultural shift for many organizations, with HR owning the transition and reinforcing the agile values and behaviors with the newly reimagined processes, methods and systems.

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Figure 2. Agile HR Manifesto and Principles. [Click on the image for a larger image]

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Figure 3. HR, reimagined in the agile context. [Click on the image for a larger image]

The organizations of the future are already here

“There is a new generation coming to work that has been deeply shaped by social media, deeply resonant with some of the challenges of the world. Their expectations have been changing faster than the reality of the workplace.”

– Gary Hamel

What do organizations of the future look like? For them to be nimble enough to operate in our reality they need the right type of leadership and the right type of organizational structure. Be it the Humanocracy organizations studied by Gary Hamel and Michele Zanini ([Hame20]), the teal organizations of Frederic Laloux ([Lalo16]), or the organizational trends Corporate Rebels track all over the world, we see a common theme of agility on both leadership and process level that will further support agility of culture and structure. Some common characteristics have been identified, which would form a sound basis and starting point of the necessary mindset and culture (see Figure 4 for comparison between teal organizations and organizational trends from Corporate Rebels). Let’s meet some of them in the box “Organizations of the future that employ Agile HR principles and values”.

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Figure 4. Characteristics of Agile organizations according to Frederic Laloux and Corporate Rebels (shown in bold). [Click on the image for a larger image]

Organizations of the future that employ Agile HR principles and values

1 Morning Star

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Founded in 1970, the California-based tomato-processing company is an excellent example of a self-organizing company. Morning Star is the worldwide market leader in tomato processing with total revenues close to 1 billion USD annually. It permanently employs 600 employees, with additional 4000 seasonal workers joining the company during harvest season ([deMo17]). Morning Star’s employees determine their own salary increases, which are then reviewed by volunteer peer panels. Furthermore, Morning Star, just like the rest of the organizations presented below, does not have a middle management layer, instead it is comprised of self-steering teams that have no bosses and no job descriptions. The self-management of Morning Star is based on two fundamental principles: all interactions should be voluntary and honor your commitments ([deMo17]).

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2 Buurtzorg

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Buurtzorg Nederland is a Dutch home-care organization. The word buurtzorg is Dutch for “neighborhood care”. Founded in 2006 by nurse Jos de Blok in response to declining quality and lack of continuity of personal care in the Netherlands and a disillusioned nursing workforce ([CPI18]). Buurtzorg is famous for operating differently than other healthcare providers by having small, self-organizing teams with no leaders and no managers. The purpose of the nurses is not to solely provide health care, such as vaccinations or medication, but to promote patients’ independence as much as possible by working together to discover what they could (learn to) do themselves.

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3 ING

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With customer behaviors rapidly changing in response to new digital distribution channels, the well-known Dutch bank embarked on their agile transformation in 2015. Agility is now part of their culture, focusing on empowerment, ownership and customer centricity. Every employee spends time at the call center, taking calls from customers when they start working at the bank, and teams are responsible for hiring decisions ([Maha17]). HR had a pioneering role in the transformation – they had the important task of redesigning processes and systems and reinventing their product portfolio, so that they could create the foundation of the new organization and support the new ways of working ([Scho18]).

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Some more examples of organizations (non- and for profit) that have changed their management style and support processes are:

  • RHD, a human services nonprofit in the United States, 4,000 employees
  • Sun Hydraulics, a manufacturing of hydraulic valves and manifolds, global company, 900 employees (for profit)
  • Heiligenfeld, network of mental health hospitals in Germany, 600 employees (for profit)
  • Morning Star, tomato harvesting, transport and processing in California, United states, 400-2400 employees (for profit)
  • Holacracy, an organizational ” operating system” adopted by many organizations throughout the world
  • FAVI, brass foundry, automotive supplier, France, 500 employees (for profit)
  • Patagonia, outdoor apparel maker and retailer in the United States, 1350 employees (for profit)
  • AES, a global producer and distributor of electricity with 40000 employees worldwide in 2001 (for profit)
  • ESBZ, a publicly financed grade 7-13 school in Berlin, Germany, with 1500 teachers, students and parents (non-profit)

Source: [Lalo16]

Only when there is a fit between culture and structure, can an organization be truly agile

Agility is the sole answer to operate successfully in a VUCA environment, since organizations of the future need agile leaders and agile processes to support, inspire and help them grow. While some critics have been insisting agile is still a fad, it has slowly permeated every corner of many organizations. We believe agility, both as a mindset and a set of principles to apply, creates a foundation on which organizations can build, motivate and let their workforce be(come) whole. Since HR is the organizational architect, they should be the ones not only redesigning the core processes and structures for agility, but also setting the intention and leading the transformation to adapt and embrace a new mindset. Only when there is a fit between the culture (values and behaviors) and the structure (methods, processes, systems), can an organization be truly agile. And who better to spearhead the cultural and structural change, than HR.

References

[Beck01] Beck, K. et al. (2001). Manifesto for Agile Software Development. Retrieved from: http://agilemanifesto.org

[Camp15] Camponelli, A.S. & Parreiras, F.S. (2015). Agile methods tailoring: A systematic literature review. Journal of Systems and Software, 110(C), 85-100.

[Capp18] Cappelli, P. & Tavis, A. (2018). HR Goes Agile. Harvard Business Review, March-April 2018. Retrieved from: https://hbr.org/2018/03/hr-goes-agile

[CPI18] Centre for Public Impact (2018, November 15). Buurtzorg: revolutionising home care in the Netherlands. Retrieved from: https://www.centreforpublicimpact.org/case-study/buurtzorg-revolutionising-home-care-netherlands

[deMo17] de Morree, P. (2017). Morning Star’s Success Story: No Bosses, No Titles, No Structural Hierarchy. Corporate Rebels. Retrieved from: https://corporate-rebels.com/morning-star/

[Denn16] Denning, S. (2016). How to make the whole organization “Agile”. Strategy & Leadership, 44(4), 10-17.

[Fern09] Fernandez, D.J. & Fernandez, J.D. (2009). Agile Project Management: Agilism versus Traditional Approaches. Journal of Computer Information Systems, 49(2), 10-17.

[Hame20] Hamel, G. & Zanini, M. (2020). Humanocracy: Creating Organizations as Amazing as the People Inside Them. Harvard Business Press.

[High01] Highsmith, J.A. & Cockburn, A. (2001). Agile software development: the business of innovation. Computer, 34(9), 120-127.

[Horn10] Horney, N., Pasmore, B., & O’Shea, T. (2010). Leadership Agility: A Business Imperative for a VUCA World. Human Resource Planning, 33(4), 34-42.

[Lalo16] Laloux, F. (2016). Reinventing Organizations: An Illustrated Invitation to Join the Conversation on Next-Stage Organizations. Nelson Parker.

[Maha17] Mahadevan, D. (2017, January 10). ING’s Agile transformation. McKinsey Quarterly. Retrieved from: https://www.mckinsey.com/industries/financial-services/our-insights/ings-agile-transformation

[Meso06] Meso, P. & Jain, R. (2006). Agile Software Development: Adaptive Systems Principles and Best Practices. Information Systems Management, 23(3), 19-30.

[Pere10] Perez, C. (2010). Technological Revolutions and Techno-Economic Paradigms. Cambridge Journal of Economics, 34(1), 185-202.

[Rigb16] Rigby, D., Sutherland, J., & Takeuchi, H. (2016). Embracing Agile: How to master the process that’s transforming management. Harvard Business Review, May 2016. Retrieved from: https://hbr.org/2016/05/embracing-agile

[Scho18] Schotkamp, T. & Danoesastro, M. (2018, June 1). HR’s Pioneering Role in Agile at ING. Retrieved from: https://www.bcg.com/publications/2018/human-resources-pioneering-role-agile-ing

[Shei21] Sheikh, A. (2021, July 13). Why agile transformations fail in the corporate environment. Forbes. Retrieved from: https://www.forbes.com/sites/forbestechcouncil/2021/07/13/why-agile-transformations-fail-in-the-corporate-environment/?sh=581a584165e3

[Such11] Suchman, A.L. (2011). Organizations as Machines, Organizations as Conversations: Two Core Metaphors and Their Consequences. Medical Care, 49(12), S43-S48.

[Thor17] Thoren, P.M. (2017). Agile People: A Radical Approach for HR & Managers (That Leads to Motivated Employees). Lioncrest Publishing.

[Wald21] Waldman, E. (2021, August 31). How to Manage a Multi-Generational Team. Harvard Business Review. Retrieved from: https://hbr.org/2021/08/how-to-manage-a-multi-generational-team

[Wind21] Windham-Bradstock, C. (2021, December 13). The Value Of Employing A Multigenerational Workforce. Forbes. Retrieved from: https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/12/13/the-value-of-employing-a-multigenerational-workforce/?sh=1289e9b2665f

Blockchain technology in the luxury watch industry: moving beyond the hype towards effective implementation

Because of its ability to provide unforgeable proof of ownership and authenticity of watches through digital certificates, Blockchain can benefit consumers by creating trust in pre-owned market transactions and transparency on brands’ commitment to environmental sustainability. In this article, we review the drivers behind the adoption of blockchain technology in the luxury watchmaking industry during the last few years. We will take a close look at how Blockchain is being used to create digital twins of watches to ensure the traceability and authenticity of watches, with particular attention to the case study of Breitling, one of the pioneering watchmaking companies in the use of blockchain technology. Finally, we will take a glimpse at how the collection of luxury watches may become a fully digital experience through the launch of non-fungible watches, or digital-only watches.

Introduction

Blockchain has often been referred to as the internet of the future and its potential for disruption has been compared to the changes brought by the Internet to our way of life since the turn of the century. First appearing in 2008, when developers under the pseudonym of Satoshi Nakamoto published a white paper defining its model, Blockchain has since found applications in the world of crypto currencies and in organizations’ supply chains.

If a few years ago the adoption of Blockchain in the luxury watch industry seemed to be a hype, nowadays it has become a mature trend that is changing the relationship between watch owners, collectors, consumers in general and luxury watch brands. An increasing number of brands are adopting Blockchain to implement digital IDs or “Digital Passports” for their watches in order to grow their Direct-to-Consumer (DTC) channels and increase their margins – by cutting out intermediaries (i.e. multi-brand retailers) – and better connect with consumers and take control of the customer relationship.

A 2021 McKinsey study forecasts that about 2.4 USD billion in annual watch sales, spanning the premium to ultra-luxury segments, will shift from multi-brand retailers to direct-to-consumer brands by 2025 ([Beck21]). Driven by the young consumer segment, with Millennials and Generation Z leading the way, the e-commerce of luxury watches will be the fastest-growing direct-to-consumer (DTC) channel, rapidly expanding from just 5% of sales in 2019 to between 15% and 20% by 2025.

What is Blockchain technology?

Blockchain is a digital ledger, decentralized and distributed over a network, structured as a chain of registers responsible for storing data. It is possible to add new blocks of information to the chain of registers (i.e. blockchain), but it is not possible to modify or remove blocks previously added to the chain. Encryption and consensus protocols guarantee security and immutability across the blockchain. The result is a reliable and secure system, where our ability to use and trust the system does not depend on the intentions of any individual or institution (see Figure 1).

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Figure 1. Blockchain Fundamentals. [Click on the image for a larger image]

Blockchain enables the digitalization and storage of the identity of a watch as a block onto the digital ledger as a digital ID (e.g. think of it as a “digital passport”) and this identity cannot be tempered with. Throughout the life cycle of the watch, the owner will be able to add blocks of information to the existing first identity block – e.g. additional information on servicing and lost and found – and form a chain of blocks representing a chronology of events relating to the watch. This chronology, or chain of blocks, ensures the traceability and transparency of the watch and therefore its authenticity and ownership.

The digitalized identity of the watch is created through non-fungible tokens (NFTs): unique cryptographic tokens that exist on a blockchain and cannot be replicated. NFTs can represent real-world items like artwork and real-estate, in addition to luxury products. They can even represent individuals’ identities, property rights, and more. “Tokenizing” real-world tangible assets such as watches makes buying, selling, and trading them more efficient while reducing the probability of fraud.

The Drivers behind the adoption of Blockchain

An increasing number of brands are adopting Blockchain to grow their Direct-to-Consumer (DTC) channels, which is made possible by digitalization of the relationship between brands and their customers. Social and consumer behavior trends are behind the key drivers behind digitalization.

The customer base of luxury watches has been getting younger. Nowadays, as reported in the McKinsey study, affluent young consumers prefer buying their watches directly from mono brand retail channels. They have a much greater knowledge and culture of watchmaking, which allows them to consider an online purchase without having to visit a store.

The success of the online auctions in 2021 reflects changing social and consumer behaviors: younger generations are more open to purchasing luxury goods online, a trend that was only facilitated and accelerated by the pandemic effects. A snapshot of online auctions buyers and participants shows a large number of them being newcomers (e.g. Phillips 40%; Sotheby’s 44%; Christie’s over 20%), a majority of them being under the age of 40, and bidding from over 80 different countries.

The pandemic has accelerated the digitalization of the relationship between luxury watch brands and consumers. The lockdowns and restrictions caused a temporary stoppage of production and distribution and considerably affected business in the entire high-end watch industry. As a result, many consumers turned to the online market to satisfy their desire for a luxury watch.

Most brands are also moving into the pre-owned market. The pre-owned market was the industry’s fastest growing segment in 2021. It is expected to reach 20 to 32 billion USD in sales by 2025, up from 18 billion USD in 2019, which will be more than half the size of the first-hand market at that time. That’s an 8 to 10% per year increase compared to the 1 to 3% market increase for new watches. High-end watch brands see the pre-owned market as an opportunity to allow new clientele to experience the brand or enter the luxury market in general. Technologies like Blockchain and Artificial Intelligence are helping with authenticity and in creating secure, and intelligent user-friendly e-commerce platforms that establish trust in digital transactions and combat counterfeiting.

A “Digital Passport” for all watches

A “Digital Passport” is essentially a digital certificate of authenticity and ownership of a watch stored on a blockchain. The passport represents a means to monitor and control the long life cycle of watches: from production, to sale, to resale, and to the recycling the materials from the watch case. Blockchain is used to record information (data, photos, documents) characterizing a collector’s watch for example – from point “zero” in time (issue of the certificate) throughout the life of the watch, and in a fully secure and non-falsifiable manner, while also maintaining the anonymity of the owner.

Take the case of this year’s Bulgari Octo Finissimo Ultra limited edition (see Figure 2), a technological excellence with its case of only 1.8 mm thickness. The Italian watchmaker part of the Richemont group announced that each one of the 10 pieces produced has a QR code laser engraved on the barrel and visible on the dial. When scanned, the QR code yields access to a unique NFT representing digital artwork and serving as a method of authentication. The launch of the Octo Finissimo Ultra and its digital passport was made in partnership with LVMH-founded AURA Blockchain Consortium.

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Figure 2. The Octo Finissimo Ultra by Bulgari. It carries a laser engraved QR code on the dial which gives access to its digital passport. [Click on the image for a larger image]

By creating a unique digital ID for each watch, the AURA Consortium delivers proof of authenticity and ownership, product history information, and access to improve after sales services for clients. It establishes client trust and protection against counterfeiting, transparency as to the material and standard used to produce the watch, and ability to monitor the life of the watch through pre-owned markets.

Using “Digital Passports”, brands connect directly with their customers and get access to consumer data bypassing intermediaries like multi-brand retailers, enabling them to implement more effective marketing and product strategy.

The case of Breitling

In October 2020, Breitling announced that all its new watches would come with a Blockchain-based digital passport. Since then, each new Breitling watch is assigned a unique unforgeable digital certificate that proves authenticity and is also capable of storing information about all events throughout the life cycle of the watch (i.e. repairs, change of ownership, etc.). The solution creates a direct, secure, permanent, and anonymized communication channel between Breitling and its products, and its watch owners.

As explained by Breitling on their website, the goal of embedding its new watches with a digital blockchain technology is to transform its customer relations and watch owner experience by delivering transparency, traceability, and tradability.

The digital passport ecosystem (see Figure 3) enables Breitling to deliver a series of digital after-sales services to its customers starting with the full digitalization of the warranty program, customer support (e.g. repair & service, lost & found, insurance), transparent tracking of the history and transactions of the watch, while ensuring watch owners to maintain control over their personal data and remain anonymous. The innovative approach by Breitling includes connecting the community of Breitling owners via a trade-in platform where they can transfer the ownership of their watches, enriched with real time estimates of the watch value.

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Figure 3. The Breitling-Arianee “Digital Passport” Ecosystem. [Click on the image for a larger image]

Breitling’s digital passport is secured by Arianee technology. Arianee is an independent participatory organization created in 2017 providing a global standard based on Blockchain for the digital certification of authenticity of luxury watches. For Breitling’s watches with a Arianee certificate, watch owners can scan the QR code on the e-warranty card using their smartphone and then claim ownership of the watch’s digital passport.

In addition to Bretiling, Vacheron Constantin and other luxury watch brands like Audemars Piguet, Roger Dubuis, and MB&F have also subscribed to Arianee’s digital passport.

Conclusion: What’s next? Non-fungible watches are here!

Consider non-fungible watches (NFWs) as the final frontier of watchmaking. A non-fungible watch is essentially a purely digital watch: a non-fungible token (NFT) sold in the form of a video, image, or the intellectual property to a watch prototype. Where watchmakers like Breitling are using NFTs to store on the blockchain the digital passports of a physical watch, other market players have begun using NFTs to store a digital watch not linked to a physical item and sell it or auction it.

Beyer Chronometrie, the world’s oldest watch store located in Zurich, Switzerland, for example, has launched in 2021 one of the market’s first NFWs collections. In collaboration with FTSY8 Fictional Studio, Beyer has designed and created a selection of collectible NFWs called Time Warp Collection (see Figure 4). In the words of Beyer, the collection “explores the intersection between traditional watchmaking and the aesthetics of technology, gaming, fashion, and street wear”. Beye’s NFWs can be purchased via the retailer’s website and can be traded on the OpenSea platform, the largest digital platform for NFT sales and auctions.

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Figure 4. NFT Watch Allevio from the Time Warp Collection by Beyer Chronometrie and FTSY8. [Click on the image for a larger image]

A NFW is not linked to a physical watch in the real world; it represents a unique item in the blockchain and as such it is valued for its scarcity. Where a watch collector will value the quality of craftsmanship and technical complexity of a mechanical watch, the owner of a NFW will enjoy possession of a unique digital watch that cannot be damaged or stolen. Whether NFWs point to the end of mechanical haute horlogerie as we know it, or they simply represent a hype, only time – measured from a real watch – will tell us.

References

[Aria22] Arianee (2022). Website of Arianee. Retrieved from: https://www.arianee.org

[Aura22] Aura Blockchain Consortium (2022). Website of Aura Blockchain Consortium. Retrieved from: https://auraluxuryblockchain.com

[Beck21] Becker, S., Berg, A., Harris, T., & Thiel, A. (2021, June 14). State of Fashion: Watches & Jewelry. McKinsey & Company. Retrieved from: https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion-watches-and-jewellery

[Beye22] Beyer Chronometrie (2022). The first Beyer NFT Drop – limited to 100 pieces. Retrieved from: https://www.beyer-ch.com/en/blog/the-first-beyer-nft-drop-limited-to-100-pieces/

[Brei20] Breitling (2020, October 13). Breitling becomes the first luxury watchmaker to offer a digital passport based on blockchain for all of its new watches. Retrieved from: https://www.breitling.com/us-es/news/details/breitling-becomes-the-first-luxury-watchmaker-to-offer-a-digital-passport-based-on-blockchain-for-all-of-its-new-watches-33479

[Bulg22] Bulgari (2022). Octo Finissimo Ultra. Retrieved from: https://www.bulgari.com/it-ch/orologi/uomo/octo-finissimo-orologio-titanio-grigio-103611

[Chia19] Chiap, G., Ranalli, J., & Bianchi, R. (2019). Blockchain: Tecnologia e applicazioni per il business. Hoepli.

[Gala19] Galanti, S. (2022, January – March). Lo stato del settore orologiero svizzero nel 2021. La Rivista n.1 – Anno 113, p. 44.

[LVMH21] LVMH (2021, April 20). LVMH partners with other major luxury companies on Aura, the first global luxury blockchain. Retrieved from: https://www.lvmh.com/news-documents/news/lvmh-partners-with-other-major-luxury-companies-on-aura-the-first-global-luxury-blockchain/

De rol van een stuurgroep in een project

Een project wordt veelal groots opgetuigd. Projectteam, werkgroepen, klankbordgroep, stuurgroep, het hoort er allemaal bij. Maar welke rollen moeten de verschillende projectonderdelen vervullen om een project te laten slagen? Vooral een stuurgroep wordt regelmatig ingesteld zonder dat vooraf goed is nagedacht wat de taken van deze groep zijn en welke personen er zitting in dienen te nemen om de taken te kunnen vervullen. In dit artikel wordt ingegaan op de rol van een stuurgroep in een project. Naast de taken, bevoegdheden, verantwoordelijkheden en leden van een stuurgroep worden ook enkele illustrerende praktijkvoorbeelden gegeven waarbij de stuurgroep een belangrijke rol heeft gespeeld bij het slagen of juist falen van het project.

Inleiding

Organisaties zijn continu in verandering: er worden nieuwe producten en diensten ontwikkeld, er is sprake van fusies en overnames, er worden nieuwe technologieën toegepast. Projectmanagementmethoden worden toegepast om deze veranderingen te realiseren. Bij alle bedrijven zijn dan ook eigenlijk continu meerdere projecten onderhanden, projecten die op zichzelf staan dan wel geclusterd zijn in een programma. Projecten worden veelal gekenmerkt door een structuur bestaande uit een stuurgroep, een projectgroep en enkele werkgroepen. De stuurgroep wordt veelal gepositioneerd als het bewakende en bijsturende orgaan van het project. In de praktijk blijkt dat de samenstelling van de stuurgroep en de taken die de stuurgroep uitvoert, verschillen tussen projecten. In dit artikel wordt ingegaan op de rol van een stuurgroep, haar verantwoordelijkheden en haar samenstelling.

Het oprichten van een stuurgroep heeft alleen toegevoegde waarde als deze een adequate samenstelling en een adequaat takenpakket heeft. Voor een projectteam is dit vanzelfsprekend, maar bij een stuurgroep worden deze aspecten nogal eens vergeten. Hierdoor functioneert de stuurgroep niet altijd naar behoren.

Stuurgroepen komen voor in verschillende soorten. Sommige soorten stuurgroepen functioneren goed, andere minder goed. Ter illustratie omen in dit artikel een aantal voorbeelden van projecten met goed en slecht functionerende stuurgroepen aan de orde. Mede op basis van ervaringen in de praktijk is een stappenplan gecreëerd dat kan worden gebruikt voor het samenstellen van de stuurgroep.

Impact van projecten

Het belang voor organisaties om tijdig en adequaat te kunnen inspelen op externe ontwikkelingen en/of de toepassing van technologische mogelijkheden is erg groot. Dit belang vertaalt zich direct door naar het belang van het succes van projecten die deze veranderingen moeten realiseren. Het falen van projecten heeft naast het niet behalen van de beoogde doelstelling ook nog eens een forse financiële impact.

Door de jaren heen zijn diverse studies uitgevoerd naar de faal- en succesfactoren van projecten. Kijkend naar een groot aantal van deze studies is de kern van de succesfactoren terug te brengen naar:

  • Betrokkenheid van senior management. Betrokkenheid van senior management bij een project reikt verder dan alleen de initiatie van een project. Het senior management is feitelijk de eigenaar van het project: het wil dat er iets wordt gerealiseerd of veranderd. Het organiseren van adequate gebruikersbetrokkenheid en het afwegen van de prioriteiten tussen projecten onderling en met ander senior management moet de projectleider ondersteunen in de uitvoering van het project. Dat betekent ook dat het senior management randvoorwaarden moet invullen en dat het sturing moet geven. Denk aan het organiseren van gebruikersbetrokkenheid, prioriteiten stellen wat betreft de inzet van middelen in de verschillende projecten en lijnactiviteiten, maar ook besluiten nemen over het project.
  • Eenduidige doelstellingen en scope. Een doelstelling die niet op meerdere manieren kan worden geïnterpreteerd, helpt bij het behouden van de focus. Een goed gedefinieerde scope voorkomt dat er onbedoeld wordt uitgeweid naar andere terreinen.
  • Hoge kwaliteit project- en programmamanagement. Wellicht een open deur, maar project- en programmamanagement is echt een discipline. Niet iedereen heeft de capaciteiten die benodigd zijn voor het kunnen managen van een project. Het aantal mensen binnen een organisatie dat echt ervaring heeft met het managen van complexe transformaties is niet groot. Daarbij komt dat lang niet alle organisaties een rigide vorm van projectmanagement willen hanteren voor het realiseren en bewaken van de voortgang. In de huidige tijd van omvangrijke veranderingen en technische vernieuwingen is executiekracht cruciaal.
  • Focus op kwaliteitsborging. Organisaties besteden in hun projecten gek genoeg minder veel aandacht aan kwaliteitsborging dan in hun primaire proces. Het toepassen van kwaliteitsborging in projecten verhoogt de slagingskans. Door expliciet voorafgaand aan de start van de realisatie van producten de kwaliteitseisen te definiëren en vast te stellen hoe men deze gaat testen, is voor eenieder eenduidig wat de verwachte kwaliteit is en wanneer de producten eraan voldoen.
  • Focus op realiseren van de baten. De door een project gerealiseerde producten (een nieuw CRM-systeem of een afdelingsstructuur) moeten ook daadwerkelijk gebruikt gaan worden of moeten gaan ‘werken’. Alleen dan zullen de beoogde doelen of baten zoals verhoging van de productiviteit, besparing en/of extra omzet gerealiseerd kunnen worden. Het aansturen en bewaken van de realisatie van deze baten wordt te vaak impliciet opgepakt. Actieve aansturing zorgt ervoor dat de verantwoordelijke managers in de organisatie de baten gaan realiseren.

Een stuurgroep in een project speelt een belangrijke rol in het succes van het project. Ze verankert de betrokkenheid van senior management, helpt de focus te behouden op de doelstellingen, bewaakt de kwaliteit van projectmanagement, ziet toe op de kwaliteit en kan de lijnorganisatie aansturen ten aanzien van het realiseren van de baten. Het instellen van een stuurgroep is echter nooit zonder meer een garantie voor betrokkenheid. Hierna worden enkele eisen weergegeven waaraan een stuurgroep moet voldoen om succesvol te kunnen functioneren.

Taken, bevoegdheden en verantwoordelijkheden van een stuurgroep

Belangrijkste taken

De projectstuurgroep heeft als belangrijkste taak het vervullen van een initiërende, signalerende en op doelstellingen bijsturende rol ten aanzien van een project. Deze taak kan nader worden omschreven als het regelmatig beoordelen van het projectresultaat, de projectdoelstelling en de projectrisico’s aan de hand van rapportages. Na afronding van een projectfase zal de stuurgroep moeten vaststellen of de projectresultaten voldoende zijn, de projectdoelstellingen nog gelden en de projectrisico’s aanvaardbaar zijn en/of in voldoende mate worden afgedekt. Deze taak van de stuurgroep impliceert dat de leden van de stuurgroep goed op de hoogte dienen te zijn van de status en voortgang van het project. De praktijk leert dat de kennis en de beschikbare capaciteit van de stuurgroepleden veelal te beperkt zijn om een gewogen oordeel te kunnen vormen over de risico’s binnen het project.

Een verstandige stuurgroep laat zich dan ook ondersteunen door een onafhankelijke externe adviseur die de stuurgroep ondersteunt op het gebied van projectrisicomanagement. We zien verschillende invullingen van deze rol. Ten eerste is er die van sparringpartner: een zeer ervaren project- en programmamanager coacht de stuurgroepleden in hun taak. De stuurgroepleden worden voorbereid om echt hun rol te pakken in de stuurgroep: hoe laat je je informeren, waarover moet je besluiten nemen, hoe luister je naar je gevoel? De sparringpartnerrol biedt ook de mogelijkheid om in vertrouwen door te spreken wat te verwachten valt in een project en wat de mogelijke risico’s kunnen zijn. Een andere invulling van projectrisicomanagement is het inzetten van de Quality Assurance-rol. Iemand in de Quality Assurance-rol onderzoekt periodiek de status, de voortgang, de belangrijkste risico’s en de wijze waarop het project de risico’s beheerst. Hiertoe wordt projectdocumentatie bekeken en wordt gesproken met de belangrijkste betrokkenen in het project. Onafhankelijk van de reguliere voortgangsrapportage door de projectleiding rapporteert degene in de Quality Assurance-rol zijn/haar bevindingen aan de stuurgroep.

Bevoegdheden van een stuurgroep

De projectstuurgroep vervult eveneens een taak in de besluitvorming voor situaties waarin de projectleider geen bevoegdheden heeft of waarin er sprake is van tegengestelde belangen of conflicten binnen de projectorganisatie. De rol die de stuurgroep in het besluitvormingsproces vervult, lijkt op het eerste gezicht een duidelijke zaak: de besluiten die de stuurgroep neemt zijn bindend; zij is immers het hoogste onderdeel in de projectorganisatie en daarmee bevoegd tot het nemen van bindende besluiten. De mate waarin de stuurgroep een besluitvormende rol inneemt, verschilt echter. In de situatie dat een organisatie een stuurgroep positioneert als klankbord, zien we zelden dat de stuurgroep een besluit neemt. Als er situaties worden voorgelegd aan de stuurgroep, zal de stuurgroep een advies ten aanzien van de besluitvorming formuleren. De projectgroep volgt dit advies op of niet. De stuurgroep kan een meer ondersteunende rol vervullen. Zij neemt alleen besluiten waarvoor de projectgroep niet bevoegd is of waarover er een dispuut is binnen de projectgroep. De sturende stuurgroep neemt alle besluiten; de projectgroep heeft in het besluitvormingsproces een voorbereidende en uitvoerende taak.

Maar hoe zit het met de rol van de stuurgroep in organisaties die een agile aanpak hanteren? De kern van de agile werkwijze houdt in dat teams in korte, overzichtelijke periodes werken aan nieuwe producten (diensten of IT-aanpassingen). Deze werkwijze heeft vele voordelen: doordat medewerkers uit verschillende disciplines nauwer kunnen samenwerken en dus ook sneller besluiten kunnen nemen, is er meer ruimte voor het creatieve proces en wordt de organisatie wendbaarder. Hierdoor is men eerder in staat bij te sturen als er sprake is van veranderende wensen of prioriteiten.

Het agile werken wordt wel eens aangegrepen als reden om een project minder te sturen en daarbij ook de verantwoording van het budget en de voortgang vrijer of los te laten. Helaas is dit een misvatting. Ja, het klopt dat agile werken zelfsturende teams voorstaat. Echter, deze zelfsturende teams maken bijna altijd deel uit van een groter geheel: een project of programma dat als doel heeft een verandering (verbetering van een bedrijfsfunctie, een integratie of een implementatie van een IT-systeem) te realiseren. De verschillende agile teams dragen bij aan de realisatie van het grotere geheel. Deze projecten passen de reguliere projectmanagementmethodieken toe om uiteindelijk binnen de kaders van tijd, geld en kwaliteit vooraf gedefinieerde doelen te realiseren. Een stuurgroep die uiteindelijk eigenaar is van het project, is ook bij agile werken aanwezig. Deze stuurgroep heeft natuurlijk wel veel meer een ondersteunende rol dan bij een traditionelere aanpak.

Verantwoordelijkheden

De stuurgroep is formeel ook de opdrachtgever van een project. De laatste jaren zien we meer en meer dat bij de initiatie van een project ook een stuurgroep wordt samengesteld en zijn er minder projecten zonder een stuurgroep. De opdrachtgeversrol impliceert eveneens dat de stuurgroep de projecteigenaar is en daarmee verantwoordelijk is voor de succesvolle uitvoering van het project. De eindverantwoordelijkheid voor een project is belegd bij de stuurgroep omdat het eindresultaat van het project moet bijdragen aan de organisatiedoelstellingen. De stuurgroep heeft zowel budgettaire als bestuurlijke verantwoordelijkheid. Deze verantwoordelijkheidsstructuur moet waarborgen dat er vanuit de organisatie voldoende aandacht is voor het realiseren van de projectdoelstellingen. De stuurgroep delegeert hierbij het dagelijkse projectmanagement aan de projectleider, die binnen afgesproken grenzen (tijd, geld, kwaliteit en scope) gevolmachtigd is. Er is geen bijsturing van de stuurgroep nodig zolang een project op koers ligt. Binnen de tolerantiegrenzen kan de projectmanager zelfstandig beslissingen nemen. Hij is verplicht te rapporteren aan de stuurgroep zodra het project buiten deze grenzen dreigt te komen. De stuurgroep heeft als taak te bewaken dat de grenzen niet worden overschreden. Hiermee wordt in zekere mate gewaarborgd dat significante afwijkingen van de koers niet onopgemerkt aan de stuurgroep voorbijgaan.

Om een effectieve besluitvorming door de stuurgroep te kunnen waarborgen zullen het projectteam en de stuurgroep bij de start van het project enkele duidelijke afspraken moeten maken over:

  • de taken, bevoegdheden en verantwoordelijkheden van de stuurgroep;
  • de beslissingsbevoegdheid van de projectleider;
  • de wijze waarop het projectteam rapporteert aan de stuurgroep;
  • de frequentie van bijeenkomen van de stuurgroep.

Samenstelling van een stuurgroep

Het succes van projecten is onder meer afhankelijk van de betrokkenheid van alle belanghebbenden. Binnen het project wordt een product opgeleverd door leveranciers (intern of extern), voor klanten (eindgebruikers) of ten behoeve van het realiseren van organisatiedoelstellingen. Als een van deze partijen ondervertegenwoordigd is, levert dat risico’s op voor het succes van het project. Het leidt tot vertragingen, ontevreden klanten of projectresultaten zonder toegevoegde waarde voor de business.

Bij de samenstelling van de stuurgroep moeten de volgende aandachtspunten in ogenschouw worden genomen:

  • waarborging van de verschillende rollen in de stuurgroep inclusief de beslisrol;
  • vertegenwoordigers in de stuurgroep die de juiste beslissingsbevoegdheid hebben.

De Prince2-projectmethodiek onderkent drie vertegenwoordigende rollen in de stuurgroep om ondervertegenwoordiging te voorkomen: businessmanager (Business), senior gebruiker (User) en senior leverancier (Supplier). Deze rolverdeling in de stuurgroep wordt binnen Prince2 aangeduid als BUS:

  • Businessmanager (Business). De businessmanagerrol is de projecteindverantwoordelijke en de eigenaar van de businesscase. Hij beoordeelt het project in relatie tot de bedrijfsdoelstelling en het bedrijfsbelang, en de rechtvaardiging van de kosten afgezet tegen de baten.
  • Senior gebruiker (User). De senior-gebruikersrol vertegenwoordigt de groep die gebruik zal gaan maken van de op te leveren producten van het project. Daarnaast verzekert deze rol de goede aansluiting van de projectresultaten op de gebruikerseisen.
  • Senior leverancier (Supplier). De senior-leveranciersrol levert de benodigde menskracht, goederen en/of diensten voor het project. Deze rol draagt zorg voor de degelijkheid van ontwerpen en producten en voor het volgen van standaarden. Daarnaast beoordeelt de leverancier de haalbaarheid van op te leveren producten binnen de gestelde grenzen van tijd en kosten. Deze rol wordt veelal ingevuld door een vertegenwoordiging van de IT-organisatie omdat zij veelal de interne en externe menskracht levert voor de uitvoering van het project. Deze rol kan ook zeker ingevuld worden door een externe leverancier. Hierbij merken we wel op dat relatief veel leveranciers er huiverig voor zijn om echt onderdeel te zijn van de stuurgroep en liever toehoorder zijn.

Behalve aan het waarborgen van een goede vertegenwoordiging dragen deze drie verschillende rollen eveneens bij aan een natuurlijk krachtenspel binnen de stuurgroep. Hierdoor komen de verschillende belangen goed tot uitdrukking en kunnen ze goed tegen elkaar worden afgewogen.

De impact van een project bepaalt voor een groot deel de samenstelling van de stuurgroep. Een project dat een groot effect heeft op alle bedrijfsprocessen en dus ook op de gehele organisatie, heeft een stuurgroep nodig met daarin vertegenwoordigers uit de gehele organisatie. Daarnaast is het van belang dat deze vertegenwoordigers de juiste beslissingsbevoegdheid hebben. De stuurgroepleden moeten bevoegd zijn beslissingen te nemen die de gehele organisatie beïnvloeden. Voor een project op afdelingsniveau dat alleen impact heeft op de bedrijfsprocessen op de betreffende afdeling, zal de stuurgroep moeten bestaan uit leden die beslissingsbevoegd zijn binnen deze afdeling en die de consequenties van bepaalde beslissingen voor deze afdeling juist kunnen inschatten. Hierbij geldt: wie niet investeert in het project, in welke zin dan ook, moet zeker niet meesturen. Een financieel directeur als lid van een stuurgroep van een klein project dat slechts impact heeft op een afdeling buiten het financiële domein, is geen effectieve keuze. De directe betrokkenheid ontbreekt. Een stuurgroep(lid) moet de veranderingen voor de organisatie kunnen zien en voelen en daarop kunnen sturen. Naast voldoende beslissingsbevoegdheid bij de verschillende leden van de stuurgroep is het van belang dat er binnen de stuurgroep een duidelijke beslisser is. Hij is degene die in geval van verschil van mening/inzicht binnen de stuurgroep een beslissing kan nemen. Eveneens zal hij in voorkomende situaties buiten de stuurgroepvergadering besluiten nemen op verzoek van de projectleider. De voorzitter van de stuurgroep vervult veelal deze rol.

De rol van de stuurgroep in de verschillende projectfasen

Een project doorloopt verschillende fasen. Iedere fase heeft een ander doel. De activiteiten die een stuurgroep moet uitvoeren om haar taak te kunnen vervullen, verschillen hierdoor enigszins per projectfase. Dit op zich stelt weer andere eisen aan de samenstelling van de stuurgroep. In tabel 1 is per projectfase weergegeven welke taken de vertegenwoordigende rollen in de stuurgroep moeten hebben en welke eisen dit stelt aan de samenstelling van de stuurgroep. Ook al zijn verschillende rollen van de stuurgroep en verschillende typen personen in de stuurgroep gewenst per projectfase, dit betekent nog niet dat de stuurgroep bij iedere fase totaal van samenstelling moet veranderen. Een vaste kern binnen de stuurgroep is van groot belang. Alleen met een aantal stuurgroepleden die gedurende het gehele project in de stuurgroep zitting hebben, kan gewaarborgd worden dat de stuurgroep het overzicht heeft over het totale project. Zij moet namelijk niet alleen de benodigde besluiten kunnen nemen voor de fase waarin het project zich bevindt, maar ook de eerder genomen besluiten in overweging kunnen nemen. In voorkomende gevallen is het raadzaam dat de stuurgroep deskundigen uitnodigt haar te assisteren in haar rol.

C-2022-1-Lof-NL-t01-klein

Tabel 1. Taken en samenstelling van de stuurgroep gerelateerd aan de projectfasen. [Klik op de afbeelding voor een grotere afbeelding]

Praktijkvoorbeelden

Hierna wordt een aantal praktijkvoorbeelden gegeven van de rol van de stuurgroep in projecten:

  • Initiële stuurgroep: een stuurgroep waarvan de initiële samenstelling passend is voor de start maar niet voor de uitvoering.
  • Inhoudelijke stuurgroep: een stuurgroep die zich laat verleiden veel inhoudelijke thema’s aan te boren en reeds gevoerde discussies op stuurgroepniveau laat herhalen.
  • Terugzakkende stuurgroep: een stuurgroep die naar aanleiding van succes in een eerdere fase, in de volgende fase meer afstand neemt van het project.
  • Sturende stuurgroep: een stuurgroep die zich heel bewust is van het positieve effect op projectsucces om een projectleider scherp te houden.

De initiële stuurgroep

Een organisatie stelde een belangrijk beveiligingsincident vast. Het bleek dat verschillende medewerkers inzage hadden in de persoonlijke contactgegevens van medewerkers maar ook in die van hun klanten. Een eerste onderzoek maakte duidelijk dat het oplossen een complexe opgave zou zijn. Het was beduidend meer dan het verbeteren van de beveiliging. Hier moest ook worden uitgezocht hoe de verschillende contactgegevens binnen de verschillende processen en systemen worden gecreëerd, gebruikt en veranderd. Maar nog veel urgenter was de onduidelijkheid wie nu waar verantwoordelijk voor is en hoe invulling gegeven moest worden aan deze verantwoordelijkheid.

De raad van bestuur heeft direct gehandeld door enkele medewerkers te vragen een aanpak uit te werken om dit probleem te adresseren. Er is als een van de eerste acties een stuurgroep samengesteld bestaande uit RvB-lid, Corporate Security Officer, controller en IT-directeur. De beoogd projectleider is met interne en externe support aan de slag gegaan voor de uitwerking van de aanpak. Deze aanpak is doorgesproken met de verantwoordelijken voor HR en Verkoop en er is afstemming gezocht met aanpalende projecten om de (wederzijdse) afhankelijkheden goed in kaart te brengen. De uitgewerkte aanpak voor het gehele project en de detailaanpak voor de eerste drie maanden zijn goedgekeurd voor de stuurgroep.

Vrijwel direct na deze goedkeuring werd er gesleuteld aan de stuurgroepmeetings. Het eerste signaal was dat het RvB-lid in de stuurgroep bij voorkeur op de hoogte gehouden werd bij de oplevering van belangrijke mijlpalen. De frequentie van de ingeplande stuurgroepen werd aangepast: meetings waar het RvB-lid bij aan zou haken en ‘tussentijdse’ stuurgroepvergaderingen die bedoeld zijn om de overige stuurgroepleden bij te praten.

De eerste echte stuurgroep na de verleende goedkeuring was eigenlijk niet meer dan een bijpraatsessie voor twee leden van de stuurgroep. De projectgroep had in de voorliggende periode van zes weken de afgesproken producten gerealiseerd, maar ook vastgesteld dat de reikwijdte van de problematiek groter was. De stuurgroepvergadering richtte zich op het bespreken van de gerealiseerde producten en de goede samenwerking binnen de organisatie. Er werd in de stuurgroep eigenlijk niet stilgestaan bij de impact van de omvang van de problematiek op het budget en de planning. Het signaal voor langere tijdslijnen is niet door de stuurgroepleden opgepakt maar ook niet door de projectleider expliciet gemaakt.

De interne reflectie van het projectteam op deze stuurgroep maakte duidelijk dat de betrokkenheid van senior management niet meer werd gevoeld. Het voelde niet goed dat slechts twee van de vijf stuurgroepleden aanwezig waren. Het projectteam heeft vastgesteld dat de samenstelling van de stuurgroep toch niet de juiste was voor de uitvoering van het project. Dat het RvB-lid het voortouw nam om het project te initiëren was goed. Maar het werd ook duidelijk dat in het eerste deel van de uitvoering de verantwoordelijke hr-directeur eigenaar is. In afstemming met de stuurgroepleden is de samenstelling hierop aangepast. Afgesproken is dat het verantwoordelijke RvB-lid periodiek wordt geïnformeerd via de hr-directeur. Het projectteam heeft ook de hand in eigen boezem gestoken ten aanzien van de insteek van de stuurgroepvergaderingen. Er wordt nu gerapporteerd aan de hand van een duidelijk stramien: niet alleen wordt de stuurgroep geïnformeerd over de voortgang, maar standaard worden ook issues, te nemen besluiten en budgetuitnutting besproken.

De inhoudelijke stuurgroep

Een Nederlandse groothandelsorganisatie bestaande uit meerdere werkmaatschappijen heeft een project gestart voor de invoering van een nieuw ERP-systeem. De projectorganisatie bestaat uit een stuurgroep, een projectgroep en een aantal werkgroepen. De werkgroepen zijn ingedeeld naar functionele aandachtsgebieden: Financiën, Inkoop, Verkoop, Logistiek en ICT. De stuurgroep bestaat uit management­teamleden van de verschillende functionele aandachtsgebieden.

De projectgroep komt vanaf de start wekelijks bijeen; de stuurgroep komt één keer in de maand bijeen. De organisatie wordt gekenmerkt als sterk operationeel ingericht met een beperkte aandacht voor de langere termijn. Deze kenmerken ziet men ook terug in de pragmatische projectaanpak: zaken oppakken zonder een duidelijk plan van aanpak. Dit vertaalt zich door naar de projectgroepvergaderingen: veel onderwerpen van de verschillende disciplines worden uitvoerig inhoudelijk besproken en in gezamenlijk overleg worden er acties vastgesteld. De gemiddelde projectgroepvergadering duurt dan ook minimaal vier uur. Ter voorbereiding van de projectgroepvergadering levert elke medewerker een voortgangsverslag in voor zijn eigen functionele aandachtsgebied. Dit voortgangsverslag wordt uitgebreid besproken in de vergadering. Na afronding van de projectgroepvergadering wordt er een totaal voortgangsverslag opgesteld bestaande uit de afzonderlijke voortgangsverslagen aangevuld met de geformuleerde acties.

De stuurgroep wordt door de projectleider op de hoogte gebracht in een bespreking van dit voortgangsverslag. De projectleider beperkt zich niet tot de belangrijkste onderwerpen of de beslispunten: het gehele voortgangsverslag wordt doorgenomen. De stuurgroep bespreekt evenals de projectgroepvergadering de onderwerpen inhoudelijk en stelt in onderling overleg vast of de door de projectgroep genomen acties de juiste zijn geweest of dat er andere acties genomen dienen te worden. Alhoewel deze vergaderingen een lagere frequentie hebben dan de projectgroepvergadering, wijkt de duur niet af. Al gauw wordt een hele ochtend of middag uitgetrokken voor de vergadering.

De stuurgroep in deze projectorganisatie vervult een sterk inhoudelijke rol; zij wil van de kleinste details op de hoogte worden gehouden. Alhoewel het de cultuur is van deze organisatie om sterk inhoudelijk gericht te zijn, is deze aanpak natuurlijk weinig efficiënt voor de projectleider en voor de leden van de stuurgroep. De projectleider heeft te maken met twee projectgroepen waartussen hij aan het schipperen is. Daarnaast besteden de stuurgroepleden van een redelijk senior niveau relatief veel aandacht aan inhoudelijke zaken. De vraag is natuurlijk of deze constructie ook effectief is. Voor deze organisatie is de constructie zeker effectief omdat er voor de uitvoering van het project gekozen is voor een pragmatische aanpak. Dit bracht met zich mee dat een groot aantal zaken besproken diende te worden. Een risico van deze aanpak is dat er ondanks de uitvoerige besprekingen beslissingen worden genomen die men in situaties met een gedegen voorbereiding niet genomen zou hebben. Daarnaast is de kans groot dat de stuurgroep het overzicht verliest. De stuurgroep vervult geen reflecterende/beschouwende rol meer, maar is sterk inhoudelijk betrokken. Wie is er dan nog in de organisatie die het project kan bijsturen? In deze stuurgroep valt op dat er geen duidelijke afspraken zijn gemaakt voor taken en bevoegdheden van de stuurgroep en de projectgroep. De stuurgroepleden zijn zodanig inhoudelijk betrokken dat er meer sprake is van uitvoeren dan van (bij)sturen.

De terugzakkende stuurgroep

Een multinationale productieorganisatie heeft een transformatieproject gestart dat als doel heeft de bedrijfsprocessen (inkoop, verkoop, financiën en productie) te harmoniseren en de huidige IT-systemen te uniformeren naar een nieuw ERP-systeem. De organisatie heeft een extern adviesbureau aangetrokken voor de implementatie van het ERP-systeem. De projectorganisatie is gedegen opgetuigd en bestaat uit een projectgroep onder leiding van een externe projectleider, diverse werkgroepen en een stuurgroep. De werkgroepen bestaan uit een goede vertegenwoordiging van de gebruikersorganisatie aangevuld met externe implementatieconsultants. De stuurgroep is vier man groot en bestaat uit de algemeen directeur, de financieel directeur, het hoofd productie en een directeur van het adviesbureau.

De implementatie van het ERP-systeem is opgedeeld in twee fasen. De eerste fase betreft de implementatie van de financiële modules, de tweede fase die van de inkoop-, verkoop- en productiemodules. De eerste fase van het project is succesvol verlopen. De financiële modules zijn binnen de initieel geplande tijd en het initieel geplande budget geïmplementeerd. De stuurgroep kwam in deze periode maandelijks bijeen. De vergaderingen van de stuurgroep werden gekenmerkt door alertheid; de stuurgroep had goed gevoel voor de status en voortgang van het project en de bijbehorende projectrisico’s. De verschillende stuurgroepleden waren positief kritisch naar de projectleider en namen concrete besluiten in de gevallen die de projectleider voorlegde.

De tweede fase van het project werd geleid door een andere projectleider van het organisatieadviesbureau, met meer kennis van de inkoop-, verkoop- en productiemodules. Er heerste een winnaarsgevoel in het project door de succesvolle implementatie van de eerste fase. Dit gevoel was zo sterk dat al enkele maanden na de implementatie van de eerste fase de aandacht van de stuurgroep voor het project verslapte. Haar vergaderingen werden korter en werden niet door alle leden bijgewoond. Het kwam zelfs voor dat stuurgroepvergaderingen geen doorgang vonden. Dit leidde voor de projectorganisatie tot een vervelende situatie doordat verschillende activiteiten in de organisatie buiten de invloedssfeer van de projectleider niet goed afgestemd waren op de projectactiviteiten. Het implementatieproject liep hierdoor onnodige vertraging op.

De projectleider heeft als gevolg van de verminderde betrokkenheid van de stuurgroep bij het project besloten zelfstandig besluiten te nemen. Daardoor is de implementatiedatum van de tweede fase twee keer verschoven zonder dat de stuurgroep inhoudelijk betrokken was. Nadat de implementatiedatum voor de tweede keer was uitgesteld, heeft de algemeen directeur de stuurgroep bijeengeroepen en aangegeven te laten onderzoeken wat de status van het IT-project was. Er is op verzoek van de stuurgroep door een onafhankelijke IT-auditor een projectreview uitgevoerd naar de status en voortgang van het project. De belangrijkste bevinding van deze projectreview was dat de stuurgroep onvoldoende betrokken was en haar samenstelling nog gericht was op de eerste fase. Hierdoor was er voor het project een situatie ontstaan waarin voor kritische processen en op kritieke momenten onvoldoende resources vanuit de gebruikersorganisatie beschikbaar werden gesteld. Naar aanleiding van deze bevindingen heeft de algemeen directeur in samenwerking met de projectleider een nieuwe samenstelling en een nieuw takenpakket voor de stuurgroep geformuleerd en een nieuwe planning opgesteld voor het resterende deel van het project. De eindverantwoordelijken voor de inkoop- en verkoopprocessen zijn opgenomen in de stuurgroep.

De stuurgroep in dit project heeft een goede rol vervuld in de eerste fase. Door strakke rapportagelijnen, frequente vergaderingen en heldere besluitvorming heeft de stuurgroep een duidelijke bijdrage geleverd aan het succes van de eerste fase. De aandacht van deze stuurgroep verslapte in de tweede fase, en wel uiteindelijk zodanig dat de projectleider zich genoodzaakt zag zelfstandig besluiten te nemen. Oorzaak van de verslapte aandacht is de gedachte van de stuurgroep dat met de succesvolle implementatie van de eerste fase het project goed op de rit zat. Ook sloot de samenstelling van de stuurgroep onvoldoende aan op de scope van de tweede fase. Proceseigenaren van de inkoop- en verkoopprocessen waren niet betrokken in de tweede fase. Een belangrijke les die geleerd kan worden uit dit praktijkvoorbeeld is dat de stuurgroep gedurende het gehele verloop van het project betrokken moet blijven bij het project.

De sturende stuurgroep

Een financiële instelling heeft door een extern adviesbureau een blauwdruk laten ontwerpen van de toekomstige informatievoorziening. Na goedkeuring van deze blauwdruk door de organisatie en de moedermaatschappij is er een projectgroep opgericht voor het realiseren van de blauwdruk. De projectgroep wordt geleid door een externe projectleider. De stuurgroep bestaat uit de directieleden (algemeen, financieel en commercieel directeur), de IT-directeur van de moedermaatschappij en de projectleider. De financieel directeur is binnen de organisatie verantwoordelijk voor de realisatie van het project.

In de eerste maanden van het project vertaalt de projectleider de blauwdruk van de informatievoorziening naar plannen van aanpak voor het realiseren van concrete toekomstige informatiesystemen. In een van de eerste stuurgroepvergaderingen laat de stuurgroep de projectleider de uitwerking presenteren. Omdat de financiële uitwerking afwijkt van hetgeen het externe adviesbureau heeft voorgesteld, stelt de stuurgroep voor de plannen van aanpak te laten toetsen door een IT-auditor. De stuurgroep vervult hier een sterk sturende rol. Op basis van de externe toetsing worden de plannen van aanpak aangepast en wordt het project opgestart.

De projectleider houdt tweewekelijks een projectgroepvergadering; de stuurgroep komt maandelijks bijeen. Gedurende de uitvoering van het project bespreekt de projectleider wekelijks de voortgang met de financieel directeur. De projectleider legt in het gesprek met de financieel directeur eveneens knel- en beslispunten voor en de mogelijke aanpak voor het oplossen ervan. De financieel directeur vervult een beslissende rol indien er vanuit het project verschillende ideeën zijn ten aanzien van de realisatie van functionaliteiten en organisatorische veranderingen.

Aanvullend worden in de maandelijkse stuurgroepvergadering de status en de voortgang van het project formeel gerapporteerd. De algemeen directeur vervult in deze vergaderingen heel bewust een prikkelende rol ten aanzien van de projectleider. Hij wil op deze manier continu laten merken dat het project een serieuze zaak is voor de organisatie en zeer nauwkeurig gevolgd wordt. De stuurgroep laat zich in haar rol periodiek ondersteunen door een IT-auditor. Eens in de drie maanden laat de stuurgroep de status en voortgang van het project door deze auditor onderzoeken. De bevindingen worden gerapporteerd in de stuurgroep; de projectleider mag direct aanvullend op de rapportage zijn voorgestelde acties presenteren om de geconcludeerde leemten op te pakken. De stuurgroep houdt op deze manier grip op het project en de projectleider.

In de afrondende fase van het project is om verschillende redenen het in productie nemen twee keer met een maand uitgesteld. Na de tweede keer uitstel wil de stuurgroep om velerlei redenen dat er geen derde uitstel volgt. De stuurgroep heeft besloten zich vanaf dat moment meer inhoudelijk te laten informeren over de status en voortgang van het project. De projectleider dient hierover dagelijks te rapporteren aan de financieel directeur. Aanvullend hierop heeft laatstgenoemde een IT-auditor gevraagd continu te onderzoeken of de door de projectleider geformuleerde actiepunten voldoende opgepakt worden en of de projectleider de risico’s adequaat beheerst. Alhoewel de constructie geen optimale situatie was voor de projectleider, was het een noodgreep van de stuurgroep teneinde weer grip te krijgen op het project.

De stuurgroep in deze organisatie heeft zich van het begin af aan gerealiseerd dat het een omvangrijk project zou worden met ernstige financiële consequenties als het project zou mislukken. Ze heeft daarom vanaf het begin grip willen hebben op de status en voortgang van het project. Dit heeft ze bewerkstelligd door de realisatie van het project op te nemen in het takenpakket van een van de directieleden. De verantwoordelijkheid van de organisatie voor het slagen van het project lag duidelijk op het netvlies van de stuurgroep. De stuurgroep, die bestond uit de voltallige directie, was zich bewust voor welke onderwerpen zij zelfstandig kon bijsturen en voor welke onderwerpen zij externe ondersteuning nodig had. De samenstelling van de stuurgroep was, hoewel zwaar, effectief en in lijn met de omvang en complexiteit van het project voor de organisatie.

Reflectie op praktijkvoorbeelden

Uit de hiervoor beschreven praktijkvoorbeelden kan de conclusie worden getrokken dat de samenstelling en de taken die de stuurgroep verricht ,niet altijd goed aansluiten bij de behoefte vanuit het project. De samenstelling van de stuurgroep bestaat dan weliswaar uit veelal senior medewerkers, maar in de beschreven situaties is niet helder welke gebruikers zij vertegenwoordigen, of zij de juiste beslissingsbevoegdheid hebben en welke taken/activiteiten van hen worden verwacht. Ook wordt de samenstelling van de stuurgroep niet periodiek geëvalueerd aan de hand van de ontwikkelingen binnen het project.

Voor zover wij weten is de stuurgroep in het praktijkvoorbeeld van de initiële stuurgroep heel bewust samengesteld, maar niet op tijd aangepast. De andere stuurgroepen zijn op een natuurlijke wijze gevormd; met andere woorden, deze leden leken op het eerste gezicht de meest aangewezen personen. Uit de geschetste praktijkvoorbeelden blijkt echter ook eenduidig dat een evenwichtige samenstelling van de stuurgroep, een duidelijk takenpakket en een verdeling hiervan over de leden een aantal knelpunten in het projectverloop hadden kunnen voorkomen.

Stappenplan om te komen tot een samenstelling van de stuurgroep

Op basis van voornoemde taken, bevoegdheden en verantwoordelijkheden binnen een project volgt hierna een stappenplan dat gehanteerd kan worden voor de samenstelling van een stuurgroep:

  • Bepaal de impact van het project (welke organisatieonderdelen worden beïnvloed door het project?).
  • Bepaal welke groepering voor het project een belangrijke bijdrage kan leveren. Denk hierbij aan ‘Business’, ‘User’ en ‘Supplier’.
  • Beschrijf de bijdrage van de verschillende groeperingen vooraf en kies die personen die op dat gebied een groot respect hebben verworven. Wie geen gezag heeft, in welke zin dan ook, moet niet proberen om dat via een stuurgroep alsnog te verwerven.
  • Stel vast welke beslissingsbevoegdheden de stuurgroep nodig heeft. Kies personen die een dergelijke beslissingsbevoegdheid in hun huidige werkzaamheden ook al toegekend gekregen hebben.
  • Wijs de voorzitter en daarmee de beslisser van de stuurgroep aan.
  • Maak een stuurgroep niet groter dan vijf of zes personen. Voorkom dat de stuurgroep een log orgaan wordt dat moeilijk tijdig bijeengeroepen kan worden en waarin discussies door de omvang onmogelijk zijn.
  • Overweeg de stuurgroep bij haar taken in het bewaken van de voortgang en de beheersing van de projectrisico’s te laten begeleiden door een (externe) deskundige.

Conclusie

De stuurgroep vormt een belangrijke niet te onderschatten rol in de projectorganisatie. De stuurgroep is de opdrachtgever voor de realisatie van het project. De opdrachtgeversrol ontslaat de stuurgroep allerminst van haar verantwoordelijkheid voor het succesvol uitvoeren van het project. Deze verantwoordelijkheid brengt met zich mee dat de stuurgroep participeert in het project en niet de vorderingen van de projectgroep vanaf de zijlijn gadeslaat. Dit stelt dan ook eisen aan de taken die de stuurgroep dient uit te voeren en de hiermee gepaard gaande tijdsbesteding.

De praktijkvoorbeelden in dit artikel geven echter weer dat het takenpakket en de samenstelling van de stuurgroep in de praktijk niet altijd bewust tot stand zijn gebracht. Mede op basis van ervaringen in de praktijk is een stappenplan gecreëerd dat kan worden gebruikt voor het samenstellen van de stuurgroep.

The role of a steering committee in a project

A project is usually organized on a large scale. Project team, workgroups, sounding board, sponsor group, steering committee, they are all part of it. But which roles do the different parts have to fulfil in order to make the project succeed? Especially a steering group is regularly installed without prior proper thinking about the tasks of this group, and which functions should participate in order to fulfil the roles and tasks. In this article, we will address the role of a steering committee in a project organization. Next to its tasks, powers, responsibilities and members, you will also find a few illustrating and practical examples in which the steering committee has played an important role in the success or the failure of a project.

Of lees dit artikel in het Nederlands: De rol van een stuurgroep in een project

Introduction

Organizations change continuously; new products and services, mergers and acquisitions or application of new technologies. Project management methods are applied to realize these changes. Multiple projects are continuously in progress at any organization. Either projects that stand on its own or are clustered in a program. Projects are often characterized by a structure of a steering committee, a project group and some workgroups. The steering committee is often positioned as the directing and guarding body of the project. In practice, the composition of the steering committee and the task of the steering committee differs per project. In this article, we address the role, responsibilities and composition of the steering committee. The creation of a steering committee only has added value if this has an adequate composition and responsibilities. This is an obvious matter for a project team, but in a steering committee, these aspects are often forgotten. This is why the steering committee does not always function properly. Steering committees exist in different forms and types. Some types of steering committees function properly, others less. As an illustration, in this article we provide a number of examples of projects with sound functioning steering committees and with malfunctioning steering committees. Partly based on practical experiences, a step-by-step plan has been developed that can be used for the composition of your steering committee.

Impact of projects

It is of critical importance for an organization to respond to external developments and/or the application of technological possibilities in a timely and adequate manner. This importance translates directly into the importance of the success of projects that have to realize these changes. Next to project failure, not achieving the intended project objectives also has a substantial (financial) impact.

Over the years, various studies into the failure and success factors of projects have been carried out. When looking at a large number of these studies, key success factors can be reduced to:

  • Involvement of senior management. Involvement of key management in a project reaches further than the mere initiation stage of a project. Actually, senior management is the owner of the project: they want something to be realized or changed, and can weigh priorities between projects among themselves and with other senior management members. Furthermore, the project leader should be sufficiently supported by the steering group in the execution of the project. That also implies that they need to establish the necessary preconditions and give direction. Think of organizing adequate user engagement, prioritizing the use of resources in the various projects and line tasks and activities; but also taking decisions about (re)directing the project.
  • Clear objectives and scope. An objective that is unambiguous and not multiple interpretable helps in maintaining focus. A well-defined scope prevents scope creep and unintentional digression to other areas.
  • High quality project and program management. Perhaps self-evident, but project and program management is a discipline. Not everyone has the capacity and competencies to manage a project. The number of people within an organization that are experienced managing complex transformations is rather limited. In addition, not all organizations want to use a rigid form of project management for the realization and monitoring of its progress. In the present time of sizeable changes and technical developments, vigor and decisiveness are crucial.
  • Focus on quality control. Oddly enough, organizations devote less attention to quality control than in their primary processes. Using quality control in projects increases the likelihood of success. By explicitly defining the quality requirements or acceptance criteria prior to the realization of project deliverables and by determining how these will be tested and validated, it is obviously clear to all stakeholders what the expected quality will be and whether the deliverables will be strictly in adherence with the criteria.
  • Focus on benefits realization. The products realized by a project (e.g. a new CRM system or a new supply chain process) actually need to be used or need to start “working”. Only then can the intended objectives or benefits such as increased productivity, cost-saving or higher Net Promotor Score be realized. Managing and monitoring that these benefits are realized is too often handled implicitly. Actively controlling a project ensures that the responsible managers in the organization will take on the realization of the benefits as anticipated in the business case.

Therefore, a steering committee of a project has an important role in the success of a project. It anchors the involvement of senior management, helps to maintain focus on objectives, monitors the quality of project management and deliverables, directs and controls the line organization for the realization of the business benefits, etc. However, establishing a steering committee is never a guarantee for involvement without further ado. We outlined a few criteria to which a steering committee needs to comply with to function successfully.

Tasks, powers and responsibilities of a steering committee

Major tasks

The project steering committee has as its most important task the fulfilling of an initiating, signaling and adjusting role to objectives with respect to a project. This task can be further defined as regularly assessing project results, the project objective and the project risks on the basis of reports. After completion of each project phase, the steering committee has to assess whether the intended results suffice, the project objectives are still valid, and the project risks are acceptable and/or have sufficiently been addressed. This task of the steering committee implies that het members of the steering committee have to be well-informed of the status and progress of the project. Practice shows that the knowledge and the available capacity of steering committee members is usually too limited in order to be able to form a well-balanced and weighted opinion about the risks of the project.

A sensible steering committee is therefore supported by an independent external advisor who supports the steering committee in the area of project risk management. We see various interpretations of this role, two basic types are:

  • A sparring partner role. A highly experienced project and program manager coaches the steering committee members in their role. The members of the steering committee are being prepared to really take on their role: how to be informed, which decisions do you have to take, how to listen to your gut feelings and presentiments. The sparring partner role also offers the possibility to discuss in confidence what to expect of a project and the possible risks.
  • A quality assurance role. A quality assurance role periodically investigates the status, progress, most important risks and the way in which the project controls the risks. To this end, project documentation is viewed and discussed with the most important people concerned in a project. Independent from the regular progress reports by project management, the quality assurance role reports its findings independently to the steering committee.

Powers of a steering committee

The project steering committee also fulfils a task in the decision-making for those situations in which the project manager has no mandate or when there are conflicting interests or when there are conflicts within the project organization. At first sight, the role the steering committee fulfils in the decision-making process seems a clear: the decisions of the steering committee are binding as it is the highest entity in the project organization and can take binding decisions. However, the way in which the steering committee takes on a decision-making role differs. In the situation that an organization positions a steering committee as a sounding board, we hardly ever see the steering committee taking a decision. If cases are submitted to the steering committee, the steering committee will formulate an advice regarding the decision-making. The project group either follows this advice or not. The steering committee could have a more supporting role. It only takes decisions for which the project group is not competent or about which there is a dispute within the project group. The steering committee takes all decisions; the project group has a preparing and executing task in the decision-making process.

But what about the role of the steering group in organizations that have an agile approach? The core of the agile way of working entails that teams work on new products (services or IT adjustments) in short clear periods (“sprints”). This way of working has many advantages: it stimulates closer cooperation of employees of several disciplines, which results in faster decision-making, and it offers more room for creativity in the development process, ensuring flexibility for responding to and redirecting of projects due to changing requirements or priorities.

The agile way of working is sometimes used as a reason for giving less direction to a project. And with it also relaxing or giving up the responsibility on budget and progress. Regretfully, this is a misconception. Yes, it is correct that agile working advocates self-directing teams. However, these self-directing teams almost always are part of the bigger picture; a project or program that has as its goal to realize a business change (e.g. improvement of a Shared Service Center or an integration of an IT system). The different agile teams contribute to the realization of the bigger picture. These projects apply the regular project management methods in order to ultimately realize the prior defined targets with the scopes of time, budget and quality. A steering committee that ultimately is the owner of the project is also present when working in an agile manner. This steering committee has a far more supporting role than would be the case in a more traditional approach.

Responsibilities

Formally, the steering committee is also the “commissioner” of a project, the recipient of the project results. In recent years, we see more and more that a steering committee is formed at the start of a project and that there are fewer projects without some type of steering committee. The commissioner’s role also implies that they are the project owner and with that responsible for the successful execution of the project. The ultimate responsibility of a project is with the steering committee as the final project result needs to contribute to the business objectives. The steering committee has both budgetary and managerial responsibilities. This governance structure has to guarantee that there is sufficient attention from the organization for the realization of the project objectives. The steering committee delegates the daily project management to the project manager, who is authorized within the predefined boundaries (time, budget, quality and scope). No adjustments by the steering committee are needed as long as a project remains on course. The project manager can take self-sufficient decisions within the tolerance limits and is obliged to report to the steering committee as soon as the project threatens to cross these limits. The steering committee’s task is to maintain the applicable boundaries and limits. In this way it is safeguarded that significant deviations of the project cannot go unnoticed by the steering committee.

In order to guarantee effective decision-making by the steering committee, the project team and the steering committee has to make some clear agreements at the start of the project on:

  • the role, tasks, mandate, responsibilities of the steering committee (a RACI matrix might be useful in complex project organizations);
  • the power and mandate of the project manager (also in relationship to those of line management);
  • the way in which the project team reports to the steering committee (and in some cases even beyond);
  • the frequency of the steering committee meetings.

Composition of a steering committee

The success of projects is , amongst others, dependent on the productive involvement of all persons concerned. Within a project, a product is being delivered by suppliers (internally or externally), for clients (end users), or on behalf of the realization of organizational objectives. If one of these parties is underrepresented, it creates risks for the success of the project. It leads to delays, dissatisfied customers or project results without sufficient added value for the business.

For the composition of the steering committee, the following points of attention need to be considered:

  • ensuring the different roles of the steering committee, inclusive the decision-making role;
  • representatives in the steering committee who have the proper decisive power.

The Prince2 project method acknowledges three representative roles in the steering committee in order to prevent underrepresentation: the business manager (Business), the senior user (User) and the senior Supplier (Supplier). This cast in the steering committee is indicated within Prince2 as BUS:

  • Business manager (Business). The business manager role is the project manager and the owner of the business case. They assess the project in relation to the business objective and the business interest, the justification of the costs compared to the benefits.
  • Senior user (User). The senior user role represents the group that will leverage the results of the project in their operation. In addition, this role ensures a sound alignment of the project results with the user requirements.
  • Senior supplier (Supplier). The senior supplier role provides the required manpower, budget and/or services for the project. This role assumes the responsibility for the robustness of the designs and products and standards followed. Moreover, the supplier assesses the feasibility of the products to be delivered within the set boundaries of planning and budget. This role is often filled in by a representation of the IT organization as they usually provide the internal and external manpower for the execution of het project. This role can also be filled in by an external supplier, such as an IT provider or software package supplier. We do note that most suppliers are reluctant to fulfil an actual role in the steering committee; they prefer to be a listener.

Except for ensuring a sound representation, these three different roles also contribute to a natural powerplay within the steering committee. This is how the different interests are properly expressed, and they can be counterbalanced (so-called countervailing powers).

The business impact of a project largely determines the composition of the steering committee. A project that affects most business processes significantly and therefore the entire organization, needs a steering committee with representatives from the entire organization. In addition, it is important that these representatives have the proper power. The steering committee members must be entitled to take decisions that influence the entire organization. For a project at department level that only impacts the business processes at the department concerned, the steering committee should consist of members that have decision-making power within this department and can properly assess the consequences of certain decisions for this department. Those not investing in the project, in whatever sense, should definitely not co-govern. A financial director as member of a steering committee of a small project that only impacts a department outside of the financial domain is not an effective choice and could even be a drag factor; direct involvement is lacking. A steering committee (member) must be able to experience the changes in an organization and navigate likewise. Next to sufficient decision-making with the various committee members, it is important that there is a clear decider within the steering committee. This decider is the one who in case of a difference of opinion/insight within the steering committee can take a decision and will, upon the request of the project leader, take decisions in specific situations outside of the steering committee meetings. The chairman of the steering group mostly fulfils this role.

The role of the steering committee in the different project phases

A project goes through several phases, each phase has another purpose. Therefore, the activities that a steering committee needs to perform in order to fulfil its task differ somewhat per project phase. This poses other demands of the composition of the steering committee. Table 1 shows per project phase the tasks of the representative roles in the steering committee and the requirements of composition of the steering committee. Even though various roles of the steering committee and various types of persons are desired per project phase, this does not mean that the steering committee has to change completely with every phase. A fixed kernel within the steering committee is of the utmost importance. Only with a number of steering committee members serving on the steering committee throughout the project can it be ensured that the steering committee has an overview of the overall project. This is because it needs to be able to not only make the decisions necessary for the phase the project is in, but also to consider the decisions made previously. Where appropriate, it is advisable for the steering committee to invite experts to assist it in its role.

C-2022-1-Lof-EN-t01-klein

Table 1. Tasks and composition of the steering committee related to the project phases. [Click on the image for a larger image]

Examples from practice

The following provides some practical examples of the steering committee’s role in projects:

  • Initial steering committee. A steering committee of which the initial composition is suitable for the start but not for the execution.
  • Substantive steering committee. A steering committee that is seduced to touch a lot of substantive themes, focuses heavily on project content and repeats discussions previously held at the same (steering committee) level.
  • Receding steering committee. A steering committee that, further to the success in a prior phase, further distances itself in the next project phase.
  • Directing steering committee. A steering committee that is very conscious of het positive effect on the project success in order to keep a project leader alert.

The initial steering committee

An organization identified a critical security incident. It appeared that several employees had access to the personal contact data of employees, but also to those of their clients. A primary investigation revealed that resolving it would be a complex task. It appeared to be significantly more than the mere strengthening of access security rights. The various contact data within the different processes and systems that were created, used and changed also had to be investigated. But far more urgent was the uncertainty who was responsible for what and how to operationalize this responsibility.

The board of directors acted immediately by requesting some employees to develop an approach in order to address this problem. As one of the first actions, a steering committee was formed consisting of a member of the board of directors, the Corporate Security Officer, the Concern Controller and the IT Director. The intended project leader started elaborating the approach, supported by internal and external resources. This approach was discussed with those responsible from HR and Sales and agreement was sought with adjacent projects in order to properly map the (inter)dependencies. The detailed approach for the entire project and the first three months were approved by the steering committee.

However, almost immediately after this consent, the steering committee meetings were tampered with. The first signal was that the member of the board of directors wanted to be informed about the delivery of certain important project milestones. The frequency of the planned in steering committees was adjusted: meetings in which the board of directors was present and steering committee meetings “in between” intended to catch up with the other steering committee members.

After the granted approval, the first real steering committee was no more than a catch-up session for two members of the steering committee. The project group realized the deliverables agreed upon in the prior period of six weeks, but also established that the range of the project issues was far bigger. The steering committee meeting directed itself towards the discussion of the realized products and the sound cooperation within the organization. No one within the steering committee thought about the impact of the size of the issues on budget and planning. The signal for longer timelines was not picked up by the steering committee members but also not made explicit by the project leader.

The internal reflection of the project team on this steering committee revealed that the involvement of senior management was not felt any more. It did not feel right that only two out of the five steering committee members were present. The project team therefore determined that the steering committee did not have the proper composition required for the execution of the project. The initiative of the board member to start the project was sound. But it also became abundantly clear that in the first part of the execution the responsible HR director was the owner. In alignment with the steering committee members, the composition was adjusted accordingly. It was decided that the responsible board member would be periodically informed by the HR director. The project team also looked into its own conscience with regard to the approach of the steering committee meetings; reporting is based on a clear pattern. Not only is the steering committee informed about progress, but standard issues, decisions to be taken and budget utilization are also discussed

The substantive steering committee

A Dutch wholesale organization consisting of multiple operating companies initiated a project for the introduction of a new ERP system. The project organization consists of a steering committee, project group and a number of working groups. The working groups have been subdivided into functional areas: Finance, Purchase, Sales, Logistics and ICT. The steering committee consists of management­ team members of various functional focus areas.

From the start, the project group gathers weekly, the steering committee gathers once a month. The organization is featured as strongly operational with a limited attention to the longer term. These features are also reflected in the pragmatic project approach: collecting matters without a proper action plan. This translates into project group meetings; multiple subjects of the various disciplines are discussed substantively and extensively and in joint consultation actions are determined. The average project group meeting therefore lasts at least 4 hours. In preparation of the project group meeting, each employee provides a progress report for their own focus area. This progress report is extensively discussed in the meeting. After rounding off the project group meeting, a total progress report is drafted consisting of the separate progress reports, including formulated actions.

In a discussion of this progress report by the project leader the steering committee is briefed. The project leader discusses the entire progress report. The steering committee as well as the project group meeting discusses the subjects substantively and determines by common agreement whether the actions taken by the project group have been correct or whether other actions should be taken. Even though these meetings have a lower frequency than the project group meeting, the duration does not differ.

The steering committee in this project organization has a strong substantive role; it wants to be kept informed of the smallest details. Even though it is the culture of this organization to be strongly content oriented, this approach is of course highly inefficient for the project leader and for the members of the steering committee. The project leader has to deal with two project groups, switching between the two. In addition to that, the steering committee members of a fairly senior level devote a lot of attention to substantive matters. The question is of course whether this construction is effective. For this organization, the construction is certainly effective because a pragmatic approach was chosen for the implementation of the project. This entailed that a large number of matters needed to be discussed. A risk of this approach is that despite the extensive discussions, decisions are taken that would not have taken with a solid preparation. In addition to that, chances are that the steering committee will lose oversight. The steering committee does not fulfil a reflective/contemplative role anymore but is strongly involved in content. Who then in the organization is available to redirect the project? In this steering group, it is striking that no clear agreements have been made regarding the tasks and responsibilities of the steering group and the project group. The members of the steering group are so involved with regard to content that it is more a case of implementing than adjusting.

The regressing steering committee

A multinational production organization has initiated a transformation project that has as its goal to harmonize the business processes (purchase, sales, finance and production) and to unify the current various IT systems into a single new ERP system. The organization has attracted an external consultancy firm for the implementation of the ERP system. The project organization is firmly built up and consists of a project group lead by an external project leader, various working groups and a steering committee. The working groups consist of a sound representation of the user organization complemented with external implementation consultations. The steering committee consists of four people: the general director, the financial director, the head of production and a director of the consultancy firm.

The implementation project of the ERP system was divided into two phases. The first phase relates to the implementation of the financial modules, the second phase relates to purchase, sales and production modules. The first phase of the project was successful; the financial modules was implemented within the initially planned schedule and budget. In this period, the steering committee gathered monthly. The meetings of the steering committee were characterized by alertness; the committee had a good sense for the status and progress of the project and the associated risks. The different members of the steering committee were positively critical towards the project leader and took concrete decisions in the cases the project leader submitted to them.

The second phase was led by another project leader of the consultancy firm, with more knowledge of the purchase, sales, and production modules. There was a “winners feeling” due to the successful first phase. This was such a strong feeling that a few months after the implementation of the first phase the steering committees’ attention for the project deteriorated. Its meetings became shorter and were not attended by all members. It even occurred that steering committee meetings simply did not take place. This led to an unpleasant situation for the project organization as several activities in the organization were not properly attuned to the project activities as they were outside the influence sphere of the project leader. This is how the implementation project was delayed unnecessarily.

As a result of the reduced involvement of the steering committee, the project leader decided to take decisions independently. This is how the implementation date of the second phase has been shifted twice without the steering committee being substantively involved. After the implementation date had been shifted for the second time, the general director gathered the steering committee and indicated that the status of the ERP project needed to be investigated. Upon the steering committee’s request, a project review was performed by an independent IT Auditor into the status and progress of the project. The most important finding of this project review was that the steering committee was insufficiently involved and that its composition was still based on the first phase. This created a situation for the project in which insufficient resources were made available from the user organization on critical processes and at critical times. In response to these findings, the general director in cooperation with the project leader devised a new composition and new job responsibilities for the steering committee and drafted a new planning for the remainder of the project. Those ultimately responsible for purchase and sales were included in the steering committee.

In this project, the steering committee performed a sound role in the first phase. Through clear reporting lines, frequent meetings and clear decision-making, the steering committee delivered a clear contribution to the success of the first phase. The attention of this steering committee slackened in the second phase, in the end to such an extent that the project leader was forced to take independent decisions. The cause of the slackened attention was the steering committee’s idea that they were well underway with the successful implementation of the first phase. Also, the composition of the steering committee did not connect perfectly to the scope of het second phase. Process owners of purchase and sales processes were not involved in the second phase. An important lesson to be learned from this example from practice is that the steering committee needs to be involved in the entire course of the project.

The directing steering committee

A financial institution had a blueprint developed by an external consultancy firm for future IT/information provision. After approval of this blueprint by the organization and by the parent company, a project group was set up to realize the blueprint. The project group is led by an external project leader. The steering committee consists of the executives (general, financial and commercial director), IT director of the parent company and the project leader. Within the organization, the financial director is responsible for the realization of the project.

In the first months of the project the project leader translates the blueprint into action plans to realize the concrete future information systems. In one of the first steering committee meetings the steering committee has the project leader present the elaborated plans. As the financial impact differs from what was proposed by the external consultancy firm, the steering committee proposes to have the action plans tested by an IT Auditor. Here, the steering committee has a strong steering role. Based on external testing, the action plans are adjusted and the project is started up.

The project leader holds a biweekly project group meeting; the steering committee gathers monthly. During the execution of the project, the project leader discusses the progress every week with the financial director. Also, in the discussion with the financial director, the project leader provides an overview of bottlenecks and decision points, as well as a suggested approach in resolving the bottlenecks. The financial director has a decisive role if there are multiple ideas resulting from the project with respect to the realization of functionalities and organizational changes.

In addition, in the monthly steering committee meeting the status and the progress of the project is formally reported upon. The general director in these meetings very consciously fulfils a stimulating role with respect to the project leader. In this way he wants to show continuously that the project is a serious matter for the organization and is followed meticulously. The steering committee is periodically supported in its role by an IT Auditor. Once every three months, the steering committee has the status and progress of the project investigated by this IT Auditor. The findings are reported in the steering committee; the project leader may present his proposed actions directly after the report, in order to fill up the concluded gaps. In this way the steering committee maintains grip on the project and on the project leader.

In the final phase of the project, the production was postponed twice with a month for various reasons. After the second postponement, the steering committee did not want a third postponement for a number of reasons. From that moment onwards, the steering committee decided to get more substantively informed about the status and progress of the project. The project leader needs to report to the financial director on a daily basis. In addition to that, the latter has requested an IT Auditor to continuously investigate whether the action points as mentioned by the project leader are sufficiently picked up and whether the project leader adequately controls the risks. Even though the construction was not an optimal situation for the project leader, it was an emergency intervention of the steering committee in order to get a grip on the project after all.

From the beginning, the steering committee realized that it would be a sizeable project with serious financial consequences if it would fail. That is why it wanted to keep a close grip on the status and progress in the project from the start. This was accomplished by including the successful realization of the project in the job responsibilities of one of the executives. As a consequence, the responsibility of the organization for the succession of het project clearly was on the retina of the steering committee. The steering committee, consisting of the entire management, was conscious of which subjects it could redirect independently and for which subjects it needed external support. Although top-heavy, the composition of the steering committee was effective and in line with the size and complexity of the project for the organization.

Reflection on examples from practice

From the above-mentioned practical examples, we can conclude that the composition and the tasks of the steering committee do not always meet the needs from the project. Admittedly, the composition of the steering committee consists of mostly senior employees, but in the situations described, it is not clear which users they represent, whether they have the proper decisive power and which tasks/activities are expected from them. Also, the composition of the steering committee is not periodically evaluated in relation to the developments within the project.

In as far as we know, the described steering committee was initially consciously compose, but not adjusted in time. The other steering committees were formed in a natural manner; in other words, the members seemed the right persons for the job at first sight. Our examples show, however, that a balanced composition of the steering committee, clear job responsibilities and a division thereof over the members could have prevented a number of bottlenecks in the course of the project.

Step-by-step plan to come to the composition of a steering committee

Based on the tasks, powers and responsibilities within a project as mentioned before, a step-by-step plan that can be used for the composition of a steering committee entails:

  • Determining the impact of the project (which parts of the organization are influenced by the project).
  • Determining which group can provide an important contribution to the project. Think of “Business manager”, “User” and “Supplier”.
  • Describing in advance the contribution of the different groups and opt for those persons who have gained a lot of respect in that area. Those without authority, in any sense, should not try to acquire it through a steering committee.
  • Determining which decisive powers the steering committee needs. Opt for persons who already have such decisive powers in their present activities.
  • Indicating the chairman and with that the decider of the steering committee.
  • The steering committee should not be larger than five or six people. Prevent the steering committee from becoming an unwieldy body that is difficult to convene in a timely manner and in which discussions are impossible because of its size.
  • Considering guidance of an (external) expert in guarding the progress and the control of the project risks .

Conclusion

The steering committee holds a role in a project organization that should not to be underestimated. The steering committee is commissioner for the realization of the project. This role in no way dismisses the responsibility to successfully execute the project. This responsibility entails that the steering committee participates in the project and does not look at the project group’s progress from the sidelines. This also poses demands for various tasks of the steering committee, and for the time actually spent on the project.

The real-life examples in this article also reveal that in practice the job responsibilities and the composition of the steering committee have not always been established consciously. Based on experiences, you can use the step-by-step plan for the composition of the steering committee.

Van remote desktop naar cloudwerkplek: just an ordinary walk in the park?

Vrijheid om te werken waar, wanneer en op welke device men maar wil. Dat is de verwachting van de hedendaagse medewerker. Tien tot vijftien jaar geleden was de traditionele remote desktop gebaseerde werkplek de standaard. Vele organisaties hebben deze vorm van werkplek nooit aan hoeven passen, echter door de sterke opkomst van cloudapplicaties begint het gebruikspatroon het ontwerp te ontgroeien. Ook de beperkingen die de remote desktop met zich meebrengt qua gebruiksgemak, zorgen voor irritaties bij medewerkers die hierdoor op zoek gaan naar alternatieve oplossingen die vaak buiten de controle van de organisatie staan.

Inleiding

Digitale en technologische ontwikkelingen hebben ervoor gezorgd dat remote desktops niet meer goed werken. De komst van COVID-19 heeft de druk op remote desktops verder verhoogd, omdat medewerkers plotseling allemaal vanuit huis gingen werken. Veel organisaties worstelen met verouderde werkplekken in de vorm van remote desktop computing, in de volksmond Citrix en RDS genoemd. Tot ongeveer een decennium geleden was dit type werkplek een goed idee, omdat alle data centraal konden worden beheerd en beveiligd. Bovendien werd de IT-beheerlast verminderd door de inzet van een lichtgewicht computer of thin client. Deze omgevingen waren uitermate geschikt voor simpel kantoorwerk en client-server-applicaties die in het datacentrum hun werk deden. Met de opkomst van verregaande integratie van werkplekfuncties, zoals telefonie, whiteboards en conferencingsystemen, moest worden gezocht naar kunstgrepen om deze functies te integreren in het werkplekconcept. Ook het gebruik van Software-as-a-Service (SaaS)-applicaties in een browser bleken rampzalig voor de performance van remote desktops en organisaties zagen zich genoodzaakt veel geld te investeren teneinde de performance acceptabel te krijgen.

De richting die een aantal jaren geleden is ingezet, kwam in een stroomversnelling met de komst van COVID-19. Organisaties zagen zich ineens genoodzaakt hun medewerkers vanuit huis te laten werken. Uit onze onderzoeken blijkt dat de werkhouding aan het veranderen is. Zelfs als corona overwonnen is, zullen medewerkers anders werken. Vijf dagen per week op kantoor is niet langer de normaal. Onze visie is dat medewerkers twee of drie dagen per week op kantoor zullen werken en de rest thuis. De focus zal niet langer liggen op aanwezigheid, maar op output. Vrijheid om te werken wanneer men maar wil, draagt bij aan de creativiteit, omdat goede ideeën niet alleen geboren worden tussen half negen en half zes. Als gevolg van de nieuwe werkelijkheid, waarbij thuiswerken de norm is geworden, is er een sterke focus op online samenwerken ontstaan. De oude werkplekconcepten belemmerden online samenwerking tussen medewerkers onderling, laat staan met klanten.

De moderne werkplek hanteert daarom een (fundamenteel) ander concept, dat de gebruiker en zijn (persoonlijk) apparaat centraal stelt. Daarom is het noodzakelijk de werkplek onder de loep te nemen en (deels) opnieuw te ontwikkelen, zodat de voortdurende verbetering van productiviteit door steeds slimmere software ook kan worden gefaciliteerd vanuit de werkplek. Steeds meer organisaties bewegen zich ‘terug naar de desktop’ en laten de remote-desktop-computingconcepten achter zich. In dit artikel wordt stilgestaan bij de belangrijkste redenen om deze stap te zetten.

Vijf redenen voor de overstap naar de moderne werkplek

Voor organisaties zijn er uiteenlopende aanleidingen om de overstap naar de moderne werkplek te maken. Eerst worden vijf van de belangrijkste redenen besproken. Daarna nemen we u mee in de reis vanuit de huidige situatie naar de gewenste situatie.

1. De digitale verwachtingen van medewerkers zijn hoog

In de thuissituatie maken medewerkers gebruik van allerlei online diensten. Ze zijn gewend aan een flexibele manier van werken en verwachten die flexibiliteit ook van hun werkplek. Denk aan hoe je werkt met diensten als Netflix, Spotify en Facebook. Zeker de jonge generatie is gewend om online te werken en delen is de norm. Alle diensten zijn beschikbaar op de computer, de smartphone en in sommige gevallen zelfs in de auto. Werken in een remote-desktopomgeving wordt ervaren als ‘terug in de tijd’, omdat dit werkplekconcept fundamenteel verschilt van de gemakken die men thuis ervaart. Op het ene apparaat beginnen aan een document en het op een ander apparaat afmaken is niet mogelijk. Voor iedere handeling moet je gebruikmaken van de computer, inloggen op een terminal, je aanmelden in de werkomgeving en het document opzoeken. Het gevolg is dat medewerkers manieren zoeken om de beperkingen van de werkplek te omzeilen, bijvoorbeeld door applicaties te gebruiken die de organisatie niet ondersteunt. Hierdoor ontstaan er datastromen ver buiten de controle van de organisatie, neemt de productiviteit van de medewerkers af en groeit de frustratie over de werkplek.

2. De rek van server-based computing is eruit

Thin-client- en server-based-computingconcepten zijn met regelmaat het oorspronkelijk ontwerp ontgroeid. De configuratie van het systeem is niet in staat het gebruik te ondersteunen en er zijn veel resources nodig om de performance op een voldoende niveau te houden.

Updates van softwarepakketten vinden tegenwoordig plaats op dagelijkse basis. Applicaties moeten hierdoor steeds opnieuw worden ‘gepackaged’ en toegevoegd aan het ‘golden image’ van de remote desktop. Organisaties willen af van deze dure en tijdrovende klus, want een verouderd applicatielandschap zorgt voor beveiligingsrisico’s.

Ook de integratie van losse werkplekfuncties vereist kunstgrepen om te implementeren. Het gebruik van een lokaal aangesloten USB-webcamera op de remote werkplek vereist wijzigingen in de serveromgeving, de client en de software die er gebruik van maakt.

3. Beveiligingsrisico’s als gevolg van remote desktop

Hoewel het remote-desktopconcept is ontworpen om data goed te kunnen beveiligen, zoeken medewerkers in de praktijk naar manieren om te kunnen werken zoals zij willen. Een bestand wordt tegengehouden door het mailfilter, delen met een klant? Met WeTransfer en Dropbox is dat probleem snel verholpen. Ondertussen ontstaan kopieën van bestanden op plaatsen waar de organisatie er geen controle meer over heeft en is het overgelaten aan de discipline van de medewerkers om verantwoordelijk met data om te gaan.

4. Single sign-on moeilijk te implementeren als gevolg van organisch gegroeide omgevingen

Als gevolg van organisch gegroeide omgevingen, waar door de jaren heen applicaties, werkplekfuncties en andere zaken aan toegevoegd zijn, worden gebruikers geconfronteerd met tientallen verschillende inloggegevens. Een tech-savvy medewerker gebruikt een password manager om veilige wachtwoorden te maken en op te slaan. Het gros van de medewerkers zal echter doen waar menig security officer bang voor is: wachtwoorden op briefjes schrijven, bij voorkeur een post-it op de zijkant van de monitor. Een kwaadwillende kan met slechts een paar foto’s uw data stelen. De moderne werkplek heeft één identiteit als uitgangspunt, die met de gebruiker mee reist door het landschap. In de volgende paragraaf wordt hier dieper op ingegaan.

5. De nieuwe wereld vereist een flexibele werkplek die medewerkers in staat stelt hun (eigen) werk te automatiseren

In plaats van specifieke applicaties te selecteren voor iedere bedrijfsfunctie, gebruiken organisaties steeds vaker kant-en-klare bouwblokken om zelfstandig functionaliteit te creëren. Deze functionaliteit is eenvoudig aan te passen aan veranderende markten en verhoudingen. Wil uw organisatie bijvoorbeeld naast een traditionele markt ook een meer digitale en dynamische markt bedienen, dan kan het verstandig zijn een dynamisch en aanpasbaar platform te kiezen in plaats van een statische applicatie die niet mee kan bewegen met marktontwikkelingen. Als de werkplek bouwblokken biedt waarmee de organisatie zelfstandig functionaliteit kan ontwikkelen, dan wordt de organisatie meer agile. Met deze functionaliteit kunnen medewerkers hun eigen werkzaamheden automatiseren en op slimme manieren applicaties met elkaar integreren, zowel de eigen applicaties als die van klanten en partners.

Van het heden naar de toekomst: de route en de aanpak naar de moderne werkplek

Organisaties melden uiteenlopende knelpunten ten aanzien van de werkplek, van technische beperkingen tot functionele tekortkomingen. De wensen en eisen van iedere organisatie zijn anders, een one-size-fits-all-oplossing bestaat daarom niet. Niet alleen de huidige werkplek, het applicatielandschap en de technische infrastructuur zijn van belang om de optimale werkplek te kunnen ontwerpen, ook ontwikkelingen in de bedrijfsstrategie kunnen impact hebben op de inrichting. Het realiseren van de moderne werkplek, eentje die aansluit op de behoeften van uw organisatie, klanten en partners, vereist de juiste aandacht. De route naar de nieuwe werkplek is gebaseerd op generieke IT-veranderaanpakken. Aangezien iedere organisaties anders is, hanteert KPMG een voor u op maat gemaakte aanpak. In grote lijnen ziet die er als volgt uit.

1. Een werkplekvisie formuleren

De visie op de moderne werkplek verschilt per organisatie. Ook de wensen variëren, soms vrij extreem. In samenwerking met u en uw medewerkers wordt de werkplekvisie geformuleerd. De visie sluit aan op de bedrijfsstrategie en de ontwikkelingen in de markt en beschrijft de eigenschappen van de werkplek, die uw organisatie in staat stellen eenvoudiger samen te werken en sneller te innoveren.

Les

In sommige gevallen is een remote-desktopomgeving toch de beste oplossing, bijvoorbeeld in een omgeving waar werknemers sporadisch een werkplek nodig hebben of het verloop van interne en externe medewerkers hoog is. De keuze tussen een virtuele en een fysieke werkplek moet daarom altijd worden overwogen.

2. Doelstellingen vastleggen en een eerste doelarchitectuur opstellen

Op basis van de visie worden de doelstellingen vastgelegd zodat tijdens de (agile) implementatie continu kan worden bekeken of de werkplek op de juiste manier wordt uitgerold. Door regelmatig terug te kijken naar de doelstellingen kan ook worden bijgestuurd op basis van nieuwe inzichten. Een veelvoorkomende doelstelling is het opruimen van legacysystemen die veel tijd en geld kosten om te onderhouden. Daarnaast is een belangrijke doelstelling te voldoen aan de digitale verwachtingen van de medewerker zodat zij snel en efficiënt kunnen werken, alle functionaliteiten hebben om hun werk op een prettige manier te kunnen uitvoeren en niet hoeven zoeken naar omwegen om hun doelen te bereiken.

Ook wordt de voorlopige doelarchitectuur ontworpen, waarbij voor iedere component wordt aangegeven welke wens of eis ermee wordt vervuld. De doelarchitectuur beschrijft in grote lijnen de gebruikte componenten, technologie en werkplekconcepten en processen, maar ook de (IT-)organisatieveranderingen die nodig zijn om in de nieuwe situatie te kunnen opereren. Denk aan de inzet van Infrastructure-as-a-Service (IaaS)-componenten voor legacy-applicaties die op termijn worden uitgefaseerd of de inzet van SharePoint-omgevingen ter vervanging van oude file-sharediensten. In dit proces worden implementatiepartners betrokken, om te garanderen dat de modernste technieken worden ingezet. De integratie met SaaS-applicaties in de eigen systemen, bijvoorbeeld om aparte inlogschermen voor deze diensten weg te nemen en gebruikersbeheer te kunnen centraliseren en automatiseren, kan onderdeel zijn van de doelarchitectuur. Het doelontwerp is altijd gebaseerd op good-practice-principes, zoals security by design en built-in compliance, waardoor organisaties grip krijgen op hun data en eenvoudig kunnen voldoen aan wet- en regelgeving. Een voorbeeld van security by design is het maken van een koppeling tussen de (on-premise) Active Directory (AD) met de Azure AD. De Azure AD wordt gekoppeld aan de diverse SaaS-leveranciers, waardoor identiteit op één centrale plaats georganiseerd is. Een medewerker die uit dienst gaat en uit de eigen systemen verwijderd wordt, heeft vanaf dat moment ook geen toegang meer tot externe applicaties.

Les

De IT-beheerorganisatie is van cruciaal belang voor het succes van een moderne werkplek. De IT-medewerkers moeten worden geholpen en getraind in het beheer van de nieuwe werkplek. Bovendien moeten zij het nut en de noodzaak van verandering inzien, zodat ze meer geneigd zijn deze te omarmen. Afhankelijk van het startpunt veranderen hun werkzaamheden, veelal van repetitief naar innovatief.

3. Een roadmap opstellen

Op basis van de huidige situatie wordt bepaald welke stappen moeten worden gezet en in welke volgorde. De roadmap wordt tijdens de uitrol van de moderne werkplek met regelmaat bijgewerkt, om te kunnen voldoen aan veranderingen in wensen en prioriteiten. Ook de mate van benodigde training van medewerkers en IT-personeel is onderdeel van de roadmap. Zonder adequate training zal de organisatie niet het volledige voordeel kunnen genieten van een moderne werkplek.

De roadmap is een dynamisch plan. Als bij het opstellen van de roadmap niet alle gegevens beschikbaar zijn, dan is het van belang om regelmatig bij te sturen. Als bijvoorbeeld door aflopende contracten met hostingpartijen de tijdslijnen kort zijn, zorg dan voor een platform in de cloud waar (legacy-)applicaties op kunnen landen. De technische werking van de applicaties kan dan grotendeels behouden blijven, waardoor snelheid gemaakt kan worden in de migratie. Op die manier hoeven de contracten niet te worden vernieuwd, kunnen bestaande omgevingen sneller worden afgeschaald en kunnen dubbele kosten worden vermeden.

Les

Onderzoek het leervermogen van de IT-beheerafdeling en de wendbaarheid van het bestaande technologieplatform. Pas de migratiestrategie aan aan de mate waarmee beide onderdelen kunnen bewegen en zet eventueel tussenstappen om veranderingen te laten beklijven.

4. Een geschikte technologiepartner selecteren

Als de roadmap opgesteld is, dient een geschikte technologiepartner te worden geselecteerd. De technologiepartner is de partij die de implementatie van uw moderne werkplek uitvoert en de details in kaart brengt. Bij de selectie van een implementatiepartner is prijs vaak een belangrijke component, maar de ervaring leert dat dit niet altijd het leidende argument moet zijn. In samenwerking met uw organisatie en de technologiepartner kan de migratie naar de moderne werkplek worden gestart. De technologiepartner brengt naast kennis ook praktische ervaring in, die uw organisatie helpt de moderne werkplek perfect op uw organisatie te laten aansluiten. Het is belangrijk een partner te selecteren die aansluit op uw organisatie, de omvang, de cultuur en de markt waarin u opereert. Vanuit ons netwerk kennen wij veel technologiepartners, maar de keuze ligt altijd bij u.

5. Ondersteuning bij de uitrol van de moderne werkplek

Als de technologiepartner gecontracteerd is, start de uitrol. In deze fase wordt de doelarchitectuur verder uitgewerkt in gedetailleerde ontwerpen. Op basis van deze gedetailleerde ontwerpen zullen alle benodigde belangrijke keuzes gemaakt worden, in samenwerking met u en uw organisatie.

De beschikbaarheid van een moderne werkplek is de eerste stap. De techniek kan zodanig worden ingericht dat aan alle eisen kan worden voldaan. Ook zeer belangrijk is het verzorgen van een goede inbedding van de moderne werkplek. Goede adoptie en training zijn cruciaal voor het behalen van de gewenste doelen. Zonder aandacht voor deze facetten wordt het nieuwe systeem vaak ‘op de oude manier gebruikt’. Bij de begeleiding van onze klanten ziet KPMG uiteenlopende uitdagingen, die soms vooraf niet verwacht waren.

Adoptie is een belangrijk facet in de uitrol van een moderne werkplek. Onze ervaring is dat het raadzaam is om een aantal sleutelgebruikers te selecteren die ‘de boodschap’ naar de rest van de organisatie brengen. Iets horen en leren van een collega is veel krachtiger dan een geprepareerd verhaal van een externe docent voorgeschoteld krijgen. Deze sleutelgebruikers zijn doorgaans meer tech-savvy dan de gemiddelde medewerker, vinden het leuk om met de nieuwste technologieën te werken en vinden het bovendien niet erg om soms last te hebben van kinderziektes en opstartproblemen.

Les

Zorg voor het juiste mandaat en voor beslissingsbevoegdheid binnen de IT-organisatie, zodat de snelheid van verandering gewaarborgd blijft.

Conclusie

De moderne manier van werken vraagt om een moderne werkplek. Het werkplekconcept op basis van remote desktop computing sluit niet meer optimaal aan op de eisen en wensen van deze tijd. Werknemers werken overal en op verschillende devices en verwachten hetzelfde gebruiksgemak als dat zij thuis gewend zijn. Het toenemende gebruik van SaaS-applicaties vraagt om een andere benadering om grip te houden op de bedrijfsgegevens en integratie in de werkplek.

Het introduceren van een moderne werkplek is echter geen triviale stap. Uitdagingen zijn hierbij onder andere de integratie tussen de werkplek en het bestaande applicatielandschap, maatschappelijke ontwikkelingen en wettelijke verplichtingen. Daarnaast is het beschikbaar stellen van bouwblokken waarmee medewerkers zelf functionaliteit kunnen maken terwijl voorkomen wordt dat er wildgroei ontstaat, een van de puzzelstukken van de missie.

Hydrogen fuel cell technology is an important piece of the puzzle in an electric future of mobility

In recent years, much emphasis in the climate change debate has been placed on renewable electricity and the transition to electrified houses, industry and mobility. In itself, very positive developments to move away from fossil fuels, but we still face several challenges in making society and economy more sustainable. Energy carriers like wind and solar include high volatility of generation (imagine the impact on a windless or cloudy day). On the other hand, the demand for electricity is also characterized by volatility due to specific patterns during the day. As a result, moving towards fully sustainable energy production is a comprehensive transformation with many associated challenges. Moreover, these challenges also mark opportunities for hydrogen, which could be a potential problem solver for such arising challenges as a new, sustainable era is dawning.

In this article, we examine the potential for hydrogen to play a significant role in the low-carbon economy of the future and, in particular, as part of the future mobility landscape.

Challenges of the current generation of battery electric vehicles (BEV)

Today, electrification is undoubtedly at the top of OEMs’ agendas. Almost every major automaker has pledged significant investments in electric technology. OEMs are striving to expand their EV development and production as quickly as possible. However, there are several significant challenges involved with the large-scale electrification of mobility.

Financial challenges

The investment costs involved in replacing current fossil fuel-oriented infrastructure with electrical infrastructure are significant. A major component is the cost of developing a sufficient public and private charging infrastructure to support mass usage. The electricity distribution network in Europe will not be able to support mass (battery) electrification without extensive investment, as demand for electricity will approximately double if all passenger vehicles move to BEVs. For the automotive industry, hefty costs will be involved in developing new electric drivetrains and in obtaining the scarce raw materials needed for batteries. Meanwhile, for individuals the total cost of ownership (TCO) of a BEV is likely to remain relatively high compared to ICEs given the high price of BEVs themselves. On top of which come the costs of the energy needed to actually power these vehicles, as well as associated taxes for usage (although these additional costs are currently limited due to zero-emission incentive programs).

Technical challenges

The transition to a lower-emission economy is, in some circumstances and parts of the world, technically very difficult. Primarily because the ratio between energy storage capacity and associated mass of batteries is limited. BEVs are still hampered by technical limitations for which solutions will need to be found. These include the time currently needed to recharge/refuel (one or more hours) and the range currently possible on a single full charge (400 km for a passenger car, but only 200 km for a truck). Additionally, the scarce raw materials required for mass adoption could be a bottleneck for electrification.

Socio-economic challenges

In order to replace fossil fuel alternatives, an enormous amount of technically skilled labor will be needed. But these skills are scarce within the workforce, which could be a serious limitation to achieving a transition within the planned timescale. This matters because in order to meet CO2 reduction targets, it is crucial to tackle all challenges on time. Another barrier may include persuading all individuals or companies to shift away from fossil fuels. Financial incentives may be needed, as well as effective communication and education to overcome issues such as “range anxiety” – which is known as the anxiety that users of battery electric vehicles experience when battery range is fairly limited. Without widespread and rapid adoption, there is a high risk of targets not being met.

Hydrogen as a potential solution in specific segments

Given the financial and timing constraints of investments to support BEVs, focus on battery electrification only will hamper reaching the greenhouse goals that have been set.

In particular, commercial vehicles such as LCVs, HGVs and buses face significant limitations with the current generation of BEV technology, such as the associated weight of batteries for a sufficiently long range. Technically and financially, heavier vehicles face more problems with (battery) electrification than passenger vehicles as can be seen in Figure 1.

C-2020-4-Hesselink-01-klein

Figure 1. Electrification of consumption, challenges analysis. [Click on the image for a larger image]

That is why other powertrains must be developed in conjunction with electric batteries – and hydrogen-based fuel cell electric vehicles (FCEVs) could hold a significant part of the answer. Globally, around 25,000 FCEVs were out on the roads ([KPMG20a]) in 2019. Currently, a small but growing number of hydrogen stations are in operation. In Europe, around 100 hydrogen stations are available in Germany, for example. The EU has the ambition to achieve around 3,700 hydrogen refueling stations across Europe by 2030.

The FCEV market is only in its infancy but shows incredible potential and appears a key component of a greenhouse emission-free mobility model. In 10 to 15 years’ time, the picture may look very different from today, with the number of FCEVs moving from the tens of thousands to the tens of millions.

An FCEV/hydrogen fuel cell vehicle is a type of vehicle that uses a hydrogen fuel cell to power its on-board electric motor. It does not release any greenhouse gas (GHG) emissions during vehicle operation – only water vapor and warm air – unlike diesel and gasoline powered vehicles.

To identify where hydrogen can be a success, these three main areas need to be observed (see Figure 2).

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Figure 2. The three pillars of Hydrogen success. [Click on the image for a larger image]

To enable true CO2-free mobility, greenhouse gas emissions should not only need to be reduced to zero during vehicle operation, but also during energy production. Consequently, without green energy sources, green mobility does not generate the benefits it is supposed to deliver. This means that electrification requires renewable sources, be it renewable electricity for BEV or green hydrogen based on renewable electricity for FCEV. Luckily, renewable electricity has so far been the cornerstone in the energy transition. Production in Europe is expected to be seriously ramped up over the course of the next decade.

The three pillars to make hydrogen a success

To overcome the challenges and to stimulate hydrogen adoption, there are three key pillars that we will examine in turn: production, supply and utilization. Each of these must support and reinforce each other if FCEVs are to reach their full potential over the coming years.

Pillar 1: Hydrogen generation

As we already have outlined, the usage of renewable energies seems crucial for a climate-friendly transition from internal combustion vehicles to electrified mobility. The uptake of renewable electricity generation forms, particularly wind and solar, is resulting in temporary oversupply. Consequently, in order not to lose electricity that has been produced, this electricity needs to be stored temporarily. Hydrogen is considered to be the most effective and versatile means for medium and long-term storage of electricity (> 1 day): even though the energy efficiency is lower than with batteries (25% – 35% vs. 70 – 90%) due to energy losses in the electrolysis process ([Volk20]). In addition, the ability to scale is less dependent on scare resources as resources for hydrogen (water) are nearly infinite, while batteries require scarce metals (see Figure 3).

C-2020-4-Hesselink-03-klein

Figure 3. Efficiency rates for hydrogen and electric driving ([Kane20]; [Volk20]). [Click on the image for a larger image]

Regions with high volatility in supply and demand of electricity will therefore have a better business case for efficient (green) hydrogen production. High volatility produces higher storage needs. In addition, hydrogen is expected to become more cost-effective in the coming decade (compared to its gas equivalent) as a result of improved hydrogen production technologies and the supply of renewable energies.

In Europe, Germany, the United Kingdom and the Netherlands have an interesting energy mix composition with a relatively large share of solar and wind energy. Therefore, these countries could profit at an earlier stage from hydrogen applications as can been derived from the existing capacity of renewable energy sources published by the International Renewable Energy Agency ([IREN20]). Generally, countries with a high share of renewables simultaneously face higher production volatility. This is particularly experienced with significant shares of wind and solar energy, which therefore also require a higher storage/balancing capacity.

Pillar 2: Supply chain

The generation of electricity is transforming from conventional centralized sources to a decentralized model with renewables. But this electricity supply is volatile, as it is heavily affected by the prevailing weather conditions.

As the share of EVs and the number of charging point locations are expected to grow exponentially in the coming decade, capacity problems on the grid will arise and potentially become acute. In the Netherlands, for example, we already see variations between local grids – capacity issues are very much a localized issue, with each grid needing to manage its own demand and supply. Capacity problems are already arising, such as in the north of the country where some solar parks ([NOS19]) are only able to connect to the grid at certain times and where 20 completed solar parks are not able to be connected at all. The current infrastructure is unable to transport sufficient amounts of renewable energy to areas where it is needed. Elsewhere, some corporates with large car fleets are already at the capacity limits of how many cars can maximally be charged during the day. This implies that if additional EVs are added to their fleets, simultaneous charging of the entire fleet will not be possible anymore.

For this reason, it is essential for electricity to be generated (locally), distributed and/or consumed in a smarter way. Again, hydrogen can provide an advantage, as it not only allows for effective energy storage, but also for efficient and effective transport, bypassing the electricity grid. Both financially and technically, with some changes, existing gas pipelines could be used to distribute hydrogen. Indeed, the Netherlands and Germany are currently studying the feasibility and best way of doing this. By re-using existing gas pipelines and gas infrastructure (including existing salt caverns and empty gas fields for storage), hydrogen can prevent existing infrastructure becoming obsolete (stranded assets) as a result of the energy transition away from gas. Shell, Gasunie and the EU are commencing initiatives in this area ([Shel20]).

All in all, the issue of temporary oversupply of electricity, combined with the ability to re-use existing infrastructure at risk of becoming obsolete, is expected to make hydrogen cost-competitive in the mobility domain within the coming decade.

Pillar 3: Utilization

The global FCEV market is currently at a nascent stage, accounting for only 0.01 percent of total vehicle sales in 2019. However, according to the International Energy Agency ([IEA20]), this share is expected to reach 17 percent by 2050, with 35 million annual unit sales. Key factors that would drive this growth include rising environmental concerns and supportive government policies in various countries, to increase the use of eco-friendly vehicles.

In addition, a focus on developing the required infrastructure such as hydrogen refueling stations is also likely to drive penetration of FCEVs and push vehicle manufacturers to develop more hydrogen-powered vehicles. Efforts and attention in the nascent FCEV market are currently primarily focused on passenger vehicles, but commercial vehicles are expected to catch up. In China for instance, commercial vehicles such as buses, trucks and vans constitute more than 99 percent of existing FCEV sales. In Europe, truck manufacturer Daimler recently announced that hydrogen-based fuel cell trucks are a key part of its electrification strategy ([Daim20]). Key countries expected to drive the growth of the FCEV market include the US, UK, South Korea, Japan, China, Germany and France.

It is expected that when FCEVs become more widespread, the balance will move decisively to long distance and heavy-duty transport such as HGVs and public transport, where the size and weight of the vehicles mean that hydrogen fuel cells are a significantly more attractive and practical proposition than electric batteries.

Government incentives and regulation

While deployment of FCEVs is low compared with plug-in hybrids (PHEVs) and BEVs, several countries have announced ambitious targets towards 2030, amounting to over 7 million FCEVs and 12,000 refueling stations.

The US has been the frontrunner in the adoption of hydrogen as an alternative fuel and has formulated various laws and policies. However, Europe and other countries like China and Japan have also come up with hydrogen strategies.

These initiatives – along with incentives to promote the purchase of FCEVs and to stimulate further research and development of the technology – will be important catalyzing factors in the growth of FCEVs.

Similar to the introduction of PHEV and BEV are governmental incentives in the form of subsidies or tax benefits – these are expected to become an important driver of the FCEV ramp-up. We can expect this in particular in countries where BEVs are expected to face significant challenges, countries where volatile renewable electricity production will be a large part of the electricity mix, and those with an advanced established gas infrastructure.

All aboard the hydrogen bus

Transit buses do not require an extensive refueling infrastructure as they operate within city limits and can refuel at a central location. This makes fuel cell buses well-suited for the present situation (relatively few refueling stations), leading to their rapid adoption across the globe. The Hydrogen Council, a global industry body set up in 2017, has set a target to manufacture and sell 50,000 fuel cell buses globally. H2Bus, an industry consortium, plans to deploy 1,000 fuel cell buses in Europe including the first 600 across the UK, Latvia and Denmark by 2023. Transit agencies in the US have also started operating fuel cell buses in the last couple of years.

Commercial applications are being introduced

An increasing number of OEMs are actively producing FCEVs today, with Toyota and Hyundai currently being the clear market leaders. We can already add names such as Honda, Renault, Maxus (SAIC) and, on the commercial side, manufacturers such as Yutong, Foton and Dongfeng. A growing list of other major OEMs – including Mercedes Benz, BMW, Audi and Kia – have FCEVs in testing or in concept development stage. Alongside this, a number of major players in the automotive sector are investing heavily in either developing their own fuel cell technology or acquiring companies that already have a presence in the FCEV value chain. A race is developing, with a growing number of mergers & acquisitions (M&A) as a result. In addition, partnerships are proliferating, mostly aimed at sharing knowledge, reducing the cost of developing required infrastructure, and obtaining data for research and validation. Partnerships are also being developed on a regional level – such as the consortium that has been initiated to create a hydrogen valley in the North of the Netherlands ([Rotm20]).

Benefits and advantages of FCEVs

Some of the key benefits offered by FCEVs over other vehicles are faster refueling times, longer drive ranges, ease of scalability, lower space requirements for energy storage, lower vehicle weight as a result of not having large batteries on board, and environmental friendliness:

C-2020-4-Hesselink-t01-klein

Challenges and (current) limitations

However, while the above advantages may seem compelling, at the same time there are a number of limitations and obstacles that will need to be overcome for the deployment of FCEVs to take off at scale:

C-2020-4-Hesselink-t02-klein

Conclusion

The drive for low carbon mobility and transportation requires an accelerated transition to electrified vehicles. However, there are still some major limitations that hamper the implementation of BEVs at scale, especially for long distance and heavy-duty transport. FCEVs are an important piece of the puzzle.

The FCEV market is only in its infancy but shows incredible potential and appears a key component of a greenhouse emission-free mobility model. In 10 to 15 years’ time, the picture may look very different from today, with the number of FCEVs moving from the tens of thousands to the tens of millions.

The combination of the technical challenges of BEVs, primarily in commercial vehicles, the challenges faced by many countries’ electricity grid networks to cope with more volatile electricity production and the need to meet mass BEV charging demands, will drive demand for alternative solutions for energy storage and distribution. In addition, with the risk of gas networks becoming obsolete – and major oil and gas companies investing heavily in hydrogen technologies – there are powerful commercial and public incentives to maximize the adoption of fuel cell technology as part of the mix. It is in meeting the strains caused by the above-mentioned combination of factors where hydrogen has its greatest potential for the future.

Countries that can reuse their existing assets, such as gas pipelines to transport hydrogen produced from renewable energy generation (e.g. wind and solar), could create a strong advantage. Such countries include Germany, the Netherlands and the UK.

We expect these countries, and others in Europe including France, to see the highest growth in FCEVs alongside China, Japan, South Korea and the US. These are likely to be the jurisdictions that lead the way with hydrogen FCEVs, primarily (or at least initially) for commercial vehicles and public transport modes.

As with the future of mobility, there still is enough room for play in the FCEV space – we have an exciting journey ahead of us.

Watch this KPMG video about the role of hydrogen for industry, housing and mobility in the transition towards renewable energy: https://vimeo.com/user112272715/review/477511673/dc8c4e3059

References

[Daim20] Daimler (2020, September 16). Daimler Trucks presents technology strategy for electrification. Retrieved from: https://www.daimler-truck.com/innovation-sustainability/efficient-emission-free/mercedes-benz-genh2-fuel-cell-truck.html

[EC20a] European Commission (2020, October 27). 2050 long-term strategy | Climate Action. Retrieved from: https://ec.europa.eu/clima/policies/strategies/2050_en

[EC20b] European Commission (2020, October 27). Reducing CO2 emissions from passenger cars – before 2020. Retrieved from: https://ec.europa.eu/clima/policies/transport/vehicles/cars_en

[IEA20] IEA (2020, October 10). Global EV Outlook 2020. Retrieved from: https://www.iea.org/reports/global-ev-outlook-2020

[IREN20] IRENA (2020, March). Renewable Capacity Statistics 2020. Retrieved from: https://www.irena.org/publications/2020/Mar/Renewable-Capacity-Statistics-2020

[Kane20] Kane, M. (2020, March 28). Battery electric hydrogen fuel cell effficienty comparison. InsideEVs. Retrieved from: https://insideevs.com/news/406676/battery-electric-hydrogen-fuel-cell-efficiency-comparison/

[KPMG20a] KPMG (2020a). Analysis on global FCEV market.

[KPMG20b] KPMG (2020b, June). Obvious automotive key trends. Retrieved from: https://automotive-institute.kpmg.de/GAES2020/megatrends/obvious-automotive-key-trends

[NOS19] NOS (2019, January 11). Geen plek voor nieuwe zonneparken op stroomnetwerk. Retrieved from: https://nos.nl/artikel/2266953-geen-plek-voor-nieuwe-zonneparken-op-stroomnetwerk.html

[Rotm20] Rotman, E. (2020, March 12). Groene waterstof Groningen. Duurzaam bedrijfsleven. Retrieved from https://www.duurzaambedrijfsleven.nl/energietransitie-business/33455/groene-waterstof-groningen

[Shel20] Shell (2020, February 27). Grootste groene waterstof project van Europa start in Groningen. Retrieved from: https://www.shell.nl/media/persberichten/2020-media-releases/grootste-groene-waterstofproject-van-europa-in-groningen.html

[Volk20] Volkswagen AG (2020, October 10). What is more efficient? Hydrogen or battery powered? Retrieved from: https://www.volkswagenag.com/en/news/stories/2019/08/hydrogen-or-battery–that-is-the-question.html#

Geen paniek, het zijn maar robots

De media besteden veel aandacht aan robotisering en andere disruptieve technologie. Moeten organisaties zich nu versneld aanpassen? En hoe nemen we de medewerkers mee in deze nieuwe wereld? In een interview met Frank de Jonge van het Shared Service Center van de Dienst Justitiële Inrichtingen, wordt de hype gescheiden van de realiteit: geen paniek, het zijn maar robots.

Inleiding

Bijna dagelijks horen we iets over disruptieve technologie en de impact daarvan op organisaties en de huidige banen. Meestal bedoelen we dan dat organisaties (door middel van) innovatie of technologie hun manier van werken of de markt op z’n kop zetten, substantieel veranderen, ontwrichten. Dit zal in sommige gevallen daadwerkelijk gebeurd zijn – denk aan de opkomst van het internet of de smartphone – maar we zien veel vaker dat organisaties de nieuwe technologie geleidelijk omarmen. Door te pas en te onpas de term ‘disruptie’ te gebruiken, wordt de nieuwe technologie en de impact op de organisatie ervan te groot gemaakt. Disruptie betekent eerder dat organisaties voor continue veranderingen staan, met nieuwe technologie als ondersteuning of trigger.

Door de aandacht voor disruptie door de media en de enorme impact die wordt beschreven, zijn de reacties van organisaties hierop uiteenlopend. Waar de ene organisatie de veranderingen in de markt en de verwachtingen ziet als een ‘call to action’, en er vervolgens mee aan de slag gaat, is de onzekerheid voor veel andere organisaties reden om zich terughoudend en afwachtend op te stellen, of helemaal niet mee te gaan met de veranderingen. Dit blijkt ook uit onderzoek van KPMG in 2018, wat specifiek gericht was op digitalisering in het HR-domein [KPMG18].

Het voortbestaan van organisaties wordt doorgaans niet bedreigd door het missen van één disruptieve technologische ontwikkeling, maar door het consequent niet adopteren van vernieuwende technologische mogelijkheden. Organisaties die aan de zijlijn blijven staan, raken in de markt zó ver achterop, dat een inhaalslag niet meer mogelijk is, en de organisatie zelf achterhaald en overbodig wordt.

Bovendien loopt, door deze technologische achterstand van de organisatie, ‘goed werkgeverschap’ gevaar, doordat ook de medewerkers een technologische achterstand oplopen ten opzichte van hun peers bij soortgelijke organisaties. Er is daarom veel aan gelegen om de angst voor disruptie weg te nemen, en de mogelijkheden van de continue technologische verbeteringen te benutten.

Start small, organize big

Hoe voorkom je het ‘Kodak-moment’? Succesvolle organisaties beginnen klein, experimenteren met nieuwe technologische toepassingen, en rollen deze gefaseerd uit wanneer ze hun waarde bewezen hebben, en de organisatie eraan heeft kunnen wennen en meebewegen.

KPMG heeft afgelopen jaar de Dienst Justitiële Inrichtingen, onderdeel van het Ministerie van Justitie en Veiligheid, ondersteund bij het implementeren van Robotic Process Automation (RPA) binnen haar Shared Service Center (SSC), als een van die nieuwe technologische mogelijkheden. Dankzij RPA worden handmatige, routinematige handelingen door middel van software geautomatiseerd. Tijdens deze implementatie was er veel aandacht voor de impact op de organisatie en medewerkers. Daarbij is een aantal waardevolle lessen geleerd. Een goede reden dus om Frank de Jonge, algemeen directeur van het Shared Service Center van de Dienst Justitiële Inrichtingen, hierover te bevragen en de geleerde lessen breed te delen.

Het SSC van DJI heeft de ‘start small, organize big’-aanpak gehanteerd bij de implementatie. Frank de Jonge: “Onze aanpak van gefaseerde besluitvorming, namelijk het uitvoeren van een Proof of Concept en dit daarna breed in de organisatie uitrollen bij verschillende processen, gaf rust, comfort en beter zicht op de impact en consequenties van de inzet van RPA. Daarnaast hebben we veel tijd gestoken in het betrekken van mensen en organisaties, waardoor er breed begrip is ontstaan voor de doelstelling van de implementatie: een kwaliteitsverbetering van de dienstverlening.”

Impact op de organisatie en medewerker – onderschat het niet!

Op dit moment heeft het SSC van DJI meer dan tien processen geautomatiseerd door middel van Robotic Process Automation, zoals het aanvraagproces voor een Verklaring Omtrent Gedrag (VOG). Door het automatiseren van manuele, routinematige activiteiten wordt tijd vrijgemaakt voor medewerkers die beter besteed kan worden aan activiteiten die meer waarde toevoegen voor de klant, zoals adviseren. Frank de Jonge: “We zijn begonnen met RPA met als doel om het verbetervermogen van de organisatie te verhogen. Door de uren die we vrijmaken met RPA in te zetten voor kwaliteitsverbetering en procesverbetering, wordt continu veranderen normaal. Daarnaast biedt dit een fundament voor de betrouwbaarheid van onze dienstverlening, en hierdoor kunnen we meer klanten beter bedienen. We vonden het belangrijk om tijdig ervaring op te doen met deze technologie, zodat wij kunnen anticiperen op de consequenties en zelf de regie in handen houden.”

Automatisering, RPA in het geval van DJI, heeft uiteraard impact op de werkprocessen. Het heeft echter ook impact op allerlei andere domeinen van de organisatie. Op het gebied van governance ontstaan er vragen over het eigenaarschap van gerobotiseerde processen en de stuurmechanismen. De implementatie vraagt om andere samenwerkingsvormen, doordat Business en IT heel nauw moeten samenwerken: de Business moet een beetje meer IT worden, en IT een beetje meer Business. Hier is een andere manier van denken en werken voor nodig dan organisaties tot nu toe gewend zijn. Dit vraagt heel andere vaardigheden van medewerkers en betekent dat er nieuwe rollen nodig zijn. Voor veel organisaties, zeker binnen de overheid, betekent het omgaan met nieuwe technologie ook actief samenwerken met kaderstellende en controlerende functies. Nieuwe technologie zal niet altijd binnen de huidige kaders passen. Dit vraagt om een pragmatische en oplossingsgerichte aanpak, in nauwe samenwerking leren en het proces met elkaar verder vormgegeven.

KPMG gebruikt daarvoor het 6×6-model. Dit is een model met daarin de zes domeinen die van belang zijn bij de implementatie van technologie als RPA. Het model is een referentiekader en wordt gebruikt om de huidige situatie, toekomstige situatie en benodigde acties tijdens een implementatie te bepalen. Het eerder benoemde belang van governance, de organisatiestructuur, medewerkers en competenties komen hierin ook aan bod.

C-2019-3-Leeuw-01-klein

Figuur 1. Het RPA-implementatieraamwerk (6×6-model) van KPMG. [Klik op de afbeelding voor een grotere afbeelding]

Bij de implementatie van RPA is op voorhand duidelijk welke nieuwe rollen er nodig zijn in de organisatie. Deze rollen bevinden zich met name op het snijvlak van Business en IT, en maken de nieuwe manier van samenwerken mogelijk, bijvoorbeeld businessanalisten en RPA-developers. Frank de Jonge: “Iedere rol en functie heeft in bepaalde mate te maken met technologie, dus die vaardigheid moet ook bij iedere medewerker en vooral iedere manager aanwezig zijn. Hoewel we wisten welke nieuwe rollen en vaardigheden we nodig hadden, hebben we de impact ervan op de blijvende rollen en functies onderschat. Door RPA verandert namelijk ook het profiel van de bestaande functies. Waar een medewerker eerst tien procent klantcontact had, wordt dat nu zestig procent, omdat er activiteiten wegvallen die vervangen worden door meer waarde-toevoegende activiteiten. Dit vraagt om heel andere competenties. Nu vallen de consequenties nog mee, maar als wij straks meer processen gerobotiseerd hebben, neemt dit effect toe.”

Niet alleen de medewerkers moeten ondersteund worden in de verandering van hun werk. De structuur van de hele organisatie wordt beïnvloed, en dit vraagt om ondersteuning. Hier kan de HR-functie een grote rol in spelen, door een duidelijke visie te hebben van de toekomstige organisatiestructuur, de benodigde rollen en functies, en daarmee de benodigde vaardigheden, enzovoort. De HR-functie kan vervolgens de inrichting van de organisatie faciliteren en beïnvloeden door middel van strategische personeelsplanning, doeltreffende wervingsstrategieën, aangepaste KPI’s in performance management en een passend aanbod in Learning, om medewerkers op te leiden voor nieuwe rollen en functies.

Het is daarom van belang dat disruptie, of het continu veranderen, met nieuwe technologie als ondersteuning of trigger, hoog op de agenda van de CHRO staat. Technologie is onlosmakelijk verbonden met de andere onderwerpen die we op de HR-agenda verwachten. Denk aan de benodigde HR-organisatie en inzichten op basis van data om de veranderingen in de organisatie te kunnen begeleiden. Ook heeft HR een rol in de workforce shaping (juiste functies, juiste competenties, strategisch personeelsplan), om de organisatie klaar te maken voor de nieuwe manier van werken.

C-2019-3-Leeuw-02-klein

Figuur 2. De CHRO-agenda voor disruptie. [Klik op de afbeelding voor een grotere afbeelding]

Frank de Jonge: “Het is voor ons een belangrijke les geweest om HR eerder bij de implementatie te betrekken. Zo hadden we het effect op de functies beter kunnen inschatten.” Het SSC van DJI had vooraf een heel duidelijk beeld van de nieuwe rollen en competenties, mede op basis van de rolbeschrijvingen van KPMG, maar was zich minder bewust van de impact op de bestaande rollen, waarin geen verandering was voorzien. Het blijkt dat ook die rollen toch mee moeten veranderen. Het SSC van DJI heeft zich vooralsnog vooral gericht op de huidige implementatie en de effecten ervan. Omdat deze verandering niet op zichzelf staat, maar onderdeel zal zijn van continue veranderingen van het SSC, is het belangrijk weer verder vooruit te kijken, om ook daarop voorbereid te zijn. De Jonge: “Een strategisch personeelsplan vanuit HR helpt om ook in de toekomst de juiste functies en competenties in huis te hebben.”

Implementatie van technologie hoeft geen paniek op te leveren

Het implementeren van nieuwe technologische toepassingen, en het daarmee wijzigen van de huidige werkprocessen, vraagt de nodige organisatie rondom het meenemen van medewerkers, managers en de organisatiestructuur naar de nieuwe praktijk.

Veel medewerkers vinden automatisering en de robotisering van hun werk erg spannend. Disruptie heeft een negatieve bijklank, omdat mensen bang zijn hun baan te verliezen en overbodig te worden. Gedegen verandermanagement is hierbij heel belangrijk. Dit betekent dat vooraf een veranderplan is opgesteld, waarin beschreven is hoe de verandering kan worden ondersteund, zodat deze zo soepel mogelijk verloopt. Welke aanpak het beste past, is afhankelijk van de bedrijfscultuur, de mate van RPA en vooral de doelstellingen van de organisatie.

Het wordt voor een medewerker minder spannend om de nieuwe technologie te omarmen wanneer helder is dat deze technologie niet direct een bedreiging voor zijn of haar baan hoeft te zijn. In plaats van het te gelde maken van de vrijgekomen tijd, stelt robotisering juist organisaties in staat om deze tijd in te zetten voor activiteiten waar voorheen wellicht geen tijd voor was binnen de bestaande teams. Een gefaseerde aanpak, waarbij er tijd is om de medewerkers op te leiden en begeleiden in de verandering, kan daarbij helpen. DJI is in eerste instantie klein begonnen met een Proof of Concept, met daaropvolgend een pilot. Gedurende deze fases zijn medewerkers continu geïnformeerd en betrokken, waardoor de aanstaande verandering beter werd begrepen. Vanaf het moment dat medewerkers wisten wat de robotisering voor hen betekende, kon er stapsgewijs worden uitgebouwd. De Jonge: “We sluiten onze ogen niet voor de mogelijke kostenbesparing van 20-30% door RPA, maar dat was niet ons doel. Het is belangrijk dat we dit niet alleen zeggen, maar ook aan de medewerkers laten zien. We hebben veel mensen betrokken en vrijblijvend opleidingen aangeboden, zodat veel onzekerheid werd weggenomen. Ook hebben we de RPA-implementatie initieel niet te groot gemaakt.”

Conclusie

Waar de berichtgeving over nieuwe technologie en disruptie in veel organisaties voor onzekerheid en onrust zorgt, is het voor de meeste organisaties vooral van belang dat ze niet inactief aan de zijlijn staan als het gaat om de implementatie van technologie. Het SSC van DJI, onder leiding van Frank de Jonge, heeft bij de implementatie van robotics (RPA) in verschillende SSC-processen ondervonden dat door gedegen verandermanagement, en een duidelijke HR-visie en betrokkenheid, onzekerheid kan worden weggenomen en dat medewerkers gefaciliteerd kunnen worden om hun tijd beter te besteden. Organisaties moeten het continu veranderen adopteren als een nieuwe manier van werken, en zich daarbij laten ondersteunen door nieuwe technologie, in plaats van zich daardoor te laten leiden. Het zijn tenslotte maar robots.

Referentie

[KPMG18] KPMG International, The future of HR 2019: In the Know or in the No. The gulf between action and inertia, KPMG Assets, https://assets.kpmg/content/dam/kpmg/tw/pdf/2018/11/KPMG-Future-of-HR-survey-report-2019.pdf, 2018.

De opkomst van de Chief Digital Officer

Digitalisering gaat over het gebruikmaken van technologie die de business in staat stelt optimaal te presteren en nieuwe kansen vorm te geven. Digitalisering is inmiddels overal, met als consequentie dat het voor organisaties onontkoombaar is dit te omarmen. Veel organisaties worstelen met ‘wat’ deze verandering behelst, ‘waarom’ het noodzakelijk is hierop in te spelen en ‘hoe’ deze vorm te geven. Menig bestuurder vraagt zich af in hoeverre zijn bestuur adequaat is ingericht voor de digitaliseringsontwikkeling. Sommige besturen overwegen een nieuwe functie in te stellen die hieraan invulling moet geven binnen de raad van bestuur: de Chief Digital Officer.

Nut en noodzaak

In het verleden hebben organisaties geworsteld met waar technologie moest worden verankerd in de organisatie. In traditionele organisaties werd dit gedaan door functies tussen business en IT naast elkaar te laten bestaan. De Chief Information Officer had hierin een prominente rol ([Koot15]). IT werd gezien als een supportfunctie, maar al snel bleek IT  een veel dominantere rol te hebben in de businessmodellen van bijna iedere organisatie, waardoor de term ‘IT’ werd ingewisseld voor ‘digitalisering’. Dit betekende echter niet per se dat de Chief Information Officer in deze verandering meegroeide.

Het groeiende belang van technologie speelt eigenlijk al veel langer. Vandaag de dag is technologie een cruciaal onderdeel van de kernactiviteiten en staat technologie centraal bij het (her)ontwerpen van het businessmodel. Vrijwel elke organisatie denkt na over wat digitalisering betekent voor haar businessmodel. Het is evident geworden dat BigTechs, zoals Apple, Amazon, Microsoft, Google, Facebook, Alibaba en Tencent, een mogelijke concurrent zijn voor partijen in vele industrieën ([Pasm18]).

Gelukkig ontstaat er in veel organisaties al een grote hoeveelheid aan digitaal gedreven initiatieven. Hiervoor worden agile-manieren van werken toegepast, die de organisatie in staat stelt snel producten en diensten te leveren en te kunnen reageren op veranderingen in de markt. De valkuil hierbij is dat digitalisering vooral gaat over het oplossen van uitdagingen waar de organisatie dagelijks mee wordt geconfronteerd (zie horizon I in Tabel 1). Dit is belangrijk om het dagelijkse werk op de korte termijn te verbeteren, maar focussen op de ‘Shit of Yesterday’ ([Hins17]) is ontoereikend voor een echte digitaliseringsagenda. Belangrijker voor de lange termijn is de focus op ideeën en visies die gaan over het op een andere manier uitvoeren van de huidige werkzaamheden (horizon II, Tabel 1) en het vormgeven van nieuwe businessmodellen (horizon III, Tabel 1). Vragen die de organisatie zichzelf hierbij stelt, zijn: hoe kunnen we via andere kanalen onze klanten bereiken? Hoe kunnen we onze processen en manieren van werken veranderen, zodat deze simpeler en duidelijker worden? En hoe ontstaan er dan nieuwe manieren om geld te verdienen, door het uitvoeren van totaal nieuwe en andere activiteiten dan in de huidige business. Essentieel is dat er over elke van deze horizonnen wordt nagedacht; de verhouding van hoeveel aandacht naar welke horizon uitgaat, is verschillend per organisatie. Organisaties als Uber, Booking en Adyen hebben zich volledig op een ‘breakthrough’-wijze vormgegeven, door bestaande markten open te breken of nieuwe markten te creëren. Daarnaast denken echter ook meer traditionele organisaties, zoals De Nederlandsche Bank ([Sijb18]) of energiebedrijven als Vattenfall ([John18]), na over wat zij op de verschillende horizonnen aan digitalisering moeten doen.

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Tabel 1.  Digitalisering over drie horizonnen ([John18]). [Klik op de afbeelding voor een grotere afbeelding]

Het maken van de juiste keuzes bij het adopteren van nieuwe technologieën door de organisatie leidt tot strategische vraagstukken waar menige directie en/of raad van bestuur minder affiniteit of ervaring mee heeft. Veel organisaties worden geconfronteerd met een nieuw soort concurrenten, die veelal buiten hun eigen traditionele markt opereren. Het van oorsprong e-commercebedrijf Amazon is inmiddels een geduchte concurrent voor retailers als Ikea, logistieke bedrijven als PostNL en IT-dienstverleners als IBM.

De nieuwe toetreders die vanuit de technologiewereld komen, leiden tot nieuwe bedreigingen. Menig bestuurder vraagt zich af of zij voldoende competenties in het bestuur heeft om richting te geven aan deze uitdagingen. In diverse bestuurskamers wordt geopperd om een nieuwe functionaris in de top van de organisatie toe te voegen: de ‘Chief Digital Officer‘. Deze functie is niet te verwarren met een andere CDO, de Chief Data Officer.

Huidige verankering van digitalisering in organisaties

Uit onze recente ervaringen blijkt dat er geen eenduidig beeld bestaat over hoe digitalisering in een organisatie wordt ingevuld. Veel organisaties zijn nog zoekende naar welke functionaris de digitalisering het beste kan vormgeven, en welke positie deze functionaris binnen de organisatie zou moeten vervullen. Grofweg zien we daarin een tweedeling: de organisaties die digitalisering en de digitale transformatie als de kern van hun bedrijfsactiviteiten zien, en daartegenover de organisaties die dit (nog) niet zo zien. Naast het strategische belang hangt de mate van digitalisering ook voor een deel af van de industrie waarin de organisatie zich begeeft.

Zo hebben veel banken, verzekeraars en retailers de digitalisering in de top verankerd, mede omdat de markt waarin zij opereren al sterk is gedigitaliseerd. Organisaties zoals Ahold, Delhaize en Ikea hebben de functie van Chief Digital Officer al ingevoerd in hun Board (zie (2) in Figuur 1). In de financiële sector heeft bijvoorbeeld ABN AMRO een soortgelijke functie in de Board benoemd: de Chief Innovation & Technology Officer. Ten slotte is in de mediasector bij Talpa een Chief Technology Officer verantwoordelijk voor de volledige digitaliseringsagenda van radio, televisie en online. Bij deze bedrijven ligt een grote verantwoordelijkheid in het vormgeven van de digitale transformatie, waardoor de noodzaak voor een verantwoordelijke functionaris wordt vergroot. In een aantal gevallen wordt de digitaliseringsagenda in een uitgebreidere groepsraad (Extended Board) belegd. Deze groep is meestal klein qua aantal deelnemers, maar erkent het belang van digitalisering. Betekent dit dat de Chief Information Officer is vervangen? Niet helemaal.

Bij organisaties als de Rabobank is er naast de Chief Transformation Officer (zie (3) in Figuur 1) ook nog steeds een Chief Information Officer die leiding geeft aan de ICT-ontwikkelingen. Hierdoor is het beleid voor digitalisering dus gesplitst van de meer traditionele ICT-verantwoordelijkheden. Vaker is het takenpakket van de Chief Information Officer uitgebreid met digitaliseringsvraagstukken, zoals bij Achmea (zie (4) in Figuur 1).

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Figuur 1. Digitalisering verankerd in organisaties. [Klik op de afbeelding voor een grotere afbeelding]

In sommige sectoren wordt de digitalisering belegd in de Business Units. Hierdoor lijkt digitalisering een minder prominente rol te hebben, zoals bijvoorbeeld het geval is bij Heineken, waar digitalisering is belegd in de verschillende landenunits (zie (5) in Figuur 1). Het voordeel hiervan is uiteraard wel dat bij deze organisaties de digitalisering dicht bij de business is belegd. Deze inrichting vraagt echter wel van de Board dat zij oog houdt of de digitalisering voldoende wordt meegenomen in de strategie van de verschillende BU’s.

Digitalisering kan ook belegd worden bij een stafafdeling, zoals bij het Erasmus MC het geval is (zie (6) in Figuur 1). Dit wordt dan veelal gecombineerd met een andere functie, zoals ICT, Finance of Marketing. In dergelijke gevallen speelt wel het gevaar dat digitalisering vooral een ondersteunende rol heeft. Veelal worden dan vooral de incrementele problemen (horizon I) aangepakt. In enkele situaties wordt digitalisering gecombineerd met innovatie. Hierdoor trachten organisaties zich vooral op ‘breakthrough’-ideeën te richten.

Ten slotte kan digitalisering in een programmastructuur tijdelijk extra aandacht krijgen. In dergelijke gevallen wordt een functionaris tijdelijk aangesteld om de digitalisering te versnellen en vorm te geven. Bij een van de business units van Vattenfall is bijvoorbeeld een Digital Officer aangesteld (zie (7) in Figuur 1) voor een periode van twee jaar.

Functiebenaming

Niet alleen wordt digitalisering op verschillende manieren in de organisatie gepositioneerd, in de praktijk wordt er ook een groot aantal functienamen voor gehanteerd. Veelvoorkomende namen zijn: Chief Digital Officer, Chief Technology Officer, Chief Information Officer en Chief Data Officer (zie Tabel 2). De benaming is in een aantal gevallen mede afhankelijk van de combinatie met eventuele andere functies, zoals innovatie, marketing of strategie.

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Tabel 2. Functienamen. [Klik op de afbeelding voor een grotere afbeelding]

De mens centraal

Door de onvoorspelbaarheid van technologische ontwikkelingen, de impact daarvan op de organisatie en de snelheid waarmee deze gepaard gaan, is het moeilijk om vast te stellen over welke vaardigheden een Chief Digital Officer voor de langere termijn dient te beschikken. Een logisch gevolg hiervan is dat de set aan vaardigheden van zowel andere medewerkers als de Chief Digital Officer niet een statisch geheel is, maar zich in hoog tempo zal ontwikkelen. Dit is echter niet het belangrijkste aspect. Omdat de onzekerheid alleen maar groter zal worden naarmate de technologische ontwikkelingen elkaar sneller opvolgen, is het juist de taak van de Chief Digital Officer om medewerkers deze onzekerheid te laten omarmen, door manieren van werken te vinden die hier beter bij gedijen. De techniek staat dus niet centraal, maar juist de mens.

De Chief Digital Officer kan zijn of haar medewerkers motiveren en geeft hen de vrijheid om buiten hun dagelijkse werkwijze en processen te denken. Google geeft bijvoorbeeld haar werknemers vier uur per week de tijd om ideeën te ontwikkelen die zij zelf hebben bedacht. Zo ontstaan ideeën die verdergaan dan alleen verbeteringen van het operating model en die leiden tot nieuwe, disruptieve businessmodellen. Daarnaast is GV (Google Ventures) opgericht: een investeringstak die onafhankelijk van het moederbedrijf investeringen doet in opkomende (kleine) externe organisaties. Hiermee hoopt Google kennis en creativiteit van buiten de organisatie aan te kunnen trekken, en daarmee sneller significante doorbraken te realiseren. Daarnaast draagt de Chief Digital Officer op authentieke wijze uit dat het maken van fouten het creatieproces juist ten goede komt, en dit wordt daarom dan ook omarmd. Belangrijk is dat de Chief Digital Officer duidelijk maakt binnen welke bandbreedtes het maken van fouten wordt geaccepteerd. Door deze manier van samenwerken ontstaat een cultuur waarin de angst voor het maken van fouten plaatsmaakt voor de durf en het lef om te komen met nieuwe initiatieven, die de ontwikkeling van de digitale transformatie versnellen.

De snelheid in het maken van de juiste keuzes is cruciaal voor de wendbaarheid van de organisatie. Daarom zal de Chief Digital Officer controlemaatregelen los moeten laten. In plaats daarvan komt de focus te liggen op het selecteren van de juiste mensen, die de Chief Digital Officer het vertrouwen durven te geven om zelf beslissingen te nemen. Op het moment dat een besluit niet de meest optimale keuze blijkt te zijn, kan dan veel sneller worden bijgestuurd of een initiatief worden stopgezet. De verantwoordelijkheid komt zo daadwerkelijk lager in de organisatie te liggen, wat voor meer betrokkenheid van de medewerkers zorgt. Het is dan de taak van de Chief Digital Officer om de juiste focus te bewaken. En omdat de teams zelf keuzes en beslissingen maken, wordt van de Chief Digital Officer verwacht als vaandeldrager te acteren. Dit geldt zowel voor binnen als buiten de organisatie. De Chief Digital Officer is in staat om binnen de organisatie verzoeken te doen die worden gehonoreerd, maar ook dagelijkse routines aan de kaak te stellen. Hij of zij kan daardoor mogelijk overkomen als hinderlijk of irritant, maar wordt als het goed is ook gezien als een visionair. Het gevolg is dus dat de Chief Digital Officer soms extra geduld moet bewaren, totdat de organisatie meegaat. Buiten de organisatie draagt hij uit met wat voor interessante vernieuwingen zijn teams komen, en welke waarde deze hebben voor de klanten en samenleving.

Ondanks de hierboven genoemde voordelen kan het zijn dat medewerkers het gevoel hebben dat door digitalisering hun baan wordt bedreigd. Dit kan tot weerstand voor verandering leiden. De gedachte die kan ontstaan, is dat als de medewerker niet meewerkt, de digitalisering niet succesvol zal zijn, en daardoor diens baan langer behouden blijft. Het is de taak van de Chief Digital Officer om juist het tegendeel hiervan te bewijzen. Dit doet hij of zij door constant uit te stralen en te benadrukken dat digitalisering juist kansen biedt voor vernieuwing en het meer uitdagend maken van de werkzaamheden. Een ander voordeel is dat de kennis en vaardigheden van de medewerkers worden bijgewerkt, zodat zij cruciaal zijn voor de arbeidsmarkt van de toekomst.

Leiderschapsstijlen van de Chief Digital Officer

Om de digitalisering succesvol te laten landen, is het niet alleen noodzakelijk om te besluiten over de inrichting en benaming van de functie, maar minstens zo belangrijk is discussiëren over de competenties en leiderschapsstijlen die een dergelijke leider nodig heeft (zie Figuur 2).

Veel organisaties starten met een leider die hen helpt om de ideeën vorm te geven ([Viae17]). Sommige organisaties doen dit vanuit hun competenties, om medewerkers de mogelijkheid te bieden de digitalisering te omarmen en te kiezen voor een visionair leider (Visionary). Deze schetst de visie en missie, en zorgt ervoor dat in de hele organisatie een duidelijke focus en commitment ontstaat. Daarnaast bepaalt hij de toepasbaarheid van nieuwe ideeën uit de organisatie, en identificeert welke competenties nodig zijn voor de uitvoering ervan.

Andere organisaties kiezen meer voor het transformeren van ideeën naar kansen in de markt, met een ondernemend leider (Vigilant). Deze leider is goed in het begrijpen van de businessmodellen die voor de organisatie in de nabije toekomst het meest relevant zijn. Hij is zich bewust van digitale bedreigingen en kansen voor de organisatie.

Op het moment dat de organisatie in een fase komt waarin het concretiseren van de ideeën wordt gevraagd, is een architect (Vested)-leiderschapsstijl gewenst. Deze leider formaliseert de kaders en stelt (architectonische) principes op. Hij of zij kijkt ook naar de externe omgeving om te bepalen of door het aangaan van bepaalde partnerships de digitaliseringsgroei kan worden versneld, en of het product of de dienst daardoor kan worden verrijkt. Deze leiderschapsstijl behelst ook de selectie en prioritering van alle initiatieven.

Uiteraard is het hebben van ideeën cruciaal, maar ook de juiste implementatie ervan is een essentiële voorwaarde voor succes Dit vergt een leider die meer aandacht besteedt aan het concretiseren van de ideeën, evenals het op een agile manier sneller, beter en goedkoper realiseren ervan. Deze implementator (Voyager) zorgt ervoor dat de digitale roadmap ten uitvoer wordt gebracht, en faciliteert de teams in hun samenwerking en creatieve proces, om zo te komen tot de beste oplossingen met een fail-fast-, start-up-mentaliteit.

Uiteraard zijn de bovengenoemde leiderschapsstijlen als ‘extremen’ geformuleerd. In de praktijk zijn organisaties meestal op zoek naar mensen die een combinatie in zich hebben van deze stijlen, en die op verschillende momenten in de digitaliseringsreis toepassen.

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Figuur 2. Leiderschapsstijlen, geïnspireerd op [Viae17]. [Klik op de afbeelding voor een grotere afbeelding]

Conclusie

Het moge duidelijk zijn dat door de snelheid waarmee nieuwe technologische ontwikkelingen elkaar opvolgen er nieuwe leiders nodig zijn met andere leiderschapsstijlen en nieuwe competenties. De Chief Digital Officer is de functionaris die nieuwe technologieën spot die relevant zijn voor zijn of haar organisatie. Daar blijft het echter niet bij: hij of zij moet weten waar deze technologie bruikbaar kan worden ingezet voor de organisatie. De Chief Digital Officer is in staat de rest van de organisatietop te overtuigen waarom juist deze technologieën relevant zijn, en heeft lef om hierin serieuze investeringen te doen. Op deze manier geeft de Chief Digital Officer vorm aan zijn of haar visie en het invullen van de daarbij behorende digitale transformatie. Het belangrijkst is echter dat de Chief Digital Officer zijn of haar medewerkers in staat stelt deze digitale transformatie optimaal te versnellen. Hij of zij weet de medewerkers met de juiste technologische vaardigheden op de juiste plekken in de organisatie te positioneren. Hierbij geeft hij of zij veel vrijheid aan de medewerkers, door hen in staat te stellen zelf beslissingen te nemen in een gecontroleerde omgeving, waarbij falen niet als mislukking wordt gezien, maar juist als een leerproces dat van waarde is voor het verloop van de transformatie. Daarmee wordt geconcludeerd dat de ‘ophanging’ van de rol als formele functie van nevengeschikt belang is en sterk verschilt per organisatie, industrie en de mate van strategische waarde van digitalisering. Van levensbelang voor de organisatie is dat er iemand wordt benoemd die verantwoordelijk is voor de digitale transformatie en focus aanbrengt in welke digitale ontwikkelingen moeten worden omarmd.

Referenties

[Dijk18] A. van Dijk et al., Organize for digital – the CIO/CDO relationship, Deloitte.com, 2018.

[Hins17] P. Hinssen, The day after tomorrow, Lannoo Campus: Amsterdam, 2017.

[John18] A. Johson et al., How to build a strategy in a Digital World, Compact 2018/2, https://www.compact.nl/articles/how-to-build-a-strategy-in-a-digital-world/.

[Koot15] W.J.D. Koot, E.J. Mutsaers en I.E. Veen, Het demand-supply model voorbij!?, Compact 2015/1, https://www.compact.nl/articles/het-demand-supplymodel-voorbij/.

[Pasm18] J. Pasman, R. Fijneman en K. Kuperus, Unlocking the value of the platform economy. Mastering the good, the bad and the ugly, Dutch Transformation Forum, 2018.

[Schw16] K. Schwab, The Fourth Industrial Revolution: what it means, how to respond, www.weforum.org, 2016.

[Sijb18] J. Sijbrand en F. Elderson, Visie op Toezicht 2018 – 2022, De Nederlandsche Bank, 2018.

[Viae17] S. Viaene, What Digital Leadership Does, The European Business Review, 2017.

The benefits, challenges, and best practices of crowdsourcing ideas

Crowdsourced idea generation can bridge the gap between stimulating internal innovation capabilities of organizations and identifying the industry’s future disruptors. KPMG’s Innovation Factory, which is part of the Smart Tech solutions portfolio, is an industry leader in cloud-based ideation software. Building on the extensive experience KPMG has using this Smart Tech solution in both internal and external ideation challenges, we give examples of how crowd-sourced ideation can help organizations find long-term organizational success by developing and implementing new ideas.

Introduction

According to [MITS17-1]: ‘approximately 50% of U.S. annual GDP growth can be attributed to product and service innovation, and more than 90% of executives claim that long-term organizational success depends on developing and implementing new ideas.’ Additionally, another study in the same journal [MITS17-2] reported a significant correlation between the ideation rate at companies and the growth in profit or net income: the more ideation, the faster they grew. The challenge lies in finding those now ideas!

Building on these statistics, it seems more than logical that companies should be spending their time and resources finding and developing ideas to fuel growth. But where a lot of organizations nowadays tend to focus on identifying the future disruptors of their industry, a lot of uncut diamonds of knowledge within their own organization are still waiting to be discovered. Many companies have extensive experience in working with start-ups, starting investment funds or organizing hackathons, but forget to stimulate the internal innovation capabilities of their own organization. Additionally, many senior executives are trained as operators, not innovators, and tend to focus on activities that contribute to exploitation rather than exploration. According to data from 3.5 million employees analyzed by [HABR17-1], crowdsourced ideation, when properly executed, can bridge this gap. It is a great way of generating new ideas and using the knowledge and creativity of your organization, while building innovation capabilities among your employees.

The benefits and challenges of crowd-sourced ideation

Example

That the benefits of crowdsourcing can be staggering is illustrated by Deutsche Post [DHL09], which announced in 2009 that employee inventiveness through idea management resulted in benefits of € 265 million. In other words, this resulted in a financial benefit due to crowdsourcing of € 530 per employee. In similar fashion, Continental [CONT16] announced in 2016 that employees saved around € 550 million over the last four years through Continental Idea Management – saving approximately € 124 million in 2015, or € 596 per employee.

So, why do so many companies leave all that knowledge within their direct ecosystem unused and sometimes even uncharted? Well, because it is a complex process. In our client engagements we often meet sceptical employees, who see crowd-sourcing as just another black box for ideas. They believe that, after submitting an idea, they will not hear about it again, will not be included in the feedback loop or be part of implementation afterwards. Sometimes, this can be caused by a risk averse organization, which leaves innovative ideas unrewarded – or even actively discourages new ideas. Other times a process to find and improve the best ideas, and to later implement them, is simply lacking. All of this can kill employee participation in the blink of an eye; nothing is more discouraging than working on new ideas, only to see that none are picked up for further development and implementation.

A path towards reaping the benefits, and avoiding the challenges of crowdsourced ideation

In order to streamline crowdsourcing in your organization, and enable the wealth of ideas to flourish, we have identified a couple of best practices.

1. Adopt a vision that guides your idea generation efforts

Idea generation starts with a shared vision on innovation and defining focus areas. A great example of this approach is Imagine Chemistry by AkzoNobel Specialty Chemicals [ICAN18]. During the past two years, they have organized an open innovation program, challenging start-ups to work with them. AkzoNobel Specialty Chemicals started with defining key focus areas, in which they have identified opportunities. This guides the program, allows experts to contribute and enables a targeted approach to which start-ups can connect. The key is to have a shared understanding of the goals of crowdsourcing, and top management support for both the vision and the focus areas. As each day could hold unexpected changes in technology, regulations and customer preferences, even the best run organizations can become obsolete. By focusing too many resources on exploiting existing business, you run the risk of getting better and better at things your customers might some day care less about. The key is to explore new products, services and even business models to stay relevant. Consider spending resources on new initiatives that do not always have defined revenue or profit goals, because their purpose is to explore opportunities that cannot yet be quantified. Crowdsourcing is a great way to involve the whole company in generating ideas that kick start those new initiatives.

2. Focus your innovation vision into concrete challenges and projects

Once you have a shared vision, make sure to translate that vision into concrete challenges for the crowd (your employees). Be clear which (client) problem you want to solve, and make sure your selection criteria reflect the direction of the type of solutions you are looking for, without limiting the scope of potential ideas. As an innovation team at KPMG, we have extensive experience in running idea challenges, and are never disappointed by the number of ideas. However, sometimes a portion of the generated ideas does not appear to solve the actual problem. Often, this is because selection criteria were not well communicated; or because management was not clear on the expectations for the output. Be transparent about your expectations and assessment of the submitted ideas from the beginning.

3. Setup a structured approach to your idea challenge

To leverage the wealth of internal ideas in an effective manner, thereby linking ideation to strategic focus areas and the innovation portfolio, organizations should implement idea management in a structured manner. A recent study from [IJIS17] found that companies that embraced a program aimed at idea management have more successful innovation behavior. Examples of integral idea management are setting up an agile stage gate process and managing your idea portfolio while keeping a mix of Horizon 1, 2 and 3 innovations in mind.

4. Prepare to find all possible ideas

Almost by definition, disruptive ideas will not address the masses, at least not initially. Evaluating and selecting ideas by looking primarily at current market demand will therefore often result in excluding more disruptive ideas. As the technology adoption curve shows, new ideas are typically not well understood, and tend to perform rather weakly during the first couple of years. The curve shows that, for new products, innovators and early adopters combined account for only 16% market share. While some ideation challenges will be aimed at generating short term benefits, balance the focus areas to also delve into the more challenging or difficult areas. Additionally, our advice to all organizations is to have a process in place that can distinguish more disruptive ideas, and stimulates development of both incremental and more radical ideas. Evaluating and selecting ideas based purely on market size or revenue in the next five years may not be the best approach. Instead, include softer metrics, such as the wow-factor and customer experience (enhancements), into your selection process to uncover hidden gems.

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Figure 1. The Technology Adoption Curve. [Click on the image for a larger image]

5. Drive the ideation rate

Once management is on board and committed to innovating through crowdsourcing, it is crucial to focus on impact. Innovation is, like marketing and sales, a pipeline. Through crowdsourcing, you can fill up one end of the funnel, to make sure that financial benefits for your organization keep emerging from the other end. But how do you keep this funnel filled up? By keeping the ideation rate high. The ideation rate is the number of ideas approved by management, divided by the total number of active participants in crowdsourcing. Studies in [HABR17-2] and [MITS17-1] show us that whether your company is aiming for incremental or disruptive innovations, the variables to boost the ideation rate are the same. These variables consist of four key factors, which should therefore be included and steered on in every idea management program, as focusing on these factors will keep the ideation rate high.

Aim for scale

Engage as many participants as possible, as a large group of people will always generate more ideas than a small group of people. As a benchmark, the [HABR17-2] study shows us that on average every four participants to an idea management system, generate one idea. In our experience, it is of the utmost importance to execute an integral communication plan that targets all the members of the crowd.

Raise the frequency

Organizing more idea challenges will lead to more ideas, and a fuller innovation funnel. It will also get employees used to crowdsourcing ideation and innovation, and a culture of innovation will take hold. We recommend clients to organize at least one full-scale challenge each year to engage the whole of the company, preferably accompanied by multiple smaller, more focused idea challenges on different topics and with smaller crowds.

Engage the crowd

We like to use the analogy of a greenhouse, in which seeds are sown and nurtured until they grow into full concepts that are ready to be harvested. Comments, likes, and discussions are fuel for the ideas to grow. It enables ideas to get better and more people to have a grasp of the potential value of the ideas. Forget about the static idea box, online dialogues that turn raw concepts into good ideas are the engine of crowdsourcing.

Different perspectives

Engaging not only subject matter experts, but a more diverse crowd, will lead to better ideas. Tap into their expertise early in the ideation phase. Where relevant expertise helps to gain new insights and another perspective, the network is crucial for both idea generation and innovation acceptance. Especially staff that is close to the front line, such as shop associates and call center employees, can shed a very different light on ideas submitted. They tend to have a different understanding of your clients, the work to be done and the challenges faced in day to day operations. We also advise clients to consider engaging their external ecosystem, to enrich ideas with outside expertise. Leveraging your network will help you come up with better ideas. In the Imagine Chemistry competition of AkzoNobel [ICAN18], participating start-ups had access to the expertise of chemical specialists. This considerably accelerated the development of the innovative solutions, inspired the AkzoNobel specialists, and created an alternative innovation funnel (next to the traditional R&D pipeline).

6. Enable further development of ideas

Making sure the ideation rate is high, is not the only key to the successful crowdsourcing of ideas. It is also about uncovering entrepreneurial pockets within the ecosystem, and unleashing these through creating adaptive space; a great concept recently coined in the abovementioned study of [MITS17-1]. Adaptive space is defined as the network and organizational context that allows people, ideas, information and resources to flow across the organization. As innovation is fuelled to a large extent by the transfer of knowledge, adaptive space is a critical factor in making innovation work. Until now we have been discussing the tools to focus all stakeholders on certain topics, and to increase the number and quality of ideas. The next step is to dive into the manner in which these ideas will spread across the organization or ecosystem. As the spreading of knowledge and ideas is based on interaction, this should be stimulated by creating three psychological benefits for participants.

Establish mutual benefits for the crowd

Crowdsourcing is not a zero-sum game, so engage with others in a way that benefits them, as well as you. For instance, in a recent engagement, we supported a client that was explicitly looking for innovative solutions, that would benefit their customers as well as their employees. The participation rate was significantly higher than the benchmark.

Spread ownership of the idea

So-called hub-and-spoke models of innovation, where idea submitters put themselves in the centre of interaction, and coordinate all efforts have been shown to be less effective, as all iterations and feedback have to pass through a single person. This often results in a decrease in discussion and group interaction, hampering the wisdom of the crowd. Additionally, a potential drawback is that the hub – the idea submitter – is opinionated about his or her idea, and could filter out suggestions which might be good, but are not in line with the original idea. As stated earlier, engage with the right expertise, share ownership and work on an idea together. This will increase the dialogue and help create a shared vision. We advise our clients to not only reward the submitter of the best idea, but also the top collaborators; improving an idea is as important as coming up with the initial idea.

Create trust – Prototype as soon as possible

They shouldn’t be complicated or ready to market; early versions can already serve as an opportunity for feedback, and better end products. A prototype helps to funnel people towards the improvements that could be made. It also moves the innovation forward towards a solution, as it establishes trust that the idea can really be turned into something practical. A prototype results in a shift from ‘benevolence trust’ (trust that you have others’ interest in mind) to ‘competence-based trust’ (trust that you can do what you say).

Our conclusion on crowdsourcing

Over the past years, our clients have been increasingly focusing on building or optimizing their innovation engine. This often starts with generating ideas from all across the organization, and engaging with the ecosystem they are active in, and a crowdsourced approach to ideation is our approach of choice. The key is to organize crowdsourced ideation programs in such a way that ideation is focused, rewarded and transparent, in order to increase engagement and reap the benefits from these initiatives. In this day and age, getting in the best ideas and rapidly prototyping them can quickly lead to a competitive advantage. At KPMG, we focus a lot of time and effort on finding ideas that will enable us to digitalize our services. Ironically, it is a smart technology solution that enables us to connect the ecosystem, bring ideas together and turn this knowledge into new technological solutions, that help us move forward. We build new technology based on a digitalized idea funnel, as we advise you to do.

Getting the best ideas out of your organization starts with setting out a compelling vision with regard to innovation. The next phase is to set up a process for the transfer of ideas and knowledge, and fill up the innovation pipeline with projects that will help execute on this vision. Focusing on the wisdom of the crowd and the quantity of ideas will enable you to do this. This is the main reason our approach to idea management is aimed at interaction. We focus on, and measure, metrics such as logons, likes, interaction and views, and rigorously steer on these metrics. And most importantly, we adhere to the above guidelines.

Our methods for innovation vision development, setting up ideation processes/pipelines, and scaling up concepts to market share one thing: they are all structured and tested with stakeholders. Bring structure to your innovation efforts, connect to the ecosystem, create adaptive space, and you will find you can be an innovation factory.

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Figure 2. Six key steps to accelerate crowdsourced innovation at your organization. [Click on the image for a larger image]

References

[CONT16] Continental, Ideas are welcome worldwide at Continental, Continental-Corporation.com, https://www.continental-corporation.com/en/press/press-releases/ideas-are-welcome-at-continental-8984, July 2016.

[DHL09] DHL, Deutsche Post DHL releases Sustainability Report 2009, DHL.com, http://www.dhl.com/en/press/releases/releases_2009/other/200409.html, 20 April 2009.

[HABR17-1] Harvard Business Review, Data from 3.5 million employees shows how innovation really works. 09 October 2017.

[HABR17-2] Harvard Business Review, 4 ways leaders can get more from their Company’s innovation efforts, 10 October 2017.

[ICAN18] AkzoNobel, Imagine Chemistry. The AkzoNobel Chemicals Startup Challenge, AkzoNobel Global, https://www.imaginechemistry.com/, 2018.

[IJIS17] International Journal of Innovation Studies, Idea Management revisited. A review of the literature and guide for implementation, 2017.

[MITS17-1] MIT Sloan Management Review, How to catalyze innovation in your organization, 2017.

[MITS17-2] MIT Sloan Management Review, Are Innovative Companies More Profitable, 2017.