Pwc
GST implementation: Good, but not yet simple
One year of GST has brought along with it the benefits of a single tax regime, but for a number of sectors, it's also caused some pain. PwC looks at some of the pain points and proposes some solutions
Government-corporate collaboration could be the new hope for CSR in India
India created history when it made it mandatory (by law) for companies to spend a part of their profits on corporate social responsibility (CSR) activities. Following the landmark legislation, corporates have started doing their bit under the purview of Section 135 of the Companies Act 2013. Every year, they are required to present a report card of what they managed to achieve or spend in the stipulated time frame in the Director?s report. However, it remains to be seen if the CSR projects supported by the corporates are yielding far-reaching impact on the community, as was envisioned by the Act. As per a publically available CSR spend analysis of 91 NSE listed companies in fiscal year 2015-16, a total of 79 private firms were cited to have spent a cumulative amount of Rs 4,190.5 crore on CSR. This is an increase from 75 companies investing Rs 3,509.7 crore in FY 2015. Compared to this, 12 government-run companies ended up spending Rs 1,250.8 crore and Rs 1,842.9 crore in FY 2015 and FY 2016, respectively. If the private companies spent the money on government schemes and programmes, the impact could have been much more effective and widespread. While executing any CSR campaign, companies invest time in identifying/selecting beneficiaries and partners as well as monitoring the same. By supporting government programmes, they could save their precious time as these programmes are far more credible and would help save time and effort. The private sector emphasises on getting trained manpower or training the manpower for the benefit of the company. It could use the same approach while coordinating with government agencies by training people involved in the upkeep of the project, building their capabilities in tune with the requirement of the cause. Unfortunately, this is not always the case. More often than not, corporates take up projects that they believe are good enough to support. They are selective in their approach and not all-encompassing, something that a government-run program would be. These causes may or may not impact the community targeted in the desired way. Government programmes, on the other hand, are the ones that are crafted in detail, keeping in mind the larger good of those who truly need it for the betterment of their lives. However, a lot of these programs fall short of achieving the results due to limited resources, especially lack of skilled manpower. Indian bureaucracy and administration also hamper the good work these programs could entail. The corporate world can always pitch in and undertake activities to remove these deficiencies and plug-in gaps through their CSR resources. Though Schedule VII allows for some CSR activities to be aligned with government-run schemes, it is not always the case. It needs to move beyond this. A collaboration or partnership between the two for social good would mean government policies/schemes/programmes develop an ally in the private sector. The corporates could invest their time, resources and look at the larger well-being of the communities by their innovative solutions and skilled manpower. This would ensure a sustainable and impactful campaign rather than just undertaking CSR projects for the sake of adding volume and expanding the size of such programmes. If addressed jointly, this is a win-win situation for both the parties. Government schemes are, more often than not, designed to keep the interests of poorest of the poor in mind. It goes up from there. All the schemes in the field of education, healthcare, environment, rural development, gender equality, and the like, eventually aim to create an impact on ground zero. Let?s understand the subject from a cursory analysis of some of the country?s flagship programs. The administration has been working on the Swachh Bharat Abhiyan, which was launched on October 2, 2014. Corporates were roped in to build toilets after toilets in cities and villages, which they did. Last reported in September 2016, over 2.3 crore household toilets have been constructed in villages and more than 76,000 community toilets have come up in cities. However, more or less, it was a check-mark activity for most corporates as they just built the toilets and moved on. Not much though was put into the campaign so as to ensure clean water supply or maintenance of these toilets which is such a critical part of the whole exercise. Creating awareness about the adoption of hygienic practices and instituting a behavioural change in rural people could have had a far greater impact on the government?s mission. Though a period of three-four years is very little time to pass a judgement on the Swacch Bharat Abhiyan campaign, but it is time enough to assess the shortcomings and work on them with an objective of optimising future efforts. Companies can also tie up with local government bodies to start a pilot project in a region, work on it together and assess its performance. If it successfully meets the needs of the local population, the same can then be customised and implemented in other regions as well. ?When running such projects, corporates need to conceptualise, strategise, implement and also document the pros and cons of their pilots. The learnings could then be shared with the government so that they can ?scale? and ?replicate? it. In view of the above, if the companies have a wider range of issues to support on a sustainable basis with the help of and to help the government, they would refrain from treating CSR as a part of their to-do list, and look at the same as a strategic and meaningful investment of corporate resources. -By Abhishek Tripathi, Director ? CSR Advisory, PwC India With inputs from Biplav Chatterjee, Associate Director ? CSR Advisory, PwC India
How imperative is Design Thinking?
Who doesn?t love a good design? People would readily tell you how much they love the way something looks or feels... yet many still think of design as an esoteric art practiced by those with a taste for liberal arts or for organisations that design objects and products. Nothing could be further from the truth. 'Design Thinking' is a mindset that can be employed by any business to transform itself. It is time for business leaders to understand the power of design and design thinking; specifically how Design Thinking will help them transform their businesses and make them future-proof. Here are five reasons you need to leverage Design Thinking today to transform your business. A problem well-defined is a problem half-solved Ever met a consultant who cannot immediately tell you the solution to your problem? We often plunge headlong into doing what we have been rewarded for - answering a question quickly. So what?s wrong with that? A few things ? we first need to know if we understand the problem deeply. We need to know if we are solving the right problem. We need to take the time to ask the right questions. Finding a solution without taking the time to understand the real problem is fraught with risk. Organisations waste tremendous amounts of energy and resources solving the wrong problems. A few years ago, I was advising a retailer on how to improve their product returns process. They felt the only solution required was to re-engineer the check-out process to make product returns faster. But when my team and I spoke with consumers, we understood that they would highly value not having to return the item at all or at least want not to come to the store to return it, or even if they came to the store, they would prefer not having to stand in line to return products they didn?t want. Surprise, surprise! Using these simple insights, we helped the retailer develop an assortment of strategies that would reduce product returns; we helped them equip consumers with tools that would enable them to buy the right product in the first go, and also helped make the return process friction-less. We often create solutions based on best practices or assumptions that are typically based on market trends and what the competition is doing. We don?t take into account our customers? needs and expectations. Forget that, sometimes we even fail to recognise whether the stated problem is the right problem to solve at all. This is the reason 70 percent of all strategic transformations fail. While effecting a strategic transformation at any level, it is vital to know who it is that we are doing problem solving for. Who are the stakeholders? What do they really want? What?s the most impactful problem to solve? When we go ahead without empathising with the key stakeholders, we are bound to be in for a rude shock. Walk a mile in my boots Empathise, empathise and empathise some more! This is the foundation design thinking is built on. We need to ?walk? in our customers? shoes to be able to fully experience the world from their perspective. Without true empathy, we won?t be able to identify the ?real? problem and in turn deliver game-changing outcomes. We need to know why ? why is a certain product more popular than the other? Why do people choose a particular cab service over the other? With each answer, we need to dig further until we know the real reason why! Only when we can see, think and feel the way our customers do, will we be able to determine what would be game changing for them. Empathy is the bedrock of meaningful and memorable products, services and experiences. Because perfect is the enemy of good Fail as much as possible and fail fast. As clich? as that is, here?s a fact: failing forward works. During a large-scale transformation at a pharma chain in the US, where they were redesigning their store layouts, a senior executive of the company said: ?Perfect is the enemy of good.? He wanted us to try out multiple formats and learn from them. My team and I did exactly that in a short amount of time, combining elements that worked well in a certain context to redesign their new store formats. That was my introduction to failing forward a decade and a half ago and it worked well. The more you ?do,? the more you learn. Don?t go out looking to fail. Go out looking to learn. Create byte-sized learning opportunities and prototypes, put them to the test and learn from them. Basically, fail forward to succeed rapidly. Because everyone loves a good story Stories inspire and motivate! They help us connect with our audience and evoke emotions that trigger change. Storytelling is a powerful insight tool that can effectively communicate even the most mundane facts and figures in a clear and thought-provoking manner and captures the imagination of the audience. When we think of new processes, products or experiences, it helps to bring them to life in ways that people can relate to. Don?t just create personas and journey maps, put them to play in communicating your ideas. Storytelling is one amazing way to prototype in an evocative manner. Tell stories. Seek reactions. Learn. Make it better and tell that story (again). Because it is important to be at the intersection of being meaningful and memorable In the words of Dieter Rams, ?Good design is making something intelligible and memorable. Great design is making something memorable and meaningful.? It?s not about the big idea. It?s about how an idea translates into providing a memorable experience that also holds personal significance for the end user. A large utilities company in Europe called us to help them with customer retention in the rapidly transforming energy market. Despite a well-designed website and apps, the company seemed to be losing ground. When we spent time with consumers, we learnt that they expected a lot more than just regulated tariffs from their energy provider. They wanted their energy company to be a one-stop shop for everything energy-related, which would help them be in control of their consumption of the utilities. It was not simply about the product or service, but about how it would eventually translate into a practical solution that actually delivers value to the consumer. When designing, it is important not to get lost in the razzle-dazzle of slick ?user interface?. Good design is not just about the looks. Both form and function need to come together beautifully to deliver an experience that is both meaningful and memorable. Prateek Sinha, Partner and Experience Leader, Digital Services, PwC India
How successful transformation can help grow the business empire
Emerging as an Emperor It is said that with the era of digital disruption, two-thirds of the Fortune 500 companies will no longer exist. And this is what keeps the CEOs of most companies awake at night as they grapple to achieve the growth and ambitious targets set forth by their boards. What should they do to ensure that their companies not only remain relevant tomorrow, but take advantage of the digital opportunities? Nearly every company today is embracing a transformation journey enabled by the convergence of technologies. These are strategic business transformation programmes that can help an organisation weather the digital storm with one of the three outcomes: 1) diminish or perish 2) survive but not make significant impact and 3) emerge as a leader through a game-changing disruptive play. No prizes for guessing which one an ambitious CEO will choose. The journey of a CEO is no different from that of ambitious kings who gazed into the crystal ball and planned strategies to grow their kingdoms beyond the empires they created or inherited. Those who successfully grew their empires became rulers of many lands ? and were called Emperors. The key to the success of CEOs with an emperor?s ambition not only lies in what they do, but more importantly how they do it. Let's look at some of the aspects that make a strategic business transformation journey successful ? focused on, of course, the growth of the empire. Focus on the human experience More often than not, companies look to new-age technologies as a one-stop solution for all their transformation needs. And this is usually where they go wrong. The idea that technology alone can provide all the answers is a myth. It?s more critical to focus on the human element or the customer experience that is required. New technologies are far more intuitive than ever before and that brings in a new dimension. Today, ensuring that a technology adapts to the user i.e. the ?experience? is a must before embarking on the transformation journey. The user is no longer satisfied with just being just satisfied. Their expectations go beyond the pure functionality of technology. It?s no longer about implementing new systems, but about creating a differentiated or disruptive experience for one?s customers, employees or any other stakeholder who will use those systems. It?s about understanding the unmet needs and desires and seeing beyond optimising and improving to disruption. This requires a company to look at a business problem through various lenses ? bring in different perspectives from across the company and not just IT to make sure everyone?s speaking the same language ? that of human experience. Great kings like Ashoka and Akbar always strived to understand their people and give them an unforgettable experience, which is what eventually immortalised them in the pages of history. It is said that Emperor Akbar and his ministers often walked through the kingdom disguised as common men to understand how people felt. Many of Akbar?s reforms related to tax, land and religion were born from these excursions. The Emperor also established the Diwani-i-Am, a public grievance forum, where he met people to address their problems in person. Ashoka appointed officers called Dhamma Mahamattas who kept the emperor in touch with public opinion. It?s this empathy towards their people that made Ashoka and Akbar two of the most revered leaders in Indian history. Break the silos within Business transformation is no small feat. It calls for a complete change ? from the boardroom to the basement. And it can be achieved only by breaking down the silos. It is important though to adopt a proper strategy for collaboration across departments with a clear end goal at the start of this journey ? else there would be complete chaos. There is a method to the madness after all. People need a well-defined vision for how the technology will support the new business strategy. Your organisation needs to see how the transformation efforts will integrate with the go-to-market strategy, increase efficiencies in the supply chain, help regain competitive edge and unlock value ? constantly. Only then will all the stakeholders get behind it. Chandragupta Maurya, the first true emperor of India, had a vision ? and that vision bonded all nobility, generals and the people. He dreamed of breaking down political barriers and unifying the smaller kingdoms under his rule to end constant battles between them. People from all walks of life, who were tired of the violence and bloodshed, were more than willing to rally behind the young crusader. They bought into his vision of peace and that of a strong, unified and prosperous India. It was this conviction that helped Chandragupta Maurya overthrow the mighty Nanda dynasty - a feat that even Alexander the Great and his army shuddered from - and realise his dream. Innovation from anyone Many companies typically follow the chain of command when it comes to brainstorming. The view is that the more senior you are, the better equipped and more experienced you are to come up with solutions that can help the business. Companies need to quickly realise that in the digital age, disruptive and novel ideas can come from anyone at any level ? from the CEO to the trainee. It?s therefore critical to listen to as many different voices as possible during ideation. Often the softest voice in the room has the grandest idea. Today, the rules of ideation are changing quite fast and some of the most innovative thoughts come in from people who are new and look at business problems through an outside-in lens. The concept of open innovation is now the mantra. Companies need to involve stakeholders outside their organisation to collaborate, think through solutions and solve business problems. Many companies bring in start-ups who operate in various areas to work alongside their executives. This brings in fresh, new ideas and perspectives. No one understood the power of collaborative thinking and co-creation better than Akbar. He encouraged the free flow of ideas among his officials. Many of his revolutionary social, religious and administrative reforms were a result of such open discussions with his people, especially the Navaratnas like Birbal, Todar Mal and Abul Fazl. In the great battle of our digital era, some will lose and some will win but only a few will emerge as Emperors from kings. The above perspectives are a few important steps that one needs to keep in mind when planning a strategic business transformation with the objective of propelling or retaining the company?s position in the market tomorrow. - By Sudhir Singh Dungarpur, Digital Services Leader, PwC India
Digital Transformation: Direction far more important than speed
Over the last few years, we have seen a heated race among organisations to embark on their digital transformation journeys. The continuous process of disruption caused by startups, born in cloud and the younger 'digital age' companies have created a sense of fear and urgency in the larger organisations. In their clamour to stay relevant, these organisations allocated unprecedented budgets and created digital leadership roles ? all of them with the primary objective of embracing and retrofitting new technologies within their environment, just so the digital ?box? is checked. Most of these organisations approached their digital journey through a technology-led lens. Huge investments were made in the latest technologies by well-known firms over the last two-three years. Many of these projects created a lot of excitement too. A large majority of these investments, however, are still awaiting the desired business results ? or we can simply say that they are waiting for their "ache din". So what is the reason behind this? After all, the technology revolution brought about the same productivity, cost benefits and advantages as the digital age promises. The paradigm shift here is the fact that during the technology revolution, man followed the computer, i.e., the processes were created in a manner required by that software or hardware. In the digital age, technology has to follow man. Technology today is far more intuitive, with user experience being at the centre of its differentiation. A human-centric approach to solving problems ? that is the fundamental shift we see today. Organisations need to pause and consider this shift carefully before setting out on their digital or strategic business transformation journey. It is important to remember that one doesn?t need years of experience or even its own products to author a disruption ? consider Uber and AirBnB. It?s all about understanding the need of the user and creating the right experience. Setting the direction: The need for digital transformation is a given. It?s not about when, but how. And while digital is often considered synonymous with speed, it?s more important to set the right direction for the journey. Identify the real problem: Before an organisation embarks on its transformation journey, it is important to acknowledge that it is venturing into unchartered territory to create something different; something that hasn?t been created or even thought of before. It?s therefore imperative that the organisation identifies the right problem. Whose problem is it aiming to solve ? the customer, employee, supplier or any other stakeholder? Identifying the real problem to solve is key to a successful digital transformation. Without this, transformations are a waste of time, effort and resources. Gain insights: Understanding your target user is another very important aspect of this journey. We often hear organisations make bold statements about how well they understand their customers. If this were true, more and more digital transformation processes would yield results. As it stands, about 70 percent of these transformations fail according to a recent PwC study. This is because most transformations introduce new complexity without truly understanding the customer/ users' needs. They expect people to change and adapt. Organisations need to invest in gaining deeper insights into their target audience ? this is where design research comes into play. Ethnography and secondary research tools are a design thinker?s primary weapons in understanding and empathising the end customers ? without which the transformation journey is doomed. Use collaborative workshops for creating solutions: Solutions must be created by bringing different minds and approaches together. It?s not enough to include only technology minds while charting the digital transformation journey. Companies have to adopt a workshop-led approach to bring together all divisions within the organisation and blend the knowledge to transform, imagination to create and the trust to deliver. Open approach that transcend borders: Today boundaries between various industries are blurring rapidly. Digital native companies are quickly adapting and putting together an ecosystem that addresses all customer needs ? a one-stop shop if you will. While sectors are known to disappear or merge, such developments were traditionally slow. The digital revolution, spurred on by big data, AI and similar technological advances is causing this restructuring to happen at a much more rapid pace. Organisations need to take into account this shift while planning their digital transformation journey. The most common example is smartphones. Which sector does it belong to? Steve Jobs started a journey by integrating music, communications and telephony. Today the apps on our phones transcend boundaries in virtually any sector ? news, travel, photography, banking, and so on. Another example is a prominent Indian auto manufacturer that we are engaged with in driving their digital transformation. They have defined themselves as a retail organisation and have put 360 degrees customer experience at the heart of their transformation strategy. Unlike the age of technology revolution, we are today living in an age of digital transformation. Digital transformation is a lot more than just new age technologies. It is the seamless integration of business, experience and technology with customer/ user experience at its heart. An organisation that understands, embraces and implements this will set their digital transformation programs on a path to success. Sudhir Singh Dungarpur is the Digital Services Leader for PwC in India and works with clients on designing and implementing their strategic transformation programs.