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City Focus

June 2018 • ANZ EDITION

Westpac New Zealand Digitisation and innovation at one of NZ’s biggest banks

Gemmill Homes Building a ‘smart’ future in Australia’s housing industry

TOP 10

Investment companies in Australia and New Zealand


The source of value

Procurement executives across the globe continue to see the potential they can unlock throughout the supply chain. They understand that business today is about engaging, collaborating, adapting instantly to evolving needs, and finding new sources of value. Getting that value, however, can prove a challenge.


HELLO AND WELCOME to the June issue of our ANZ edition of Business Chief. Our cover story this month features Westpac New Zealand and the story of digital transformation in procurement at one of the country’s largest banks. Chief Procurement Officer Rob Halsall discusses digitisation, innovation and the indigenous economy across an in-depth chat with John O’Hanlon. Elsewhere in our latest issue, we speak to Craig Gemmill, Managing Director of Gemmill Homes, about how embracing cutting-edge technology to build ‘smart’ homes is securing the company’s future. Shedding a more global light on the subject, we asked Lloyd Snowden of Oliver Wight to talk us through the importance of value chains in sustainable business planning, and how making the most of them can add to any business. Meanwhile, we caught up with Everbridge, a company which manages critical events from terror attacks and natural disasters to IT outages by using state-ofthe-art software to keep businesses running and employees safe. Finally, looking into people management, Sony Electronics’ Head of Corporate Communications Cheryl Goodman is discussing the rise of women in STEM and how females can be encouraged to make it to the top. This month’s Top 10 lists the biggest investment companies in the region while our City Focus profiles the Tasmanian city of Hobart. Finally, our exclusive digital reports boast interviews with, on top of Westpac, Charter Hall, Mercedes-Benz, Linfox and Naked Wines – all involving in-depth discussions with top executives and industry experts.

Enjoy the read! www.anz.businesschief.com www.bizclikmedia.com

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10 Westpac New Zealand’s

Procurement Transformation

26 L E A D E R S H I P & S T R AT E G Y

Building a smart future

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TECHNOLOGY

CRITICAL EVENT MANAGEMENT ACROSS A CHANGING LANDSCAPE


PEOPLE

S U S TA I N A B I L I T Y

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HOW MORE CAN BE DONE TO MAKE THE MOST OF VALUE CHAINS

50 SONY

ELECTRONICS and the rise of women in STEM CITY FOCUS

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HOBART

TOP 10

84 Top 10 investment companies in Australia and New Zealand


92 104

Charter Hall Construction

Mercedes-Benz Group Technology


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134

Linfox

Supply Chain

Naked Wines Food and Drink


POWERING DATA-DRIVEN DIGITAL TRANSFORMATION IN MANUFACTURING Hewlett Packard Enterprise’s (HPE) Hybrid IT technology is enabling original equipment manufacturers (OEMs) such as GE Digital enter a world powered by Internet of Things (IoT) connectivity and data analytics – where nothing ever breaks. These benefits are being passed on to customers, allowing them to adopt new business models, streamline operational processes and create more innovative products and services. Hewlett Packard Enterprise’s (HPE) Hybrid IT technology is enabling original equipment manufacturers (OEMs) such as GE Digital enter a world powered by Internet of Things (IoT) connectivity and data analytics – where nothing ever breaks. These benefits are being passed on to customers, allowing them to adopt new business models, streamline operational processes and create more innovative products and services.

CHALLENGE For OEMs, the current idea economy is all about turning ideas into value faster than the competition. With the vast amounts of data gathered from a growing number of IoT endpoints, manufacturers can drive operational efficiencies, deliver better user experiences, and develop new capabilities. However, while leveraging technology to improve performance is critical to remaining successful, it’s not as easy as it sounds. This is due to a variety of factors, including: • Bespoke systems: Many existing industrial systems are purpose-built, with distinct protocols and limited capabilities. However, right now, what companies need are cross-platform visibility and insights. • Implementation difficulties: The lack of mature skills and resources for IoT implementation means that the integration of information technology (IT) and operational technology (OT) has become essential in driving productivity and business results. • Alignment between IT and operations: The financial risk and uncertainty resulting from IoT adoption has driven companies to use a mix of SaaS, Hybrid and Cloud-first strategies, which must now be connected to each other.

SOLUTION To combat these challenges, HPE OEM has built hybrid IT solutions that include pioneering edge computing and analytic data techniques, to help manufacturers turn vast quantities data into real-time, actionable insights. These solutions have been designed to adapt to a variety of business challenges. For example, GE Digital harnessed them to create Predix – the operating system for the Industrial Internet – to drive its own business transformation, as well as that of other manufacturers. As the world’s first and only industrial cloud platform, GE Predix is turning data into actionable insights from the edge to the cloud, and employing the latest innovations to optimize assets and operations – all supported by a robust ecosystem that accelerates app development. With the HPE-powered Predix, manufacturers can leverage big data and analytics in conjunction with industrial expertise to achieve real gains in productivity,

BENEFITS The partnership between HPE OEM and GE Digital is helping national electric utility company Saudi Electricity achieve an ambitious modernization of Saudi Arabia’s electricity infrastructure. Working with the HPE OEM and GE Digital Alliance, Saudi Electricity implemented an industry-leading Industrial IoT platform that supports machine learning and predictive maintenance technologies. This allows them to improve the company’s quality of service while minimizing energy costs. By 2020, Saudi Electricity expects to this continuing partnership to yield a $19B reduction in operational and capital costs, 3x increase in power generation capacity and improved reliability, and 100% control of critical electrical assets. Ultimately, companies seeking to thrive in the idea economy must implement data-driven digital transformation Ul practices. By identifying problems before they occur, manufacturers will derive improved quality, reduced production time and machine downtime, and lower production costs – and then pass these benefits on to the customer. The collaboration between HPE OEM and GE Digital is a powerful example of how hybrid IT platforms are giving manufacturers real-time visibility across heterogeneous systems, putting them in a safe and secure environment that enables decisions to be made quickly, accurately, and intelligently.


Westpac and the virtuous supply circle Westpac NZ, one of the country’s largest banks with over a million customers, is committed to improving the social, environmental and economic wellbeing of all Kiwis. Rob Halsall, Head of Commercial Services talks about the role of innovation, technology and data analytics in creating a virtuous supply circle. Written by John O’Hanlon Produced by Glen White


Westpac New Zealand

It would be a mistake to think of Westpac in the same way as one thinks of the big global corporate banks, even though it is one of the ‘big four’ in Australia. For a start it doesn’t even sound like a bank, its portmanteau name, adopted in 1982 when it merged with a number of Australian banks, signifying the western pacific region rather than the finance sector. Westpac has been in New Zealand ever since it was founded as the Bank of New South Wales in 1861, and today Westpac New Zealand is the government banker as well as serving businesses throughout the country and more than 1.3mn customers. Talking to Rob Halsall, the bank’s Chief Procurement Officer (CPO), one quickly begins to appreciate why it is different. For a start, it is very closely aligned to the values that make New Zealand an outstanding place to live. That’s illustrated by three issues it places right at the front of its agenda – promoting electrification in transport, tailoring its services for people with dementia and providing equal opportunities to women, especially in leadership roles. The first of these is a passion of Westpac NZ CEO David McLean, who drives an electric car himself, and has joined a group of large corporations in committing the bank to a 30% electric fleet by the end of next year. Halsall himself is on the board of Drive Electric. “Transitioning to EVs is more complex than just ordering the cars: you have to take the infrastructure, people’s habits and preferences as well as total cost. At the bank we’ve been working on the project for the last 18 months.”

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S U P P LY C H A I N

“The P2P system gives us a level of transactional data and insight that we didn’t have previously” – Rob Halsall, Chief Procurement Officer

Rob Halsall provides leadership in commercial management and sustainable supply chain solutions across IT and non-IT services within the Westpac New Zealand business. He has more than 20 years domestic and international strategic procurement experience within automotive chemicals, aerospace, telecommunications, tertiary and financial services organisations, providing leadership in business strategy, commercial project delivery and endto-end procurement services. This includes category management, strategic sourcing and integrated supply chain management.

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Electrifying New Zealand’s oldest bank This year NZ’s oldest bank will electrify its fleet with NZ’s favourite electric vehicle, the Hyundai IONIQ. We couldn’t be prouder of Westpac New Zealand who are leading the way with their ongoing commitment to sustainability.

Give New Zealand’s favourite new Electric Vehicle (EV) a try today. To enquire about electrifying your fleet, contact the fleet team at Hyundai New Zealand on 0800 HYUNDAI (0800 498 632) today.

WINNER

GREEN CAR OF THE YEAR

EV/PLUG-IN HYBRID BEST IN CLASS

hyundai.co.nz/electric The Hyundai IONIQ EV is NZ’s leading selling new electric vehicle based on New Zealand 2017 electric vehicle sales.

N E W

Z E A L A N D


Hyundai New Zealand has been partners with Westpac New Zealand for more than 10 years supplying more than 200 vehicles to its fleet. Today, Hyundai New Zealand is the preferred vehicle choice to provide the Electric Vehicles that will enable the Westpac New Zealand vision of converting 30% of its fleet to electric by 2019. As a partner to one of the oldest banks in New Zealand, Hyundai New Zealand has always strived to go above and beyond what is expected of a partner, and as champions of the Electric Vehicle industry in New Zealand, the company works closely with Westpac New Zealand on truly showcasing the viability of transforming a fleet to being Electric. With Westpac New Zealand’s transformation, Hyundai New Zealand

benefits from having a highly recognisable partner with a proven EV fleet solution that shows other customers electric fleets are a reality today here in New Zealand, not just in the future. Westpac New Zealand values the industry expertise Hyundai New Zealand provides. With Hyundai New Zealand being 100% Kiwi owned, it ensures Westpac New Zealand has the support and

information it needs as well as a New Zealand based customer support team. With the ever-evolving process of transformation, Hyundai New Zealand shares its experience from similar rollouts and provides invaluable learnings from these to support Westpac New Zealand with navigating the complex, yet highly rewarding process of having an electric vehicle fleet.

FAST FACTS >> The Hyundai IONIQ is the bestselling New Zealand new electric vehicle in the market due to its range of over 200km, practicality, styling and is backed by a 10 -year unlimited KM battery warranty. >> The Hyundai IONIQ is the only model in the world that offers three separate drive trains which provides flexibility and versatility for fleets. >> All Hyundai New Zealand EV dealerships are required to undergo a specific training programme and cerfification around Electric Vehicles. >> The Hyundai IONIQ was the 2017 winner of ‘NZ’s favourite electric vehicle’ Fairfax New Zealand, ‘Best electric vehicle’ – NZ Autocar, ‘Small Car of the Year’ Company Vehicle, ‘Motoring Green car of the year’ - NZ Herald Driven, ‘Best in class - EV/Plug-in Hybrid’ - AA Motoring, ‘Supreme Winner’ - Women’s World Car of the Year and DriveLife’s ‘Eco Warrior’s’ Car of the Year.

www.hyundai.co.nz


ACCELERATING

DIGITAL BANKING TRANSFORMATION Banks with a strategic, enterprise-wide approach to digital technology are better prepared to transform, innovate and compete amid an increasingly disruptive and rapidly changing marketplace. DXC Technology, the world’s leading independent, end-to-end IT services company, provides digital services from ideation and change through to development and ongoing evolution to accelerate large enterprise on their unique transformational journeys. To find out more, visit www.dxc.technology/au

Š 2018 DXC Technology Company. All rights reserved.


S U P P LY C H A I N

Halsall is in his fifth year with the bank, and recently awarded Ernst & Young New Zealand Procurement Professional of the Year’ for 2018. A native of Belfast, he has over 20 years’ experience in procurement and supply chain management, 11 years of which were in manufacturing across telco, automotive and aerospace, with a further five years in tertiary before entering the financial services industry. Halsall joined the Westpac Group in Australia as Director of Commercial Services in 2014 and in 2016 he jumped at the chance to move to New Zealand when offered the role in Auckland. On his arrival in Auckland, he found a procurement culture that worked well, but needed to refocus on the basics which he thought necessary to support the bank through the next phase of its growth. “Before we could embark on full scale transformation, we had to get the basics right, and for me that meant looking at the core dimensions of our operating model and re-establish the purpose and value proposition of the function.”

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Westpac New Zealand

His strategy for changing the operating model was formulated under ‘eight Ps’:

1. People (capability maturity, learning & development roadmap, improved engagement);

2. Product (what are our core products and services and do our stakeholders understand them?);

3. Process (are the core processes effective and do business partners understand them?);

4. Platforms

5. Partners (the approach to internal business partner management and external supply partner management);

6. Planning (collaborative cycles, to cocreate on innovation, for example);

7. Pace (the rate of change and the cadence, or rhythm at which the business can regularly and consistently deliver projects that effect change);

(the right data, document and information management tools, 8. Progress source-to-manage, and simple (measuring everything so that task automation); all processes can be evaluated, Voice of Customer, Voice of Supplier, Value Creation).

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“These are the lenses I tend to use to examine our current state and where we need to be heading. When I joined the team there was room for improvement under all of these headings,” Halsall says. “Today, data is like oxygen to any business. From a Procurement specific perspective, we have moved over the last 21 months from a data poor, insight poor position to one where we are richer on the data side and have created more insights through the use of analytics.” The science of procurement is all about data and making the right choices based on the insights that the data provides, he believes. The art is the narrative around the data and the change it suggests.

“We focus heavily on both those areas. We built a repository of spend, contract and business unit data that we could interrogate and visualise using a Microsoft product that was available to us in-house.” The painstaking task of building a database and a data analytics structure has resulted in far better transparency across the supply base and the spending patterns of the bank. Not so much cost reduction, Halsall says, as cost management; enabling movement from the reactive to the proactive. “At the very least, we are now able to say that we know what we don’t know.”

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Westpac New Zealand

“Before we could embark on full scale transformation, we had to get the basics right, and for me that meant looking at the core dimensions of our operating model and re-establish the purpose and value proposition of the function” – Rob Halsall, Chief Procurement Officer

The data analytics structure is complementary to Westpac’s new networked Purchase-to-Pay (P2P) platform. The Basware system was introduced in 2017 and has made a big difference. “Until then, the bank didn’t have a P2P system. It gives us a level of transactional data and insight that we didn’t have previously and it has also allowed us to create supplier payment efficiencies, something that is of the first importance to them.” Another direct benefit of implementation was to rationalise the bank’s supplier base by 40%, with a further consolidation planned by 2020, Halsall adds. As a career procurement professional, Halsall naturally looks at ways to raise the profile of the team. “In my experience, it’s a question of overcoming any apathy that June exist towards procurement by demonstrating

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its value to stakeholders.” By rebranding the Procurement function to Commercial Services, he signalled his determination to move away from being viewed purely as a sourcing function to a trusted advisor to all the business units. “We have definitely increased our strategic role. The engagement at executive level is higher than it has ever been before. Collaboration with our key business partners on planning and identifying key projects is now embedded, where even a year ago it was minimal.” Procurement is now accepted by the executive leadership as a contributing partner in commercial decision-making. It is also seen as being more digitally enabled with improved operating disciplines. His team works very closely with the Technology team.


S U P P LY C H A I N

PARTNERSHIPS IN FOCUS

Hyundai provides Westpac New Zealand with corporate fleet vehicles including electric vehicles (EVs). The company also provides thought leadership on the motor vehicle industry with a particular focus on EV adoption. Halsall adds: “The partnership with Hyundai has delivered great outcomes for Westpac New Zealand, they go above and beyond continually across all aspects of their service delivery and have been instrumental in Westpac being able to bring its sustainability agenda to life. “Hyundai and Westpac New Zealand have partnered as champions of electric vehicle adoption and the partnership will continue to evolve over time as Westpac New Zealand’s fleet becomes more sustainable.”

DXC provides document composition and multi-channel distribution, digital archiving, cheque processing in addition to development and maintenance services for a number of our core technology platforms and is pivotal to our ability to deliver financial transactions, account statements, and online banking services. “The partnership between Westpac New Zealand and DXC has delivered significant benefits to both Westpac New Zealand and its customers,” Halsall says. “Benefits include resource augmentation of specific skill sets (such as Java developers), alignment to and actively supporting Westpac New Zealand to embed an Agile methodology, driving transformation activities to position Westpac New Zealand as an innovator in the New Zealand banking industry and providing the flexibility enabling Westpac New Zealand to respond quickly to change. “DXC and Westpac New Zealand regularly collaborate to plan and refine the road map for continuous improvement and next generation banking, made possible due to the open and honest communication of our respective business strategies and the likely impacts on the other party.”

FCM provides customised, end-to-end travel management services to Westpac, from online/offline travel bookings through to strategic account management, providing global insights and innovation. Halsall comments: “FCM provide Westpac with a market leading service experience for corporate travel, including any bespoke event management requirements. They also service our customers as our exclusive hotpoints travel partner. FCM always go the extra mile whilst challenging the status quo and offering continuous improvement opportunities. “The partnership between both parties has grown and developed over several years. Westpac New Zealand and FCM will continue to innovate and work together to achieve mutually beneficial outcomes on both strategic and tactical initiatives and further embed our long standing partnership.”

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Westpac New Zealand

How will you grow today?


S U P P LY C H A I N

Fortnightly meetings to define priorities and shared targets have been so successful that the same style of collaboration now takes place with the operations and marketing teams. “IT, analytics, artificial intelligence, simple task automation, IoT and cognitive technologies mean the workforce of the future will do things very differently,” Halsall says. “Speaking as a procurement professional, I will be very surprised if around 40% of the tasks we do today cannot be automated or completed by cognitive systems within the next five years.” The profession will look different too. Halsall anticipates that relational, social and commercial skills, and the ability to think and act strategically, will take centre stage. “For me, procurement is about being a trusted advisor to the business: a commercial advisor delivering innovation and relationships for our market but also leveraging the technology so we can do our job faster and smarter.”

It’s a deep and ongoing change management process. Weekly 30-minute sprint sessions on relevant commercial and continuous improvement topics were introduced to leverage and transfer collective knowledge and create project delivery efficiencies. In practical terms, we have been able to understand who has experience in a particular subject area and we have created a knowledge hub within our team so everybody can benefit from that material and is key to the development of the team. Halsall also engaged ArcBlue, a specialist procurement consultancy and training provider and CIPS partner, to complete a competency assessment resulting in the delivery of technical training aligned to professional development goals within the function. The team also worked on a Vendor Open Learning Tribe (VOLT), a concept designed in partnership with the internal Technology business unit leaders to accelerate innovation with supply partners.

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Westpac New Zealand

Over three days, business units within the bank were invited to pitch challenges to key suppliers, who then came back with solutions. “VOLT was actively co-creating innovation, and it is amazing how quickly that can happen if you establish the correct forum,” Halsall comments. “We learned a lot from this experience and have plans to build on this in the future”.

Work in progress for his team is to continue to deliver commercial outcomes for the business, and deepen collaborative working with internal partners and external supply partners. Halsall intends to continue working on analytics using Microsoft Dynamics and Power BI data visualisation, exploring machine learning options and leveraging the LinkedIn ‘XRM’ functionality to improve the bank’s approach to supplier relationship Supply chain transformation management. Then, finally, there’s means having a greater sustainability. This is definitely a partnership with fewer suppliers supply chain matter, says Halsall, and doing it in a more collaborative from realising the NZ Chief way. Internally, implementing a Executive’s vision to convert 30% new intranet and the P2P system, of the fleet to electric by 2019, rebranding the function and kickto Westpac’s global responsible starting innovation in just one year, sourcing initiative, which aims to is something Halsall says would ensure that all suppliers meet have taken three in any other required ethical standards. “The organisation he has experienced. sustainability agenda is huge. “We have introduced rapid We’ve been leading the way in transformation into the team, sustainability leadership and and that was necessary because we remain a leading sustainable we had to build agility and bank globally. Our aim is to build effectiveness into our operating on what we’ve achieved and to model. We measure employee continue meeting our sustainability engagement using a global targets. benchmark, and over the last year this has risen by 23% and is now above the global benchmark we use within the group.” 24

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“We believe that by working with other public and private partners in New Zealand, we have the opportunity to create a body that will help supplier diversity, including Maori suppliers in New Zealand” – Rob Halsall, Chief Procurement Officer

For Westpac NZ, a progressive procurement and sustainability objective, and passion of Halsall’s, is creating more opportunity to recognise and build on our supplier inclusion and diversity including Maori, as the country’s indigenous population. “We are working with partners to establish how we can develop a supplier database that would include Maori suppliers, categorised in a way that will allow all procurement practitioners within NZ to understand their services. New Zealand doesn’t have an equivalent to Australia’s Reconciliation Action Plan targets, or Supply Nation. However, we believe that by working with other public and private partners in New Zealand, we have the opportunity to create a body that will help supplier diversity, including Maori suppliers in New Zealand.

“We held a social procurement symposium in July 2017, with 200 local community leaders, procurement leaders and suppliers. We invited CPOs from telecommunications, banks, insurance, government and other community partners including Auckland Tourism (ATEED), Air New Zealand, Auckland Council, and also the chief executive of Supply Nation, to help share interest and knowledge in this area. The entire catering and product placement was provided by diverse local Maori and Pasifika suppliers.”

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L E A D E R S H I P & S T R AT E G Y

Gemmill Hom

Building a smart future

Managing Director Craig Gemmill reveals how embracing cutting-edge technology to build ‘smart’ homes is securing the company’s future Wr it te n by N I K I WA LD EG R AV E


mes

e


L E A D E R S H I P & S T R AT E G Y SMART TECHNOLOGY IS disrupting the housing industry. As consumer demand for innovative solutions in the home rises, companies are racing to keep up with the pace - yet one Perthbased business has positioned itself perfectly in the market. Craig Gemmill, Managing Director of Gemmill Homes, says smart technology has been key to his company staying afloat and profitable amid the end of Western Australia’s mining and construction boom. Such technology can help water plants, improve productivity and save money on bills. “It’s no secret that the economy in WA directly affected the building industry, so everyone had to kind of reinvent themselves,” he says. “And I think the problem with a lot of companies, is that they don’t look to the future. “Even in a tough market and tough climate you must look to the future, however hard it is at the given time.” In 2017, Gemmill – which has an annual turnover of more than $130mn – built brand new offices featuring a modern, state-of-the art pre-start area where customers can see all 28

June 2018

“THE BEAUTIFUL THING ABOUT IZONE AND SOME OF THE WAYS WE COMMUNICATE WITH IT, IS THAT CLIENTS ARE AMAZED AT HOW SIMPLE IT ACTUALLY IS” Craig Gemmill, Managing Director the futuristic items they can have incorporated into their new home. “There is a lot of technology out there,” Gemmill explains, “and putting ourselves forward as a premium builder, we must make sure we’ve got the right products to back that up.” Gemmill readily admits he had no idea how important technology would become in home building when he launched the business in 2004 after recognising the potential of growth in the West Australian housing industry. After investigating the top residential technology companies, Gemmill – which now has 76


Craig Gemmill Managing Director “Having started my career in the hospitality industry employed with various hotel chains, I returned to university as a mature age student to study law, spending the weekends working in land sales with a developer in Canberra. After recognising the potential of growth in the West Australian housing industry I made the move to Perth to start a career as a New Home Sales Consultant. “I quickly progressed into various roles, with several reputable building companies, including Sales Manager, Sales & Marketing Manager and Development Manager. In 2004 I began to concentrate my energies on establishing Gemmill Homes. “Our goal at Gemmill Homes is simple – to be the most respected and sought after residential building company in Western Australia. We aim to consistently deliver high-quality homes and customer service, exceeding the expectations of our clients – this give us the confidence to publicly declare to our customers that we stand behind everything we do.” 29


staff and approximately 250 subcontractors ­– recently partnered with smart technology company iZone to install market-leading smart technology into new residential building projects. The wi-fi and 4G-enabled iZone app allows homeowners to control everything in their home via a smartphone or tablet, and some of the technology uses the same CAN Bus protocols – which connect individual systems and sensors – that BMW and Mercedes incorporate into their luxury cars. “We went and looked at all the manufactures that were around and thought, ‘what’s the best fit? What’s the reliability of the product? Who are the people behind them?’” he says. “And the iZone system is easy to use and incredibly efficient. It allows you to manage your energy use, so you will save money on your electricity bill, and also allows you to help the environment in the process.” With iZone, a touch screen interface allows control of many household appliances, and from a smart device, the homeowner can control everything – including air conditioning, power, lighting, reticulation, security and 30

June 2018


L E A D E R S H I P & S T R AT E G Y

entertainment – from their smart device remotely and from anywhere in the world. It can even schedule the watering of your plants. Although it sounds mind-blowing and complicated, Gemmill reveals customers have been shocked by the technology’s simplicity. “The beautiful thing about iZone and some of the ways we communicate with it, is that clients are amazed at how simple it

actually is,” he says. “Before, there was a lot of fear associated with it, especially with the over 50s, whose kids are more au fait with this kind of thing, but as the technologies are evolving, so are the users. “Look at the advent of iPhones and everything – they’ve got bigger, the screens are bigger and better, and everything’s waterproof now. You can do everything with 31


L E A D E R S H I P & S T R AT E G Y

“THERE’S DEFINITELY A DIGITAL TREND WITH THE BUYING PUBLIC” Craig Gemmill, Managing Director

Gemmill Homes - One of Three - We Stand Behind Every Home We Build

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them – play games, use them as microphones… you can even play football with the damn things!” Gemmill says another huge change in the last 14 years has been how it communicates and interacts with its customers, admitting that social media is a necessity, and insists the digital world has revolutionised and improved the business. “There’s definitely a digital trend with the buying public,” he claims, “and we’ve seen it even with our own marketing. We moved away from traditional print media to digital, and it’s been a gamechanger over the last two years. “People are interacting and communicating differently with social media and Facebook, and that definitely flows on into housing.” Gemmill used to present clients with brochures, but that’s all digital now too, and new homeowners are given an iPad that’s preloaded with its ‘My Home’ portal, so customers can interact with staff 24/7. “We’ve got little faces on there,” he explains, “so if they’re not happy we get a grumpy face. If they’re content you get a neutral face, and if they’re happy you get a smiley face. That immediately 33


L E A D E R S H I P & S T R AT E G Y

“IF YOU DON’T HAVE A PEOPLE-FIRST APPROACH YOU WON’T BE SUCCESSFUL” Craig Gemmill, Managing Director

flags up and can be handled instantly.” Customer experience is something Gemmill prides both himself and the business on, coining the company slogan ‘we stand behind every home we build’ eight years ago. “We’ve gone out there and we’ve had to back that up,” he says. “We’re transparent and to be honest, I think we’ve endured 34

June 2018

our fair share of criticism, because we made our accountability so open – so what works for you can be used against you, as well. “But we just keep striving for success – pushing on, pushing forward. Everyone knows what our customer service expectations are, and the people that work for me are under no illusion


that that’s what we do.” He cites a quote from John Hughes, one of the most successful car dealers in Western Australia, as inspiration, explaining: “He said, ‘if you’re going to put your name on the building and your face on your brand, make sure you’re there,’ and that’s one thing I’ve always taken as good advice. I still work six days a week and I’m in

the office every Saturday morning. “A lot of people think that building companies are just ‘building companies’, but they’re not, they’re people-based businesses, and from all our suppliers that employ people, to our sub-contractors that are people, to our customers, our staff – if you don’t have a people-first approach you won’t be successful.” 35


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HAVE YOU SEEN OUR OTHER TITLES?


CRITICAL EVENT MANAGEMENT across a changing landscape In a fast-changing world, businesses and governments alike must become more proactive in dealing with a variety of threats. Javier Colado, SVP of International Sales at Everbridge, tells us more


TECHNOLOGY

Writ ten by OLIVIA MINNOCK


TECHNOLOGY IN AN AGE where theft isn’t just of physical goods but of data, and criminals don’t just break into buildings but into digital ecosystems, security threats are becoming much harder and more complex to manage. Throw natural disasters and terror attacks into the mix, and 21st century security is about managing the unpredictable at an ever-increasing pace. Critical event management company Everbridge helps governments and business not only react to, but also prepare for and anticipate such threats. We caught up with Javier

Colado, SVP of International Sales at Everbridge, to find out how the business takes care of companies and incidents of every shape and size, and where it plans to go next. Colado has worked with several global businesses like McAfee and SAP and as such is well-placed to head up Everbridge’s journey in an increasingly connected world. “I chose to come to Everbridge for two reasons: firstly, it’s unique in the market as our solutions help keep people safe and can even save lives; secondly, there is huge potential for us to grow out of the USA,” he explains.

“WE ENABLE CORPORATIONS AND COMMUNITIES TO QUICKLY AND CONTEXTUALLY REACH ANYONE ON ANY DEVICE, ANYWHERE AT ANY TIME” JAVIER COLADO SVP International Sales, Everbridge

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In a nutshell, critical event management involves helping organisations deal with events as they happen, from active shooter incidents to internet outages. “Businesses today typically manage critical events in silos that use disparate data sources and unintegrated tools, making it difficult to achieve a common operational view of threats and of the status of response,” Colado explains. “A Critical Event Management (CEM) platform like ours helps unify this process by offering a combination of real-time monitoring, situational awareness and integrated

response and collaboration solutions from a single, enterprise-wide view.” This platform helps businesses to not only keep employees safe, but also monitor potential threats so they can grow proactively across less familiar locations such as emerging markets. Everbridge was founded in the wake of 9/11. It became clear that a tech-based solution was needed to enable communication during critical incidents. “We saw government agencies struggle to communicate with citizens and businesses,” says Colado. “The technology wasn’t what it was today, but the event demonstrated that emergency responders needed a technology platform to help them protect the public during a major emergency.” Everbridge wanted to move away from the existing method of emergency response which largely consisted of a one-way ‘blast’ message. Instead, the Everbridge platform allows tailored communication specific to a situation for the specific recipient, through any means, to any location. “We also incorporate business rules, workflows and logic to enable contextual and effective communications and allow users to verify and confirm delivery 41


TECHNOLOGY and receipt,” Colado adds. Since 2002 when Everbridge was founded, it has been necessary to adapt this offering to not only help government organisations get crucial messages out there, but also “global businesses, large healthcare organisations, leading universities, transportation hubs, IT operations teams and much more”. This has led to the service expanding to both operational and emergency-oriented applications. In short, there are many less dramatic incidents that can also pose threats to a business’

operations and profits, and it became a priority to deal with these as well. Coldao adds: “Beyond our core mass notification services, we have developed an industry-leading set of applications to improve organisational responses for all these diverse types of events to help keep people safe and businesses running faster.” Such issues range from IT outages, power outages, facility issues and scheduling challenges to supply-chain interruptions. In 2017, Everbridge’s platform dealt with over 2bn messages across 200 countries and territories.

“WHERE TRADITIONAL EMERGENCY NOTIFICATION AND PHYSICAL SECURITY SOLUTIONS FOCUS ON AN INDIVIDUAL’S STATIC HOME OR WORK ADDRESS, SAFETY CONNECTION UTILISES MULTIPLE METHODS TO DYNAMICALLY LOCATE, NOTIFY AND INSTRUCT INDIVIDUALS” JAVIER COLADO SVP International Sales, Everbridge

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As well as helping organisations send secure messages to their staff at work or home, there is a lot more to the service. “We also enable multimodal delivery to dynamic – actual and predicted – locations,” says Coldao. “This is particularly critical when reaching mobile, travelling and remote workers. Overall, we enable corporations and communities to quickly and contextually reach anyone on any device, anywhere at any time. “Our CEM platform also helps organisations develop a common operating picture of their risk events,

with the ability to assess threats impacting assets or systems, locate responders, resolvers and stakeholders, automate incident response workflows and analyse all results to improve future response efforts.” Applications such as Safety Connection, IT Alerting and Visual Command Centre all serve to keep employees safe during incidents as well as improving efficiency and maintaining, where possible, ‘business as usual’. For example, last year Everbridge worked with London-based financial

The Everbridge Critical Event Management (CEM) suite demo

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TECHNOLOGY services giant, Willis Towers Watson, which manages over 140,000 staff in 140 countries. “They used the Everbridge platform while monitoring the approach of Hurricane Irma toward America in 2017.” This software helped the company decide to close 12 offices in Florida and inform 700 workers of the emergency decision. Coldao adds: “The company was then able to verify the safety of all colleagues as the storm hit, and advised when they could return to the office. Various messages were also sent to colleagues due to be travelling in the region.” The security and safety market has of course developed due to technology transformation. “The historic market for corporate security and safety solutions has been focused on establishing perimeters (e.g. locks, alarms and guards) to keep threats to employees outside of the physical premises,” says Colado. “However, it’s been necessary to shift away from this given the nature of today’s increasingly mobile workforce.” Everbridge recently conducted a survey of the key safety and security issues facing businesses today. It found that organisations were largely concerned by the risk of workplace 44

June 2018

violence. Only 79% felt they were even somewhat prepared for an active shooter event, and businesses stated that the biggest challenge faced was communicating with people in an impacted building. 37% of businesses said they maintained an accurate record of where employees are expected to be during working hours, and only 25% dynamically locate employees when a threat occurs in order to tailor their alerts. Therefore, in emergencies like shooting situations, terror attacks and natural disasters, it’s clear that a CEM platform like Everbridge’s could provide a much-needed solution in an oft-overlooked area. Indeed, with the labour force becoming increasingly made up of mobile – and indeed temporary or freelance – workers, corporations are finding it even harder to deal with threats, from keeping up-to-date with exact locations to checking in on people’s personal safety. Everbridge’s software not only helps companies during these events but can also help them find out where it is safe for their staff to operate when contemplating expansion. Everbridge Safety Connection focusses on


79%

keeping mobile staff informed. “Where traditional emergency notification and physical security solutions focus on an individual’s static home or work address, Safety Connection utilises multiple methods to dynamically locate, notify and instruct individuals,” Colado explains. “When

THE NUMBER OF BUSINESSES THAT FELT THEY WERE EVEN SOMEWHAT PREPARED FOR A CRITICAL EVENT

deployed, security professionals can aggregate near real-time location data from multiple sources, including building access control systems and travel management systems to send notifications to individuals and employees who might be in dangerous situations.” 45


TECHNOLOGY

“OUR IPO WAS A SIGNIFICANT MOMENT WITHIN THE COMPANY’S HISTORY AS IT NOT ONLY DEMONSTRATED THE EMERGENCE OF EMERGENCY COMMUNICATIONS AS A MAJOR MARKET BUT ALSO OUR LEADERSHIP POSITION WITHIN IT” JAVIER COLADO SVP International Sales,

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So far, Everbridge’s offering has garnered interest from well-known clients such as airports, investment banks and the UK’s NHS (in fact, around one third of FTSE 100 companies use Everbridge) as well as faith from investors. In 2016, the company made its debut on the stock exchange and since then its stock price has increased by over 200%. Everbridge’s $100mn revenue in 2017 marked 36% year-on-year growth. “Our IPO was a significant moment within the company’s history,” says Colado, “as it not only demonstrated the emergence of emergency communications as a major market but also our leadership position within it.” Everbridge is set to continue on this path of rapid growth with its recent acquisition of United Messaging Systems, a leading European provider of critical communications. Will this be a step toward dominating the European market? “Given the importance of mobile delivery internationally, UMS’ unique ability to message the mobile phones of anyone connected to a carrier’s cell towers significantly enhances Everbridge’s ability to protect people worldwide,” says Colado, adding that UMS has

over 1,000 customers in Northern Europe and reaches over 500mn people with public notifications, using its Population Alerting System (PAS) to provide two-way SMS broadcasting. “Together we will provide the broadest delivery capability for critical communications worldwide… UMS accelerates our international growth and creates the most comprehensive CEM platform for business, state and local government, and now entire countries. UMS provides Everbridge with a passionate and customerfocused team of experts, differentiated technology, and a shared mission to keep people safe and businesses running during a critical event.” Overall, this European expansion will only add to Everbridge’s capability to deal with any event the world throws at it, and to help its clients do the same. While expanding out of the US and into Europe and the wider world will come with its challenges, such as GDPR compliance and generally making sure customers’ data is looked after and only used when truly necessary, it is also an opportunity to utilise the latest technology to keep people safe and keep the business world running like clockwork. 47


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PEOPLE

SONY ELECTRONICS and the rise of women in STEM


Business Chief speaks to the tech giant’s Head of Corporate Communications Cheryl Goodman on her career in technology and how other ambitious females can rise in the industry Wr i t t e n by TO M WA D LOW 51


PEOPLE

T

he world of technology is still largely dominated by men. Almost all statistics (and there are many) point towards low female participation in STEM industries, from educational uptake all the way through to representation at boardroom level. Take UNESCO Institute for Statistic’s 2017 Women in Science factsheet – globally, it says just 28.8% of the scientific research and development workforce are female, although figures are higher in Central Asia (47.2%), Latin America (44.7%) and Central and Eastern Europe (39.6%). Further, United Nations research reveals that women who start out

in business roles in tech-intensive industries leave for other industries at high rates – 53% of women compared to 31% of men. This in turn leads to an extremely low presence in the boardroom, with IT industries struggling to hit 15% in terms of female representation at the highest leadership levels. A bleak picture perhaps, but many of the world’s top technology companies are actively seeking to address the divide and drive women in STEM numbers significantly north. One such industry heavyweight is Sony. In 2016, the percentage of management positions held by

Sony played an active role in San Diego Women’s Week, held in March

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Sony headquarters becomes the hub for best practices and methods for women to live their fullest mission, wherever they are, whether that’s in Sony Electronics or down the street in a competitor’s company” CHERYL GOODMAN Head of Corporate Communications for Sony Electronics

women across the tech firm’s global operations stood at 24%, almost double the proportion seen in the 2011 financial year (12.7%). In the US, this figure rises to nearer 36%. Cheryl Goodman, Head of Corporate Communications for Sony Electronics, is among this 36%. Stationed at the company’s base in San Diego, she is tasked with the formidable challenge of driving a greater understanding of key developments in an everchanging world of innovation. “Is it a headache? Yes,” she tells Business Chief. “I think there are a lot 53


of nuances. When you walk into that television aisle I’m sure you look at the TVs and you see new HD, 4K, and all these acronyms and you probably think to yourself, ‘why do I care?’ “So, we have to drive that ‘why you care’, and we have to drive understanding. I figure if I can explain to my mom what all these acronyms mean, and why she should care, then we’re at a good spot. So, we try to drive understanding down to the very base level. It all equals quality.”

28.8%

of scientific research and development personnel are female 54

June 2018

Goodman is certainly wellqualified and prepared to negotiate the communications conundrum of such rapid advances in technology. Having majored in political science and television media at San Diego State University, she has worked through the rise of web and increase in the number of ways we consume media. Starting out at San Diego’s KGTV News, she moved to MP3.com and Lindows before a long stint in PR and marketing at Qualcomm. It was

36%

of the management positions held by women at Sony (USA)


PEOPLE here that Goodman ramped up her involvement in championing the wider ‘women in STEM’ agenda, chiefly through membership and local leadership of Athena, a professional development organisation helping women develop careers in STEM industries. Goodman served as Executive Director for the San Diego branch between January 2016 and August 2017, during which time she doubled the number of technology and life science partnerships and helped break numerous fundraising records. “Then I moved to Sony,” she says, “and nine months later, two grey hairs

later, I can tell you it is a phenomenal place. It had to be if I was to consider leaving my mission at Athena.” A big part her decision was the approach to diversity of Sony Electronics President and COO Mike Fasulo. “My boss believes it is tried, true, and proven that diversity is a positive impact for the bottom line,” Goodman adds. “I had just not seen that before. For him it is a business imperative, and that’s why I’m here today to illustrate and support that.” These beliefs are backed up by action. For three consecutive years Sony Electronics has been named among the best places to work in the

Sony is committed to the nationwide Women Unlimited Mentoring Programme

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PEOPLE Human Rights Campaign Foundation’s Corporate Equality Index, scoring a maximum 100 each time. “It’s a big acknowledgement,” Goodman says. “This is a very wellrespected organisation, and in the past 11 years we have had at least a very high 90s ranking. So, while it is the trend for many technology companies to pull together some type of gender agenda to check the box, Sony Electronics has been walking the walk and talking the talk for over a decade. “Our president even wears the pin on his lapel every single day, and he brings it up at every meeting. It’s part of his DNA and it trickles down to the leadership and business as a whole.” This is no better demonstrated than by Sony’s commitment to the nationwide Women Unlimited Mentoring Program. Designed to build talent management strategies through mentorship, Sony is supporting the participation of more than 70 women from its San Diego base. Goodman is joined by Julie Wenzel, Senior Manager of Community Relations, who is taking part in a lead programme aimed at middle management and above. She describes her experience 56

June 2018

While it is the trend for many technology companies to pull together some type of gender agenda to check the box, Sony Electronics has been walking the walk and talking the talk for over a decade” CHERYL GOODMAN Head of Corporate Communications for Sony Electronics

to date: “It really provides a great opportunity to not only experience a couple of different mentors from outside organisations at an executive level, but an opportunity to look at your career path, identify areas where you’d like to grow and put together a strategy for getting there. “It’s been a very positive experience and is a great chance to meet women from various industries and understand challenges and opportunities


regardless of where you work.” Further still, Sony has become something of a hub in San Diego and Southern California, be it through participation with Athena, sponsoring the YWCA TWIN Awards or holding events for the North County Chamber of Commerce Women’s Week. For the latter, Naomi Tutu, daughter of cleric and human rights activist Desmond Tutu, recently addressed an audience at Sony Electronics. “Sony headquarters becomes the hub for best practices and

methods for women to live their fullest mission, wherever they are, whether that’s in Sony Electronics or down the street in a competitor’s company,” Goodman explains. “We like to hold the conversation, we like to curate the conversation.” Goodman is also keen to stress how Sony’s own products can be moulded by and contribute to that conversation. She cites Koov, an allin-one coding, robotics and design kit that combines digital coding with physical building to teach the next 57


PEOPLE generation of problem solvers and innovators. Launched in February, it is targeted at children as young as eight years old. “We don’t target necessarily girls or boys,” Goodman adds. “We are targeting coding as a skill, something the nation needs.” Indeed, 4.4mn computer and IT jobs will exist in the USA alone by 2024, according to the country’s Bureau of Labor and Statistics. An added complication, revealed by a World Economic Forum report, is that 65% of children entering primary school today will work in jobs that do not yet exist. However, while uncertainty

remains as to the future makeup of the workforce, Goodman is full of advice for women seeking to develop careers in STEM today. “Number one is that your contribution level is more important than the colour of your skin or your gender,” she insists. “Bottom line is the value that you add to the organisation. When we hire we are looking for people to solve the problem with the skills that they have, regardless of what they look like or what gender they are. So, it is about quality, it is about skill, and it is about contribution. “If you experience any pushback in

KOOV: The coding and robotics kit for the next generation of young innovators

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We’ve got a long way to go, but I’ll say, again, the key theme is that this is an industry issue. This is a business issue. Gender equality impacts the bottom line. It impacts our return on investment, and we will continue to support this moving forward as long as I can imagine” CHERYL GOODMAN Head of Corporate Communications for Sony Electronics

your career, I would challenge you to find mentors. Find successful women in your realm to partner with and help navigate your path. I would also recommend joining an organisation, whether it’s an organisation for your industry at large, or a women’s organisation in your local chapter.” Goodman’s final piece of advice is to find a mentor in a top leadership position, which in many cases, she says, will be male. “Find someone in leadership that you trust to ask what the key issues for the organisation at large are, and make sure that your contributions are in line with these needs.” And what of Sony Electronics? How can it improve on three years of perfect scoring from the Human Rights Campaign Foundation’s Corporate Equality Index? “We’ve got a long way to go,” Goodman says, “but I’ll say, again, the key theme is that this is an industry issue. This is a business issue. Gender equality impacts the bottom line. It impacts our return on investment, and we will continue to support this moving forward as long as I can imagine. “Is it complete? Is our work done? No.” 59


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HOW MORE CAN BE DONE TO MAKE THE MOST OF VALUE CHAINS Business Chief looks at how some of the traditional theories about value chains align with modern business realities Written by STUART HODGE

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S U S TA I N A B I L I T Y

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S U S TA I N A B I L I T Y THE CONCEPT OF a value chain was first introduced to the public consciousness by American business strategist and economic theorist Michael Porter more than 30 years ago in his best-selling book Competitive Advantage: Creating and Sustaining Superior Performance. Porter was talking about these ideas as early as the late 1970s, so the concept has existed for a long time, but the way that companies create and exploit maximum value has changed immeasurably in the intervening

three or four decades. This is largely given the huge societal changes and the exponential acceleration and increased prevalence of technology in our daily lives. Veteran Harvard academic Porter showed he hasn’t missed a beat either when he appeared at the World Business Forum in New York City last year. Porter spoke about how smarter, connected products are changing the market landscape by increasing ability to monitor, control and optimise systems. This still ties in with his original

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“You must understand your customers or consumers and what they see as value. It’s then about making sure that each of the different supply points, or nodes of our supply chain, understand which part of that value they need to deliver”  LOYD SNOWDEN L Business Transformation Specialist, Oliver Wight EAME

value chain concept, which is comprised of both primary and supporting business activities and how they can affect the margin. Generally speaking, the ideas and ideals of the generic value chain model still hold true, but as well as the world around us, what has also changed is the way that companies do business and the way that different suppliers engage with one another. There is less of an emphasis now on interpersonal relationships and it’s more about leveraging technology to extract maximum value at the various points in the supply chain. Lloyd Snowden is a business transformation specialist for UK-based consultancy Oliver Wight EAME, and he feels that value chains are becoming even more important to businesses as they become more savvy and aware. “You must understand your customers or consumers and what they see as value. It’s then about making sure that each of the different supply points, or nodes of our supply chain, understand which part of that value they need to deliver,” explains Snowden. “You then take, with this understanding of the value to be delivered, and push it right the way back through your supply chain, so that each node of the supply chain then delivers that same value back to the customer. “The value chain is something that is starting to grow a lot more, because I think more and more companies today are also embracing strategic planning. Those kind of integrated, strategic plans didn’t exist in the same way 10 years ago. Because 65


S U S TA I N A B I L I T Y people are starting to understand those strategic directions and when possible the strategies of their customers, the ability to understand the anticipated value, I believe, has grown. Therefore, there’s a greater interest in people and companies talking about the value chain today than there has been in the past.” So, businesses are more aware of where value can be extracted and how supply chains can be turned into value chains, but how is it done? Obviously, the plethora of technological aids available to companies makes it easier to pinpoint where value can be created or extracted, but given that businesses in the same supply chain are sometimes competing for the same customer base, how can you engender the necessary level of trust for a value chain to function as it should? According to Snowden, it comes back to the ideals of being transparent and exhibiting best business practice wherever possible and, once again, knowing your customers. “Excellent delivery in a mature business is enabled through transparency,” Snowden says. “Ensuring visibility of performance and improvement 66

June 2018

activity, along with a good, accurate, clear and relevant communication. One set of numbers, accurate data, sharing information and slinging strategy between supply points, or nodes, that would possibly, traditionally, be at arms-length from each other. What you need to try and to do is get this to be a much more open relationship, to enable that value to be understood and delivered. “I guess it all depends where you sit in the supply chain, to some extent. But say we’re a company in the middle of the supply chain, with the customers and the consumers at one end and our suppliers at the other – we’re the manufacturing warehouse, or logistics element. I would need a clear understanding of who my key customers are, their key requirements, and what they value from those requirements. “You need to have some real, open, collaborative dialogue with them. Not just vendor, managed inventory level of collaboration, but where we might be sharing strategies, where we have real trust between our organisations. Could I align my strategies of business to that customer direction? That would be delivering better value.


“W hen companies are much better at performing, they change their focus from the management of the short term and firefighting to ‘eyes up and look out’, so they’re able to better understand the marketplace”  LOYD SNOWDEN L Business Transformation Specialist, Oliver Wight EAME

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“If I then look back through the supply chain to the key suppliers that I have, can I get the relationship between me and my key suppliers to the point where they want their strategy to align with mine? If we’ve got all of that kind of strategic alignment and those different thought processes going on, then the ability for people to deliver value is going to be much higher than if it was independent businesses with their own strategies trying to supply things for you.” Teamwork makes the dream work – or as legendary luxury hotelier and entrepreneur Horst H. Schulze once stated: “In life and business, relationships are important – but they are empty unless they are established and based upon trust.” When it comes to the creation of value chains, that has never been truer. It requires all parties to be honest and transparent and operate fairly and ethically, with the benefits of the customer at the forefront of their thinking. Obviously creating value impacts positively on margins and that can only be a good thing, but it requires the buy-in of all stakeholders. Snowden reckons it’s right for companies to be wary of trust potentially backfiring but he also says it’s an area where businesses often lack maturity. “If companies don’t actually understand the market place and they’re firefighting, then there’s no time for them to lift their head up and say, ‘what are we doing wrong? And what can we do to put it right? And how do we align that to what we’ve got in the marketplace?’ That is very often part of the problem. When companies are much better at performing, 68

June 2018

“In life and business, relationships are important – but they are empty unless they are established and based upon trust”  ORST H. SCHULZE H Luxury hotelier and entrepreneur


S U S TA I N A B I L I T Y they change their focus from the management of the short term and firefighting to ‘eyes up and look out’, so they’re able to better understand the marketplace. Why? Because they’re in control, have stopped firefighting and therefore can spend more time understanding their markets, customers, consumers and competition.” Snowden goes on to explain that this is phase one of business maturity on the Oliver Wight Maturity Model. Essentially what that means is having a managed environment. Phase two is a led

environment, where a company is moving more towards percentile perfection. Snowden estimates that around nine out of 10 businesses find themselves mired somewhere

between phase one and phase two, and estimates that more than half of those are still in phase one. If that’s the case, there is more to be done with regards to maximising the opportunities to create value and build a value chain. Whether increasing numbers can successfully achieve this remains to be seen. For a final thought, we’ll

go back to the original critical thinker, Porter. Speaking at an event at the Rotterdam School of Management, Erasmus University, in the Netherlands a couple of years ago, he said: “Creating shared value means addressing societal needs and challenges through business itself, with a business model – and making a profit. In fact, some of the greatest opportunities for business are meeting the unmet needs of society.” Therein lies the challenge in the months and years to come.. 69


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HOB HOB CITY FOCUS

THE CITIZENS OF HOBART ARE READY TO SHOW THE WORLD THAT THE CAPITAL OF TASMANIA BELONGS ALONGSIDE THE POPULAR COASTAL METROPOLISES OF MAINLAND AUSTRALIA, BUT WHAT MAKES THE ECONOMIC ENGINE OF HOBART MOVE? Edited by OLIVIA MINNOCK


BART 73


CITY FOCUS

HOBART: THE FACTS Approximately 150 miles to the south of mainland Australia lies the island state of Tasmania, and its capital city Hobart sits near the southern coast of the island. About 225,000 people (around 40% of the population of Tasmania) reside in the greater Hobart area, which makes the city the beating heart of the state in terms of industry, government, tourism and culture. The abundance of natural resources on the island of Tasmania has long been a crucial part of the city’s economic identity. Both the processing and refinement of natural resources, as well as exporting products abroad, make up a significant portion of the gross product of the state of Tasmania. In particular, processed metals, ore, wood and food products have been driving economic activity in Hobart since its early days as a colonial outpost. China is the largest market for Tasmanian exports, having contributed about $873mn in 2016, but the state also has strong trade relationships with Taiwan, Japan and the US. Total Tasmanian exports for the 2016 financial year were valued at $2.85bn. 74

June 2018


Tourism is also a critical sector of Hobart’s economy, both in terms of employment figures and revenue generated. The industry accounts for approximately $980mn yearly, and 2016 saw Hobart attract more visitors than Perth, and equally as many as Brisbane. Cruise ships remain a popular mode of tourist entry into Hobart, but many adventurers flock to Tasmania to experience the island’s rugged wilderness and abundant protected natural areas.

THE ECONOMIC LANDSCAPE OF HOBART

40% of the population of Tasmania live in Hobart Tourism accounts for $980mn each year In total, Tasmania exported $2.85bn of goods in 2016

As Tasmania is the smallest state in Australia, both in terms of population and area (not counting territories and other holdings), Hobart has often taken a backseat in global commerce to its larger siblings such as Melbourne and Perth. However, that is beginning to change as new residents and businesses are finding themselves drawn to Hobart’s low cost of living, diverse economy and ample opportunities. After somewhat muted economic growth levels hovering around 1% from 2015 to 2017, the Australian government 75


CITY FOCUS expects Tasmania’s gross state product to expand by over 2% in 2018 and beyond. Employment numbers in the state tell a similar story – where the statewide employment levels fell somewhat in 2016 and remained stagnant in 2017, labour force participation is forecast to rise in the near future. After ending 2016 at 6.5%, unemployment in Tasmania has fallen to 6% in recent months. Young Australians in particular have

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been moving to Tasmania in recent years thanks to its positive economic outlook and relative affordability. Many economic experts note that it is a serious struggle for young residents to find affordable housing in cities such as Melbourne or Sydney, which is in turn driving them to Hobart. CommSec, which publishes a quarterly ‘State of the States’ economic scorecard for Australia, noted in early


2017 that Tasmania had jumped from seventh place overall in the previous edition to fourth place, largely due to population growth and strong home lending figures.

A HUB FOR HEALTHCARE Despite the recent growth in tourism and strong manufacturing and exporting activity, more people in Hobart are employed by healthcare and social

assistance organisations than any other sector. The Royal Hobart Hospital – a public hospital operated by the Tasmanian Department of Health and Human Services – is located in the city’s central business district and is the single largest employer in Tasmania. It also functions as an important teaching hospital, maintaining a relationship with the nearby University of Tasmania.

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CITY FOCUS AN INCOMING WAVE OF TECH INNOVATION The recent growth in Tasmania isn’t just about more affordable housing. Lately the state has emerged as a hotbed for IT startups that has led to some pundits labelling it the ‘new Silicon Valley’. The governments of both Australia and Tasmania have been making a big push to attract tech companies by offering substantial incentives to encourage the formation of startups in the state. Even global conglomerates are recognising the benefits of doing

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business in Hobart. In 2013, telecom giant Vodafone Australia announced it was adding 750 employees in southern Tasmania, with plans to expand its operations there further in the future. In addition to the incentives, IT startup founders are flocking to Hobart because of the low costs of operation and the investments in tech and communication infrastructure throughout the city. With stories of the lack of affordable housing and office space in cities throughout Silicon Valley in California, it’s no wonder that many


innovative entrepreneurs are choosing to build their empires on the more welcoming shores of the Tasmanian capital. Some IT startups that have been established in Hobart include:

SAVAGE INTERACTIVE http://savage.si This team of software developers created a design wapp which has been used by Pixar, Mattel and DC Entertainment.

ISW http://isw.net.au An award-winning Australian IBM business partner which houses its Tasmanian operations in Hobart and facilitates a diverse array of business technology solutions.

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CITY FOCUS GROWING A MILLION-DOLLAR BRAND IN HOBART… Francesca Collections is a Hobart-based company that was named 2015 Telstra Tasmanian Business of the Year. The company has developed from a market stall to a growing jewellery brand since it was set up in 2011 by Hannah Vasicek, alongside her sister Rachel. The jewellery company is now a million-dollar brand, but its roots at the Salamanca Market, a major Hobart tourist attraction, have not been forgotten. Vasicek shared some insight with Business Chief about why Hobart is the ideal location for a startup. “The business scene in Hobart was struggling a few years ago but now it is truly a special place to have a business. We have the most supportive community who really love watching small businesses grow and they stay loyal to these businesses. A lot of people are moving here to start businesses as it is such an amazing community to be a part of and our tourism industry is absolutely booming.” www.francesca.com.au

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Sisters, Rachel (left) and Hannah Vasicek


Hobart team members

“We have the most supportive community who really love watching small businesses grow” — Hannah Vasicek, co-founder, Francesca Collections 81


T O P 10

Top 10 investment companies in Australia and New Zealand


THE 10 LARGEST INVESTMENT COMPANIES IN AUSTRALIA AND NEW ZEALAND, RANKED BY REVENUE, ACCORDING TO REPORTS BY THE AUSTRALIAN FINANCIAL REVIEW, FORBES MAGAZINE AND THE CORPORATE FINANCE INSTITUTE Written by HARRY MENEAR


T O P 10

09

CMV Group $830mn

10

Perron Group Ltd $409.7mn www.perrongroup.com.au Perron Group is based in Perth, Australia. The locally-owned PLC provides investment services, specialising in the commercial property, automotive distribution and retail sectors, as well as providing administrative and management services for its holdings. The Perron Group’s investment services are operated through the Perron Investments sub-segment, which reported a net revenue of $409.7mn in 2017, according to the Australian Financial Review. This represents a 2% growth in sales, year on year.

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| www.cmv.com.au With an initial staff of five, the CMV Group now owns and operates substantial holdings in the automotive sales and agribusiness sectors, primarily in Victoria and South Australia. CMV reported a new revenue of $830mn in 2017, which represents a 1.1% growth in sales in comparison to the previous financial year. CMV Group also operates a charitable trust which returns distributable profits back into the local community. Managing Director Paul Crawford received the Australian Entrepreneur of the Year Industry prize in 2016.


07

Scentre Group $1.87bn

08

Australian Unity $1.21bn www.australianunity.com.au Headquartered in Brisbane’s financial district, Australian Unity provides personal investment services and financial planning, in addition to trust management, corporate financial services, and a range of insurance coverage. The company manages client holdings in secure investments to create long-term-focused financial support plans. Australian Unity reported a net revenue of $1.21bn in 2017, which represents a growth in sales of 6.7% year on year.

| www.scentregroup.com Based in Sydney, the Scentre Group was founded in 2014 and has since grown to employ over 42,000 people. The company partially owns and operates holdings in Westfield branded shopping centres in Australia and New Zealand, according to Forbes. Scentre reported a net revenue of $1.87bn in 2017, an all-time low for the company. However, net profits have risen by over $200,000 in comparison with the 2016 financial year. In March 2018, Scentre and property management firm Dexus presided over the opening of a new $80mn retail redevelopment in the suburbs of Melbourne, “offering the local community a complete dining and lifestyle experience”, said Westfield Plenty Valley Centre Manager, Craig Tapping.

‘CMV Group operates a charitable trust which returns distributable profits back into the local community’ 87


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05

Macquarie Group Ltd $10.56bn

06

AMP Bank Ltd $9.74bn

| www.amp.com.au Also headquartered in Sydney, AMP Bank Ltd operates various financial services associated with a banking house. As well as serving an average of over 5mn retail customers and 400 institutional clients within Australia and New Zealand, AMP operates as one of the largest independent wealth management companies in the region. The company engages in the provision of insurance, pensions, fund management, banking and related personal financial services, according to Forbes. In 2017, AMP reported a net revenue of $9.74bn. The company also experienced a net loss, for the first time in a 10-year period, of over $250,000.

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www.macquarie.com/uk/corporate The Macquarie Group Ltd. provides global financial services, including advisory and capital markets, trading and hedging, funds management, asset finance, financing, research, principal investment, as well as retail financial services, according to Forbes. The company is headquartered in Sydney, Australia and employs 13,500 members of staff. The Macquarie Group reported a net revenue of $10.56bn in 2017. The company is forecasting record profits in the first quarter of 2018, with “net income that is about 10% higher than 2017’s record $2.2bn�, according to the Australian Financial Review.


03

Australia New Zealand Bank (ANZ) $26.53bn

04

National Australia Bank $24.18bn

| www.nab.com.au The National Australia Bank (nab) is headquartered in Melbourne and provides comprehensive banking and financial services in Australia, New Zealand, the United Kingdom and Asia. The bank’s investment services are offered through a range of holdings, including international shares, managed funds and bonds with nabtrade. National Australia Bank reported a net revenue of $24.18bn in 2017, continuing a five-year trend of decreasing sales, from a high point of $40.5bn in 2013. The company’s asset portfolio of $595.33bn has also decreased over the same period, from $793.5bn.

| www.anz.com With headquarters in Docklands, Australia, Australia New Zealand Bank (ANZ) operates and owns a range of retail banking holdings across Australia, New Zealand and the wider Asia Pacific Region. It also operates in the United Kingdom and the United States, according to Forbes. Additionally, the bank provides financial services, including investment, superannuation, insurance products and services through its global wealth and private banking division. The company reported a net revenue of $26.53bn in 2017, continuing a five-year decline in sales from a high of $40.85bn in 2013. ANZ’s asset portfolio is currently at a 10-year high point, with its holdings and properties valued at $701bn.

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‘Founded in 1817, Westpac Banking Group is the oldest company in the top 10’

02

Westpac Banking Group $27.76bn

| www.westpac.com.au The Westpac Banking Group is headquartered in Sydney, Australia. Founded in 1817, it is the oldest company in the top 10. Westpac provides banking and financial services, including investment and wealth management, to over 13mn customers. The company manages its clients’ investments through the BT Australia segment. In 2017, Westpac reported a net revenue of $27.76bn which, along with other major Australian banking houses, represents a continuation of a five-year decline from the 2013 high point of $43.5bn.

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01

Commonwealth Bank of Australia $30.39bn

| www.commbank.com.au The Commonwealth Bank of Australia is headquartered in Sydney and provides a range of financial services, including retail and corporate banking, brokering services, and personal investment and wealth management, to clients in Australia, New Zealand, the United Kingdom, the United States, Japan, Singapore, Malta, Hong Kong, Grand Cayman, Fiji, Indonesia, China and Vietnam. In 2017, Commonwealth Bank reported a net revenue of $30.93bn, which is also in line with the Australian banking industry’s five-year revenue decline. However, it is the only large Australian banking house to experience net profits in excess of $1mn, recording net growth of over $150mn year on year.

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Leveraging

proptech

to lead Australia’s real estate sector


Charter Hall has long been a leading Australian property management company: as the sector evolves it is also leading in the transition from traditional attitudes to a future enabled by proptech Written by John O’Hanlon Produced by Glen White


CHARTER HALL

T

he organisation that Aidan Coleman joined in 2014 as its transformational Chief Technical Officer is not as wellknown as it deserves to be. But it sits among the ASX top 100 companies with more than 350 properties and around A$23bn under management. It differs from its rivals somewhat – as well as managing assets for active funds in key retail, office complex and industrial markets it is also deeply involved in property finance as an investment manager for some 30 funds across the retail and wholesale space. Coleman found that

he had a dual role. The first objective was to create a scalable technology and information systems capability and platform that could support the business going forward. The second, no less important, was to understand the potential impact of technology disruption and help the business to identify opportunities that would get it onto the front foot and create a real commercial advantage. There was, he says, much work to be done to achieve the former and transform the internal employee experience. The latter he took to like a duck to water, taking leadership of the accelerator

Aidan Coleman CTO

Aidan Coleman joined Charter Hall in 2014, and has over 16 years technology experience across a range of industries and geographies including property, funds management, retail, media, consumer goods, consulting, financial services and telecommunications. In his current role, Coleman is responsible for providing leadership and direction for all strategic IT activities associated with supporting IT’s contribution to the organisation’s key business initiatives. Since joining in May, he has focused on improving the IT user experience 94

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at our head office and regional sites, whilst building the IT strategy and underlying capability that can leverage technology to power growth and productivity across the Charter Hall business. Prior to joining Charter Hall, Coleman worked at Stockland as IT Strategy and Planning Manager where he delivered significant improvements to customer, asset, development and financial systems. Aidan also transformed Stockland’s digital platform and online capability. His additional experience includes eight years at News Corporation Australia.


TECHNOLOGY

programme described below. On his appointment Coleman found a business whose leadership, though attuned to the potential of IT, was experiencing growing pains as it put its EnterPRISE business technology transformation programme into effect, still relying on manual processing, spreadsheets and printtailored solutions. The first task that faced him was to make the case for an IT focused vision. “Bringing the business along on the transformation journey was a significant part of my first years. In the last 18 months we have gained positive momentum, and we have been able to shift our

focus more towards innovation and how we might utilise investment in some of the newer platforms and technologies to add value, not only empowering our employees with the information and tools they need, but giving a better experience to our tenants and customers.” There’s a new wave of younger property investors emerging, he says: more tech savvy and demanding than their predecessors and ready to embrace the concepts of proptech and fintech. The cloud beckons It quickly became clear to Coleman, from annual engagement surveys,

“IN THE LAST 18 MONTHS WE HAVE GAINED POSITIVE MOMENTUM AND WE HAVE BEEN ABLE TO SHIFT OUR FOCUS MORE TOWARDS INNOVATION” – Aidan Coleman, CTO, Charter Hall

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that that investment in technology had not been prioritised, though that soon started to change. “People across the business are now encouraging us to continue to invest in and focus on digitisation.” A good example of transformation initiatives that have impacted cycle times and helped de-risk the business was the group wide Forecasting Analytics program, launched in 2016 and developed in partnership with MRI Software. “MRI is a well-known global platform in our industry,” Coleman says, “but less so in the investment management space. We have put our IP into MRI, and that allows us to really draw out the value of this platform.” In the past Charter Hall was doing this in a bespoke way, fund by fund: this has shifted to a more integrated real-time environment that admits of change. For example, what used to take 10 people 20 days in Excel will now take minutes, like reflecting a future interest rate assumption change across all property and fund valuations. “We’ve significantly improved our risk profile by moving our key inputs,

calculations and outputs/analytics into a centralised and controlled environment,” Coleman says. A principle he established from day one was to minimise the fixed footprint, whether in infrastructure or people, to minimise capital spend, moving it where possible to operational cost so as to create more elasticity in the business. “Property cycles go up and down. When we are booming we need to be able to dial up services and capability quite quickly and when they flatten we need to be able to do the opposite. But when you have fixed costs you can’t do that so we have been looking at platform- and software-as-a-service (PaaS and SaaS) strategies for any new applications or software that we bring on board. I also wanted to transition from on premise legacy platforms, either replatforming in a cloud-based environment or decommissioning them altogether.” Disaster recovery (DR) relying on a secondary data centre, both expensive and of doubtful efficacy, was a case in point. Considerable capital expenditure would have been

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“PEOPLE ACROSS THE BUSINESS ARE NOW ENCOURAGING US TO CONTINUE TO INVEST IN AND FOCUS ON DIGITISATION” – Aidan Coleman, CTO, Charter Hall

needed to upgrade it, and most of the time that capacity wouldn’t be needed. Bringing in technology partners like Microsoft and VMware to create a DR solution in the cloud meant that for a management fee Charter Hall moved millions of dollars off its balance sheet, at the same time enabling it to recover from any disaster scenario with speed and agility. Microsoft Azure is now Charter Hall’s platform of choice for conditioning all its data and documents, continues Coleman. “We have been able to

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eliminate all but between 5% and 10% of existing infrastructure in our data centres.” Unlocking the value of elements such as OneDrive, SharePoint in conjunction with Power BI, and the CRM capabilities of Dynamics has de-risked the business significantly as well as eliminating infrastructure cost. “From an infrastructure point of view, I would say that we are very close to being fully cloud enabled,” Coleman continues. “We are rolling out a network to our retail shopping centres and corporate sites over the next 12 months and


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Western Sydney University - Rethinking a University | Developed & Managed by Charter Hall

that will give us a lot capacity and bandwidth into all our properties. People in retail sites will be working in the cloud: all their applications, documents and key network points will be cloud-enabled and that will speed traffic over the large distances that separate these sites in Australia, reducing latency and congestion through to our data centre.” Proptech to the rescue Until recently real estate technology has been, relatively speaking, neither user friendly nor integrated,

he admits. Innovation, and not only in the IT space, is one of his passions, one in which he has taken a leadership role. One innovative solution his team delivered was a first in Australia in partnership with a proptech startup aptly named Comfy – an app that delivers ‘climate control on demand’, allowing people to make known their temperature preferences using their smartphones. “Before Comfy,” Coleman says, “we had very little information on how occupants were actually experiencing the temperature in the

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building. The standard approach for temperature control in buildings has been ‘one temperature fits all’, and the feedback loop is manual and usually complaint-driven.” This is about more than end user satisfaction. It is expected to deliver between 15-25% energy savings across properties as it’s rolled out in more offices. For example, Comfy will use machine learning to track and learn how meeting rooms and shared spaces are used, heat or cool the room for the meetings and not waste energy conditioning an empty room. There are significant benefits from collaborating with these startups, Coleman believes. “Engaging with them is creating a palpable dynamism within the business that we have never seen before, and from a brand positioning perspective it

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has been fantastic. We have been getting a huge amount of feedback from our peers and lots of coverage from major news organisations in Australia, and among whom proptech is becoming a new hot topic.” So, ahead of most of the competition, Charter Hall has really thrown its weight behind proptech, partnering with the Australian incubator and accelerator Collective Campus in an initiative to find and encourage some of the most promising startups. After some discussion it lit upon three relevant segments – smart buildings, shared space (think of it as Airbnb for offices) and finally fintech. There has been a lot of disruption by financial technology of Australia’s financial institutions and this is starting to spill over into real estate fintech.


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The Charter Hall PropTech Accelerator was set up in 2017 in collaboration with Collective Campus. It’s an initiative very much led by Coleman: “We received applications from about 50 startups, went through a process of evaluation and shortlisting that reduced the list to 15. These we brought in to a two-day boot camp in Melbourne and took them through a very intensive two days of thrashing out their business case and their business model, culminating in a pitch night to which we invited peers, customers and potential investors.” Out of this group, four startups were invited to join a 13-week programme that stated in February 2018. The four companies have been given intensive training around business and product development, marketing and everything a startup needs to survive and grow. The programme culminates with a demo day when their products will be showcased to Charter Hall leaders and managers, and a range of investors that partner with Charter Hall. Why these technologies are of interest to Charter Hall is a no-brainer

“WE HAVE BEEN ABLE TO ELIMINATE ALL BUT BETWEEN 5% AND 10% OF EXISTING INFRASTRUCTURE IN OUR DATA CENTRES” – Aidan Coleman, CTO, Charter Hall

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THE FUTURE OF PROPTECH

The four companies Charter Hall is supporting

InSpaceXR Justin Liang, Co-founder and CEO of InspaceXR leads one of the startups recently selected to participate in a 13-week incubation period at Charter Hall. Liang’s virtual reality software helps architects visualise a project in 3D, leading to better design outcomes, reduced iteration times and easier discussions with engineers and project developers. “The majority of the top 10 architecture firms already have VR headsets and younger architects who know it’s the future of the profession, are a lot more active and receptive in picking up the tools. It’s moving in the architecture space, but I’m not sure if we’ll see the same kind of adoption rates across the rest of the industry,” says Liang. With the upcoming launch of his software to market, Liang recognises a mindset challenge in Australia in comparison to the tech hubs of the world.

BricksandAgent.com Bricks & Agent, founded by entrepreneurs Jon Stuhl (the son of Shopkins billionaire Manny Stuhl) and Rafael Niesten is a cloud-based platform focused on streamlining residential property management and maintenance. This will now be developed through the Charter Hall incubator program to handle retail property and facilities management. Stuhl said the company had enough

money to self-fund itself indefinitely but would consider taking on investors “if there is a strategic benefit”. “I would describe their product as the Uber for property maintenance,” comments Coleman. “We have 45,000 retail customers and we want to be able to give them some productivity tools so that they can manage their retail shop and easily communicate when they have issues.”

Snaploader Snaploader, which has developed a webviewer that enables potential tenants and investors to access an interactive 3D model of properties, is already being used by Charter Hall’s industrial business to support lease negotiations. The business was founded by former Hugo Boss Australia MD Erik Fink.

Estate Baron Estate Baron is a blockchain-enabled property development and investment crowdfunding platform. Coleman says Charter Hall saw potential synergies with this platform and its emerging millennial investor base: “It’s interesting because it is more investor-focused, having evolved from being a crowdfunding platform for retail investors. We are now looking at how to build a blockchain and streamline our whole retail investment process for what is becoming a very tech savvy and technically aware investor base.”


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for Coleman. “We are all about bringing to life the experiences that we can provide to our customers. For example we have investors spread around the globe, and potential tenant customers that we want to bring into our commercial offices, so why not use advanced visualisation technology to give them that experience wherever they are, showing them the fit-outs they might be able to achieve and the potential of the space? Till now we had to show potential clients, in person, our assets in the form of physical models or at best architects’ 3D plans. They may be based in Perth and we might want to take them through that asset in Sydney: virtually reality enables us to bring that experience to life.” Embarking on this process, and the collaboration with Collective Campus, has in a real sense augmented Coleman’s team, or at least the resources available to them. “These four startups are really trying to revolutionise different parts of our business. As the programme ends we can see how to continue to partner with them, whether that may be by investing in their business,

partnering with them as a strategic customer, or simply continuing to leverage the platforms they have developed.” It’s a kind of symbiosis that may have been explored in Silicon Valley, Cambridge or Sophia Antipolis but it is less common in ANZ. “We are blazing a trail here in Australia,” Coleman proclaims with satisfaction. IT at Charter Hall has a very different look and feel today compared with 2014. It has given the company a much more visual experience from the board down through the business units. “All this was a bit of a shock to the system but a shock that was needed in order to effect change,” Coleman concludes. “Now I feel that we have morphed into a steady state. People are very accepting, asking for more, looking to get even more engaged. We have a great cohort of business product owners at all levels of the business full.” More remains to be done in the way of change management and employee experience, but the business is ready now, he feels, to take full advantage of a proptech revolution that is still in its infancy.

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Inside room of


e the financial engine

Mercedes-Benz Written by Laura Mullan Produced by Kristofer Palmer

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MERCEDES-BENZ GROUP SERVICES PHILIPPINES, INC

A progressive and dynamic work culture is key for corporate success, and it seems Mercedes-Benz Group Services Philippines understands that better than anyone

B

OASTING ITS ICONIC silverstarred emblem, the Mercedes-Benz Tower has become a landmark in the Philippines, supporting the brand’s position in the Asia-Pacific market. With offices in both Cebu and Clark, Mercedes-Benz Group Services Philippines (MBGSP) provides finance and accounting services for the Daimler Group, one of the world’s most successful automotive companies. Supporting esteemed vehicle brands like Mercedes-Benz, Heiko Nitsche, President and CEO, says that the firm’s services are critical for the automotive giant’s success. “MBGSP is responsible for paying Daimler’s supplier, so we are ensuring that our factories across the world get the parts, materials and services they need. “MBGSP also supports many of the 106

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Daimler Group subsidiary companies with the production of their financial statements,” he adds. “So even though we are just 500 of Daimler’s 289,000 employees worldwide, I think we play an important role.” Since its creation, MBGSP has steadily matured, surpassing its initial growth target. Serving at the helm of the company for almost seven years, Nitsche has helped to build the Daimler subsidiary from the ground up, working with peer groups and sector leaders to gain the latest industry knowhow. “It was really exciting to be the first person in the Philippines from the Daimler Group and to start something completely from scratch,” he notes. Building a company from its very foundations is a challenge for any executive. For Nitsche, perhaps the biggest priority was finding the right


Cebu office

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MBGSP Clark Building Inauguration

team with the right skills and attitude for the job. “In the beginning, most of the time was focused on recruiting the right people, our pioneer team,” he explains. “It was of the greatest importance that we found the right team with the right skills but, even more importantly, that they had the right attitude and spirit. “I think we are unique because of our people and our corporate culture. At MBGSP we believe in the best of both worlds. This mean you can’t copy and paste the corporate culture of our parent company into any country.

“We merged the best elements of the German Daimler culture with the Filipino culture. In the Philippines, you have world class customer service, excellent English skills, and the people are very adaptive to new cultures. Now, we have a very young, dynamic and customer-service oriented organisation with lots of energy.” MBGSP has a millennial-centric environment and is committed to providing equal opportunities. Creating a progressive, open and welcoming work culture is something which Nitsche is clearly passionate asia.businesschief.com

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Heiko Nitsche, Chief Executive Officer of Mercedes-Benz Group Services Philippines A keen eye for numbers, a quest for adventure and the world’s maker of the best automobiles brought Heiko Nitsche, Chief Executive Officer of Mercedes-Benz Group Services Philippines to Asia. Heiko who is originally from Stuttgart, Germany started his career with Ernst & Young AG as a young Executive in 1997. He joined Daimler AG as Manager for Corporate Controlling & Accounting in 2003, and as Chief Accounting Officer for Mitsubishi Fuso Truck & Bus Corporation, one of the subsidiaries of Daimler AG’s in Tokyo, Japan. He eventually established the Philippine office in 2011, after careful deliberation of this strategic location for the company. The Cebu office opened in December in 2011 with only three persons and last November 2017 MBGSP inaugurated its new office in Clark as the latest addition to the Daimler Group’s shared-service network. Currently, it has a team of 500 employees for both Cebu and Clark and is considered among the best in the field who provide finance and accounting services to subsidiaries of Daimler in Germany, the rest of Europe, Africa, Asia Pacific and the US.

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about, so much so he describes his team as “more like a family”. It’s an ethos which is well placed amidst the Philippines’ family-focused culture. “I would say what also makes the company unique is our working atmosphere and high retention rate. We have a low employee turnover, which is a critical success factor in this industry. Because of this, we have a higher performance and service quality because every time you lose an employee you have to find a new employee and retrain them to the same level of quality. “I’m very supportive of open communication and believe everybody should speak their mind. We speak to each other on a first-name basis and

we break down the hierarchy walls. We treat everyone as equal without tarnishing our roles and responsibilities and without sacrificing our respect for one another.” By tapping into the local language, embracing the Filipino culture, and creating meaningful relationships with his employees, Nitsche has strived to create a positive work environment. As such, he says that whilst other companies may list impressive values, they are taken to a new level at MBGSP. “Here at MBGSP we really embrace and live by our corporate values. Our values of passion, respect, integrity and discipline are a part of our DNA. “In order to showcase this, we created an annual corporate value award system,

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MERCEDES-BENZ GROUP SERVICES PHILIPPINES, INC

“We chose this location because it’s very important to have the right infrastructure, transportation, and facilities,” Nitsche says. “Today we now have a seven-tonne star on the rooftop. It’s really a landmark in Cebu.

“It was of the greatest importance that we found the right team with the right skills but, even more importantly, that they had the right attitude and spirit” Heiko Nitsche, President and CEO Everybody in the city knows the building, which is good for us as it strengthens the company brand and also helps us recruit our best talent. “The key to our success has been how we attract and then retain the best talent,” he adds. “With our company culture and brand, which is symbolised by that star, we really can attract the best talent in Cebu. I think the proof that we are an employer of choice is the fact that the vast majority of our 114

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employees are recruited by through an employee referral programme. It shows people actually enjoy working here, and they encourage their friends to join also.” Keen to keep up momentum, the Daimler subsidiary has also opened a second state-of-the-art Philippines office, in Clark. This not only ensures there’s capacity for growth, it also means MBGSP’s services are not disrupted and always available.


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The Mercedes-Benz Future Truck 2025 provides a glimpse of driverless trucks “If something were to happen to our operations like a natural disaster, for instance, that could be a significant issue for us,” Nitsche explains, “therefore, we have developed a very sophisticated business continuity management programme. As part of this, we created our second office in Clark which gives us additional operational stability, security, and a world-class business solution for our global customers.”

Keen to ramp up its operations further, MBGSP has focused its investments on two pivotal areas: the upskilling of its staff and digitalisation. As part of this, the whole Daimler Shared Service network is investing in robotics, automation and artificial intelligence, for example, to improve its productivity and efficiency. “For our business, technology is very important. It’s crucial for the finance and accounting function, but asia.businesschief.com

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it’s also vital across all of Daimler’s subsidiaries,” Nitsche says. “With technology comes the opportunity to automate certain activities to free up your team. This means they can do fewer manual tasks and focus on the more interesting, valueadding jobs. “On the infrastructure side, when we established our second site in Clark, it became a hub site for IT,” he continues. “For example, in this site, we installed a state-of-the-art server room, which houses Smart Row cabinet. “Our Cebu and Clark site are fully integrated and capable of absorbing the load of each other in case one site fails to perform,” he adds. On the other hand, whilst technology has been a core focus, MBGSP hasn’t forgotten its most important asset: its people. As a result, the Philippines firm is investing heavily in development and training programmes to help attract and retain the best talent in the region. “We have soft-skills programmes from communication to change management and stress management to leadership, which are all equally

important,” explains Nitsche. “These programmes are not given arbitrarily; each employee’s career plan is carefully designed by their respective managers together with HR.” It’s been seven years since MBGSP was first founded. Years before, Daimler has already started its Shared Service journey with Daimler Group Services

“In 2011, we started with just three employees in total. Now, we have almost 500 in both Cebu and Clark. I’m very excited for the further growth of that family” Heiko Nitsche, President and CEO Madrid (DGSM) and Daimler Group Services Berlin (DGSB). Since then, the Daimler subsidiary has gone from strength to strength, offering state-ofthe-art finance and accounting services and more. In doing so, MBGSP has bolstered Daimler’s position in Asia-Pacific but, not one to rest on its laurels, Nitsche asia.businesschief.com

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Vision MercedesMaybach 6 Cabriolet ALL PHOTOS COPYRIGHT BY DAIMLER AG

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believes it’s only the beginning for the firm. “In 2011, we started with three employees in total. Now, we have almost 500 in both Cebu and Clark. I’m very excited for the further growth of that family. The company still has the potential to grow, whether that’s in terms of headcount, processes, or value-added services. “Our most important target is to have a very good relationship with our global business partners, our customers so that they earn the trust and the confidence in us,” he continues. “For our employees, we want to ensure that there is always an opportunity for successful career growth. We also want to have mature and standardised processes. We want to integrate robotics and automation into our processes. It’s a journey which we’re currently on but it won’t happen overnight. “As a responsible employer we create job opportunities within MBGSP and beyond in our supplier network to encourage business growth in the region.”

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WHERE STRONG LEADERSHIP IS KEY TO LOGISTICS SUCCESS Linfox may have become a global leader in logistics, but it hasn’t forgotten its roots as a family business Written by Laura Mullan Produced by Charlotte Clarke


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n 1956 Lindsay Fox founded Linfox with just one truck in Melbourne, Australia. Fast forward to today and the company is regarded as a logistics giant, standing as the largest privately-owned logistics company in the Asia Pacific. Still owned by the iconic Australian family, Linfox’s footprint now stretches across the Asia-Pacific, with more than half of its growing team situated in Asia. Even with this acclaim, however, Linfox hasn’t forgotten its roots and remains now, more than ever, a company built on family values and compelling leadership. Andrew Johnstone, Operations Director at Linfox Thailand, says that, even as the company’s presence expands, Linfox’s foundation is one that will remain focused on those same meaningful family values that were instilled in the company from the beginning. “Whilst working at both Linfox Australia and Linfox Thailand, I’ve really seen the depth and breadth of how Linfox does business,” observes Johnstone. “The value that we have

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in our people and our leadership has allowed us to channel our vision from Australia through to Asia. “There are cultural differences, absolutely, but the fundamentals of doing business from a leadership perspective are very much the same,” he continues. “It’s about investing in great leaders, investing in partnerships, and bringing our vision to life to connect with our customers. “Fundamentally, I think one of our key differentiators is that we are a large business that operates with family values. We care about our people and customers like they’re our own family. Lindsay’s original vision of taking care of our people, our customers and building relationships, from back in 1956, still carries on in the business today and it’s stronger now than ever before. For me, that’s the key to the company’s success.” First joining Linfox in 2008, Johnstone understands the importance of strong leadership firsthand. Responsible for managing large-scale operations, warehouse management, supplier relations and more, he says that Linfox


S U P P LY C H A I N

“Lindsay’s original vision of taking care of our people, our customers and building relationships, from back in 1956, still carries on in the business today and it’s stronger now than ever before” Andrew Johnstone Operations Director at Linfox Thailand

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2,500 Number of staff on Andrew Johnstone’s team at LINFOX

VIDEO: Andrew

recognised early on that it needs great leaders to connect and inspire its large, diverse workforce. “As a non-Thai speaking leader in this country, I utilise all my skills and past knowledge to navigate cultural differences,” he explains. “When it comes to leadership it comes back to the fundamentals of focusing on the company’s vision and managing change through effective communication. “Pace of change is much quicker here in Asia and Thailand particularly,” he adds. “Although there may be differences, there are also lots of similarities – I think it’s important to understand that wherever you go people are universal and the way we need to lead comes back to people first.” For great leaders to succeed they also need a clear strategic plan to follow and it seems that Linfox has

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developed a sure-fire vision for growth. Clear to grow its footprint, the firm has continued to make significant capital investments throughout Australia and the Asia-Pacific region. In doing so, it seems the logistics giant has a meticulous plan for expansion and sustainable growth. “This investment demonstrates to both the country (Thailand) and our customers that we’re serious about doing business here, not just in the next two or three years, but long into the future,” Johnstone explains. “Part of our long-term strategy for growth also involves

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attracting new business and investing across the Asia Pacific region.” With compelling leadership at the helm of the company, this is not only transforming the firm internally, but also having a tangible impact on the customer experience. “From my perspective, when I talk about the family values, it’s about people, it’s about relationships,” notes Johnstone. “People are our number one asset. If we can invest in our team and give them the opportunity to grow and develop, we believe that they’ll be thoroughly engaged and care for our customers’


S U P P LY C H A I N

“It’s about investing in great leaders, investing in partnerships, and bringing our vision to life to connect with our customers” Andrew Johnstone Operations Director at Linfox Thailand

needs on an authentic and genuine level. “The way you engage employees is by having great leaders,” he continues. “Every time we talk to an employee – a driver, a cleaner, a shift manager – it’s an opportunity to engage with them in a genuine, authentic way.” Personally responsible for a team of around 2,500 people, Johnstone says that the firm consistently invests in the upskilling and training of the team to create a workforce that is adaptable, agile and skilled. “Today, we’re investing in developing our leaders’ cross-functional capabilities so that they have transferable skills and can move from one role to another,” he explains. “This is because we don’t want to employ someone to just fill a vacant position, we are always thinking two or three positions ahead so that the employee has the opportunity to grow and develop. We want to build capability within our brand and become an employer of choice. “I believe we should hire for attitude and train for skill because bringing in the right people with the right attitude, the right mindset, and the right behaviour is key to success. My approach involves taking managers and developing them into leaders.” By creating a highly-skilled, driven workforce, this is also influencing the way that Linfox approaches key challenges such as health and safety. Safety is a top priority at Linfox and, as such, the logistics firm has created a dedicated Vision ZERO safety programme whereby it aims to achieve zero

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24,000 Linfox is Asia Pacific’s largest privately-owned logistics company with operations employing more than 24,000 people spanning 12 countries

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fatalities, injuries, motor vehicle incidents, net environmental emissions and also pledges zero tolerance of unsafe behaviour and practices. Since launching the programme, Linfox has reduced its Lost Time Injury Frequency Rate (LTIFR) by more than 90%. In Thailand, Johnstone says that whilst instilling a culture of safety and compliance has been a challenge at times, it was an important task because when it comes to safety, one injury is one too many. “Thailand frequently tops the rankings as the country with the

highest amounts of traffic incident rate in the world. Therefore, for us to see a year-on-year reduction in the number of incidents has been something that I’m extremely proud of,” Johnstone says. “My hope is that all of our people will do the right thing when no one’s watching,” he adds. “I want to ingrain the values and the principles of the organisation in our team so they truly understand the responsibility that they have to act safely, not only for Linfox but for themselves and their families. “In Asia, we have programmes

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LINFOX

to consistently improve the culture of safety and compliance as we don’t want our team to make decisions at any cost or put themselves in harm’s way to get a job done, so we’re educating our people – we have an extremely robust fatigue management policy, and we monitor our vehicles and driver hours. On top of this, we’re also partnering with our customers and the local authorities to ensure that we’ve got the best safety practices in place.” As well as promoting the highest safety practices, Linfox is also tapping into some of the industry’s most cutting-edge technologies to protect its people and support its customer relationships. By using state-of-the-art innovations such as driver monitoring, facial recognition, and fleet care, Linfox is making sure that its team operate in a safe and responsible manner. “We monitor our vehicles to ensure safety and we proudly partner with Michelin in Thailand. The fleet care programmes they offer are fully digitized and their monthly tyre inspections ensure our team are safe and our vehicles efficient at all times. “We also have a 24/7 monitoring capability which checks our drivers’ safety, performance, and efficiency,” explains Johnstone. “With this, we’ve been able to reduce incidents involving distractions and fatigue which are some of the biggest causes of road incidents in Asia. This investment has been made because we genuinely care about our people. For me, if we save one life it’s been successful.”

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“Fundamentally, I think one of our key differentiators is that we are a large business that operates with family values� Andrew Johnstone Operations Director at Linfox Thailand

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LINFOX

1956 The year that LINFOX was founded

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Keen to tackle the pressing issue of sustainability and CO2 emissions, Linfox has also explored the use of electric vehicles, partnering with automotive behemoth Volvo. “We’re fortunate to have long standing partners in Michelin and Volvo who are aligned with our values and place the same level of importance on safety, efficiency and innovation.” Although challenges such as congested areas and unpredictable geography remain, the firm says it is striving to become more environmentally-aware. “We’re constantly researching and working on alternate fuel source vehicles and automation,” notes Johnstone. “In Asia, the region is increasingly looking for alternative fuel vehicle solutions particularly due to environmental issues such as air quality and pollution. At Linfox, we’ve partnered closely with Volvo, who are on the cutting edge for safety and innovation in electric heavy vehicle production. Anything we can do to reduce our emissions is absolutely being evaluated.” Whilst Linfox may have invested in state-ofthe-art technologies and implemented the very latest safety practices, the fundamentals of Lindsay’s original vision still ring true today. Looking to the future, Johnstone says that he is optimistic about the road ahead. “I would say that in the next five or 10 years, our relationship with our customers is going to be closer


S U P P LY C H A I N

and more developed than ever and we will also attract new business because of our strong ethos, family values, and commitment to innovation,” he says. “Our safety record speaks for itself and our leaders are doing a phenomenal job in driving change and leading our people in the right direction. “I get really passionate when I talk about leadership and our team because I genuinely believe that that’s what the business about,” he adds. “We can have all the technology in the

world but it doesn’t mean a lot unless we have passionate leaders who share and integrate our vision to ensure that technology is used correctly. Today, if you want to send products and goods you need to rely on transport systems and logistics, and these systems still, and will likely always, rely on people. I believe if we get the people right, we’re on the road to success.”

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Taking on

the wine industry

heavyweights


Naked Wines Managing Director Greg Banbury reveals how the ground-breaking business is like ‘a dating agency’ for winemakers and wine drinkers Written by Niki Waldegrave Produced by Andy Turner


NAKED WINES

D

espite owning no taxis, Uber is the biggest public transportation company in the world. Likewise Airbnb, which despite being the largest provider of accommodation, doesn’t own any hotels. Now, the sharing economy is spreading to the vineyards, and Naked Wines Managing Director, Greg Banbury, reveals how the Australian arm of the online startup he founded with eight others 10 years ago, including Richard Branson’s former right-hand man Rowan Gormley, is bridging the gap between its 45 winemakers and consumers in a unique business model. “We’ve got a very specific purpose – and that purpose is to revolutionise the wine industry,” he says. “One of the ways we describe Naked Wines is, ‘it’s a dating agency for winemakers and wine drinkers’ – we’re connecting someone who loves the product, our angels, with someone

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Customers enjoy one of Naked Wines’ tasting events

who loves making the product.” Naked Wines’ consumers are called ‘Angels’ – after the rich New Yorkers who used to fund Broadway shows by fledgling writers – directly support independent winemakers by paying $40 a month in return for exclusive access to delicious hand-crafted wines at low prices. Banbury was a co-founder of Naked Wines in the UK, along with eight of the old Virgin Wines team lead by Gormley. The business launched in Australia in 2012 and he took the role of Australian Managing Director in April 2016. “In Australia, we’re putting the power back into the hands of the two most important people, the wine drinker and the winemaker,” he says. “There’s a bunch of dead costs in the production of wine that the consumer ends up paying for.” The idea of a ‘naked’ wine is one where the all the things you pay for but can’t taste are stipped away. The winemaker is freed from all the things they might not be good at, like spreadsheets, selling, attending trade shows, hiring sales people

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– all of which go into the cost of the wine but don’t add to the flavour. Banbury explains how they knew that if they did a good job from the outset – facilitating that winemaking process by funding the winemaker, and taking over the “boring stuff in the middle, like building a website, doing the logistics, shipping it to the customer’s door, handling the customer service” – and they did it well, they’d have a booming business, with loyal, returning customers. “The great thing about the model is that it’s very authentic,” he says. “You genuinely can make wine for a lower price if you work with winemakers the way that we do. There’s no one clipping the ticket on the way through and there’s no risk – you’re only really paying for the juice and the winemaking talent. “It’s a ground-breaking new model and only possible because of the internet. Up until now, the wine industry has just made wine, put it in boxes, stuck it in a warehouse, and then tries to sell it later. “We’re going straight to the winemaker and selling it all before the

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“In Australia, we’re putting the power back into the hands of the two most important people, the wine drinker and the winemaker” – Greg Banbury, Managing Director, Naked Wines Australia


FOOD & DRINK

winemaker has even made it. So, by the time it hits the site, the customer is excited about the wine because they’ve been part of the process.” Banbury claims the main benefit on the winemakers side is that they’re guaranteed orders, are paid on time, and have ongoing communication with their customers. “Naked is completely different to traditional retailers,” he insists. “When winemakers work with us, not only does the money turn up on time, the wine is delivered on time, and thousands of our customers talk to them directly through our website on a monthly basis. “When you have loyal customers, it can grow very quickly, and when you talk to our winemakers, they say, ‘this Naked thing is what I dreamed the wine industry

would be like, but it never actually turned out to be that way’.” In 2015, Naked Wines was acquired by Majestic Wine – which Gormley is now CEO of – for $98mn. The last 18 months have been all about growth for the Australian arm of Naked Wines, which is based in Sydney’s stunning Northern Beaches. The business shipped more than 300,000 cases of wine last year – that’s close to four million bottles – and revenue is on track for $47mn in the latest financial year. “That’s a lot of wine,” Banbury laughs, “and it’s growing. We’re growing at a rate of about 30% year-on-year.” Banbury states the focus over the next few years is proving Naked can grow, explaining if it was to stop investing in growth, it could be

Introducing Naked Wines to Partners

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FOOD & DRINK

more profitable in the short term, “but that that’s a fool’s game”. “We get a great return on our investment, so if we keep investing into growth, then we can fund even more winemakers.” Liberating winemakers is something Banbury is passionate about, and Naked works with three different types of winemakers – those who currently work, or have worked, for other small or big name wineries, including award-winning Caroline Dunn, who is probably the most awarded female winemaker in Australia, and used to make Wolf Blass. It also works with fledgling wineries, those “rags to riches kind of winemaker who had raw talent, but didn’t have the money to produce any kind of quantity of wine,” as Banbury explains. “But now they’re making a really good living, with tens of thousands of cases every year, and that’s all because of Naked Wines’ angels.” While Naked doesn’t put restrictions on winemakers to say they can’t work for anyone else, it ensures the particular wines it funds are only

available to its Angels who fund it. “Hitting 70,000 angels has been a pretty exciting milestone for us,” he adds. “We don’t sit here going ‘we want to be a $1bn dollar business’, instead we focus on liberating as many winemakers as we possibly can.” “We’re at 45 – if we can get to 100, we’ve made a good start. But there are probably 1,000 to 2,000 winemakers in Australia we could potentially either help or enable them to make wine the way that they want to make it – and that’s a good thing for the consumer who wants to drink wine made by a real person, not a supermarket.” Banbury says Naked’s best customers come from referrals, usually from other customers because they’ve been to an Angel’s house for dinner, and the host has handed them a bottle of wine and said, ‘I know the winemaker’ or ‘I helped make this wine possible’. “They get the full story,” he explains, “and those people then, in turn, become our best customers.”

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“Everyone loves the fact we’ve built a really viable business and are going up against the likes of Coles and Woolworths, and that’s really a lot of fun” – Greg Banbury, Managing Director, Naked Wines Australia

Naked Wines’ website currently boasts approximately 200 wines ranging from $8-$30 dollars, with most of them in what it calls the ‘sweet spot’, costing $12-15 a bottle, which Banbury claims is comparable to $30-35 bottles of wine in the bottle shop. “We believe there’s not a bottle of wine in the world that costs more than $20 to physically make when

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you take in fruit, winemaking, oak, glass, label, screw cap etc,” he says. “20 bucks really is the max, and that’s with really top quality fruit. “There’s no reason that any bottle of wine should cost more than $30– anything over $30 and you’re paying for a name or a brand, or scarcity or stuff that you can’t taste.” While delivery logistics within Australia is obviously difficult due


FOOD & DRINK

to its size, Naked decentralises its supply chain, with warehouses in NSW, Victoria and Western Australia, meaning Angels in major cities such as Sydney, Melbourne and Perth all get next day delivery. With customer experience at the forefront, the website has just launched a tastebud matching algorithm, and it’s also about to launch live chat in the mobile app. “We love innovating and pushing the envelope,” adds Banbury. “Once you become an Angel, the

loyalty factor is very important and we’re always looking for ways to improve the customer experience. “We also put a lot of effort into the culture and the ethos of Naked, and I think people like working for a business with a purpose. We’re trying to stick it to the big guys. Everyone loves the fact we’ve built a really viable business and are going up against the likes of Coles and Woolworths, and that’s really a lot of fun. “We want to revolutionise the wine industry – and we’ve only just started.”

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