Business Chief Europe - April 2018

The disruptive, blockchain-based music streaming service WITH EXCLUSIVE VIDEO

April 2018 โ ข EUROPE EDITION

Leading the Mรถvenpick charge

AN EXCLUSIVE INTERVIEW WITH CEO OLIVIER CHAVY

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ServiceBot

The AI-based customer service software

City Focus

Amsterdam, the gateway to technology innovation

Top 10

Companies in Europe by revenue

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THIS MONTH’S ISSUE of Business

ServisBot founder Cathal McGloin

Chief’s Europe edition offers exclusive

explains why businesses shouldn’t be

insight into the hotel and resorts industry

afraid to adopt artificial intelligence,

as we catch up with Olivier Chavy, CEO

Olivia Minnock looks at the mutual

of Swiss multinational Mövenpick.

benefits academia partnerships can

Chavy looks back on a successful

generate for companies and institutions

2017 for his company, outlines its plans

and Armadillo CRM’s CEO James Ray

for growth over the coming year and

tells Stuart Hodge how technology can

also assesses the impact technology is

be used to drive customer retention.

having as Mövenpick plots its future.

“We do spend a lot of time, energy,

This month’s City Focus shines the light on Amsterdam and its reputation

and money in technology,” explains

as Europe’s gateway to technology

Chavy. “However, we should not ignore

innovation, while our Top 10 is quite

the fact that we are in the industry to

simple: we bring you the biggest

make moments and to sell sleep. We

companies on the continent by revenue.

still want to make moments in terms of

Finally, our exclusive digital reports

human interaction and human behaviour,

feature interviews with Cadent Gas,

and use technology as the support.”

Flybe, CBRE and AquaComms – all

Another must-read feature is Dan Brightmore’s interview with music producer Gareth Emery. The

involving in-depth discussions with top executives and industry experts.

We hope you enjoy this latest

hugely-popular DJ has launched the

issue and, if you have any feedback,

blockchain-based music streaming

you can find us across social

service Choon, and accompanying this

media: @Business_Chief.

fascinating article is some exclusive video as Business Chief visited Gareth at London’s Ministry of Sound.

Elsewhere in our April magazine,

http://europe.businesschief.com www.bizclikmedia.com

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F E AT U R E S

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

IN THE HOSPITALITY HOT SEAT WITH MÖVENPICK HOTELS & RESORTS CEO OLIVIER CHAVY TECHNOLOGY

TAKING THE FEAR OUT OF AI

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10

PEOPLE

38 The mutual benefit of academia partnerships

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

50

The value of customer retention BLOCKCHAIN

68 A FIGHT FOR YOUR RIGHTS

how blockchain can save the music industry

CITY FOCUS

60

AMSTERDAM

78 TOP 10 BIGGEST COMPANIES IN EUROPE 5

Š 2017 Accenture. All rights reserved.

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C O M PA N Y PROFILES Cadent Gas TECHNOLOGY

Flybe

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

THE HOSPITALITY HOT SEAT AN INTERVIEW WITH MÖVENPICK HOTELS & RESORTS CEO OLIVIER CHAVY THE SWISS MULTINATIONAL IS GEARING UP FOR SOLID GROWTH IN EUROPE THIS YEAR HAVING MADE SIGNIFICANT STRIDES IN THE AREAS OF SUSTAINABILITY, TECHNOLOGY AND HOTEL DESIGN Written by TOM WADLOW

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

E HAVE HAD so much rain.

There is so much flooding in town, it’s insane. I’m obliged to ask the staff to leave at two o’clock today because the roads will be impossible to drive on tonight. There is one metre of water in some streets.”

Not many would believe that Olivier Chavy, CEO of Swiss multinational Mövenpick Hotels & Resorts, was speaking from his regional office in Dubai. Zurich, London, Colombo, Hamburg – Chavy could instead be at any number of Mövenpick premises in parts of the world not unfamiliar with rainfall. “Dubai is not equipped in terms of drainage... it is not equipped at all for heavy rain,” says Chavy, who, thankfully, decided to stay on premises and ride out the storm.

It has been almost a year since the French hotelier discussed all things hospitality with sister publication FDF World, and bizarre weather events aside, a lot has happened at Mövenpick since. “2017 has been a good year for us,” Chavy reveals. “It’s been very exciting. We have announced our ExCom-Y initiative, hiring 10 millennials 12

April 2018

to be part of our executive team, and they have brought a lot to the table.”

GREEN DNA Not only does industry veteran Chavy describe the younger makeup of his leadership team, but he also mentions that a stronger environmental conscience has developed over the course of the year. This is illustrated by the fact that 90% of Mövenpick hotels operate to a gold Green Globe standard.

Green Globe, established in 1992

“ WE HAVE ANNOUNCED OUR EXCOM-Y INITIATIVE, SO HAVE HIRED 10 MILLENNIALS TO BE A PART OF OUR EXECUTIVE TEAM, AND THEY HAVE BROUGHT A LOT TO THE TABLE” – Olivier Chavy, CEO, Mövenpick Hotels & Resorts

following the United Nations Rio Earth Summit, represents the best in sustainable practice in the travel and tourism industry. From energy saving and waste management to community support and heritage preservation, certification requires genuine dedication to socio-environmental issues.

“We’re extremely proud because this is part of our DNA,” says Chavy. “It goes beyond energy saving. It is a behavioural mindset.” Whether it’s converting the lighting systems of entire hotels, simply 13

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

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“ WE’RE EXTREMELY PROUD BECAUSE THIS IS PART OF OUR DNA. IT GOES BEYOND ENERGY SAVING. IT IS A BEHAVIOURAL MINDSET” –O livier Chavy, CEO, Mövenpick Hotels & Resorts

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April 2018

gathering and reusing part-used bottles of shampoo, or running clothes collections for local charities, Chavy is adamant that 100% of Mövenpick hotels should and will be gold-certified in the near future.

125 BY 2020

125 ——— BY ——— 2020

MÖVENPICK’S HOTEL AND RESORT PORTFOILIO TARGET

Indeed, half of the new hotels opened by the company last year are already up to Green Globe’s gold standard, and several more openings are planned for 2018 and beyond. At the turn of the year, Mövenpick had 83 hotels on its books, and Chavy plans to open at least 14 more throughout the year, with another 40 agreements already sitting in a construction pipeline. The company’s target of a 125-strong portfolio by 2020 appears to be well on track.

Last year, the CEO eagerly discussed the company’s then recent unveiling of a vertical resort in Sri Lanka’s capital Colombo, which Chavy described as the city’s first relevant hotel opening for 25 years. So, how has the first year of operation been? “When you open a hotel it’s what we call a rampart, the period of time before it reaches a stabilised year, which is generally after two or three years. But year one 17

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

“ YOU CAN’T IGNORE TECHNOLOGY, BUT IT SHOULD NOT BE A CULT. IT’S ALL BASED ON THE FREEDOM YOU GIVE TO YOUR CLIENTS AND TO THE PEOPLE” – Olivier Chavy, CEO, Mövenpick Hotels & Resorts

in Colombo was a good one – we closed at 63% occupancy and are in talks over new business contracts, with airlines for example. We are focusing on the Middle East, Japan and Asia markets to fill up this hotel.”

Mövenpick has also been busy in Europe, with regional chief Amir Lababedi recently moving to London, the new launchpad for the company’s continental growth. In Den Haag in the Netherlands, a new 72-room 18

April 2018

boutique hotel is acting as a platform or benchmark to base new openings on. Mövenpick worked closely with New York’s Wilson Associates on the design, a firm Chavy holds in the highest regard when it comes to creating contemporary, timeless hotel spaces.

“Den Haag is a cool one,” Chavy says.

“It’s very high-end but still a new way of thinking in hospitality. For example, the public space downstairs is very much dedicated to connectivity, and

you have the freedom to choose your own level of privacy. You can go to a common table where you can speak and interact with people you don’t know, or you can go to the very comfortable eating space and be by yourself. The design is definitely a new era for Mövenpick.”

SLEEPING SMART Technology is also influential in shaping Mövenpick strategy in this new era.

For example, a new ‘smart mattress’ concept has proven to be a successful new revenue stream in a series of trials carried out last year. Inspired by a Swedish innovation called YouBed, it allows guests to alter the firmness of their mattress via a remote control, and comes as part of an upgrade package costing €15 ($18-19). “This has been something of a home run for us,” Chavy comments. “The repeat business for it is remarkable. People want to try it, and we are going to deploy it in the Middle East and Asia. At the end of the day, we are in the business of selling sleep.”

Chavy is also acutely aware that he is in the business of selling customer experience, and of the fine balance between technology adding or detracting from any one guest’s perception of a hotel stay. So, as CEO, what is his approach to technology?

“You can’t ignore technology, but it should not be a cult,” he says. “It’s all based on the freedom you give to your clients and to the people. If I travel to London today, I like to check in with my phone, go to the plane without speaking to anyone, fly, land, call my Uber and go to my meeting. But, if I am flying 19

L E A D E R S H I P & S T R AT E G Y with my family, I don’t care about going to the booth at the airport to check in, to check in my luggage, and to speak with someone.”

Mövenpick is certainly an early mover when it comes to the hospitality industry and moving functionality to the cloud.

For instance, its operating and marketing systems have already been migrated. “We do spend a lot of time, energy, and money in technology,” Chavy states. “However, we should not ignore the fact that we are in the industry to make moments and to sell

sleep. We still want to make moments in terms of human interaction and human behaviour, and use technology as the support.”

RECRUITMENT REDEFINED? Asked whether the growing influence of technology risks dehumanising the industry, Chavy reiterates the importance of balance. “It is a risk,” he admits, “but only if you shut down other options. I read last week that Singapore has opened its first terminal with no human interaction – it’s all fully

“ THERE ARE EXCITING MONTHS AHEAD OF US. WE HAVE AN AMAZING TEAM AND HAVE HIRED SOME GREAT TALENT LATELY. I’M FULL OF HOPE” – Olivier Chavy, CEO, Mövenpick Hotels & Resorts

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April 2018

automated. However, it’s one terminal: if you don’t feel comfortable, you can go to the other terminal. I think there is a risk. I’m personally very tech savvy; I use a lot of technology but I like human interaction as well. You have to find the right blend.”

Finding this blend also permeates into recruitment. As technology adapts in the hospitality industry, so must Chavy’s staff, but again, managing this blend will be a factor in whether 2018 is another successful year.

“The important word here is diversity,”

he explains. “As much as we love diversity for the staff in terms of geographic origin and speaking the languages, we like to have those who are tech savvy and those who are not.

Those who are not tech savvy – they have developed some human behaviors which are unique. Those people take initiative that millennials who are tech savvy may not take.

“There are exciting months ahead of us. We have an amazing team and have hired some great talent lately.

I’m full of hope.”

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TECHNOLOGY

TAKING THE FEAR OUT OF AI Business Chief speaks to ServisBOT Founder and CEO Cathal McGloin about AI adoption and why businesses shouldn’t be afraid of it Writ ten by OLIVIA MINNOCK

TECHNOLOGY “NO TECHNOLOGY WINS because it’s a piece of technology: it wins because somebody figures out how to apply it to solve a particular business problem in a unique way.”

Cathal McGloin, CEO of artificial intelligence and automationbased customer service provider, ServisBOT, enthuses about the potential of AI, but warns businesses must apply it properly to their needs or risk being left in the dust.

McGloin, a self-confessed “software-addicted entrepreneur”, recently founded his fourth startup which utilises the latest in AI and automated technology to help businesses more easily manage their customer service needs. He’s passionate about making AI more accessible to a variety of businesses.

Certain elements of AI are nothing new, as McGloin is quick to clarify.

The idea for ServisBOT came about from experiences within the contact centre space, in which McGloin had co-founded Performix Technologies in 1998. “We created this idea of employee performance back in the late 1990s, with the rationale that if you give people a view of what their targets are and 26

April 2018

“AI will become table stakes in software going forward – anybody who doesn’t have it won’t even be in the race” Cathal McGloin, CEO, ServisBOT

how they are doing in real-time, they perform much better. We created, patented, and still own that, and every contact centre has employee performance software today.”

It’s clear our demands on technology are changing, and AI is key in both promoting and fulfilling that expectation.

“One of the big changes is we’ve moved away from a big screen onto mobile which is now a combination of touch and voice,” McGloin says. “My 16-year-old daughter will sometimes voice-text her friends, and won’t bother typing into Google… they can now just activate Siri, for example, to ask a question. The

interface is part of the conversation… that’s what’s interesting to me.

“One of the few areas that has not been impacted by digital transformation is customer service,” McGloin argues. “We’re still very much voice centric, waiting on hold. With live chat – which is 20 years old and has resurged in the past five years – you still have to have staffing, and 27

TECHNOLOGY so can only have your live chat work between, say, 8am and 8pm, often with a live chat agent handling several queries at once. That’s what gave rise to ServisBOT: the idea there had to be a better way of handling customer service with a conversational interface in a digital world that’s mobile-centric.”

The evolution of AI “AI has been around for 40 or 50 years now,” McGloin explains, “but a few things have changed. One is the abundance of data to create an AI system – because these are learning systems, you need large amounts of data for machines to know what to do. That’s fulfilled today by the data

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overload we have.” Another element, according to McGloin, is the major processing power required for AI. “You needed a lot of processing power to crunch that data and come up with the answers – the Android device we now carry in our pocket has more power than anything in the 1990s.”

In addition, open sourcing has made essential knowledge and skills available. “Amazon’s been using AI for 10 years for book preferences… they open sourced it and made it available,” he explains, saying that these tech giants are releasing APIs to carry out machine learning and as such making AI easier to use so that “ordinary developers are able

to get up to speed very quickly”.

These factors are set to make AI as much a part of life as the computer.

“As Andreessen Horowitz talks about, AI will become a feature of all software going forward. Software will have to have some self-learning capability, and some artificial intelligence. So, AI will become table stakes in software going forward – anybody who doesn’t have it won’t even be in the race.”

The application of AI McGloin is clear that “the difference between the winners and the losers is who knows how to apply AI. At ServisBOT, we’re trying to change the customer service experience

ServisBOT – changing the customer service conversation ServisBOT was founded in 2016 by brothers Cathal and Ray McGloin along with Chris Doyle. The company aims to transform customer service for businesses using technologies like AI and automation.

An army of “bots”, including Chat Bots and Service Bots, provide automated solutions giving customers “the service they want, any time they want”. In this way, the Massachusetts-based software company makes it easier and cheaper for businesses to implement AI.

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TECHNOLOGY

“The onus will be on application providers and vendors like ourselves to make it easy: we’ll build a solution that has an AI engine under the hood” Cathal McGloin CEO, ServisBOT

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by heeding trends. For example, millennials don’t like phone calls – they want to send off a text and hear back.

People are impatient and want instant answers. Applying AI and chat bots means we can respond immediately.

In addition, the way we’ve built it, a company can get this system up and running within hours and days.”

“Automation is key to what we’re trying to do,” McGloin emphasises.

“It’s not AI for AI’s sake… while chat bots can be used to hold a conversation, we then have service bots which perform a particular task. It could print your banking statement or help you manage a journey… and because we use serverless technology, you can scale up to millions of transactions in an instant. Service bots aren’t just about chatting, but about performing a task, and our platform allows a company to orchestrate

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TECHNOLOGY an army of service bots across different areas of their business.”

Why aren’t all businesses implementing AI? Recently, software giant Red Hat commissioned Vanson Bourne to survey IT decision-makers on the adoption of technologies like AI. Respondents expected to increase technology investment by 25% from 2017-18. However, only 24% stated they currently implement AI, with an additional 30% planning to implement the tech in 2018. What threats, real or perceived, have stopped businesses already adopting AI in a flash?

First, McGloin mentions fear of AI replacing jobs. “This was the same argument with computers in the 1980s, but you’re always going to need human involvement. For example, customer complaints can’t be handled

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by bots as they can’t empathise.

With certain transactions, people will always want to talk to someone, especially those to do with money.

What will happen is we’ll provide better service, automate mundane tasks, and take the repetition out for folks.”

He also argues that most businesses are already using AI even if they haven’t made a disruptive song and dance about it. “Even things like preference selection on websites, there’s AI technology behind it. I think there’s this fear: ‘I don’t have a data scientist, it’s hard to get these people, it’s too expensive for my budget, I can do without it…’ You’ve got the issue of barriers like skills, availability, costs and so on that are stopping people from trying it out. The onus will be on application providers and vendors like ourselves to make it easy: we’ll build a solution that has

an AI engine under the hood. As we make it more about the application and less about the technology, I think we’ll find it easier to embark on.”

So, is AI just the latest buzzword?

“It’s the bees and the honey: everyone swarms to the latest thing, but AI is just a piece of technology. If you don’t

apply it in a different way you don’t get anything out of it. Companies like ServisBOT are coming out and saying ‘don’t worry about the AI, we’ll solve that – this is about its application. Here are some easy tools to create a new work flow, or a new bot, to complete a new task… don’t worry what’s under the hood’. We’re selling it as a service.”

What’s next for AI? Customer service and AI, then, go hand in hand – but where else can businesses easily utilise the tech?

“Customer service is across all industries,” McGloin clarifies, “so it’s a horizontal layer. Where I see 33

TECHNOLOGY

“People are scared of AI, but if you just make it easy for them to embark on it, they will” Cathal McGloin, CEO, ServisBOT

AI going next is into back-office, becoming the new business process management and elevating back-end tasks. It’s a useful area to apply AI because it can learn about things as it goes, it can change and adapt…”

In terms of ServisBOT, McGloin adds: “We’re at a really exciting stage, the product-market fit phase. We think we’ve hit something really big. People are scared of AI, but if you just make it 34

April 2018

easy for them to embark on it, they will.

We see a huge opportunity in actually taking the fear out of it and making it easy and low-cost to get started.”

One can’t help but wonder whether the serial entrepreneur will stick with his business, but McGloin is focused on creating a solution that lasts. “The thing I am most proud of is the fact that every company I’ve been involved with on this whole journey, including

the first one, Performix, all the technology is still available and in use today for companies to benefit from.

What drives me is the idea of creating something new that has a purpose and is useful. That to me is success: regardless of how much revenue it’s generating, there’s somebody getting use out of it. It’s creating something out of nothing and having it live beyond when you’re involved.”

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PEOPLE

The mutual benefit of academia partnerships How can businesses and academic institutions work together to boost productivity? Business Chief investigates Edited by OLIVIA MINNOCK

PEOPLE

ACCESS TO TOP experts for R&D will benefit any company, and now more than ever recruiting bright minds is top priority for business. In addition, higher education institutes are constantly looking to offer their students and academics the chance to build relationships with top players in the business world. Business Chief gathered some insight on how these partnerships can be developed and who stands to benefit.

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Collaboration for a brighter future in the UK

Gary Davie, Partner and Head of Independent Providers at law firm Shakespeare Martineau, feels that in the UK, collaboration is the way forward to benefit those in education as well as potential employers. “Whilst competition may in many ways fuels creativity and innovation, for the education sector, closer collaboration between further education,

“ For employers, a more streamlined education sector could be vital in helping solve the UK’s productivity crisis” – Gary Davie, Head of Independent Providers, Shakespeare Martineau

higher education and private providers could be just what UK students and learners need. People looking to take up a place in education would be able to see a demonstrable path towards a job and career progression, and businesses would have access to a talent pool which is equipped across the full breadth of the skills gap.

“HE policy in recent years has centred on competition, but that approach is starting to be questioned. A recent

report by the Higher Education Commission, titled One Size Doesn’t Fit All, put the themes of collaboration and competition under the spotlight, suggesting that a culture within the education sector, which encourages both equally, would bring greater benefits for students and the wider business community.

“Learners navigating UK education are likely to encounter a variety of different providers; the linear model 41

PEOPLE “ There’s significant untapped potential for businesses to establish mutually beneficial partnerships with universities” – David Docherty, Chief Executive, National Centre for Universities and Business

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April 2018

of traditional study is still popular, but by no means works for everyone. For those students whose educational outcomes are best delivered through different learning settings, for instance both vocational courses and academic qualifications, closer collaboration could be integral to their success.

“Educational institutions have been working together for a number of years in some form. For instance, colleges, universities and private providers have long collaborated to deliver foundation programmes, franchised or validated provision. However, there is the potential for much more.

“Greater collaboration would be beneficial in two main ways: access to courses offered by further education and private providers would increase, equipping learners with a more diverse skillset for the workplace; and universities would benefit from more streamlined progression to higher education and the more extensive talent pool it would bring.

“Particularly for those learners who may not have considered higher education as an option, this clear progression through a range of learning environments would be a confidence booster, with an end goal in sight from

the start. This could be a particular career or qualification, even up to Masters or PhD level.

“To achieve this, though, all providers must accept that they cannot do everything on their own and realise that working together while drawing on individual strengths is key.

“For employers, a more streamlined education sector could be vital in helping solve the UK’s productivity crisis. Jobseekers in the market currently tend to have a range of qualifications and with different roles requiring various accreditations, they may have to engage separately with a number of different providers. If a consortium model was set up which could support learners through the different stages of education or employment, the benefits to employers looking for candidates across the range of qualification levels would be great.

“As the world changes and Brexit looms on the horizon, students in the UK will no doubt be considering employment and education options overseas. With more educational institutions setting up foreign campuses and forging links with multinational companies, the options 43

PEOPLE are there for learners and facilitation within the industry to support outward mobility will certainly be beneficial.

“The solution to the productivity puzzle has collaborative education at its heart. If learners have better access to the courses and qualifications of their choice which will get them the right jobs, and if employers can tap into the best possible pool of talent, the benefits will be felt by all.”

Partnerships to foster innovation and success

Meanwhile, Professor Elena RodriguezFalcon, Provost Chief Academic Officer of new STEM-focussed university, NMiTE (New Model in Technology & Engineering), offers an academic perspective on this kind of collaboration.

She also has some advice on how we can make these important relationships work.

“Having partnerships between universities and businesses is not new; there is now a long and evolving history of collaboration and innovation.

“Whilst there has always been a keen interest in developing partnerships that enable universities to understand the challenges being faced by industry in order to inform the creation of knowledge, or from companies to 44

April 2018

identify the next generation of capable employees, in more recent times the trend is for businesses to increasingly become co-creators of knowledge. Businesses are increasingly active participants in the development and delivery of the student learning experience.

“This provides a huge win-win for businesses, students and academics, and the benefits such partnerships deliver to industry are now even more valuable in our age of tightening

“ The trend is for businesses to increasingly become co-creators of knowledge. Businesses are increasingly active participants in the development and delivery of the student learning experience” – Professor Elena Rodriguez-Falcon, New Model in Technology & Engineering R&D budgets and, seemingly, an everincreasing speed of innovation.

“For instance, a study by IBM in the US found that a majority of tech industry and academic leaders felt partnerships are essential to provide students with skills for these jobs. It noted that when comparing the past five years to the next, those involved expect such partnerships will help bring significant improvements in meeting industry demands and ensuring the employability of students.

“Certainly, I have seen from my own experience how having students work closely with businesses has had a positive and inspirational effect. One such example from Sheffield University, where I taught previously, a group of students started their own company Handy Fasteners after having input that included local manufacturing businesses such as Gripple and Kingkraft. In another, a collaboration with Crown and Sheffield Hallam University resulted in the development of easy-open packaging.

“Ensuring tomorrow’s graduates have the skills your business needs is one benefit from such partnerships.

Another, very sizeable one is that they enable companies to make breakthroughs through accessing the leading-edge research and analytical skills universities have and, of course, lots of bright and inquisitive minds.

“However, businesses and universities are very different beasts, and making such partnerships work so successfully is not always easy. I have been personally involved with very many, and from the start it’s important to create a joint vision that identifies clear purposes and goals for the collaboration.

It’s also important to mention the 45

PEOPLE importance of them being viewed as long-term at the highest level of all involved. Ultimately, there also needs to be a clear strategic “what is in it for me” for both parties if it is to survive competing calls on time and budget over the ensuing years.

“There are lots of basics that need to be in place early on: in particular, agreements regarding intellectual property must be agreed upon and transparent, without putting undue risk on either party. In my experience the partnerships that work the best do so because expectations from both parties are managed right from the start; this is because there is a clear benefit for all involved, but mainly because partners really want to make it work.

“My institution, NMiTE (the new engineering university being created in Hereford in the UK), is taking these principles up a level by boldly forgoing set textbooks, lectures and exams.

Instead we are focussing entirely on a curriculum based around teams of students solving practical challenges actually designed in association with engineering companies to reflect the technical and commercial challenges they currently face.

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“We are currently working with a range of engineering and manufacturing companies to help tackle the current shortage of suitable graduates that such businesses regularly report, and I am inviting all others that are interested to get involved.”

Academia for R&D — finding the perfect match

How might these businesses create the mutually beneficial partnerships they require in this day and age? One platform that’s helping them to do so is Konfer.

With a “trusted user group” that includes leading business groups and companies representing bioscience, commercial chemistry, cybersecurity, digital media, energy, food production, intelligent mobility and transport, land management, technology and textiles, Konfer aims to accelerate research partnerships with UK universities.

Founding members include Capgemini, National Tryst, and Unilever, and total members represent a collective turnover/income of over £48.6bn ($68.69bn). Konfer takes the form of a free online match-making tool, which connects businesses with research expertise and funding opportunities.

It is backed by 132 universities in the

“ The benefits partnerships deliver to industry are now even more valuable in our age of tightening R&D budgets and an ever-increasing speed of innovation” – Professor Elena Rodriguez-Falcon, New Model in Technology & Engineering UK and includes profiles of over 130,000 academics available for collaborative research.

As a not-for-profit resource, Konfer has been funded and developed by the National Centre for Universities and Business (NCUB), Higher Education Funding Council for England (HEFCE), Research Councils UK and Innovate UK. Since its beta launch in November 2017, Konfer has already helped big names like Jaguar Land Rover conduct vital R&D.

David Docherty, Chief Executive at NCUB, told Business Chief: “There’s significant untapped potential for businesses to establish mutually beneficial partnerships with universities… we were inspired by business leaders who said they would be better equipped to grow and exploit opportunities in the UK and internationally if they had better access and insight to academic research partners and innovation funding.”

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VISIT OUR WEBSITE

READ THE LATEST ISSUE

The value of customer retention Armadillo CRM helps major global brands manage customer relationships. We speak to CEO James Ray about the value of retaining customers and how technology like AI and machine learning can help Writ ten by STUART HODGE

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

S U S TA I N A B I L I T Y AS LEGENDARY MANAGEMENT theorist Peter Drucker once remarked: “The purpose of business is to create and keep a customer”. Indeed, the art of creating new customers, as per the maxim, has been welldocumented by many business publications, but the challenge of keeping customers is not always given quite as much mainstream attention.

Research from Econsultancy a few years ago demonstrated that seven out of 10 businesses reckon it easier to retain a customer than acquire one. If this is the case, why is more attention is not devoted to this topic?

In recent years, customer relationship marketing (CRM) has emerged as a key means by which businesses can tap into their existing customer base to generate easy profit. To find out a bit more about the potential benefits of CRM, Business Chief spoke to James Ray, CEO of Armadillo CRM, a big player in the space which underwent a management buyout earlier this year.

Ray was part of the three-man team responsible for the buy-out, and has been with the company since 1996, previously serving as Armadillo’s Client Services Director, 52

April 2018

Armadillo CEO James Ray

Chairman and MD prior to the buyout.

We asked him exactly how CRM works.

“Data is our raw material,” Ray explains. “In our case our clients tend to be businessto-consumer (B2C) brands so we are usually working with consumer data, purchases, clicks, logins, browsing and so on.

We mine the data for insights – analysing patterns, trends and signals. That insight feeds a strategy to engage, influence or change the customer’s behavior in line with our client’s objectives – usually with KPIs and a business case attached. Then we bring that strategy to life with the right mix of data, creativity and technology to change the customer

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S U S TA I N A B I L I T Y experience and deliver the behavior change our clients are seeking.

That might be to get the customer to spend more, become more loyal, or even to feel more positively toward the brand. To complete the loop, we analyze the resulting data and optimize the strategy.”

Armadillo, which is celebrating its 25th anniversary this year, lists McDonald’s, the BBC and Disney amongst its clients. The company claims to have run a number of CRM strategies as part of integrated

campaigns for clients which have driven double-digit uplifts in performance from the CRM channel alone. Impressive – but as companies embark on digital transformation and become more tech-aware, has CRM become more popular? “Yes,” says Ray. “The diversity of our client base points to this – digitally native brands like Hotels.com, where CRM is baked in to their DNA, as well as more traditional businesses like McDonald’s and Disney, where what started as a specialist channel is now core to their future plans.

“We often start working with businesses when they are consciously at a turning point in their approach to managing and using customer data.

We help them build the strategy for managing their customer relationships, which helps define the associated requirements for technology within the business. I think there’s a shift in client expectations going on, not only in CRM but in marketing services more generally, too. With the

“With the accessibility of powerful marketing technology and the empowerment it brings, clients’ needs are more fluid and varied than ever before” – James Ray, CEO of Armadillo CRM 54

April 2018

Armadillo CRM: data insight creative The launch of a new brand

accessibility of powerful marketing technology and the empowerment it brings, clients’ needs are more fluid and varied than ever before. Tailoring solutions and services to specific needs used to be a nice option to have – and a quirk of Armadillo – but now it’s an expectation.”

Armadillo is ambitious, and upon completion of the recent buyout, the new leadership announced the company now aims to double in size over the next five years. Integral to that is how it retains some of its

bigger clients, while ensuring it enables its clients do the same.

“We’ve been the retained CRM agency partner for McDonald’s in the UK since 2011, helping them develop a CRM capability, originally from a standing start, with a full service that includes analysis, strategy, data management, creative and campaign delivery,” says Ray. “We’ve been working with Hotels.com since 2015, supporting their in-house team on strategy, analysis and creative projects 55

“Where machines can automate and do tasks better than humans, it leaves more time for humans to do the creative and lateral things that create resilient and loyal connection between customers and brands” – James Ray, CEO of Armadillo CRM

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S U S TA I N A B I L I T Y that are tested in the North American market, and then rolled out globally.

And we’ve been working with The Walt Disney Company since 2007, currently helping them deliver eCRM campaigns across five key European markets.

“What I love about what we do is that every client is different.

For McDonald’s in the UK, who’ve had 48 quarters of consecutive growth, market share and sales are not a problem for them – the priority is building and sustaining customer affinity, so our approach is tailored to do that. That means eCRM programs that connect customers to new products and tastes according to their favorites and preferences, and driving them to use new convenience platforms like mobile ordering and delivery. For Hotels.com, who operate in a fiercely competitive and highly-commoditized market, it’s very different. Here, we work with the client to identify trends and patterns in customer behavior, and develop multi-channel CRM strategies to intervene with offers and messages in order to restore and

retain customer booking behavior.”

According to Ray, the key to Armadillo’s success has been “fundamentally about finding the right people” and the fact the team has an “obsession with service”. That, alongside the company’s capacity to change and evolve, has helped it navigate any choppy financial waters caused by major events such as the global financial crash.

The CEO recognizes that you always need to have an idea of where the next major disruption or industry innovation may be coming from, and Ray has already identified the key areas Armadillo will be keeping an eye on over the coming months and years.

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“We mine the data for insights – analysing patterns, trends and signals. That insight feeds a strategy, to engage, influence or change the customer’s behavior in line with our client’s objectives.”

– James Ray, CEO of Armadillo CRM

“For a while now, the big players in the marketing tech space have been sweeping all before them,” he adds. “We’re seeing quite a few frustrations on the client side as expectations have fallen a bit short.

Our tech teams are increasingly called on to develop additional tech to plug some of these gaps. I can see this growing: the creation of mini bits of bespoke tech as a service 58

April 2018

rather than an off-the-shelf product.

“As well as artificial intelligence and machine learning, in Europe there’s the new GDPR legislation. Brands need to re-permission some or all of their customers ahead of the May deadline. We’re helping brands to make a virtue out of the opportunity for customers to keep their investment in the data they give and what benefits they receive in return. Although it’s

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

been a long process for brands, it will also bring positive change in the long term, encouraging companies to talk to customers more openly about the value their data provides them.

“I think we’re still in the foothills of the potential for AI and machine learning, but it’s already changing the landscape. I think it’s a great opportunity not only for brands but for agencies like us – where machines

can automate and do tasks better than humans, it leaves more time for humans to do the creative and lateral things that create resilient and loyal connections between customers and brands.”

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AMSTE CITY FOCUS

ERDAM AMSTERDAM IS AIMING TO SOLIDIFY ITS REPUTATION AS A GATEWAY TO TECHNOLOGY INNOVATION IN EUROPE. LET’S TAKE A LOOK AT WHAT THE DUTCH CAPITAL HAS TO OFFER Written by HARRY MENEAR

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CITY FOCUS

AMSTERDAM – A BUSINESS ECOSYSTEM

WITH A LARGE ENGLISH-speaking community and a vibrant business ecosystem, Amsterdam is considered “a gateway to Europe and used as a launching pad for EU test markets,” claims Ton van ‘t Noordende, a senior partner at Dutch startup investor Keadyn. Leading tech giants Tesla, Uber, Optimizely, Netflix, Atlassian

‘ IN OCTOBER 2018, THE WORLD SUMMIT AI WILL EMPHASISE PRACTICAL DEMONSTRATIONS AND CUSTOMER ENGAGEMENT’

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and Nextdoor already have European headquarters in Amsterdam. The city also plays host to marketleading tech and funding events like Summit AI, IBC, Amsterdam Capital Week, StartupFest, and the TNW Conference. IAmsterdam reports that “there is no ecosystem in Europe that is as collaborative

and forward driven as Amsterdam”.

The city already plays host to several burgeoning artificial intelligence and machine learning startups, and is working to grow its ecosystem every year through its tech and funding events. Let’s take a look at a selection of Amsterdambased AI startups.

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CITY FOCUS

TECH STARTUPS IN AMSTERDAM

Applyr | www.applyr.ai Applyr is a seed-stage startup located in Sloterdijk, Amsterdam. The company specialises in intelligent chat-bot AI, designed to provide efficient solutions to the top of the corporate recruitment funnel. “The bots are smart and configurable, and provide intelligent insight,” according to IAmsterdam.

The intelligent bot-to-human software is intended to provide applicants with personalised conversations, in order to create “the most human experience possible”.

Unlike most chatbot services, which operate through third-party platforms like Facebook Messenger, Applyr integrates seamlessly into the customer company’s careers website and application system. The ability for recruiters to outsource initial recruitment stages to intelligent AI is expected to improve both workflow and applicant experience, as well as improve the quality of final stage hires. Applyr was founded with the financial support of Amsterdam startup studio VentureBuilders and currently operates with a staff of six.

Aidence | www.aidence.com Aidence is an early-stage growth startup that provides intelligent software solutions to the field of medical diagnostics. Its product uses computational engine Deep Learning, providing radiologists with an integrated insight and analysis tool that “automatically detects and classifies various disorders on multiple imaging modalities�.

Deep Learning is a revolutionary analytics program that has been shown to achieve human-level accurate readings of medical images. It is believed that Aidence’s radiology analysis tech will not only promote efficiency in the medical field, but can provide more accurate readings on average than its human counterparts.

Aidence announced last year that it had acquired another $2.75mn in seed funding from notable investors Northzone, HenQ, Health Innovation Fund, and the medical specialists of the Haaglanden hospital group. The firm is currently valued between $11mn and $15mn and employs 10 people.

CITY FOCUS

World Summit AI 2018 Amsterdam’s vibrant artificial intelligence community aims to celebrate its successes, as well as expanding its talent and funding pools this October. The Gashouder, a 3,500- capacity venue in the heart of the city, will once more play host to the World Summit AI. The organisers claim the event is set to “gather the whole ecosystem, enterprise, startups, investors and deep tech to discuss the future of artificial intelligence”. With the 2017 summit boasting 140 in the field, the Head of Software and Development for Sainsburys Argos described it as “the best event for feeling the global pulse of AI”.

In 2018, attendance is predicted to double, with an emphasis on practical demonstrations and customer engagement, everything “from starting your own AI experiment to deploying machine learning models to gain insight from data”.

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‘ HARVER ALREADY PROVIDES RECRUITMENT AND HR SERVICES TO TECH AND RETAIL GIANTS LIKE NETFLIC, VODAFONE, AND BOOKING.COM’

Harver | www.harver.com Harver is a late-stage growth startup specialising in talent-matching and evaluation aimed at improving recruitment strategies in the pre-hiring stage. The Amsterdam-based HR startup uses intelligent screening procedures that assess candidates on tasks they’ll have to do on the job by generating engaging test scenarios, according to TMI Investments. The service is also part of an initiative to modernise applicant experience, treating them “like a customer,” Harver claims.

The company already provides recruitment and HR services to tech and retail giants like Netflix, Vodafone, and Booking.com. Customer data reports a decrease in employee turnover of up to 70%, an increase in quality of hires of up to 300%, and a decrease in company time spent reviewing pre-interview applicants of about 90%.

The company announced in January 2018 that it had attained a further $4.2mn in funding from its primary backer, Insight Venture Partners, bringing Harver’s total funding to $15.2mn. The company is valued between $17mn and $25mn and employs 68 members of staff.

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BLOCKCHAIN

A FIGHT FOR YOUR RIGHTS

how blockchain can save the music industry

S—

n

Business Chief speaks with international superstar DJ and recording artist Gareth Emery (aka GTR) regarding the launch of his disruptive, blockchain-based music streaming service Choon, and why it represents a watershed moment for artist power in the music industry

BLOCKCHAIN

DJ

GARETH EMERY is aiming high with an ambitious new innovation designed to revolutionise the music industry as we know it.

“Rather than trying to build a solution on top of a system that is broken,” Emery declares, “Choon offers a new take. If we invented the recorded music industry today, this is how it should be done.”

Choon is a blockchain-based music streaming service and ecosystem designed to solve what its founders see as the music industry’s most fundamental problems. “Over the past 20 years we’ve failed to look after artists and pay them fairly – the contracting and accounting architecture is antiquated and a total mess,” says Co-founder and DJ Gareth Emery. “It was designed back in the days of jukeboxes and sheet music and is totally unsuitable for the modern world. We’re leveraging an Ethereum-based blockchain to deliver improved accounting and transparency. Rather than trying to build a solution on top of a system that is broken, Choon offers a new take. If we invented the recorded music industry today, this is how it should be done.”

Emery found success in the music 70

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Click to watch our exclusive interview with Gareth Emery on how blockchain can revolutionise the music industry

industry as a DJ and in-demand producer who still plays live to fans across the globe each week. He has 1.5mn monthly listeners on Spotify and boasts tens of millions of streams on Soundcloud, yet knows better than most how little one gets paid even when you pull in a comparatively large amount of streams. “I’ve seen how difficult it is to understand whether or not what you’re getting paid is fair,” reveals Emery. “When I get a statement from my record label, it’s hundreds of pages

“ We just want to break this system where 95% of all the money goes to the people in the middle and deliver that to the artist” – Choon Co-founder and DJ Gareth Emery

and impossible to work out. Although you can get accountants to audit your record label or streaming partner, the cost of doing so will outweigh what you’d win back. Though I’ve been able to supplement my income with live performances, which is 99% of what I make, not everyone wants to spend 200 days a year on the road. We want to create a system that allows those who don’t tour and play live the opportunity to make a good living from the music industry.”

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BLOCKCHAIN

“ We want to create a system that allows those who don’t tour and play live the opportunity to make a good living from the music industry” – Choon Co-founder and DJ Gareth Emery

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Choon is based around a priority token called Notes, an ERC20 token based on the Ethereum network which lives under the surface of the app, which is how artists get paid. When people make smart record contracts, which determine how the income for a track is split, it will be Notes that get divided up and distributed, on a daily basis, to each of the participants. “The cool thing is end users and listeners don’t need Notes to use Choon,” enthuses the LA-based Emery. “You can pay for streaming packages in traditional ways, while all the cryptocurrency architecture happens under the hood. Essentially, there will only ever be 80mn Notes created as an all-time total, with 50% of those distributed to artists over the first five years of the service. So that’s 20,000 notes a day, which will be distributed on a pro-rata basis – so it’s incredibly egalitarian and split across all the artists using the network. For those joining early, there will be an amazing opportunity to land grab and accumulate a lot of these Notes. At that point they won’t be worth a lot but, as the years go by, the utility of Notes will go up and they’ll be more useful, but harder to get as more artists compete for them.”

Choon can also utilise Notes on the 73

BLOCKCHAIN blockchain to deliver smart record contracts, so if an artist makes a track with somebody and they split the royalties 50/50, it’s written into the contract on the Ethereum network which is then used to divide up Notes in real time. “Today, it can take up to two years to get paid for royalties, which is absolute madness, it should happen in days,” maintains Emery.

“This also has wider applications.

An artist could pre-authorise people to be able to produce remixes of their tracks. We can also implement this for management contracts. Rather than having an offline paper contract that you may need to enforce via the courts if you don’t get paid, a smart management contract could stipulate, for example, that for the next two years a manager will get 15% of an artist’s earnings so that this can be actioned in real time.”

Choon is aiming to disrupt the hegemony of major players like Spotify, which in their early days sold large chunks of their companies to the major record labels in order to develop catalogue. “It probably seemed like a good decision at the time to build up the music available, but when you’re 74

April 2018

‘ Choon is based around a priority token called Notes, an ERC20 token based on the Ethereum network which lives under the surface of the app, which is how artists get paid’

Click to watch ‘An introduction to Choon’

trying to disrupt the market you shouldn’t sell a big part of your business to the very people you’re trying to disrupt,” says Emery, who believes the goal for Choon is to remove as many intermediaries as possible. “Anybody that puts their music on Choon owns their own music, the recording and the publishing. Artists are not signed to copyright societies so they’re completely free to get paid directly. We just want to break this system where 95% of all the money goes to the people in the middle and deliver that to the artist.”

Emery doesn’t want Choon to be a one-sided system where it’s just 75

BLOCKCHAIN another company providing services to the listener/customer, so he’s aiming to create an ecosystem where everybody can earn something. “We’ll offer the ability for playlist curators to get paid, so if you make a really popular playlist you can earn tokens (Notes),” he explains. “We’ll also have a tipping system so listeners can tip artists and artists can tip their super fans to reward them for their comments and support. Listeners can also earn tokens by streaming promoted tracks.

Rather than promoting music via Facebook ads, artist can promote their music directly on Choon. For listeners, it’s actually better than free. There’s a number of ways you can earn Notes and spend them within the ecosystem.”

Emery reckons his dream team of co-founders are ready to do more than just shake up the dancefloor: “John Watkinson and Mark Hall are hardcore, blockchain Ethereum

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developers, while Scott Sartin is a chartered accountant who specialises in the music industry, so he understands the needs of artists to be paid fairly.

Our advisory team also features 2017 Grammy winner RAC and David Hyman, former CEO of Gracenote and Beats Music.”

“ If we make the music industry transparent and more democratic, allowing artists to get paid what they deserve, that for me is success” – Choon Co-founder and DJ Gareth Emery

Though aware that the volatility of the cryptocurrency market may not be for everyone, Emery is excited about “leveraging the power of blockchain for what it’s really good at” – financial security and public transparency. “We need this because of the decentralised nature of Choon,” he says. “Meanwhile, until the blockchain catches up, we handle other elements in a centralised way. For example, we deliver the actual

music streaming via a central server because distributed file storage is not reliable at present.”

Emery admits the challenge lies in finding enough quality product to build Choon and expects the balance of genres on the service to be 80% in favour of electronica. “Most of the catalogue existing right now is signed to those old legacy systems, but we’re okay with that; we’d rather not lock ourselves in and have more freedom.

We’re not interested in streaming Elvis and The Beatles. If you want to listen to those artists there are many options out there to do that. We’re not even interested in Calvin Harris or Ed Sheeran, we want to find the next artists like these that are making music in their bedrooms currently undiscovered, so that when they look at the portfolio of options they’re not just signing up to a 360 deal and losing the rights to their music for life.”

So, for Emery, what would represent a measure of success for Choon in the coming year? “If we make the music industry transparent and more democratic, allowing artists to get paid what they deserve, that for me is success.”

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T O P 10

TOP 10 BIGGEST COMPANIES IN EUROPE The 10 European companies with the highest reported revenue at the end of 2017.

Revenue data has been established using Fortune’s Global 500 list Written by HARRY MENEAR

T O P 10

09

Allianz $122.2bn

www.allianz.co.uk

10

BNP Paribas $109bn

www.bnpparibas.co.uk France’s largest banking house, BNP Paribas, generated $109bn in revenue in 2017. While this represents a 2.2% decrease in revenue when compared to 2016, BNP experienced a profit increase of 14.7%, according to Fortune. This is the third-largest profit increase in the top 10, and is predicted to increase further in the future, as BNP reveals plans to use Brexit as an opportunity to expand its share of the UK’s financial market. BNP is currently ranked 14th among investment banking houses in the UK, according to the Financial Times.

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Allianz, the world’s largest property and casualty insurer, is based in Munich, Germany, and last year declared $122.2bn in revenue. While this represents a 0.6% revenue decrease in comparison to 2016, the company’s profits have grown by 3.7%. This makes 2017 a 10-year high point for company profits, according to Forbes. Allianz CEO Oliver Bate has recently warned that the improving health of the global economy may experience setbacks in 2018. As a result, Allianz is offering enhanced coverage for commercial property owners going forward by combining property and casualty covers.

07

AXA $143.7bn

www.axa.co.uk

08

Total $127.93bn

www.total.com Total, France’s largest oil and gas conglomerate, reported a total revenue of $127.93bn in 2017. At 10.8%, Total experienced the second-most severe revenue decrease in the top 10, in keeping with the industry as a whole, but experienced a profit growth of 21.8%. In April 2018, Total took ownership of the Lapa and Santos Basin oil fields from Petrobas, as part of a $1.95bn alliance deal.

Expansion across multiple holdings is expected to add over 200,000 barrels of crude per day to the company’s production capacity.

With a reported revenue of $143.7bn, France’s largest insurance company AXA experienced revenue growth of 11.2%, the largest of any company on the list. Company profits have grown steadily at 3.5%, and a recent agreement between AXA and transportation giant Uber is expected to promote further growth. The new deal provides more comprehensive cover to Uber’s drivers for “medical expenses, disability indemnities, and survivor benefits in case of an accident”.

‘A recent agreement between AXA and transportation giant Uber is expected to promote further growth’

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T O P 10

05

Daimler $169.5bn

www.daimler.com

06

Exor Group $154.9bn

www.exor.com Italian investment company Exor Group reported a yearly revenue of $154.9bn in 2017. While this figure represents a 1.5% increase over the previous year, Exor registered a profit-reduction of 21.1%, the worst of any company on the list. The Exor Group, through its subsidiaries, controls auto manufacturers (Fiat, Ferrari, Maserati), real estate service providers (C&W), and the Juventus FC football franchise. At over 300,000, Exor employs the largest workforce in the top 10. The company’s asset portfolio has shrunk dramatically in recent years: from $165.8bn in assets four years ago to $11.348bn this year, according to Forbes.

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German auto manufacturer Daimler reported a revenue of $169.5bn at the end of 2017, according to Fortune’s 500 list. The company has experienced stable growth in revenue (2.2%) and profit (0.9%), despite the decision to recall 3mn diesel vehicles in the summer of 2017 in response to the revelation that its products were performing far below carbon emission standards.

The recall effort has been estimated to cost over $220mn by Fortune. The company has shown steady growth in profit since turning a loss of over $3.6bn in 2015. The scandal is being held responsible for Daimler’s descent down the Fortune Global 500 list this year, to a worldwide position of 17.

03

British Petroleum (BP) $186.61bn

www.bp.com

04

Glencore Plc $173.9bn

www.glencore.com Swiss commodities giant Glencore reported a net revenue of $173.9bn this year, the figure representing a 2.2% increase over 2016. Profits showed no change, according to Fortune’s Global 500 list. The company’s investment in mining and metals, agricultural equipment, and energy products has resulted in a slow return to profitability after massive losses in 2011. The steady sale of its assets has seen a reduction in company value of almost $100bn since 2012. Steadily declining commodities prices and rising costs have caused concern among investors over Glencore’s future, reports Fortune, and the company has been urged to reduce spending further in the coming year. Glencore has fallen two places on the Fortune Global 500 list this year, down to number 16 overall.

With a net revenue of $186.61bn, BP continues its descent through the Fortune Global 500 rankings, from its high point of second in 2005, dropping again to rank 12th in the world this year.

The company experienced a 17.4% revenue decrease in comparison to the previous fiscal year, although profits remained the same. BP displayed promising signs of resurgence this year, resuming the practice of share buybacks in a move that shows Big Oil is learning to turn a profit in a post-oilcrash market, according to Fortune.

‘ BP displayed promising signs of resurgence this year, resuming the practice of share buybacks in a move that shows Big Oil is learning to turn a profit’

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T O P 10

‘ Deep spending and job cuts have allowed Shell to adapt to the $50 per barrel oil market’

02

Royal Dutch Shell $240.03bn

www.shell.com Royal Dutch Shell is incontestably this year’s European success story. While the company’s net revenue $240.03bn decreased by 11.8% from the last financial year, Shell experienced a profit increase of 135.9%, the highest by far of any company in the European top 10. Deep spending and job cuts have allowed Shell to adapt to the $50 per barrel oil market. Third-quarter profits were also boosted in Shell’s upstream sector by Hurricane Harvey, which temporarily reduced US oil production by over 25%. The company announced it remains confident going into 2018, provided world oil prices remain above $50 per barrel.

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01

Volkswagen $240.4bn

www.volkswagen.co.uk

Boasting the highest revenue of any European company at $240.4bn, Volkswagen continues its steady ascent up the Fortune Global 500 list, with a revenue growth of 1.5%, reaching an all-time high of sixth in the global rankings. While profits remain unchanged from 2016, Volkswagen increased sales in 2017 by 4.3%, according to German news source De Local. In the face of financial setbacks, Volkswagen has turned to the emerging markets of electrical and self-driving cars, acquiring Aurora Innovation at the beginning of 2018, financially backing the startup’s aim to have self-driving cars on the streets in between two and five cities by 2021.

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Reimagining the utilities sector with trailblazing technologies Written by Laura Mullan Produced by Andrew Lloyd

CADENT GAS

With a pipe network connecting 11mn homes and businesses, Cadent Gas is using technological innovation to meet its customers’ needs, today and tomorrow

H

ow would we set up the company if we were starting from scratch? If we were a startup, what would we do?

These are the wide-reaching questions that Cadent Gas asked itself when the firm decided to diverge from the National Grid last year and carved out its own path in the utilities sector.

With an invigorated startup mentality and technological ingenuity, the UK-based company has developed a strong tech strategy and is set to become a frontrunner in the competitive utilities industry.

A startup mentality With over 18 years’ experience in the energy and utilities business, the task of developing a brand

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CEO, Chris Train

new digital roadmap has fallen into the capable hands of Chief Technology Officer James Houlton, who described the company’s separation from the National Grid as a crucial catalyst for change.

“The biggest change I have seen is that we now have a real startup mentality,” observes Houlton.

“Separating from National Grid has allowed us to lose the shackles of such a large utility organisation. It’s allowed us to ask ourselves ‘How

would we set this up if we had a clean slate? If we were startup what would we do and how would we do it?’

“This mentality is helping our team drive performance, drive efficiency, and really care about the lives of the people that we affect on a daily basis - our customers” he adds.

Technological ingenuity Re-evaluating its industry standing has allowed Cadent to reimagine a new technology pathway.

europe.businesschief.com

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BUSINESS DOESN’T WAIT The question IT leaders need to ask is “Are we displaying the sense of urgency which business expects from their technology partner?”. Today, the cloud must be an integral part of business growth strategies. More and more enterprises are adopting Cloud as a permanent and non-negotiable component of their business plan. They expect IT to lead the way towards achieving this cloud state of mind.

Enterprises with a cloud state of mind become service oriented, have partnered with hundreds of leading enterprises to help them achieve a cloud state of mind and empower their business with a platform for growth.

12K+ PRACTITIONERS ACROSS PUBLIC, PRIVATE AND HYBRID CLOUD CLOUD BUSINESS SOLUTIONS FOR ALL MAJOR INDUSTRIES PLATFORM PARTNERSHIPS WITH THE LEADING CLOUD PROVIDERS CLOUD INNOVATION LABS AND CENTRE’S OF EXCELLENCE IN THE UK, INDIA AND NORTH AMERICA PROVEN CLOUD MIGRATION TOOLSETS 200+ CUSTOMER SUCCESS STORIES, 1000+ PROJECTS

Visit https://www.hcltech.com/cloud to know more or write to cloudnative@hcl.com.

HCL CLOUD NATIVE SERVICES Cloud Consulting | Cloud Migration| SaaS Implementation | Cloud Native Build | Cloud Operations

CADENT GAS

“The biggest change I have seen is that we now have a real startup mentality” James Houlton, CTO, Cadent Gas Understanding and adopting practices followed by major technology players such as Amazon and Microsoft is one way we see giving Cadent a competitive edge, says Houlton.

“The business can’t operate without technology and technology can’t operate without the business,” says Houlton. “There’s much less of a divide as there has ever been. When we devised the IT strategy we started by talking to our business colleagues to understand some of the challenges and the pain points they have and how we can serve our customers better.

“It’s about understanding what we are we driving for, what our goals are and what type of

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organisation we want to be.”

Technology has, by all accounts, become a fundamental element of Cadent’s operations.

It’s no longer the job of the IT department, it’s the responsibility of everyone in the organisation.

It’s no longer a supplementary function, it’s a driver of change.

In many aspects, technology is changing the operating model of the organisation, says Houlton.

Driving efficiency and excellence “In some cases where we’d traditionally turn to human resources to do things, we’re asking, ‘could technology deliver that function in an easier, consistent and more efficient way?’” Houlton says.

“Through robotics and automation, for example, we’re looking at how we can be more effective and readily available because technology can run 24/7, whereas humans can’t,” he adds.

“It’s also about improving the quality and efficiency of delivery, so where a human could make errors, automation and robotics could eliminate these.”

CADENT GAS BOASTS OVER 82,000 MILES OF PIPELINE, DELIVERING GAS TO AROUND 11MN HOMES AND BUSINESSES

CADENT GAS

“I’m a great believer in the fact that you can’t really futureproof technology because of the pace and the rate that things are changing today” James Houlton, CTO, Cadent Gas

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TECHNOLOGY

The origins of the firm’s digital transformation can be traced back to April 2017, when National Grid sold a majority stake in its gas distribution business and became Cadent, an independent, privately-owned organisation.

As part of this division, Cadent also has to separate all of its technologies – its networks, the data centres, applications and more – by March 2019. It is a mammoth task, but Houlton says that it’s helping the Cadent team to focus on what matters – “being as efficient and effective as we possibly can, maximising performance and productivity, and delivering a great service to our customers.”

An agile, fast-moving platform But when technology is everchanging and constantly improving, how does Cadent keep up with the pace of innovation?

“I’m a great believer in the fact that you can’t really future-proof technology because of the pace and the rate that things are changing

today,” Houlton says. “Our strategy was to create a foundation that allowed us to be agile and fast-moving so that we could respond to the changing demands of the business.”

To this end, Houlton says that the company’s move to a public cloud, specifically Amazon Web Services (AWS), was “fundamental” to give the company the scalability and flexibility it needed to deliver solutions quickly.

A competitive edge What’s more, Cadent’s strategy has also involved looking at the areas where it equaled competitors in the marketplace such as its back-office operations, HR, finance, procurement, and its ERP system, and standardising the back office to maximise efficiency and value. Keen to deliver an effective SAP transformation, Cadent is moving to SAP S/4HANA for its back-office functions. They key is simplification – removing the complexity built up over multiple years and adopting best practice driven by our technology.

“It’s been an interesting shift in culture and conversation,” Houlton

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says. “Those areas of the business are very keen to standardise the way they operate and their back-office processes around the technology.

This is driving standardisation of the business processes and is shifting the way we operate, our attitude and our mindset.”

Simultaneously, Cadent has also highlighted the core areas which differentiate the business, such as its field technology, its customer experience, and its Critical National Infrastructure, and is ramping up technological investment in these areas.

Such investments have seen Cadent explore the use of modern innovations such as virtual reality, mixed reality, sensor technology and the Internet of Things, to add value to the organisation.

“If we didn’t take a look at these technologies which offer flexibility, agility, and scalability, then we’d be left behind,” says Houlton. “These technologies are key to help us achieve our strategy, but they will also ensure that Cadent pushes to

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the top-of-the-pack. We are a new organisation, we want to do things differently. We’ve got a massive focus on efficiency and these technologies in the marketplace allow us to achieve that by reducing costs and reducing waste.

“We’ve tried to create a culture that showcases how technology can make us fast-paced and agile,” he continues. “It doesn’t always have to be a multi-year, or multi-million-pound technology to deliver a quality service. We can

TECHNOLOGY

turn things around very quickly, we can use digital technologies and it doesn’t have to be costly.”

Sustaining strong partnerships Such a root-and-branch transformation of Cadent’s digital capabilities wouldn’t be possible without its strong strategic partnerships which are helping the company on its journey to become a technology-enabled, technology-driven organisation.

“We can’t do it alone,” notes Houlton. “We need to be close to what’s happening in the technology sphere, and utilising our partners is helping us achieve that by accelerating our performance and growth. We have capability, but we can’t attract the talent or the investment that our strategic partners can. Without those partnerships, we wouldn’t be as successful as we are going to be, and we have been so far.”

Houlton says that the company’s five-year partnership with HCL Technologies will be vital for its digitisation strategy. “HCL Tech is

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TECHNOLOGY

“If we didn’t take a look at these technologies which offer flexibility, agility, and scalability, then we’d be left behind” James Houlton, CTO, Cadent Gas our main application support and delivery partner,” he explains. “The firm has a wide breadth of experience and a large client base which we can really make use of. In terms of the thinking that’s out there, some of the solutions that they’re delivering for us are really accelerating our route to market and helping us grow.

“SAP has also been a key partner as we’ve got a large SAP footprint,” he continues. “Changes in that space, in terms of engineering capability, are going to be key. Therefore, we’re

utilising its global experience and the breadth of its customer base to really understand what other people are doing, how they’re really being performed, and bringing that back in. It’s really accelerating our thinking and our innovation.”

On top of this, Amazon and Microsoft are key partners which Houlton describes as key accelerators for technological innovation.

“Amazon’s cloud platform AWS has been fantastic and we’re also working with the company to explore how they achieve customer excellence because they are stand-out in this area,” he says. “We’re working closely with Amazon to see how we can drive innovation across the company more than we could do if we were doing it alone.

“We’re also talking to Microsoft about our challenges and how we could better innovate,” he continues.

“We’re talking to them about analytics, so for example, how we could use the Office 365 platform to really draw out some great analytic insights which could promote employee productivity.”

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“We want to be a shining example that industry leaders and our strategic partners use as a reference point�

James Houlton, CTO, Cadent Gas

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TECHNOLOGY

Cadent Hinckley team

Above and beyond Cadent’s startup mentality, technological ingenuity and strong industry partnerships have culminated to create a firm which has achieved meteoric success in its brief history.

The UK firm is quickly becoming one of the top gas distributions companies in the country, but for Houlton, it’s also about setting an industry-wide standard of technological and business success.

“We would like to see Cadent standout as an industry leader and a technological leader,” he reflects. “We want to be a shining example that industry leaders and our strategic partners use as a reference point as to how companies can use technology to maximise value for their customers and derive benefit for the organisation.”

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Propelled by procurement Inside Flybe’s supply chain overhaul

Written by Catherine Sturman Produced by Richard Durrant

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lying from more UK airports than any other regional airline, Flybe offers a customerfocused, cost-effective and time-saving advantage over its competitors. The company has undergone a significant transformation to become the airline of choice.

Recognising the growing importance of procurement across its operations, Director of Procurement & Finance Business Partnering, Richard Young has streamlined Flybe’s internal processes to become more seamless and deliver increased value to its customers.

Responsible for engagements relating to all commercial and contracting matters with external suppliers, Young has undertaken a thorough overhaul of Flybe’s direct and indirect spend, including its aircraft fleet acquisitions, disposal and financing activities.

Driving efficiencies Young has spearheaded transformational change across the procurement department, helping to

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Flybe’s fleet consists of 81 aircraft

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ensure its position as an increasingly pivotal participant in key strategic decisions made by the business.

“We’ve undergone quite significant transformation, a part of which has been to centralise procurement. It’s moved away from individual departments doing their own buying to a much more strategic function. We are now involved in all activities relating to supplier expenditure, be it IT or marketing, engineering or maintenance, becoming a business partner to all our internal stakeholders.

“We support all departments to improve security of supply and drive better value,” he continues. “We’ve also organised ourselves in a category management structure, where individual procurement team members are accountable for chosen areas of spend.

Their specialist knowledge adds value that makes a more effective procurement experience for our business owners.”

As a result, Flybe has gained increased clarity across its procurement functions, enhanced its knowledge and capabilities and delivered significant cost reductions across the business.

“Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery,” says Young.

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Technological capabilities The company’s three-year transformation has impacted all areas of the business. Throughout its ‘Back to Basics’ project, Flybe enhanced its back-office capabilities, focusing on three main areas – finance, HR and procurement functions.

“Driving out cost was only part of the motivation,” notes Young. “One of the key aims was also to improve

governance and compliance and improve the general quality and availability of data that, in turn, would better support decision making.”

As such, the overhaul of Flybe’s centralised procurement systems has been a key part in contributing towards an improvement in sustainable business processes.

“In actioning these improvements, we conducted a comprehensive

“Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe

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sourcing process involving a Request For Information (RFI) and a Request For Proposal (RFP), looking at both integrated enterprise resource planning solutions as well as best of breed systems with the added need for them to be integrated with one another,” explains Young.

“We elected to go down the last best of breed route as we felt that presented a better

overall fit for our business.”

In the procurement area, investing in Wax Digital’s web3 source to pay (S2P) solution has enabled Flybe to gain meaningful cost savings, streamline sourcing and purchasing processes whilst establishing improved governance and controls relating to supplier engagement.

“We have also invested in Cleardata’s off site invoice

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Flying high with Sage Business Cloud Why Europe’s largest regional airline designed its business transformation with Sage Business Cloud Enterprise Management at its heart When Flybe launched its ‘Back to Basics’ initiative, the quest to build a fully integrated solution using best-of-breed technology for finance, HR and procurement led to the airline adopting Sage Business Cloud Enterprise Management (formerly Sage X3).

“The ultimate goal was more visibility and control by refining and redesigning how we did things across the business,” says Flybe’s finance systems manager, Matt Julyan. “We wanted to make things faster, more efficient and eliminate any potential failure points in our procedures.”

To accomplish this, Flybe designed an integrated network of best-of-breed business software solutions, including web3, AMOS, Airpas and iTrent, with Sage Business Cloud Enterprise Management’s finance capabilities at the heart of these interconnected solutions.

“Sage is at the core of our system’s design,” Matt says. “It monitors the financial performance of everything we do, so any interconnecting software has to work with Sage.”

Supported by the real-time data integration solution Talend, Flybe has created a platform that integrates with industry-specific functionality from a carefully selected range of software – including Sage’s enterprise management.

A platform for progress Placing Sage’s enterprise management solution at the centre of its system provides Flybe with numerous benefits, including the ability to introduce best-practice financial processes. “Sage’s finance functions are built around industry best practice,” adds Matt. “We are now planning to improve, and Sage will be a valued partner to help us on this

journey so our employees can really see how much it benefits what they do.”

This ties into Flybe’s aim of driving business-wide consistency and uniformity, as Matt explains: “One of our objectives was to implement a solution that could automate as many financial processes as possible to ensure process consistency. Where needed, the Sage system gave us effective controls to steer and limit those processes.”

But the creation of Flybe’s Sage-centred system brings far more than a change of process for the airline. “It’s much more than a change of method,” Matt explains. “The usability of Sage Business Cloud Enterprise Management means employees are far more self-sufficient.

“For example, we’ve now got the ability to create bespoke reports within Sage. People no longer have to rely on a specific person to do it for them.”

And continuous business improvement is a core focus for Flybe, as Matt explains: “Where there are changes to the business, we have people dedicated to managing them. My team takes responsibility for making sure the finance system can deliver exactly what the business needs now and going forward.”

Partnering for success To ensure Flybe could achieve the aspirations of its ‘Back to Basics’ initiative, the company turned to its long-standing Sage Business Partner Datel to evaluate Sage Business Cloud Enterprise Management. The solution was selected as best-ofbreed for the financial element of the solution. From there, Flybe and Datel embarked on implementing the Sage software and integrating it with the other selected applications.

“Datel has been our Sage support partner for over 25 years,” Matt says. “We had built trust in them from previous experience and knew Datel could deliver what we wanted.”

Flybe also decided to adopt Datel’s Managed Services offering to support the business in its focus on continual improvement. “Sage is such a core component for us, and it’s key for us to embrace the rich functionality and best business practice it offers,” says Matt.

“Datel’s managed service is absolutely critical and gives us access to the expertise we need, allowing us to further develop our knowledge of the Sage software. We’ve become more self-sufficient and confident in Sage Business Cloud Enterprise Management thanks to the Datel team.”

The same partnership that supports Flybe’s Sage system also assisted with the integration into that system, as each solution constantly exchanges vast volumes of critical information, “Sage’s integration flexibility has been beneficial as we have designed interfaces to fit with the wider systems design,” says Matt.

“Having a partner that understands and can implement Sage on that basis is proving to be very beneficial, especially given the complexities of a best of breed solution.

“Datel’s support gives us the confidence we need to continue to improve our processes and drive business efficiency.”

Your industry. Our expertise.

Expert implementation, accomplished integration, dedicated support As the UK’s largest Sage Business Partner, Datel has the expertise and outreach to support your business wherever it goes and however it grows.

And with a highly accredited technical support team, we’re dedicated to guiding your success with minimum disruption and maximum uptime.

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F LY B E Employee engagement is valued highly by Flybe

Flybe operates a fleet of 81 aircraft – 56 Bombardier Q400, nine Embraer E195, 11 E175 & 5 ATR 72s and was recognised as the most punctual UK-based airline in the latest report on ‘Best and Worst Airlines’ issued by leading consumer watchdog Which? in January 2018.

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processing solution to reduce on-premise invoice handling and also Sparefinder’s data tool to help standardise our non-aircraft materials and service master data.”

Additionally, Flybe has invested in new technology in its HR areas, procuring iTrent from Midland HR along with a new Finance platform utilising Sage’s X3 software.

Lastly, the decision to implement specialist airline aviation system AMOS (in the engineering maintenance arena) and Airpas to process direct operating cost transactions, will further enable operational efficiency. Young explains

CASE STUDY

Procurement automation takes off at Flybe Optimising spend, streamlining supplier management, reducing risk and ensuring best-value purchasing across the business; why Flybe has implemented Wax Digital web3 Source to Pay.

Integrated supplier master data All master supplier and contract data is hosted in web3, fully integrated with Flybe’s Sage X3 finance system Procurement time and cost savings An end-to-end electronic procurement process cuts manual workloads and administration costs Increased efficiency and output

Powering our source to pay processes with web3 brings around 2,000 vendors with an annual spend of several hundred million pounds under management. All our supplier and contract master data is managed in web3, fully integrated with Sage X3 and our airline-specific direct procurement systems such as Airpas and AMOS, so we’re now in total control of supplier data quality and risk management. We expect significant and ongoing cost savings for the business.

Richard Young Director of Procurement and Finance Business Partnering, Flybe

Flybe is doing more with less, running sourcing events more frequently to identify cost savings for the business across a wider category set Improved compliance and risk mitigation Electronic supplier due diligence and on-boarding, with all supplier master data stored centrally, alleviates supply chain risk in a heavily regulated industry Enhanced supplier negotiations Using web3 Contract Management, automated alerts stop contracts rolling over so Flybe can renegotiate terms and prices to ensure suppliers continue to deliver great value Supporting strategic initiatives As part of a long-term aircraft fleet review, web3 drives efficiencies in purchasing process with manufacturers across the world

Hello. We are Wax Digital For the past 17 years we’ve been providing innovative procurement and spend management solutions to help organisations reduce costs, achieve greater efficiencies and improve spend compliance and control. Our web3 software is used in over 100 countries, with 260,000 users managing £23bn of spend annually.

Let’s talk about your next eProcurement project. Call us on 0333 323 1187 or visit waxdigital.com

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“We employ different sourcing strategies and test the market more frequently when looking at commodity products” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe

that as part of the ‘Back to Basics’ project, all new systems are being integrated through the use of data extraction technology from Talend.

“We’re now at the benefits realisation stage,” he says. “The majority of the systems are now implemented. We selected solutions based on a number of factors including functional and cultural fit, vendor flexibility and cultural alignment with Flybe’s core values.”

Enhanced value The investment in technology and subsequent benefits

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has also transformed Flybe’s relationships with its suppliers.

“We have relationships with over 2,000 suppliers, many of which are, of necessity, strategically long term when relating to the supply of mission critical goods and services,” notes Young.

“For others, where there may be multiple supply options, we employ different sourcing strategies, testing the market more frequently when looking at commodity products like office supplies and IT hardware.

“Being a publicly-listed company, it is critical that we adhere to agreed corporate governance and that the

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new technologies we have employed are paramount in achieving the overall compliance that is so necessary in managing and maintaining relationships with both new and existing suppliers,” he continues.

“This allows us to mitigate any potential credit risks on the supply side whilst at the same time making the overall source to pay cycle more operationally efficient.”

Customer focus With the General Data Protection Regulations set to become enforced within Europe in May,

how will this impact Flybe’s operations going forward?

“This is mission critical to our business and we are taking it very seriously,” observes Young. “To ensure compliance, we continue to invest in talented people and technology across all relevant areas of our business to ensure that we have covered off all foreseeable eventualities.

“We are also naturally monitoring Brexit developments closely,” he adds. “The most important thing for us is to receive clarity from the Government; however, we don’t fly

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point to point within mainland Europe, which means we are less exposed than others.

“Of course, no one really knows truly what the impacts are going to be, but nevertheless, because we do operate in Europe it is something that we are preparing for.”

Flybe would not be where it is today without the commitment of both its dedicated staff and loyal customer base.

“We are passionate about the regional communities we connect and serving them is at the very heart of our business. This is our purpose – our mission,” concludes Young.

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Richard Young MCIPS, MBA, BA(hons), has over twenty years’ procurement and supply chain experience gained in a number of industrial and consumer facing businesses across manufacturing and service sectors. He started his career recruited onto the graduate management scheme of British Steel plc (latterly part of the Tata group), where he was quickly promoted and moved through the ranks being sponsored to complete an MBA at Warwick University. He spent several years in the third party logistics industry managing operations for Sainsbury, Pedigree Masterfoods and Nestle, before moving on to senior procurement leadership positions for Ideal Heating (formerly part of Caradon plc) and African Minerals, where he worked extensively overseas. He joined Flybe Group plc in 2014 where he has led the transformation of the procurement function having more recently taken on additional responsibility for property & estates, aircraft fleet financing & trading and finance business partnering.

Married with two children, outside of work he enjoys cycling, hill walking, music and travel.

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REVO LUTI O NI real estate supply chains with a state-of-the-art supplier portal Written by Laura Mullan Produced by Richard Durrant

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Unveiling its trailblazing CBRE MySupplier platform, the real estate giant is set to meet the supply chain demands of the future

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ransforming the supply chain of the world’s largest real estate services company is no easy feat, but thanks to its innovative thinking and technological ingenuity CBRE is making it look easy.

With acquisitions of Norland Managed Services and Johnson Controls GWS under its belt, the Californiabased company has undergone a mammoth supply chain transformation in recent years.

Thanks to these purchases CBRE now offers a diverse range of real estate services which gives the firm the platform to not only guide businesses about how they should invest their money, but also how they should run a building – whether that means advising them on their space management or actually running the facilities for them.

B E S P O K E S U P P LY C H A I N S Despite such far-reaching changes in its supply chain, one thing has remained the same at CBRE – its commitment to its customers.

Anna Williams, EMEA Supplier Engagement Director, says that the

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ANNA WILLIAMS EMEA SUPPLIER EN GAG E M EN T D I R E C TO R

Williams has over 10 years’ experience in senior supply chain roles, spanning a number of industries including Facilities management, Rail, Pharmaceutical, Construction and Professional Services.

In her eight years at CBRE, she has worked in different supply chain functions and currently oversees the Supplier Engagement and Compliance Programmes.

In this role, she has designed and worked on the development of CBRE’s industryleading Supplier Portal, CBRE mySUPPLIER.

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COLLABORATION /kelabe’reijn/ noun

A purposeful relationship in which all parties strategically choose to cooperate in order to achieve shared or overlapping objectives.

The CBRE Combustion Partnership is a collaborative partnership comprising of CBRE and a group of their preferred suppliers and manufacturers, this ensures delivery of a consistently high standard of quality, innovation & value in all aspects of commercial gas and heating services to their client.

Delivering engineering excellence www.jdservicesltd.co.uk Info@jdservicesltd.co.uk Tel: +44 (0)1322 315588 JD Services (JDS) are specialists in the design, installation, commissioning, service and maintenance of air conditioning and Heating services. With expert advise and response to match any of your service requirements.

UKS

Keeping the Customer in Focus

Keeping the Customer in Focus www.uksouthservices.com Info@uksouthservices.com Tel: +44 (0)1252 549 272

UKS delivers its customers, a smooth and seamless experience from survey to job completion through our paperless management system. We oer responsive, dynamic, knowledgeable and tailored solutions to our customers through our Operations team.

Maintaining our excellent reputation within the service industry www.protech-heating.com Info@protech-heating.com Tel: +44 (0)141 771 9567 We specialise in high quality bespoke technical solutions, for all types of heating / water systems and complex boiler and burner applications delivered by a professional team focused on customer care and excellent client communication.

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company’s downstream business model is vital to this customer-centric ethos.

By not centralising its procurement activities and offering bespoke supply chains to its customers, CBRE ensures that the spotlight is truly on its customers’ needs and wants.

“I think what gives us a competitive edge is that we treat each supply chain as an individual organisation,” Williams explains.

“We take our time to understand our supply chain. We make sure it fits within each of our client’s requirements and we offer bespoke supply chain partners rather than having a one-size-fits-all solution.

“I think that helps us to create a worldclass solution for our clients and it also makes suppliers want to work with us because we recognise their core skills and competencies across

“I think what gives us a competitive edge is that we treat each supply chain as an individual organisation” A N N A WI LLIA MS, EMEA SUPPLIER EN GAG E M EN T D I R E C TO R

CBRE’s supply chain transformation has been a customer-focused one

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geographical areas and utilise them,” she adds.

The real estate market is a fiercely competitive one, but CBRE distinguishes itself by also offering sector-specific solutions.

“We operate across a wide range of sectors such as industrial, healthcare, life sciences, heritage, stadia and education,” notes Krys Stanton, Supply Chain Solutions Director. “Our strategy is to tailor the supply chain to the sector so that clients know they’re buying into a company which is not only a reputable brand but also understands the sectors that it’s operating in.”

A DIVERSE R ANGE OF SUPPLIERS With both its global footprint and bottom line set to soar, the company has gained a well-earned reputation as a market leader in commercial, leasing, investment sales, and residential project managing.

Such renowned success has come about for a culmination of reasons, but it can partially be traced to the way CBRE works with both large corporations and SMEs alike.

“This means if the client has requirements to use local suppliers or diverse suppliers such as women-owned businesses. We can adapt the supply chain to make sure they’ll get what they want,” Williams says. “On the other hand, some clients may want to use international players, so we also adapt to that to ensure that we offer a

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R ACH EL LEE V P, G L O B A L S U P P LY C H A I N T R A N S F O R M AT I O N

Lee has over 30 years' experience in senior supply chain roles in the UK, New Zealand and Australia, spanning a number of industries including Facilities management, FMCG, Pharmaceutical, Retail, Manufacturing, Telecoms, IT and Airport management.

In her 10 years at CBRE, she created the supply chain function from green fields, integrated key acquisitions, and established the supply chain team as a critical business partner.

In this role, she has built an industry-leading approach to supply chain management which sets CBRE apart from its competitors in the FM market.

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solution tailored to the customer.”

A L E A D I N G S U P P L I E R P O R TA L With a global spend in excess of $50bn provided by more than 85,000 global suppliers, delivering a revolutionary supply chain transformation was by no means a simple task.

To take on such a mammoth function, CBRE looked to the marketplace to find a supplier portal which would help it streamline its operations and drive operational excellence.

When it couldn’t find one, it made CBRE MySupplier.

This digital tool isn’t an

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off-the shelf-package – it was specifically designed by CBRE, and it is this innovation which has been the cornerstone of the company’s supply chain journey.

Whether it’s making the firm’s supply chain more transparent, encouraging supplier engagement or offering supplier feedback, it seems the leading compliance tool has elevated the firm to new heights.

“Our supply chain strategy involves not consolidating or solely spending with big suppliers,” explains Rachel Lee, VP, Global Supply Chain Transformation.

“We continue to use SMEs to fully support our local customers and that means we have a huge network of

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suppliers that we work with in Europe.

We wouldn’t be able to manage such a large network without our supplier portal. This is a problem that many other companies have, and nobody’s solved it until now.

“This means we’re putting decisionmaking back into the hands of our client teams rather than a centralised procurement function making the decisions,” she continues. “We’re giving business managers the tools they need to make the right decisions around which suppliers to use.”

C O M M I T T E D TO C O M P L I A N C E Compliance is one of the most deeprooted challenges in the supply chain discipline today and with a broad footprint spanning across continents, CBRE has ensured this

“We build relationships with all suppliers, small, medium, or large. It's not a process, it's not SRM in its theoretical term, it's about how we deal with suppliers on a dayto-day basis. SRM to us is a real living and breathing philosophy that everybody is involved in, it's not just a process run by the procurement function, it's our dayto-day business” R ACH EL LEE, V P, G L O B A L S U P P LY C H A I N T R A N S F O R M AT I O N

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portal adapts to local language and legislation requirements.

Already launched in the UK, the portal is now set to roll out in Europe, the Middle East, Africa and Russia (EMEAR) and by the end of this year, it will be linked to the company’s ERP system to ensure its supply chain is fully compliant.

Going a step further than other portals in the market, CBRE MySupplier also acts as an engagement portal. It allows suppliers to understand CBRE as a business, who they need to contact to help with their business development and how they can attend CBRE’s renowned events.

Transparency, engagement and feedback are just three ways in which CBRE MySupplier is helping the firm wholly transform its supply chain capabilities.

The portal also provides suppliers with feedback to see if they

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are performing well, how they could improve, and how they compare to their market competitors. “Suppliers receive their performance rating and this allows them to see how they rank against other suppliers in their field or marketplace,” explains Lee. “It sets up a competitive environment.

If a supplier wants to win more business in CBRE, they know what they need to do because they can see how they’re ranking against their competitors in our portal.”

Contending with the ever-increasing pressure to achieve savings and sustain supplier relationships, the global property firm has taken a relationship-driven approach to its supply chain function. As a result, it has invested capital in creating a supplier engagement team, which is responsible for not only managing compliance but also managing relationships with CBRE’s suppliers.

S U S TA I N I N G S U P P L I E R R E L AT I O N S H I P S Embedded in the company’s fabric

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is a commitment to developing deep and long-lasting relationships with vendors. Therefore, the team meets with suppliers at company events to keep them updated with the latest CBRE knowhow.

“Supplier relationship management (SRM) is generally approached with large suppliers only because it takes quite a lot of investment from both sides,” explains Lee. “We take a different approach.

We build relationships with all suppliers, small, medium, or large. It’s not a process, it’s not SRM in its theoretical term, it’s about how we deal with suppliers on a dayto-day basis. SRM to us is a real living and breathing philosophy that everybody is involved in – it’s not just a process run by the procurement function, it’s our day-to-day business.”

CBRE’s technological ingenuity is exemplified by its leading supplier platform, CBRE MySupplier, and for

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Lee, Williams and Stanton, it is this genuine commitment to developing supplier relationships which gives the company a competitive edge and allows it to offer leading supply chain solutions to its clients.

“We want to make sure our clients recognise that we’re a world-class supply chain function,” explains Williams. “We want clients to come to CBRE to outsource their real estate needs to us not just because of our own in-house

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capability, but also because of how we manage the supply chain on their behalf. Our supply chain has experienced growth with CBRE. From a supplier perspective, it’s been a positive journey. Even our small SME suppliers have come on a journey with us and as we grow through acquisition, we’re moving forward and upholding our best-in-class approach.”

S U P P LY C H A I N

K R Y S S TA N T O N S U P P LY C H A I N S O L U T I O N S D I R E C TO R

Stanton joined CBRE in November 2013 as the Procurement Director for the UK Services Division and has recently been promoted to Supply Chain Solutions Director for UK and Ireland. He is responsible for defining and supporting the strategic development of the Procurement function within the business and is focused on four key priorities; developing downstream procurement capability, service quality, continuous client benefit and innovation.

Stanton joined CBRE from another key FM provider where he led the Soft Services category management team and was responsible for delivering global procurement strategies that provided assurance and continuous improvement of client value. Previous roles include heading up the procurement function for a UK wide care sector business and managing M&E in the water industry.

w w w. e u ro p e . b u s i n e s s c h i e f . c o m

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AND THE UNDERWATER CONNECTIVITY REVOLUTION

The demand for connectivity is heavily impacting the subsea cable industry. Chief Executive Officer Nigel Bayliff discusses Aqua Comms’ involvement in this growing market and its aim to connect both sides of the Atlantic

Wr i t t

en b

y Ca

ugha a V s i w therine S e t u r m a n Pro d u c e d by L

n

THE TELECOMS INDUSTRY has undergone something of a subsea revolution. Whilst subsea cables built 30 years ago were both expensive and time-consuming, they were also only built for telephone calls between corresponding operators on either side of the ocean.

The partnership of US operators such as AT&T, Sprint and Verizon, as well as European operators British Telecom, France Télécom, Deutsche Telekom and others enabled the development of subsea cables which could handle increased volume of calls.

However, with private entities deployed across the Atlantic, it was international provider Cable & Wireless which built a private cable to America in a bid to sell capacity to smaller operators emerging in Europe.

Providing a competitive threat to the pricing of telephone calls, the space for providers to privately build infrastructures and sell them in alignment with the life of the cable was born, and filtered into the development of the internet.

Impacting the way undersea cables are designed, the internet fuelled a consumer demand for connectivity.

With an increased need to send low-speed data over a telephone call-style channel, the launch of 9.6kb dial-up modems created a crossover, where providers sought to turn a telephone-capable cable into a data cable.

Despite this, whilst the number of consortiums and telcos sought to build cables to cater to this rapid demand, the dot.com bubble burst and led to not only an oversupply, but a subsequent crash within the telecoms sector.

“There were competing organisations with brand new 134

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Nigel Bayliff, Aqua Comms’ CEO speak s to JSA TV

cables across the Atlantic and a market which had dwindled. Speculators came in and bought the assets, which had cost hundreds of millions to build, for just tens of millions,” explains Nigel Bayliff, Chief Executive Officer at Aqua Comms.

“Suddenly the private equity markets and the general banks lost a lot of money in that very strange period of history.

“Today, there remains a 20% price decline model used for the price of a particular piece of capacity in the Atlantic.

At the same time, people have managed to stay in business because the growth that was forecasted in 1999 has started to occur,” he continues. europe.businesschief.com

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CONSTRUCTION

“At Aqua Comms, demands are roughly doubling every two years. There is a huge data flow now, many orders of magnitude bigger than they were 20 plus years ago.”

INFRASTRUCTURE AS A SERVICE (IAAS) Established in 2011, Aqua Comms seeks to monetise undersea assets by taking capacity from one shore to the other side of the ocean, delivering high quality services at lower costs. With 20 employees with up to 25 years’ experience each, it presently houses up to 100 target customers, which are mostly global telecoms carriers.

“We don’t sell to banks or engineering firms. Neither do we go into the enterprise layer and break up the capacity on our layer into smaller pieces,” says Bayliff. “We sell big, high-capacity pipes between major interconnections sites either side of the Atlantic to people who go out into the metros and the communities and supply consumers and enterprises with telecoms services.

“We operate as a carrier’s carrier and sell, effectively, infrastructure as

“

Technology has changed dramatically, and our new cable can do at least 24 terabits per fibre pair, at a lower operating cost

” –N igel Bayliff, Chief Executive Officer, Aqua Comms

a service,” he adds. “Our investors are mostly infrastructure-grade and they are looking for a long-term return on the capital deployed, which is a pretty different world to 1999, when it was mostly private equity making a play on what might happen in the high-tech market.”

SPIKE IN DEMAND Utilising new technologies proven by specialist construction companies, Bayliff’s extensive sector experience covers all aspects of the development of new, innovative solutions embedded europe.businesschief.com

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into subsea cable systems.

Whilst the number of cables built around 2001 are now coming to the end of their economic life, the growing need for capacity is enabling Aqua Comms to lead the way in the subsea fibre-optic network industry.

“Cables which I built in the early 2000s are approximately four terabits (Tb) per fibre pair. Technology has changed dramatically, and our new cable can do at least 24 Tb per fibre pair at a lower operating cost,” acknowledges Bayliff. “The challenge is to cope with the massive growth of capacity requirements, but not to grow your costs at the same rate as the capacity growth, because the price is in decline.”

Upon joining Aqua Comms in late 2016, Bayliff has worked to monetise the company’s subsea fibre-optic cable, AEConnect, in the carrier market in both Europe and the US. “We own two cables. One goes from western Ireland to New York (AEConnect), and one goes from Dublin to Holyhead in Wales, which was built about six years ago, called CeltixConnect-1,” notes Bayliff.

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“ The challenge is to cope with the massive growth of capacity requirements, but not to grow your costs at the same rate as the capacity growth,because the price is in decline

” –N igel Bayliff, Chief Executive Officer, Aqua Comms

“We’re now in a phase where we’ve stabilised the company and paid back all the construction costs of that original cable.“

ENHANCED DESIGN In order to remain ahead of the competition, Aqua Comms has deployed significant investment in both the design of its cables, and what it can offer its customers.

Through its Spectrum Services, users are able to partake in ownership economics and technological improvements in end user equipment over the life of a particular cable.

CONSTRUCTION

5,250km of cable being laid between Ireland and the USA

Aqua Comms was established to provide capacity networking solutions to content providers, cloud-based networks, data centres, IT companies and the global media. By building, acquiring or merging with subsea fibre optic networks, the company provides the systems which will cover the needs of tomorrow, today.

“We sell 100 gigabits (GB). If you keep this for 10 years, it will be 100GB. Spectrum allows you to get underneath that layer and own part of the physical transmission bandwidth across the fibre and add new parts to that technology over the course of ownership,” says Bayliff.

“At the end of 10 years, that channel might be able to deliver 400GB because of improvements in technology. You start to see the benefit of a different grade of investment in the telecoms supply.

“Below that is the fibre pair, where you get the ability to put whatever you want on the end of it. There are lots of innovative companies, like Ciena, Infinera and Xtera. They are always coming up with new generations of Spectrum management capability and improving the capacity of each fibre pair as they go. So, you’re latching into that ability when you buy Spectrum,” he continues.

The importance of speed has also been addressed. Previously, cables were at risk of the light becoming obscured across the route of the cable, creating errors in signal. This would also reduce the transmission europe.businesschief.com

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bandwidth which could be utilised.

By implementing specialist types of fibre, the use of coherent detection now provides a cleaner way of detecting the signal on arrival at the receiving station, therefore removing the need for complex management.

“High-powered amplifiers boost the light signal, and the fibre is the same all the way across,” observes Bayliff. “It’s a new design of a large effective area fibre optics, which provides increased power and bigger bandwidth.”

Furthermore, Aqua Comms has placed significant investment in its cable 140

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security, where its two biggest threats are fishing within shallow water areas, and also where ships anchor through its strengthened design.

HAVFRUE CONSORTIUM The company’s CeltixConnect-2 cable will seek to provide an additional secure route from Ireland and the UK in its bid to cater to a growing surge in demand. It will also link to its current subsea cable across the Irish sea, named CelixConnect-1.

“There are big carriers who have a lot of business in Ireland and want dark

CONSTRUCTION

fibre so that they can operate their own network. Dark fibre is sold to big carriers or content players such as Facebook, Google, Amazon, Microsoft, etc,” explains Bayliff.

“Our second cable will also connect to the Isle of Man, so we will connect Dublin with Blackpool, and we’ll also branch into the Isle of Man itself, bringing our services to the gaming and financial management companies.”

The company’s growing connection with the data centre and cloud market will accelerate business growth.

It’s decision to join the HAVFRUE consortium will bring a multitude of advantages for the business. The new cable will connect New Jersey and the US to Ireland and Denmark, with connectivity options in Norway.

Once completed, Aqua Comms will own approximately a third of the cable’s capacity to market and sell capacity services.

“We are working with people who we know and who don’t compete with us, because they buy capacity for their own private use,” observes Bayliff.

“The cable will branch into the west of Ireland and join up with our existing

“

High-powered amplifiers boost light signal, providing increased power and bigger bandwidth

” –N igel Bayliff, Chief Executive Officer, Aqua Comms

cable. Once completed, we will have fibre optic capability to deliver massive capacity. These fibres carry 20-plus Tb per fibre. We will be able to do that in a ring-based structure between Europe and Ireland, and Ireland and the US, which is a very resilient path for data-centred traffic and general telecoms traffic.

“This route is important, as it goes directly to Denmark, which means that these will be the two northern cables in the Atlantic,” he continues. “The cost to build them is prohibitive, unless you have a good market to off take that cost.” europe.businesschief.com

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“It’s also important to me as the north of Europe is cold and electricity is cheap. Those are two of the key design criteria for these mega scale data centres. Companies want low cost of electricity and as much natural cooling as possible. The third thing they need is connectivity.

“We really are aiming to connect the data centre and the cloud centres on either side of the Atlantic.”

“Ireland has the unique position because of its tax rate and its hightech workforce. It has enormous data centres for Apple, Amazon, Microsoft, Google and Facebook already established. Connecting the three big places where data centres will develop over the next five years was a very good strategic move for us,” adds Bayliff.

“We can also enter Sweden and Finland and pull through traffic that comes up from Russia and China, which travels into Frankfurt. All of those northern European locations are where the traffic flows will come onto our cable and, obviously, help us monetise it.”

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REMAINING PRODUCTIVE Working with international companies, as well as smaller enterprises, has enabled Aqua Comms to build a strong, global network and close-knit relationships with its partners.

Working with INOC in particular has seen the company eradicate any issues within its network operation centres (NOCs), where the company has put up walls up between Aqua Comms’ data and knowledge

CONSTRUCTION

processes, which is kept in house.

“Our network operations process manager, who effectively commands what the NOC does, is the ex-process lead for Deutsche Telekom’s Global Network Factory, which was one of the industry’s best deployment of electronic network management in Europe and, in fact, the world,” says Bayliff.

“Although the NOC has all the tools, they’re directed in how to do that by an internal resource. We have people in our company who can then provide second and third line technical assistance and direction to the vendor in the event of any serious or complex situation.

“It’s a good partnership because INOC have a large operation in Madison, Wisconsin in America, but they’re able to flex the resource they deploy on our account as and when we need it.”

FUTURE TRENDS The subsea cable industry will continue to grow but, interestingly, Bayliff believes that dynamic services will be the ones to watch. Whilst streaming

“

Once completed, we will have fibre optic capability to deliver massive capacity.

We will be able to do that in a ring-based structure between Europe and Ireland, and Ireland and the US, which is a resilient path for data-centred traffic and general telecoms traffic

”

–N igel Bayliff, Chief Executive Officer, Aqua Comms

services such as Netflix will drive traffic across domestic networks, there are other areas of focus which will determine the need for data on a global scale.

“Services which will really drive connectivity will be interpersonal, dynamic, high-data services such as video calling. Video, WhatsApp, or posting a Facebook Live video uses significantly more capacity. It is a random event and there’s two billion europe.businesschief.com

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“

There are big carriers who have a lot of business in Ireland and want dark fibre so that they can operate their own network

”

–N igel Bayliff, Chief Executive Officer, Aqua Comms

random users of Facebook who might all decide to do things at different times. The dynamism is very important and that’s where we keep an eye on the trends,” observes Bayliff.

“Certain trends we are looking out for especially is augmented virtual reality (AVR). If you take video as being a unit of one, virtual reality (VR) is about 6.7 times the data rate. So, if you then go to AVR, you’re another 10 times the data rate.”

Additionally, people’s assumptions that there remains enough capacity will need to be addressed long-term.

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Whilst in the 1990s there were constricted channels of bandwidth, and a lot of research undertaken in how to get increased richness of communication in the same bandwidth, this has since been eradicated.

“I receive between 15-17 megabits per second (Mbps) on my BT broadband, but on mobile I get 24 Mbps on Vodafone 4G. There’s an assumption that it’s effectively limitless and we won’t need to bother, which means people will use more communications, which translates into more international bandwidth,” comments Bayliff.

Consequently, Aqua Comms will remain a specialist and focused company which will work to provide customers with access to IaaS at all levels for both carrier content and media industries.

“We are not a full-service telco, so we don’t try to sell to the same people as they sell to,” concludes Bayliff.

“We’re trying to provide the backbone and the North Atlantic bridge for data centre and cloud business growth over the next decade and beyond.”

Aqua Comms traffic is doubling every two years, with 41% approx. CAGR of data usage Aqua Comms monetises undersea assets by taking capacity from one shore to the other side of the ocean, delivering high quality at lower costs.

Bayliff has worked to monetise subsea fibreoptic AEConnect Cable with the carrier market in both Europe and the US. Through its Spectrum Services, users are able to partake in technological improvements in end user equipment over the life of a particular cable.

The company’s CeltixConnect cables will provide a secure route in Ireland and the UK in its bid to cater to a growing surge in demand.

Working with INOC in particular has eradicated any issues within its network operation centres (NOCs).

Kevin Foley, Chief Financial Officer

Nigel Bayliff, Chief Executive Officer

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