Talk of intelligent automation, artificial intelligence, and other emerging and innovative technologies always promises a revolution across every aspect of your business – especially when these discussions turn to what these technologies can do for your finance and accounting (F&A) function.

However, despite the race to become the most digitally-augmented company on the market, your organization still faces a range of problems if you want to achieve truly high-performing business operations. What’s more, these same obstacles often lead to an impaired customer and employee experience, inefficient decision-making, reduced speed-to-market, and an inability to keep pace with rapidly changing regulatory environments.

Countering friction requires real operating model evolution – to break down your internal barriers, take control of your data, and redefine your finance processes for the digital age. Your finance function should be a key protagonist of this evolution, and needs to move from simply cleaning-up frictions to becoming a business model disruption catalyst.

But how can you make this transformation easier? How can you handle the ins-and-outs of this kind of transformation without disrupting your day-to-day business operations?

Capgemini – recognized as a finance Leader by Everest for eight consecutive years

Enter Capgemini, who have recently been positioned as a Leader in the Everest PEAK Matrix^® for Finance and Accounting Outsourcing (FAO) Service Providers 2021 with our new Frictionless Finance solution. This is also the eighth consecutive year that we have secured the Leader position here due to our depth and breadth of expertise.

What’s more, this report assessed the market impact, vision, and capabilities of 28 FAO service providers globally to understand which providers were really ahead of the curve and had the evidence to prove it.

The Everest Group recognized Capgemini for our Frictionless Finance solution’s strengths in the following areas:

• A robust digital ecosystem and consulting experience, offering a comprehensive suite of solutions across the F&A value chain
• Our Digital Global Enterprise Model (D-GEM), a unique platform-based architecture that provides business transformation and benchmarking to guide the right digital operating model for your organization
• Increased inclusion of Digital Twin capabilities in service delivery, which helps to predict issues, avoid bottlenecks, and drive service efficiency
• Extensive industry expertise in serving key clients across several sectors globally
• Strong client-centricity and a relationship-driven approach which is appreciated by clients
• Providing seamless transition and strong support to clients during the global pandemic.

We’re delighted to be recognized by Everest for our F&A services. It reaffirms our continued commitment to provide future-ready, tech-backed innovative solutions that transform our clients’ finance functions, and enable the transition to – what we call – the Frictionless Enterprise.

To read the Everest Group’s Focus on Capgemini report – fill in the form at the bottom of the page.

The tangible benefits Capgemini’s award-winning solution

Our Frictionless Finance solution delivers AI-augmented order-to-cash, purchase-to-pay, record-to-analyze, and analytics in order to enable your finance function to enhance top-level outcomes such as:

• Up to 25% improvement in forecast accuracy
• Up to 25% sales growth in digital revenue streams
• Up to 40% improvement in days sales outstanding.

In short, Capgemini’s Frictionless Finance solution helps your organization implement a comprehensive digital ecosystem that addresses each and every friction in your finance operations – ensuring you overcome every typical challenge organizations face on their race to digital. This, in turn, unlocks value from your finance function, enabling you to transition to – what we call – the Frictionless Enterprise, ensuring your digital dreams become a reality with minimal effort on your part.

Want to discover more about what our Frictionless Finance offer can do? Then reach out to david.lumley@capgemini.com to start breaking down finance function barriers today.

David Lumley leads a global team that delivers global finance transformation projects for large organizations across a range of industries including CPRD, Financial Services, Utilities, and Telecoms.

To read the Everest Group’s Focus on Capgemini report – fill in the below form.

Contact Business Services

To learn more, contact Capgemini’s Business Services at:  businessservices.global@capgemini.com

To stay up to date with our latest thought leadership pieces, product launches, and news – click here

David Lumley

Expert in Finance Transformation

I lead a team that delivers global Finance Transformation projects for large organizations across a range of industries including CPRD, Financial Services, Utilities, Telecom.

Download the full magazine

In our most recent edition of Innovation Nation, my colleagues within the Digital Customer Operations (DCO) space contribute articles on how to drive a superior, frictionless customer experience.

Implementing a seamless customer experience

In the magazine’s leading interview, Anjali Pendlebury-Green (DCO Practice Lead) and Robert Brillhart (Digital Contact Center Head) discuss how Capgemini’s DCO portfolio integrates humans and machines to drive a more meaningful digital customer experience.

On top of this, Darshan Shankavaram (Global DCX Leader, Capgemini) writes about how brands need a partner that can connect the dots, between empowered sales, augmented service, and connected marketing to achieve a more frictionless relationship with their customers.

Modernizing the contact center to transform customer interactions

Contact center operations are now evolving into experience hubs where customers can access relevant information across all channels. Philip Bush (Amazon Connect SME & GTM Lead) and Stephen Barnett (Business Transformation Manager) discuss finding better ways of communication at scale.

In an article on digitalization in healthcare, I write about how Capgemini’s solution for the healthcare industry is based on our Convenience, Advice, Reach (CARE) approach where patients receive timely care through a range of devices, resulting in improved clinical outcomes due to their personal focus. While Tim Szymanski (GTM Manager – High Tech) discusses how a unified, comprehensive digital approach to digital customer experience not only provides satisfaction for customers, but for the high-tech businesses that serve them.

Driving a connected marketing and a smart sales experience

Data-driven digital marketing is all about enhancing value. Demanding customers require a more personalized experience. Abha Singh (Senior Director, Marketing and Communications Services) and Thomas Dmoch (Global Offer Lead Connected Marketing) discuss how Capgemini’s comprehensive suite of solutions help our clients realize additional benefits to cost and customer engagement, brand value advancement, and revenue extension.

Deepak Bhootra (GTM Lead, Digital Sales Operations) talks to Innovation Nation about how organizations can drive a frictionless sales experience through streamlining, integrating, and digitalizing the lead-to-order lifecycle to deliver enhanced sales growth, productivity, and user experience.

The tools and technology behind customer operations

Philip Bush and Antoine Grappin (Managing Digital Architect, Chief Digital Office) grapple with customer-centricity and agent support in their article on taking CX performance to a new level, highlighting the business benefits when service providers forefront their customers.

Finally, Abhishek Barat (Engagement Manager, WFM Solutions) and Amruta Maheshwari (Global Practice Head, Analytics, Products, and Solutions) talk to Innovation Nation about how Capgemini’s Workforce Management function and Customer Insights 360 platform deliver a more meaningful experience between our clients and their customers.

Happy customers and data-driven operations

Happy customers are a result of an excellent customer engagement process, enabling them the freedom to serve themselves at times and being there to help them at others. Putting the digital into customer operations is our goal and we hope to ease our clients’ journeys in this way.

I hope you enjoy reading our latest edition of Innovation Nation.

To learn how Capgemini’s Digital Customer Operations can help you deliver a superior, frictionless customer experience, contact: scott.manghillis@capgemini.com

Scott Manghillis helps clients transform their technology into digital, omnichannel, personalized solutions.

Choosing the right cloud provider entails considering a variety of security risks as well as asking a host of questions that will help you determine what’s right for your business. A solid analytical framework is foundational to this process.

The increase in the externalization of IT systems is forcing businesses to reevaluate their priorities to ensure long-standing success. Unfortunately, there is no standard trajectory for assessing cloud service providers and naturally, no two are identical. There are a few market giants to choose from such as, Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP), but there are also niche companies that specialize in certain services. With so many options which all differ from each other in one way or another it can be quite daunting to find the right one. The goal should be to find a CSP that will take care of the cloud and let you focus your time and energy on applications and data.

The first thing that comes to mind is CSP certifications and standards. Providers that comply with recognised standards and quality frameworks demonstrate an adherence to industry best practices and standards. While standards may not determine which service provider you choose, they can be very helpful in shortlisting potential suppliers.

Also, the CSP should have SAP certified solutions like certified hosting capabilities for SAP HANA and Non-HANA workloads. So, look at your current SAP architecture and see to it that supporting hosting is available in the selected region of the CSP.

Second thing that comes to mind is the cost. Each cloud service provider has a unique bundle of services and pricing models. Different providers have unique price advantages for different products. Typically, pricing variables are based on the period of usage with some providers allowing for by the minute usage as well as discounts for longer commitments. It is a good idea to assess your usage patterns to decide which model fits your timeline, budget, and business model. Data in transit also play major role when calculating the cost.

Another key factor we should consider is reliability and performance. First, check the performance of the service provider against their SLAs for the last 6-12 months.  Some service providers publish this information, but others should supply it if asked. Ensure your chosen provider has established, documented and proven processes for dealing with planned and unplanned downtime.  If you are implementing DR, then look to understand the provider’s disaster recovery provisions, processes, and their ability to support your data preservation.

Cost should not be your only priority, however. Data-security is the most critical factor when choosing the right CSP.

Understanding each CSP’s protection practices will be important to assess the CSP’s maturity of security processes. It is important to note that a cloud provider’s encryption capabilities should meet the level of sensitivity of your data. There are two cloud encryption options – data-at-rest and data-in-transit – and sometimes it is wise to use a combination of both. By examining your data operations and applications you can determine what kind of cloud encryption solution is necessary – some key questions to consider are:

• Does your data contain sensitive intellectual property?
• Is the data essential to the organization’s operations?
• Does the data fall under certain requirements such as privacy acts (GDPR), financial data (PCI, SOX) and health records (HIPAA)?

Cloud compliance is also a key factor to bear in mind. The specific architecture platform you choose will help you meet your unique compliance standards. Being aware of your responsibilities on top of the compliance standards the provider will help you maintain presented in a clear service level agreement (SLA) between you and the provider, is crucial, to avoid any pitfalls along the way.

Realizing business benefits via SAP 2 Cloud migration is my key area. Organizations need to understand how the quick migration of their SAP landscape to a specific cloud platform will help them realize business benefits. Migration support is fundamental to ensure a smooth transition and with all the components in the right place having chosen the right CSP and migration service acting as a firm backbone, you can relax and focus on manifesting your desired business outcomes.

To learn more about Capgemini’s approach to SAP visit : https://www.capgemini.com/service/cloud-services/

Author

Devendra Goyal
Head – Global SAP2Cloud Offer & SAP2Cloud Transformation

With today’s changing customer expectations, companies recognize the need to evolve their loyalty programs and create a consistent customer experience with personalization across all touchpoints. At the same time, companies are under pressure to reduce operating costs and find new sources of revenue. Therefore, it is important to build your loyalty program in a sustainable way. This all starts with a loyalty vision and strategy, that unites all teams and departments within a firm.

Did you know that 90% of consumers have a negative perception of loyalty programs, 54% of members are inactive and 28% of consumers abandon loyalty programs without redeeming any points (Source: Loyalty deciphered, Capgemini)? This raises the question, “why invest in loyalty?”. Despite the negative numbers, loyalty can save you costs, if built sustainably. Acquiring a new customer is at least five times more expensive than retaining an existing one. In addition, it can lead to a five-percent increase in annual revenue, because loyalty drives up customer lifetime value (Source: Harvard Business Review). Furthermore, eight out of ten customers who are loyal to a brand promote this brand among family and friends (Source: Loyalty deciphered, Capgemini).

So, there are sufficient reasons to invest in loyalty, but what is loyalty exactly? Loyalty consists of various theories and its purpose is to bind customers to a brand. A commonly used method to gain loyal customers is to develop a loyalty program. This should comprise a structured marketing strategy that generates rewards for customers based on their repeat purchases and engagement on a continued basis. Now that we know why we need to invest in loyalty and what loyalty is, the question that remains is, “how do you build a sustainable customer loyalty model?”. We answer this question in this blog and it is based on six building blocks.

1. What should you consider when acquiring and registering customers?

When introducing or redesigning a loyalty program, you need to think about how to attract customers. An effective way to attract customers is with relevant benefits that fit within the company’s brand. This can be crucial to the success or otherwise of your program. The registration process is also important as this is the first impression customers get of your program, so design it carefully. Whether it’s online and/or offline, registration and participation should be easy and seamless processes. If the registration process is complicated and not user-friendly, customers will already drop out at this stage, as this is one of the main frustrations among customers. You should also make sure not to request and gather unnecessary personal data. Besides the fact that filling out long forms is time-consuming; customers can become suspicious of what a company is doing with their data. It is therefore advisable to ask for the bare minimum at first and then slowly collect more data later in the journey. Moreover, it is important to offer training to those employees involved in operating the loyalty program and keep them up to date. Nothing is more annoying than an employee who can’t help customers with their registration and who doesn’t know anything about the loyalty program or the current offers.

2. How to identify your customer?

To identify a customer, it is important that they have a unique ID, which is connected to multiple applications to initiate the central customer profile. You can arrange this via a simple, singular login with a client number, barcode and/or QR code (physical or digital card) in the app, website, cash registers (incl. self-checkout) and customer service. There should be a single source of truth in your application landscape for every unique customer, so that you can provide the best possible customer experience in store, near store, and online. It can be very frustrating for a loyal customer not to be recognized when they contact customer service via different channels, for example. In addition, as an organization, you don’t know what kind of customer you are dealing with (very loyal or not loyal, for example) and can’t anticipate this. As a brand, try to identify your customers automatically and as early as possible in the customer journey via app (phone), web and/or loyalty card. Technology can be used for real-time localization using GPS, Wi-Fi, mobile network, and beacon technology. This enables communication with the customer based on context and location to enhance customer interaction. It’s important to update these data insights to enrich the customer data for profiling and personalized engagement.

Within registration and identification, another important topic to consider is regulations such as GDPR and other local laws concerning privacy and transparency, as you want to reduce the risks for both the customer and the company.

3. What are the different loyalty mechanisms?

The next element to consider is what type of loyalty program best suits your business and customer needs. The program should be based on a mechanism that is understandable to both customers and employees. It could offer tempting and relevant deals, for example, which are up-to-date and available across different channels. The earning and redemption of rewards should be possible through both a physical (if you have a store) and a digital loyalty card. Also, customers should be able to easily access their balance both online and in stores.

A loyalty mechanism that is commonly used is the Earn and Burn program, which rewards customers for their (purchasing) behavior towards your brand. One of the challenges of the earn-and-burn program is that it is often not enough to reward customers with just points, they want rewards that are relevant and valuable to them. Other loyalty program types are cash back, paid loyalty, and partnerships. In a cash back program, often offered by credit card issuers, customers are rewarded with money, for example a percentage of the purchase amount. Paid loyalty is when customers pay a fee to participate in the program and receive ongoing benefits in return, such as free shipping. Strategic partnerships are formed by companies to better service their customers, who then are rewarded for engaging with either of the companies in the partnership.

The mechanisms have different levels of simplicity to implement and ease of use. You can have simple loyalty cards without points, or programs with points, tiers (based on customer spending) or both. The first has the lowest technical complexity and this complexity increases as points and tiers are added. When the complexity increases, it is also possible to create an emotional connection, as this is not achieved by merely handing out points. All of these loyalty program types can be connected by combining aspects of the different types and creating a hybrid program to fit your needs.

4. What’s in it for the customer?

There are several ways of rewarding your customers and we will highlight four. The first and most commonly used method is discounts. By providing discounts, you can attract buyers. Discounts come in all shapes and sizes. For example, a promotion code for the next purchase, a discount when you sign up for the newsletter, special member discounts, and personal offers. Discounts play the biggest role in loyalty program use, as indicated by 74% of customers (Source: Comarch) Secondly, when you have attracted customers, special services comfort buyers. Examples include higher-quality services, free shipping, free content, and early access to products. Around 20% of customers say they would like to receive such rewards (Source: Comarch). Thirdly, brands can give you access to a community of like-minded people, and you can send birthday gifts. Additionally, when you have comforted your buyers, you can strengthen the bond through gamification. You could, for instance, reward people who take a quiz or provide feedback. Another form of gamification is rewarding customers every time they reach a new milestone. Finally, you can go the extra mile by introducing add-ons, such as organizing (member) events, the option to donate rewards to charity, or providing products on subscription. These types of reward appeal to 14% of customers (Source: Comarch). As you can see, there are plenty of reward options per type and stage in the customer journey, so choose which forms best suit your customer and brand.

5. How to create a personal experience?

One size fits all does not apply when creating a sustainable loyalty program. Nowadays, customers not only expect high-quality products and excellent service, but also relevant offers and personalized content that is tailored to their needs. People expect personal experiences everywhere, because they already happen more and more in everyday life. A customer’s favorite streaming service recommends series based on the movies they like and the supermarket around the corner offers personal promotions based on frequently bought products. Customers expect brands to listen, understand and anticipate their needs with valuable suggestions throughout the entire customer journey. To build a lasting relationship with your customer, it is important to create a 360-customer view, know your customers’ needs and values, and act on this information. The use of customer insights and automated tools will help you to create personalized content and consistency in your omni-channel communication. This personalized content should be based on customer characteristics and preferences. Relevant offers can be created based on shopping behavior and engagement with the brand, for example. After buying a product, you could offer a loyal customer discount on complementary products, or you can predict when the customer is likely to run out of the product and adapt the deals you offer. By offering relevant and personal content, and products based on customer insights, you can increase the customer lifetime value.

6. Which data and technology is needed for your program?

Building block six is one of the largest, most complex, and time consuming to realize within a company, as you need to consider a lot of questions. For example, which KPI’s measure our vision and goals, and therefore need to be reported? What applications best suit all requirements and fit within the architectural landscape? And how are all the data running through all the different applications in the landscape?

Every company has its own goals and strategy associated with its core values. An example of a loyalty vision is Nike’s, which recognizes community as a value, with movements and communities of like-minded people, such as running clubs. Amazon Prime, meanwhile, chooses convenience, where people are willing to pay for services that make their life easier. So, what kinds of KPI would quantify the success of those companies’ values? For Nike, it could be the number of new or active members, likelihood to recommend, or contacts per interaction. While for Amazon Prime, it could be usage metrics or customer-base penetration rate, likelihood to buy additional products, or revenue per member.

Thinking about what to report on is a good way to start thinking about all the data running through the different applications. There is a need for centralized customer data to avoid data silos from all those applications. When a company starts to create a 360˚ customer view, capabilities are needed to manage the right customer data from the company, to ensure the best personal experience. Whereas third-party data is being phased out, loyalty programs will become the main instrument for collecting zero-party data. Companies can also use these insights to develop new products or propositions in the future.

A cohesive application landscape is needed throughout the customer lifecycle and in all channels, online and offline, from your digital customer experience platforms to your back-end systems.

Conclusion

Starting from the question, “how to build a sustainable customer loyalty model?”, we can conclude the following. The building blocks provide a framework to start building your customer loyalty. However, it all starts with a vision and strategy, based on the brand’s core values. An easy, understandable, and seamless registration and participation process is crucial, since a lack of this is one of the main annoyances that causes customers to drop out. The most important element from the building blocks on which marketers should focus on the coming years is constructing a solid data-driven base to hyper-personalize offers and content. Furthermore, since we are entering a zero-party data era, loyalty programs will become even more important in the future. Our data teams within Capgemini can tell you more about the Customer Data Hub as a key enabler and single source of unified, trusted, and actionable customer profiles, measures, and insights. And finally, choose the right technology, that is feasible in relation to your company’s current application landscape and in order to achieve the objectives of improving overall CLV, lowering customer churn, and acquiring new customers. When combining all the elements from the building blocks, make sure they are not only in line with the company’s vision and strategy, but also connected to the other blocks. This will help you to create a consistent loyalty program in which all the elements are seamlessly integrated for the best possible customer experience.

Do you want to find out more about building a sustainable loyalty model? Register for the online webinar:

    <div class="row">
        <div class="col-12 text-center">
            <a href="https://go.capgeminigroup.com/sustainable-loyalty" id="btn-1641815827095" class="section__button btn-general" target="_blank">Register here</a>
        </div>
    </div>

Authors 

	Lotte Derichs – Sluiter is a Loyalty Expert at Capgemini. Contact her here.
	Zita Delsing is Customer Engagement Consultant at Capgemini. Contact her here.
	Lobke Kolhoff is Customer Engagement Consultant at Capgemini. Contact her here.

Sources

• Loyalty deciphered, Capgemini
• Loyalty Trends 2021/2022, Open loyalty.io
• Comarch’s loyalty market research 2021
• The Value of Keeping the Right Customers, Harvard Business Review
• Customer data hub proposition

“Blue-chip enterprises that want to make the most of innovation must build strong, trusted bonds with their internal teams, the startup community, and external third-party experts.”

This sentence happens to be the conclusion of a former FD Day session and the beginning of the 2021 FD Day session entitled “Winning Together: Tips to Successful Corporate-Startup Collaborations.” On stage, Frank Desvignes, global head of open innovation at insurance giant AXA, alongside Damien Philippon, COO & co-founder of InsureTech startup Zelros, and myself representing Capgemini Ventures.

AXA, Capgemini, and Zelros engage with each other in successful ways. The collaboration between Zelros and AXA was born out of the experience of Zelros’ founders within AXA, who were able to meet the insurance leader’s internal demands for external expertise with startups and enablers. Besides, the AI-driven platform dedicated to advanced distribution closed an $11m fundraise, backed by ISAI Cap Venture. Capgemini’s insurance business stream is substantial, Zelros’ solution is a game changer in Insuretech, thus fueling Capgemini’s strategy to address this fast-changing market demand.

Though, in such a crowded market, identifying new opportunities is not that easy. Proper targeting among north of 33,000 Fintechs/Insuretechs worldwide requires adequate identification and assessment. At Capgemini, it is the role of Capgemini Ventures to best support business teams leverage innovative startup solutions to best address client needs, by providing end-to-end services enabling scouting, assessment, and business collaboration leveraging internal tech experts, VC industry, and early metrics ratings.

Corporations engage with startups to speed up innovation and time to market. AXA’s high-level scouting capacities are also deployed worldwide, and the scouting process is carefully tied to business needs. Former AXA’s employee startups such as Zelros or Descartes Underwriting are now AXA’s business partners, and working closely with Capgemini is helping adopting this innovation at scale.

Capgemini’s global footprint can facilitate startups international expansion, in particular thanks to its intimate knowledge of solutions landscape in the various geographies, as for North American insurance core solutions in the Zelros case.

Successful corporations between large corporates and startups requires though adapting to different processes and pace. AXA has an established framework to involve various stakeholders including legal and IT to smooth the collaboration process. Once priorities are established, it is easier to scale and accelerate innovation across your global enterprise.

Zelros’ feedback on working with large corporate was aligned on AXA’s feedback. Progress can sometimes feel slow, yet startups can’t just tell their enterprise partners to “hurry up.” Entrepreneurs must appreciate that approval processes can take time. Most crucially of all, startups must prioritize security. Zelros deals with data and AI, client prospects tend to request many security reviews and penetration tests. Ensuring your startup is ISO 2071-certified can prove valuable on the market.

Ensuring a smooth formalization process to large corporates/startups collaboration often represents the last mile but not the less challenging one. Capgemini joint initiative with Village by CA to publish a charter of Best Practices for Startups/Corporates relations is an open framework intended to pave the way for successful collaboration along the cycle, that can be adapted to the very circumstances.

The end of the session was pointing to the “magic ingredients” for scaling innovation, with Capgemini research suggesting three-quarters of finance firms do not achieve productive results from collaboration, there is still room for improvement.

Zelros insisted that startups shall start real-life deployment using real data rather as soon as possible beyond the proof of concept stage.

AXA stressed that open innovation strategy shall also leverage the digital transformation leaders such as Capgemini to establish quality engagement models with external innovation players and enrich the global business offer and value.

Capgemini Ventures stressed the multidimensional nature of innovation ecosystems, which now calls for extended ecosystem play on the market.

Lucia Sinapi

Expert in Innovation, Startup Ecosystem

I am running the Corporate Venturing arm of the Capgemini Group with a view to contribute to our business market intelligence via the start-up ecosystem, as well as to support our business and support our innovation and growth agenda.

Cop 26 has certainly been focusing the minds of politicians, economists, industrialists, and consumers alike. And indeed the Italian prime minister, Mario Draghi, called for a ‘quantum leap’ on climate change. Unwittingly perhaps he may have pointed to one of the solutions.

Climate change is one of the greatest challenges we face. To avoid the worst effects of climate change, such as severe droughts and collapsing ecosystems, we must move to net-zero emissions of greenhouse gasses in 2050. At the current pace, 51 billion tons of greenhouse gases are added to the atmosphere every year. To get to net-zero, we need to change our behaviour, we need new legislation, and we need new technologies.

We will need all types of technologies to achieve that. One type of technology though, is particularly interesting. Running quantum computers can reduce emissions because they are more energy efficient than large supercomputers clusters and can thus save energy consumption. However more importantly, quantum computers can be used in research to develop and evaluate the technologies that we need to get to net-zero. Quantum simulations, in chemistry, material science, or pharmaceuticals, can exponentially speedup the simulations (compared to classical computers) that we would need to invent better solar panels, industrial processes, and electric vehicles. Given the enormous potential of quantum computers, it is worth exploring if quantum technology can help in our ambition to get to net-zero emissions.

To explore how quantum computers can assist, I’ll start with an overview of where our emissions come from. I borrowed these statistics from the book “How to Avoid a Climate Disaster” by Bill Gates. From the 51 billion tons of CO2equivalence, almost a third (31%) comes from the way we build or make things. Although most of us are most aware of climate policies related to transportation (such as subsidies on electric vehicles) or plugging in (solar roof panels), the way we make things is more than four times more polluting than emissions from keeping us warm and cool. Electricity generation (through coal, gas, sustainables, or others) accounts for 27% of global emissions, getting around (either through cars, planes, or ships) accounts for 16%, and growing things (agricultural processes) account for 19%.

Technology breakthroughs in the past have made some sustainable practices within reach. Solar panels, for example, have decreased 90% in price over the past ten years, and are now, in some countries, competitively priced with conventional electricity generation. That is, if the sun is shining. Other industries, such as concrete fabrication, have found it to be a lot harder to reduce emissions. Green premiums, the added costs of replacing conventional methods with carbon-free manufacture, are highest in concrete fabrication. To get to zero emissions here, we will need technology breakthroughs that drive down the green premiums. Quantum computers, through its potential of exponentially speeding up simulations, can play a significant role in discovering and accelerating these breakthroughs.

A Quantum advantage in producing electricity

Let’s look at some of the most meaningful ways in which quantum computers can do just that, starting with the way we produce electricity. Electricity production accounts for 27% of greenhouse gas emissions and without significant governmental and commercial interventions is likely to double in the next decade. We need sustainable ways to produce it, and we need to use less where possible. To produce clean energy, we need to move to renewables (such as solar, wind, tidal and biomass) and nuclear. Renewables, such as wind and solar, however, only provide energy when the sun is shining and the wind is blowing, subsequently requiring storage and flexible grids.

I believe that there are three important ways quantum computers could support the supply side of electricity:

·      More efficient solar panels. Current, conventional solar panels have a maximum efficiency of around 15%, while theoretically limited to 23%. Quantum computers could help through simulations of novel photovoltaic materials, such as quantum dots, or perovskites that either improve the efficiency, or reduce the costs of manufacturing.

·      Efficient energy grids. The variability of sustainable energy sources puts considerable pressure on energy grids. Quantum algorithms could help in optimisation, planning, and logistics of grids, as well as simulations to forecast, and to balance the load. In addition, quantum simulations could help in discovering new materials, such as high temperature superconductors, with better conductive properties.

·      Development of next-generation nuclear power. Next-generation nuclear fission or nuclear fusion are promising energy sources without any emissions. Nuclear fusion, in particular, promises almost infinite energy, without any radioactive waste or emissions. Developing next-generation nuclear power, however, is extremely complex and typically relies on large computer models. Quantum computers can speed up the process with simulations of new materials (such as high temperature superconductors), or high energy particle physics.

A quantum advantage in the way we make things

Another big part of greenhouse gas emissions come from the way we make things,adding up to a total of nearly a third (31%) of total emissions. Emissions arise in all parts of the production supply chain, however, emissions from steel, cement, and plastic production are particularly interesting to explore with quantum computing, because they are so ubiquitous.  Also, the production processes of these materials pollute significant emissions because of the vast amount of electricity required to keep the factories running, the heat needed to trigger chemical reactions and the carbon that is released during chemical processes itself.

However, there are various ways in which quantum computers can help manufacturing:

·      Stronger concrete, so that less can be used. One way to reduce the environmental impact, is to produce ultra-strong varieties, such that less concrete is required to do the same job. Stronger concrete can be made by using quantum simulations to find the right combination of polymers. According to Karen Scrivener, Head of the construction laboratory at the Swiss Federal Institute of Technology, “This will be the quantum leap everybody is trying to achieve. I’d say, on a five-to-10-year basis, we might be able to fundamentally change the properties of concrete on a nanoscale.”

·      Hydrogen powered steel production. The primary cause of emission in steel production is related to getting the required temperature in the fabrication process. Currently, this is done by burning coal, which is among the most polluting fossil fuels. However, quantum simulations could help in finding better and more efficient catalysts for hydrogen production, and hence would reduce the costs of hydrogen.

·      More efficient supply chains. Global supply chains suffer from inefficiencies due to their complexity. Quantum optimization algorithms could potentially help in optimizing routing networks, efficiently scheduling resources, and forecasting demand and supply. Although a quantum advantage for this use case is less clear than for other cases, only a few percent improvement would have a dramatic environmental and economic impact.

A quantum advantage in the way we grow things

Third, the way we grow things adds up to 19% of total emissions. There is a large variety in the origin of emissions related to the food that we produce. Part of it is emissions related to industrial processes, such as the production of fertilizer, while others are related to methane emissions in meat and dairy production or related to deforestation for agricultural purposes. There are also many opportunities to reduce emissions, or even sequestrate greenhouse gases in agricultural processes. There is a huge gap in agricultural productivity between the developed world and some parts of Africa (the yield in Africa per square meter for corn is on average a tenth of that in the US), suggesting a huge potential to improve agricultural sustainable land use. The following use cases are particularly promising.

·      More efficient fertilizer production. The polluting part in fertilizer production is the fixation of nitrogen through the century-old Haber-Bosch process, which requires high pressures and temperatures. In the process, nearly 2% of the global energy is consumed. On the other hand, the naturally occurring nitrogenase enzyme fixates nitrogen at room temperature and pressure. Understanding the working of nitrogenase is out of reach of current classical systems but would be feasible with medium-term quantum computers. Ultimately, quantum computers could help in the development of nature-inspired industrial catalysts.

·      Carbon sequestration in agriculture. The total potential of carbon sequestration (putting carbon back in the ground) through sustainable agricultural practices is between 300 and 400 giga tonnes, almost ten times the world’s emissions in 2021. Quantum simulations of plant genomes could potentially improve characteristics such as resilience to weather conditions or the yield of crops, so that farmers can apply sustainable practices, or give agricultural land back to nature.

A quantum advantage for mobility

And finally, the way we get aroundamounts to 16% of total emissions. Although electric car sales have picked up drastically in past last few years, the stock of plug-in electric vehicles represented just 1% of all passenger vehicles on the world’s roads by the end of 2020. Additionally, other means of transport such as planes, ships, trucks, and busses will be more difficult to electrify. The following are two particularly interesting quantum computing use cases.

·      More attractive electric vehicles. A major hurdle for the adoption of electrical vehicles is the limited capacity, degradability, and time to charge of batteries. Quantum algorithms could help in the development of high-capacity lithium (metal) batteries. Daimler and IBM have already been working on improving the capacity and speed-of-charging of lithium batteries, using a quantum computer to model the next generation lithium sulfur (Li-S) batteries that would be more powerful, longer lasting, and cheaper than today’s widely used lithium-ion batteries.

·      Hydrogen powered heavy transport. Electric propulsion will likely be impossible for heavy transport such as planes, ships, and long-haul trucks. Instead, hydrogen could be used. Quantum algorithms could be used to develop more efficient industrial catalysts for hydrogen production and storage.

Let me stress, quantum technology, or even technology as a whole, is not the sole solution to the climate crisis. To get to net-zero, we will need a vast variety of behaviour change, legislation, research, incentives, and investments. Frankly, there is no time to waste. We cannot permit ourselves to wait for quantum computing, which may still be 5, 10 years or even further out. However, we must also plan for future challenges. We must acknowledge that we do not have the technology ready to replace hard-to-transition industries such as steel and cement production. While we should adopt solar and wind power massively today, we should invest in research into the smart grid, and alternative energy sources for tomorrow. Quantum computing, as one of the most disruptive technologies of the 21st century, may provide a strong advantage in developing the breakthrough technologies that we will need.

Julian van Velzen

Expert in Analytics, Big Data, Machine Learning

I am an enthusiastic big data engineer with a strong background in computational physics. As the leading consultant for the quantum exploration center, I take clients on a journey into the exciting era of quantum computing.

As part of our new series of blogs and vlogs focused on startups and their role as a catalyst for sustainable innovation, Capgemini Ventures is exploring the benefits of opening up the conversation. But, of course, there’s a lot to take onboard during this journey and the first consideration is the introduction of new ways of working.

For many organizations, there’s a notion that innovation from startups can be positioned at the periphery and not the heart of the bigger picture. In our opinion, however, this represents a gap in the corporate strategy that needs to be plugged. Startups are no longer shiny objects but are now embedding themselves firmly into business value propositions.

However, collaborating successfully with startups is not simply a change of mindset. Because collaboration through an open ecosystem speeds up time to market, enterprises may need to explore new approaches to their old challenges – rapidly adapting their organization, processes, systems, and even business models to respond with agility. But this isn’t necessarily as daunting as it sounds.

Many organizations are beginning to realize the value in blurring their boundaries and including startups as part of their value proposition. Salesforce, for example, has augmented part of their business to embed startups. They’ve created AppExchange, where startups and independent software vendors (ISVs) can sell their services and grow. AppExchange is the leading enterprise cloud marketplace to help extend Salesforce – and customers can find proven apps and experts to quickly solve their business challenges.

Dominique Gillies, regional vice-president, strategic ISV partnerships, EMEA, Salesforce, explains: “This is the fastest way to bring innovation to our customers and ensure their success in the long run.”

Bringing startups into an effective ecosystem

If the benefits of bringing startups into an effective ecosystem are clear, and other organizations are starting to reap the rewards, then the next question is: “how?” Because even though startups bring in disruptive innovations and exciting new technologies, they also bring in niche markets and high-risk associations. So, how do you overcome the challenges?

Here are a few ways to help organizations create an open ecosystem that fosters powerful collaborations and partnerships with startups – while avoiding many of the associated growing pains:

1. Establish internal sponsorship and strategic buy-in

The first thing you must do is work out your mission and define your unique objectives because it’s vital to have strategical clarity on the business need.

Next, it’s important to map out the stakeholders across leadership and the operational teams that will execute the strategic ambition – and take the newly defined objectives to them. These can not only be used to achieve the buy-in that’s required, but also act as a tool to learn more about the business and its needs. When working with a partner such as Capgemini, you can then bring the objectives to us to help sharpen the proposition, too.

It should all be part of an ongoing process that happens over time, as opposed to a one-off strategic play. This will help to foster strong collaborations that nurture long-term associations with startup ecosystems.

2. Scout the right startup

New startups appear all the time and spotting the right one can be a challenge. You should therefore have a predefined and time-bound process that provides decision-making support to your business before any startup engagement begins.

The methodology that’s employed should help your organization understand the strengths, synergies, and risks of engaging with a particular startup – and should ultimately be tied to your overarching strategic ambition.

Once a suitable startup has been identified, and the due diligence carried out, you can then work with the startup closely to jointly develop a value proposition that will deliver the right outcomes before any actual work begins. This can be followed throughout the entire engagement to ensure everything remains on track.

3. Test the water

Along with gathering anecdotal evidence and assessment outcomes, it’s important to run proof of concept (POC) testing to demonstrate feasibility while continually interrogating the value proposition that’s been defined.

This will enable you to outline the constraints and parameters that will ultimately help to validate how the startup’s solution infuses innovative solutions and compliments your market position and go-to markets. It’ll also provide an insight into whether you should invest in, or nurture, a strategic alliance.

4. Collaborate with agility and rigor

Once all the preparation stages are complete, the process itself can begin. Here, it’s crucial to be clear on decision making and timelines – and simplify them wherever possible.

The most successful organizations also make sure to propose simplified contract templates that are specific to the startup, and approved by the purchasing department. This provides the structure required for everyone to collaborate with agility, moving freely within the guidelines of expectation.

It’s a good idea to establish a dedicated single point of contact; someone within your organization who can connect the startup with the relevant contact they need, based on the project type.

The business collaboration framework, defined by Capgemini Ventures, has industrialized this set of guidelines to collaborate with startups, which speeds up GTM and provides risk mitigation strategies to be implemented.

5. Accelerate to adopt at scale

When the priorities are established, the business alignment model is defined, and the contracts are signed off, it’s time to scale and accelerate innovation across the global enterprise.

You can mobilize and access the relevant resources required to make scaling easier. You can promote collaboration internally and externally to help the startup grow. And you can start working towards reaching the desired outcomes of the collaboration.

However, you must remember to keep working at it in order to achieve success.

Bridging the gap between business and technology

In conclusion, it’s become clear that bilateral partnerships are no longer enough. Each partner must understand every other partner’s wider ecosystem. If we all do that successfully, then we’ll collectively benefit from some truly exciting and innovative ideas.

As the bridge between business and technology, Capgemini is here to help our clients adopt startup solutions at scale. A startup is a partner unlike any other and our open framework is fine-tuned to your organizational requirements to enable you to adapt and build – it’s a strong foundation for creating a mutually beneficial relationship for both sides.

For further insight into the other major considerations around bringing startups into an effective ecosystem, don’t forget to keep your eyes peeled for the forthcoming blogs and vlogs as part of this series.

Authors:

Susana Rincón, Startup Catalyst Global Manager, Capgemini

Susana is the Global Manager of Startup Catalyst, which is Capgemini’s Startup Framework, designed to enable in a structured way collaboration with value-adding startup ecosystems through an end-to-end catalogue of services.

In our latest series of blogs and vlogs, Capgemini Ventures is looking at the role of startups in transformation and value creation – and for any partnership to be successful, the importance of risk management can’t be underestimated. So, we’ve joined forces with Early Metrics, a leading independent startup rating agency, to outline some of the key considerations.

Risks are inevitable when running any business – not least within the ever-evolving, highly uncertain environments within which startups operate. However, while risk-taking is a common trait found in entrepreneurship, it doesn’t come as easy to large corporates that are more comfortable in pursuing success using traditional, low-risk methods. How then, do we strike a balance and handle risk management for sustainable innovation?

Startups face numerous risks in their different growth stages, which sometimes lead to failure. This could be due to internal factors, such as a weak business model or poor financial planning; or it could be down to external factors, such as market demand or the recent pandemic. But even when startups get it right, large corporates still face challenges when it comes to adopting the new cultural shift required to work with them.

To ensure a safe and secure partnership, it is therefore imperative to assess a startup’s maturity on a number of critical aspects via a structured and customized process. This process should take into account some of the following considerations:

Reducing risk exposure when partnering with startups

1. Analyze financial risk first

According to CBInsights, running out of cash, or failing to raise new capital, is the most common reason (38% out of 111 researched) why startups fail. Money is the fuel that runs startups, and it is easy to burn out without proper financial planning.

Analyzing a startup’s financial data is therefore just as important to a large corporate as it is to an investor. And it is the responsibility of a large corporate to assess the startup’s key financials to ensure stability over the course of their partnership – no matter whether it’s projected to be a long-term or short-term relationship.

2. Prioritize cybersecurity

Cybersecurity is perhaps the biggest risk when partnering with any organization, not just startups. While disruptive breaches at major firms often make headlines, such as the recent Kaseya or SolarWinds stories, startups are becoming a prime target for organized crime due to their perceived lack of defense against hacking, so it’s important to thoroughly check if the startup has the right security measures in place.

The number of data breaches in small businesses is almost the same as in large enterprises, as per Verizon’s Data Breach Investigation Report 2021. The damages caused by such attacks are almost irreversible in most startups; 60% of small businesses fail during the aftermath of a cyber-attack. Consequently, it is not enough just to master the initial defense to avoid a breach, it is of equal importance to have a robust cyber-response strategy planned out and in place.

3. Ensure data privacy

Data is a vital asset for businesses of all sizes, but as startups scale up to partner with large customers, it is particularly important for them to have adequate privacy policies in place to handle confidential data responsibly. Even with the blurred geographical borders of a connected world, it is essential to stay compliant with regional regulations, such as the GDPR.

The key for startups is therefore to recognize the need to have data privacy practices in place and take necessary measures for proper guidance – with the constant support of an internal or external Data Protection Officer (DPO). The large corporates partnering with startups also need to assess their privacy posture for engagement and to avoid future risks and possible huge financial penalties.

4. Minimize operational risk

Operational risk is the most common risk of all. After all, an incredibly innovative product is ineffective unless the business fit has been established. Without confirmation that a product or service can be successfully integrated into the existing business model, an investment in resources may be wasted. For this reason, early-stage startups often hit significant roadblocks as they scale.

Effective mentorship from a trusted partner is vital in equipping the startup with the tools it needs to succeed. Over- and under-mentorship both handicap growth, so a clear plan at the outset is crucial in mitigating against risk or overriding the innovative value of a company by subsuming it fully into the bigger company’s ways of working. To address these challenges, it is necessary to undertake a comprehensive review of the Startup.

5. Check for regulatory compliance

Organizations of all types and sizes are exposed to compliance risk, whether they are public or private entities, for-profit or non-profit, state, or federal. But regulatory compliance is an especially complex area for startups during the early stages. As a startup begins to scale, it is crucial to remain compliant to local laws and regulations – but it doesn’t have to feel daunting with the support of a trusted expert.

Capgemini, for example, helps startups understand the importance of all-inclusive policies that include anti-money laundering and anti-fraud guidelines in order to avoid future risks. We also help clients look for existing and/or past legal cases with startups, issues involving fraudulent activities, reputational damage regarding compliance, or any possible political influence.

Partnering for success

Managing risk is never an easy task for organizations that focus solely on commercial growth. They must instead allocate specific resources and efforts towards risk management in order to avoid the kind of impending crisis that can damage their organization’s future.

We understand that startup partnerships require special consideration and customizable processes. We’ve therefore developed an assessment framework in partnership with Early Metrics, which provides a comprehensive view of a startup’s bankruptcy risk and growth potential to business.

Our assessment framework is not just a decision-making tool, it’s consultative and resource led, providing valuable guidance and expertise to Capgemini’s business leaders and sectors, It enables them to assess the risk, so that ultimately organizations can make faster and better decisions when collaborating with startups.

For further insights on sustainable innovation with startups, don’t forget to keep an eye out for the remaining blogs and vlogs within this series. Meanwhile, you can catch up on our previous blog article here.

Authors:

Vasuja Kishore Salikineedy, Senior Manager, Startup Assessment Services Lead, Capgemini

Vasuja is a lead for Startup Assessment Services (SAS) as part of Startup Catalyst initiative by Capgemini Ventures.

Early Metrics, ratings & research empowering a changing economy, independent agency based out of London

Early Metrics produces ratings and research to empower a changing economy. The independent agency has developed a scientific methodology to reliably evaluate both qualitative and quantitative metrics in startups and SMEs.