Banks play a crucial role in driving the sustainability transition. Their greatest influence lies in guiding clients towards adopting more sustainable business practices. By redirecting financial resources, banks can significantly speed up the shift towards a greener economy. Yet, to be able to double-down on this role, the financial business case needs to become clearer. Until now, sustainability has been a regulatory-driven and mainly considered as a cost driver.

The business case can be made: with the market for sustainable finance products expectedly growing from 5.4 trillion now towards $31.1 trillion in 2032, the sustainability transition offers a great opportunity for banks. A bank committed to sustainability must understand the clients that drive this growing demand. Bankers, being the main connection between the bank and the client, will be key to understand these clients.

Banking will become more multi-faceted, and more complex. Before, a banker could focus on core banking parameters, such as cashflow and collateral. Now, additionally, they need to advise clients what it means to transition to a sustainable future, how to integrate sustainability best practices and accurately report on mandatory ESG disclosures. In this article, we address three important sustainability related focus points for bankers. We believe that taking these client focused considerations into account, leads to a positive business case for sustainable finance. The focus points are:

1. Bankers need to understand the clients’ sustainability ambitions to align with the bank’s strategy
2. Bankers will have to offer tailored sustainability advice to clients
3. Bankers need to effectively gather essential clients’ sustainability information in a non-invasive way

In the rest of this article, these focus points are explained in more detail.

Bankers need to understand the clients’ sustainability ambitions to align with the bank’s strategy

Many bankers already have sustainability related conversations with their clients. Each client is unique; some clients have significant sustainability ambitions, and some are happy with the way things are going now and are reluctant to change. If a bank has an ambitious sustainability strategy, it is important that it attracts clients that have an aligned ambition. Such ambitious banks shift their focus from the ‘traditional creditworthiness view’ towards a new balance, where the clients’ sustainability ambitions and actions are also considered.

At Capgemini, we developed a simple matrix to show this shift. We combine two important variables when it comes to the bank-client relationship towards sustainability. We take the traditional creditworthiness of the client^[1], and combine it with the ‘sustainability ambition’. These sustainability ambitions are the eagerness of the client regarding making a sustainability transition^[2], and is placed on the x-axis in the figure below.

We classify clients on this axis and divide them into a matrix. This helps decide which client type the bank should focus on, and which approach to take for existing clients.

If a bank itself has high ambitions regarding sustainability, it wants to have equally green clients in their books, whilst ideally also being highly creditworthy.

For the sake of grouping them, we have named the high creditworthy and sustainability ambitious clients “Superstars”. Less creditworthy but ambitious clients we call “Idealists”. High creditworthy, but low ambitious clients are “Grey Geese”. If they are neither willing to be sustainable, nor sufficient in their creditworthiness, we call them “Strugglers”.

Of course, all banks with an ambitious sustainability strategy would rather have the Superstars in their portfolio, meaning that there is high competition among banks to bring in these types of clients. When a bank not only wants to focus on this highly competitive client segment, it can also choose to focus on another segment. It can choose for the idealists, which have high sustainability ambitions, but a lower creditworthiness. In this case a higher risk acceptance might be warranted. Ideally, the bankers can push clients towards the Superstars quadrant by offering financial advice. In the same way, there are possibilities for green^[3] banks to target Grey Geese. These grey clients can be persuaded by bankers to heighten their sustainability ambition.

The best focus area for a bank is mostly dependent on the bank’s sustainability strategy but is also influenced by which type of client is most dominant in its current portfolio. An assessment should take place to find the sweet spot for the bank, and if a focus should take place on a specific client segment.

Bankers will have to give tailored sustainability advice to clients

Apart from understanding which client to focus on, acting upon sustainability ambitions is extremely difficult. Helping a client with their sustainability transition will be a new skill bankers have to develop. A banker needs to understand the financial position of a client and become versed in sustainability. Generally, they need to focus on three steps.

1. The climate risks which the client is exposed to
2. The latest sustainable sector developments for the clients they service
3. Relevant sustainable banking products for the client’s situation

Below examples of these steps:

Climate risks

A banker needs to understand the climate risk exposure of the client. This is to ensure the client’s business continuity in a changing climate. For example, a banker can point out that if a client has three textile suppliers that are all in the Bangladesh coastal region and deliver 90% of its inventory, more frequent and intensive flooding might be a business continuity risk. Another example is the risk that carbon prices are imposed or heightened for a relatively carbon intensive steelmaker. Bankers need to have a holistic view on these risks, and help clients mitigate them.

Sector developments on sustainability

Mitigating these risks is very sector specific. Improving the impact of a fashion boutique store is very different from “greening” steel making. On these matters, sector expertise is of the essence. Bankers should understand the latest sustainability related developments within a sector. Shipping bankers should know the latest ship legislations, which technology could aid the shipping company lower their emissions, and which options should be most beneficial in the client specific situation.

Sustainable banking products

Subsequently this knowledge should be combined with financing expertise. There are a lot of new questions bankers can ask, and again, these will need to be highly sector specific. Let’s start with the most important question: “Is a client helped with the financing of their transition?”

Let’s take the example of a bakery:

Would a bakery be better off with a new and efficient electrical oven, instead of a gas-powered one? Can we finance that favorably for the client, and will the client be left with sufficient free cashflow? Is the investment in an electrical oven worth it, considering the expected remaining time in business and the resale value of the oven? Are there additional subsidies the client can be helped with? Can the baker install solar panels to lower the oven’s energy costs? What is its energy contract currently, and can it be improved? Favorable financing, and “wiggle room” for bankers to tailor towards the sustainability need of a client often materialize via different products a banker can offer a client. Whether it is a Sustainability Linked Loan, a Green Loan or a Sustainable Mortgage, bankers need to know what they can offer. This also requires effort from a banker.  

Ideally, a banker becomes an expert in sustainability and can help the client with both the financial case as well as the new sustainability challenges. Yet, this asks a lot of a banker. Not all bankers will be able to become fully comfortable with this new area. In practice, we see that banks sometimes set up a support team. This team supports bankers with specific sustainability related questions. The degree of involvement depends on the amount of help the bankers need regarding sustainability: the support team can join for every client visit, so the responsibilities are split, or only jump in when for example setting highly specialized targets for Sustainability Linked Loan.

Bankers need to effectively gather essential the clients’ sustainability information in a non-invasive way

Banks need to understand the sustainability impact of their portfolio. Part of this need comes from regulatory pressure. Regardless, most green banks have also made voluntary commitments to lower their impact on the climate.

Understanding the sustainability impact of the portfolio requires a lot of new information. Information such as the client’s greenhouse gas emission, or the EU Taxonomy’s ‘greenness of activities’, has traditionally not been something a bank was interested in. After all, it did not convincingly impact the creditworthiness of clients. Likewise, lowering sustainability impact of a bank’s portfolio has not been a goal in the previous decades.

This means new data challenges arise. As mentioned before, the targeted climate impact reduction goals can only be reached when banks can finance clients on more sustainable business practices, or to only finance (relatively) green assets. This requires detailed and frequently recurring sustainability information on client and asset level.

Understandably this requires a lot of effort. Luckily there are more benefits apart from regulatory adherence. Having detailed information allows for more sustainable product innovation, picking the most transition-worthy clients, a lower exposure to stranded assets and many types of other benefits, ranging from more sustainable brand recognition to being more attractive for sustainability-conscious talent.

Sustainability related data requirements and methodologies are not yet standardized. This is currently visible in relatively a lot of variation in client outreach. This frustrates clients and bankers alike, and hampers sound data gathering. Even though clients can have strong sustainability ambitions, it does not mean that clients accept an endless barrage of either vague or oddly specific ESG questions from a banker.

This creates a squeeze, as a lot of client specific information is also necessary for ESG reporting and for example tracking the bank’s decarbonization pledge. However, these issues can be mitigated. Two key factors play a role in making the client outreach journey smoother; make sure it is client centric and efficient.

Below two best practices:

1. Client centricity entails that it is clear why the bank asks certain questions, and how the client benefits. Also, it is important to make sure the client understands the questions asked, as the clients are not ESG experts themselves. They are entrepreneurs or business leaders. Therefore, it is also the perfect opportunity to help the client with their transition. See below an example for an agriculture (horticulture) client: 

2. Efficiency can be subdivided in finding a methodology that circumvents client outreach from bankers and making sure information that is requested is used and stored properly, so that bothersome recurring requests are limited.  
   • Using public or third-party data is a more and more common way to retrieve ESG data. Either client specific or location-based information can be derived from an external party. The amount of information offered is growing fast, both from data vendors as well as from more raw data sources, such as national statistics organizations. Alternatively, climate impact estimations are allowed to be made, based on generic client data, such as industry or country of incorporation of the client.
   • Storing and using information properly is key to unburden bankers. This prevents repetitive questions. Yet, as ESG data within the bank is rather new, it is not a given that this is immediately well-implemented. With Capgemini we have designed and implemented data management best practices regarding Sustainability Data. Some key components are as follows:
     • First, a solid process should determine what is considered sustainability data and what is not. This solves multiple discussions before they start. An example is the greenhouse gas emission of a collateral. Is it specific ESG data, or an additional data attribute relating to a collateral – and should remain with the collateral data owner?
     • Secondly, a separate role should be created for an ESG data owner within the Data Office. This person is responsible for the ESG data. This is the go-to person in the organization for ESG data management; whether it is missing data, a prioritization issue, or a decision on a new ESG data system, the ESG data owner should be the main character.
     • Next the ESG Data Use cases need to be clear from a business perspective. This way, it is clear what needs to be implemented. There is a big difference in data needs for reporting or for portfolio steering.
     • When the use case is clear, it needs to be operationalized. Operationalization consists of several activities, such as bringing the use case from words into output data attributes (data that ultimately is being used by the end user), finding the best methodology to get the used data attributes, and distilling such a methodology back to supporting data attributes (input data attributes). The methodology can also be influenced by whether data is already available via existing processes. A final step is converting these attributes into IT requirements, including description, format, frequency of use, etc., and finding the right IT environment to store this information^[4].
     • If available, using the existing data architecture -such as a data marketplace – for central storage and reuse, will ascertain that data will not be requested twice, or that old data will be used.

When data gathering is both client centric and efficient, the client relationship is better, and time is saved. This enables the banker to help clients take the next step in their sustainable transition.

Conclusion

The role of bankers is changing quickly. This requires a lot from bankers themselves, and they will need to acquire new skills. They ought to be helped. The banks’ strategy ought to give clear guidance on what a banker should be able to do for different types of clients.

The bankers should also be helped by a strong data governance regarding ESG data, which ought to give good client data without overburdening the bankers with client outreach questions. This gives focus towards the company and the employees.

Capgemini can both help in the customer and employee journey’s and is a frontrunner on managing ESG data. Furthermore, Capgemini has sector sustainability experts which can support bankers on the latest trends and their applicability to real customers.

To find out more, do not hesitate to request a meeting with our expert, Diederick Levi.

From AI-enabled hyper-personalized experiences to the rise of responsive ads via retail media networks to next-gen supply chain automation, the retail industry is transforming on all fronts.

But while retailers face unprecedented disruption across markets, digital enablers and consumers, it is important to remember that this onslaught of change also offers an unparalleled opportunity. Here we offer our take on three ways the retail landscape is changing, the retailers that are at the forefront of these trends, and the steps companies can take to turn fantasy into future success.

A glimpse from NRF 2025

Blended retail: Every space has commercial potential

Long gone are the days of clear delineation between physical and digital channels. Now, retailers are operating in a blended reality, where every space, interaction, and data point has commercial potential.

Take Gap, for example. In a session led by Bill Forbes, Sr. Director of Mobile Software Engineering, we learned that the retailer has more than 1.6 billion visits to its Gap app. Part of Forbes’s job is figuring out how to leverage AI to draw the insights out of those visits and determine the best touchpoints—digital, physical, or somewhere in between—for shoppers. The retailer is now experimenting with a fashion AI system designed to guide shoppers through tasks such as gifting, event styling, and brand discovery while addressing core challenges like accurate sizing, outfit recommendations, and relevant reviews.

The takeaway for retailers is that in this current landscape, the product has become the consumer. Retailers are not selling physical goods so much as meeting consumer needs. With an incredible amount of data at their disposal, the business shouldn’t be around static products, but dynamic, personalized experiences that transcend channels and unite touchpoints.

The new era of connected consumption and contribution

The customer journey is no longer linear. Nor is it rooted in the idea of passive consumption. Instead, retailers are now operating in a dynamic and connected environment—one where the journey is determined by the customer’s needs, not the retailer’s capabilities.   

As a result, companies will need to dramatically transform their systems and processes to enable this new paradigm. What used to be back-office functions must expand to include customer-facing applications.

In a keynote session featuring Burberry CEO Josh Schulman, the retail exec outlined a new framework that the company designed to unite merchants, product development teams, and business leaders to help enhance customer engagement. This initiative focuses on reviewing product archetypes, identifying areas for improvement, and aligning investment, merchandizing and distribution strategies to drive growth.

The key for retailers is to connect the business with their consumers as closely as they can. The mandate isn’t just about selling products—it’s about being an authentic part of consumers’ lives.

Know what consumers want

Every retail success story highlighted at NRF had one thing in common: A deep understanding and focus on the consumer. It’s what’s behind Bath & Body Works’ high NPS scores, Foot Locker’s high-impact loyalty program, and Tommy Hilfiger’s 40-year history as one of the world’s most celebrated brands.

On one hand, brands and retailers have an incredible amount of data at their disposal to help them make better decisions. But what may be missing is a broader understanding of how consumer behaviors and preferences are changing.

Filling this gap is the reason for our annual research study by the Capgemini Research Institute, What matters to today’s consumer. Unveiled at NRF 2025, this report highlighted some important findings that retailers can use as a lens when looking at their data.

For example:

• Over half (58%) of consumers have replaced traditional search engines with gen AI tools for product/service recommendations, an 86% increase from 2023
• Two-thirds of shoppers say they would switch retailers due to a lack of sustainability
• Over the past 12 months, online adverts influenced nearly one-third of online purchases

Do any of those data points spark new ideas about what to look for in your own data? Do they serve as a starting point when considering investments in new technologies or capabilities, like AI or retail media networks? Do they give you pause about how to adapt or refine your goals, priorities and approach for 2025 to be more customer-focused?

We believe our report to be a useful tool for retailers to better understand consumer sentiment and behavior. To download a copy, please visit our research page, What matters to today’s consumer: 2025.

What’s next for retailers: 3 steps to guide 2025 and beyond

While every retailer’s journey to the future will be different, we’ve identified three core principles to serve as the foundation of success, guiding businesses as they unlock growth, adapt operations and embrace purpose.

Unlock channel growth

Growth starts at the channel level. As companies consider their future strategies, they must identify where they can drive the greatest influence and impact. One promising opportunity highlighted by our research is the rise of retail media networks—leveraging existing digital and physical infrastructure elements to deliver personalized digital experiences to high-intent customers and forge new connections with brand partners. The value of retail media networks is significant: According to our analysis, Kroger delivered $1.3 billion in operating profit in 2023 from its alternative profit businesses, including Kroger Precision Marketing.

Adapt to compete

Consumers are now willing to pay 9% of the order value for 2-hour and 10-minute delivery. 65% of consumers consider a 2-hour delivery format a key attribute when they shop, indicating that retailers should consider integrating this into their business models. Is your supply chain up to the challenge? For grocery and mass merch segments, where quick delivery and product availability are paramount, adapting operations to include localized inventory systems will be critical. These enhancements can drive efficiency and ensure customer satisfaction in a highly competitive landscape. The non-linear, dynamic, and multi-directional nature of today’s retail landscape requires a next-gen supply chain. Retailers need to create a holistic strategy that simultaneously takes cost out while also meeting the needs of the customer. 

Lead with purpose

Sustainability and purpose-driven products may be last on our list, but it is certainly not an afterthought for modern shoppers. In fact, our research revealed that consumers want retailers to do more in this area, such as offering clear and compelling information about sustainable choices, providing easy-to-understand information about product sourcing, traceability and nutrition, and creating programs that tackle everyday issues like food waste. As retailers plan for the coming year, they can’t ignore the call to lead with purpose on issues that matter.

Turning science fiction into shopping reality with Capgemini in 2025

As retailers face waves of disruption on all fronts, leaders have a fundamental choice: stay the course or embrace the opportunity for change. In today’s dynamic landscape, those who seize the possibilities of transformation will not only navigate the challenges ahead but also redefine the future of the industry, driving innovation, resilience, and long-term success.

Need help turning your NRF inspiration into action? Our team can help. Set up a consultation with our experts to learn more about how Capgemini can help your organization get the future you want. 

Customer Data Platforms (CDPs) are essential in nearly every industry, enabling organizations to create detailed customer profiles, predict behavior and provide valuable insights for businesses aiming to enhance customer engagement and experience.

While new capabilities introduce new possibilities – realizing them can expose unexpected limitations. In this case, turning these customer insights into compelling interactive experiences that resonate with individuals starts with producing and managing huge amounts of content.  

The virtuous cycle of personalization  

Personalization is no longer optional for digital marketers – it’s an essential component of any marketing strategy. With the rise of diverse digital channels and touchpoints, customers expect (often subconsciously) content tailored to their behaviors, interests, and unique needs.

This is where CDPs deliver their value. With these supercharged databases organizations are able to craft hyper-targeted marketing campaigns that resonate with specific customer segments. And the more your customers interact with the content, the more data is generated for creating better targeted campaigns.

This creates a virtuous cycle of data, strategy, content and consumption.

Content-data paradigm 

CDPs are adept at collecting and analyzing customer data. By transforming these insights into engaging content, businesses increase their marketing effectiveness.  However,  scaling the production of content to meet marketing demands amplifies this challenge. To deliver a truly exceptional customer experience, we need a content production and  delivery pipeline that’s fast, flexible, and able to keep up with ever-changing customer preferences. The key is to bridge the gap between data-driven insights and engaging content.

While modern CDPs are especially effective capturing data to build segments and user profiles, the impact of these insights is only realized through equally compelling and timely customer content

Essentially, delivering targeted campaigns means creating personalized content for diverse sets of audiences. This is where traditional content creation falls short, sparking the need for a faster, more adaptable content production pipeline to meet the with dynamic, real-time demands for high-quality, customized content.

Translating the data insights into comprehensive and customized content which resonates with your target customers is the need of the hour.

The content gap: building a robust content supply solution stack 

With demand set to quintuple over the next two years, most organizations are finding it challenging to meet these escalating requirements. The fast-paced digital landscape continues to narrow the window of (user) relevance, compressing cycles and timelines for departments already struggling to keep up with demand volume Inevitably kicking off a downward spiral of futility which one can only escape with new strategy optimized with technology.

As Adobe’s Chief Strategy Officer, Scott Belsky, reflects in a recent paper published by Capgemini Research Institute, “Marketing professionals need to start to experiment and think expansively about what Generative AI can do for them. The future of the digital world is going to be more personalized than ever before. Marketing has not been personalized down to the individual consumer yet, at least not at scale in any profound way. And that is the future.”

As Scott astutely observed, complex problems call for innovative solutions. Adobe’s GenStudio is a solution that streamlines the entire content lifecycle, from initial planning and workflow management to final delivery and analytics. Powered by Firefly generative AI, it enables you to meet increasing demands, reduce costs, accelerate time to market, and drive significant ROI.

Business impact of a strong content supply chain

The true power lies in the integration of these tools. It provides organizations with the key to create, manage and distribute content while gathering insights with the much-needed velocity to attain hyper-personalization at scale. Coupled with our strategic expertise, this connected platform helps them deliver value to your customers effectively, and efficiently. 

Installing a solid scalable content delivery system can help with: 

1. Efficiency Gains- Reduction in content production timeline with automated routine content adaptation tasks can reduce the time and effort required for each step in the production cycle. Efficient and structured asset management will help establish standardized workflows. 
2. Lesser bottlenecks and agile workflow- By implementing a streamlined content workflow that facilitates real-time collaboration, we can mitigate bottlenecks such as redundant editing and version control. Parallel collaboration tools streamline the approval process, accelerating content production and minimizing single points of failure inherent in traditional workflows.
3. Improved scalability- Connected tool ecosystems allow for efficient and improved resource utilization.  Dynamic content scaling across media, channels, and formats makes personalizing content at a large scale possible in a short duration of time. The automated image and text creation tools of Firefly allow you to create content almost magically, in the blink of an eye. Scott Belsky (Adobe) uses ‘automagically’ to describe Firefly imaging models. 
4. Consistency and quality- Using a unified ecosystem to go about the content production cycle facilitates us to maintain a uniform brand image. Consistent high-quality visuals along with customized personalized experiences for simultaneous customer segments attract customers and inspire loyalty.  
5. Increased engagement and ROI- Increased responsiveness with personalized content and an easy go-to-market production cycle will significantly boost your credibility among your consumers. By understanding and catering to your customers’ needs, you can foster loyalty and encourage repeat business. With comprehensive and real-time data, measuring the performance of marketing strategies also becomes convenient and easy.  

The path forward 

To scale personalized content creation, a strategic approach is essential. This involves leveraging advanced tools and technologies to streamline the content production process, while also optimizing workflows and training teams to effectively utilize these tools.

A seamless and efficient content supply chain is critical to drive personalized customer experiences. This involves leveraging advanced tools and technologies to streamline the content production process, while also optimizing workflows and training teams to effectively utilize these tools.

At Capgemini, working together with Adobe, we reimagine customer experience by combining strategy, creative design, data and technology, so that our clients can transform their businesses to drive sustainable growth, operational excellence and the ability to adapt to change.

Ready to unlock the power of personalized content? Join us at Adobe Summit to learn how our streamlined approach can help you transform your content supply chain and drive business growth.

The Need for an Engineering Doctrine 

As CTOs, we face a unique set of challenges: the rapid pace of technological change, the convergence of digital and physical worlds, and unpredictable external forces. These complexities require more than just strategic plans; they demand actionable principles that can guide day-to-day operations and long-term projects. This is where an engineering doctrine comes into play. 

An engineering doctrine is vital for several reasons. Firstly, it provides a clear set of principles that guide the execution of strategic priorities. This ensures that all engineering activities align with the company’s broader objectives, fostering consistency and coherence across various projects. This alignment is essential for maintaining a competitive edge in a rapidly changing market. 

Secondly, an engineering doctrine helps bridge the gap between high-level strategy and day-to-day operations. By translating strategic goals into specific actions, it enables teams to focus on what truly matters, driving efficiency and productivity. This operational clarity is particularly important in large organisations where the complexity of projects can often lead to fragmentation and inefficiency​. 

Moreover, the doctrine promotes agility and adaptability. In an era where technological advancements occur at breakneck speed, having a flexible framework allows the organisation to pivot quickly in response to new challenges and opportunities. This agility is a critical component of modern engineering practices, ensuring that the company can stay ahead of the competition and continuously innovate​. 

And it enhances communication and collaboration. An engineering doctrine establishes a common language and set of expectations across the organisation. This shared understanding fosters better collaboration among teams, reducing misunderstandings and aligning efforts towards common goals.  

Our Engineering Doctrine 

At Capgemini Engineering, our own engineering doctrine encapsulates the lessons learned from our extensive experience in running engineering innovation projects. This doctrine aims to be time-responsive and context-sensitive, ensuring it remains relevant in an ever-changing technological landscape. 

Our engineering doctrine addresses several key areas: 

1. Artificial intelligence is transformational – guiding the comprehensive adoption of AI across the organisation, focusing on transformational applications rather than isolated use cases. 

2. Treat sustainability as a systems issue – prioritise according to reliable data; integrate sustainability into every aspect of engineering practices to ensure long-term viability and environmental responsibility. 

3. Agility through model-based engineering – exploiting collaborative data models and mature tools to accelerate delivery and acceptance across disciplines, enhancing responsiveness and adaptability in project execution. 

4. Prioritise the role of the human in engineering – incentivising creativity and problem solving whilst ensuring that human-centered design and social acceptability are at the forefront of product development and engineering processes. 

5. Engage with key ecosystems – contribute to the standards and tools that enable network effects 

Implementing the Engineering Doctrine 

To effectively implement an engineering doctrine, CTOs must ensure that it is deeply integrated into existing organisational culture and processes. This involves: 

• Communication and Training – clearly communicating the doctrine to all stakeholders and providing training to ensure everyone understands and can apply the principles in their daily work. 

• Continuous Improvement – establishing mechanisms for continuous feedback and improvement, ensuring the doctrine evolves with technological advancements and organisational needs. 

• Alignment with Strategic Goals – ensuring that the doctrine is aligned with the company’s strategic goals and themes, such as sustainability, digital transformation, and human-centered design. 

• Metrics and Monitoring – setting up metrics and monitoring systems to track the effectiveness of the doctrine in driving desired outcomes and making adjustments as needed. 

A strategic tool for tactical excellence 

An engineering doctrine is indispensable for a CTO. It transforms strategic priorities into actionable plans, enhances operational efficiency, promotes agility, improves communication, and embeds a culture of continuous improvement. By leveraging such a framework, CTOs can navigate the complexities of the technological landscape and drive their organisations towards sustained success and innovation.At Capgemini Engineering, we continue to refine our engineering doctrine to meet the evolving challenges of the technological landscape, providing a clear path for our clients to achieve their strategic goals. As CTOs, embracing such a doctrine can help navigate the complexities of our roles and lead our organisations towards a successful and sustainable future.

To explore further

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 1: Introduction

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 2: Introduction

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 3: The Core vs Context Model

The Core-Context model

The Core-Context model, introduced by Geoffrey Moore in 2006, is based on the rationale that the value of a company is tightly tied to the competitive advantage it has over its competitors, both in terms of Competitive Advantage Gap (CAG), which represents the difference with the competition, and Competitive Advantage Period (CAP), which defines the time this competitive advantage will be kept.
This implies that companies have to focus their scarce resources on creating and maintaining this competitive advantage, and that puts the processes in two main categories:

• Core: any process that contributes directly to the competitive advantage (CAG or CAP)
• Context: all other processes required to fulfil commitments made to one or more stakeholders in the enterprise.

The Core/Context model provides a valuable framework for CTOs to strategically prioritize and manage engineering and technological initiatives. By distinguishing between core activities that drive competitive advantage and context activities necessary for successful ongoing operations, CTOs can make informed decisions on resource allocation and innovation focus.

Aligning the Core-Context Model with Themes

A clear vision of an organizations core and context activities, and their criticality, remains a crucial support to effective decision making. The themes identified above, however, do present challenges and opportunities to re-think the implications of this model. For example,

• Advancing technology has the potential to shift the boundary between automation and outsourced services in fulfilment of context activities
• New technologies will require knowledge of, and capabilities in, new domains in core activities (for example in data-driven research).
• Market commoditization may encourage movement of activities from critical to non-critical, even as opposing pressure arises from strategic concerns and the need for robustness in global supply chains.

Gaining and maintaining clarity on the challenges and opportunities here is key. At Capgemini Engineering, we continue to leverage this approach, helping our clients achieve their strategic goals and drive sustainable growth through focused engineering innovation.

To explore further

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 1: Introduction

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 2: The Importance of Thematic Focus

Innovation

The CTO Playbook for Innovation Strategy in Engineering – 4: Engineering Doctrine

Thematic Focus: A Strategic Imperative 

In our previous discussion, we identified the three main factors influencing CTO decision-making: the pace of change, the convergence of digital and physical innovations, and unpredictable external forces. These factors underscore the importance of having a thematic focus to guide our engineering and technological efforts, and the way we prioritise. 

At Capgemini Engineering, we have developed five key themes that help anchor our strategic direction. These themes emerged organically, reflecting the bottom-up recognition of crucial areas that are influence our customers every day. They are interconnected, highlighting the multifaceted nature of modern engineering challenges. Below I have outlined the rationale behind each one:  

Five Themes Driving Engineering Innovation 

1. Organic Engineering: 

Organic engineering is inspired by the resilience and efficiency observed in natural systems. This theme focuses on designing products and systems that are both autonomous and efficient, much like nature itself. The aim is to create engineering solutions that can adapt and evolve, ensuring long-term sustainability and resilience in the face of disruptions such as those seen during the COVID-19 pandemic. This approach is evident in innovations like additive manufacturing, where nature-inspired lattice structures enhance product strength and flexibility. 

2. Resource Revolution: 

The resource revolution theme addresses the critical need to engineer materials at a molecular level to meet specific requirements that natural materials cannot fulfil. This theme is about creating materials with tailored properties, such as high thermal conductivity and low expansion rates, which are essential for advancing various technological fields. This revolutionary approach marks a significant departure from traditional engineering practices and is key to driving future innovations. 

3. Hybrid AI: 

Hybrid AI combines classical machine learning with advanced artificial intelligence, grounding AI applications in solid, defensible knowledge bases. This theme focuses on leveraging AI to enhance human capabilities rather than replace them, ensuring that both human intuition and machine efficiency are optimally utilised. The development of augmented engineering tools – where AI assists engineers in making more informed decisions; and autonomous systems in defence, where human machine teaming reduces the need to put people in harm’s way to achieve military outcomes, are both examples in practice. 

4. Digital Fabric: 

The digital fabric theme encompasses the foundational technologies that enable advanced computing and connectivity, such as 5G connectivity, edge computing, and advanced data architectures. These technologies are crucial for supporting the other themes by providing the necessary infrastructure for real-time data processing, communication, and system integration. This interconnected digital ecosystem allows for seamless integration and scalability of engineering solutions. 

5. Velocity of impact: 

This theme addresses the societal and ethical implications of technological advancements. It emphasises the need for responsible innovation that considers the broader impact on society and the environment. This theme is particularly apparent in the context of autonomous vehicles and AI, where the social acceptance and safety of these technologies are paramount. Engineers must ensure that their innovations contribute positively to society, fostering trust and acceptance. 

The power of themes for the CTO 

Having a solid thematic focus provides a strategic framework that helps CTOs balance innovation; practicality; and societal responsibility to overcome the dilemma of what to progress and what to hold off on. By aligning engineering efforts with themes that are uniquely relevant to their organisation’s strategy, CTOs can ensure that they anchor their decisions around what really matters in the areas that will enable them to achieve their corporate goals – be they commercial; environmental; or societal. Engineering, with its focus on practical application and real-world problem-solving, remains the cornerstone of this journey, guiding us through the ever-changing landscape of technology and innovation. 

Engineering drives global growth by advancing technology, boosting productivity, and improving efficiency across industries. Strong infrastructure reduces costs, enhances connectivity, and opens up markets, while engineering projects promote international collaboration. Engineering also addresses emerging threats, supporting sustainability, defence, and global biosecurity efforts. The IMF’s 2024 World Economic Outlook stresses that engineering innovations are key to sustaining global economic momentum. Chief Technology Officers (CTOs) must prioritise the development of effective engineering innovation strategies to foster growth, but this task is increasingly complex and critical. The challenge is shaped by three key factors. 

Three influencing factors

The first factor is the pace of change. The speed at which innovation occurs makes effective decision-making more difficult. Digital transformation, driven by advances in artificial intelligence, machine learning, and the Internet of Things (IoT), is accelerating rapidly. This evolution also extends to the physical world through innovations in materials science, nanotechnology, and biotechnology. CTOs must stay ahead of a constantly shifting technological landscape in both realms. The volume of information they receive today is overwhelming compared to previous generations, and they must discern what is substantive versus speculative, adding complexity to their decision-making. 

The second factor is the convergence of digital and physical innovation. This convergence reshapes industries, creating a multiplier effect where the combined impact of these innovations is greater than the sum of their parts. For instance, semiconductor advancements are opening up new possibilities in biology and medicine. CTOs face the dual challenge of staying ahead of rapid change and managing a vast array of potential advancements. 

The third factor is unpredictable external forces. CTOs must navigate an environment marked by rapid, unpredictable changes driven by societal demands, environmental concerns, and global economic shifts. With the convergence of digital and physical innovation, new opportunities and threats can arise quickly, requiring technology leaders to remain agile and responsive. 

The power of engineering for CTOs

The impact of these three factors makes it difficult for CTOs to plan long-term strategies. But they are held to account on their ability to do so, regardless.

This is why engineering is so pertinent, it  is an essential discipline to navigate the shifting sands  of technological change effectively. Its grounding in real world application, and its requirement to consider immediate consequences on people, processes and organisations makes it highly relevant to the pace of change. While fundamental science provides the theoretical foundation for technological advancements, it is engineering that converts these into practical applications because it is inherently focused on solving real-world problems and achieving desired changes in the physical world. It is this relentless focus on effective application that makes engineering indispensable for CTOs dealing with the convergence of digital and physical environments, and the use of technologies that work effectively in both.  

The CTO’s Dilemma

To accommodate the three influencing factors above, CTOs must strike a difficult balance. They need an engineering innovation strategy that fosters a culture of innovation within their organisations, where engineering teams are empowered to experiment, iterate, and develop cutting-edge solutions with freedom to explore. Yet they must simultaneously ensure that any engineering efforts driven by this strategy are aligned with the company’s overall business objectives and societal responsibilities, whilst also taking account of unpredictable external factors affecting the wider environment in which the company operates. Constantly navigating between these shifting sands is the essence of the CTO’s dilemma and they are understandably wary of making these tricky choices. Effective decisions are seldom reported but bad ones can become the stuff of corporate folklore. Nokia’s decision to pass on the Google Android operating system and Kodak’s dogmatic adherence to physical film over digital imaging are strategic failures driven by CTOs that defined their corporate stories. It’s a challenging time for this cadre of executive leaders. How can they tackle the task in front of them?   

In the coming blogs in we will cover the tools we use to set our innovation strategy for engineering.