Net Revenue Management (NRM) or Revenue Growth Management (RGM) is vitally important – even more so in the current climate with cost-of-living and increased input costs squeezing margins. Consumer Packaged Goods (CPG) companies worldwide invest up to 20% of their revenue annually in trade promotional activities, making it the second highest line item in Profit & Loss (P&L) after the Cost of Goods Sold (CoGS).

The discipline of NRM depends on the interconnectedness of business strategy, planning, and in-market execution. Until now, this interconnectedness has been difficult to navigate, and NRM solutions have been inherently disjointed. They also do not adequately address the new wave of connected commerce platforms, such as direct-to-consumer, social commerce, last-mile partners, 3P marketplaces, 1P pure players, bricks & clicks, and others. These have grown to the point where the game has changed forever.

However, evidence suggests that many CPG companies are not yet ready to play this new game, let alone win it. Their current NRM models are implemented based on 70% intuition and 30% science, whereas to play and win in the new game it really needs to be the other way around.

Unsurprisingly, with ad-hoc implementations of NRM, 59% of trade promotions fail to generate profit, with performance varying widely—up to a 5x difference between the most efficient best-in-class CPG promotions and the least effective ones.

How the game is changing?

What is driving this change now? The answer lies in three generational forces at work that are all set to reach a tipping point in the next four years. These forces relate to dramatic changes to the “who” (the consumers), “where/when” (the shopping environment), and “how” (the methods of purchase) of the typical shopper journey.

For more information, see our related article: Going for Gold.

Shoppers’ needs have stayed the same, but thanks to data and digital platforms enabling unprecedented levels of connected shopping, their expectations have changed forever.

Over 40% of shopping journeys now begin in emerging channels. However, conversion often happens elsewhere. According to research from the Capgemini Research Institute, 32% of consumers have discovered a new product or brand on social media. This presents a significant challenge for CPG companies traditionally focused on winning shelf space in established retail formats.

This is because the shopping journey is no longer linear. It reflects the fact that every digital touchpoint is now a potential point of engagement, and every physical touchpoint has become a potential point of fulfillment. 

This directly affects CPG companies because these same digital platforms and new routes to the consumer come with a different investment profile than their existing trade expenditure frameworks, in that costs typically borne by the retailer are now the responsibility of the brand-owner (e.g., customer acquisition, retention, and fulfillment costs). 

What are the winning plays in this new game?

Most CPG companies have an NRM or RGM playbook based on the classic five pillars (brand pack-price architecture, channel/assortment mix, pricing, advertising and promo spend, and trade terms). However, this new game requires a critical update to provide an integrated view across strengthened pillars inclusive of these new digital platforms.

To regain control in this new landscape, CPG companies need to adopt a comprehensive, unified, NextGen NRM approach that spans the initial customer engagement all the way to repeat purchases.

Connecting pre-shop engagement to purchase behavior and establishing robust tracking based on Customer Lifetime Value (CLV) metrics — calculated as unique visitors × conversion rate × average order value × repeat rate—are critical challenges in building a coherent, future-ready NRM model.

See the below illustration of how NextGen NRM metrics align to drive revenue growth and value in the new connected commerce world.

Click here to read more about our collaboration with Databricks for a NextGen NRM analytics suite.

Getting into the game

Getting into the game requires the total organization—not just the sales function—to embrace a more systemic and inclusive approach to NRM that reflects the more connected commerce and full-funnel world we are operating. It will still feel somewhat uncomfortable (the challenges are, well, very challenging), but those who do will be set to be the main beneficiaries in the next 3-4 years.

The evolving role of data in modern business environments, particularly within the context of NRM, underscores the need for real-time, always-on data connectivity and agile data collaboration built on a solid data foundation. NRM’s success going forward lies in interconnectedness, where underlying levers are intricately and logically linked, driving the need for a holistic, integrated approach that spans commercial markets and operational contexts.

Collaboration is the key. The rich combination of first-, second-, and third-party data encompassing behavioral and transactional data will take the guesswork out of marketing and sales. Enabling brands to integrate signals across platforms to optimize CLV by identifying white space opportunities for new product development, targeting high-propensity consumers, and efficiently driving higher order values, and repeat purchases.

We can help

The future of NRM in CPG is becoming more complex but that doesn’t mean it needs to be complicated. We can help.

As a frontrunner in business and tech transformations, Capgemini has been working with leading CPG companies to help them extend and incorporate NRM into their ways of working for the new retail landscape. The results of our previous work have been impressive, leading to gains in annualized gross margins of up to 4% and productivity/operational effectiveness increases up to 15%.

With the prize for delivering on NextGen NRM promises to be even greater, it’s not surprising that the race to excellence has already begun.

Capgemini’s Connected Commerce is a strategic framework for helping our consumer-facing clients upgrade their go-to-market capabilities to compete and win in the ecosystem-led generations of retail. This includes a clear vision for NextGen NRM.

Our dedicated industry team can help you transform your current NRM capabilities and also leverage our extensive partner network to provide access to cutting-edge technologies and solutions, helping you unlock the full power of NextGen NRM at scale.

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. 

What do these three very different technologies all have in common – generative AI, 6G mobile networks, and autonomous vehicles? Clearly they are all exciting, but they also all rely on the science – and the magic – of advanced processors. GPUs (Graphics Processing Units) are a member of this family; a family which boasts sophisticated architectures and exceptional miniaturization, enabling high performance for massive data processing while balancing size, speed, and energy efficiency. But are we in danger of taking this incredible technology for granted?

The journey of GPUs from the 1990s to today is a tale of innovation and competition. Initially designed to enhance gaming 3D graphics, GPUs have transcended their original purpose. Thanks to their powerful parallel processing abilities, they now play a pivotal role in artificial intelligence and deep learning. Today, GPUs have transformed from specialized gaming hardware to indispensable tools that enable cutting-edge technology and underpin critical day-to-day services.

Europe’s position and challenges

Despite the critical role of GPUs, Europe finds itself behind in the manufacture of these essential processors.

High costs of cutting-edge semiconductor manufacturing technology limit GPU production to just three global players, and Intel is the only one considering production in Europe by the end of the decade. However, the design of GPUs is as crucial as their production and offers a way for Europe to regain some sovereignty in the market. Once the design of a processor (its system architecture and key intellectual property blocks) is mastered, it is technically possible to have it produced anywhere. In terms of sovereignty, this offers freedom. That’s why Europe must design its own advanced processors, even if it must depend – and it has no choice in the short term – on non-European manufacturers.

Recognizing this, global tech giants and countries around the world are investing heavily to quickly design alternatives and take back control. Yet Europe is not currently part of this effort and until it enters the fray, the gap with the rest of the world will continue to widen.

Envisioning a European GPU

Designing a European GPU is therefore a strategic necessity. The European industrial fabric (health, defense, aeronautics, automotive, telecoms, data centers) cannot depend on a single source of supply – especially one outside the region. But it is a challenge that requires significant investment estimated at several billion euros over several years. This is not just to catch up, but to ensure a diverse supply chain for critical technology.

The focus of this investment is not only on creating a GPU, but on developing a complete advanced processor with a heterogeneous architecture combining different functionalities for efficiency (though the modular ‘chiplet’ approach also offers interesting possibilities). Progress has already started across Europe. France, Germany and the Nordics have already taken steps towards this goal, benefiting from collaborations with global tech firms like Thales, and smaller specialists such as Kalray, SiPearl, VSora, GreenYellow, Menta, Scalinx, GrAI Matter Labs, and many other leading lights in the world of CPU and accelerator technologies. Capgemini, following the acquisitions of Altran and HDL, is now Europe’s leading silicon engineering services company and can drive this project forward. Leading forces across the continent have never been brought together for a common sector project like this. Combined, they give Europe the foundational elements that, if properly assembled, could constitute the embryo of a sovereign advanced processor, potentially rivalling non-European tech giants in the long term.

A unified industrial vision

The realization of a European GPU hinges on aligning European stakeholders around a common industrial vision. This involves a coordinated effort to define a unique architecture, development roadmap, software environment and ecosystem, and market strategy, supported by both the state and private sector investment.

A rapid task force could kickstart this initiative, outlining a political and industrial framework within three months. This would catalyse collaboration among industrial clients and technology providers, addressing Europe’s pressing needs for digital sovereignty and technological independence.

In summary, developing a European GPU is not merely a technological endeavor but a strategic move towards securing Europe’s position in the global tech landscape, paving the way for technological sovereignty and innovation. This will ensure Europe can continue to enjoy the current and next wave of exceptional technologies that have the ability to change the world in which we live and work.

“Good companies manage Engineering. Great companies manage Product”.

– Thomas Schranz

Semiconductors are the backbone of modern technology, playing a pivotal role in virtually every aspect of our daily lives. These tiny electronic components – which manage the flow of electric current in a device – can be found in everything from smartphones and LED bulbs, to cars, kitchen white goods and medical devices.

Looking ahead, the importance of semiconductors is only expected to grow as society becomes increasingly reliant on digital technologies. The rise of the Internet of Things (IoT), autonomous vehicles, artificial intelligence (AI), and 5G networks all require sophisticated semiconductor technology. These advancements require faster, more energy-efficient, and smaller semiconductors to accommodate the ever expanding demands of a digitally connected world.

As such – semiconductor manufacturers must produce more efficiently, meeting the ever increasing need for ‘smaller, faster, cheaper’, whilst maintaining margins, and dealing with fluctuations of demand and uncertainty of supply. Because of this, it’s increasingly evident that these companies need to better manage the requirements of the semiconductor chip product lifecycle – eg. the mix of chip complexity and the need for specialized ‘mission-specific’ chips, regulatory constraints, and various other challenges. This will allow companies to gain R&D, operational and margin efficiency, and decrease their time to market – largely by enabling digital continuity across their systems.

Below we outline major trends affecting the semiconductor industry which, due to the impact of semiconductors, also have broader global significance.

Semiconductor industry trends

• The growing importance of ecosystem partnering and selling across vertical industries: Proof of functionality and new next-gen technology, for example, AI, Metaverse, 5G, and Edge, are driving partnerships across the semiconductor ecosystem to address end markets with complete end-market platforms.
• 5G is accelerating the pace and possibilities of connectivity – and the use cases it enables: Next-gen connectivity is evolving, from wired and wireless networks to private 5G, which is revolutionizing use cases across a wide range of industries.
• Verticals are bringing chip design in-house: Semiconductor manufacturers are losing share to a growing number of product/system companies, which are designing chips in-house for use in their own products/services – allowing them to disrupt, differentiate and control the supply chain.
• The steady shift towards ‘Industry 4.0’ and fully automated manufacturing – Digitization is creating an array of challenges (and opportunities) related to collecting, managing, processing, analyzing, visualizing, and effectively utilizing data – a microchip-hungry endeavor.
• Increased product innovation and reimagined customer experiences – An increased focus on co-innovation and co-design with the goal of establishing digital continuity and a single source of truth (SSoT) for all product data. The intent is to accelerate product innovation and consequentially delight customers.
• The value of Moore’s Law diminishing: Semiconductor manufacturers competing on performance, power, and area (PPA) seek creative ways to achieve a competitive advantage, while others add value by producing customizable modular chips called ‘chiplets’ that can be combined to form a complete system-on-chip (SoC).

Why is digital continuity important to the semiconductor industry?

‘Digital continuity’ is an organization’s ability to maintain (and put to use) important information, despite ongoing changes to the organization’s ways of storing data, and relentless evolutions in digital technology. This allows an organization to connect the ‘digital threads’ (information flows) of this data across its systems. Through this intelligent information sharing and monitoring, digital continuity helps the company and its ecosystem to operate more efficiently.   

The ability to manage information will be a competitive differentiator. Success for companies that produce these chips will depend upon these companies achieving a faster time to market with a ‘first time right’ approach. Geopolitical changes and challenges (eg. certain countries ‘reshoring’ the production of core semiconductors for national security purposes) will continue to force the localization of production, and these new greenfield plants will only be able to meet the required pace with the right PLM backbone and digital continuity foundations.

The previous approach to development, ie. using custom homegrown disconnected systems, results in misaligned technical investments and technical debt – namely the accumulated cost of shortcuts taken during software development, creating increased complexity and maintenance efforts over time.

The traditional document-centric development approach often does not allow traceability between requirements, product design, or the front and back-end manufacturing of products. This loss of traceability creates additional costs, quality control issues, compliance risks and sustainability overheads for enterprises.

As such, there is a clear need for an industrialized PLM backbone that provide a single source of truth (SSoT), offering consistency, accuracy, and reliability in the use of data and information across all departments and processes. In addition, rapid integration into end-user product ecosystems (which is required to meet the competitive pace of business today) requires the use of simulation and model-based approaches.

What features would such a PLM backbone require?

• A complex hierarchical data model: Allowing oversight of variables like chip order part numbers and customer part numbers. It could also manage complex chip design, development & verification and tapeout, as well as finalize die designs. Other capabilities would include register-transfer layer (RTL) design, GDSII data management, mask set management, along with control over reticles & die variants, wafer fabrication & sort – and, ultimately, the chip assembly process to the final product.
  
  • This data model would also address product complexity and technology development needs for the data models that are used by downstream systems to design and manufacture products. These include engineering bills of materials (EBOM), manufacturing bills of materials (MBOM), and production bills of materials (PBOM).
• Management of new product introduction (NPI) programs and product portfolios: Meeting the need for new markets, changing consumer demand and emerging technologies.
• Integrated fabless and foundry management: Once designs are ready to hand over to approved foundries or to outsourced semiconductor assembly and test (OSAT).
• IP management: Providing integrated IP reuse that is controlled and secured. Transparent IP management increases efficiency in R&D, operations, and margin efficiency – whilst avoiding the risk of IP infringement.
• Product sustainability and environmental compliance: Offering integrated material substance declarations and compliance checks for Integrated Device Manufacturer and Original Design Manufacturer compliance management. Ultimately, this can help to increase the effectiveness of semiconductor equipment, moving us towards the future of sustainability compliance in the factory.   

With all the above, the semiconductor industry is looking to build integrated close-loop quality system tracking into its design and manufacturing processes.

An opportunity, for those with the means to seize it

Once the hard work has been done to establish digital continuity across an organization’s many systems, companies can expect increased efficiency in R&D, operations and margins, decreased time to market and, of course, a significant competitive advantage.

Semiconductor manufacturers today have a major opportunity to support the next generation of technology, but will only be able to properly exploit it with the kind of digital continuity that sophisticated PLM provides.

Capgemini’s world class team of semiconductor industry experts is ready to help you build a next-gen secure, intelligent PLM backbone for your semiconductor business.

Our VLSI practice experts be an integral part of your team, working closely with your business product managers and fab leadership team. We also offer pre-configured semiconductor solutions and accelerators for PLM, MES, and ERP triptych products – to help you bring everything together.

Ready to progress, or want to learn more? Meet our experts.

Commercial buildings have a dark secret; they are among the planet’s worst climate offenders. Heating, cooling and powering data centres, office blocks and manufacturing plants consumes huge amounts of energy and currently accounts for 30% of all energy consumption, and for 26% of energy-related emissions.

Consider, for example a data centre. A single data centre’s electricity usage is equivalent to that of approximately 50,000 households. This means that the combined power consumption of all data centres globally is around 200 terawatt hours (TWh) of energy annually, which is more than many individual countries need.[1] By 2025, global data production is expected to reach 181 zettabytes – much higher than the 15.5 zettabytes recorded ten years before, which means more processing will be needed, increasing data centre demands on electricity even more.

Older buildings contribute significantly to the global environmental impact too. In 2009, one of the world’s most iconic structures, The Empire State Building in New York, underwent a makeover to improve its energy efficiency. Windows were refurbished, insulation was improved, and the building’s HVAC system was upgraded. These changes led to a significant reduction in energy consumption by 38% and annual energy cost savings of $4.4 million. This retrofit has been widely cited as a landmark example of how energy efficiency measures can be implemented in older buildings to achieve substantial energy savings and environmental benefits.

The figures associated with inefficient buildings are only expected to grow given landlords now have a reduced incentive to undertake green refurbishments as a result of post-pandemic uncertainty around the level of future demand for commercial property.

This presents a significant sustainability problem that could jeopardise companies’ reputations; reduce their ability to attract and retain talent; and affect their chances of successfully securing new contracts, particularly in the public sector where environmental credentials have become a fundamental part of selection criteria.

But this sustainability issue also represents a more direct financial problem, because energy costs money. As environmental regulations become more demanding, and as the number of digital technologies deployed in modern facilities proliferates, optimising building energy consumption is not just a choice, but a necessity.

The need for digital…

Uncontrolled and unplanned energy consumption sits at the heart of the business energy challenge.

Ineffective management of the incredibly complex energy environment results in wastage and therefore cost when it comes to buildings and facilities. This is exacerbated when companies use outdated and siloed systems that restrict data-driven decisions and oblige them to respond to issues after they occur rather than preventing them in the first place. They need to take a different approach.

For example, companies often find it hard to improve the energy efficiency of their infrastructure because they don’t know about their existing inefficient processes, and they don’t fully understand the amount of energy that is needed for the day-to-day running of their facilities – often referred to as their ‘energy baseline’. Knowing the consumption patterns and usage trends, helps them make better decisions when it comes to forecasting and planning budgets. It also helps them to calculate how much energy can be saved if they make changes.

The question is how can organisations accurately measure their energy baseline, implement better processes, and work towards becoming energy-efficient?

Digitisation and automation are key elements of any intelligent enterprise-wide solution to address all three. The smart use of technology helps organisations to collect precise data on energy usage and gain valuable insights from equipment data, resulting in significant cuts in operational expenses. This is why digital solutions are so critical to addressing this problem. Digital tools make it simple to monitor, understand, and manage energy production, distribution and consumption related to buildings and facilities. They make optimising energy supply and demand far simpler than it is today. What’s more, the implementation of condition- and prescription-based maintenance based on the energy data digital tools provide can decrease downtime, improve utilisation, and cut maintenance costs.

Thus, the switch to managing the supply and demand of energy for buildings and facilities through digital tools will have a massive impact for businesses. Research tells us that ‘Demand-side optimisation’ (such as digitisation) can reduce emissions by 25%; electrifying processes can reduce emissions by 30%; and decarbonising energy supplies can reduce emissions by 45%. Together these measures, all enabled by smarter digital tools, can have a tangible impact on closing the net-zero gap by 2050.

… and the destination

So what organizations need is a platform for state-of-the-art monitoring and control of the energy of buildings and facilities by harnessing the power of Internet of Things (IOT) and artificial intelligence (AI) technologies. They need an approach that optimises energy efficiency, and that is scalable both operationally as well as geographically.

Capgemini’s Energy Command Center is designed to meet these needs. It provides precise information about energy consumption and carbon emission via power and energy monitoring and uses smart technology for real time monitoring and control of energy-intensive utility equipment.

It’s the aggregation, collation, and interpretation of data that is key. With the Energy Command Center, this data supports decision-making for resource optimization and decarbonization. Artificial intelligence and machine learning algorithms facilitate the control of building operations and assets remotely and ensure that expert advice is available at remote locations, thereby reducing downtime.

In addition, our approach complies with sustainability reporting requirements and enables organizations to demonstrate their commitment to environmental responsibility.

In the second and final article in this short series, we’ll take a closer look at the Energy Command Center concept, and at the results that might be expected.

[1]The Staggering Ecological Impacts of Computation and the Cloud, The MIT Press Reader, February 2022