NEW TECH VALUE CASE

TRANSFORM THE CORE

TO FUND THE NEW
New Tech imperatives—growth and speed

NEW TECH GROWTH WITH

NEW TECH
Plan and buy Move Sell After sales
GROWTH
TOPLINE
~5 to 10% ~1-2% ~1-2% ~2-5% ~1-2%
IT as Enabler Indicative

SPEED
ACCELERATE DIGITIZE DIGITIZE
TIME TO MARKET OPERATIONS EXPERIENCES
BY 30 to 40% 2

NEW TECH NEW TECH COST New Tech New Tech New Tech Model
EFFICIENCY REDUCTION and Architecture Delivery and Workforce
IT Cost Indicative
Reduction ~20 to 40% ~5-10% ~10-15% ~10-15%

1 Based on Accenture experience Potential EBITDA1 improvement through Digital. Digital Value Lab: Identified means to improve client’s performance by 20%
2: Accenture Internal Benchmarking Copyright © 2018 Accenture. All rights reserved. 2
 THE SUCCESS OF NEW TECH IS MEASURED BY HOW W
DIGITAL CAPABILITIES DRIVE BOTH REVENUE GROWT
AND OPERATIONAL EXCELLENCE
Increased
Growth Revenues
CUSTOMER FOCUS
New New Revenue Streams: Enabled by new digital
business models
Revenue
Streams
Revenue Lift Revenue Lift: Incremental revenue enabled by digital
Due to Digital technologies
Traditional
Revenues Traditional Revenues: Revenue from current models
2018 2019 2020 2021 2022 2023 …
Illustrative
Process Simplification: Enhancing processes by
Process Simplification removing redundant or wasteful activities
Productivity
Improvements Productivity Improvements: Increased output and
Through Automation quality by automating routine / mundane tasks

Efficiency
ENTERPRISE FOCUS Intelligent Enterprise
Intelligent Enterprise: Next generation intelligence
capabilities designed to enhance human decision making
and execution

Unlocked Value

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 HOW NEW TECH USES DIGITAL CAPABILITIES TO DRIVE
BOTH REVENUE GROWTH AND OPERATIONAL
EXCELLENCE
Increased
Growth Revenues Digital
CUSTOMER FOCUS Playing to Win: Commits to
Capabilities
• eCommerce Enablement
New Market Penetration & Revenue • Collaborative Commerce
Revenue Growth • Digital Consumer
Streams Experience
Revenue Lift • Pricing Analytics
Due to Digital
Traditional
Revenues • Digital Marketing
2018 2019 2020 2021 2022 2023 … • Personalized Loyalty
Illustrative Playing Not to Lose: • Digital Procurement
Focuses on flexibility & • Distribution Optimization
Process Simplification revenue shift • Digital Support Functions
• R&D Process
Productivity
Optimization
Improvements
Through Automation

Efficiency
ENTERPRISE FOCUS Intelligent Enterprise Empowered
• Smart Manufacturing
Playing to Win: adds waves of IT
• Collaborative Innovation
productivity improvements
Productivity Improvements
• Intelligent Supply Chains

Intelligent Enterprise
Unlocked Value

Copyright © 2018 Accenture. All rights reserved. 4

EXAMPLE OF PROJECTED NEW TECH REVENUE UPLIFT
AND COST SAVINGS FOR LEADING CPG’S DIGITAL
OPPORTUNITY WITHIN 3-5 YEARS
Digital Value Levers Business Value Impact

REVENUE
UPLIFT
$. 5 B– 1 .0 B +
REVENUE
UPLIFT

COST
$100 - $500 M
COST SAVINGS
SAVINGS

Source: Accenture Digital Value Analysis

Copyright © 2018 Accenture. All rights reserved. 5
PROJECTED NEW TECH REVENUE GROWTH AND/OR COST
REDUCTION ACROSS EACH DIGITAL VALUE LEVER FOR
CPG CLIENT
Digital Value Lever
eCommerce Enablement
Pricing Analytics
Personalized Loyalty
R&D Process Optimization
Digital Marketing
Digital Customer Experience
Collaborative Innovation
Collaborative Commerce
Intelligent Supply Chains
Smart Manufacturing
Distribution Optimization
Digital Procurement
Digital Support Function
Copyright © 2018 Accenture. All rights reserved.
Revenue Growth Impact Measurement
• 10-30% increase in online channel
• 1-2% improvement in revenue through modern trade
• 30-50% increase in share of wallet with new loyalty consumers
• 10% increase in share of wallet in already loyal consumers
• 1-3% of new product revenue
• 1-3% of current online revenue
• 1-3% of current online revenue
• .5-1% of uplift in sales attributable to social media marketing
• .2-.5% addition to consolidated net sales
• .5-1% revenue uplift
• 2-5% revenue uplift on modern trade
• 3-7% gross profit improvement against current promotion products
Non Exhaustive
Cost Reduction Impact Measurement
• 20-40% of digital advertising cost of current agency intermediaries
• 5-10% reduction in sales force FTEs
• 15-20% reduction in customer care costs
• 2-10% reduction in R&D costs
• 20-30% improvement on unsold inventory write-off
• 30-50% reduction in supply chain function costs
• 5-10% reduction in in-scope distribution / inventory write down costs
• 15-30% reduction of in-scope maintenance costs
• 15-25% reduction in manufacturing energy costs
• 10-15% of in-scope logistics cost
• 5-15% reduction of in-scope warehousing costs
• 30-50% reduction in procurement function costs
• 5-10% drop in indirect spend (excluding marketing and distribution)
• 10-30% reduction of HR, Finance and IT costs
Source: Accenture Digital Value Analysis
6
NEW TECH REQUIRES NEW METRICS LINKED TO
BUSINESS OUTCOMES
Measuring

Agility &
Time Quality &
to Market Experienc
Business e
Efficiency Value
• Cycle Time
• People Trained vs
Executing Agile • Performance
• Scope Volatility • Customer Engagement
• Process Maturity • Revenue Impact by IT • Code Coverage
• FTEs Replaced by AI • Scalability Capability • Customer Satisfaction
• Cost of Ownership • Agile Enablement • Ability to Innovate
• Automation Level
• Adoption of …APIs • Business Value
• Storypoint Throughput Delivered
• Architecture Allocation • Specific IT KPIs Mapped

to Business Objectives
• Business Satisfaction

Copyright © 2018 Accenture. All rights reserved. 7

EFFICIENCY

Automation Adoptio
Cost of
Cost of Level n
Ownership Purchase
Running
Total cost of Business and/or Level of utilization for
designing, building, operational key technologies and
deploying, and processes and level practices your
operating a $ of human organization
capability. Avoid intervention prioritized. Common
measuring silos or required. These may ones include API’s,
units of cost. include IT processes mobility, and cloud.
such as build,
Cost of Not
deployment or
Running
business processes
such as password
resets.
Throughput Architecture Allocation
25% Reserve
Velocity teams deliver working Percent of effort and time spent
capabilities into production. All phases on architecture and shared 5%
of delivery should be measure (avoid functions capabilities for any 25%
just measuring engineering for given project. These can include Team
example) and units such as story points infrastructure, platform and Capacity
or function points can be utilized. frameworks as well as defining 50% 80%
the structure of an application.

Copyright © 2018 Accenture. All rights reserved. 8

AGILITY AND TIME TO MARKET
Cycle Time
Elapsed time to make
various types of
changes in a
production system
including ALL time
from request to
deployment.
% of Agile Projects
% of People Trained
Track amount of projects
successfully executed
using agile (only those that
yield agile benefits –
incremental deployments
to production and closer
alignment to business).
Track number of people
trained in agile across an
organization.
Copyright © 2018 Accenture. All rights reserved.
Scope Volatility
Frequency with which
scope changes once it is in
the backlog. NOTE: this is
not measuring the
A B evolution of requirements
in an agile environment,
but the actual rate of
change once a specific
requirements is confirmed
(i.e. in the backlog)
Process Maturity
Identify maturity
levels for various
delivery processes, Managed
assess and measure Controlled
VS
on continuous basis.
Repeatable
Ad Hoc
Agile Enablement
Identify various functions
that enable agile delivery in
your organization, then
measure and track their
maturity. Such functions Agile
should include architecture
components, operating
Backlog Entry model capabilities, and IT
operational practices such
as funding model.
System Scalability
Define scalability
Optimized maturity levels (ex.
elastic cloud, physical
infrastructure upgrade,
custom development)
and assess current
state. Define target
state and measure
against it.
9
BUSINESS VALUE

Revenue Impact by IT Business Value Delivered Business Satisfaction

Product
Direct revenue generated Throughput of value How happy are your
and direct revenue delivered to the business business partners?
supported by a specific IT and should be expressed Specific criteria and
capability. In a world where in terms business uses target levels should be
IT is increasingly becoming a to measure its value (for defined and assessed on
revenue generator, example Function a continuous basis.
measures such as % spend Points).
of revenue will be replaces
by these metrics.

Ability to Innovate Specific IT KPIs Mapped to

Business Objectives KPI

This is increasingly a key survival metric Understanding business objectives is KPI KPI

for any organization. Innovation is enabled
through culture & op model, architecture
foundation, and speed. Op Model and
architecture KPIs are already captures
elsewhere in this list, so speed is the
critical one to measure here in addition.
Specifically, measuring the time it takes
to go from an idea to MVP is critical.
critical for any IT organization but most
today do not identify IT objectives that
underpin or map to the business ones.
Defining these is a critical process and
create a set of IT KPIs to measure and
track against business objectives.
Business Objectives

Copyright © 2018 Accenture. All rights reserved. 10

QUALITY AND EXPERIENCE

End User Engagement End User Satisfaction

How connected end users / customers are to How happy are your end users /
a product or service provider. On one of the customers? Specific measure and
spectrum, customers may not at all be objectives should be defined.
interacting (think of buying toothpaste every
month) while on the other customers may
have purchased an experience requiring
constant interaction (think amazon prime).
Engagement types, channels and objectives
should be defined and measured against set
goals.

Performance Code Quality

Performance of systems drive Rigorous measure of quality in
customer experience and thus is a development is critical to customer APP

critical KPI. End to end experience experience. Beyond testing,

must be laid out and all aspects conduct static code analysis to
possibly impacted by IT systems track code complexity, code </>

should assess performance targets coverage, and adherence to

and measures. principles. In addition track defects
and defect trends coming out of
testing and production.

Copyright © 2018 Accenture. All rights reserved. 11