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A challenging landscape for commercial
banking with Dan Wilkinson, Head of
Transformation at Lloyds Banking Group, and
Tom Merry, Managing Director at Accenture
Strategy
COMMERCIAL BANKING PODCAST EPISODE 1 TRANSCRIPT
Stephen Pegge: Welcome to the
commercial banking Podcast series from
UK Finance and Accenture. The series will
explore the commercial banking
relationship management model of the
future. I’m Stephen Pegge, Managing
Director of Commercial Finance for UK
Finance and today I’m joined here by Tom
Merry of Accenture and Dan Wilkinson from
Lloyds Banking Group to discuss the
challenges facing commercial banks and
their relationship management models at
the moment. Welcome both.
Both: Hi Stephen
Stephen: Tom, how much has changed in
recent years and is relationship
management now less important than it
once was?
Tom Merry: Let me get onto I think what
has changed and what we’re seeing that
isn’t changing. Because probably it’s the
combination of the two that’s fascinating
here. Stepping back and pausing for a
second, I think this is a hugely exciting time
for this part of the industry. I think what we
are seeing is a focus that we haven’t seen in
the last decade across all players here. We
know there are some new exciting entrants
coming in. There’ll be some winners of the
funding coming out of RBS Remedies. But
at the same time, some of the big
incumbent banks that won’t be receiving
money per se are massively focused on
driving improvements in this sector. So, it
feels like a very exciting time for customers
in the SME (small to medium enterprise)
space. And it will be really interesting to
see how banks and the different types of
banks and their different models come to
the fore in the next few years.
I think in terms of what’s changing - you’ve
touched on a few of those things. We’ve
recently done a survey of 1,000+ SMEs with
YouGov and there are definitely some new
things happening. So, propensity for
digital. And, by that, I mean customers who
want and clients who want to see digital as

implied
the key entry point for their banking
services has shot up. We saw that 50% plus
see advantages of artificial intelligence
over human interactions - fascinating to
see that jump. So, there’s a whole suite of
digital things that we are seeing coming
through. We’ve talked a little bit about the
new entrants in this space, some who have
recently received [RBS Remedies funding]
awards. That is exciting because I think it is
challenging the industry to improve. And
the technology piece as well. It was very,
very difficult 10-15 years ago to automate
some of the things that clients would
expect to be automated very easily as they
are seeing that in other industries. That
technology is now being opened up to the
commercial banking space as well.
When you put those things together, the
market is changing. I would say at the same
time there are some things that aren’t
moving as fast. Particularly if we look at
commercial banking versus retail banking.
We are not seeing the sort of leapfrog step
change in transformation that you might
have expected. Our evidence suggests that
switching is still stubbornly low - less than
4%. And indeed, the values and behaviours
that clients call out as being important in a
decision as to which bank they go with are
the same as we’ve seen historically. So, it’s
about quality of service. It’s often about
relationship manager and it’s about the
fees that they charge.
When you put all of that together, we are in
a little bit of a paradox where on the one
hand there’s lots changing - RBS Remedies
is a force for greatness I think in terms of
stimulating this marketplace. New entrants
coming in. But, at the same time (and we
will come onto this a little bit later), some of
the traditional values are still there. So,
there’s other things that aren’t changing so
fast.
Stephen: So, Dan, those customer
expectations of the total offer, including
through digital channels, where perhaps a
few years ago people were seeing digital as
the means of providing convenience on a
very transactional level. Tom mentioned
the advent of AI, more sophisticated
customers also being dealt with through
those digital channels. How are customers
framing their judgement of service on the
basis of what they expect and what they
experience in other ways? Is it just fast
delivery or greater added value? Where
does a relationship manager fit in anymore
and are they going to be put out of
business by AI technology?
Dan Wilkinson: Well I think that is the tricky
bit. Every customer and, by definition
relationship manager that serves them, has
slightly different needs, depending on their
business. And I think that’s the subtlety
compared to the retail world. I think that’s
where, as Tom alluded to earlier, banks
trying to keep up with the change is quite
tough because you could have a farmer
who has got very different requirements to
a new tech company, all running business
models. It is likely that the tech guys are
going to understand a lot more about API
and Open Banking. But, that said, if people

implied
are interested in the personal side of seeing
Open Banking go live and available in the
retail space, they are going to start asking
questions about the commercial world.
Certainly, at Lloyds Banking Group, we are
looking to invest across all the spectrums
and that is what we can’t get caught out on.
We are trying to offer to all our customers
the best possible service. So, we are as
concerned about those competition areas
that are looking at the more transactional
banking customers who are considering
product and price more so than maybe the
relationship management lens. And then
from an RM (relationship manager) point of
view, we are trying to make sure that our
colleagues have the right information and
data in front of them to be able to offer that
subtlety of service to the customer who
asks questions about it. So yes, it does
make it quite tricky, as a provider, to work
out what kind of customer you have in front
of you and what their demands might be of
you as a relationship manager.
Stephen: Tom I’m quite interested in your
perspective on how providers are actually
living up to those customer expectations
and Dan just mentioned open banking
there. I guess the original core of the model
of relationship management used to be the
one stop shop where you had everything
delivered through the one manager. If
people are now picking and choosing best
services from across the market, and that is
being aggregated for them, does the
relationship manager have a role to play in
facilitating that or at least living with it?
Tom: Well let me come onto open banking
in a second. I think the first thing is to say
it’s been great that we are talking about
expectations and not needs here because I
think there is an important distinction. I
don’t think the needs of SME clients have
materially changed over the last decade or
decades. It is about launching a business, it
is about establishing that. It is about
growing that business and, at some point,
hoping to expand it, whether that is
geographically or in terms of product suite.
Now underneath that you need some of the
things that you would have always looked
to your bank for like finance and support
and increasingly they are looking for the
bits round the edges, so called value add
services that would help them through that
growth cycle. What I think has changed is
not those needs, but the expectations as
you say. So, when they are seeing the
ability to get convenient app based digital
solutions in the retail space, they are asking
the question: Why isn’t that possible for me
as an SME banking client as well? And it is a
very fair question to ask.
Our studies suggest that overall, sentiment
in this space has remained pretty flat since
we ran a similar survey a few years ago. So
that is not to say that it is greatly improved,
nor has it got considerably worse. I think it
is often interesting when you go and talk to
SMEs, like Dan will have done historically,
but when I come across them in my line of
work, invariably they find it hugely
frustrating dealing with their bank. And I
think that is well known. It doesn’t mean

implied
that people are dropping the ball on easy
things. Some of these are quite
complicated difficult things and, of course,
when it all goes smoothly you never hear
about that. But it is when it doesn’t go so
smoothly you hear complaints.
We are not seeing a massive shift in terms
of what they go to their bank for. And so
when we have asked them what is
important, as I mentioned earlier, they talk
about service. They talk about having a
relationship manager there. They talk about
fees that are competitive. And somewhere
quite considerably down the list are things
like access to value-add services. In fact,
when you ask SMEs what they want and
how they want to be treated by their bank,
51% came back and said, well “just let me
be”. And that doesn’t mean that they don’t
want you to be responsive when something
goes wrong or when they need something
new. But aside from that, at all other times
actually they just want to be left alone. So, I
think this conversation about what clients
need and what their expectations are, and
as Dan mentioned, the expectations are
going through the roof right now.
I think, to your point around open banking,
open banking is fascinating in that the
potential and opportunity around open
banking is significant. And we are seeing
that start to come to the fore in the retail
space. There are various regulatory reasons
why Open Banking has had a leapfrog head
start in retail versus commercial, not least
because there’s an obligation on banks that
exists in retail around AISP (Account
Information Service Provider) and making
data available that doesn’t exist to the
same degree in the commercial space yet.
I think Opening Banking for me is one of
these. You can either capitalise it and is ‘a
thing’. It is a piece of regulation. Or you can
talk about ‘small caps open banking’ as a
theme that we are seeing coming through.
And I think that’s the more interesting
space for commercial. When people start to
recognise that they can go to different
providers and they can pass their data
more smoothly through APIs, and they can
get access to different component parts of
that lifecycle then that becomes a really
interesting challenge for the banks
because it is where do they want to play in
the full spectrum of widgets or capabilities
or offerings. And indeed, if they don’t want
to be a provider of some of those
capabilities then how do they partner up
and allow access to their clients’ data to
make those experiences as formidable as
possible, even if it is ultimately coming
from another provider.
Stephen: And Dan, from your point of view,
are you beginning to see that customers
are shopping around a little bit more and
are expecting to have the choices laid out
in front of them and to be able to manage
those seamlessly or have them managed
for them?
Dan: Yes certainly, I think it is obvious in
the market now that there are a lot more
suppliers of finance coming on-stream and
can see certainly the profitability to a
business in providing that finance, certainly

implied
to the smaller end of the book. When you
look at your Starling banks and Metro
banks who are looking at that area in
particular and your start-ups, that is
certainly an area of focus. I think one of the
things that, as Tom alluded to, certainly
what we are investing in in Lloyds is looking
across the spectrum and trying to consider
all those different client types. So, we are
looking at speed of service and improving
some of our more antiquated processes.
We have made some huge strides in that.
We are continuing to lend to businesses
across the country and growing that
business strategy at the same time as
targeting technology improvements and
experimenting more and more. And a really
exciting thing within Lloyds Banking Group
is actually we are doing some more
experimentation, mindful of conduct and
risk issues. But actually, it is all targeted at
making and creating a better customer
experience.
So we are seeing competition actually stir it
up a bit. And I think that is a very healthy
thing, especially when we are looking after
the commercial and business customers
because I think, ironically, entrepreneurs
would expect us to be on our toes and be
thinking more like them and thinking about
how do we supply the best service possible
and challenge some of the processes that
sit behind the scenes to ensure that we
manage things safely but, equally, offer the
best quality service to our customers.
Stephen: And traditionally, and I think back
to when I was a relationship manager, one
of the jobs my customers expected me to
do was manage the rest of the bank for
them. Sometimes fixing things when
processes don’t quite run smoothly or
there’s change to go through. And there is
still a lot of that isn’t there in reality?
Dan: I think that is certainly one of the
exciting things. We are in the middle of our
third Group Strategic Review and we are a
year in now. And one of the great things for
us, obviously we have been through some
challenging times as an organisation, is we
are now seeing that real focus and flip on
that end-to-end experience for our
customers. And it is challenging Stephen,
as you say, but actually it is challenging in
two ways - for the organisation in order for
us to think more broadly about offering a
service and providing data, as Tom says, to
all parts of the organisation through more
seamless CRM, or Customer Relationship
Management tools that we have tried in the
past but haven’t really deployed because
the technology hasn’t been as good as it
probably is today.
And then there is that extra part that means
the colleague, the RM themselves, are
questioning what it is that they bring to the
party. And certainly, within Lloyds we are
focusing very much on the specialisms that
some of these fantastic guys and girls out
in the networks can bring to actually
genuinely help businesses prosper in their
local community or grow to wherever they
want to be. And I think that is a really
exciting thing that we can free up some
time now not to be that point of failure if

implied
you like, failure demand, but actually for
the guys to actually spend more time
actually having good conversations about
business. Which largely is why these
individuals within the bank actually do their
job. It’s because they really are excited
about helping see customers fulfil on their
dreams and expectations.
Stephen: Yes. We saw back in August
[2018] and again it was refreshed in
February [2019], service quality
information on providers of finance to
SMEs and it was interesting, wasn’t it, that
actually it was relationship banks that were
at the top of those tables for overall service
quality - the Handelsbanken’s, the Metro’s,
the Santander’s, the Lloyds, the Barclays
and so on.
Now, to a certain extent, we may be
missing some of those pure digital offers
because their market shares aren’t big
enough for them quite to register yet and
therefore have the responses needed.
Some of them will be saying, actually this
relationship management stuff, an awful lot
of that operating model, which is
expensive, is necessary because actually
the technology that is being offered
doesn’t give the streamlined, straight
through process for that 50% I guess that
you were talking about Tom, who just want
to be left alone. And therefore, they don’t
feel they can let go of the umbilical cord of
a relationship manager to kind of fix things.
Do you see a market space in terms of
competition for a kind of no relationship
pure play offer?
Tom: So, on the point about “leave me
alone”, of course when something goes
wrong they then expect an RM to be there
at any time of the day, preferably someone
who’s named and who they know who is
going to solve the problem for them. And,
as Dan says, historically a lot of what RMs
have done has been papering over cracks
that have emerged from manual paper-
based processes in the back end. And they
do a fantastic job in almost every case of
working extremely hard to keep the
customer away from some of those
challenging processes.
When we ask the question about value for
money around relationship manager, it is
interesting to see that 32% say “we think
we get good value for money” and only 12%
talk about bad value for money. Now it is
not 90/10 but it is larger, and I think there is
still an acceptance that the relationship
manager is an important part of a
compelling proposition.
I do want to stress that the SME market
itself is quite varied, and Dan mentioned
this earlier. Perhaps if I could just share a
couple of stats on that. So, of the 5.5 to 5.7
million SMEs in 2017, 4.3 million of them
are so-called non-employing entities*. So
that means that they do not have staff. That
is, owner operators or very small
businesses. And, in fact, about 90% of the
growth in the SME market since 2000 has
entirely been driven by this increase in
owner operator or non-employing entities.
Now I think you could easily see a model
where an extended PCA, so an extended

implied
personal current account, that looks like a
business current account can be extremely
valuable if it is digital only to some of those
people as they are looking to grow their
business and extend, initially digital, highly
simplified, very effective, very streamlined,
low cost model may be just what they are
after.
And so I think when we talk about SMEs
and, to Dan’s point, one of the challenges
for the incumbents is that not only are they
trying to grow across the whole spectrum,
but they also have a legacy book across the
whole spectrum. And so, for them, they
can’t afford to be very narrow in terms of
their response. Whereas there are some
other players you have talked about who
are very much targeting how can we go
after a very, very simple neo-digital
offering into that space.
Stephen: So, Dan I am interested, is it a
binary choice between relationship
manager model and pure kind of direct
automated service? Because if it’s true that
when things go wrong, and I think of my
daughter with one of the Fintech card
providers, had a problem there and it was a
nightmare dealing with their chatline to
actually get the problem sorted out. Or on
the other hand a business that actually gets
to the point where they are growing and
changing and want to have that interaction.
Is it possible for a relationship manager to
be fed in more on that responsive model
rather than in your face all the time? So you
can have all the advantages of the efficient
low-cost model, but really provide a much
more triaged service when it’s really
needed?
Dan: Yes, I think that is a real opportunity,
certainly within the organisation I work in,
as Tom said, we have got a huge wealth of
information and data about our customers
that obviously we treat as private unless we
are allowed to use the information. But that
gives us a great opportunity to look for
moments of truth that, as these companies
grow and, by definition, this growing bit
that Tom mentioned, for a number of those
individuals, they will start to see growth
and see pain points that actually banks and
organisations that have been around for a
while can advise them on and help them
through. And it won’t be until they get to
that point they realise they need it.
And so, for us, in that sense it is all about
understanding the customer lifecycle,
providing data and information to
relationship managers at the right time to
then have value-added conversations. But
then equally to the 51% who hopefully we
do get things right day in, day out. But
when things do go wrong, we still have that
ability to be more hands on and involved
when we need to. And that is where having
local business support, local business
management as well as the technology and
telephony offerings. Certainly, within the
organisation in which I work, we see that, if
we can get it right and continue to grow
our service model, then actually it is an
opportunity for us rather than a cost.
And I think, going back to that point around
helping Britain prosper, it is understanding

implied
where each of our customers are on that
continuum and providing that level of
service.
So, in answer to your question, I think the
opportunity we have to get things right is
probably, as things go wrong or companies
grow, it’s actually probably easier for us in
some ways because we have some of those
models set up. It is all about ‘how do we get
the information to the RM or the customer
at the right time?’ and how do we do that as
efficiently as possible?’. And that is where
we are focusing our efforts. It’s trying to
ensure that we are having the right
conversations with our customers and it is
not feeling force fed, as you said. And it is
all about actually when the customer wants
that interaction that we are available for
them.
Stephen: Dan you mentioned the local
element and, traditionally, the relationship
manager has been a bit of an ambassador
for their organisation. They’ve done
business through having great
relationships with intermediaries and
professionals and they may even, with their
customers, be interested in what is going
on in terms of local development and
issues which are important in that neck of
the woods. I guess it has thinned out hasn’t
it over the last few years, the level of local
representation, certainly at the smallest
business end as banks have pushed
upwards in terms of segmentation? Do you
see a continued role for that kind of local
engagement?
Dan: Yes, I do, I think the key part of this is
changing Stephen as you mentioned
earlier. We have run local ambassador
programmes across the UK and they have
been very successful. And that is all about
us being more joined up in the local
community. So, what we are seeing more
and more now is that, quite rightly in the
SME market and commercial market in
particular, a lot of work is targeted locally.
But equally a lot of these tech savvy
companies who are based in a different
part of the country are expecting more of
us in terms of understanding the impacts of
Brexit, on trade in Europe, understanding
trade finance more broadly as well as
understanding the local community. And it
comes back to understanding your
customer segments.
So, what we are seeing in local business
clubs locally is far more of a tie up between
some of the technology activity alongside
your more traditional business clubs. And it
is how banks respond to that to recognise
that actually tech events and business
events are one and the same thing and can
be in local communities. And certainly, that
is what we are looking to do more and more
is to bring the two things together. So, you
have relationship managers alongside
some of the technology experts from banks
actually working together in the local
community. And certainly, within Lloyds
Banking Group we have just announced 5
core hubs for technology centres around
the UK. And each of those core hubs now
are reaching into the community alongside
the relationship manager and providing a

implied
bit more expertise, where needed, for
those RMs with those types of customers,
which is really exciting to see. They can
cover Cloud Technology, they can talk
about robotics, AI and actually the banks
can actually provide that locally now to
those customer segments.
I think you are right at headline level in
terms of the coverage model across the UK.
It is a different model to how it used be and
it is determined by the level of service that
maybe some of those smaller customers
have in order for us to deliver through
technology the right kind of things for them
at a transaction level. The key part is then
how do we interact with some of those
individuals locally if they do want more
advice and make sure they are aware of
what is going on and supported by Lloyds
Banking Group in the community.
Stephen: So, Tom, it sounds like you need a
certain critical mass if you are going to
have sector specialists as well as local
people. How does a smaller or newer player
that is just building up its presence deal
with that? Is it a matter of focus, you say
you are going to focus on one particular
market, start to make your presence felt
and meet that need for both specialism and
localism?
Tom: I think this is where technology can
play a really important role. So, we’ve
talked there about the need for local
presence and, indeed, our stats say that
when SME clients are looking to switch,
41% are interested in a trusted brand
presence. So that would lend itself towards
not only the incumbents, but also those
who have got bricks and mortar and a
presence on the ground.
I think the evidence suggests that, at least
for a part of this group, that trusted local
feel is important. However, I think when
you look at what some of the banks outside
the UK have done in this space, they are
looking at opportunities to use big data,
analytics, digital tools to provide a quasi-
local feel to their services. So, connecting
different SMEs who have relevance to each
other. Looking at value chains, so where
you can meet your suppliers. And bringing
some of those parties, sometimes even
across geographic boundaries
internationally, together to discuss
important topics, again linking back to the
concept of established grow and then
expand.
So, I think there is a technology play to be
done here. You are right, Stephen, that if
you are a pure digital neo player with no
focus on providing some of that kind of
proximity angle in the services that way,
then you are not going to have the ability to
feel so local as some of the incumbents do.
So, I think there is definitely a technology
piece to this.
And, to go back to your question, I think it
is a challenge because, as you are a small
digital focused bank, then you are not
going to look to invest necessarily in feet
on the ground in local areas because that
goes quite contrary with your model. But I
think you need to be clear that, for those
customers who want to see their bank as a

implied
connector and for whom the local advisory
and local knowledge is important, then are
there technology plays that you can use to
get that feel without necessarily going
completely against your digital model.
Dan: And Tom, just to come in on that, I
think one of the things we are seeing is, to
your point Stephen, we have specialised
certainly in the medium- to top-end of the
book. And we are connecting more and
more on manufacturing, dentistry, some of
the industry practices, we are seeing being
really successful in terms of local
community, but also offering that specialist
advice, not only from a technology
transaction banking point of view. People
are obviously very, very interested in their
own industry and how that is moving. Now
there is some technology you can bring to
that and I am sure we will need to dial that
up. But actually, a lot of our relationship
managers in those segments really do
understand, not only the local community,
but those policies and practices within
those industries that are pretty
fundamental to organisations to start-up
but also as they grow.
Stephen: I am interested in that growth
angle because, traditionally, banks have
approached the market on quite a strict
segmented model of having someone deal
with business banking, and then someone
deal with commercial banking and then
mid-corporate further up. And there are
points of discontinuity that a business goes
through when it is transferring from one
proposition to another. And yet those
would be, I assume, some of the most
valuable clients that a bank can have and
dealing well with those must be important.
Is that something that technology can
enable us to deal with better?
Dan: From my point of view I think it
absolutely can and we are absolutely,
within the organisation, challenging our
thinking to fundamentally think ‘customer
first’. I think one of the challenges we have
within a large organisation is some of our
routines and ways of working have led
ourselves to being quite obsessed around
those key markets or ways of working
inside. And we are now challenging it to say
“no this is about the customer and how do
we support them through those different
parts of their own lifecycle”. And it comes
back to what we were talking about earlier -
how do we provide the right data to our
relationship managers or any part of the
Lloyds Banking Group offering to actually
have a good conversation with those
customers as they go through their
journey…or, indeed, finish their journey and
sell up and move into something else?
Stephen: And Tom, continuity, still
important?
Tom: It’s very important of course and you
have got continuity within a large
organisation like Dan’s where you are
moving between business divisions and
between operating models and segments.
And the customer sure as hell doesn’t want
to know about that. They are not interested.
What they want is the very best service that
they can expect, ideally it is the best they

implied
are going to get on the street and it is
better than the person who is in the SME
working around the corner.
So, you need to keep them insulated from
that and the same is true when you are
moving between organisations. Now we
know switching is not prolific in this sector,
but hopefully that is going to go up. And
the same thing is true, how do you make
that switching to your organization, which
may be fundamentally different in model,
feel like it is seamless and best placed for
the customer?
I go back, Stephen, to your question about
the segmentation model. I think banking
has a lot to learn here from other industries
that have moved on significantly in the last
few years. But we talked about
segmentation based on the traditional
lenses of turnover and of sector which are
primarily the way that organisations like
banks have looked at their customers. And
we see now that there is a whole load of
additional lenses that you can throw into
the mix. So, where they are in that growth
lifecycle, and that often tells you what they
need in terms of products etc. What is their
willingness to pay and sensitivity to move
based on certain characteristics? How
mature are they as an organisation from a
digital perspective? That can often
determine what model of interaction you
are going to use for them. And there is a
whole load of other behaviour
characteristics.
Now, when you look at those in the round,
and you go back to what is the right and
most effective way of us marketing to
customers and then servicing those
customers, the logical conclusion that
probably we would all get to is that the old
model of traditional segmentation is not
necessarily the best one. Having said that,
for the big incumbent banks, changing to a
completely different model - let’s say one
that thinks about what type of customer
you are by your behaviours and your digital
footprint and actually giving you a different
model based on that rather than whether
you are a pharmaceuticals company, a
farmer and what size you are, makes a lot of
sense. But actually, there are barriers to
moving to that quickly. What we are seeing
in other industries is that you do the two
together.
So, we are not saying that these banks
necessarily need to completely rip up the
model of segmentation and the way that
they have constructed their operating
model. But there is an ability to have a
different treatment strategy which is more
sophisticated and aimed at the needs of
their customers. Using digital technology,
analytics and big data to draw some
conclusions about what the customer really
wants and needs and the best model to
serve them. And then being able to really
bespoke your offering and the way you go
to market very quickly on a needs basis, so
that it is not one size fits all. And it is
hopefully not one bad size fits all.
Stephen: And that point about marketing is
quite interesting because this is a market
which has always been intermediated to a

implied
degree by commercial finance brokers, by
accountants making introductions and so
on. There are now many more platforms
and online means by which people find the
service they want to find. How does the
relationship manager make sure that they
interface with the newer intermediary
landscape, Tom?
Tom: I think that is one of the great
challenges. I know the next session in the
Podcast Series is going look at the
relationship manager in isolation. But as
Dan says, that is one of the things that is
going to need to change in the skill set and
capability set of the RM. Because if you
think about what you were driven by and
where your balanced score card was and
what you were paid to do decades ago, it
didn’t involve ‘think about the wider
ecosystem and fintech landscape’. That is
now important.
I think the first thing to do is help RMs
understand the opportunity itself from the
customers’ shoes. And lots of banks are
doing a huge amount to educate on what
the art of the possible is. I think beyond
that you have then got to look at where
your own bank can build up the right
relationships into what is perceived to be
the best offering out there - third
parties/Fintechs and partner up with them -
so that you are coming at it not only from
an informed basis where you can have that
conversation and realise there is something
out there. But even better, if you actually
have the ability to advise and say “well,
these are some of the things that we, as a
bank, have now set up a very seamless
partnership with and we can bring those
propositions to you, even if they are not
capabilities or activities that we deliver
ourselves”.
So, I think when we think about rotation of
the relationship manager, away from the
time-consuming low value-add onboarding,
servicing, querying type exercises and into
what is required in the new world, a lot of it
is about understanding open banking, the
ecosystem, what’s out there and getting in
the shoes of their customers and clients.
Dan: And I think Tom, if you go all the way
back Stephen to your opening comment
around banking in the UK and more broadly
has changed, actually a number of the core
skill sets that our relationship managers
now need is that intrinsic curiosity of
business, understanding how businesses
work, understanding how important cash
flow is within an organisation and spotting
patterns. And that includes working in the
local community or with brokers or online
channels who actually provide those
services as an opportunity rather than a
threat and working closely with them in the
right way. And, as a relationship manager it
was consuming a decade ago, two decades
ago, with the number of things you had to
consider, more from an internal point of
view, as Tom mentioned, when you look at
that failure demand that the front of house
had to deal with.
Now it’s actually okay, what do we need to
spend time looking at and focusing on? We
are spending a lot of time and energy

implied
looking at how we upskill our relationship
managers to be as good as they can be
either in industry, but also for them as
individuals to be equipped to actually cope
with the future. Because there is the whole
spectrum that a customer could talk to you
about every day. And being prepared for
that is one of the hardest things for
relationship managers of the future. And
that is one of the things we are looking at -
how do we do that; how do we upskill those
people?
Stephen: Well we will come onto talking in
more depth as to what we need to be
looking for in terms of the relationship
manager of the future in future Podcasts.
And Dan, for you transformation is not just
about onboarding and self-serve tools.
Relationship managers are fundamentally
part of it too?
Dan: Absolutely. I think relationship
managers are at the heart of what we do.
But it is no longer dealing with just the
failure demand. I think the biggest shift I
have seen, and it has been driven through
the personal side of banking but more
broadly, is that the technology has caught
up. There were a lot of things promised
probably a decade ago that we will be able
to do from a change and technology
agenda that we are now actually able to do.
And, as you said, 10 years ago we were
following more of a factory-based silo
model of specialisation in certain
processes behind the scenes. We have
experienced that in some of these large
organisations now and it is how do we flip
that back to the customer being at the
heart of things and use technology to allow
us to really get out into the market and, in
Lloyds terms, really help Britain prosper in
terms of providing that service that is right
for our commercial banking customers and
supporting our relationship managers with
the right tools.
Stephen: Dan, Tom, thanks for joining us. It
has been really interesting to get your
views on the challenges facing commercial
banks. Tom, if listeners want further
information how can they get this?
Tom: The findings of that survey that I
mentioned earlier, together with our other
views are available via the Accenture
Banking blog online.
Stephen: Thanks Tom. And thank you for
listening. Stay tuned for the next Podcast in
the series when we will be discussing what
the future holds for relationship
management in commercial banking.
End
*Sources of statistics cited: BEIS, Business
population estimates, 2017; ONS, Business
Demography, 2016

ORNELLA DIAN: And our business is able to
see changes really in production every month on
a monthly basis. So, yeah, it’s been great for us.
JASON WARNKE: Hi, I’m Jason Warnke, part
of the Accenture internal IT organization and I’m
glad to be here today with Melissa Summers and
Ornella Dian. Melissa was responsible for the
initial Accenture.com replatform program and
Ornella is our current leader in this area. Thanks
for joining me today, Melissa and Ornella.
MELISSA SUMMERS: Thanks for having us,
Jason.
ORNELLA DIAN: Yes, thank you.
JASON WARNKE: Excellent, great. Well, let’s
start off with maybe a little bit of the history,
going back to the time when this program was
kicked off. Can you tell us what led to the
decision to overhaul our Accenture.com
website?
MELISSA SUMMERS: Sure, Jason. So, I mean,
the journey started back in 2014 in terms of a
need to replatform. We really wanted to move to
an actual content management platform and we
were also looking to redo the site from a creative
perspective, as well as move to a more
consistent message across all of our content. So
there were a variety of different reasons to
decide to overhaul the platform. But those were
some of the overall highlights of why we did it,
but we also had performance gaps on the old
platform. We were really failing over and moving
to a static site very often and we really needed to
get to a more digital solution for our external
website.
ACCENTURE.COM
POWERED BY SITECORE
TRANSCRIPT
JASON WARNKE: Excellent. There’s obviously
an array of content management platforms to
choose from and there are many more today.
What did we choose and why did we ultimately
choose that particular platform?
MELISSA SUMMERS: Sure. We decided to go
with the Sitecore platform when we chose our
new content management system. It was chosen
for a variety of reasons. Mostly, it was chosen
due its ability to flexibly adapt to a design. We
knew that we would be changing designs over
time and so, we needed a tool that was going to
enable us to do that functional pivot pretty easily.
We also needed to address those performance
issues that I mentioned earlier and have a stable
platform and we were also moving to the cloud.
So we needed to be able to support our
enterprise at scale.
A couple of the additional reasons that we went
with Sitecore were our need to enable some
mass publishing and cloning type functionalities.
So we needed to be able to provide for
consistent pages across a variety of different
country sites. So 59 different country sites and in
a number of different languages. We also
needed to be able to have our performance be
much better than the old platform and we really
saw paid load performance increase. Finally, we
had the requirement to make sure that
Accenture.com is always on and highly
available. And Sitecore enabled us to have that
requirement fulfilled.
JASON WARNKE: Interesting. A lot of really
important reasons to choose and ultimately
continue to evolve ‘cause once you make the
choice and you get on the platform, it’s a
continual process to keep – to ensure that those

things continue to be met, but there are
obviously more requirements that come about
over time.
A project like that can’t be done alone. It’s not
just an IT thing, it’s not just a marketing
communications team, but maybe let’s talk a
little bit about the way that this all came together.
What teams from across the organization
collaborated to implement the new platform?
ORNELLA DIAN: Yeah, we had tons of teams
that came together to basically make this huge
overhaul happen. I think at the peak, there was
over 300 people across different organizations
that came together and collaborated on this
huge effort. It was definitely a global team. So
when we consider the actual IT delivery team, as
well as the stakeholders and the other groups
that we had to pull in, it was really worldwide.
Our internal CIO technology team was
responsible for the key technology change. That
team was located primarily in the Philippines and
we also had a core team in Chicago supporting
that effort as well. We collaborated with other
groups inside of Accenture, a group primarily
called Avanade and they are a Microsoft partner
that we have internal within Accenture and they
helped us really upskill and provide the right
expertise that would facilitate the
transformational change.
So there was a lot of collaboration around
different groups. Our business stakeholders
were also worldwide, again with a core team in
Chicago. So there was a lot of coordination and
all hands-on deck essentially to make this effort
happen.
JASON WARNKE: That’s a big team and lots of
sophisticated collaborating across the globe in
terms of bringing the right folks to the table at the
right time. You mentioned the Microsoft skills
and Avanade bringing that to the table and a
very large offshore component partnering with
our global marketing communications team. That
must have been quite the program.
So let’s talk a little bit about how you started out.
What was the initial focus of the overhaul and
how did this tie into the various releases along
the way?
MELISSA SUMMERS: Sure. So the initial focus
was really to look at what did we need at a base
level in order to get the new site and across all of
that new tech stack released and out to the
public? So we wanted to get away from the
various fail overs that were happening. We also
wanted to highlight our new design, as well as
we were moving to the cloud. So that was a key
priority to get everything in line together. But we
needed to make sure that through a really
important partnership between the marketing
business and IT, that we had what we needed,
those must haves in order to operate the
business and really show our best face
externally. So we identified that key functionality
and got that out as quickly as possible. And then
we had a number of follow-on releases which
really then turned into our current delivery
process.
One of the key things here was that we were
doing a massive conversion of content and that
conversion was not just move page one on one
CMS to another CMS. It was transforming that
content into our new creative design. So it was
really a huge lift and that partnership between
marketing and IT was amazing to watch as all
these pages really came to life in that new
design.
JASON WARNKE: Interesting. So you
mentioned 2014 was the start of this journey, the
replatforming began in 2014. You know, five
years ago, right, a lot has changed in that
timeframe, a lot of user expectations, our end
users on Accenture.com are business users’
expectations about what they want the site to do
and how they want it to perform. As
enhancements and updates arise, such as new
design templates and data privacy regulations
that were not initially scoped out, as a part of the
original build, how do we handle these changes
now?
ORNELLA DIAN: Yeah, so our delivery team
utilizes a framework called SAFe, so it’s Scaled
Agile Framework and this really enables us to
basically meet all of the business requirements
and even any non-business requirements, such
as that those things like GDPR or data privacy
regulations and fulfill those in a quick and agile
manner.

And so, for us, we basically run four program
increments a year that is basically a chunk of
work that we plan for and commit to and then
within each program increment, we are basically
delivering sprints within that and our business is
able to see changes really in production every
month on a monthly basis. And so, we’ve been
really successful in terms of having our
stakeholders share the requirements and us
actually meet the commitments in a timely
manner and release regularly into production.
So, yeah, it’s been great for us.
MELISSA SUMMERS: I think it’s also been a
continued journey with the business here. I
mean as we moved into SAFe, they took a much
more active role in the process.
ORNELLA DIAN: Agree.
MELISSA SUMMERS: And now have a much
better – I think on both sides, we have a much
better appreciation for different priorities and
how long things take and how well-defined, how
when we have something more well-defined,
we’re able to deliver it that much quickly. It’s
been really nice to see.
JASON WARNKE: That’s great. So then if you
translate that better partnership, that more agile
approach to delivery and methodology, to the
restructuring of the team, etc., how does that
then translate to what our users feel on
Accenture.com. So now that we’ve been live for
quite some time, what has that led to in terms of
the better overall experience for visitors to
Accenture.com?
ORNELLA DIAN: Yeah, so it’s enabled us to
work on business priorities like personalization
and then, as Melissa mentioned earlier, we are
aligning to a new design and a new, I’ll say, UI
that was developed in the past year or so. And
so, we’ve been really like over time, over the
past few months, we’ve been realigning our
content within that framework to just present a
more cohesive and an improved user
experience.
For us, the user is not just the external visitor or
potential candidate that’s coming onto our site,
but also our internal users that are creating
content and developing the things that we want
to share out more broadly. And so, one of the
cooler things that we’ve done lately is we’ve
started to develop self-service framework. So,
for example, we have the ability for different
groups to create blogs and to self-service
publish blogs, so that they’re not dependent on
long business processes to create the content
and then they’re able to just push that out at their
own speed as they like. And so, that’s one of the
pivots that we have done just recently and where
we see ourselves going in the near future for
sure.
JASON WARNKE: That’s great. Well, I just
want to thank, you, the listener, for tuning into
another episode of our Accenture 24/7 Podcast.
This was a fascinating discussion on our
transition to a new CMS platform which for a
brand and company in our size is a, as you’ve
heard, quite the complex process and lots going
into the decision on the platform and lots going
into the evolution of the platform as time has
gone on, really in service of a really great user
experience ultimately when our clients and our
potential candidates come take a look at
Accenture.com.
So I also want to thank Melissa and Ornella for
being guests on the show and providing your
insights into that terrific journey. So thanks to
both of you.
MELISSA SUMMERS: Thanks for having us.
ORNELLA DIAN: Thank you, Jason.
JASON WARNKE: Absolutely. And you can
subscribe and share the podcasts with your
friends and colleagues by subscribing on any of
the podcast platforms and please share it with
friends, let them know if they are going through
or considering a change to their content
management platform, that this is a great story
to hear, a great credential to understand. And
with that, I want to sign off another episode of
Accenture’s 24/7 Podcast. I’m Jason Warnke.
Thank you.

SPEAKER: Thank you for joining today’s
podcast. Be sure to subscribe to the Accenture
CIO Podcast Series on iTunes for all episodes.
Copyright © 2019 Accenture
All rights reserved.
Accenture, its logo, and High
Performance Delivered are
trademarks of Accenture.

mean to you?
MEHUL DESAI: It means that businesses need
to learn how to operate as an athlete. They
need to run their businesses at a smart sprint. If
you notice, Brian, digital disruption is significant.
Boundaries between industries and functions
are disappearing. We are being called in to talk
about what new capabilities are needed to drive
growth, what new capabilities are needed to be
prepared for the future and it means that
businesses must not only deliver on the current
expectations of profitability and to ensure that
the shareholders get the necessary returns. But
they are also expected to continue to invest in
new capabilities, which means that they have to
find the opportunities to continue to drive
greater margins and to ensure that they’re able
to fund those investments.
So that is what competitive agility means. It
means continuing to operate in the now to drive
profitability, but at the same time being very
targeted about what new investments are
needed to be ready for the next wave of growth.
Q3) BRIAN VABULAS: So what I’m hearing is
it’s a multi-faceted, approach. And really, you
need to be driving growth. It’s critical. But why?
Why do we need to drive growth?
MEHUL DESAI: If you look at the competitors
that some of the traditional companies have
today, a lot of the competition isn’t coming from
the traditional sources. I would say about 8, 10
years ago, companies in the consumer goods
Welcome to Competitive Agility. The new
podcast with Accenture’s Senior Management
Team, where we try to unravel the mysteries of
agile business operations and how companies
can identify and pursue new ways to increase
margin and fund investments that will drive
growth.
I’m your host, Brian Vabulas. Today, we’re
talking with Mehul Desai, Managing Director and
North American Co-Lead of Competitive Agility.
Q1) We’re kicking off our podcast series by
exploring the concept of competitive agility for
business growth. Mehul, welcome to the show.
Why don’t you tell us a little bit about yourself?
MEHUL DESAI: good to be with you, Brian. And
thanks for the opportunity. A little bit about me,
I’ve had about 20 years of consulting
experience, primarily focused on consumer
goods and retail. And for the last five years, I’ve
been in Accenture working very closely with
some fairly significant consumer goods and retail
clients and helping them drive their cost
transformation programs.
We help clients think about what comes after in
terms of how do you drive capabilities to enable
growth as they find the funds using zero-based
thinking within their operations.
Q2) BRIAN VABULAS: Great. I’ve read
something around competitive agility is kind of
like the corporate world’s version of being a
highly trained athlete. So what does that exactly
GAINING COMPETITIVE
AGILITY IS KEY TO
DRIVE GROWTH
AUDIO TRANSCRIPT

industry would be looking to traditional sources
of competition. However, as we look at the new
sources of competition, for many of these very
established companies, they’re, in fact, coming
from places that they never imagined.
At the same time, a large part of the
transformation in these large companies have
been driven by the fact that there are companies
that have been essentially born out of the
internet and the digital era, who are going and
disrupting themselves almost on a daily basis.
So successful businesses have to think about
how to operate in today’s environment, as well
as about how to drive growth. Because at the
end of the day, consumers are going to continue
to engage with companies that are going to drive
experiences that are more relevant to them.
So it’s important that these companies, the
traditional companies who have been around for
a long time, they make what we call is a wise
pivot.
Q4) BRIAN VABULAS: So I’m hearing a lot
about disruption, traditional companies, even the
non-traditional companies doing a lot of
disruption. And then you mentioned the phrase
wise pivot and I’ve been hearing this a lot. What
is a wise pivot and then how do I leverage that to
really create this as a foundation for growth?
MEHUL DESAI: In very simple terms, it is
essential organizational change. And we think
about wise pivot in three steps and let’s be clear,
these aren’t three steps that are taken
sequentially, but in many cases, these have to
be done almost together.
So the first step is getting fit. What does that
mean? It means that successful companies have
to get extremely efficient in their core business.
One of the methods that we’ve seen a lot of
companies adopt is zero-based budgeting. And
why is zero-based budgeting important? It helps
companies adopt a behavioral and a mindset
change that is critical to getting full visibility to its
processes, operations and spend, both internal
and external. And thereby, it allows them the
ability to be able to get efficient and sustain that
efficiency.
The second part is building the muscle. Now this
requires being very mindful about where are we
going to seed these sources of competitive
advantage? In many cases, the sources of
competitive advantage are going to come in from
the workforce. In some cases, it is going to be a
combination of technology, whether it’s
organically built internally or leveraged through a
set of ecosystem partners.
But at the same time, as these companies are
building muscle, using a combination of internal
workforce, technology and external partners, we
have to make sure that they do not lose sight of
customer experience. Continuous innovation is
the bedrock of building muscle.
And finally, the third step in the process is flexing
those muscles. And you flex the muscles by
scaling the new businesses and by aggressively
feeling the growth. Now, it’s important to
remember that it’s not as important to build all
the capabilities internally. What we’ve generally
found is that companies start to build a lot of the
capabilities internally to try and gain competitive
advantage.
It is becoming increasingly important for
companies to leverage ecosystem partners. And
it’s only by doing that, that companies can focus
on doing what they do best, while letting the
ecosystem partners doing what they do best and
then collectively, offering the customers a one
stop shop, which in turn will allow them to be
able to flex the muscles and continue to gain
and retain that competitive advantage.
Q5) BRIAN VABULAS: I love the fitness
metaphor of, you know, getting fit, building the
muscle and then actually flexing the muscle. I
want to dive in a little bit to the first metaphor
around getting fit. You know, it’s the first thing
you need to do and you mention it’s zero-based
budgeting. Can we dive into a little bit of what’s
the thinking currently and how have you seen it
evolve over time?
MEHUL DESAI: What we are seeing is that
successful companies today are going past
using zero-based budgeting as just a cost
cutting or a budgeting technique. That was the
case in the last decade where a lot of companies
use the opportunity to get visibility to their spend
and their operations and took a lot of cost out.
However, the companies that are really evolving

zero-based thinking are starting to use the
zerobased mindset as a tool to create ongoing
and sustained visibility into their processes.
They’re using that to reimagine not just the
operating model as it relates to the way they
construct the operating model within their
businesses, but also in conjunction with what the
operating model would look like with their
ecosystem partners.
And the goal is what kind of an operating model
would be required for the companies to continue
to drive growth in the digital era.
Now this zero-based mindset, focuses the
leadership to have honest conversations
internally on what aspects of the operating
model and processes are important today to
continue to drive customer experience and
growth? And where do we really need to make
the new investments, so that we are better
prepared for the future?
So the whole concept of zero-based thinking is
evolving towards almost a mindset shift so that
at any point in time, in any given year, we are
constantly going to challenge our operating
model and challenge our ways of working, so
that we stay relevant to the consumer and we
continue to operate in as lean a way as possible.
Q6) BRIAN VABULAS: And I love the comment
of we’re going to stay relevant, we’re going to
stay lean, but we’re going to grow. What are
some areas where you invest some of that cost
savings when you make new investments? And
then how does that support growth strategies?
MEHUL DESAI: A lot of the investment areas
today are as we think about artificial intelligence,
analytics, automation and they’ve been invested
in for two purposes. The primary purpose being,
how to drive better customer experience.
Companies are also realizing that those
investments are, in fact, performing the added
benefit of helping taking costs out of the system.
And that’s all the more reason why the business
case for these investments are becoming
increasingly relevant.
The other areas where investments are
happening is how do we invest in our workforce
to ensure that this workforce works with this
constantly evolving technology differently. You
know, the future, Brian, is going to be about the
Human + Machine. And you can invest in all the
technology, automation, AI, but if you do not
ensure that your workforce can engage and
interface with those technologies in an efficient,
effective and an agile way, companies will not be
successful. So they’ve got to be able to invest in
the technology, as well as the workforce.
Now, let’s be clear about one thing. Every
business cannot invest in everything at the same
time. Businesses have different needs, they’re at
different levels of maturity, some have
anticipated certain needs and have been making
those investments in anticipation and some
haven’t. It is important that they’re very targeted
about how these investments are made.
In many cases, some of these investments can
be made by ensuring that they are funded as
they go. No matter what you do, it is critical to
ensure that the core business is kept strong
because at the end of the day, the funding
mechanism for any of these new capabilities can
only happen if the core business is strong and
we are able to constantly meet the requirements
of return to shareholders.
Q7) BRIAN VABULAS: So now that we’re
focused on growth and we’re fit, how do you
really reinvest that? How do I take that to the
next level? What kind of questions are you
hearing?
MEHUL DESAI: The areas that we are finding
ourselves engaging with our clients now are help
us understand how a functionalist organization
will operate in the future. Help us understand
how I can drive continuous innovation in my
business at all levels within the organization, not
just in terms of the products and solutions that I
sell to my consumers, but also in the way I
operate my business, so that I’m one or two
steps ahead of my competition in delivering
those products and services in an efficient and
agile way. And then the third area that we are
called in for is help us understand how to
balance the focus on being locally relevant while
we are globally efficient. And that is a tightrope
to walk, especially for businesses that have
been in existence for long periods of time and
have operations in multiple countries.
Q8) BRIAN VABULAS: What are some barriers
you see that are facing some of these

companies as you’re looking for growth?
MEHUL DESAI: I think there are a whole bunch
of barriers that every business typically faces as
they are trying to realign themselves and drive
growth.
The first one being balancing between
addressing the local needs, as well as trying to
scale globally. How do you balance those two?
And this is where a combination of ecosystem
partners, creative thinking, the operating model
thinking can actually come into play where
businesses are able to balance the two.
The second area that they’re struggling with is
most of our clients, Brian, tend to be businesses
that have been in operations for a long time. And
what we generally find is that they struggle with
getting culture to buy-in and managing that pace
of change while continuing to operate.
I have very often seen businesses and
organizations being brought to their knees as
transformation unfold. You can have the best
ideas on the table, you can invest in best
technology, but if you do not find ways to engage
your organization and your people within the
organization, transformations will not deliver the
value that they were supposed to deliver.
And the third, very important barrier that I’ve
seen businesses struggle with is in the area of
talent. As we think about operating in the digital
era, it is very important to have honest
conversations internally at all levels of the
organization on how talent needs to be reached
at all levels of the operating model.
And it is also important to think about where do
we really tap into the talent? Do we really need
to have the talent internally or do we have an
opportunity to leverage ecosystem partners to be
able to bring in those talents at the appropriate
places and stages of the journey.
Q9) BRIAN VABULAS: So given some of those
barriers that you just talked about, how do you
overcome some of those to reach agile success
or have you seen any great examples of this
happening?
MEHUL DESAI: Every company is at different
stages of their journey in trying to address these
challenges. I think addressing these barriers
starts with having a clear understanding of what
truly makes the organization tick, what is the
vision and what are the competitive advantages
that they need to go create to be able to not only
survive and thrive in today’s environment, but
position themselves for the future.
Most leading companies continue to make
progress in this area, there are some who
embrace this journey better than others. And I’ll
take the example of UK based home
improvement retailer. The getting fit and the
building muscle part of that this company has
really focused on. And I’m very confident that
they’re going to start flexing those muscles when
they build that muscle.
But what they’ve done is, as a part of building
the muscle, they have decided to infuse digital
innovation in their customer experience and
sales channels. And that includes how they’re
going to improve their websites, their marketing
efforts and the company’s click and collect
programs.
Now these require a lot of investments. These
aren’t things that you just make a decision on
and find the money and go to do it. So what this
company has done is they’ve realized that for
them to be able to find these funds, they also
have to get fit. And to get fit, the retailer chose to
drive efficiencies by standardizing its core
business processes, by consolidating its supply
chain and by centralizing its middle office or its
procurement office in terms of the purchasing
and inter-management capabilities.
What this retailer is doing in a relatively short
timeframe of between 6 to 9 months is they were
getting fit and building muscle both at the same
time. This is a good example of a company who
is clear about what it takes for them to be
relevant to their consumers today and what they
think is critical for them to build capabilities for
the future and is also willing to make the hard
decisions on what they’re going to need to do in
their operations today to get fit.

Q10) BRIAN VABULAS: Again, going back to
the fitness metaphors, I love it. It is about
growth. It’s about getting fit. What’s the strongest
advice you can offer companies on embracing
competitive agility?
MEHUL DESAI: One word, excitement.
Embrace competitive agility with excitement. The
reward for companies that made this leap is not
just in terms of driving shareholder value. But it
is actually about the confidence that the
businesses are thinking about not just operating
in the now to drive profitability, but they are
constantly thinking about how they should be
investing in new capabilities to drive growth.
At a time when growth is top of mind for
executives, the ability to drive efficiencies by
getting fit, the ability to be clear about where the
new capabilities are and to drive innovation by
building muscle and by flexing those muscles,
provides businesses the opportunity to expand
into new areas and that is where I think the
excitement is. Excitement not just in terms of the
businesses and the leadership that exists today,
but for the employees who work within the
company, for the ecosystem partners who are
engaged with those businesses, essentially
creates an excitement which can be fairly
addictive. And actually, in fact, can help
businesses propel to the next level of growth.
BRIAN VABULAS: I can really hear your
excitement. I’m excited. I want to get fit and build
some muscle and flex. It’s really been a delight
speaking with you today and you taking the time
to speak with us about competitive agility. To
everyone out there, please stay tuned for more
leadership podcasts on Competitive Agility soon.
And we’ll hear others on Accenture’s Senior
Management Team. Thanks so much.

[Leena]: That’s right Josh, and this new service
is upending the traditional business model for
gyms. These new digital platforms allow for real-
time data capture regarding when, where, and
how people want to take classes, and then it
uses the AI to predict what type of class a
person would like. The apps make people
actually want to go to the gym by providing them
with suggestions of classes near them that will
pique their interest.
[Josh]: These technologies are changing how
these businesses create value and make
money. For example, ClassPass, the oldest of
these new app-based fitness startups, has
grown from zero revenue to pulling in around
$150 million annually.
[Leena]: But disruption enabled in part by AI
isn’t just about growing revenue. And it certainly
extends beyond just the fitness industry. In fact,
it’s nothing short of transformative across the
entire economy.
[Leena]: Paul Daugherty is Chief Technology
and Innovation Officer at Accenture. He co-
wrote a book called Human + Machine:
Reimagining Work in the Age of AI. He
explained how tech like AI challenges the way
business gets done at an event launching
Technology Vision 2018. That’s Accenture’s
annual report on the latest tech trends.
AI: THE NEW
INGREDIENT FOR
GROWTH
[Leena Rao]: Josh, how often do you go to the
gym?
[Josh Klein]: Probably not as much as I should.
Why?
[Leena]: Because today we’re going to talk about
how a combination of AI, the right data, and
human-machine collaboration is set to disrupt
everything, including your workout.
[Josh]: Hey everyone, this is Josh Klein.
[Leena]: And this is Leena Rao. Welcome to
Innovation Decoded, a podcast dedicated to
breaking down the new technologies that are
transforming the way we live, work and think.
[Josh]: Leena, did you know that traditionally
gyms have made most of their money by selling
memberships to people who don’t often use their
services. There’s a report in 2017 by the
National Bureau of Economic Research that
showed that 95% of people who have a gym
membership go less often than they thought that
they would. But recently a host of app-based
startups are allowing people to use their
smartphones to find, book, and pay for fitness
classes at participating gyms and studios.
AUDIO TRANSCRIPT

[Paul Daugherty] What is the role of innovation?
How do you develop that innovation architecture
in your intelligence enterprise? That’s something
every company needs to think about… How do
you build the intelligent enterprise?... You need
a different mindset and approach we think to
deal with this. This isn’t about applying tech to
the business you do, it’s about reimagining and
reinventing the new business that you could do.
[Leena]: Developing a new way of thinking about
innovation can lead to revenue growth, but not
without another ingredient. Paul believes that
data, and how it allows humans and machines to
work together, is the key to unlocking value in
almost every industry. Let’s listen to how he
explained this shift to a group of influencers at a
panel hosted by Wired magazine at the World
Economic Forum in Davos.
[Paul Daugherty] I think it’s really early in the
evolution of AI and what we can do with it. We’re
going to continue to see advances in algorithms
and more and more data applied to problems. I
think we should think of this as the start of really
the age of innovation in the way we apply
intelligence into solving business problems.
[Leena]: But how does a company use the right
kind of data to power the type of human-machine
collaboration that actually changes the way they
do business and uncovers new ways to make
money?
[Josh]: For a Paris-based company called Flint,
the answer is cobots, a type of bot designed to
learn by collaborating with humans. That means
the bots need humans just as much as humans
need the bots.
Benoit Raphael, Flint’s co-founder and Chief
Robot Officer, has been experimenting with how
a combination of good data and human
interaction can make AI-powered bots more
useful.
[Benoit Raphael] What we need to understand is
that the robot can be good at to predict… but
they can be wrong… Robots can help us, but
first we need to interact with them and not just
listen to them.
[Josh]: So, AI isn’t just some sort of sausage
grinder where you shove data in one end and
business value comes out the other. It turns out
that making sure that a company’s employees or
customers can work properly with an AI is an
important aspect to unlocking that value.
[Benoit Raphael] In the world of artificial
intelligence, the world of prediction with a lot of
data, we need to decide what story we want to
tell.
[Josh]: Accenture Research launched a project
using Flint’s cobots that looked at the ways this
human-robot interaction could work in the real
world. Accenture had 50 researchers from
around the world train a cobot to act as their
virtual personal assistant. The cobot was tasked
with sifting through hundreds of thousands of
articles every day and providing the researchers
with only the most important bits. Philippe
Roussiere is Innovation Services Global Lead for
Accenture Research.

[Philippe Roussiere] We looked at how we could
grow efficiencies in tracking relevant news. All
our researchers suffer from the fear of missing
out or the FOMO as they track important news in
their relevant industries or functional business
areas or geographies. They really have a lot of
info thrown at them. They need to carve out time
to do that and to do it efficiently.
[Josh]: But using existing technologies like RSS
or keyword scanning wasn’t going to cut it.
Accenture wanted a smart technology,
something that would provide a laser focus on
broad topics like supply chain technology or
gender diversity, stuff for which the Boolean
search logic, the Google Field for example,
doesn’t work very well. Roussiere wanted
something that individual researchers could train
to increase their efficiency over time. The result
was a project that taught Roussiere as much
about people as it did about robots.
[Philippe Roussiere] Some of the people make
extensive feedback and input into the model,
and it forced us to rethink how our researchers
are actually looking for relevant news. And they
benefited as well. They say to us, “Hey, we’re
learning actually, how we’re ourselves even
thinking about searching for relevant information
by the way that the machine is asking us to
validate whether what they found, what the
algorithms found, is relevant or not.
[Josh]: The type of human-bot interaction that
powered Roussiere’s project is starting to
happen throughout the economy. You can find
examples of successful human-bot interactions
in sectors thought of as old or traditional, like
regular media.
[Leena]: The news media is just another space
that’s being disrupted by technology and a
reimagining of business models. In fact, the
pressure this disruption puts on revenues of
traditional newspapers is a global phenomenon.
Il Secolo XIX has been delivering news to
people in Northern Italy for generations.
Founded in 1886 in Genoa, the newspaper has
tried to keep up revenue in a pretty difficult
media landscape by establishing a multi-channel
digital presence and also playing an active role
on social media. Now it’s integrating AI into its
production of content to help its journalists
produce more unique stories. Stefano Ramagli is
Il Secolo’s IT director.
[Stefano Ramagli]: One of the big challenges
now is to keep up the reputation of the
newspaper, and that can be achieved by
creating quality content.
[Leena]: Enter Il Secolo’s AI-powered editorial
assistant. Using advanced machine learning
techniques, the assistant employs algorithms
powerful enough to analyze and classify the
paper’s content in real time. When one of Il
Secolo’s journalists starts a story, the assistant
continuously checks the text for data consistency
and potential links to other sources.
The editorial assistant also leverages one of the
company’s greatest strengths: its 130 years’
worth of archived material, all currently stored
digitally.

[Stefano]: The AI-assistant tool can provide the
journalist with additional related content by
checking the database of our digital historical
archives for stories relevant to what the journalist
is writing about. The tool can cross reference
people, organizations and places mentioned in
the article and it can help the journalist integrate
that information into the new content.
[Leena]: The use of the AI-powered editorial
assistant gives Il Secolo a leg up on the
competition by burnishing its reputation for
producing cutting-edge, high-quality journalism,
which drives subscriptions, reader loyalty, and
ultimately, revenue. And the human-machine
collaboration allows the paper’s journalists to
focus on what they are really good at: tasks that
involve distinctly human qualities like tracking
down a story that subscribers will actually read.
[Josh]: Freeing people up to do things that are
uniquely human is one of the major ways
human-machine collaboration creates value for a
business. Eva Sage-Gavin, Senior Managing
Director of Accenture Strategy, Talent and
Organization, has been following the
development of human-machine collaboration
for decades.
[Eva Sage-Gavin]: If you almost look back for
over three decades now from the early days
where machines may have been fully under
human being control, when human beings were
still doing redundant tasks, but not yet really
enhancing the human experience, or being
predictive or anticipatory.
[Josh]: But more recent technological
developments have not just simply freed people
from repetitive tasks. Advances in AI are
liberating people to become more productive
and drive revenue growth.
[Eva Sage-Gavin]: I think the biggest moment for
me was when we moved into the period that I'd
call “machines as partners in the workplace.” We
sometimes call them now “digital workers,” in
being able to do things that we as humans
couldn’t do as well. I think when machines
became our partners in doing what they do best
on data and analytics, and letting humans do
what we do best on judgment, empathy,
creativity, adaptiveness, that's in the last decade
where the biggest breakthrough has come in my
mind.
[Josh]: Perhaps no industry has more of a need
for human empathy and adaptiveness than
medicine, and advances in technology are
creating space for healthcare professionals to
leave the analytics to the machines. AI is
enabling medical researchers to mine data from
electronic medical records to uncover new
insights and conduct virtual experiments that test
hypotheses more efficiently.
It’s also allowing healthcare professionals to
diagnose diseases faster and with greater
accuracy. Dr. Andrew Beck is a pathologist, and
the CEO of PathAI, a startup that uses AI and
machine learning to help pathologists make
faster, more accurate cancer diagnoses. And
this helps the physician get to the treatment
decision sooner.
[Andy Beck]: There are certain things AI systems
can do really well, like identifying patterns in a
very reproducible, predictable way. Particularly
when humans provide the AI systems with tens
of thousands or hundreds of thousands of
examples of that pattern. And the type of pattern
I'm thinking of is like, what does cancer look like
under the microscope. And that's one where if
you provide the computers with enough
examples, it can actually begin to automatically
identify that pattern within a slide.

[Josh]: And when the machine recognizes those
patterns, it can produce a report noting whether
or not it thinks a patient has cancer. All the
doctor has to do is go in and use his or her
decades of experience to confirm or refute the
machine’s findings, leading to a much faster
diagnosis. The automation of the process
enables machines to more accurately and
quickly identify cancer and then lets doctors
spend time doing what really matters: making
people feel better.
[Leena]: You know what Josh, it occurs to me
that all the examples we’ve looked at in this
episode have something in common. They’re
disrupting business by setting up a human-
machine collaboration. And that allows people to
focus on what they’re good at. Here’s Paul again
from Davos.
[Paul Daugherty] With this human plus machine
age we’re moving into an age not where
machines have to take control, it’s about how we
design this future and what decisions we make
as leaders. I think we’re moving to an age of
human empowerment where, just like every
technology since the first axe or whatever
arrowhead we ground as human beings, we use
technology to help ourselves. I think it’s the
same with this technology.
[Josh]: So, Leena, what have we learned?
[Leena]: We learned human-machine
collaboration isn’t only about disrupting the
status quo. It’s actually unlocking value in
businesses and driving new revenue growth.
[Josh] This has been Innovation Decoded by
Accenture. Join us next episode, when we’ll
uncover more stories of how technology is
transforming business.

[Leena] So how did Carnival pull this off? The
long answer? Through Future Systems, which
we’ll explore in depth in this episode. Short
answer? the Cloud.
[Innovation Decoded theme music fades in]
[Josh]: Hey everyone, I’m Josh Klein.
[Leena]: And I’m Leena Rao. Welcome to
Innovation Decoded, a podcast dedicated to
breaking down the new technologies that are
transforming the way we live, work and think.
Sound effects evoking technology (beeps and
buzzes)
[Leena]: The cloud is so powerful. So
ubiquitous. And yet so underappreciated. A lot
of people don’t really know what it is. Here’s
Eric Brewer, one of the “fathers of the Cloud,”
and the current VP of Infrastructure at Google.
Eric was there at the beginning of the Cloud
revolution. Now he works on productive
platforms for modern Cloud computing at
Google.
[Eric] The main role I played was sorting out
how to build large-scale computers used for
internet applications out of clusters of
commodity machines. So, instead of having one
big computer, like a mainframe, that's how ten
or a hundred or a thousand or ten thousand
normal computers interact and use them to build
Cloud services that have tremendous scalability
and high availability.
[Leena] So, how important is the cloud?
[Josh] Remember The Love Boat, where the
crew members—from the bartender to the ship’s
doctor—always did their best to please guests
and, of course, help them fall in love with each
other?
[quick audio clip of late 70s theme song –
evocative of the Love Boat theme, or a cover of
the song]
[Leena] I remember the cruise director, Julie
McCoy. She was basically Cupid with a
clipboard.
[Josh] Yeah–you could say the service was a
little too good to be true. Here’s a fun fact: The
Love Boat was set on the Pacific Princess, an
actual Princess Cruises ship. Real passengers
even got to star as extras in the scenes.
And today we’re talking about how Carnival,
which now owns the Princess line of ships, is
transforming the erstwhile love boats into high-
tech hubs on the sea.
[John Padgett] Now, the ship is essentially a
150,000-ton mobile device that is fully
connected.
[Josh] That was John Padgett, Chief Experience
and Innovation Officer for Carnival, which is the
largest cruise company in the world, with 117
ships that carry more than two million
passengers a year.
Sometimes truth is better than fiction: A trip on
The Royal Princess today has even better
service than the kind The Love Boat producers
dreamed up.
INNOVATION DECODED:
FUTURE SYSTEMS
PODCAST
AUDIO TRANSCRIPT

[Eric] Oh, it’s a big, big deal. I would say it’s a
similar impact to the internet and then the web,
then Cloud computing. They are fundamental
bits in human history about how we interact with
each other and what’s possible.
I remember a kid, I believe he was from
Mozambique, learning to play piano over Skype.
[cut to short audio of piano scales that sound like
they’re via Skype]
That's Cloud computing, too. Basically, there
were no piano teachers in his part of the country
in rural Africa. We've done work in telemedicine
where patients are doing online interviews with
doctors because there are no eye doctors near
them. In general, there’s no specialists in rural
areas even in the U.S. And so, all these things, I
think, are really, in the end, powerful human
examples of why a connected platform based on
Cloud computing is going to be a fundamental
thing in the evolution of human history.
[Josh] The Cloud is key to Future Systems. And
Future Systems are key to thriving in this age of
continuous disruption. Here’s Annette Rippert,
who leads the Accenture Technology business
in North America:
[Annette] So we're living in a time of constant
change, and to scale tomorrow's innovations and
maximize value, organizations really need to
think about how they take a hard reset to their IT
systems. So future systems enables innovation
at scale, and it has really these three unique
characteristics; boundaryless, adaptable and
radically human.
[Josh] These three characteristics have
important implications for creating experiences.
[Annette] So when we think about boundaryless,
that refers to the way that systems operate,
breaking down barriers, whether those barriers
are within the IT stack or between companies, or
in fact in between the way humans interact with
machines. So you know, this really gives
businesses a near infinite set of opportunities to
improve how they operate.
The second factor is really around adaptable
systems, which minimize the friction in business
caused by inefficient processes, or unnecessary
human intervention, and they do this by
harnessing advances in trusted data in intelligent
technologies, that allow them to create systems
that can interact, improve and adapt by
themselves, thus adaptable systems.
And thirdly, with radically human systems, we
can now do something we've long dreamed of,
that is design systems that talk, and listen, see
and understand similar to the way that we do as
humans. It means tomorrow's advantage will go
to those who design systems that adjust to
people, and really have a seamless interaction,
not just to those who continue to expect to have
people adjust to the way we design systems.
[Josh] Annette’s favorite example of Cloud-
enabled Future Systems in action is Carnival’s
move, in partnership with Accenture, from a
“ship-centric” system to a “guest-centric” one.
We’re talking about a major upgrade from Julie
McCoy’s clipboard.
[audio clip of people excitedly embarking,
sounds of ocean and seagulls, etc]
[Annette] Carnival moved away from their legacy
systems, embracing a cloud-based property
management platform composed of almost 200
microservices to enable the guest experience
that they imagined. They shifted to a decoupled
event driven architecture that's scalable, flexible,
and delivers insight and information real time.
[Josh] These high-level tech changes are
contained, practically speaking, in a quarter-
sized “OceanMedallion” that guests can wear as
a sports band or as a pendant. It enables every
guest to connect to a secure Internet of Things
network composed of thousands of sensors and
digital devices. But there’s no discernible
technology—no on-off switch, no charging, no
menu to navigate. It’s…pretty magical. Again,
here’s John Padgett of Carnival.
[John] Historically, the immense ship, very large,
is essentially a floating city where you're moving
large groups of people from experience to
experience, like from a dining room and then to a
show that evening.
But, with the OceanMedallion, it is very much
different. This completely turns it upside-down to
where anything you want, anywhere you're at,
any time you want it you can have service
delivered to you, to your specific location.
There's a display outside your stateroom door
that recognizes you as you are walking up to it. It
greets you by your name.

It celebrates any celebration you might have like
a birthday or anniversary. It would indicate that
right there at your stateroom door and then
unlock your door automatically before you even
touch anything.
[Leena] The results are impressive, but
implementing Future Systems isn’t simple.
According to John, Carnival’s efforts were like
turning around a supertanker.
[John] I think I would call it immense and epic.
Because it was a complete tech overhaul.
And then, when you combine the guest mobile
devices, the crew mobile devices, all of the
public portals, stateroom portals, and door
portals, you're really looking at a population of
probably 15 to 20 thousand connected devices
on that ship. Of which then, is connected to
Cloud-based services through a hybrid satellite
connectivity model that combines both MEO
satellites, mid earth orbit satellites, and geo-
satellites, geo-synchronous satellites with high
band-width connectivity real-time to the Cloud.
And then, that all synchronized to shore-side,
what I would call, traditional data centers, as
well, back in Miami.
[Leena] And all of these tech implementations
came about because the teams followed human-
centric, or, in this case, guest-centric, design
principles. Here’s Annette once more.
[Annette]
You know, human centric design is so important
to future systems. At the start of the Carnival
project, for example, the team gathered at
Carnivals Innovation and Experience Center in
Doral, Florida. Here that Carnival team created
replicas of different physical touchpoints in the
guest journey, from the living room where people
would make their travel choices to the airport, to
the port of embarkation, to the state room, to
onboard points of interest like the pool, and the
casino.
Walking through the space, developers could
literally immerse themselves in the next guest
experience, and then they organized the
development teams by those guest experiences.
[Leena] This method is one of the aspects of the
project John is most proud of.
[John] We start with the guest and we build
everything else around it. In fact, the
MedallionClass experience was started from a
clean slate concrete floor and a little bit of
masking tape. And then we rebuild everything
else it takes to actually enable that vision we
have for that guest from a visionary standpoint.
[Josh] Carnival’s Future System takes the
concept of personalization to a new level, in that
it constantly adapts to how a guest is behaving
on a particular trip.
[sounds of children playing on a ship]
[John] When you go on vacation you have many
different personas. You may be traveling with
your kids. And you have one child persona. You
may be traveling with your college friends and
that's another persona.
We actually maybe start with a profile where you
as a guest provide your preferences. But, as you
engage across your entire experience, we
somewhat forget what you said you were, and
we adapt to what you actually are in space and
time, in real time.
[sounds of music and dancing/partying]
[Leena] It’s like you can take a vacation from
yourself! Now that’s luxury.
[John]. Another great innovation we have is
something we call the OceanCompass. And it’s
very similar to, if you combine waze plus find
friends and made it about an individual or a
guest. And so, on our cruise ships, we now have
not just point-to-point navigation, but individual-
to-individual way-finding and navigation to where
you can find your travel party on this massive
cruise ship. And you can text your shipmates
and travel mates, there, as well.
[Leena] Can you imagine the fun Julie McCoy
would have had with that feature? Her
matchmaking game could have gone way up.
[glasses clicking with romantic music in the
background]
[Josh] Carnival is now scaling these experiences
and services across the entire Princess Cruise
Line. And John’s excited about expanding the
platform and applying it in other contexts.

[John] Because the platform, essentially, allows
us to amplify our innovation because the
platform is so strong. It's similar to, if you think
about, back to the mobile device or iPhone
analogy, of how early on there were just a
handful of apps and then they proliferated
because the platform is a given. We see a lot of
proliferation in capabilities to do some very
special things that we could never do before.
[Annette] The very concept of standalone
applications in modern systems development is
rapidly disappearing. Our Future System survey
of 8,300 business and IT executives showed us
that companies who embrace future systems
stand to grow their revenues at more than two
times the rate of those who don't. So the
financial upside is pretty staggering.
And I think when you compare that against
companies who may be successfully innovating
in pockets in their organizations, but if they've
not really been able to achieve that desired
impact on a broad basis across the enterprise,
you know, it's unfortunate they're not really
realizing the full value that they could be.
[Leena] Annette says a lot of companies are
reconfiguring their tech in a piecemeal or ad hoc
way. But it’s better to have a step-by-step plan
for building all three components of Future
Systems into your business. Here again is Eric
Brewer of Google.
[Eric] There’s still plenty of private data centers,
but I would say every major company I’ve talked
to has a plan to move to the Cloud in part or in
whole. If not quick it will take five or ten years for
lots of reasons including they already own data
centers that they need to depreciate, but they’re
not, there’s no real discussion anymore about
are they going to move to Cloud or not. It’s more
about when and how, and how many Clouds and
which parts of their workloads do they move?
[Annette] Today's dynamic market demands new
ways of thinking and working that are much
more experimental, agile, and experiential. Now
is the time to close that innovation achievement
gap, the gap between what companies are doing
and what they could be achieving, and all of that
enabled through future systems.
[Leena] So, Josh, what did we learn today?
[upbeat music]
[Josh] That going on a Princess cruise today is
like taking a hyper-personalized voyage. With its
Cloud-based property management platform, the
OceanMedallion exemplifies the boundaryless
component of Future Systems. It’s adaptive
because it will keep changing to better meet
guests’ needs, and it’s radically human because
its technology is designed to reduce friction and
allow the crew to give people the best
experience possible. And as with all Future
Systems, the potential for building out the
platform and propelling growth is huge.
Sometimes you have to turn the whole ship
around to get where you need to go.
[Leena] This has been Innovation Decoded by
Accenture. Join us for the next episode, when
we’ll uncover more stories of how technology is
transforming business.

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