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News Article | February 28, 2017
Site: www.businesswire.com

BOSTON--(BUSINESS WIRE)--Agile Alliance, The Boston Consulting Group (BCG), and Project Management Institute (PMI), today announced the formation of a coalition dedicated to becoming the leading authority on strategic initiative management with the aim of helping enterprises reduce the failure rate of large-scale strategic initiatives and avoiding the resulting loss of competitive advantage and destruction of value. As founding members of the Brightline™ Initiative, these three organizations are developing a platform that will offer CXOs insights and solutions to bridge today’s recurring and expensive gaps between strategy development and strategy implementation. A report by the Economist Intelligence Unit of more than 500 senior executives worldwide found that 61% admit their organizations struggle to deliver the expected results of strategy planning, and only 56% of strategic initiatives were implemented successfully. The amount of money wasted as a result of poor implementation is a staggering 30 cents on every dollar of investment in organizations that are the worst performers, PMI research shows. According to BCG, only 24% of organizations deliver consistent total shareholder returns. Being able to adapt to regulatory changes, competitive pressures, and stakeholder needs requires the ability to develop and successfully implement strategy. The work of the Initiative will be shaped through a diverse coalition of highly influential thought leaders from the business, government, academic, and social sectors. Along with Agile Alliance, BCG, and PMI, new members of the Coalition from other sectors will join in to develop and champion best practices for strategic initiative management. Coalition members will also help shape the Initiative’s principles and global standards and framework for strategy implementation. Ricardo Vargas, Executive Director of BrightlineTM, describes the Initiative this way, “ The Brightline Initiative, bringing together the thought leadership of the Coalition will integrate the best of the existing knowledge surrounding strategy implementation and link it to initiative management. It will deliver insights and solutions, empowering leaders to successfully transform their organization’s vision into reality through strategic initiative management.” The Initiative will take a holistic approach, providing thought and practice leadership that will include frameworks and cutting-edge research, networking through events and membership, and capability building through a resource library, education programs, and publications. For more information, or for media inquiries, please visit Brightline.org or contact Ricardo Viana Vargas at ricardo.vargas@brightline.org. The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. Agile Alliance is a nonprofit organization dedicated to promoting the concepts of Agile software development as outlined in the Agile Manifesto. With nearly 35,000 members and subscribers around the globe, Agile Alliance is driven by the principles of Agile methodologies and the value delivered to developers, organizations and end users. Agile Alliance organizes and supports events to bring the Agile community together on a global scale. Project Management Institute (PMI) is the world's leading association for those who consider project, program or portfolio management their profession. Founded in 1969, PMI delivers value for more than three million professionals working in nearly every country in the world through global advocacy, collaboration, education and research. We advance careers, improve organizational success and further mature the project management profession through globally-recognized standards, certifications, communities, resources, tools, academic research, publications, professional development courses and networking opportunities. Visit us at PMI.org, www.facebook.com/PMInstitute and on Twitter @PMInstitute.


News Article | December 12, 2016
Site: www.marketwired.com

As Costs Rise and Margins Fall, Institutions Must Commit to Strategic Digital Transformation and Sharply Lift Performance to Survive Industry Disruption and Emerge Stronger, Says Report by The Boston Consulting Group BOSTON, MA--(Marketwired - Dec 12, 2016) - Corporate banks must reinvent themselves to adapt to a new climate in which digitally enabled business models are redefining the movement of data and money and challenging banks' traditional advantages, according to a new report by The Boston Consulting Group (BCG). The report, Global Corporate Banking 2016: The Next-Generation Corporate Bank, is being released today. Drawing on insights from BCG's most recent Corporate Banking Performance Benchmarking survey -- involving 300 small-business, midmarket, and large corporate banking divisions from around the world -- the report explores the current state of the industry, the growing need for cutting-edge digital capabilities, and the scenarios in which next-generation corporate banks will likely have to operate. The report further offers clear steps that players can take to begin their digital transformations and best position themselves for the future. "Our benchmarking data confirms the hazards of clinging to traditional credit-centric revenue models and static, inflexible operating practices," said Carsten Baumgärtner, the global leader of BCG's corporate banking segment and a coauthor of the report. "Incumbent banks must embrace deep, systemic digitization to stay relevant, open up new paths to economic profit generation, and overhaul all key levers." The State of the Industry. According to the report, relatively few corporate banking divisions -- less than one-third in North America and Asia and less than half in Europe -- reported positive and growing economic profit from 2013 through 2015. In addition, while these top players achieved returns above the hurdle rate, bottom-quartile performers fell below the hurdle rate in almost every region and segment. (BCG's methodology uses a 16% pretax hurdle rate and assumes that regulatory capital is 10.5% of risk-weighted assets.) The survey revealed some favorable developments as well. The economic profit of around 70% of corporate banking divisions in Western Europe improved during the same period despite ongoing economic challenges -- a marked contrast to BCG's 2011-2013 study, when economic profit improved for just one-third of Western European divisions. Conversely, the economic profit of more than half of North American corporate banking divisions shrank during the 2013-2015 period, a worrying trend that has been somewhat camouflaged by the fact that many divisions in the region still post relatively high returns on capital compared with those in other parts of the world. In Asia, meanwhile, some banks reported improved economic profit -- but two-thirds suffered declines. Digital Capabilities. The report says that corporate banks are being disrupted by digitization whether or not they are fully ready -- and most are not. With the contours of the next-generation banking environment already taking shape, the only way that corporate banks can stay relevant is by adapting their operating models swiftly and aggressively. But they have a narrow window of time in which to free up resources and develop the capabilities needed for the sweeping transformation that is required. Leading banks, for their part, are already well on the way to digitizing the traditional enablers of value. In the process, they are overhauling their client strategies, revenue models, cost approach, and risk management. Banks must start by addressing pricing -- usually the single biggest source of untapped funding for digital investment. The Next-Generation Corporate Bank. Although the exact nature of the industry in 20 years is impossible to predict, the report discusses three possible evolutionary scenarios: Industry 4.0, ecosystem banking, and the Internet of Things. The rise of Industry 4.0 shows how technology can alter the nature of specific industries and the financial services they use, the report says. Industry 4.0 will connect buildings, vehicles, sensors, and machines, enabling faster, more flexible, and more efficient processes that, in turn, will generate significant increases in productivity and radical new business models. These capabilities will also fundamentally change traditional relationships among banks, suppliers, producers, and customers. In ecosystem banking, the report says -- noting that digital leaders in many industries are often also platform leaders (such as Amazon) -- corporate banks would be able to serve not only the platform leader itself but the many individual suppliers and distributers that operate on it. The result would be a powerful ecosystem that allows corporate banking divisions to support a diffuse network of companies in a particular industry-specific value chain. It is also possible to envision an even more ambitious future built on the Internet of Things and blockchain-enabled smart contracts, the report says, citing a hypothetical example of trucks that are not only self-driving but also operate as autonomous business units. A truck could be programmed to join an Uber-style system for shipping containers, and when empty could log on to a platform and sign up for whichever shipping container journey was identified as optimal by its profit-maximizing algorithm. One result would be far more payments that are fully digital. The bank would increasingly be seen as a trusted provider and fraud risk manager, potentially generating new service opportunities and revenue streams. Beginning the Transformation. According to the report, although all corporate banks have taken at least tentative steps down the path to digitization, launching a long-term strategic transformation can be daunting. Rather than focusing on specific projects or products, it is important to identify a transformation path that keeps options open while building digital capabilities and generating near-term cash to fund the ongoing journey. This path comprises five imperatives: "Corporate banking divisions have emerged from the financial crisis only to be hit by a massive digital disruption," said Baumgärtner. "To stay viable, they need to understand the client journeys that matter most, invest in continual client-centric innovation, adopt agile ways of working, and create more effective and collaborative sales cultures. The example of early movers makes clear that the next-generation bank is around the corner. The only question is which banks will be among them." A copy of the report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.


New Research by The Boston Consulting Group and Partnering Health-Care Institutions Identifies Significant Variation in Hospital Outcomes Across the US BOSTON, MA--(Marketwired - Dec 14, 2016) - A pioneering study of over 22 million hospital admissions found significant variation in health outcomes across the United States. Patients in low-performing hospitals (bottom 10%) are three times more likely to die and 13 times more likely to experience complications than those in high-performing hospitals (top 10%). These are the key findings of The Boston Consulting Group (BCG) and research partners Ariadne Labs, Harvard T.H. Chan School of Public Health, Alerion Institute, Johns Hopkins School of Medicine, University of Michigan Medical School, and the University of Rochester Department of Public Health. The research was published today in the peer-reviewed scientific journal PLOS ONE. The study is the most comprehensive analysis of health outcomes variation in the United States to date, covering 22 million hospital admissions across states where over half of the US population resides. It analyzes 24 specific health outcomes including many widespread illnesses such as cardiovascular disease, diabetes, and pneumonia. "Quite simply, this study found that where you live can determine if you live," said Barry Rosenberg, MD, a Chicago-based BCG partner in the firm's Health Care practice and lead author of the study. "Americans do not fully appreciate the alarming extent of outcomes variation that exists among US hospitals. If you call 911, do you want your loved one's heart attack treated at a hospital with a 4% death rate or a 16% death rate? The closest hospital may not always be the best hospital." Even after extensive risk adjustment, the research found that large variations in hospital performance persisted across geographies. These differences in hospital outcomes could not be fully explained by differences in patient demographics, health, or a variety of macro health system factors. For example, even after risk adjustment: Challenging conventional wisdom, the study identified regions with poor-performing hospitals that serve high-income, largely white populations and many regions with high performing hospitals that serve low-income, minority populations. The observed variation in hospital outcomes exists across the US and can be found both between states and within states. "It's been known that hospitals vary in quality, but it hadn't been recognized exactly how large the variation is between high performing and low performing hospitals," said author Atul Gawande, MD, MPH, executive director of Ariadne Labs, professor at Harvard T.H. Chan School of Public Health, and surgeon at Brigham and Women's Hospital in Boston. "This clearly indicates that greater outcomes transparency and greater focus on performance improvement are necessary. We have a tremendous opportunity to improve outcomes for patients." For the past decade, researchers and policy makers have focused attention on geographic variation in health care cost and utilization, but limited attention on outcomes. "We need to expand the focus to include measuring and improving outcomes that matter to patients, such as death rates and complication rates. Only if hospitals measure and share their risk-adjusted outcomes will we have an efficient health care market with a high rate of innovation and competition to improve quality of health care," said Stefan Larsson, MD, PhD, a senior partner and global leader of BCG's Payer and Provider practice. BCG CEO Rich Lesser, another co-author of the study, commented: "As the US prepares for its next generation of health care reform, these findings reinforce that it is not just about how much to spend on health care, it's also about how to create an environment that accelerates the sharing of best practices across the broader health care system." The present study uses all-payer data from 2011 from the Agency for Healthcare Research and the Quality Healthcare Cost and Utilization Project/ State Inpatient Databases (HCUP/SID). Due to changes in the HCUP/SID database design in 2012 that removed most hospital identifiers needed for geographic mapping, it is not possible to update the analysis with more recent data. A copy of the article, "Quantifying geographic variation in health care outcomes in the United States before and after risk-adjustment," can be obtained from the PLOS ONE website at http://bit.ly/2gBIQVG. BCG's interactive tool visually displaying all 24 risk-adjusted outcomes is available at http://on.bcg.com/2hmseW5. To arrange an interview with one of the authors, please contact Hanah Heintzelman at +1 646-455-4667 or heintzelman.hanah@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com.


News Article | February 15, 2017
Site: www.marketwired.com

Illinois Ranks 34th Overall and 11th Among the 15 Most Populous States, But Its Strengths Offer Reasons for Optimism, Says The Boston Consulting Group in a New Report CHICAGO, IL--(Marketwired - Feb 10, 2017) - Illinois' performance in translating wealth into well-being for its residents has been underwhelming, according to a nationwide study by The Boston Consulting Group (BCG), one of the world's leading management consultancies. The detailed findings of the research appear in a new report, The Path Forward for Illinois: Prioritizing Well-Being in the Prairie State, released today. The report provides a quantitative evaluation of Illinois' performance in four areas -- economics, investments, sustainability, and equality -- and compares the results with those of the other 49 states, focusing particularly on the 15 most populous states. The report illuminates Illinois' key strengths and challenges, identifies opportunities for improvement, and highlights the strategic choices that business, civic, and political leaders must make for the future. "We've developed a scorecard that objectively measures a state's ability to provide well-being for its residents," said Marin Gjaja, a Chicago-based BCG senior partner and coauthor of the report. "GDP doesn't tell the whole story." Of the four areas, investments is a bright spot for Illinois. The study found that the state's accomplishments in funding early and higher education and in providing health insurance contribute substantially to its ranking of 17th in this element. However, Illinois' overall performance is weighed down by its ranking of 44 in economics, 38 in sustainability (a measure of civic engagement as well as governance and environmental factors), and 39 in equality (a measure of income, health, and education inequality). These rankings are based on BCG's Sustainable Economic Development Assessment (SEDA), a diagnostic tool that benchmarks social and economic conditions as a measure of a government's success in providing for the well-being of its people. Since 2012, BCG has been using the tool to conduct worldwide comparative analyses of country-level well-being. The framework was adapted for the US by adding equality as a fourth element and choosing dimensions appropriate for state-level analysis. Drilling Down to the Real Issues "The headlines tend to cite Illinois' administrative gridlock and dysfunctional political culture," said Justin Manly, a Chicago-based BCG partner and coauthor of the report. "It's easy, however, to lose sight of the state's notable strengths." Although Illinois ranks a disappointing 34th nationwide, the state has a strong foundation on which to build: a world-class city, a large and still-vibrant economy, an educated workforce, and a young demographic profile. Illinois also has a history of investing in its people. As an example, its education system in some parts of the state matches the best in the country. Still, investments don't always translate into results. Despite a strong record of providing health insurance and health care access, Illinois is only middling in health outcomes. In education, impressive preschool enrollment numbers and a high level of college attainment are offset by disappointing scores on national elementary education tests. "Our analysis zeroes in on specific areas that can have significant impact in improving well-being," Manly noted. Two clear trends emerged from the national analysis of state-level results. First, strong performance in economics often comes at the expense of success in sustainability. Three of the top five performers in economics (Texas at number two, Delaware at number three, and Wyoming at number five) rank in the bottom third in the area of sustainability. Second, highly populated states tend to struggle on equality, as measured by racial, gender, and socioeconomic gaps in income, health, and education outcomes. Of the 15 most populous states, 7 rank very low in equality; Illinois is 39th. But having a large population does not necessarily handicap well-being. Massachusetts and Washington, each with populations of about 7 million, finished first and eighth, respectively. Strategic Choices of the Best in Class The report examines the results of the top performing, most populous states on the basis of the priorities and choices of those states. Almost every large state faces similar challenges: deindustrialization, legacy economic burdens (including high pension obligations), and complex demographics. The difference between Illinois and its high-ranking peers is that Illinois lacks a clear, coherent strategy for the future. "Successful states have a vision, a strategy, and the will -- political, economic, and social -- to work through the tradeoffs, make well-considered choices, and lay the groundwork for long-term success," said Gjaja, who leads BCG's six offices in the Great Lakes region and Canada and directly manages the Chicago office. "Illinois' leaders need to come together to focus on our strengths and on the possibilities for shaping a better future." The publication of The Path Forward for Illinois: Prioritizing Well-Being in the Prairie State coincides with the launch of BCG's Center for Illinois' Future. Located in the firm's Chicago office at 300 N. LaSalle, the center was established to consolidate BCG's social impact (or corporate social responsibility) work in Illinois and maximize the benefit of that work for all those with a stake in Illinois' future -- residents, leaders, advocates, and institutions. For more information on the center, please visit centerforillinoisfuture.bcg.com. To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or corriveau.alexandra@bcg.com. The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.


News Article | November 2, 2016
Site: www.marketwired.com

Facing Weak Container Demand, Carriers Must Master New Moves to Boost Performance, According to a New BCG Report COPENHAGEN, DENMARK--(Marketwired - Nov 2, 2016) - Container liners must adopt new strategies for enhancing their performance in a new normal characterized by slowing container demand, according to a new report by The Boston Consulting Group (BCG). The report, titled Sailing in Strong Winds: The New Normal in Global Trade and Container Shipping, is being released today. Demand for containers picked up during 2014, but by the end of 2015, average global growth in the container-shipping trade was a disappointing 1.9%. Still, in a bid to boost scale and reduce slot costs, liners continued to invest in new and large vessels. This worsened the overcapacity that was already afflicting the market and pulled freight rates down to a new low. Ulrik Sanders, a BCG senior partner and a coauthor of the report, noted that "in 2015, for the first time in history, growth in container demand lagged behind global gross domestic product." To identify potential culprits behind the disappointing news for 2015, the authors analyzed the performance (including import and export volumes) of six major trade routes, or trades, that collectively represent more than 80% of the total world container trade. The trades are: Asia-Europe, Transpacific, Intra-Asia (including Intra-China), Indian subcontinent and Middle East, Latin America, and Africa. Several individual trade regions -- particularly Asia-Europe (including Intra-Europe), Transpacific, and Indian subcontinent and Middle East -- achieved impressive growth rates that year, even as Intra-Asia, historically a powerful growth engine, saw disappointing rates. Performance varied depending on key drivers of demand in the different trades, such as industrial and consumer demand, as well as structural changes in economies such as China. In addition to analyzing container demand volumes in 2015 for key trades, the authors assessed the main drivers of demand to develop several scenarios -- base, bear, and bull -- for what global container shipping might look like over the next several years. Camille Egloff, a BCG partner and a coauthor of the report, explained, "Our goal was to answer the question, 'Was 2015 a cyclical low point or an indication of a new normal for global trade?'" The authors took a particularly close look at possible scenarios for container demand and container supply-and-demand balance over a six-year period. For container demand, they expect global container traffic to grow from 2.2% to 3.8% annually from 2015 through 2020, depending on the growth performance in each of the six major trades. For container supply-and-demand balance, they anticipate a supply-demand gap ranging from 8.2% to 13.8% in 2020. (The gap was 7% in 2015.) The authors estimate that by the end of 2020, oversupply in vessel capacity will stand at 2.0 million to 3.3 million 20-foot-equivalent units -- 90 to 150 Triple E class ultralarge container vessels. BCG's analysis of shipping companies globally suggests that many container carriers are stuck in the middle between being a scale leader and being a niche player focused on certain trades. Egloff said, "They lack sufficient scale to drive down costs and enough differentiation to offer unique commercial value or to command premium rates. This is a dangerous position in an increasingly commoditized industry." To improve their performance in the industry's new normal, container liners should consider making several moves. These include boosting scale on their own through a blend of global mergers and smaller M&A deals that can help them lower costs, harvesting synergies from savvier deployment of their fleet, rationalizing their combined network of lines, and streamlining their network of agencies. Egloff added, "Our client work suggests that maximizing synergies through such means could deliver a 5% to 10% decrease in the cost base of a combined company." Pushing alliances to the next level to unlock even more synergies (for instance, by forging joint procurement and operations arrangements), another move worth considering, could deliver a 3% lift in EBIT, according to the authors. Still, capturing these gains will require sophisticated alliance models characterized by better integration of operations and assets. Moreover, the additional complexity that comes with collaboration with many alliance partners may offset potential benefits. Meanwhile, optimizing the core business (for example, by rethinking the company's product offering and services network while also controlling costs) could deliver EBIT improvements of 5% to 7%. Enhancing commercial excellence, even in a commoditized industry, can create competitive advantage in areas such as yield, sales force effectiveness, and channel strategy, delivering EBIT improvements of 3% to 5%. Extracting value from adjacent markets (by, for example, accelerating development of additional forwarding services in rapidly developing economies) could also improve carriers' returns on assets. Finally, carriers can leverage digital technologies to improve commercial platforms and booking systems, as well as boost internal-process efficiency, improve fleet management, and foster more fluid collaboration with value chain players. A copy of the report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.


News Article | October 28, 2016
Site: www.marketwired.com

BCG Estimates That Agtech Investments by Agribusinesses and Venture Capital Firms Have Surpassed $20 Billion Annually, with Data-Enabled Agriculture as a Top Priority CHICAGO, IL--(Marketwired - Oct 25, 2016) - A wave of startup activity in agriculture technology (agtech) has promoted unprecedented levels of investments by agribusiness companies and venture capital firms. Yet more than 80% of executives say that their investments are primarily intended to defend or enhance their core businesses, rather than to create a new business. These findings, presented in a new report by The Boston Consulting Group (BCG), suggest that agribusiness companies must change the way they think about investing in early-stage agriculture technologies -- not only regarding how much they invest but also where and how. The report, titled Lessons from the Frontlines of the Agtech Revolution, is being released today. The outlook for agtech investments is of great interest to both industry participants and government regulators. Some of the largest agribusiness companies have announced plans to merge. The proposed combinations have raised questions about how greater market concentration will affect companies' incentives to innovate and the prices they charge farmers for their products and services. Farmers are facing an especially difficult business environment, as lower commodity prices have driven down net farm income to 65% of the peak reached in 2013. Investments in agtech may be part of the solution to the current low-price environment. The report discusses a study conducted by BCG and AgFunder that sought to understand agtech investment levels, priorities, and strategies. The study included a survey of more than 50 executives at leading agribusiness companies globally, including most of the world's largest agribusiness players, and, for comparison, 15 investment professionals at different agtech-focused VC firms. The authors also conducted a detailed analysis of agtech patent activity since 2010. Among the key findings: "To survive and thrive in the next decade, agribusiness executives must understand the technologies that other players have prioritized and develop a strategy that leverages their company's unique competitive advantages," says Decker Walker, a partner and a report coauthor. "They need the flexibility to pursue both offensive and defensive investments and must be open to taking nontraditional investment approaches." "Our study shows that the major sources of revenues are changing, and new profit pools are being created," says Torsten Kurth, a partner and a report coauthor. "To emerge as the winners in this shifting landscape, companies must identify the most valuable technologies to pursue, given their capabilities, and think differently about their investment strategy." Agribusiness executives believe that their unique competitive advantage in agtech stems from their ability to provide scale and a path to market for new technologies. However, the survey findings indicate that agribusinesses' strategies and capabilities do not yet support the ambitions reflected by their high levels of investment. For example: To rethink their agtech investment strategy, agribusiness companies need to start by considering customers' needs, not technologies. The report discusses a combination of six steps that offer a customer-focused, systematic approach to winning in the agtech revolution. A copy of the report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.


News Article | March 1, 2017
Site: globenewswire.com

GENEVA, March 01, 2017 (GLOBE NEWSWIRE) -- New technologies are transforming the engineering and construction (E&C) sector at an accelerated pace, according to a new report compiled by the World Economic Forum in collaboration with The Boston Consulting Group (BCG). The report being released today, Shaping the Future of Construction: Inspiring Innovators Redefine the Industry, analyzes ten innovation leaders, identifies key success factors, and makes policy recommendations for accelerating innovation in construction. Relative to other industries, productivity in E&C has stalled over the past 50 years. Technology was not making any fundamental advances, and companies remained averse to changing their traditional methods. Recently, however, transformative technological developments have emerged, and some pioneering firms have adopted them for current projects. These developments—3D printing, building information modeling, wireless sensing, and autonomous equipment, to name just a few—are already starting to turn traditional business models upside down. The ten lighthouse innovation cases in the report illustrate the value of embracing innovations. Prominent flagship projects, such as Dubai’s Burj Khalifa, the world’s tallest building, and The Edge in Amsterdam, the world’s most sustainable office building, showcase state-of-the-art innovation. So too do the various pilot projects or startups that the report analyzes, such as the 3D printing of houses by the Chinese company Winsun or the predictive analytics of construction data by the Chicago-based firm Uptake, Forbes’s hottest startup of 2015. Jointly, their inspirational stories give a glimpse of the industry’s future. “To paraphrase William Gibson: the future of construction is here now—it is just not evenly distributed. Innovative companies and projects, as described in the report, demonstrate the art of the possible and how to address the challenges involved,” says Philipp Gerbert, a BCG senior partner and coauthor of the report. “The impact of these innovations on the traditional construction ecosystem will be interesting to follow. We see a widening gap between the innovation laggards and leaders, in particular with regards to their digital transformation.” On the basis of BCG’s analysis of these successful innovators, the report suggests ways for companies to stimulate innovative ideas, turn those ideas into reality, and ultimately succeed in the market. Pioneering firms, for instance, create an innovation-friendly culture that rewards risk taking; they take a longer-term product perspective, rather than thinking in terms of individual projects; and they proactively shape the regulatory environment. Companies have nothing to gain from delaying. Once they implement innovations, the benefits—lower costs, shorter delivery times, and reduced environmental impact—can begin to accumulate. Governments are crucial participants in the transformation of the construction industry. They need to create an environment conducive to the adoption of innovative technology as a regulator, strategic incubator, or project owner. The report recommends that governments should update building codes, move to performance-based and forward-looking standards, and introduce more flexible procurement models in infrastructure projects to overcome typical hurdles for innovation. In fact, infrastructure is again high on the agenda in almost all regions of the world. In the words of John Beck, president and CEO of Aecon Construction Group, one of Canada’s leading construction companies: “There has always been a mismatch between the need for infrastructure assets and the capital to fund them. We now have a new opportunity to narrow that gap—by leveraging all the remarkable innovations that have emerged in recent years.” For infrastructure and other built assets alike, innovation will boost the value over their entire life cycle. As construction companies reap the benefits of innovation, so too will their clients and the community at large. “Incremental change is not an option; by redefining the ultimate frontier, leapfrogging innovations in construction will finally help to address major societal challenges, from mass urbanization to climate change,” says Michael Buehler, head of infrastructure and urban development at the World Economic Forum. “The widespread adoption of these innovations is going to make a serious difference, both economically and environmentally.” The report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management’s agenda. It also provides unprecedented access to BCG’s extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm’s founder and one of the architects of modern management consulting. All of our content—including videos, podcasts, commentaries, and reports—can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.


It Is Imperative for US Manufacturers to Achieve a Step-Change Increase in Productivity and Then Maintain Growth Through Continuous Improvement CHICAGO, IL--(Marketwired - Dec 14, 2016) - Productivity is cited by more than 90% of executives as one of the top five most important corporate initiatives, according to a new report by The Boston Consulting Group (BCG) and The National Association of Manufacturers (NAM). Titled Productivity Now: A Call to Action for US Manufacturers, the report says that the productivity of US manufacturers was -0.4% for the period from 2011 through 2015, a decline from an already low 0.4% for the period from 2007 through 2011. Global headwinds have challenged manufacturers, making it difficult to implement the productivity changes identified as high priorities. This shows in their lack of urgency to implement productivity changes, according to the surveyed executives. Their responses indicate that they rely too much on traditional improvement levers and are not sufficiently rigorous in managing their improvement programs. As a result, they fail to maximize the impact of their efforts. "Leaders should be bold in achieving step-change productivity gains of more than 15% to 20% in key cost areas, not eking out advances of 1% to 2% each year. In many manufacturing industries, such large productivity gains will tip competitiveness from low-cost countries back to the United States," said Justin Rose, a BCG partner and coauthor of the report. Manufacturers can achieve these gains through the disciplined application of a comprehensive set of productivity levers that attack all the underlying drivers of cost. Essential to this approach is the use of new digital and analytical tools that can help manufacturers reach continually higher levels of productivity. Companies apply the traditional productivity levers they are most familiar with, rather than utilize cross-functional levers. By doing more of the same, companies are promoting diminished returns. Both types of levers must be applied to drive a step-change in productivity gains. Further, few companies have taken a sufficiently rigorous approach to managing their productivity programs. Respondents were presented with a list of five basic elements of a comprehensive productivity improvement program. Although more than 70% said they are designing their efforts with at least one element partially incorporated, only 14% are executing on all five. For too long, manufacturers have stayed within their comfort zone, applying the productivity levers they are most familiar with and eking out anemic productivity gains. If companies continue doing more of the same, the consequences for US manufacturing competitiveness could be disastrous. To reverse the recent downward trend in productivity, manufacturers must establish bold ambitions and pursue them using the comprehensive and rigorous improvement program described in the report. "Many of the manufacturers that I speak with are dedicated to making long-term strategic moves that will boost their company's productivity and competitiveness. But there's more to be achieved in the near term -- both through productivity investment by companies and a commitment by policymakers toward a stronger US," said Chad Moutray, chief economist at NAM and coauthor of the report. Industry 4.0 is the lever most underutilized and underappreciated by the executives surveyed. Of all the cross-functional levers, Industry 4.0 holds particular potential for capturing tangible value. Leading companies have used these advanced technologies to capture gains in productivity of up to 15%. BCG has launched its Innovation Centers for Operations (ICO), a network of model factories in France, Germany, and the US. The ICO includes real production lines and visionary technology demonstrations, allowing for a unique client experience. Supported by an array of academic and technological partners, the centers showcase the impact of new technologies on these production lines, offering immersion, experimentation, and training to ICO visitors on all topics related to Industry 4.0. "US manufacturers must set a bold ambition, take a programmatic approach, pull cross-functional productivity levers, and embrace new digital tools to see a step-change in productivity outcomes," says Jonathan Van Wyck, a BCG principal and coauthor of the report. "But those that get it right will see five times higher shareholder returns versus those that don't." Learn more about BCG's Innovation Centers for Operations here. A copy of the report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn. About The National Association of Manufacturers The National Association of Manufacturers (NAM) is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12 million men and women, contributes $2.17 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for more than three-quarters of all private-sector research and development in the nation. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States.


News Article | December 8, 2016
Site: www.marketwired.com

A Survey by BCG Finds That US Companies Consider These New Digital Technologies a Priority, but Many Manufacturers Lack a Sense of Urgency or Holistic Strategy CHICAGO, IL--(Marketwired - Dec 8, 2016) - US manufacturers recognize the potential of Industry 4.0 to create value, but they have yet to fully appreciate the scope and magnitude of the opportunity or find the path to success, according to new research by The Boston Consulting Group (BCG). For example, nearly 90% of manufacturing leaders regard adopting new digital industrial technologies as a way to improve productivity, but only about one in four see opportunities to use these advances to build new revenue streams. Many are pursuing isolated initiatives scattered throughout the company, without a clear vision and coordination from the top. These insights are presented in a new BCG report, Sprinting to Value in Industry 4.0, which is being released today. The stakes are high, as the value created by Industry 4.0 vastly exceeds the low-single-digit cost savings that many manufacturers are currently pursuing. "In an era of stagnating productivity, Industry 4.0 stands out as a means of generating significant productivity gains," says Justin Rose, a BCG partner and a coauthor of the report. "The real value is achieved when manufacturers maximize the impact of these advances by combining them in a comprehensive program." To succeed, companies must set ambitious goals and capture value rapidly over the course of a multiyear transformation. "Our findings point to the need for US manufacturers to gain a deeper understanding of how they can apply Industry 4.0 and accelerate the pace of adoption," says Vlad Lukic, a BCG partner and report coauthor. "The winners will approach the race to Industry 4.0 as a series of sprints but manage their program as a marathon." To gain insights about the status of Industry 4.0 adoption by US manufacturers and the challenges they face, BCG surveyed 380 US-based manufacturing executives and managers at companies representing a wide range of sizes in various industries. The survey found conflicting signals: Hands-On Experience Gives Visibility to the Full Range of Possibilities "Providing hands-on experience is essential for helping managers understand the state of the art in Industry 4.0 and the innovative ways they can apply these technologies in their plants," says Tom Milon, a BCG principal and a coauthor of the report. To support companies in accelerating their digital transformation, BCG has launched its Innovation Centers for Operations (ICO), a network of model factories in France, Germany, and the US. "The ICOs include real production lines and visionary technology demonstrations, allowing for a unique client experience," says Milon. Supported by an array of academic and technological partners, the centers showcase the impact of new technologies on these production lines, offering immersion, experimentation, and training to ICO visitors on all topics related to Industry 4.0. Companies can apply the insights gained at the ICO to define a strategic plan that guides their transformation effort. Bold ambitions and speed are essential. A cross-functional innovation team should conduct experiments, iterate fast, and rapidly scale up new solutions. Battle-tested program-management techniques can keep the large-scale, multiyear effort on track. Sprinting to Value in Industry 4.0 provides a step-by-step approach to capturing value rapidly while managing a long-term transformation. A copy of the report can be downloaded at www.bcgperspectives.com. To view additional details of the research, please visit SlideShare at http://bit.ly/2gDAePm. To request a copy of the findings or arrange an interview with a BCG expert, please contact Dave Fondiller at +1 212 446 3257 or fondiller.david@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.


News Article | March 2, 2017
Site: globenewswire.com

BOSTON, March 02, 2017 (GLOBE NEWSWIRE) -- Amid a continuously rising tide of regulation and high costs of compliance, banks must create more efficient and effective processes, and leverage technical innovation, if they hope to survive and thrive in the run-up to 2020 and beyond, according to a new report by The Boston Consulting Group (BCG). The report, Global Risk 2017:  Staying the Course in Banking, is being released today. Drawing on an extensive benchmarking exercise to determine the overall health, risk profile, and performance of the banking industry—a study involving more than 300 retail, commercial, and investment banks that represented more than 80% of all banking assets worldwide—the report examines economic profit (EP) both globally and regionally, analyzes the ever-evolving regulatory climate, and proposes a senior-management agenda to help institutions stay the course in these turbulent times. “The seas of regulatory change have continued to surge worldwide, producing a strong impact on banks’ strategic and operational planning efforts,” said Gerold Grasshoff, the global leader of BCG’s risk management segment and a coauthor of the report.  “Coping with regulation must therefore remain a priority, and the increasing costs of doing so will place substantial pressure on all banks regardless of size or specialty.” Economic Profitability Tallied globally, banks created positive EP of €159 billion in 2015, or 18 basis points as a percentage of total assets. This was the highest value created since the crisis, as EP ranged from –24 to 17 basis points from 2009 through 2014.  Averaged globally and adjusted for risk costs, it was the fifth year in a row in which EP rose, and the third consecutive year of positive EP performance worldwide, as the industry continued its recovery from the upheaval of 2007–2008. The global increase in EP in 2015 was driven by the positive regional performance in North America, the Middle East, and Africa, where banks continued to surge ahead. In Europe, banks have stalled in their struggle for recovery. Asia-Pacific banks’ EP shrank slightly compared with performance in 2014, while South American banks’ EP fell by nearly half. The Regulatory Climate The report says that the era of constantly evolving and increasing regulatory requirements persists and that the number of individual regulatory changes that banks must track on a global scale has more than tripled since 2011, to an average of 200 revisions per day. Identifying overarching themes, BCG makes several predictions: that regulation will stay at an extensive level (despite recent developments in the US that may augur critical challenges to regulatory implementation); that actions by individual jurisdictions, rather than by globally coordinated initiatives, will remain the source of most new and changing requirements that banks must comply with; and that the influence of regulation on strategic and operational planning will continue to be significant. To assess the current status of regulation, the report also organizes the global spectrum into three clusters: An Agenda for Staying the Course According to the report, bank steering functions will need to become more involved and effective in overall cost management. Their tools for doing so are varied—from adjusting the organization and operating models to harnessing the strong potential of new technologies. Partnering with both fintech and regtech startups can provide access to innovative capabilities and solutions relevant to bank steering. At the same time, banks must not forget that their risk and steering functions are ultimately responsible for optimizing the scarce financial resources of capital, liquidity, and funding. Success will require closer collaboration of those functions and more integrated management of the banks’ P&L and balance sheets. “Managing regulatory change will remain at the top of bank risk and steering agendas for the foreseeable future,” said Grasshoff. “Defining an efficient interaction mode between banks and regulators will be a critical task. In an era of rising regulatory seas, this focus on change management is mandatory, not optional.” A copy of the report can be downloaded at www.bcgperspectives.com. To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or gregoire.eric@bcg.com. About The Boston Consulting Group The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries. For more information, please visit bcg.com. About bcgperspectives.com Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management’s agenda. It also provides unprecedented access to BCG’s extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm’s founder and one of the architects of modern management consulting. All of our content—including videos, podcasts, commentaries, and reports—can be accessed by PC, mobile, iPad, Facebook, Twitter, and LinkedIn.

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