PwC QUARTERLY COMMENTARY SPRING 2015

Motim Technologies

Leading the way in mobile marketing

It’s time to adapt

PwC Herald Talks Innovation can improve your business

PwC digital – Helping businesses prepare for what’s next

PwC Hi-Tech Company of the Year Xero

am seeing a wave of exciting innovation sweep across New Zealand. A lot of this isn’t about

providing a completely new product or service, but rather, the latest trend is more around solving an existing problem or rethinking a business model to do things in a different and novel way.

So what’s driving all this innovation? Firstly there’s been an impressive boom in new disruptive technologies and cloud-based business, prompting others to follow suit. Uber and Airbnb are great examples of this. And there are a large number of great home-grown examples like Xero – who won the 2015 PwC High-Tech Company of the Year, an award we’re proud to have sponsored for over 10 years.

We all need to embrace technology at the core of our business strategies. So it’s concerning to see the results of our latest Digital IQ Survey where only 20 per cent of respondents said their companies had excellent Digital IQ – defined as how well they understand the value of technology and weave it into the fabric of their organisations.

Changing customer expectations are also contributing to this wave of innovation. Customers’ preference for digital technologies, specifically smartphones, means we have to focus on being much more responsive. With 70 per cent of all New Zealand mobile users having a smartphone it’s no surprise that more of our customers are demanding on-the-spot product, service and advice support.

The great thing about everyone moving online is the available data that comes with that. We need to tap into these valuable insights to inform our business decisions. This is something our PwC digital experts love helping businesses with. Our message is it’s great to consider your gut instinct – just don’t discount what the hard data is telling you too.

So today’s business can’t be complacent – we all need to innovate to stay ahead of what our customers want and need. Not moving now, means losing a competitive advantage. My best piece of advice – if you haven’t already, focus on how to move fast today to keep up with tomorrow’s expectations.

I hope you enjoy our featured articles around digital technologies and innovation, and other insights included in this edition of AddingValue.

Cheers,

IWelcome

Bruce Hassall CEO & Senior Partner

ContentsIs your business compatible with the future? 4

Protecting your critical data 6

How effective is your website? 8

The business of innovation 10

Making waves world-wide in mobile marketing 12

Celebrating Hi-Tech success 14

Digital drives advertising growth 16

Building a people strategy equipped for 18 tomorrow’s world

Excellence in food trust 20

Helping new clients 22

New publications 23

Want to hear more from us? PwC New ZealandJoin us on Linked

Spring 2015 3

wC digital launched in New Zealand in June, offering a new and unique kind of digital consulting.

How well digital thinking is integrated into business strategy is critical for New Zealand businesses’ success and we’re focused on helping them to keep pace with digital change to gain competitive advantage.

With a fully integrated digital service offering, PwC is the first of the ‘Big four’ in New Zealand to provide a dedicated, end-to-end digital and experience solution, from strategy and innovation right through to execution.

Bruce Hassall, PwC CEO and Senior Partner says, “The launch of PwC digital continues our focus of making sure we offer the best solutions for the problems that worry our clients most. Technological advancements and the pace of change are overwhelming for many organisations and they are seeking a strategic adviser with a deep understanding of digital business.”

PwC has a track record in this area, having already helped New Zealanders reimagine

their organisations across a range of industries, including leading one of New Zealand’s largest technology change programmes, incubating a new telecommunications product, securing New Zealand’s most critical infrastructure and allowing organisations to use many systems with confidence.

After having put significant funds into information technology over the years, New Zealand organisations now want to see a strong connection between digital investments and business objectives. Implementing a digital strategy that gets results isn’t possible by tinkering around the edges and companies need to reconfigure their operating models – and perhaps their business models. In order to do so, they need to ensure that they’re not only investing in the right digital technologies, but can deploy them in a smart and effective way.

“We’re committed to continuing to increase what can be achieved for our clients and challenging our own business model to offer what our clients want – as well as anticipating what their customers want from them,” says Bruce.

PwC digital - Helping businesses prepare for what’s next Our servicesThe PwC digital team brings together expertise in strategy, innovation, experience design, technology solutions, data and analytics, and cyber security, and builds on from the firm’s strategic acquisition of New Zealand’s market-leading user experience and design consultancy, Optimal Experience, in June last year.

With over 2,000 PwC digital professionals around the world, our rapidly growing local team is well positioned to draw from global insights to deliver extraordinary results for clients.

If you’d like to discuss the digital challenges your organisation is facing, please get in touch and for more information, see our new site pwcdigital.co.nz

Is your business compatible with the future?

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PwC digital CONTACT: KRIS NYGREN

PARTNER, DIGITAL & CUSTOMER LEADER

T: +64 9 355 8955

E: kris.x.nygren@nz.pwc.com

“The launch of PwC digital continues our focus of making sure we offer the best solutions for the problems that worry our clients most. Technological advancements and the pace of change are overwhelming for many organisations and they are seeking a strategic adviser with a deep understanding of digital business.”

Bruce Hassall, CEO and Senior Partner

Is your business compatible with the future?

PwC digital. Be ready for what’s next. pwcdigital.co.nzIn June, PwC digital featured on

billboards near Auckland and Wellington airports

The journeyIt’s been a year since Optimal Experience started shaping the customer offering for PwC New Zealand. Now as part of PwC digital – the team is really making a mark. Post-it notes and Sharpies are now commonly used by senior executives and boards all over New Zealand. Taking a human-centred approach to everything, PwC digital has the capability to go from strategy through to execution and everything in between.

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hether it’s investigating employee fraud or providing electronic discovery for clients

involved in legal scuffles, PwC New Zealand has provided forensic technology services for a decade. Now, because of increased client demand, the team is expanding and so are its offerings.

Historically, forensic technology has been called upon as a reactive service for clients, focused on cleaning up after a data breach, investigating misconduct or simply establishing evidence for court proceedings.

Now, especially given the uptake in cloud services, businesses are turning to forensics to mitigate risks before breaches occur, says PwC Director Campbell McKenzie, who leads the forensic services’ technology team. New value-added services such as information governance and sensitive data finding have developed from traditional forensic offerings.

Information governance involves understanding and improving the way information assets are accumulating in your system, including where they’re located and how they’re managed, Campbell says.

“Based on our experience of examining hundreds of email, file and document management systems, we know that about a third of all data is redundant, obsolete or trivial. Get rid of it. You do not need to be storing all of that on critical servers. Items like invites to a morning tea, invites from two years ago to a training course, duplicates – we can help people get rid of all that,” he says.

“If you’re moving from one system to another – for example, from a local server to the cloud – you don’t want to have to pay to transfer all of that data because it’s going to take time and cost money. Information governance is about understanding that data and tidying it up so that it is more efficient, and secure, in the future,” Campbell says.

Alongside information governance, the other service stemming from electronic discovery relates to locating sensitive data. Sensitive data can include anything from credit card numbers and personally identifiable information to contracts and trade secrets. This service takes into account that there may be a large amount of information being stored, Campbell says, so where possible, instead of collecting massive amounts of irrelevant data, systems are scanned only for sensitive information.

“Traditionally, to examine an organisation with 50 terabytes of data it would take weeks if not months to process and examine the data. Organisations, if they are concerned, need to know the answers much quicker. The same software we have used for many years now does the same examination, but rather than collecting it all – it is just scanning it,” he says.

“So we tell it in advance that, instead of collecting the whole email server, we want to only collect information related to credit cards, for example. So it starts scanning and then when it finds a hit, it puts a copy of that file only into a secure storage location. And then at the end of it, we can then report back to the client what’s there,” he says.

PwC expands team and launches further offerings in forensic technology

The Office of the Privacy Commissioner has provided good resource around how to keep client’s data secure, Campbell says. Given recent high-profile data breaches, New Zealand privacy laws are likely to change in the coming years to be more in line with US laws relating to data breaches.

“In the US if you breach a client’s privacy, you are required to inform each customer that their privacy has been breached. That is a massive cost and has subsequently driven up the need for cyber insurance,” Campbell says.

The Forensic Services technology team is expanding to meet these growing client needs as more businesses look to be proactive with their information storage and mitigate risk around data protection.

The team is trained to a level that’s acceptable for the New Zealand Courts, allowing them to give evidence and affidavits as expert witnesses. Team members are part of a global network of about 750 forensic technology employees, which they often leverage to share knowledge and best practices.

The forensic technology laboratory was built in 2008, where client data is stored on a separate network from the rest of the business.

“We run all our own hardware separately because we have to,” Campbell says. “We’re bringing in confidential data and we often don’t know whether or not it is clean and free of viruses. So we don’t want to put that on our firm’s network. Then, we run our examination purely through a laboratory environment. Given the growth in this area of PwC’s business, we have recently increased the footprint of the lab.”

It doesn’t matter how small or large, businesses face similar challenges, Campbell says. A small business can be wiped out with a single data breach; a large business can also suffer a serious interruption leading to reputational harm.

“People are stealing data all over the show in New Zealand,” he says. “The idea here, behind information governance and sensitive data finding, is to try and avoid being put in that position. Reduce your risks, understand where your data is, and keep it secure and private so that you can better handle a breach if it occurs. And this area is really gaining momentum. The big thing is that you have to understand it and have the technical skill.”

Protecting your critical data

Forensic Technology CONTACT: CAMPBELL MCKENZIE

DIRECTOR

T: +64 9 355 8040

E: campbell.b.mckenzie@nz.pwc.com

W“Based on our experience of examining hundreds of email, file and document management systems, about a third of all data is redundant, obsolete or trivial. Get rid of it.”

Campbell McKenzie Director

Campbell McKenzie is a Director in PwC’s forensic technology offerings and certified by the International Association of Computer Investigative Specialists. For more information, visit pwc.co.nz/forensics

“Traditionally, to examine an organisation with 50 terabytes of data it would take weeks if not months to process and examine the data”

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utting people right at the heart of the opportunity is a great idea when creating a new product, service, or channel – but what does this really mean?

Research into customer experience helps us to understand what people need and want, how they behave, and the motivations behind these behaviours. This research can be applied to help improve your products or services, including your company website.

Taking a human-centred approach early on ensures products, services, and channels like a website satisfy real needs and provide customers with positive experiences.

PwC digital works with clients, stakeholders and their customers to learn more about what’s most important to each group. It’s not unusual for our clients to be surprised to learn that their priorities don’t always match up with their customers’ expectations. To understand where the mismatch lies, we use a range of methods like journey mapping, user testing, site analytics, surveying, and field studies.

Once we understand a website’s strengths and weaknesses from the customers’ perspective, we hold collaborative design sessions, and create and test prototypes. When testing, we compare how prototypes perform against the existing site and industry benchmarks – but most importantly, against customer needs, wants, and expectations. We discuss insights from testing, iterate prototypes, and re-test. The final product from this human-centred process is a prototype website that caters to customers’ wants and needs.

Sometimes it’s difficult to imagine what a poorly-designed website looks like, so we’ve compiled a list of five common usability problems that you need to avoid.

1. Confusing navigation structure

It’s common for large businesses to have huge, multi-layer websites that cover a broad range of topics, which can become overwhelming for new or infrequent site users.

If a website’s navigation is poorly constructed, it’s easy for users to get lost and give up on the site. You can check this by asking real customers to find information on your site – and observing how easily they complete their search.

2. Ineffective search function

Roughly half of all people use the search function as their primary method of navigating a website. So firstly, make sure you have a search engine implemented on your site, then ensure relevant content can be found by checking your search engine has been optimised – through correct tagging and regular updates of webpages.

3. An excruciating checkout process

Don’t make it hard for customers to give you money, or sign up for membership. This seems like a no-brainer but it’s surprising how often commercial websites fail to make the checkout or signup process easy for customers. For ecommerce sites anticipating repeat purchasing, allow users to create a profile at checkout or once the purchase is made – but be careful how you implement that option.

PwC digital answers this from the customer’s perspective Sometimes businesses collect large volumes of information because of the perception that more customer data will translate to better customer analytics. As a general rule, if your businesses hasn’t made any decisions in the past year based on information collected from customers and it doesn’t have any specific plans to do so, don’t force customers to fill in unnecessary fields.

4. Information overload

One of the most crucial tasks is deciding what information is most important, where to put it and how it should be presented visually. This is especially important given the increasing number of people visiting websites from mobile phones, with smaller screens.

The solution to information overload lies in establishing a few simple, intended purposes for the site and ensuring those purposes match customers’ needs. Co-design workshops, interviews and user surveys help to establish the users’ most important needs.

5. Compatibility issues

Not all web browsers are created equal and these differences often result in compatibility issues. If your customers can’t see your content then they cannot interact with it, and your sales may suffer.

The good news is that compatibility issues can be easily monitored using site performance dashboards created with analytics suites such as Google Analytics.

By Gregg Franco, PwC digital.

PwC digital’s services span all phases of the strategy-design-execution process. These range from user testing a website or system to full end-to-end service design. For more information about how PwC digital can help your business, visit: digital.pwc.co.nz.

How effective is your website?

Usability

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Taking a human-centred approach early on ensures the product, service or website satisfies a real need, and provides customers with great experiences.

CONTACT: GARETH PARRY

DIRECTOR

T: +64 9 355 8939

E: gareth.x.parry@nz.pwc.com

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What does it take to go global?Learn about global business and how to take

your business to global success

Keynote speakerFady Mishriki, Co-Founder, Executive Vice President and Chief Tesla Officer of PowerbyProxi

SKYCITY THEATRE, 7–9am, August 26Tickets $89 – Buy now at iTicket.co.nz

Brought to you byThanks to our partners

Expert advice from Fady Mishriki, Erica Crawford, Phil Veal, Tim Green and Fran O’Sullivan

he PwC Herald Talks series kicked off on 1 July, with the first event focused around

how companies could use innovation to improve their business and become more agile.

Around 500 people attended the breakfast event held at SkyCity Theatre, to hear from leading experts including the keynote speaker and Academy Award winner Mark Sagar.

Minister for Innovation Steven Joyce opened the session with a very clear message – innovation is in our DNA, yet we need to foster innovation for New Zealand to prosper on the world stage.

“New Zealand needs to be an innovation hub for the Asia Pacific region,” he said and to become leaders in innovation, Steven suggested companies should focus on coming up with a product or service that people really value and need, and do something else no one else can do. He encouraged businesses to, “go out there and slay those dragons, and keep New Zealand out there punching above its weight.”

Following this, keynote speaker Mark who is an Associate Professor at Auckland University, amazed the crowd by demonstrating his ‘Baby X’ project - a virtual baby that responds to vocal and visual cues and discussed the new types of human computer interfaces, explaining that almost exact replications of a person’s face can be made. Mark referenced some of his pioneering work on digital faces which led him to Weta Digital where he has worked on films such as Spiderman, King Kong and Avatar.

Business Herald Editor Liam Dann, closed the event by asking the panel of experts what their best piece of advice would be for companies wanting to become more innovative. Bruce Hassall, PwC CEO & Senior Partner, applauded businesses that are constantly changing and evolving for having created a culture of innovation. He added that an innovative culture needs to be built through clear leadership in New Zealand’s businesses and gaining education and skills in STEM (Science, Technology, Engineering and Mathematics) subjects should be encouraged by parents over traditional routes.

PwC Herald Talks series Mary Quinn, CEO Callaghan Innovation, said there were opportunities at all levels to continue growing and innovating, and companies should access the plethora of help available to them. She said the world is awash with cash looking for investment in great ideas, know what your target market wants and remember there is always competition.

Rod Snodgrass, CEO Spark Ventures, suggested that businesses should be thinking about what consumers are doing and where they are, then to adapt revenue streams and business models accordingly. He thinks that open innovation is a must and in corporates, “you have to assume there is more happening externally than internally.”

Mark’s advice was to set an ambitious target, where the process of thinking about how to reach this target will encourage innovation.

Going global – 26 August

After a successful first event, the second HeraldTalks breakfast will be held on August 26 and will focus on global growth. Keynote speaker Fady Mishriki, Co-Founder, Executive Vice President and Chief Tesla Officer, PowerbyProxi will share his insights on growing a global business and succeeding on the world stage.

An expert panel discussion will follow, comprised of: Erica Crawford, Global Woman member and co-founder of Kim Crawford Wines and Loveblock Wines; Phil Veal, CEO, Rangatira Investments and Chair, Kea New Zealand; Tim Green General Manager International, NZTE and Fran O’Sullivan, Editorial Director, Business Herald. The panel will discuss what it takes to go global.

PwC clients will receive a $20 discount when booking at iticket.co.nz. Enter code pwcgoingglobal at checkout to receive your discount.

The business of innovation

Innovation

T

PwC clients will receive a $20 discount when booking at iticket.co.nz. Enter code pwcgoingglobal at checkout to receive your discount.

CONTACT: BRUCE HASSALL

CEO & SENIOR PARTNER

T: +64 9 355 8037

E: bruce.hassall@nz.pwc.com

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otim Technologies is leading the way in mobile marketing for some of the

biggest brands across the globe. And it’s doing all of this from the company’s home base in Christchurch.

CEO Andrew Plimmer says that his business is just “really good at enabling consumer experiences that don’t feel like advertising.” The secret to Motim’s success is, in part, down to making marketing campaigns more customised, personal and entertaining.

Rather than using traditional hard sell techniques, Motim takes the softer elements of a brand message to create a fun brand experience.

This comes at a time when the importance of mobile technologies ranks at the top of the list for organisations in New Zealand. According to the PwC 2015 New Zealand CEO Survey, 84 per cent of chief executives said mobile technology for customer engagement is the most strategically important digital technology for their organisations.

Front of mind is the award-winning app, Dog-a-like, which Motim developed for Pedigree. Using facial analysis technology and live interfaces with pet-rescue databases, Motim created a tool that allows people to match their own photos with real dogs currently in rescue shelters, then choose to adopt or donate to the rescue programmes. The app exceeded client expectations, Andrew says, and was top rated by users in multiple countries.

The in-house team at Motim, albeit small, is made up of leading software engineers, computer scientists and user experience designers. These experts seamlessly blend technology with creative thinking – a capability especially rare for overseas companies that have stand-alone creative and tech departments.

Since its inception in 2007, the business has worked with a number of leading global brands including Nike, Disney, Coca-Cola and Universal, as well as local companies like Weta Workshop. With a solid base of its own intellectual property and an ability to rapidly create new technology, Motim occupies a unique position in the marketplace.

But why focus on just mobile marketing? According to PwC’s 18th Annual CEO Survey, the number of mobile phone users globally reached 4.55 billion in 2014 – nearly 70 per cent of the world’s population. The volume of mobile traffic generated by smartphones alone is now about twice that of PCs, tablets and routers – despite having only surpassed them in 2013 – and is predicted to grow ten-fold by 2019.

Motim has a reputation in the marketplace for solving the impossible.

“Agency partners often come to us when no one else has been able to find a solution,” Andrew says.

Motim Technologies Recently, Motim worked with Sony to demonstrate the waterproof capabilities of a new smartphone. Industry experts had said there were no way to do this as the devices had no water sensing technology, so Motim invented one using a sonar technique and neural networking technology, creating a virtual goldfish that would perform tricks in the water when the phone is submerged. Motim’s then produced a suite of Sony Underwater apps, helping launch the phones in a unique and compelling way.

Motim is constantly developing a pipeline of intellectual property. The growing base of IP is tailored to new client work, which puts the business in a strong strategic position. And although there are other successful New Zealand businesses operating in the mobile space, Andrew doesn’t view them as a threat.

“I’m often seeing New Zealand mobile companies doing great things with overseas clients,” Andrew says. “In New Zealand, we’re adept at creative technology and we come from a broader skill set, so not being as specialised as off-shore companies, we have people that understand both the technical and marketing sides of the equation.”

As a valued PwC client, Motim has seen the benefits of the firm’s international network.PwC Partner Scott Kerse has been assisting Andrew with introductions to relevant senior executives in PwC’s US networks, reinforcing the global nature of our relationship.

“We help Andrew to make smart decisions as he grows the Motim business - knowing we have his back allows Andrew to concentrate on the critical customer and agency relationships,” says Scott.

Andrew mostly deals with vice presidents and senior executives in strategy and marketing. He says, based on recent conversations, the outlook for 2015 is positive. He expects to see more money allocated to mobile marketing and customer engagement in the coming year.

“The flip side of this, of course, is a challenge: how do we scale up fast enough and have the resources to support more and more clients?” he says.

Although Motim has no plans to leave New Zealand, the team is quickly growing with a presence in the US, Germany and China.

Recruiting and retaining top talent is difficult in the tech industry. Andrew sees some challenge around agencies building in-house mobile teams but says that his business naturally attracts really talented and qualified people, looking to build client solutions beyond the minimum standards. They recruit through word of mouth and impressive retention rates are put down to the work culture. The relatively small, but hugely talented, team is known for speed, quality and executing the impossible.

Making waves world-wide in mobile marketing

Motim Technologies CONTACT: SCOTT KERSE

PRIVATE BUSINESS PARTNER

T: +64 9 355 8433

E: scott.kerse@nz.pwc.com

M“In New Zealand, we’re adept at creative technology and we come from a broader skill set, so not being as specialised as off-shore companies, we have people that understand both the technical and marketing sides of the equation.”

Andrew Plimmer CEO Motim Technologies

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arlier this year, PwC celebrated over 10 years of sponsoring the NZ Hi-Tech

Company of the Year Award, which recognises the winner as the overall best performing, established high-tech company in New Zealand and is the most coveted title at the Hi-Tech Awards. This year’s category winner was accounting software company, Xero.

PwC Partner Owen Gibson says, “We’re thrilled to continue to support the Hi-Tech awards as we believe it’s important to acknowledge and celebrate the success of New Zealand’s technology businesses and entrepreneurs. Congratulations to Xero, winner of the PwC Hi-Tech Company of the Year Award, and all of the nominees in this category.”

The 2015 awards saw a record number of entries from over 150 organisations with judges commenting that the calibre of this year’s entrants was at an all-time high, making the job of selecting winners exceedingly challenging and showing the New Zealand technology sector is clearly in great shape.

The gala dinner event, held at the TSB Bank Arena in Wellington on 15 May, showcased a long list of top performing New Zealand companies, with 12 different award categories, across a variety of technology industries including ICT, electronics, software, biotechnology, creative, telecommunications and digital media.

The PwC Hi-Tech Company of the Year award category was judged solely by the international judging panel who when commenting on the winners Xero said, “It takes continuity of performance over more than a single year to earn this award. The company evidences superb operational efficiency, planning a new version of its software each week, with 400 releases in 2014. Development of new features follows a tried and true winning behaviour: give your customers what they request. Lastly, the open API’s for go-to-market through the accountancy channel is brilliant.”

Xero, who has just reached half a million customers across 180 countries has recently been ranked number one by Forbes as the World’s Most Innovative Growth Company, headed off competition from other Hi-Tech Award nominees ARANZ Geo, Serko and Shotover Systems.

Xero named 2015 PwC New Zealand Hi-Tech Company of the Year

Celebrating Hi-Tech success

Hi-Tech Awards

EFor a full list of 2015 winners, please visit hitech.org.nz

PwC Partner Owen Gibson and Victoria Crone, Managing Director, Xero

From PwC: Bridget Riley, Anand Reddy, Louisa Graham, and Scott Kerse

“We’re thrilled to continue to support the Hi-Tech awards as we believe it’s important to acknowledge and celebrate the success of New Zealand’s technology businesses and entrepreneurs. Congratulations to Xero, winner of the PwC Hi-Tech Company of the Year Award, and all of the nominees in this category.”

Owen Gibson Partner

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igital growth in New Zealand’s entertainment and media industry continues to offset the

flattening growth on traditional entertainment and media, according to PwC’s Global Entertainment and Media Outlook 2015-2019. Spending on digital content is forecast to grow at 10 per cent year-on-year to 2019, while spending on non-digital content will increase by just 0.13 per cent year-on-year.

PwC’s Digital Strategy and Data Leader Greg Doone says, “For consumers it’s all about content experiences. If digital is a simpler way of getting the content, they will gravitate towards that. Given the wide variations in consumer tastes for content, the challenge for entertainment and media companies is to blend traditional intuitive approaches with data insights and to maximise the value of the experiences they offer.”

Advertising growth is primarily digital, driven by mobile. This fact is underlined by internet advertising, overtaking TV advertising as the biggest share of advertising in 2014. Internet advertising is one of the fastest-growing segments of advertising at an average of 11.1 per cent year-on-year through to 2019.

PwC’s Outlook forecasts the total entertainment and media industry in New Zealand will grow at an average annual rate of 4.0 per cent to 2019, compared to global growth of 5.1 per cent. Over 39 per cent of all advertising revenues and 16.5 per cent of consumer revenues will be digitally sourced by 2019. Looking across all segments in New Zealand to 2019, overall advertising revenues – will rise at a rate of 2.2 per cent year on year – less than consumer spending at a growth rate of 2.9 per cent year-on-year.

Underlying the trends in entertainment and media spending detailed in the Outlook is the migration by New Zealand consumers to new ways of consuming content. One of the clearest shifts is in TV and video consumption, with consumers increasingly demanding high-quality original programming in a flexible, on-demand manner across numerous devices – thus enabling ‘binge viewing’ and greater convenience.

“Consumers never really regard any distinction between ‘digital’ and ‘non-digital’ as relevant. They take on board the proliferation of content and access options enabled by digital, and exploit it to seek more flexibility and freedom in what, when and how they consume,” says Greg.

Against a background of shifting infrastructure, New Zealand’s entertainment and media companies need to embrace the consumption experience as their critical success factor. This year’s Outlook shows that a company’s ability to combine content with a user experience that’s differentiated and compelling on the consumer’s platform of choice, will emerge as the winner.

“To achieve this blend, companies need to do three things: first, innovate around the product and the user experience; second, develop seamless consumer relationships across distribution channels; and third, put mobile at the centre,” concludes Greg.

What’s happening in New Zealand’s entertainment and media industry?

Digital drives advertising growth

Entertainment & Media CONTACT: GREG DOONE

DIRECTOR, DIGITAL STRATEGY AND DATA LEADER

T: +64 9 355 8946

E: greg.x.doone@nz.pwc.com

D

“Consumers never really regard any distinction between ‘digital’ and ‘non-digital’ as relevant. They take on board the proliferation of content and access options enabled by digital, and exploit it to seek more flexibility and freedom in what, when and how they consume.”

Greg Doone PwC Digital Strategy and Data Leader

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s technology and demographic shifts transform customer bases and behaviours,

businesses will need to consider these changes for their hiring and deployment strategies.

Tomorrow’s winners will be the ones who can leverage the full spectrum of benefits of a talented and diverse workforce to stay ahead of the competition. Part of this strategy may include bringing workers into New Zealand or deploying a mobile workforce overseas. But how are New Zealand businesses faring?

In our 2015 New Zealand CEO Survey, 84 per cent of CEOs told us they were concerned about the availability of key skills (compared to 73 per cent globally). However, a further dive into the data reveals that New Zealand businesses appear to be slightly behind the eight ball in addressing these challenges.

Only 66 per cent of CEOs in New Zealand equip employees with new skills through continuous learning or mobility programmes, compared to 83 per cent in Australia and 81 per cent globally. Further to that, only 55 per cent look for talent in different geographies, industries or demographic segments, compared to 79 per cent in Australia and 71 per cent globally.

So where are New Zealand businesses taking action in the workforce? Nearly 40 per cent are increasing reliance on contractors, part-time workers, outsourced functions or service agreements. It is important to remember that even with outsourcing, a business should still consider compliance to regulatory requirements.

Take for example, an organisation that uses a manpower agency to supply temporary labour to work on its premises. If some of those temporary workers do not have the correct work visas, is the organisation free of all responsibility? Irrespective of the contractual details, with social media and the internet, a negative headline can be very damaging to an organisation’s brand – and very quickly. So how do you manage risks without stifling flexibility?

Whatever the resourcing model, businesses seeking to grow and exploit new opportunities need to be able to quickly deploy talent to the areas needed. The biggest challenge for many organisations can often be having ready access to information on who in the business is available and is best suited to perform the role. Only 26 per cent of New Zealand CEOs use data analytics to provide better insight into how effectively skills are being deployed within their organisations, compared to 46 per cent globally.

Maintaining flexibility and managing risks are key to a mobile workforce

When businesses can’t access information quickly, problems arise. For example, drawn out discussions on the contractual terms between the employer and employee, between divisions or group entities can cause a delay.

Businesses need the tools to pre-empt issues but be flexible enough to adapt. If choosing between a business that is equipped to pre-empt problems and one that is constantly operating in ‘fire-fighting’ mode, which would most people rather work for? A successful leader knows to communicate a clear direction, and empower its people to get there, while teaming with providers whose job it is to be in the know, to help them stay flexible enough to adapt.

Our Global Talent and Immigration team is one such provider. We can help you put in place measures to manage compliance and associated risks, so that you are poised to compete in a rapidly changing digital world and a marketplace without boundaries.

Building a people strategy equipped for tomorrow’s world

Mobility CONTACT: TOM MCCALLUM

DIRECTOR

T: +64 4 462 7154

E: tom.j.mccallum@nz.pwc.com

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80%

90%

Actively search for talent in different geographies, industries and/or demographic segments

100%

Equip employees with new skills through continuous

learning or mobility programes

Look for a much broader range of skills when hiring than we

did in the past

Have greatly increased relianceon contractors, part-time

workers, outsourced functions or service agreements

New Zealand

Australia

USA

UK

China

Globally

To what extent do you agree or disagree with the following statements about your organisation’s talent activities?

*Per cent of respondents who answered agree or strongly agree.

CONTACT: JAQ CHONG

MANAGER

T: +64 9 355 8102

E: jaq.a.chong@nz.pwc.com

AddingValue Spring 201518 19

arely a week goes by without news of another food safety concern throughout

the world. It confirms the increasing picture of risk affecting the food industry that’s not only being seen globally, but here in New Zealand.

A recent example is the bizarre case of Chinese authorities seizing more than 100,000 tons of smuggled frozen meat – some of it found to be up to 40-years-old. Across the Tasman frozen berry products were recalled in Australia for fear of hepatitis A contamination. And closer to home, eco-terrorists recently tried to blackmail our Government and the dairy industry with a threat to poison infant milk formula.

Our confidence in food has been rocked and we want to know more about what we’re buying and feeding to our families. With the World Health Organisation estimating unsafe food contributes to the deaths of two million people every year, it’s clear we need a new approach to reducing this risk. It’s a public health concern, a significant political issue and a substantial risk for food companies and governments that get it wrong.

It’s not a case of avoiding a crisis but rethinking the challenges that globalisation and increasingly complex supply chains present. Today, problems can turn up in more products, more quickly than ever before, causing food

safety scandals that threaten large numbers of people. Our food companies are not dealing with a few local suppliers and farmers, but often hundreds of suppliers all around the world.

Take population growth – just one of the five big megatrends alongside urbanisation, climate change, global economic power shifts and technological advances reshaping business and society right now. By 2025, the UN expects the world’s population to grow by 1 billion, yet to feed all these extra people, agricultural production will need to increase 70 per cent by 2050. Factor this in against a backdrop of climate change and the global trend of reduced water, energy and agricultural land availability and it’s a perfect storm for food trust failure.

One outcome is food fraud, which is a growing problem. Beyond the economic cost it can lead to serious public health risks. This is what we saw in China, when the industrial chemical melamine was added to milk and infant formula, leaving thousands of people sick and several dead in 2008. China has since named food safety as its priority, and as part of this, PwC is playing a leading role to improve trust in China’s food, based on New Zealand and leading international agricultural models.

New Zealand exports global solutions in food safety Elsewhere, interagency police resources are coordinating to combat these ever present risks and the joint Interpol and Europol operation in January is a prime example, and resulted in the recovery of 2500 tons of counterfeit, fake and life threatening food across 47 countries. We suspect this may be just the tip of the iceberg with resource scarcity enabling demand for such illicit products.

Food fraud, contamination, resource scarcity, the changing food demand, sustainability and ethical issues are just some of the outcomes becoming more commonplace as global forces increase supply chain stresses. Finding a solution to these enormous challenges remains a focus for the sector and have led to PwC partnering with AsureQuality, a New Zealand Government-owned food safety and biosecurity provider, to export food supply and integrity services; including offering these services in China and New Zealand through a formalised alliance model.

We ultimately believe we can help restore trust in the world’s food by exporting excellence in New Zealand food and agricultural practices. As a country we’re increasingly seen not just as an exporter of food, but as a powerhouse of best practice and agricultural and food production knowledge, which has fuelled the development of our food security, safety and recall management services announced in Australia, China, US, Europe and elsewhere, led from New Zealand.

Our country has been built on the back of its reputation for world-leading food and agriculture industries so it seems natural we’re taking a global leadership role in developing these services. The potential is there to create a globally recognised benchmark and best practice processes based on the New Zealand model – which is something we can all be proud of.

Excellence in food trust

Food Trust CONTACT: CRAIG ARMITAGE

GLOBAL LEADER, FOOD SUPPLY AND INTEGRITY SERVICES

T: +64 3 374 3052

E: craig.armitage@nz.pwc.com

R

Our country has been built on the back of its reputation for world-leading food and agriculture industries so it seems natural we’re taking a global leadership role in developing these services.

AddingValue Spring 201520 21

Helping new clients

We’ve also been confirmed as the successful tax team for Vend.

Vend help customers to grow their businesses through attractive point of sale inventory and customer loyalty software. Originally a fast growth start-up, Vend now has 200 staff in seven offices around the world, with users in over 140 counties, and processes over $1 billion in sales. Vend’s global success is a great example of what can be achieved through support from NZTE and Callaghan Innovation.

This engagement reinforces our capabilities in business growth strategy. Our first task will be to conduct a strategic tax review for Vend, to help understand their risks, and how we can best help them to be successful.

PwC’s victory with Vend

We’re delighted to be working with Vista Group – a fast growing, high profile film industry software company with great potential for future growth. PwC has been appointed as auditors to the company which has recently listed on the NZX and ASX.

New Zealand-based Vista Group provides software for cinema management, film distribution and customer analytics to companies across the global film industry.

Vista’s cinema software is installed in more than 60 countries including the USA, Canada, Mexico, UK, India, China, Australia and New Zealand, and it estimates that in excess of a billion cinema tickets are processed every year through Vista Cinema.

We’re looking forward to working with Vista throughout the audit.

Lights, camera, action for PwC and Vista Group

New Zealand: Preserving water through collaboration that works

Access to water that’s too dirty, too expensive or too little has an impact on the bottom line. This report considers how New Zealand, within a global context, has responded to water risks and the potential to improve our water management in the future.

New Zealand:Preserving water through collaboration that works

pwc.co.nz/water

Local Government and Infrastructure Matters

June 2015

PwC Golden Age Index: How well is New Zealand harnessing the power of older workers?

PwC has developed a new ‘Golden Age index’ to compare how well countries are utilising workers aged 55 and over. The index includes relative employment, earnings and training rates for older workers for 34 OECD countries over the period since 2003.

People strategy for the digital age: A new take on talent

Organisations need a people strategy for the digital age. Our interviews with global CEOs found CEOs need to be sure that the business is fit to react quickly to whatever the future may throw at it – and that means filling it with adaptable, creative people, in a culture where energy fizzes and ideas spark into life.

Leveraging efficiency reviews to transform in the digital age

In this issue of Local Government and Infrastructure Matters: Councils in New Zealand increasingly need to target savings in their long-term plans in response to a combination of local and systemic issues. At the same time, citizens are expecting more from services and customer experiences.

Leveraging efficiency reviews to transform in the digital age

pwc.co.nz

Local Government and Infrastructure Matters

Issue 5

July 2015

PwC Golden Age Index How well are OECD economies adapting to an older workforce? July 2015

pwc.co.nz/goldenage

www.pwc.com/people

18th Annual Global CEO survey Familiar problems – and new opportunitiesp7 / The skills dilemmap11 / A new take on talentp12 / Managing talent in a digital worldp15 / Priorities for CEOs and HRp17

People strategy for the digital ageA new take on talent

81% of CEOs are looking for a much broader range of skills when hiring than in the past.

73% of CEOs said availability of skills was a serious concern, an increase of 10% on 2014.

New publications

Spring 2015 2322 AddingValue

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