Eurogroup Consulting and its partners (Newton.Vaureal for the supply chain and La Javaness for digital acceleration) deploy their expertise to serve clients in the aerospace and defence sector. In this way, we respond to the sector’s consolidation movement, major technological transformations or fierce competition between major manufacturers in the sector.

Your challenges

The aeronautics and defence industries sector faces common challenges and issues. It is, to begin with, composed of multiple actors, including manufacturers and suppliers, airlines, States and more broadly speaking airport stakeholders. On the other hand, it concerns different worlds: aeronautics, space, telecommunications, networks, air traffic control, security… Finally, it is made up of civil and military markets.

The stakes in this sector are numerous, in particular:

• market consolidation and the merger of industrial giants: equipment manufacturers / engine manufacturers, automakers
• technological revolutions: factory of the future, artificial intelligence, data, more electric aircraft
• the increase in the production rates of major aeronautical programs
• the distribution of the margin over the value chain
• competitiveness as well as international competition

Aeronautics and defence, a strategic sector for France

Currently in France, growth in civil and military and space aeronautics production, particularly satellites, is on average +3.4% per year (for 2016/2018).

The sector has 12,000 hires and a turnover of 64 billion euros (+6%) in 2017 (sources: Gifas and Usine Nouvelle, April 2018). It is thus the leading contributor to the trade balance, demonstrating its remarkable vitality and its strategic role for France.

The consolidation of the sector and the emergence of industrial giants

Market consolidation is a reality in France, Europe and the world. Indeed, equipment manufacturers, particularly engine manufacturers, are now industrial giants in the sector. In addition, they are able to have an equal dialogue with the manufacturers.

The technical and environmental performance of new engines is becoming a key issue for innovation and agility of the industrial tool. In general, any technical and production rate problems at the engine manufacturer’s site result in delays in delivery for the aircraft manufacturer. Therefore the defence industry sector, and particularly the land and aviation industries, is also entering a new era of consolidation and industrial partnerships.

Transformations of the industrial tool

The production rate, particularly for the A320, B737, A350, B787 Dreamliner and other challenger models, is increasing. It meets several challenges at the same time: the unprecedented growth of air traffic worldwide and the reduction in aircraft operating times. Finally, it is a necessary alignment of manufacturers with the commercial requirements of airlines and their fleet renewal needs.

The supply chain of the aeronautics sector is therefore heavily involved. Many organizational or structural changes are required (increase in the number of assembly lines, implementation strategy, etc.). However, they are insufficient without changes in practices: production standards, product policies, flow optimization, supply chain performance management, etc.

Innovation and the rise of digital technologies

The aeronautics industry, particularly the civil sector, must now meet several challenges. First and foremost, the control of fuel consumption, but also the limitation of noise. Finally, it must accelerate the “more electric aircraft” development by offering more environmentally friendly, safer and cheaper aircraft.

At the same time, the market is expecting a more flexible and adaptable offer, including aircraft that allow non-stop flight, are lighter and have fewer seats. This is reflected in the continued decline in production rates for large aircraft.

In addition, several elements demonstrate the increased convergence between industry and digital, so that machines, systems and products now commonly communicate with each other. Take for example the introduction of Artificial Intelligence in the defence industry or the advent of the factories of the future (factories 4.0), robotized and automated, and 3D printing.

The search for a new profitable model

Another challenge, and not the least for automakers, is to restore their margin, which is now higher for equipment manufacturers. Indeed, manufacturers have invested heavily in new technologies in recent years: lean manufacturing, digitalization and advanced technologies, production infrastructures.

They are now seeking to distribute the margin over the value chain in a more balanced way:

• transfer of R&D investment expenditure to suppliers;
• devote themselves to more profitable service activities;
• re-internalization of subcontracted activities;
• control of subcontracting costs.

Modernize the entire value chain

Defence manufacturers are also facing a new quest for profitability, pushing them to modernize their entire value chain. The multiplication of customers, the consolidation of industries, the ever-increasing customer expectations in terms of speed, volume and time-to-market, are leading defence manufacturers to transform both their products (modularity, communality, etc.) and their production tools (flexibility, speed, performance).

Eurogroup Consulting devotes great effort to staying abreast of developments in the sector. It enables us to understand our clients’ problems, adapt to their culture and anticipate gradual and sudden change in order to provide the appropriate assistance.

Overall view

The agri-food industry is a key actor of the international economy and trade. All together it represents more than 5, 982 USD of value and counts a large number of transnational giants.

Following waves of consolidation, the agri-food industry is dominated by large groups, whose size exceeds a critical threshold, enabling them to act as major players in the international trade. Global companies in the sector are increasingly integrating their upstream and downstream value chain in their core business to consolidate their grip on markets. One of the main challenges of the industry is to rationalize its logistics circuits and concentrate its flows so as to reduce delivery times and increase pricing competitiveness for delivered goods.

As a result, agri-food companies seek to make economies of scale and improve their operational performance, in order to face competition-related challenges. They also have to manage a more recent phenomenon, with an unstable international commercial context, where tariff and non-tariff barriers could potentially be reinstated.

Multichannel strategies focus on the final customer. Customer knowledge is a key factor, enabling the creation of future services to generate added value and growth. The development of brands and their media impact is also proving to be a core factor in the equation since they enhance ‘pricing power’.

The agri-food industry must also respond to social issues: demographic changes, new consumer expectations and concerns related to sustainable development, regional progress and stability of purchasing power despite rising raw-material prices.

For more than 20 years, Eurogroup Consulting has supported the biggest actors of the industry with their transformation challenges (organization, mutual insurance companies, social welfare groups, bankinsurers, brokers …).

For each of them, we are able to provide them with relevant advice and feed-back upon experience of our teams, thanks to our numerous assignments led in France or other countries we cover.

Overall view

Never has the insurance sector been so affected by transformation drivers. Internet of course has been one of the main disruptors in the mid-1990s.

The client – whether an individual or an organization – is better informed, equipped and therefore is more demanding on the advice, the services, the management of his requests, the quality of the relation, purchase conditions and contract management, … and on the overall delivered added value!

To respond to this new level of requirement, and anticipate demands and reactions, the multi-channel model (omni channel experiences) must be optimized to integrate the current channels and the new digital ones. Today, no actor has total governance over the numerous channels.

To succeed, taking advantage from the opportunities given by new technologies is key for collecting and processing data (Big Data, artificial intelligence, Machine and Deep Learning). Another challenge ahead of us…

The transformation of the relationship model and client requirements brings about organizational operational model modernization and transformation, so that performance can be achieved through innovative market solutions (development of self-care, dematerialization and digitization of managements actions through Robotic Process Automation and other techniques).

These transformations directly affect business lines, work environments and practices, and the tools used by all fellow peers of the sector. Consequently, they trigger an evolution in terms of behaviors, postures, and work ethics. Managers must be able to accompany these changes and support fellow peers in these evolutions.

In an increasingly constrained and costly regulatory environment, some actors are looking for alliances, partnerships, or even mergers for survival. This is particularly the case for life and health insurance companies, for which the market is still very fragmented.

Finally, underlying business models in the insurance sector (risk objects) are experiencing a revolution with the autonomous vehicle, smart buildings, NBIC in Health… These changes can disrupt the insurance sector business model, forcing its actors to anticipate new risks or client-related positioning changes, in terms of services and preventive actions rather than merely risk coverage and compensation.

The insurance sector is doomed to innovate, which may explain why insurances companies have invested so much effort and capital in building relationships with digital start-ups.

Eurogroup Consulting responds both to the structural challenges of the automotive sector and to its ongoing revolutions, whether they are technological or methodological.

Your challenges

The automobile is engaged in a multifaceted revolution that the sector must address simultaneously.

The revolution in uses

Consumers are increasingly eager for connectivity. As a result, they are demanding new models of use, ownership and financing. For example, customer journeys and experiences, C2C car rental, car sharing, or car leasing.

The technology revolution

Lately, we are witnessing an unparalleled acceleration of the digital shift. This digitization primarily concerns vehicles, for example autonomous vehicles or taxi robots. It also invests in production chains (connection and robotization, including collaborative in factories 4.0, automated supply chain), but also uses (Mobility as a Service (MaaS), connected services, In-Car Entertainment (ICE)). The relationship, the path as well as the customer sales and after-sales experiences are also concerned.

A new competitive framework

By redesigning the historical market maps, the entrant competitors are active in the following areas:

• manufacturing: Tesla, manufacturers in emerging countries;
• autonomous vehicles and connected services: Google, Baidu;
• distribution: new distribution models and formats, e-commerce;
• after-sales services from home: startups, insurance platforms;
• spare parts: Amazon, Oscaro.com, OTOP.

The green transformation

Major R&D efforts are required to provide solutions to new customer expectations and increasingly stringent anti-pollution standards. Among those, electric mobility and sustainable energy sources like hydrogen, LPG, or CNG are considers by the automotive main actors.

Operational excellence and industrial performance

In addition, operational excellence and industrial performance initiatives are strategic key success factors. In fact, the automotive sector is subject to strong cost pressures as it is highly competitive and historically low margin.

The global automotive market

Finally, although the global market is growing, it hides very large disparities between Western markets and emerging countries. Western markets are generally saturated. On the other hand, emerging countries (South East Asia, India, China, Russia, Latin America, Africa), benefit from strong growth pockets. They represent real development opportunities for Western carmakers and equipment manufacturers, but also a major challenge linked to a thorough understanding of local customer needs.

Ultimately, this international coverage requires the development and implementation of relevant partnership strategies adapted to local regulatory requirements. They are often essential to address these emerging markets. It is also necessary to reinvent distribution models in order to avoid reproducing historical models.

Regulation, technology and management are the three key words of today’s and tomorrow’s banking transformations. Eurogroup Consulting supports players in the banking and financial sector (retail banking, corporate and investment banking, specialized businesses). With nearly forty years of experience in advising these players, the firm deploys skills adapted to their challenges.

Your challenges

To date, in addition to Brexit, the French banking sector is facing three major challenges.

First, the regulatory constraints are tending to become much stringent. In addition to that, the sector must adapt to the acceleration of the transformations brought about by digital technologies, which are profoundly reinventing customer experience and banks’ internal processes. Finally, the renewal of generations and the craving for new ways of working in particularly standardized environments are deeply affecting HR management for financial services.

From an extensive European regulatory framework to an international “standards war”

The European regulatory framework

Market organization, customer knowledge and information, risk management, personal data protection, insurance distribution and investment product remuneration… The many compliance issues are at the root of many new banking regulations. Among them: Basel III, IFRS 9, AnaCredit, MIFID2, PRIIPs, IDD, GDPR, PSD2, Sapin II. They are also coupled with various resulting reforms led by the European supervisory authorities.

European banking markets versus US markets

This abundant banking regulation, particularly in Europe, is being implemented in parallel with an ongoing deregulation in the United States (relaxation of the Dodd-Franck Act). There is no doubt that this contrast may be the cause of long-term competitive distortions between European and American banks.

A banking market transformed by digital acceleration

The French players in the banking sector started late in digitizing their activities. Despite this, projects are multiplying around the optimization and automation of internal processes, the modernization of relationships and customer services.

The development of online banking

In response to new uses such as instantaneous or contactless payment, but also the 24/7 availability of information, online banking is developing rapidly. This growing trend concerns both the retail and corporate markets (open-banking, bank as a platform etc).

The AI in the service of the bank

Artificial intelligence can also be used by the bank. Robot advisors in private banking are key example of successfully integrating AI within banking. The advent of blockchain and ledger technologies has been also considered in the short term as an opportunity by banks. The sector wishes to use it to accelerate and secure some of its processes. For example, this is the case for the transfer, storage, exchange and management of financial assets.

New managerial practices in response to market transformations

Banking sector employees aspire to greater flexibility and freedom of action despite a working framework where norm and control dominate.

A more agile management

At the same time, the greater volatility of the markets, the capping, the rise of Fintechs, are pushing the sector to evolve towards more agility but also proactivity. In addition, managerial postures and practices, teamworking or project modalities are all issues that banks must address now.

Overall view

A sector facing radical reform

Local authorities face pressure to take better account of citizens’ needs and help reduce local public expenditure.

Authorities are to respond more effectively to user demand…

For public operators, the transformations driven by the ‘digital revolution’ provide considerable opportunities in terms of both the content of services and the way of delivering them. The challenge is to align all these projects with the main strategic approaches of an office term and, then, simplify formalities in order to optimize local public services…

… while seeking to control costs more effectively

This is where the issue lies for local politicians and their departments: to ‘do more with less’.

In the effort to reconcile cost control and good investment management, what is at stake is: debt control and protection of self-funding capabilities, while maintaining a balance between income, operational needs and investment budgets. This is an absolutely crucial question since it ties in with public expectations that resources will be used efficiently.

Hence, there is an urgent need to strengthen local governance structure, optimize the operation of local authorities, assess local public policies and pool some functions in order to gain more leeway.

A sector facing radical upheaval: is the demise of high-street stores inevitable? 

For a number of years, operators and observers in the retail industry have witnessed the irresistible rise of Internet in consumer habits. Internet affects the entire customer journey: the search for information (a vast majority of consumers prepare their purchases online), the act of purchase itself and the subsequent sharing of opinion and comments on social networks.

Act II of this surge (which impacts will probably be even more conspicuous) has emerged with the explosive spread of mobility tools: the Internet is now evermore at the consumer’s fingertips.

Physical and online retail are two worlds that do not apply the same codes and face the same constraints, but are linked by the consumer experience: customers wish to purchase online and immediatly share news of their purchase, follow their order on their smartphone, collect it from a store (‘click and collect’) and, if necessary, return their item to the retailer’s shops.

Redesigning the customer itinerary: what should the response be to consumer 3.0 expectations?

To manage the boom in digitization, retailing operators must implement an omnichannel customer itinerary. E/m-commerce has become a channel that complements rather than competes with stores. The main issue is to enable a continuous experience for customers with increasingly complex cross-channel and multi-device itineraries.

In this omnichannel strategy, retailers must precisely determine the role of each channel in the customer 3.0 itinerary and, therefore, question the store’s business model. Stores are not doomed to a future of ‘showrooming’ or even extinction! The return of the local shop and the development of new concepts such as drive, pop-up stores, concept stores, etc., are proof of this; retailers are still primarily shopkeepers.

Redesigning the store experience: how can stores convey an enhanced promise of value?

Today, stores can no longer settle for simply selling products. New possibilities are emerging, which have the potential to revive the ‘enchantment’ of points of sale and offer new experiences to consumers. High-street retail must refocus on the individual and human emotions, appeal to their senses and fuel their imagination, while ensuring brand consistency across the different channels.

Points of sale must also introduce digital technology to adapt to new 3.0 modes of consumption and provide access to information in the store: deployment of terminals, sales assistants trained and equipped with tablets allowing them to check customer records for the entire retail chain, regardless of the channel.

At the same time, retailers must also work on Social Commerce (management of net-user opinions on the site, deployment of commercial links to social networks) to upgrade their website from self-service positioning to choice guidance, as in a high-street store.

Revising organizational models: what are the issues involved in the transformation of operational models?

Beyond the changes perceived by the customer, all these developments result in a need for retailers to question their operational models on several points including the following: improved stock selection and replenishment, implementation of a cross-channel logistics master plan, modification of headquarters-network organizations, cultural transformation, HR, etc. This will happen against a background of very tight cost control to tackle increased international competition.

Your concern

Guaranteeing secure supply, improving the energy mix, finding new sources of oil, reducing greenhouse-gas emissions, increasing energy efficiency, fighting climate change, managing massive urban development and energy insecurity are all part of the challenges private and public energy operators face today.

At the beginning of the chain, the question of finance and whether industrial strategies are suited to develop renewable energies is more relevant than ever. The cost of renewables is still significantly higher than that of fossil or nuclear energy.

Security regarding the supply is a core issue for European network managers. Solutions usually involve either solely optimizing power interconnections, to ensure an enhanced balance, or increasing the volume of gas reserves, to limit the risk of shortages for households.

With the introduction of new concrete policies, smart networks have demonstrated their ability to improve management of demand and moments of peak consumption, facilitate the inclusion of renewable energies and support the development of new technologies, such as electric vehicles. The energy sector has adopted industry standards that ensure the interoperability of information and communication systems and product standardization. Today, it must meet the challenge of ‘Big Data’ and provide secure data protection.

Environmental concerns lie at the heart of public discussions. A growing number operators are positioning themselves in this market: supplying new sustainable solutions to handle water footprints and waste collection-sorting-recycling-use processes, and responsibly managing natural resources in an integrated way.

Overall view

The water challenge

Universal access to drinking water and good management of the water cycle (pumping, purification, treatment and retreatment, storage, supply, etc.) are a – and perhaps the – global issue of this century.

In Europe, the market is generally mature with stable or even slightly reduced water consumption per capita. The 2000 framework directive on water requires a good ecological state of water to be achieved by 2025. This tightening of environmental standards and sanitary concerns in a redeploying sector (increasing influence of operators in emerging  nations) raises the question of financial resources and efficient management models for both private and public operators.

Water footprint monitoring is a recent concept that highlights the impact of modes of consumption and production. It requires the identification of common benchmarks for the measurement, assessment and reporting of water use.

Waste

The waste sector has changed radically over the last ten years and poses a major financial and environmental challenge for local authorities. The major value chain operators must now take this issue into account to limit the impact on natural environments.

European regulations are changing. The assessment of the use of resources should involve four complementary criteria: the consumption of material, of course, but also of water and farmland, and greenhouse-gas emissions. A new target recycling rate should also be set for 2030.

Energy transition

Energy transition means a progressive evolution of the current energy system based mainly on non-renewables and the development of the most sustainable new energy solutions. This necessary, ambitious change involves significant opportunities and investments across the entire economy. It especially contributes to the growth of eco-activities that are playing a major role in the development of the environmental sector today: wastewater management, recycling, waste-energy production, site clean-up, the development of wind and solar power, land and water-body rehabilitation, and air pollution and noise reduction.

Climate issues

The major goal of the 21st Conference on Climate (COP21) held in France at the end of 2015 was to reach an international climate agreement to limit global warming to below 2°C until 2100. Civil society and private-sector operators in particular are to play a major role in the years to come by increasing their commitments to fight climate disruption.

Eurogroup Consulting was very keen to play a part in this mobilization and launched its ‘Low-Carbon Citizen’ programme, encompassing a range of initiatives to fight climate change. In this field, Eurogroup Consulting notably signed a partnership agreement with Solutions COP21 (a pioneer project to promote climate solutions related to COP21) and launched a skills sponsorship appeal to support it during the conference.

The Modernisation of Public Action: a new chapter in governmental reform

For many years, there have been ongoing efforts to modernize government. The basic aim is to implement public policy decisions more effectively, improve the quality of public services provided by the administration, and reduce public expenditure.

Establishing a broader perimeter, that encompasses the state, with the reform of operators (including social-security entities) and local authorities.

Adopting a more participatory approach by involving agents and users on the basis of their expectations or their expression of potential lines of innovation in order to identify measures to improve public initiatives.

Analyzing the modernization requirements in more detail and the final aims of public initiatives, through the broader systematic assessment of joint public policies, is a great task still to be undertaken.

Trendsetting and productive, luxury-goods companies constantly adjudicate between artisanship and industrialization. They aim to achieve outstanding levels of quality and originality while managing increased levels of production as industrially as possible to meet the world’s rising demand.

These high standards and creativity are also reflected in the distribution and sale processes of luxury products: selective distribution (networks of boutiques, corner stores) and innovative distribution (pop-up stores, micro-stores, digital systems, temporary displays related to collections or specific events, etc.), the e-commerce boom (boutiques devoted to the brand’s skills and creativity with varying levels of maturity of online business). Luxury brands continually adapt their models to meet clients’ expectations.

In this sector more than anywhere else, creators, designers, artisans and sales assistants, along with various departments (HR, IS, Purchasing, etc.), mobilize to deliver a level of quality and appeal that matches the brand’s promise – and from this promise stems the customer’s wish to purchase.

This quest for excellence is reflected within the companies. As in many sectors, the question of symmetry of attention (look aftr your staff, so that is looks after your clients) mush be addressed. Adjudicating between artisanship and industrial processes is an everyday task and implies management of the following dilemmas: conflict between standardization and tailor-made, high-quality spirit; conflict between industrial processes and individual expectations; conflict between internal and client deadlines.

Lastly, there are other issues the luxury-goods sector faces:

First of all, the question of skills transfers: the perpetuation of trades and training, and consequently the qualification of the sector’s professionals and craftsmen (embroiderers, lace makers, goldsmiths, etc.), raise questions about the future of luxury trades.

Moreover, the choice of production sites – in France or abroad – must take into account occupational, financial and commercial considerations (e.g. what impact does the ‘Made in France’ label have on sales?).

Increasingly strong Asian competition (along with the growing maturity and demands of the clientele and its expectations, local luxury brands, etc.) in an evolving market (impact of the anti-corruption campaign on results in China, for example) require continual adaptation.

Associated margins and profitability are also a constant concern.

Confronted by the critical problem of worldwide counterfeiting, industry players must meet the regulatory standards of highly protected products and brands.

Taking into account sustainable development considerations is a growing trend in the industry as well, often pointed out for its neglect of the environment.

Luxury-goods companies seek excellence everywhere: in the customer relationship, the production process, the distribution channels – and this is no easy task.

New public-health needs (an ageing population, an increase in chronic illnesses), the necessity to control expenditures, enhanced patient roles (health democracy, quality of care and service supply) are among the main structural challenges for today’s healthcare industry.

All operators – treatment producers, healthcare industries and agencies, supervisors and regulators – are confronted with these issues.

A sector in reconstruction after years of friction in the operators’ core business

Telecom operators have been forced to deal with major challenges as they face intensified competition in their core business, while maintaining their strategy of massive investment in network development (4G, optical fibre) in order to manage rising bandwidth demand. Of course, investing massively in networks and innovation at a time when turnover and operating margins are falling is a great challenge. In Europe, operators’ income is drying up and attempts to diversify content have not curbed this trend.

Across Europe, a review of the European regulatory framework began in 2016 and provided a response to changes in the market: priorities and regulatory resources of the sector should be amended.

On a national level, sector concentration was heightened.

Searching for new sources of growth

Just as general consumer networks are facing problems related to increasing demand for bandwidth and coverage, the emergence of new markets for connected objects is creating an opportunity to set up low-bandwidth telecom networks with increased universal coverage and a worldwide footprint, possibly providing a source of growth for operators with high-point base stations or satellites. These networks face issues such as the stabilization of technological choices, the concrete expression and design of user-based innovation, and the technical and operational capacity to provide new levels of secured communication.

Along with this, telecom operators continue to study new opportunities for growth, that are related to various approaches: invest in the assets produced by their network-operator skills (cloud computing, dedicated wholesale and B2B public networks), continue to offer wider ranges of services for subscribers (distribution of content), exploit the mass data they control (Big Data) to optimize network management and provide new B2C and B2B services.

Indeed, aside from the network constraints it involves, exponential growth in the volume of data exchanged (+70% per annum), especially because of new uses of mobile Internet, is also a major asset for operators. Big Data technologies, which encompass the collection, storage and analysis of information are opening up new opportunities like the use of data generated by the network, connection to platforms and to smart objects to produce added-value data or offer new services (connected cities, smart meters, traffic information in real time, the adaptation / optimisation of public-transport networks, visitor numbers at shopping centres and tourist locations, health chips, new, better-targeted service offers, etc.).

Because of their technical resources and commercial assets, telecom operators are recognized players that are advantageously positioned in new markets, such as the smart city and new-generation banking.

Grasping these opportunities means rapidly gaining a foothold in areas of growth by means of strategic partnerships and the development of appropriate internal skills.

The tourism sector (travel agents, transport companies, hotels and restaurants, etc.) is facing complex challenges…

Despite growth prospects – especially due to foreign tourism – many operators are unable to successfully develop their business.

Indeed, the sector is confronted by new challenges.

• Fierce competition due to:

– the emergence of new players and businesses in the value chain (online pure players, brokers, search-engine administrators, volume retailing, etc.),

– the increasing share of online purchasing (66% of purchases in the tourism sector are online).

• The repositioning of players in the sector, who are amending their economic models to reduce the number of intermediaries, diversify their business (vertical integration) or consolidate their position in the marketplace (horizontal integration). The distinct lines between the traditional occupations of travel supplier, producer and retailer are becoming blurred.
• Changes in modes of consumption (as in the volume-retailing and clothing sectors), with a disaffection for the mid-range that benefits low-cost and premium and/or customised products (personalized or ‘tailored’ travel is growing by more than 10% each year).

… Economic models must be redesigned…

In this respect, players in the sector must create new economic models and suggest offers that are better suited to customer expectations in order to increase their profitability.

Consequently, the sector will tend to be structured around two economic models:

• the first based on a volume strategy for bigger organizations,
• the second based on a value strategy for smaller organizations (niche offers).

Moreover, players must rely on every kind of lever: cooperation between operators or networks; sharing strategies (purchasing, information systems, etc.); reconfiguration of retailing modes of distribution (points of sale, pricing rationales, etc.); remodelling of customer relations and awareness and loyalty-enhancement tools (partnerships, sponsoring, etc.).

Your challenges

The transport and logistics sector is undergoing a revolution leading its players to take up important challenges and innovate in their business models. This concerns mobility operators, infrastructure managers, transport operators, logisticians, public institutions and trade hubs.

Innovate in a constrained and highly competitive environment

Several factors are leading to a redesign of the sector’s economic, industrial and business models:

• The growing competition between transport modes: rail, air, maritime, road, etc.
• An increasing globalization
• The gradual opening of markets to competition
• The scarcity of financial resources

More specifically, the question of optimizing investments, maintenance and operating costs while responding to the intensification of flows and new mobility challenges (sustainable city, IoT in the service of maintenance, etc.) is at the core of the whole industry.

In addition, the sector must identify new sources of revenue through new uses, activate all optimization levers (purchasing, make or buy, processes…) and have enforceable financial models to remain efficient. The players adapt their industrial tools, accordingly, seek to innovate at all levels (financing, infrastructure design and management, customer relations, strategic positioning, partnerships) and engage in an in-depth and long-term dialogue with the ecosystem (supervisory authorities, local authorities, manufacturers, etc.).

Respond to an increasing level of customer demand

Passengers and shippers are increasingly attentive to the elements of punctuality and regularity. At the same time, they are looking for the best quality/price ratio and “seamless”, tailor-made, fast and personalized mobility solutions.

Stations, airports and other exchange platforms are also becoming living spaces that focus on the customer experience at a time when it must be reinvented.

Provide integrated end-to-end mobility solutions

The market is gradually reconfiguring itself with the arrival of new players and operators. The latter tend to position themselves on all transport modes. Thus, they seek the greatest possible integration to meet the expectations of users and customers, without losing traceability.

In this spirit, the emerging MaaS (Mobility as a Service) is revolutionizing the management of daily trips. It is defined by a gathering of various modes of transport within a single mobility service, accessible on demand and adapted to users’ profiles and preferences.

In the first place, ” bringing back logistics to the city center” leads carriers and service providers to deploy new techniques. Those tends to services associated with flow management and are optimized by digital innovations. The second consequence is the redesigning of their networks. Finally, they are led to renew their offer throughout the supply chain, integrating environmental constraints (e.g. soft modes). These developments also require the search for new partnership strategies.

Putting people at the heart of the service relationship

The sector faces three challenges in terms of human resources. First, it employs a large number of people, some of whom are poorly qualified but at the same time have crucial and rare skills. On the other hand, job attractiveness, professional development or the advent of new professions (data management, etc.) remain at the heart of concerns. Finally, it is a sector where staff are led to offer customers and users an increasingly efficient and embodied service relationship, through a personalized response adapted to the multiplicity of needs and expectations of their interlocutors.

Accelerating global change in working methods and resources, digitisation, increasingly short product life cycles, customer-needs versatility and new market demands – such shifts require an improved management of Human Resources as people have become key in organisational succeess.

Responding to emerging issues

The corporate human landscape is changing radically today with longer working lives, the co-existence of three generations with extremely disparate aspirations and relations within the world of employment, increased awareness of quality of life in the workplace and a responsible approach towards diversity. The services supplied by HR departments must adapt to assimilate personalised but still ‘industrial’ approaches that will enable each employee to progress, increasingly commit and deliver the performance expected.

Occupations are changing faster and faster, involving new ways of working (digital, flexible office, itinerancy, etc.) and far broader access to information and its processing. It is the responsibility of companies to anticipate career developments and prepare change by working to ensure the compatibility between future needs and current resources over time.

A new relationship with their seniors and occupational changes also impact on the role of managers. Companies and HR departments need more efficient ways to identify tomorrow’s managers and support them in their new job…

… while still controlling the HR function

Cost control remains a constant concern for both the company and its HR department: lean, shared resources, shared services centres, etc.

In the field of HR development, departments must integrate new approaches and radically modernise training, hiring and mobility to satisfy demand for HR service reliability, accessibility and innovation.

For more than 30 years, IS departments have rightly been seen as the company’s main support services whose main challenge is still to implement and ensure the operation of secure information systems so as to improve the productivity of organizations through the automation/dematerialisation of their work processes. Their overriding strategic concerns are to align information systems and business strategies, supervise and implement multiannual master plans, centralise infrastructure and move from a customer-supplier to a ‘business-partner’ model. In short, to industrialise, centralise and share, but without truly challenging the fundamental issues in corporate IT and therefore IS-based corporate organization and governance.

In fact, many consultancies have actively encouraged the outsourcing of technical aspects of IS and the internalisation of supervision skills. As a result, the value of internal resources has been objectified in terms of its ability to conduct projects within allocated budgets in compliance with the prevalent methodological norms. IS departments have not been responsible for planning and structuring their companies’ information systems: their resources have been limited to proper execution and compliance with procedure (and not creativity, responsiveness or initiative taking).

Yet now in the digital era, the ‘customers’ of IS departments are no longer a few thousand users, but millions of consumers. To us, this means we must radically change our way of looking at the issue of IT within a company. IS departments are not alone in facing the impacts of digital technology: marketing and communication are equally affected since information technology is now the main tool available to disintermediate existing chains of value.

In this context, how can we develop corporate governance to tackle IS issues, that are linked to productivity, as compared to those related to the ambition of developing new services? Once again, ultimately, it is about ensuring a new consumer experience. Is this not then the right moment to review the ‘partnership’ with marketing and communication and implement repositioning to take into account data and cloud-based IT knowhow?

Socioeconomic, technological and financial developments are resulting in major doubts about the sustainability of the business models of many organizations. They must consequently implement radical change to become more competitive and successful.

In this context, financial managements must review their position and identify the correct balance between cost control and development support.

On the one hand, they must take a fresh look at the issue of financial performance: what kind of return on investment does the company want? What is the importance of ROI against a corporate background of accelerating innovation and increased competitiveness? How should corporate resources be allocated? On the other hand, the financial departments must review their positions to ensure that they act as much in the interest of shareholders as they do in that of the general management and other departments.

Consequently, aside from their usual tasks (management control, compliance with accounting regulations, management of funds, etc.), financial departments have to deal with four key issues.

The first is to ensure that their financial strategies take into account market and investor pressure in a tighter financial context.

The second is to contribute to the company’s development by not only targeting their action on cost reduction or ‘zero risk’, but also by helping the company to plan a new, more competitive business model for tomorrow.

The third is to learn to look beyond short-term obligations (solvency, profitability) and focus on the requirements of sustainability in the medium and long term, particularly in terms of investment and value creation.

The fourth goal is to support a more effective inclusion of financial considerations in job performance.

In response to these issues, Eurogroup Consulting acts as a facilitator and high-level consulting service for financial managers, bringing a combination of financial expertise and professional knowledge to the task.

The digital revolution presents radical challenges for major organizations in our traditional economy. Innovations, technologies and new practices are being deployed worldwide in ever shorter cycles. New innovative, exponentially capitalised companies are achieving extremely rapid growth and reversing established positions. Clients and staff are aspiring to new kinds of interaction, collaboration, sharing, work and management. Acceleration and iterative operations are becoming new business standards, and communities and cooperation the new organizational pattern.

Negotiating the digital hurdle is now a necessity and sometimes even a question of survival. Companies urgently need to accelerate digital transformation to take advantage of new opportunities and sources of growth, maintain or gain a competitive advantage and support radical economic and corporate development.

Since the multi-layered search for rapidity began, it has challenged our strategic thinking, even down to the level of our daily work: reviewing business models; redefining brand promises and service offers; redesigning customer experiences; identifying new uses; targeting decisions more accurately using data processing; accepting new ways of working; taking a fresh look at managerial relations and planning one’s brand as tomorrow’s employer; transforming organizations and their governance, practices and culture; motivating and mobilizing in the digital era.

In short, the aim is to learn how to ensure rapid digital transformation in concrete terms.

Big data: an amazing opportunity if handled accurately

Yes, the final answer seems to be big data! Customer data is a precious asset for companies. Skilfully managed, mined and analysed, it can be used to identify the levers that must be used to increase appeal and enhance customer loyalty. Big data can especially be used to conduct formerly impossible analyses and find unexpected correlations. However, we would repeat that this data, which is generated in increasing volumes, needs to be skilfully managed. Therefpore the questions that arise edal with its storage, its update and its analysis, and so ultimately the problem of ownership of management. Should it be done internally – requiring infrastructure and new skills – or outsourced, contracted? If the latter, then at what cost and taking what risks while managing related hazards?

Customer relations excellence is the keystone

Today, using available data, the task is to find an answer in terms of offers and services, and provide an extraordinary customer experience via a physical channel (retail stores), a web channel (e-commerce) or a combination of both. Here, the term ‘omnichannel’ takes on all its meaning. It is a core concern for retailing companies: how can they create a customer itinerary that incorporates this new dimension? How can they appeal to customers through the web channel (with new web-marketing techniques: SEM, SEO, analytics, etc.) without neglecting the in-store experience, which also needs to be revitalised? On this last point, the role of store sales assistants is decisive: without greater service quality, no point going to the store!

Sales assistants: a population to be ‘pampered’ and motivated

Sales assistants actually control 2 of the business’s 3 key indicators.

Firstly, transformation rate: for a given volume of prospects, the sales assistant’s role is to ensure that as many as possible become customers and leave the store having paid for a product/service.

Secondly, the shopping basket, which can boost additional sales: for a volume of customers, the assistant must suggest further purchase opportunities consistent with the customers’ needs. For instance, when a customer buys trousers, the assistant can suggest a belt, socks, a shirt, etc.

Therefore, it is essential that sales assistants be competent in terms of basic supply (offer/service) and interpersonal relations, but they must also be led, mobilized and motivated by their managers if they are to maintain their ‘excellence’. The ‘excel 100% of the time’ requirement probably implies a cultural and managerial revolution for many players in retailing.

The organization responsible for the customers

The final indicator is, as always, appeal. This is the result of the work done by the communication/customer/marketing departments, in order to generate traffic at their points of sale and/or e-commerce site. Organizational issues are involved, especially customer management, because each department sees itself as key to the problem. Customer departments are increasingly being structured to encompass customer knowledge, sales-channel interaction, etc. – an exciting project to plan, facilitate and develop.