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Innovation and digital disruption in professional services

This is a presentation for http://tapmint.com which I gave internally at one of the world's largest professional services firms. It discusses digital disruption in financial services, professional services and accounting services.

Various models of corporate innovation are also highlighted. Case studies of 3 companies are provided - Suncorp Group, Sensis and Carsales. Finally, I provide some thoughts on implementation.

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Innovation and digital disruption in professional services

  1. 1. Innovation & digital disruption in professional services
  2. 2. About Us Matthew Ho ● Next Digital, Deloitte, Airbnb, Native Tongue ● Tapmint: Innovative mobile/web apps ● Writing ebook: “Start your digital marketing career” ● Twitter @inspiredworlds Head of Product Development at Tapmint
  3. 3. About Us Matthew Ho ● Previously at Deloitte ● Senior Tax Accountant in Financial Services Industry Group ● Graduated B.Business (Accounting) / B.Laws (Honours) ● Honours Thesis: Financial Statement Regulation & Sarbanes Oxley Head of Product Development at Tapmint
  4. 4. Content 1. Digital disruption 2. Why innovate? 3. Disruption in services a. Financial b. Professional services c. Accounting
  5. 5. World’s largest taxi company owns no taxis
  6. 6. World’s largest media company creates no content
  7. 7. World’s largest accom provider owns no real estate
  8. 8. World’s largest retailer has no inventory
  9. 9. Why do you want to innovate? ● Scale existing services ● Grow customer base ● Create new business units / services ● Disruptive competition ● Innovation = growth
  10. 10. Digital disruption in financial services ● Physical branches declining ● Customer experience mostly mobile & online ● Big data ● Predictive analytics ● Non-financial competitors ○ Tighter customer relationships ○ Selling financial products ○ QANTAS ○ Woolworths
  11. 11. Digital disruption in financial services ● Alternative forms of financing ○ P2P lending: SocietyOne, Kiva ○ Short term loans: Nimble ○ Crowdfunding: Kickstarter, Pozible ○ Angel investment: AngelList, Our Crowd Venture Crowd
  12. 12. P2P payments in messenger apps
  13. 13. Digital disruption in professional services ● Pick and choose services online ● Online marketplaces and directories ● Global marketplaces ○ Elance-Odesk ○ Freelancer
  14. 14. Digital disruption in professional services ● Local services marketplaces ○ Oneflare ○ Service Seeking ○ Airtasker ○ Taskrabbit ○ Freelancer
  15. 15. Odesk-Elance in Australia ● Top online hiring country per capita ● Second largest client market by total value globally ● Australians spent $60million in 2013 ● Top skills being hired ○ web design ○ development ○ writing ○ online marketing ○ admin
  16. 16. Odesk-Elance in Australia ● New skills people are seeking ○ Electrical engineering ○ Data scientists ○ 3D modelling ○ Lawyers ○ Accountants ○ Financial Analysts
  17. 17. Digital disruption in professional services ● Professional services marketplaces ○ Consultants: Expert360 ○ HR: RecruitLoop ○ Legal: LawPath, Legal Vision ○ Internal & shopfront: etaskr
  18. 18. Digital disruption in professional services ● Digitisation of documents ○ Archiving ○ Search ○ Law & accounting textbooks / reports online ○ Remote collaboration ○ Electronic Discovery ○ Virtual data rooms
  19. 19. Digital disruption in professional services ● SAAS (Software As A Service) makes the job easier ○ Quoting: Quoteroller, Bid Sketch ○ Billing: Hiveage, Xero ○ E-signature: EchoSign, RightSignature ○ Time keeping: Harvest, Lets Freckle ○ Collaboration: Yammer, Slack, Trello
  20. 20. Digital disruption in accounting ● Software moving from desktop to the cloud ● Xero, MYOB, SAASU, Freshbooks, Invoice2Go ● More data available ● More points of integration ○ Bank accounts ○ CRM ○ ERP ○ Payment gateways ○ POS ○ eCommerce
  21. 21. Digital disruption in accounting ● 66% of SME’s would replace services accountant currently performs with cloud based services ● 50% of SME’s would change accountants if they didn’t embrace a cloud offering
  22. 22. Digital disruption in accounting ● Tasks most easily automated and replaced by software ○ Manual data entry ○ Book keeping ○ Year-end financial reporting ○ BAS lodgements ○ Payroll ○ Financial analysis
  23. 23. Accounting software growth of Xero.com
  24. 24. Case study: Deloitte Private ● Services ○ Private companies ○ Families & individuals ○ Entrepreneurs ● Work mix ○ 70% compliance work ○ 30%: strategic business advice
  25. 25. Case study: Deloitte Private ● 18,000 Indian workforce ○ tax & financial compliance ○ admin, business development, marketing ● 3,000 dedicated to Australian office ● Move to higher value added services
  26. 26. Deloitte Private Connect - SAAS
  27. 27. Case study: Deloitte Private ● Launched Deloitte Private Connect (DPC) ○ SAAS product for accounting ○ Compare your business data against aggregate data of 13,000 clients ○ Shift from manual compliance activities which are automated ○ Provide higher value added advisory services on top of DPC data
  28. 28. Case study: Deloitte Private ● Launched Deloitte Private Connect (DPC) ○ Built on Force.com platform ○ Starts at $599/month model ○ Shift from hourly based revenue model ● Compliance ○ Lower margin ○ Automated and billed using MRR (monthly recurring revenue) model ○ Alternatively outsourced overseas in lower cost countries
  29. 29. Digital disruption is 10min walk from here
  30. 30. SAASU: Accounting Software In The Cloud
  31. 31. Shoeboxed: Scan & organise receipts
  32. 32. Invoice2Go: $10bn invoice volume annually on mobile
  33. 33. Part 2: How X can innovate Image removed
  34. 34. 3 horizons of innovation
  35. 35. Two types of innovation Steve Blank on innovation 1. Continuous innovation (extending core) 2. Disruptive innovation (new businesses & vision)
  36. 36. When Ideas Have Sex ● Meeting & mating of ideas ● Makes new ideas ● New ideas are a culmination of previous ideas & technologies ● TED talk by Matt Ridley
  37. 37. Innovation doesn’t have to be sexy
  38. 38. Happy Inspector For Property Inspections ● Digitising property inspections ● Available for iPad/iPhone ● Take notes and photos on mobile device ● Instantly generates professional reports ● Stores information in cloud ● All reports available anywhere, anytime ● Saves 80% time in creating inspection report
  39. 39. Innovation criteria ● Management buy-in ○ Need to have an innovation champion ○ Group of people that buy into it ○ Succession planning if any individual leaves ● Firm wide buy-in ● Innovation culture ● People - starters vs scalers ● Attract and retain entrepreneurial talent ● Can be trained in entrepreneurial mindset
  40. 40. Innovation criteria ● Lightweight policies and fast approvals ● KPI’s - Growth, R&D, 20% time. ● How do we shelter and embrace creativity ● Rewarding innovation and failure/learning ● Incentivise innovative behaviour
  41. 41. Innovation criteria ● Too much focus on utilisation in professional services not on value add and growth ● Accounting - More than ROI metrics required ● Innovation fund to back ideas ● Start small ● Closed vs Open innovation
  42. 42. Closed vs Open Innovation
  43. 43. Models of corporate innovation ● Starts with awareness of what’s happening around you ● Using new services and startups ● Innovation programs: formal vs informal ● R&D: internal vs external ● Co-opetition: collaborating with competition
  44. 44. Models of corporate innovation ● Partnerships with startups ○ Mondelez International: Mobile Futures Australia ● Hackathons: Internal vs External ○ Salesforce: $1mil USD prize ○ Mastercard: Masters Of Code, $125k USD ○ Paypal / Braintree: BattleHack, $100k USD ○ Internal: See case studies on Suncorp & CarSales ● Innovation portfolios: 1 in 10 will payoff
  45. 45. Models of corporate innovation ● Acquisition ● Corporate Venture Capital (Investment) ○ Google Ventures ○ Qualcomm Ventures ○ Softbank Capital ○ Telstra Ventures ○ Singtel Innov8 / Innov8 Seed Fund ○ Reinventure: Westpac partnership
  46. 46. Models of corporate innovation ● Accelerators ○ Typically invest $30k - $100k ○ For equity of 6% - 10% ○ Telefonica: Wayra ○ Telstra: Muru-d ○ NRMA: Slingshot ○ AWI: AWI Ventures ○ Woolworths: WStart ($$ not disclosed).
  47. 47. Models of corporate innovation ● Sponsoring co-working spaces ○ Fishburners: Google, PWC, News Corp, Optus ○ York Butter Factory: EY, Coles, Adventure Capital ○ Tank Stream Labs: EY, Tank Stream Ventures ○ Tyro FinTech Hub: Tyro ○ Stone & Chalk: AMP, ANZ, Westpac, FINSIA
  48. 48. Case study: Suncorp’s FedEx days ● FedEx days ● Adopted from Atlassian ● Fridays off ● Build & ship in 1 day ● Started with small team of technical people ● Similar to hackathons
  49. 49. Case study: Suncorp’s FedEx days ● Became a firm wide initiative ● 16,000 people take time out ● Form self managed teams ● Mix of diverse skills ● Some of ideas go into production ● Change mindset to innovation
  50. 50. Case study: CarSales Hackathon ● CarSales is an online marketplace for buying & selling cars ● Staff given 3 options in hackathon: 1. Build something that would disrupt our business as if you were working for someone else 2. Build something that will help our car dealers, buyers or sellers 3. Build something that will make money
  51. 51. Case study: CarSales Hackathon ● Some ideas chosen to go into production ● Business is a disruptor to car industry ● Easier to shift staff mindset to disruption & innovation
  52. 52. Case study: Sensis Business Transformation ● History: Developed Australia’s first phonebook directory ● Help consumers connect with businesses ● Shift in how consumers search for businesses ● Became a digital marketing services business: SEO, SEM, Social, Websites for businesses ● To bring external thinking: ○ Hired people from digital environment ○ Worked with IDEO (design agency)
  53. 53. Case study: Sensis Business Transformation ● Innovation process ○ Used design thinking ○ Customer focused approach ○ Experimented with lots of ideas ○ Rapidly prototyped 60+ ideas ○ Narrowed down to 3 - 4 ideas ○ New product launched: Skip app for skipping queues for ordering food ● Best ideas & implementation are internal
  54. 54. Implementation ● Define growth goals ● Start small to change mindset to innovation ● Growth as a KPI ● Awareness: What new technologies, startups and trends exist out there? ● Use existing Yammer and comms channels to discuss opportunities
  55. 55. Implementation ● Become early customer of startups ● Provide valuable feedback as a customer ● Provide pro-bono / discounted services to disruptors ● Customer discovery days ○ Top 3 problems ■ Our customers have ■ We have internally ○ How can we solve them? ○ More collaboration between different disciplines
  56. 56. Contact me ● Email: hello@tapmint.com ● Website: http://tapmint.com ● My Twitter: @inspiredworlds ● My blog: http://inspiredworlds.com ● Top 20 Best Business Blog in Australia (Smart Company) ● Top 50 Australian Startup Influencer (Startup Daily)
  57. 57. Resources ● Matthew Ho, Amidst boom in Aussie outsourcing and freelancing, Elance-oDesk launches in Australia, Tech In Asia, 3 May 2014. ● Chris Pash, The amazing growth story of Xero in one simple chart, Business Insider, 27 April 2015 ● Sholto MacPherson, How Accountants Can Survive Digital Disruption: ICAA, Digital First 19 Sept 2013 ● Sholto MacPherson, Digital Wave To Push Accountants into Post-Compliance Era: ICAA, Digital First, 18 Sept 2013
  58. 58. Resources ● Sholto MacPherson, Deloitte Private Connect - How and why did Deloitte build it, Digital First, 4 July 2014 ● Matt Ridley, When Ideas Have Sex, TED Global, 2010 ● Steve Blank, The Search For The Fountain Of Youth - Innovation & Entrepreneurship in the Enterprise, 3 June 2010 ● Paul Hobcraft, Mapping Innovation Across The Three Horizons, Innovation Excellence,, 24 April 2013 ● Exploring the 3 horizons framework, Hype Innovation, 11 Nov 2013.
  59. 59. Resources ● Henry Chesbrough, Principles of Innovation, 2009. ● Alex Osterwalder & Yves Pigneur, Business Model Generation, 2010 ● Steve Blank, Lean Goes Better With Coke - The Future of Corporate Innovation, 7 Nov 2013. ● Carie Davis, Startup Weekend at Coke - Building Entrepreneurship in the enterprise, Coca-Cola, 3 Jul 2013. ● Allie Coyne, Carsales tests developer innovation with 'hackathon', itnews.com.au, 11 Oct 2013. ● innovation.carsales.com.au
  60. 60. Resources ● Nadia Cameron, Technology, Simplicity, and Culture: Behind The Scenes of Sensis’ Digital Transformation, CMO, 18 Dec 2014 ● Finding A New Business In The Every Day, IDEO, 2014
  61. 61. Resources People interviewed / sources: ○ James Drucza (Tapmint) ○ Ping Wang (ex-transformation team, IAG) ○ Kelly Brough (ex-GM, Sensis) ○ Kiran Kumar (ex-Suncorp) ○ Ben Reid (ex-BD, Muru-D)

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