Alumni Newsletter Central EuropeSummer Issue 2013

Central Europe

Dear Alumna, dear Alumnus,

We are happy to present you our Central European Alumni Newsletter Summer Issue 2013!In this issue we give you insights on what has happened within Arthur D. Little in the past half year, focus is on Central Europe but we also have some global news for you. And again we have the breaking news of changed jobs within the Alumni community. Finally we give you an update of our recent publications.We wish you happy reading!

Best regards,Your Arthur D. Little Alumni Team Central Europe

For any comments or suggestions please email to: info.alumni.ce@adlittle.com

Dear Alumna, dear Alumnus,

2013 is the second year of Arthur D. Little being a partner-owned management consulting firm – and it still feels good! After closing the books for 2012, we can tell you that we successfully accomplished our first year – with good financial results, exciting projects and most important of all: highly dedicated people. While our first year as a partnership was focused on mastering the challenges of this transition, on defining an appropriate and financially healthy set-up of the company and in particular on establishing the leadership and steering model of our firm, we now shift our focus to long-term and strategic topics: the sharpening of our market positioning and our offering, and most of all generating profitable growth.

These were the main topics that our second global shareholder meeting dealt with when the shareholders – including some new partners that recently joint the firm – met in Brussels in June this year.

Again, this meeting was an exciting and inspiring experience for all participants and just seeing how different it was from meetings in the “old” era of ADL and how we approached and discussed open questions gave a strong impression of the new

spirit and what it means to be a real partnership. The result of all that can be seen in our financial figures that improved a lot despite the tough market environment, but also in the progress of our transformation program “BOOST” that was started after our buy-out became effective. I just want to highlight a few achievements that were presented to the shareholders: With only one exception we had remarkable turnarounds in all markets that were in troubled conditions last year, and overall the breakeven point of the company has been improved considerably. Our cash position is even stronger than last year, giving us the possibility to invest in growth, and we are pursuing some very interesting opportunities in different markets that might be completed pretty soon.

Personally, I am very proud to let you know that ADL Central Europe improved its business significantly – looking at financial performance, the start of 2013 was the best in the past five years! We have revived our business in the healthcare industry by integrating a very experienced team of professionals, you can read more about this “new old” practice later on in this newsletter. And we won some very exciting new “leading-edge” projects: Our latest project with a global supplier of technology and services in the energy and building sector deals with the

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strategy of a newly founded business unit for building products & solutions, comprising innovative topics like “smart buildings” and decentral energy production. At a leading German logistics provider we support an organizational transformation that aims at fine tuning the existing matrix, fostering and aligning entrepreneurial spirit and using critical mass. For a leading German airline we reorganize procurement and support the implementation of a strategic procurement organization that will realize sustainable cost savings with high impact for Air Berlin’s competitiveness.

Summing up – we are highly satisfied with the development of our business despite a tough market environment and we are excited to carry on all the promising projects and initiatives that were started earlier this year. And I would highly appreciate sharing these developments and more detailed information about ADL’s development with our alumni, so please use the various opportunities to join upcoming alumni events!

I wish you an inspiring end of the summer and I am looking forward to meeting you later this year.

Yours, Fabian

Spotlights on the Practices

Rebuild of our Healthcare Practice in Central Europe

Since March of this year we are proud to have a new Healthcare team on board to revive our activities in the pharmaceutical and healthcare industry. Dr. Thilo Kaltenbach is our new responsible Partner for this industry in which we can draw back on a strong track record. He brings in experience of more than 15 years, of which more than 10 years in consulting. The focus of his consulting work lays on successfully supporting clients of the pharmaceutical and medtech industry as well as insurances and health service providers in the areas of market and product launch strategies, integrated patient-centered care, commercial due diligence, digital healthcare and R&D strategy development. Thilo is located in our office in Munich. Thilo: “I am honored to work for the world’s first management consultancy. I am looking forward to develop and implement tailor made strategies for our healthcare clients together with our global teams.“

Gregor Wick – New Partner in the TIM Practice in Central Europe

Gregor has joined Arthur D. Little in the Vienna office in January 2013. He has been with Arthur D. Little Germany and UK from 1990 to 1999. He then joined Accenture as a Partner in the Healthcare practice advising pharmaceutical, biotechnology and other healthcare clients. In the last years he founded a number of start-ups in the healthcare space, ranging from marketing & sales organizations, diagnostics businesses to home care services.

At Arthur D. Little he will strengthen the TIM practice in CE. “I am convinced that Arthur D. Little has a very strong and credible brand in the Technology and Innovation space. On the other hand our clients ask for consultants that can cover corporate strategy topics combined with a deep rooted understanding of the technologies that are the basis for sustainable success”.

“4G – Going faster, but where?” – Abstract of Arthur D. Little / Exane’s 12th study on European telecom trends (TIME Practice)

The 12th edition of the annual Arthur D. Little/Exane study focuses on LTE. We held 91 interviews across 15 countries and drew following key conclusions:

n We project European telecom revenues to further decline by 1.8% p.a. until 2016e

n Restoring growth would require LTE smartphones to add EUR7/month to data ARPU by 2016e – this is unlikely to happen

n 4G is unlikely to restore pricing power in the European telecom industry. While operators may be able to demand price increments for LTE subscriptions, this is unlikely in the mid- to long-term

n We see no capacity shortage before 2020 as 800/900/1800/2100 and 2600 MHz bands, including offloading and small-cell usage, will be sufficient to cope with steep data traffic growth

n Differentiation is elusive: Large operators do not have a sustainable spectrum advantage as challenger operators often acquired 2-3x their fair market share in LTE spectrum, enabling them to act aggressively on 4G

In this environment, mobile operators have five levers to act: n Tariff structures: we observe e.g. in the US shared data

plans and in European countries such as Austria a move towards unlimited SMS and voice tariffs, included in data plan bundles

n Partnerships on new services: Operators can partner with OTT services and social media platforms to enter into new growth areas while mitigating the threat from OTT voice and messaging

n Cost transformation: LTE reduces the costs to produce a Gbyte dramatically over time. Hence other cost positions become relatively more important. Operators hence need to become leaner on customer acquisition, SG&A and other non-network related cost-items

n Small-cells and WiFi offload: To make their networks even more efficient while increasing capacity, operators can use underlay Small-cell networks and offload data-traffic over WiFi hotspots

n Network sharing: The costs to deploy LTE networks will drive further operators into concluding network sharing agreements – on LTE only or for multiple standards and bands

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For a more detailed discussion, please do not hesitate to contact us and enjoy reading the full study.

Star Case Winner 2/2012

The global Star Case Award for the 2nd Semester 2012 went to a case managed from Central Europe:

“For an integrated incumbent operator in a large Central European market: Phoenix business transformation”

Faced with industry-wide stagnation of core telecoms services the Client decided continued cyclic cost reduction programs would not deliver escape from decline – and asked Arthur D. Little to orchestrate a complete redesign of their entire business from services, external presentation and internal organization and operations. This resulted in a new composition of the CxO team, a new organization with many new roles, a revised five year business plan with eight credible multi-year strategic initiatives “in execution” to underpin reversal of otherwise falling financial projections.

During the project the Star Case winning team could apply, revise, improve and test a broad spectrum of IC concepts in real-life client business resulting in credible application of our IC now being leveraged on multiple fronts. Leading edge knowledge applied contained topics as online transformation, Digital Home, IoT (Internet of Things), Process Transformation, Agile Product Development, Network Control strategy (implicit ServCo / NetCo layering) and Customer Expectation Management.

The members of the winning team are:

Central Europe: Karim Taga (PIC), Michael Opitz (PIC), Nicolai Schaettgen (PM), Simon Best (PM), Volker Pfirsching, Ansgar Schlautmann, Jürgen Driller, Lars Riegel, Alexios Seibt, Fabian Sempf, Marius Romanescu

United Kingdom: Richard Swinford, Vikram Gupta, Eirik Wiig, Benelux: Jean Fisch (PIC), Johan Deforseau

Arthur D. Little’s Global Innovation Excellence Study

Good Innovation Management Increases Profitability by 13%

Innovation performance is now significantly worse than three years ago, yet top innovators still regularly achieve up to 13% points more EBIT than average performers. These are key findings of our 8th Global Innovation Excellence Study, a cross-industry survey of trends and best practice in innovation management.

Drawing on over 650 responses from CxOs, the study shows a strong relationship between using best practice management approaches and achieving higher innovation performance. Comparing top quartile performers against the rest of the sample, there is a significant gap of up to 13% points in terms of EBIT from recent product & service introduction and a 30% gap in terms of time-to-break even. However, the range between the best and worst performers has narrowed since 2010, suggesting underperformers can and do catch up, and that maintaining a lead in innovation performance is getting harder.

The study identifies four cross-industry innovation management practices which have the biggest impact on strong innovation performance:

1. understanding the contribution of important technologies to corporate goals;

2. structured use of external sources of business intelligence;

3. reacting to changes in targeted segments by reviewing the product/service portfolio; and

4. mobilizing the whole organization to develop new ideas.

The study also shows a significant decrease in innovation performance of up to 25% since 2010, yet satisfaction with the level of innovation achieved has increased significantly from 25% to 42%. This may be driven by the tough market conditions which have forced companies to focus on short term performance.

“Understanding in which innovation management techniques to invest in is crucial to achieving a better return on innovation investment as some practices have a much higher impact than others”, says Markus Achtert, Principal in Arthur D. Little’s Munich office.

For more details please read the full study.

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Global scope: Working for our Dubai office

A field report from Laurent Mang

As-salam alaykum from Arthur D. Little’s desert kingdom office in the United Arab Emirates. What a nice change of scenery it was when I first arrived at our Dubai office, having completed a transfer from my beloved Munich office. My motivation towards seeking an office transfer primarily stemmed from the appeal of Dubai being a playground for the young & old to explore the Middle East, offering exceptional quality of life and, oh yes, tax-free salaries.

Arthur D. Little has been active in the region since the 1950s already, now maintaining two permanent offices in Dubai/UAE and Riyadh/Saudi Arabia. Both offices accumulate a total staff of approx. 35 people of which seven are transferees from other offices including Madrid, Stockholm, Milan and Munich. In sum there are almost 15 nationalities represented. The offices’ main areas of expertise lie in particular in telecommunication as well as energy/utilities and public sector enterprises.

Although Arthur D. Little has round 30 offices around the world, it seems striking how similar its people really are. Diverse yet very alike with regard to some characteristics, I was not surprised to meet the same type of hard-working fun-loving consultants in Dubai that I was already used to from CE. Like many other offices, Dubai also has the compulsory Arthur D. Little soccer table kicker in the kitchen, which our colleagues are very keen to play with on a daily basis in order to relax from demanding project/proposal work.

Looking outside the window from the office (see above) also has its appeal with an arguably unrivaled view over the Persian Gulf and the Palm Jumeirah (the world’s first artificially build palm shaped island). When not enjoying the view from the office nor playing kicker, the colleagues enjoy lunches around the lake at Dubai Media City or play cricket/football together on weekends.

As far as projects are concerned, Arthur D. Little Dubai has been engaging in a multitude of projects across the entire region, spanning from Iran to Yemen as well as from Saudi Arabia to

Bahrain and Qatar. Most consultants in the office will have experienced either Iran or Saudi Arabia at least once during their career.

Overall, I believe that office transfers are an outstanding opportunity to get to know a new market both professionally as well as personally. The experience of working in our arguably most diverse office has been more than just enriching for me.

Promotions since January 1st, 2013:

From Business Analyst to Consultant: n Julia Heizinger, Energy Utilities, Frankfurt n Michael Hofner, OM, Wien n Fabian Sempf, TIM, Frankfurt n Katharina Träger, S&O, München

From Consultant to Manager n Andreas Deptolla, TIM, Frankfurt n Georg Glaser, OM, Wien n Kai Hanitsch, AMG, München n Marius Romanescu, OM, Frankfurt

From Manager to Principal n Claus Heerlein, TIM, Frankfurt n Clemens Schwaiger, TIME, Wien n Nicolai Schättgen, S&O, Wien

From Principal to Partner n Matthias Riveiro, S&O, Frankfurt

December 2012, Arthur D. Little Christmas celebration of the Vienna Office

Celebrating the wonderful event of Christmas, the Vienna office once again lived up to the motto of “work hard, party hard”. The evening began in a relaxed atmosphere with a nice, enjoyable dinner. The fact that the team was not allowed to enter a pre-reserved club did nothing to destroy the mood, as the party was short-handedly switched to a bar. Dancing, motivated conversations and simply enjoying the evening in an enlightened spirit until the early hours, brought the team even closer togeth-er and was therefore a wonderful ending to a successful year.

December 2012, Arthur D. Little Christmas celebration at the Frankfurt Office

Since opening up the office in Frankfurt in 2011 and a stunning 125 year celebration at the end

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of 2011, this time was the first Christmas and end of year reception at the Frankfurt office. With the help of dozens of candles and seasonal interior decoration, everyone got into celebration mode real quickly. A variety of finger foods and selected wines and beverages made everyone enjoy themselves. Good talks with colleagues, interesting reviews and a motivating speech of Fabian about the positive business situation completed the evening. The ambitious DJ capabilities of Fabian (live mixing with his digital Ipad turntables) even made people dance in their office!

December 2012, Arthur D. Little Munich celebrating Christmas

For this year we decided for an alternative: no snow shoe walk, no curling – but delicious food in a Vietnamese Restaurant followed by a long dancing night in a Munich club. The cozy location allowed us to have the whole venue for us. We started off with light cocktails and headed for Vietnamese fire pot. In between our seniors of the office reviewed the past year and highlighted special achievements of the office, among others the splendid community we have in Munich. We finished the evening dancing and having fun in a club.

July 2013, Arthur D. Little Frankfurt: Alumni reception at THE SQUAIRE

After having relocated our Wiesbaden office to THE SQUAIRE already 2, 5 years ago, an Alumni reception was long overdue. More than 20 alumni and ADLers came together for exploring our new premises and for a joyful alumni reunion.

Fabian Doemer, Managing Partner Arthur D. Little Central Europe, welcomed the guests to the event. He explained details on our recent MBO and shared insights on our current shareholder structure. Fabian further highlighted our growth plans from currently 3 industry practices by re-introducing the healthcare practice in CE. The alumni group was highly interested in these news and discussions have been continued in small circles along with coffee and cake as well as some Riesling Sekt.

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Alumni NewsMartina Bär-Sieber (2000-2004) formerly Member of the Board of businessforce Unternehmensberatung AG in Munich Germany is now Owner of mc Bär, also in Munich.

Matthias von Bodecker (1996-1998) after being Board Member at POLIS Immobilien AG in Berlin, Germany now is Managing Director at the Handwerksgruppe Philip Mecklenburg GmbH in Hamburg, Germany.

Christof von Branconi (1989-1992) has changed from Board Member at Tognum AG in Friedrichshafen, Germany to Vice President, Europe, CIS, Africa Zone Manager at Air Liquide Global E&C Solutions.

Dirk Friebel (1998-2000) formerly European Head of Strategy at DHL Global Management /Switzerland Ltd. in Basel, Switzerland now is Principal at Roland Berger Strategy Consultants in Stuttgart, Germany.

Oliver Klaus (2005-2008) changed job from being Director of IT at Oerlikon Solar in Switzerland to Head Managed Service Architecture & Consulting at Swisscom AG in Switzerland.

Christian Mangold (2002-2009) now is Managing Director at the Sofort AG in Germany after being Head Sales Continental Europe at the Xchanging Transaction Bank.

Oliver Schubert (1998-2003) formerly Management Consultant now is Associate Principal at McKinsey & Company, Inc. in Stuttgart, Germany.

Michael Schunda (1994-2000) after being Advisory Board Member and Managing Director at candidus GmbH/ ZahnHouse GmbH now is Managing Director at ZahnHouse GmbH in Munich, Germany.

Thomas Strohmaier (2000-2006) formerly Vice President Strategy & Competitive Intelligence at Deutsche Telekom AG in Bonn, Germany now is Operating Director Business Development at Hrvatski Telekom d.d. in Zagreb, Croatia.

Lucas Velloso (2008-2010) changed from being Forecasting Manager at Merck Serono in Switzerland to Senior Manager at GlaxoSmithKline Vaccines in Switzerland.

Publications

We have selected some recent ones, for the whole spectrum and the downloads please visit our webpage.

Insights

Engineering & Manufacturing Insight:

n Lean & Agile for efficient R&D

Energy & Utilities Insight:

n Innovation Management in Utilities - five best practice levers to become a top-innovator

n Electricity Trading beyond “Buy and Sell”

Viewpoints

Automotive: Battle for Sales in the Premium Segment

Six Key Levers Impacting Current Automotive Sales Models

For 2020, all three German premium automotive brands aim to become No. 1 in sales. In fact, worldwide demand for premium cars by far outgrows the global

market, mainly due to the strong demand for premium vehicles from China and the US. For premium OEMs, the resulting challenge is to conquer new, additional customer segments while simultaneously transmitting authentic brand values to existing customers. This viewpoint presents six key levers in order to lead the marketing and sales models to strategic and operational excellence.

Contact: Dr. Andreas Gissler

Energy & Utilities: Technology Application in Mid-Sized Oil and Gas Companies

Helping E&P Companies to Better Results by Improved Use of Technology

Mid-sized upstream oil and gas companies often make relatively low investments in technology development and lack the leverage over service and

equipment companies that is held by the larger E&P companies.

Contact: Matthias von Bechtolsheim

Utilities Online - a Case Study of Italy

How Utilities Compete on the Web to Capture and Retain Customers

The dynamics of online competition are affecting the gas and power retail markets. The number of different offers, their widespread accessibility

and increasing energy costs has caused a transformation in customers’ behavior that is already noticeable in other industries.

Contact: Matthias von Bechtolsheim

Engineering & Manufacturing: Energy Efficiency

Capture growth while managing the risk of over-engineering

There is a clear trend towards improved energy efficiency in industrial products and systems. The trend is driven more

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by market factors than by governmental intervention. Leading companies are setting energy efficiency targets and launch development programs to deliver more energy efficient products and systems.

Contact: Markus Achtert

Healthcare: Launch excellence for new medicines

Global challenges require new approach for market entry

After years of low productivity, R&D in leading pharmaceutical and biotech companies is starting to deliver on its promises and the number of New

Molecular Entities (NMEs) approved by the US FDA has leveled out. Once approval has been gained there needs to be a launch. However, complexity of global market access has substantially increased. In this viewpoint, Arthur D. Little assesses the key success factors for launch excellence in times of global market access challenge.

Contact: Sebastian Herzig, Dr. Thilo Kaltenbach

Operations Management: Hitting the Bulls-Eye: Value Sourcing

Transforming Procurement from Old School to New Age

The traditional procurement model does not help organizations achieve additional and sustainable financial targets. The CFO is asked to use the procurement

department as an internal value partner to address and discuss new ways of spending the budget; often called value sourcing.

Contact: Matthias Riveiro, Bernd Schreiber

Strategy & Organization: A Glint in the Eye of the Customer

Outstanding “Wow-Effects” Through an Innovative Customer Journey

Today, differentiation from competitors by just delivering a failure-free customer journey across all touch points is not enough anymore. Companies need to

take Customer Experience Management (CEx) to the next level and surprise customers with outstanding “wow-effects”.

Contact: Matthias Riveiro

Prism Issue 2, 2012 ‘The Innovation Village’

With this issue we have refreshed the look and feel of Prism, and included a wider variety of articles. You will now find shorter pieces in our “In Brief” section, as well as longer articles in our “In Depth” section. Still, we’ve dedicated this issue of Prism to the idea of “The

Innovation Village”: a world where innovation is more closely interconnected and global than ever before.

e-Company: Becoming the Amazon of your industryMichael Opitz

Companies like Amazon and Google are setting the standards for customer service in the digital age. The question for any company entering this field is how to make the transition and give customers

the kind of online experience they have come to expect from the digital customer service leaders. This article explores what companies can do to achieve seamless customer service.

Who moved my money?Abhishek Srivastava, Hariprasad Pichai, Thomas Kuruvilla

By 2015 experts predict that the volume of mobile payments will have reached $1 trillion. Global players of all sorts are getting ready to reap the benefits of this

huge potential market. But companies wanting to enter need to address some critical issues. This article outlines the main topics.

Innovation quick wins – a guide to some practical toolsRick Eagar and Phil Kyte

Effective innovation requires a comprehensive approach, starting with strategy and supported by strong processes, an efficient organization and resources, and an innovative culture. And

it can take a long time to achieve. But what can organizations do when they don’t have a lot of time to improve their innovation performance? This article offers a handy review of some of the tools and tactics companies can employ.

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Mobile NFC – what’s all the hype aboutNicolai Schättgen and Karim Taga

Mobile Near Field Communication (NFC) has been discussed intensively over the past 24 months. Various players have geared up to enter the different market segments. Billions of dollars are at stake,

but the winners are not yet in sight. In this article, incorporating the results of a recent ADL global survey comprising 70 interviews, the authors shed light on this often-discussed and highly controversial topic. The article focuses on the important issues for companies looking to leverage this key technology across a range of applications.

Innovation in regulated industriesFrancis How, Rick Eagar, Charles Boulton and Axel Kappeler

Innovation in regulated service industries with a legacy of state ownership, such as public transport, remains a major challenge in many countries. What are

the pre-requisites for innovation and what can policymakers and companies do individually to overcome the barriers? This article shows how a regulated service sector with interdependent players can collectively become more innovative.

Creating effective innovation ecosystems through IP management

Phil Webster and Richard Granger

Creating and commercializing new ideas using inputs from multiple partners has been used for many years as the foundation for an “innovation ecosystem”. However, collaborating businesses

often don’t realize the benefits they expect. This is often because of the way in which intellectual property is managed in collaborative research arrangements. So what can companies do? This article offers a practical guide.

Crowd innovation fosters new business opportunitiesHans-Peter Erl, Michaël Kolk, Andreas Deptolla, Fabian Sempf

As a practice, crowd innovation has been around for more than 200 years. But only in the digital age has it become the hot topic it is now. And it cannot be

implemented with a “one size fits all” approach, but needs significant planning. The article looks behind the hype and discusses how companies can implement this effective route to new business opportunities. www.adl.com/alumni

Arthur D. Little

As the world’s first consultancy, Arthur D. Little has been at the forefront of innovation for more than 125 years. We are acknowledged as a thought leader in linking strategy, technology and innovation. Our consultants consistently develop enduring next generation solutions to master our clients’ business complexity and to deliver sustainable results suited to the economic reality of each of our clients.

Arthur D. Little has offices in the most important business cities around the world. We are proud to serve many of the Fortune 500 companies globally, in addition to other leading firms and public sector organizations.

For further information, please visit www.adlittle.com

Copyright © Arthur D. Little 2013. All rights reserved.