PwC Germany’s digital journey: a tale of two transformations

Practice what you preach. That’s the ethos at the heart of PwC Germany’s (PwC) approach to digital transformation in Germany. The Advisory division of PwC  has two focus streams: one is client services, the other is PwC’s in-house transformation. The idea is that one begets the other. So while the internal transformation is aimed at efficiency without interruption to ongoing business, the external transformation is expected to drum up new business and digitalise the core offering to advisory services.

PwC is the leading audit and consultancy firm in Germany, with a professional service network of more than 284,000 people providing services in insurance, tax, legal and advisory matters.

The Digital Advisory team works across a number of cross-industry portfolios, delivering solutions in a time of complex business management. Ralf Jaspert, who is leading the Digital Incubator for the Advisory team, sees the approach as two pillars. “One is the citizen-led approach, which aims to motivate younger colleagues to be part of the story,” he says. “The second is business-led, understanding what is needed by e.g. industries with different functions.”

Citizen-led

The ‘citizen-led’ approach is based around giving employees the time and space to learn, grow and invest in their own interests. The project, now running for over two years, has spurred digital ‘champions’ to create their own dashboards or bots and automate e.g. parts of SAP implementations.

“We have set up a new training approach called Your Tomorrow so our young colleagues can understand how to work with e.g. emerging technologies, analytics software and how to work more agile. We also identified a Digital Accelerator programme where they have extra time each week to understand, learn and build products, assets or automations and share them. And drive our digital agenda forward in their business teams, also from a mindset point of view.

Business-led

The flip side of that is the business-led model, which seeks to deliver new business models to clients through products, services and platforms developed as scalable technology solutions. For that, PwC has created a digital incubator to speed up the delivery of digital products, which Jaspert is leading.

“We understand how to run a product through governance processes, how to have the right people on board to build and maintain software, and now we are transformed in a new way so we can easily ramp up our own teams within PwC Germany, but also scale up with our partners,” says Jaspert.

Digital incubator

PwC’s digital incubator, as Jaspert explains, is part of an idea to bring some of Silicon Valley’s environment to the consultancy space. “The incubation comes from the huge number of ideas from the business teams. They are working at the heart of the client’s problem. They understand what else is possible or how we can do things differently. The digital incubator is there to make a connection between content which is related to the market need or the functional need and the technology we would like to add to solve this problem. And this is how a start-up does it too.”

Clients are invited to get involved as early as possible in the process to foster a sense of co-creation, workshopping ideas for days to flesh out the details of specific problems. It’s a means of support for the client, too, all leading to the ideal software solution for the particular needs of a business.

Culture of adoption

The deployment of these solutions is just the beginning. Once a technical software solution has been implemented, it must be used or the efficiencies will never materialise. For that, the culture of an organisation must change and employees must be inculcated into the digital journey that will secure their companies future in the digital age. PwC focuses “very heavily” on mindset change. Susanne Arnoldy, Head of Digital Strategy for the advisory business in Germany says that nobody should underestimate the importance of this piece of work.

“What’s best from our side is that we have established a network of change agents, our Digital Accelerators,across the firm to help the teams to adapt to technologies and find new creative solutions. We want to reach the way we want to do it and they are always part of that kind of transformation programme. This is an overall concept from the PwC network, not just in Germany, our Your Tomorrow programme.”

Partnerships are key

Partnerships are central to consultancies such as PwC. Without them the business ceases to exist as a conduit between business need and software engineering. An important relationship for PwC is UiPath, a software robotics company.

“For us,” says Jaspert, “a partner is someone who thinks of digitisation end to end, so we liked their approach. They added a combination of different core technologies in one platform, which perfectly matches the way we approach a client problem. They combined, for example, process mining, robotics and AI in a stable and robust technology, and they also work on expanding the experience and features they can offer to clients.”

Partnership matters

Isolating a single partner that ticks many of the boxes clients want is one thing, but the increasingly complex world of partnership ecosystems must be more difficult to navigate? 

Arnoldy sees it differently. “I don’t know if it’s more complicated so much as more diverse. More companies are looking for best of breed solutions and it depends on how the software is structured; if you’re using cloud-native solutions it’s easier to change from one solution to another. It’s also important to be scalable, flexible and independent. It is going to be a more diverse, best of breed ecosystem and that’s why it’s important that customers concentrate on cloud-native solutions that are more independent compared with past solutions.”

For some partnerships PwC has gone the extra mile, taking up a shareholding in the company. That’s true of Adamos, an independent platform for mechanical and plant engineering, or the Digital Business University of Applied Science in Berlin. The latter ties neatly into PwC’s citizen-led approach to learning and education in digital transformation.

“More and more we are not just focusing on classical software partnerships but working in ecosystems and we are aligning with our clients’ software providers,” says Arnoldy. “It’s really a partnership between customers, software providers and the consultancy firm.”

The future of consultancy

When it comes to the future, PwC’s strategic direction is essential. For Arnoldy, it’s all about the expectation of the client. “Our future is present,” she says. “Our goal is to deliver quality and trusted results to our clients, and the way we do it should follow the digitalisation road ahead.”

That brings us to the dual-pronged strategy at the heart of the company’s digital transformation. “The foundation is authentic, business-led transformation programmes, and that leads us in two directions. Firstly, we need to digitalise the core way we do our job in the best way possible with the technology available. We need to deliver and ensure the quality our clients expect from us – RPA, data analytics, AI, whatever’s out there. We need to embed these naturally in the way we approach projects.”

“On the other hand, we need to make sure we can deliver new business models to our clients – digital products, licensable products, which you can easily acquire by way of our digital store (https://store.pwc.de/en). They can see whether the digital product fits their market, or the problem they are facing. As these are industry related functions, we can offer more and more of them in the future given the operating model we’ve been working on in the past couple of months. We can see a number of tasks and processes, which look at the heart of the client’s work, and they are looking for support. These kind of demands need external trusted providers and PwC would like to be such a provider for e.g. managed services. So we are digitalising the core and creating also new business models for our clients.

“We find answers to even the most complex questions of our time, from strategy to implementation, to bring our clients into the digital age and help them to stay there. Or to find new portfolios, serving clients in different kinds of industries. That’s our focus as an advisory team.”

That’s the crux of PwC’s strategy: digital transformation from within and a truly consultative approach that breeds trust and finds solutions that are unique to client’s individual and sector needs. ‘Inward looking’ is not usually a term associated with business best practice, but when you are looking inwards with the intention of finding new skills and solutions that keep your clients ahead of the game and ready to face the future, that can only be a good thing.