Monthly Archives: September 2015

Big Four firms face ‘tsunami’ of threats from digital groups

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September 24, 2015
Harriet Agnew in Financial Times
Body metrics: Deloitte culls data from Harlequins’ practices©Getty

Body metrics: Deloitte culls data from Harlequins’ practices

When Harlequins rugby club was preparing for last season’s premier league, it turned to an unexpected partner in its search for a match-winning formula.

Deloitte, one of the big four professional services firms better known for its work with blue-chip companies, was hired by the English club to help make sense of the vast volumes of information it collects on its players.

The partnership illustrates how the accounting profession is trying to embrace the disruption from new technology that could otherwise eat into its own businesses.

Harlequins’ data sources include body sensors that track movements on the pitch and devices that monitor nutrition. Deloitte uses a bespoke data analytics tool to try to propel the team to a competitive advantage based on the statistics it collects.

Technology is reshaping the accounting, audit and consulting divisions that are the bread and butter of professional services firms. They are trying to fight back, launching partnerships with technology companies, picking dynamic start-ups to invest in and increasingly employing techniques that are the foundations on which innovative technology companies such as Google and Amazon are built.

Tudor Aw, partner and technology sector head at KPMG Europe, says “Companies such as Google and Amazon have three core assets: data storage, data analytics and cloud technology. They underpin the business model that we need to embrace for the future.”

Innovate or die is the stark message for the professional services firms. Last year PwC signed a joint venture with Google to combine Google’s innovation and technology platform with PwC’s industry experience and corporate insight.

Also last year, KPMG signed a joint venture with McLaren to use predictive analytics in its audit and consulting work.

Richard Oldfield, head of strategy at PwC UK, says: “There is no single technological threat to the professional services industry. It’s a tsunami of threats: data analytics, artificial intelligence and cyber security.”

Online accounting services offered by the traditional firms are ripe for disruption, as technology moves activities online and lowers barriers to entry. They are competing with established brands such as SAP, Salesforce and Oracle, as well as newer businesses such as Square, the payments company launched by Twitter founder Jack Dorsey, and Receipt Bank, which removes the need for manual data entry of bills and receipts.

Google and Amazon have three core assets: data storage, data analytics, and cloud technology

In response, last year KPMG spent £40m to develop cloud-based software that can allow businesses to go online and prepare their accounts, do their bookkeeping, administer their payrolls, and file VAT and corporate tax returns — for a monthly fee starting at £150.

As more and more data are stored in a digital format, this creates opportunities for data analytics. Nowhere more so than in audit, where a huge shift is taking place because entire data sets, such as company journals or expense claims, can be analysed.

Stephen Griggs, managing partner of audit and risk advisory at Deloitte UK, says: “We are not sampling data; we’re analysing the whole population of data. We’ll illuminate apparent anomalies and automate the more basic testing functions to enable our people to spend more time on the trickier areas.”

Market participants think it is possible for the big accountancy firms to work alongside the established technological names and disruptive start-ups, without being cut out altogether.

Fiona Czerniawska, managing director at Source Consulting, says that while it is likely that firms such as Google and Amazon will use techniques they have pioneered for analysing big data to offer new services in the marketplace, “it’s hard to see them penetrating the business-to-business sector, and professional services in particular because so much still depends on personal chemistry between client and professional”.

PwC’s Mr Oldfield says trust is very important, noting there is perhaps less of a trust premium attached to big technology groups. And data analytics can only take you so far in audit — there is also the judgment element.

SourceConsulting’s Ms Czerniawska believes that, while high-tech start-ups will begin to re-engineer parts of the audit process in the coming years, even these firms will struggle to replace the value a human being can add.

She says: “However sophisticated our algorithms, a part of the professional services market will always be human — the only question is: How much of it?”

 

AN EXOSKELETON THAT ACTS LIKE A WEARABLE CHAIR

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LIZ STINSON in WIRED
03.24.15

Innovationsforum 2015The Chairless Chair is an exoskeleton that allows workers to sit without straining their muscles.

 

STANDING IS GREAT for your health—Burn calories! Live longer! Tone those calves!—but only if you’re not forced to do it for hours on end. As with sitting on your bum, everything is best in moderation.

The thing is, if you work in a factory, you don’t get to choose when you sit and when you stand. You’re mostly standing. Employees in Audi’s manufacturing plants, for example, stand for nearly eight hours a day. And much of the time they’re stooped over in uncomfortable positions, fine-tuning some detail on an engine or console cluster.

It’s ergonomic nightmare, one Audi is trying to correct with a unique piece of technology: the Chairless Chair. Created by Swiss startup Noonee, it’s a hydraulic powered chair that lends lower-body support to people who have to stand all day long. You can think of it as a really bad-ass wearable or an especially lame exoskeleton.

The design is straightforward: A titanium frame hugs the back of the worker’s leg like a flexible brace, while a support belt is strapped around their torso. Workers can stand and walk like normal, but when they want to sit, pushing a button locks the frame into place at the desired angle. The weight the body is transfered through the frame to the floor or the heels. “You get the sensation of sitting on a barstool,” says Keith Gunura, a Noonee co-founder.
Why not simply sit on a chair? Companies like Audi have optimized factory floorplans designed to maximize efficiency, with little room, literally or figuratively, for chairs. The Chairless Chair effectively lets employees carry a seat with them at all times.

The approach posed some ergonomic challenges. Noonee designers say the biggest problem was ensuring workers can move freely. After a close study of how the leg moves when walking, they decided against creating a single rotation point at the knee in favor of a frame that moves more freely, accommodating many different gaits. (Noonee was vague on the details because it has a patent pending.)

Audi envisions the device being a task-specific tool that will help workers at the engine, door and center console assembly stations. The company says the chair will let employees take “micro breaks” of three to 10 seconds while working, easing muscle fatigue and increasing productivity.

The Chairless Chair doesn’t provide added strength like Lockheed Martin’s Fortis exoskeleton, but it is lighter, more comfortable and uses far less energy, so you might see them beyond factory walls. “I’ve had hunters say they’ll pay a pretty penny to use the device,”Gunura says. Fishermen, surgeons, farmers and retail workers also have expressed interest. “Basically anyone who’s standing for long periods of time.”