PwC’s Industry Cloud strategy delivers on 3 major cloud trends

PwC’s ambitious Industry Cloud strategy aims directly at heart of current trends

After spending an afternoon at PwC’s Boston Seaport offices in late March, TBR came away with a clearer picture of how the firm is centralizing its capabilities into solutions to be utilized in client engagements. It is a strategy that has been developed cautiously and thoughtfully over time, mirroring the firm’s overall evolution of the last few years, which has been both methodical and ambitious. The new Industry Cloud strategy is firmly in line with the company’s DNA but is also aligned with the most current trends in the cloud market, namely services, collaboration with partners, and industry alliances and preconfigured ecosystems.

The importance of services in cloud adoption and utilization has only increased over the last two years. The migration of mission-critical workloads and skills shortages have stoked demand for third-party firms to help implement and manage cloud solutions. PwC is tightly integrating services with all the cloud assets being deployed for the firm’s customers, which is an evolution of the long-standing Integrated Solutions program, incorporating the best of PwC’s consulting business across all platforms.

PwC’s Alliance strategy is integral to the Industry Cloud strategy, and through these collaborations, PwC is selecting well accepted and widely adopted cloud technologies to include in the firm’s recommended cloud solution frameworks, then filling the gaps between those individual technologies. The key is not trying to recreate the wheel with technology that already exists but using alliances to bring the leading solutions together across multiple vendors. It ties into broader PwC strategies to use automation, scale and commonalities to reduce deployments times by as much as half in some cases.

A key tenet of PwC’s strategy is also to build common cloud services that bring industry and sector-specific practices and prebuilt configurations to accelerate adoption timelines and reduce custom work. For a variety of reasons, customers are looking for diversity in their IT and cloud vendor landscapes, and PwC’s open solution frameworks cater to that desire. Lastly, industry specificity is an emergent trend in cloud. PwC is addressing the industry specialization void in the market by bringing together industry-leading technologies, tying them together with an integration fabric, and filling any gaps with its own services and innovation based on PwC’s deep experience and investments. These solutions can then enable customer business transformation spanning the front, middle and back office.

Industry customization ties the solutions together, as it as it reduces the need for custom services and is done in tight collaboration with cloud vendors’ technology. In this special report we detail these trends and PwC’s cloud strategy. However, in short, we see PwC’s strategy as being well developed and aligned not only to its core DNA but also to some of the most current trends and developments occurring in the market.

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Industry cloud is moving from a nice-to-have to a must-have

Enterprise maturity around horizontal cloud capabilities has resulted in a growing appetite for solution customization built around highly nuanced, industry-centric needs. This rising need will be addressed by both cloud vendors and services firms like PwC. Vendors have traditionally leveraged partnerships to add vertical functionality and go-to-market support to their solution sets, but that strategy has become even more aggressive recently, with multiple acquisitions being announced.

Oracle’s (NYSE: ORCL) intended acquisition of Cerner, Microsoft’s (Nasdaq: MFST) purchase of Nuance, and Salesforce’s (NYSE: CRM) strong alliance with Veeva (NYSE: VEEV) are all examples of how vendors are investing to offer more industry functionality to customers. Cloud vendors are also supporting industry-based go-to-market ambitions by augmenting their approach with an increased reliance on ecosystem partners across the IT continuum.

While tech partnerships have accelerated industry-based solution design and development, evidenced by Microsoft’s partnerships with both Rockwell (NYSE: ROK) and Honeywell (Nasdaq: HON), engagement with IT services entities will be just as critical to facilitating adoption among customers with industry-fluent advisory, road-mapping and implementation support services.

Specifically, in venues like industrial manufacturing, client DNA is rooted in hardware legacy organizational models and waterfall innovation and many clients lack not only the knowledge to support software-driven business models but also an understanding around the outcomes emerging technology — be it cloud, IoT or AI — can bring to their operations. This knowledge gap plays to the strengths of the professional services side of the IT spectrum, where innovation centers pair educational resources with business cases to provide prospective clients with an understanding as to what their own digital transformation (DT) could look like.

Not only has vendor activity with industry cloud picked up, so too have financial results as end customers increase adoption of these solutions. As shown above, customers see industry cloud capabilities as value-add elements of their cloud technologies, notably with the ability to free up resources being the least cited benefit. The ability of industry cloud offerings to first meet regulatory requirements and then also match the unique business and IT workflows within certain industries are the most compelling benefits, according to TBR’s 2H21 Cloud Applications Customer Research.

TBR’s perspective on PwC’s alignment with industry cloud trends: ‘Micro alliance activation’

      • PwC is not “boiling the ocean” with its approach to Industry Cloud, instead focusing on heavily regulated industries as the firm looks for ways to not only meet regulatory requirements but also leverage investments to competitively differentiate itself with enhanced time to market and ongoing operational excellence, While many vendors on the technology side have taken an even more focused approach to industries, we believe PwC’s strategy is appropriate for the firm, given its partner-driven engagement focus and existing presence within the industries.
      • PwC’s approach aligns to the third most selected benefit of industry cloud: “We are in the early phase of cloud adoption and are pursuing industry cloud services as a preliminary step in the process.” Many companies are still in an early stage of their cloud adoption. Regulations are more stringent in these industries, creating real and perceived barriers to adoption. In many ways, industry cloud is the ramp these customers need to get started using cloud in more significant ways as part of their IT strategy.

Cloud partnerships are moving from important to critical

The shift to partner-led growth is not a new trend but is being further legitimized in 2022. Growth from indirect, partner-led revenue streams have been outpacing direct go-to-market efforts for several years, but indirect revenue is reaching a new level of scale and significance in the market.

TBR estimates indirect cloud revenue is approaching 25% of the total cloud market opportunity, which is a significant milestone. For reference, in traditional IT and software, indirect revenue represents somewhere between 30% and 40% of revenue streams. We expect the indirect portion of the cloud segment to surpass that level within five years, approaching half of the market opportunity within the next decade. For all cloud vendors, the combination of short-term growth and long-term scale makes partnerships an increasingly critical element of their business strategy.

Partner ecosystems have been a core part of the IT business model for decades, but the developments around cloud will be different for various reasons, primarily because the labor-based, logistical tasks of traditional IT are largely unnecessary in the cloud model.

For cloud vendors and their partners to succeed in growing the cloud market, they both need to be focused on enabling business value for the end customer. Traditional custom development becomes cloud solution integration. Outsourcing and hosting are less valuable, while managed services are far more variable for cloud solutions. To capture this growing and sizeable opportunity in 2022, we expect companies will adapt their partner business models and vendor program structures to align with vibrant cloud ecosystems.

TBR’s perspective on PwC’s partner strategy

      • PwC is being proactive in how it leverages alliances, recognizing that winners in industry cloud rely on alliances and that the industry data model is only as good as the ISV solutions that run on top. Within PwC, these relationships are supported by joint business relationships and alliance groups with front-office, middle-office and back-office players, as well as the cloud service providers (CSPs) that go to market with PwC as part of the Journeys model. PwC is being selective about the vendors and technologies it recommends, focusing on leading providers like Amazon Web Services (AWS) (Nasdaq: AMZN) and Microsoft to both offer the most widely used solutions and simplify its alliances.
      • By combining the IaaS and SaaS capabilities of alliances with its own products and accelerators, PwC enables integration points in a platform-like approach. While not a PaaS offering in itself, PwC’s Common Cloud Services Platform, which targets custom Journeys for a specific industry in an end-to-end fashion, should create a high degree of stickiness.
      • PwC is emulating some best practices of its alliances, including the leading cloud service providers (CSPs) and ERP vendors. Further, some of ServiceNow’s success stems from selective innovation and deciding early on where it wishes to develop versus leveraging partners. PwC takes a similar approach, focusing custom development investments on whitespace markets while layering the capabilities of its partners on top of new solutions.
      • One of the most notable obstacles facing PwC is a degree of competitive overlap between PwC and cloud vendors it has collaborated with that are similarly working with industry consortiums to stitch together end-to-end systems. Where PwC stands to benefit in this regard is through its roots as a services firm; unlike some of the product-first competitors overlapping with the Industry Cloud strategy, PwC is going to market first with tech-enabled services that can then get clients exposed to products.

Traditional designations are morphing as value moves to IP development and managed services

In the traditional IT partner model, the business models of partners — such as reseller, systems integrator and ISV — were used to segment partner programs. Cloud has disrupted the traditional model, with born-in-the-cloud partners competing in various activities to optimize their revenue streams and traditional partners expanding their business models to sustain their financials.

As a result, resellers can develop their own solutions and IP, while systems integrators sell and resell their own software solutions and ISVs offer their own managed services. It is common for partners to have multiple business models, making the traditional designations too restrictive.

The other area of strong demand from customers, driving enhanced focus from cloud vendors, is in managed services. Increased cloud adoption has led to higher cloud complexity for many customers, leading to more challenging tasks to provide ongoing administration, integration and operations of the environment. This increasing complexity coincides with a historic shortage of personnel with cloud expertise, driving demand for managed service offerings from third-party providers to fill the gap. As a result, we expect managed services to be the fastest-growing segment of the cloud professional services market, reaching $75 billion by 2026.

Cloud vendors like AWS, Google (Nasdaq: GOOGL) and Microsoft have a vested interest in nurturing their managed service ecosystems to facilitate new investments from their cloud customers. Considering these trends and the likely erosion of legacy services lines by software and managed services, it is critical for consulting-led firms to diversify with serviceable assets that go beyond the underlying modules. While some of its Big Four competitors are similarly recognizing this trend, PwC appears to have caught on to the fact that software and services require vastly different sales models and dedicated teams for successful execution.

With Industry Cloud, PwC serves as consultant, ISV and managed service provider

Using the term Journeys is an apt description of how PwC intends to engage with customers around these solutions. It is not just a cloud technology implementation; there is upfront design and consulting, implementation of both off-the-shelf cloud technology and custom PwC IP to align solutions to industry, and finally provision of managed services to simplify ongoing operations. That is a lot of activity, but it reflects what customers need and want from these types of implementations. It is taking PwC beyond traditional services and value propositions with clients, but it aligns with where customers and the market are heading.

While the framework for Industry Cloud is compelling, it will no doubt be a challenge to execute on the vision. Expanding beyond traditional consulting business roles and activities and maintaining cohesiveness can be challenging, but as we have seen in recent years, PwC has been quite adept at reinventing itself, so we expect the firm to overcome these challenges. Alliance management, cloud service development, packaging and pricing are all competencies being developed within PwC to execute on more Industry Cloud opportunities.

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SAP use case reveals big things for PwC

Started with a simple SAP use case

In early 2022 PwC shared a few use cases on its website. One in particular, A mid-cycle SAP upgrade creates efficiency and unlocks strategy for a tech company, drew TBR’s attention, particularly its assertion that “PwC and SAP co-developed a process to allow clients to migrate to SAP’s Group Reporting module at any point in the year.”


While that may sound relatively vanilla and nondescript to some, the possibilities around co-development of software, ownership of the IP, and whether this new process was something PwC could package up with SAP and sell to more of their shared clients piqued TBR’s interest. TBR’s questions led to a discussion in April with PwC’s Chip Sherrill, a partner in the firm’s Consulting practice who worked on the specific engagement. The following reflects both the discussion with Sherrill and TBR’s ongoing analysis of PwC, SAP, and the broader consulting and digital transformation space.

Examining every ecosystem angle

Like any ecosystem play, it’s best to look at the use case through at least three lenses (with a bonus fourth based on TBR’s view of the world): PwC and the client; PwC, the client and SAP; PwC and SAP; and solely PwC.


A few things about PwC’s relationship with the client proved critical to understanding how and why this engagement succeeded. First, PwC had been working with the client on other issues, and the client understood the firm’s expertise around finance transformation, tax and governance. Second, and possibly due to that established relationship, PwC understood the client wanted a reporting solution integrated on top of its existing IT and ERP infrastructure, rather than a stand-alone piece of software or bespoke platform. Third, PwC was able to make the business case that it could help solve the client’s problem without breaking budgets or creating future problems.


Adding SAP into the mix, Chip noted that the client had a different vendor on-site assisting with the client’s migration to SAP S/4 HANA, which surprised TBR given the following details from the published use case: “a delay meant five more months of waiting, expenses, scheduling issues with key personnel and a potential loss of executive sponsorship. And, as both PwC and the tech company understood that SAP’s Group Reporting module would eventually become part of a larger move to the entire SAP S/4HANA suite, PwC helped the company look beyond its immediate needs to discover how the current project dovetailed with its long-term digital transformation goals.”


Critically, in TBR’s view, PwC was able to show the client and SAP that in solving the specific problem with an accelerated solution, PwC would be advancing the client’s move to S/4 HANA even though PwC was not responsible for that migration. How? On the specific issues of data integrity and risks, the client considered SAP’s default answers inadequate. Additionally, the client needed fewer months of parallel processing. As a result — and this goes back to knowing the client and being able to map out the business value — PwC proposed an alternative time frame to what SAP suggested and SAP’s standard practice. The client got a “40% reduction in expected implementation time” and a “75% decrease in time required for tax consolidation, compared to before the migration,” according to PwC.


Work with this client gave PwC a proven method for accelerating one aspect of SAP’s vast ERP universe, leading TBR to ask: Who owns the intellectual property, and will PwC go to market with SAP and this new solution?


Fully aware of PwC’s recent evolution of PwC Products & Technology and the firm’s willingness to sell software “as a Service,” TBR anticipated IP ownership would stay fully with PwC. As for co-marketing with SAP, PwC would be bringing the solution to SAP clients, with the potential to expand beyond existing PwC clients in the near term.

Technology as the firm’s fertilizer

At TBR, we’re always starting with the vendor itself, understanding how an individual firm’s or company’s strategies and performance reflect its place in the market and the challenges, opportunities and trends it can expect in the near term.


With this use case and with TBR’s long-running analysis of PwC, three points stood out. First, PwC securing SAP work with a client despite not being the lead vendor on the client’s migration to S/4 HANA underscores the firm’s sustained success in relationship building and expanding its footprint with key accounts. Second, PwC’s The New Equation strategy provided the framework to bring in tax expertise on consulting and technology engagement, allowing the firm to “bring all [of PwC’s] messages together … doing a better job now across the firm explaining what [PwC does] well.” And, third, PwC has better technology capabilities than many of its competitors realize, which will become even better known as this solution scales across the large market for this capability.


TBR does not expect PwC will become a software giant or a competitive threat to SAP and others, but the firm’s persistence in underpinning consulting, tax and even audit engagements with proprietary, tested and well-managed technology will help it grow ahead of peers in the next few years.

Evolving at a perfect pace: PwC EMEA Products

In mid-February, TBR met with leaders from PwC’s core Products team for EMEA, including David Padwick, PwC EMEA Consulting chief operating officer; Ralf Jaspert, PwC Germany, Advisory Digital Products leader; and Nele Van Buggenhout, PwC UK Perform Plus Leader, to discuss TBR’s observations, based on multiple interviews with current and former PwC professionals as well as with PwC clients, that PwC Products has not been adopted as enthusiastically across Europe as it has been in the U.S. Not surprisingly, the PwC leaders told a more complete and nuanced story about Products in EMEA, the emerging role of software and managed services sales, and expectations for near-term growth, describing in detail to TBR how the firm expects the next few waves of PwC Products to play out.

Creativity, if not scale, and client-driven technology in EMEA

Drawing contrasts between PwC US and PwC EMEA, Padwick noted that while PwC EMEA adheres to the firm’s global advisory strategy, at least two differences stand out. First, the PwC brand in the U.S., according to Padwick, is more technology-centric than the PwC brand in Europe, which influences how PwC EMEA consultants tailor their go-to-market messages in the region. Given the technology-centric nature of engagements in the region, combined with a higher volume of services, PwC EMEA’s sales structure has not been able to pivot to support business development through products and solutions. Second, PwC EMEA has focused on developing software assets to expedite the delivery of consulting solutions to clients and has not been designing them specifically to be sold, independent of traditional consulting engagements.

Padwick stressed that PwC EMEA contains “plenty of creativity, even without the scale” of the U.S. and that the various EMEA member firms and professionals have developed a “long list of [software assets] with applicability … and [PwC EMEA is] getting better at prioritizing.” While this initial characterization painted a picture of PwC EMEA trailing the U.S. to a significant degree, Padwick and his colleagues explained that the longer incubation periods and slower sales cycles do not preclude PwC EMEA from having a strong position with Products.

Perform Plus platform evolves to meet client needs

The PwC EMEA team walked TBR through a couple of specific offerings developed organically within the firm’s Europe practices. As far back as 2016, PwC had been working with financial institutions on stress-testing their risk and asset management systems, an effort Jaspert said had been codeveloped with clients, lending the resultant solution greater applicability and credibility in the market. This stress-testing solution as a product was a start and  is now one of 47 consulting-centric products that PwC EMEA clients license directly from the firm.

Another solution, as described by Van Buggenhout, started with a 12-week coaching program encompassing a wide array of enterprise activities, such as sales and product development. Urged on by clients, PwC EMEA built a digital solution, Perform Plus, to capture daily performance information and ideas and employee well-being, enhancing clients’ internal teamwork. The COVID-19 pandemic accelerated PwC’s efforts behind the Perform Plus platform, which the firm has now deployed with 25 clients across EMEA, as well as the U.S. and Canada. Perform Plus is built on Google Cloud with a standard API that allows integration with other technology enabling it to handle a variety of platforms, including a recent large-scale deployment integrating a client’s daily Salesforce (NYSE: CRM) data.

For TBR, PwC EMEA’s decision to codevelop solutions with clients and let the consulting engagements drive the technology solutions (not the other way around) reflects the global firm’s lessons learned from the last 10 years as emerging technologies have permeated nearly every consulting engagement and clients have come to expect a technology-enabled solution to their business problems. In previous discussions with PwC professionals in Europe, TBR repeatedly heard comments indicating that clients do not perceive PwC to be a software company, but the European clients that have recently purchased PwC Products have become excellent use cases and reliable references for other European clients. The firm’s brand perception may be slow to change, but the quiet reality is that PwC is steadily increasing revenues tied to Products.

Risk management: PwC’s newest Next platform

In mid-February, TBR met with senior leaders from PwC’s U.S. Cybersecurity, Risk & Regulatory practice, including Vikas Agarwal, the firm’s Financial Crimes Unit leader, and Arlene Laungayan, a director in the firm’s Cyber Risk & Regulatory practice. The PwC team brought TBR up to speed on developments across the firm’s range of offerings, focusing on the Risk Management Portfolio. PwC’s risk management strategy is driven by the firm’s Cyber, Risk & Regulatory leader Sean Joyce and his managing partner John Sabatini under consulting and firm leadership. The following reflects both the mid-February briefing and TBR’s ongoing analysis of PwC within the larger management consulting space.

Risk evolves along with The New Equation

After setting the stage with an update on organizational changes and a description of some recent client engagements, including timely advice provided to clients on the secondary and tertiary effects of economic sanctions imposed against Russia over the invasion of Ukraine, Agarwal commented that while PwC has collaborated closely with the largest technology vendors, the professional services firm does not aim to “be a tech company.” PwC instead aspires to be “the best knowledge company, well equipped to merge knowledge with technology.”

In the context of risk and regulations, PwC is capable of helping clients understand key issues and challenges, develop meaningful content, and deliver services through a solution. Not surprisingly, Agarwal led the discussion with PwC’s The New Equation, and his description of PwC’s value and how it is delivered dovetailed well with both The New Equation and TBR’s evolving view of PwC as a firm. Risk and compliance may be one of the oldest service lines offered by PwC and its Big Four peers, so successfully pulling technology through to the heart of risk offerings requires balancing speed, efficiency and evolving client expectations for the tried-and-true characteristics of risk and compliance (consider that one of The New Equation’s founding principles, according to PwC, is that “when our better selves and the greatest aspects of technology are brought together, there is no opportunity too great for us to achieve.”).

While internal change continues to drive PwC’s evolution, Agarwal and his colleagues did note the importance of changing client demands, particularly as the total number of chief compliance officers has increased in recent years, particularly within the Fortune 500. CEOs and CFOs, in Agarwal’s telling, have become “sick of chasing the issues” and have looked to chief compliance offices to “solve risks in silos, but [to] tell the story at the top [and to] understand and communicate” to the full enterprise the criticality of risk and compliance to the overall business.

Dealing with multiple people within an organization around risk issues could be a winning strategy in two ways. First, the more people and personas PwC interacts with, the more the firm’s value becomes clear to its clients. Conversely, consulting on risk only with a chief compliance officer and a limited risk team potentially places restrictions on PwC’s overall relationship with the client. Second, maturity, with respect to risk, will vary across an organization, providing an opening for PwC to serve clients with appropriate solutions for their needs. Of course, being able to serve multiple stakeholders within a client and at various maturity levels requires a robust set of risk and compliance offerings.

Junction accelerates Deals’ clients’ time to value and PwC’s shift to platforms

PwC looks at the market and listens to customers to envision what comes next

TBR met with PwC’s Colin McIntyre in May to discuss PwC’s Deals practice, prompted in part by the changing market landscape as pandemic fears and headwinds in the U.S. and Europe appeared to be abating, accelerating interest in merger, acquisition and divestiture activities. McIntyre started the discussion by noting the firm views the emerging post-pandemic market as a key time to accelerate the digital transformation of its Deals practice in concert with changes happening across PwC’s enterprise clients. He noted that new drivers and trends in M&A include the nature of capital, geopolitical and regulatory changes, changing demographics, technology innovations and transformations, and shifting industry opportunities. In this volatile market, PwC sees opportunities to create value around strategic repositioning, performance improvement and asset optimization.

Beyond that fairly straightforward assessment, PwC formed its emerging views around the deals landscape through both in-depth “voice of the customer” research and the firm’s ongoing — and increasing frequency of — Deals engagements. Further, PwC has recognized that clients’ expectations around data sets have shifted from data as an underlying component to wanting insights and data-backed decision making much earlier in the deal’s process. Not data for data’s sake but, in McIntyre’s phrasing, “Take insight and data and be part of the journey … what does that data mean to the client.”

If post-pandemic realities have reordered what is important to customers in looking for acquisitions, PwC’s digitization of its Deals support process is certainly fortuitous. In TBR’s view, PwC’s re-evaluation of the post-pandemic deals market, with an emphasis on data and analysis and a recognition that uncertainty persists, reinforces the firm’s core offerings to help clients stabilize, reposition, acquire and reinvest. Not surprisingly, given the shifts within PwC that TBR has discussed in special reports over the past few years, those core offerings have been bolstered through a digital platform.

Harvesting data for deals, getting to value quickly and delivering differently

PwC describes the relatively new Junction platform as “the digital connectivity point for Deals, providing an enriched, web-based platform for our clients to engage with the team’s insights and analysis. For our people, it creates a digital link between execution and delivery, automating manual processes and streamlining how we ‘report.’” In McIntyre’s more colorful words, Junction is a cloud-based “harvesting machine” for helping clients generate insights and allows PwC to link and talk with clients about their key investment thesis, rather than just keeping the various commercial, compliance and risk pieces in separate silos. The ability to pull together data and insights across an organization’s entire market landscape allows for more collaborative and connected engagements.

As McIntyre explained, “Tax structures, supply chain, risk with controls and all these different pieces of the firm [can be brought] together in a way to work seamlessly. Starts the focus on client’s deal hypothesis, the value drivers, and brings the insights and analysis to support the client’s hypothesis.” He added that Junction allows “clients to comment on the insights and scenario plan and be more collaborative and interactive throughout the deal lifecycle.” In addition, for clients unprepared for a cloud-based and deeply digital experience, PwC tackles change management and training, including “giving the clients the coverage to think differently.” Junction, then, helps PwC focus on value levers and value creation. As McIntyre added, “Value is the currency people understand, as it either goes up or it goes down.”

‘Get it right, be convincing and do it fast’: PwC’s Risk Proof upends risk assessments

As the New Equation was announced, PwC’s Cyber, Risk & Regulatory practice was ready

When PwC US Chairman Tim Ryan described trust within the firm’s recently unveiled “The New Equation,” he discussed a variety of business issues, including data, compliance, and environmental commitments, that increasingly challenge PwC’s clients and that “all come back to trust.” The firm, in Ryan’s explanation, can help clients build trust not only within their own organization but also as a client’s core characteristic. Ryan’s description of the importance PwC places on trust, highlighted as part of the firm’s US Analyst Day earlier this month, loudly echoed what TBR heard from the firm’s Financial Crimes team earlier this year during a briefing on the firm’s Risk Proof product offering.

Jeff Lavine, PwC’s Global Financial Crimes leader, told TBR in May that PwC’s Cyber, Risk & Regulatory practice helps clients quantify and measure risk; tell their boards, investors and regulators a convincing and compelling story; and move clients from checking the risk box to administering meaningful control over their enterprise’s risks. That extension of trust — from PwC, fully through the client and into the client’s ecosystem — perfectly syncs with the firm’s New Equation and suggests sustained alignment throughout the various parts of PwC, including the new Trust and Consulting organizations, will be critical to making the New Equation the kind of generational change Ryan anticipates.

Lavine and Vikas Agarwal, PwC’s Risk Products and Financial Crimes Unit leader, detailed for TBR the overall Cyber, Risk & Regulatory practice, including several distinct service lines, from strategy, to data analytics, implementation, and managed services. The Strategy service line takes a compliance and licensing perspective into advising clients on opportunities, particularly around financial technology (fintech). Risk and Controls, staffed by former regulators and experienced risk professionals, provides advice, testing and validation for clients’ risk practices. Operations, the largest of the service lines, provides anti-money-laundering and Know Your Customer (KYC) solutions, primarily based on open-source technology, which, according to PwC, helps the firm more rapidly deliver results. According to Lavine, “We go faster because we’re not a platform.” And Technology and Analytics focuses on implementing risk solutions.

With these well-established service lines providing a foundation, PwC — as part of the firmwide recognition of PwC Products — examined the opportunities for developing a robust, scalable and flexible product to bring the firm’s expertise to a wider market. PwC considered feedback from clients across the full spectrum of the firm’s engagements around risk, examined where white space existed in the current market, and analyzed which current risk trends and needs would continue beyond the next few years, ensuring PwC could build — and properly price — a sustainable and profitable product.

From consulting engagements to subscriptions: A better way to assess risk

Risk Proof, PwC’s platform approach to risk assessment, helps clients perform three basic but essential actions: quantify and measure risk; tell a more robust story to boards, investors, employees and clients; and transition from taking an administrative and reactive risk posture to exercising meaningful risk controls. With features common now in many PwC Products, such as customizable dashboards and interactive reporting, the Risk Proof platform also builds on the firm’s trusted brand around data, financial reporting, compliance and, increasingly, technology.

From a functional perspective, Risk Proof appears to be straightforward; from a strategic perspective, Risk Proof addresses what Agarwal described as critical for enterprises in increasingly interconnected and data-intensive ecosystems, stating that “getting a good risk assessment is foundational to a good financial crimes practice, for example.” While Agarwal may have been reflecting views primarily held by financial institutions required to meet financial crimes regulations, the overall sentiment that good risk assessment is foundational to good business practices stretches across every enterprise and all industry segments. And for companies seeking help around risk, PwC’s Risk Proof solution, in Lavine’s words, allows them to “get it right, be convincing and do it fast.”

Risk Proof also helps PwC. Currently, the firm conducts 15 to 20 risk assessments per year, using a methodology that, while thorough and expansive, requires considerable manual processes and runs up against data and audit trail limitations. In place of these risk assessments, clients can now subscribe to Risk Proof and access all the assessment, reporting and decision-making tools at a fraction of the traditional risk assessment engagement costs. While that opens up a wider market for PwC — those enterprises less likely or unable to pay Big Four rates for risk services — Risk Proof also cannibalizes PwC’s risk revenues.

For Lavine, even with that cannibalization, the firm benefits in the long run in three ways. First, PwC is acting upon itself, rather than being disrupted, which gives the firm some control over the pace and damage of any cannibalization. Second, the Risk Proof dashboard helps PwC better understand its clients, allowing the firm to make better-informed recommendations for other consulting or technology-driven work, ultimately boosting the total relationship value. And, third — rather neatly echoing Ryan’s point about trust and the New Equation — reducing a client’s spend on risk while increasing the client’s capabilities to assess, report and manage risk further enhances the trusted relationship between the client and PwC and between the client and its customers.

PwC accelerates SaaS strategy as latest round of solutions aim to solve marketers’ business challenges

In a series of conversations with PwC leaders during the past quarter, TBR learned more about the company’s growing products portfolio, including PwC Customer Link and PwC Media Intelligence, in addition to receiving an update on PwC’s CMO advisory practice. TBR spoke with Brian Morris, Customer Analytics and Marketing lead overseeing PwC Customer Link, and Derek Baker, CMO Advisory lead overseeing PwC Media Intelligence. While each capability serves a specific client need, a common approach and business models suggest PwC is accelerating its portfolio transformation without losing sight of the need to deliver outcomes.

Productizing knowledge while relying on trust expands PwC’s addressable market opportunities with the marketing department and beyond

As PwC continues to evolve its business model, the firm’s push into selling products not only expands PwC’s addressable market opportunities but also elevates its brand, compelling software incumbents to pay closer attention. Both the PwC Customer Link and PwC Media Intelligence solutions are part of the PwC Products catalog and support the firm’s goal of driving SaaS and managed services sales. While both products enable marketing departments’ transformation discussions, each also bolsters PwC’s value proposition with noncore buyers, including chief digital officers and chief data officers, as well as internal audit departments in the case of PwC Media Intelligence.

Relying heavily on its PwC CMO Advisory practice, as well as other areas of the firm, such as its network of Experience Centers, as the medium to introduce these offerings helps PwC drive conversations for cross-selling and upselling services. Solving complex issues around managing customer data is an ever-challenging task for clients. Productizing knowledge through the development of pointed solutions helps PwC address client pain points and close business technology gaps. As PwC continues to build client use cases by selling, deploying and managing these solutions, we expect the firm to continue to approach clients through its fundamental lens: helping marketers solve business challenges.  

Solution overview

PwC Customer Link differentiates on its ability to not only connect offline and online data but also to integrate third-party data and provide analytics around it, as the solution uses various data depositories. Key features include Data Manager that handles first-party and all digital data; Insights Manager that allows PwC to perform better analytics segmentation down to the audience level; and Orchestration Manager that supports buyers’ omnichannel campaigns. Additional features include PwC’s ability to work through a technology-agnostic lens and offer supplemental capabilities with cloud data providers such as Salesforce and Adobe.

PwC unleashed: A professional services firm adopts Netflix-like business models

From Products to Digital on Demand and ProEdge

We reported this time last year that PwC Products completely shifted from being an old-school, white-shoe, tax- and audit-focused professional services firm from the previous age of the Big Eight to being a business solutions provider, with those “solutions” including SaaS, managed services and platforms. Now the firm has taken another large leap forward, adopting elements of business models most notably deployed by Netflix to bring its software and solutions into clients’ environments in a completely new way, while simultaneously reorienting the firm’s professionals around the skills and capabilities needed to serve their clients in a new world. We understand that assessment sounds over the top in a market already swamped by exaggerated claims around digital transformation.  

Sustained investment and committed leadership — it is that simple

PwC launched PwC Products in early 2020, as covered in our special report, in which we noted: “PwC is a business solution provider, and some of those solutions include products — tangible, defined assets that allow the firm to be, as the PwC leaders noted, ‘better, faster, and cheaper for clients.’ Some of those assets will remain within the firm, scalable but deployed only to increase speed or efficiency in certain engagements. Some assets will remain with the client, paid for in full, through licensing or by subscription. For all of the solutions, PwC’s approach will start with a business problem in mind, rather than employing a systems integrator mindset of plugging technology into a business.”

Building on PwC Products, perhaps on a timeline accelerated by the remote-working realities of the pandemic, PwC rolled out Digital on Demand and ProEdge in late 2020, bringing to clients two distinct offerings made possible by years of sustained investment in digital capabilities, including software and the firm’s own IP, as well as a leadership commitment to adjusting the firm’s business model to fully accommodate subscription-based pricing and software-centric engagement models. In TBR’s view, the first element — investing in technology — does not differentiate PwC from peers, except perhaps in the firm’s early start in some areas and sustained commitment to an organizing framework. The second element — leadership and adjusting the business model — marks a critical difference for PwC. Even though peers have made some similar changes, PwC has aggressively gone all-in and adopted multiple changes to its business models.

Digital on Demand: All the apps you want for one low monthly price (Netflix model 1)

In essence, Digital on Demand is PwC’s version of Apple’s (Nasdaq: AAPL) App Store, but with a client experience more akin to Netflix (Nasdaq: NFLX), where every option is available immediately without separate pricing or technical concerns. Similar to how everyone can watch their Netflix shows on their own device, PwC’s Digital on Demand solutions can be downloaded into the client environment, where they can be configured.

Led by PwC Labs Partner Michelle Wilkes, from the firm’s Consulting practice, and US Automation Leader Jeff Lower, from Tax, Digital on Demand belongs within the larger PwC Labs practice and carries through a relatively basic premise: Take the automation PwC incorporated internally, curate the solutions and refine the automations, and then make them available for PwC’s clients to deploy into their own environments. According to Wilkes, PwC built the foundational 6,500 automations across its own back office and for client engagement and saved 8.6 million hours of staff time across the firm.

Starting with finance functions, where PwC has legacy strengths and strong brand permission, the firm has partnered with Microsoft (Nasdaq: MSFT), UiPath, Alteryx (NYSE: AYX) and others to provide clients a menu of downloadable automations (access to cloud-based AI models via information extraction using natural language processing and machine learning), deemed by PwC’s Wilkes as “proven and relevant” because the automations had been designed by people who are deeply familiar with the finance functions and have experience in the finance environment. In short, Digital on Demand is readily deployable software built by finance process people for finance process people. Wilkes said the firm has 393 downloadable automations today, with plans to reach 500 by May 1.

On Feb. 18 and 19, 2021, TBR spoke with several PwC leaders: Michelle Wilkes, partner, PwC Labs; Jeff Lower, US Automation leader; Suneet Dua, chief product officer, PwC US; Darren Lee, partner, PwC Consulting; Mike Mendola, senior associate, PwC Labs; and Maria D’Alessandro, strategy director, PwC Products. This special report includes information and analysis drawn from these discussions and looks at how much the firm has changed and where the future of consulting lies for PwC and its peers. 

PwC’s design of a Central Lending Platform concept for Singapore: Acceleration and digitization for struggling SMEs

A pandemic-induced national problem with a PwC-designed solution

In response to the COVID-19 pandemic and subsequent economic fallout, Singapore’s government sought to bolster the SME market, which employs 70% of the city-state’s workforce and generates 50% of its gross domestic product (GDP), in part through a risk-sharing program for loans to eligible SMEs. Early efforts attracted only 2% of the SMEs to apply for loans, which PwC attributed in part to lengthy loan application and approval processes exacerbated by the COVID-19 lockdown. The gap due to surge in demand and reduced supply provided an opportunity for PwC to design a Central Lending Platform to simplify the loan process, quickly connect SMEs to multiple banks in one single platform, facilitate faster access to capital, and provide Singapore’s government with analytics and data surrounding the SME sector and associated market share, including delivering insight into industry competitiveness to guide quicker and more meaningful policy decisions.

A platform to benefit Singapore’s banks and SMEs

PwC’s design of a Central Lending Platform provides a number of essential benefits for SMEs, Singapore banks and Singapore’s government, including the minimization of human efforts and errors in loan applications and processing; always-on, always available services; and the collection and assembly of previously uncollected data in a single, digital place.

According to PwC, banks prepared to loan to SMEs will rely on the platform for an “immediate eligibility assessment” of whether an SME meets the criteria developed by Singapore’s government. The digital platform will eliminate the need for banks’ loan relationship managers to check the completeness of documents, a process that PwC noted contributed to a 6- to 10-week waiting time from application submission to access to capital. Within three days of an SME’s application, banks will submit loan terms and conditions, although banks can submit loan terms and conditions ahead of the three-day window, and the applying SME can compare and evaluate. In addition, the platform should help banks more efficiently penetrate the SME market as well as accelerate the digitalization of Singapore’s banking sector.

In late August, PwC announced an initiative that can complement the Singapore government’s efforts to facilitate bank loans to small and midsize enterprises (SMEs). Given the confluence of technology, consulting and PwC’s continually evolving business model, TBR requested a discussion with the firm’s leaders working on this initiative. On Sept. 2, TBR spoke with Irene Liu, PwC’s Government and Public Services Co-Lead; Charles Loh, PwC Singapore Consulting Leader; Shierly Mondianti, PwC Southeast Asia Risk & Regulatory Consulting Manager; Andy Goldin, Southeast Asia Head of Advanced Analytics; and Lincoln Yin, CEO of Singapore-based financial technology (fintech) company RootAnt. This special report reflects the discussion and TBR’s ongoing analysis of PwC and its management consulting peers.

PwC’s Saratoga, diversity and inclusion challenges amid the shifting landscape of HR management

Beer carts do not lead to promotions  

Prior to the pandemic, companies across all industries marketed their diversity and inclusion scores, rankings and awards, demonstrating to clients, investors and potential recruits their efforts in this area and good corporate citizenship. Combine fewer marketing opportunities with increased scrutiny of what exactly well-run diversity and inclusion programs look like, and the human resources space has become ripe for the same kinds of disruption and digital transformation running through every aspect of large enterprises. In this environment, PwC noted three critical aspects of the current HR landscape.

First, data-focused companies adopt enterprise-changing diversity and inclusion initiatives more rapidly and successfully than companies that continue to focus on softer, less quantifiable actions, such as Friday afternoon beer carts and magazine awards for diversity.

Second, the challenges, risks and opportunities around diversity and inclusion have now reached the senior-most levels at most companies, with issues elevated even beyond the chief human resources officer (as noted in this story, which aired Aug. 17, 2020, on the WBUR radio station in Boston), in addition to being passed to line-of-business leaders and finance and risk officers, all of whom recognize that diversity and inclusion impacts all aspects of the enterprise, including the bottom line.

Third, promotion rates, turnover, performance and hiring remain the biggest and most significant gap for enterprises attempting to assess their performance around diversity and inclusion. Jeffords spoke at length on the challenges of moving minds to accept that awards and external recognition meaningfully address challenges uncovered by examining promotion rates. Most leaders, according to PwC, do not know the data on their own promotion rates nor the benchmarks for top-performing peers. For PwC, the time is ripe for tackling all three of these critical aspects.   

An established tool, Saratoga complements HR consulting

As a well-established product, the Saratoga performs a foundational, yet essential, service for PwC’s clients. Starting with data ingestion and leading to industry comparisons and trends, PwC helps clients understand which internal human resource management levers they can pull to make changes across their organizations. PwC provides fundamental consulting work, with benchmarks and recommendations, backed by massive amounts of client data as well as data PwC has collected from peers over many years.

Following up on our assessment of the newly launched PwC Products, TBR met virtually with two PwC partners to discuss the firm’s Saratoga offering, a long-held human resources management tool that has found renewed importance for enhancing diversity and inclusion efforts within PwC’s clients. Two partners from PwC’s Organization and Workforce Transformation practice — Pam Jeffords, Diversity and Inclusion, and Scott Pollak, People Analytics — along with Michelle Gorman, a marketing director, briefed TBR on trends within HR, especially around diversity and inclusion, and the specifics of the Saratoga product before pivoting to a discussion on the future of diversity efforts across PwC and its clients. This special report reflects the discussion, as well as previous TBR analysis of PwC and the management consulting space.