TCS 2021 Global Leadership Study

Summer 2021

Key Findings report: EUR + UK

TCS Thought Leadership Institute

TCS 2021 Global Leadership StudyWhere, How and What Leaders Will Compete With in the New Decade

2

Contents

TCS 2021 Global Leadership Study

Overview

France Key Findings

Netherlands Key Findings

Germany Key Findings

TCS 2021 Global Leadership Study: Key Findings report for Europe + UK

Europe + UK Key Findings (collectively)

United Kingdom Key Findings

More study-related content

Summer 2021

EUR + UK: Collective Key Findings reportTCS Thought Leadership Institute


4

This 2021 study from Tata Consultancy Services (TCS) examines how leaders of large global enterprises in 13 countries around the world have recalibrated their organizational strategies for the next few years, through 2025. Specifically, the study explores how senior leaders are striking a balance between innovation and optimization in four arenas.

TCS 2021 Global Leadership Study: Overview

New productsand services

New business processes to create demand and supply

New approaches to managing talent and

creating a new culture

New sectors, regions, business models

Digital strategies – deciding which businesses and markets to be in

WHERE TO COMPETE

WHAT TO COMPETE WITH Digital offerings – defining the products and services to offer

HOW TO LEADLeadership approaches to managing people who are working in increasingly digital ways

Digital ways of conducting businessHOW TO COMPETE

INNOVATION OPTIMIZATIONvs

Improving existing products and services

Existing sectors, regions, business models

Improving existing ways of creating demand and

supply

Improving existing talent management approaches

and the current culture


5

TCS 2021 Global Leadership Study: Key Findings Overview for Europe + UKWe analyzed the study findings based on individual country respondents in four major regions. This document includes a collective report as well as individual, stand-alone key findings reports from the UK, France, Germany and the Netherlands.

352151150

6161

5160

30535050

301730

60

USUK

GermanyJapan

IndiaCanada

BrazilChina

AustraliaNetherlands

FranceSingapore

New ZealandColombia

Mexico

Surveys by company headquarters country (1,206 total)


6

TCS 2021 Global Leadership Study: EUR + UK Essential Takeaways at a Glance

1. WHERE TO COMPETE

2. WHAT TO COMPETE WITH

4. HOW TO LEAD

3. HOW TO COMPETE


• Although half of European firms use only traditional industry boundaries when strategizing, two-thirds of competition is expected to come from elsewhere in the digital ecosystem, including existing digital companies (27%), companies from other industries (24%) and startups (14%).

• European firms derive a slightly greater proportion of revenue from purely digital offerings (available online) compared to the overall survey (41% vs. 39%).

• Globally, Leaders expect to earn 56% of revenues from digital products in 2025, vs. 42% for Followers.

• Consistent with Europe’s high level of customer-interaction automation, the three top priorities for improving data use involve customer outreach: digital marketing, customer service, and sales initiatives.

• The lowest priority areas for data-use improvement are employee performance, suppliers and manufacturing.

• The top forces driving environmental sustainability in Europe include the public, shareholders and talent; the ability to attract and retain customers, a top factor globally and second in North America, ranked fourth.

• For European firms, customer centricity is the most important cultural trait through 2025; it ranks 4th for all surveys. Innovation, the top trait overall, ranks 2nd in Europe, followed by quality.

7

EUR + UK companies surveyed (401 in all)

1%

0%

2%

17%

28%

22%

14%

16%

Chief Executive Officer(CEO)

Chief Operations Officer(COO)

Chief Strategy Officer(CSO)

VP/SVP/Head Strategy

Director of Strategy

Divisional/business unitheadVP/SVP/Head

Operations

Director of Operations

Roles19%

14%11%

7%7%6%6%6%

5%4%4%4%3%

1%0%0%

InsuranceManufacturing (discrete…

Life SciencesSecurities &…

Consumer Packaged…Banking and Credit…

Utilities (electricity, gas,…Transportation and…

Media & EntertainmentTelecom

RetailTechnology

Hospitals & other…Oil & Gas (exploration…

Accommodation and…Mining

Industries

57%

15%

16%

8%

1%

1%

1%

0%

USD $1 billion toless than $5 billionUSD $5 billion to

less than $10 billionUSD $10 billion to




less than $100…USD $100 billion to

less than $200…USD $200 billion or

greater

Annual Revenue ($USD)

401 companies in total: 50 in France; 150 in Germany, 50 in Netherlands, 151 in UK


8

We compare “Leaders” and "Followers"

Leaders are firms with higher-than-average increases in revenue and net profit in their industry between 2015 – 2019.

+65%net profit

These companies are

+73%

of the total survey sample.

In this study, we compared the best-performing companies ("Leaders") in the last half of the 2010s to the worst-performing firms("Followers"). "Leaders" see their digital opportunities between now and 2025 much differently than do "Followers."

Followers are firms with lower-than-average increases in revenue and net profit in their industry between 2015 – 2019.

-15% -36%

These companies are

33% of the total survey sample.29%

VS

Leaders Followers revenue

andrevenue net profit

and


9

• 52% of respondents in Europe (including UK) consider only their own traditional industry boundaries when assessing future business opportunities.

• 48% use “digital ecosystems” which include newcomers and cross-industry competition, common sources of digital disruption.

Where to Compete: Obsolete strategic framework is still common in Europe


1. WHERE TO COMPETE

2. WHAT TO COMPETE WITH Digital offerings – defining the products and services to offer

4. HOW TO LEADLeadership approaches to managing people who are working in increasingly digital ways

Digital ways of conducting business3. HOW TO COMPETE

52%33%

15%

Future Business Opportunities

Within our industry’s historical boundaries

In cross-industry “digital ecosystems"

Approximately equal emphasis on “within a single industry” and “in cross-industry digital ecosystems”


10

• Although half of European firms use only traditional industry boundaries when strategizing, two-thirds of competition is expected to come from elsewhere in the digital ecosystem, including existing digital companies (27%), companies from other industries (24%) and startups (14%).

Where to Compete: Despite traditional planning, two-thirds primarily fear non-traditional competition


1. WHERE TO COMPETE




32%

24%

27%

14%

2%

Traditional industry players

Companies from other industries

Digital companies (existing)

New companies (launched overthe next 5 years)

Not sure/competition isunpredictable

Most Formidable Competition


11

• Subscription models offer advantages in the digital economy, including steadier revenues and lower upfront costs for customers. European firms derive 28% of revenues from subscriptions, compared to 25% for all surveys.

• By 2025, both cohorts expect to boost that proportion by about six percentage points, maintaining Europe’s edge.• Globally, Leaders expect to earn 34% of revenues from subscriptions in 2025, compared to 26% for Followers.

What to Compete With: Europe seizes the subscription opportunity


1. WHERE TO COMPETE


Digital offerings – defining the products and services to offer



28%

25%

34%

31%

Europe

All Surveys

% of Revenue from Subscriptions,2021 vs. 2025

20212025


12

• European firms derive a slightly greater proportion of revenue from purely digital offerings (available online) compared to the overall survey (41% vs. 39%).

• By 2025, nearly half of European revenues (48%) will be digital, vs. 46% for all surveys.• Globally, Leaders expect to earn 56% of revenues from digital products in 2025, vs. 42% for Followers.

What to Compete With: Europe relies more on digital offerings


1. WHERE TO COMPETE





41%

39%

48%

46%

Europe

All Surveys

% of Revenues from Purely Digital Offerings,2021 and 2025

20212025


13

• Amid high labor and regulatory costs, Europe has automated 42% to 49% of marketing, sales and post-sales customer interactions, with each category rising 7 to 10 percentage points by 2025.

• North America lags, with slightly more than a third of interactions automated, rising 7 to 11 percentage points by 2025.

How to Compete: Europe leads the world in automating customer interactions


1. WHERE TO COMPETE



Digital ways of conducting business

3. HOW TO COMPETE

49%

56%

46%

56%

42%

49%

36%

43%

35%

46%

34%

45%

42%

49%

39%

49%

36%

45%

Marketing2021

Marketing2025

Sales 2021

Sales 2025

Post-Sales2021

Post-Sales2025

% Automated Customer Interactions

Europe

North America

All Surveys


14

• Consistent with Europe’s high level of customer-interaction automation, the three top priorities for improving data use involve customer outreach: digital marketing, customer service, and sales initiatives.

• The lowest priority areas for data-use improvement are employee performance, suppliers and manufacturing.

How to Compete: Europe seeks to improve data use to reach customers


1. WHERE TO COMPETE




3. HOW TO COMPETE

0.50

0.52

0.52

0.55

0.76

0.88

0.88

1.16

Manufacturing operations

Suppliers

Our employees’ performance

Distribution operations

Products used by customers

Sales initiatives

Customer service

Digital marketing campaigns

Europe's Top Data-Use Improvement Needs, by 2025


15

• The top forces driving environmental sustainability in Europe include the public, shareholders and talent. • The ability to attract and retain customers, a top factor globally and second in North America, ranked fourth. • Regulatory mandates, a minor concern in North America and globally, are much more important in Europe.

How to Lead: Public perception drives sustainability in Europe


1. WHERE TO COMPETE


4. HOW TO LEAD

Leadership approaches to managing people who are working in increasingly digital ways


3. HOW TO COMPETE


3.78

3.70

3.67

3.67

3.64

3.61

3.60

3.54

3.60

3.53

3.54

3.56

3.31

3.44

3.37

3.55

3.68

3.68

3.67

3.72

3.52

3.59

3.54

3.59

Public perception

Shareholder perception

Ability to attract talent

Ability to attract and retain customers

Regulatory mandates

Supply chain cost efficiencies

Tax advantages

Cost savings

Factors Driving Environmental Sustainability

Europe North America All Surveys

16

• For European firms, customer centricity is the most important cultural trait through 2025; it ranks 4th for all surveys. Innovation, the top trait overall, ranks 2nd in Europe, followed by quality.

• Diversity is 5th, compared to 2nd overall and 1st in North America. • Shareholder value/ financial performance ranked 3rd from last.

How to Lead: In corporate culture, the customer is king, not the shareholder


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE


0.70

0.69

0.63

0.57

0.55

0.53

0.51

0.46

0.45

0.43

0.40

0.60

0.70

0.62

0.59

0.62

0.50

0.53

0.48

0.48

0.45

0.35

Customer centricity

Innovation

Quality driven

Environmental sustainability

Diversity, inclusion and equal opportunity

Employee experience

Learning/Upskilling/Reskilling

Transparency

Shareholder value | Financial performance

Purpose driven

Risk tolerant

Most Important Cultural Traits Through 2025

Europe All Surveys

17

Even with massive growth in digital opportunities, most European and UK companies are underestimating the amount of innovation in strategy, products and services, business processes, and leadership approaches they will need to compete.

Are senior leaders prepared to lead their organizations to higher performance in the mid 2020s?

The Big Takeaway


18

Appendix

19

0

50

100

150

200

250

300

350

400

US Canada UK Germany France Netherlands India China Australia New Zealand Japan Colombia Brazil MexicoSingapore

Number of respondents by country

352

51

151 150

50 50 6130 30

5317

6130

60 60

TOTAL: 1206

0

100

200

300

400

500401403

252

150

North America

UK & Europe

APAC LATAM

Number of respondents by region Percent of respondents by region

North America 33%UK & Europe 33%

21%

12% LATAM

APAC

Study Demographics (country + region)


20

*More detailed breakdown available

0

20

40

60

80

100

120

140

160

BFS Insurance Retail TTH CPG CMI Tech BU + Hi Tech

Manufacturing Life Sciences

Healthcare Utilities Energy & Resources

Banking & Financial Services (Banking &

Credit 100) + (Securities &

Investment Svcs 50)

Life insurance (36) +

Property/Casualty (16) [This category

excludes health insurance]

Transportation & Logistics (80) +

Hospitality (Accommodation & Food Services)

(40)

Media & Entertainment (62) + Telecom

(40)

(includes comms equip, semiconductor

makers + technology)

(discrete, process)

hospitals + healthcare svc

providers (60) + health insurance

(38)

(electricity, gas, water)

(oil & gas (50) + mining (30)

Sectors included in the study

# of Respondents

150

52

102

120

90102

75

122

100 98

115

80

TOTAL: 1206

Study Demographics (industry)


Summer 2021

France: Key Findings report



22

This 2021 study from Tata Consultancy Services (TCS) examines how leaders of large global enterprises in four regions of the world have recalibrated their organizational strategies for the next few years, through 2025. Specifically, the study explores how senior leaders are striking a balance between innovation and optimization in four arenas.








WHERE TO COMPETE








supply




23

TCS 2021 Global Leadership Study: France Essential Takeaways at a Glance

1. WHERE TO COMPETE


3. HOW TO COMPETE

Although half of French companies confine strategic analysis to traditional boundaries, for three-quarters the most formidable competitor is expected to come from elsewhere, including existing digital companies (34%), other industries (24%), and startups (14%).

Partnering with competitors is a key digital ecosystem behavior, enabling companies to get the best offerings regardless of competitive pressures. Nearly two-thirds (62%) of French firms collaborate with competitors compared to 51% in all surveys, and half (48%) intend to expand collaboration by 2025.

With a costly, highly regulated labor market, France leads the overall survey in implementing automated customer interactions.

Relative to the overall survey, French respondents outweighed environmental sustainability and employee experience, its top corporate culture traits through 2025. Innovation, the top trait overall, ranked 3rd in France, tied with customer centricity. Shareholder value ranked last.

4. HOW TO LEAD


24

French companies surveyed (50 in all)

2%

0%

2%

16%

30%

22%

16%

12%


Chief OperationsOfficer (COO)

Chief Strategy Officer(CSO)



Divisional/business unitheadVP/SVP/Head

Operations


Roles14%14%

12%12%

10%10%

8%8%

4%2%2%2%2%

0%0%0%

Media &…Manufacturing…

Transportation and…Life Sciences

Consumer…Telecom

Banking and Credit…Utilities (electricity,…

TechnologySecurities &…

RetailHospitals & other…

Oil & Gas…Insurance

Accommodation…Mining

Industries

54%

16%

24%

2%

4%

0%

0%

0%

USD $1 billion toless than $5 billionUSD $5 billion to





less than $100…USD $100 billion to

less than $200…USD $200 billion or

greater



25



+65%net profit

These companies are

+73%




-15% -36%

These companies are


VS



and


26

• About half (52%) of French companies still evaluate future business opportunities using traditional industry boundaries.• Only 48% use digital ecosystems, which incorporate the cross-industry competitors that often generate disruption.

Where to Compete: Outdated, traditional strategic analysis still dominates


1. WHERE TO COMPETE




52%38%

10%

Future Business Opportunities





27

• Although half of French companies confine strategic analysis to traditional boundaries, for three-quarters the most formidable competitor is expected to come from elsewhere, including existing digital companies (34%), other industries (24%), and startups (14%).

Where to Compete: Yet three-quarters primarily fear non-traditional competition most


1. WHERE TO COMPETE




24%

24%

34%

14%

4%

Traditional industry players

Companies from other industries

Digital companies (existing)

New companies (launched over thenext 5 years)

Not sure/competition isunpredictable



28

• Partnering with competitors is a key digital ecosystem behavior, enabling companies to get the best offerings regardless of competitive pressures.

• Nearly two-thirds (62%) of French firms collaborate with competitors compared to 51% in all surveys, and half (48%) intend to expand collaboration by 2025.

What to Compete With: French firms embrace collaboration with competitors


1. WHERE TO COMPETE





62%

48%

51%

42%

Collaborateswith

Competitors

Plans toincrease

collaborationbu 2025

% of companies collaborating with competitors, 2021 and 2025

France

All Surveys


29

• A greater proportion of French respondents’ revenues come from products that are purely digital (available online): 48% compared to 39% for all surveys.

• But they foresee expanding those offerings only by 2 percentage points, compared to 7 for the global survey.

What to Compete With: France’s lead on digital offerings loses steam


1. WHERE TO COMPETE





48%

39%

50%

46%

France

All Surveys

% of Revenues from Purely Digital Offerings, 2021 and 2025

20212025


30

• With a costly, highly regulated labor market, France leads the overall survey in implementing automated customer interactions. • By 2025 its lead will expand in marketing and sales and decrease slightly in post-sales interactions.

How to Compete: French firms embrace automated customer interactions


1. WHERE TO COMPETE




3. HOW TO COMPETE

46%

54%

42%

54%

40%

47%

42%

49%

39%

49%

36%

45%

Marketing2021

Marketing2025

Sales 2021

Sales 2025

Post-Sales2021

Post-Sales2025

% Automated Customer Interactions,2021 and 2025

France

All Surveys


31

• Capabilities that will have the greatest impact by 2025 include mass customization of products and services, R&D simulations of product feasibility, and highly personalized sales and marketing campaigns.

• Capabilities that improve employee satisfaction and productivity ranked second to last.

How to Compete: Essential capabilities include customization, personalization and R&D


1. WHERE TO COMPETE




3. HOW TO COMPETE

0.88

0.88

0.84

0.54

0.54

0.54

0.48

0.46

0.36

0.22

0.60

0.63

0.73

0.51

0.56

0.71

0.35

0.59

0.65

0.48

R&D simulations that prove the feasibility of productconcepts and engineering designs

Mass customization of products and services

Highly personalized sales and marketing campaigns

Highly trackable and traceable distribution

Sophisticated, automated post-sales support andtroubleshooting

Personalized, automated and higher-value customerexperiences

Manufacturing that can be shifted to customers’ premises (i.e., 3D printing)

Real-time automated analysis of the company’s financial condition

Improving employee satisfaction, productivity and teamcollaboration

Production/manufacturing operations that can switchrapidly from global to local supply

Ranking of capabilities impacting companies through 2025

France All SurveysTCS 2021 Global Leadership Study

32

• Relative to the overall survey, French respondents outweighed environmental sustainability and employee experience, its top corporate culture traits through 2025.

• Innovation, the top trait overall, ranked 3rd in France, tied with customer centricity; shareholder value ranked last.

How to Lead: French companies value the environment and employees over shareholders


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

0.72

0.64

0.62

0.62

0.60

0.52

0.50

0.46

0.44

0.38

0.36

0.62

0.59

0.60

0.70

0.50

0.53

0.45

0.62

0.48

0.48

0.35


Employee experience

Customer centricity

Innovation


Transparency

Quality driven


Risk tolerant

Purpose driven


Top Cultural Traits by 2025

France All Surveys


33

• After public and shareholder concerns, they ranked the ability to attract and retain customers and tax advantages high on the list of sustainability drivers.

• Compared to the overall survey, French respondents outweighed every factor except the ability to attract talent.

How to Lead: Public and shareholder concerns drive environmental consciousness


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

4.02

3.92

3.82

3.80

3.70

3.64

3.62

3.60

3.68

3.68

3.72

3.54

3.52

3.59

3.59

3.67

Public perception

Shareholder perception, includingability to raise capital

Ability to attract and retaincustomers

Tax advantages

Regulatory mandates

Supply chain cost efficiencies(manufacturing & distribution)

Cost savings (facilities, employeetravel, etc)

Ability to attract talent

Factors driving environmental sustainability

France

All Surveys


34

Even with massive growth in digital opportunities, most French companies are underestimating the amount of innovation in strategy, products and services, business processes, and leadership approaches they will need to compete.


The Big Takeaway


Appendix

36

0

50

100

150

200

250

300

350

400



352

51

151 150

50 50 6130 30

5317

6130

60 60

TOTAL: 1206

0

100

200

300

400

500401403

252

150

North America

UK & Europe

APAC LATAM



21%

12% LATAM

APAC



37


0

20

40

60

80

100

120

140

160






Investment Svcs 50)






(40)


(40)



(discrete, process)



(38)




# of Respondents

150

52

102

120

90102

75

122

100 98

115

80

TOTAL: 1206



Summer 2021

Germany: Key Findings report



39









WHERE TO COMPETE




INNOVATION OPTIMIZATION




supply



vs


40

TCS 2021 Global Leadership Study: Germany Essential Takeaways at a Glance

1. WHERE TO COMPETE


4. HOW TO LEADWhat motivates German companies’ environmental sustainability efforts? For leaders, it’s about attracting customers and talent. Followers ranked these factors last. Instead, they are driven by shareholder perception (including the ability to raise capital) and tax advantages.

3. HOW TO COMPETE

Overall, 52% of German respondents said their companies consider cross-industry digital ecosystems when assessing opportunities and threats, compared to only 45% of all companies surveyed. German Leaders are much more likely use digital ecosystems (69%) than Followers (29%).

German companies are in line with the overall survey in earning revenue from purely digital products and services. Leaders are particularly advanced, with 49% of their revenue coming from such offerings, a proportion they expect to increase (55%) through 2025.Half of German companies collaborate with competitors in digital ecosystems, but Leaders do so twice as commonly (71%) as Followers (35%).

In improving how their companies use customer data in the coming years, German respondents overall ranked providing better customer service (56%) and creating new products and services (56%) highest. Leaders (75%) see much more potential in using customer data to create new products and services than Followers (42%).


41

German companies surveyed (150 in all)

1%

1%

3%

15%

26%

19%

16%

18%

Chief Executive…

Chief Operations…

Chief Strategy Officer…



Divisional/business…

VP/SVP/Head…


Roles25%

23%9%

6%6%6%5%

4%4%3%3%3%

2%0%0%0%

Manufacturing…Insurance

Life SciencesConsumer Packaged…

TechnologyUtilities (electricity,…

Securities &…Media & Entertainment

Hospitals & other…Retail

Transportation and…Telecom

Banking and Credit…Accommodation and…

Oil & Gas (exploration…Mining

Industries

59%

16%

13%

7%

3%

1%

1%

1%

USD $1 billion to…

USD $5 billion to…

USD $10 billion…

USD $20 billion…

USD $50 billion…

USD $75 billion…

USD $100 billion…

USD $200 billion…



42


Innovation


+65%net profit

These companies are

+73%




-15% -36%

These companies are


VS



and


43

• Overall, 52% of German respondents said their companies consider cross-industry digital ecosystems when assessing opportunities and threats, compared to only 45% of all companies surveyed.

• German Leaders are much more likely use digital ecosystems (69%) than Followers (29%).

Where to Compete: Most German companies consider digital ecosystems when strategizing


1. WHERE TO COMPETE




48%

31%

21%

Total




31%

46%

23%

Leader

71%

19%

10%

Follower


44

• Overall, German respondents ranked market presence as the top factor in determining where to compete, but Leaders ranked thismuch higher (2nd) than Followers (6th).

• Leaders' highest consideration was the size of the market, which Followers ranked 9th.• In contrast, Followers allocate greater weight to brand recognition (1st vs. 8th for Leaders) and political and regulatory considerations

(5th vs. 10th).

Where to Compete: In determining where to compete, top performers take a different approach


1. WHERE TO COMPETE




Overall rank Leader rank Follower rank

Existing presence in those markets 1 2 6

Brand recognition in those markets 2 8 1

Sustainability 3 4 3

Growth rate of the market 4 3 2

Alignment to organization’s purpose 5 5 4

Size of the market 6 1 9

Political, fiscal and regulatory environment 7 10 5

Cultural fit with our company 8 6 7

Existing sales and marketing capabilities 9 9 8

Degree of competition 10 7 10


45

• Half of German companies collaborate with competitors in digital ecosystems, but Leaders do so twice as commonly (71%) as Followers (35%).

• By 2025, that gap will likely grow: 58% of Leaders said they will increase collaboration, while 74% of Followers will either decrease it (16%) or leave it unchanged (58%).

What to Compete With: Leaders gain an edge collaborating with competitors


1. WHERE TO COMPETE





50%50%

Total

Yes

No

71%

29%

Leader

35%

65%

Follower

11%

48%

41%

Total

Decrease collaborationNot much change plannedIncrease collaboration

6%

35%58%

Leader

16%

58%

26%

Follower

Competitors Collaboration Status

Competitors Collaboration in Future

46

• German companies are in line with the overall survey in earning revenue from purely digital products and services. • Leaders are particularly advanced, with 49% of their revenue coming from such offerings, a proportion they expect to increase (55%)

through 2025. • Followers hope to boost their purely digital revenues from 32% today to 39% in 2025.

What to Compete With: German companies embrace digital products and services


1. WHERE TO COMPETE





39%

47%

49%

55%

32%

39%

39%

46%

2021

2025

% of revenue predicted from products/services that will be purely digital, 2021 and 2025

Total

Leader

Follower

All Surveys


47

• In improving how their companies use customer data in the coming years, German respondents overall ranked providing better customer service (56%) and creating new products and services (56%) highest.

• Leaders (75%) see much more potential in using customer data to create new products and services than Followers (42%).

How to Compete: Leaders seek to use customer data to improve their offerings


1. WHERE TO COMPETE




3. HOW TO COMPETE

53%

44%

42%

40%

27%

29%

2%

Follower56%

51%

56%

48%

35%

35%

3%

Providing better customerservice

Making improvements toexisting products and…

Creating new products andservices

Improving marketing andsales

Selling insights from ourcustomer data to other…

Selling additional productsand services to current…

None of the above

Total

63%

52%

75%

52%

46%

44%

4%

Leader


48

• German leaders place highly personalized sales and marketing campaigns at the top of a list of capabilities that will have an impact; Followers ranked such campaigns 6th.

• Leaders also value production that can switch rapidly from global to local, while Followers have high expectations for real-time financial analysis and higher-value customer experiences.

How to Compete: Leaders and Followers differ on capabilities that are important through 2025


1. WHERE TO COMPETE




3. HOW TO COMPETE

All survey rank

Leader rank

Follower rank

Improving employee satisfaction, productivity and team collaboration 1 3 1

Highly personalized sales and marketing campaigns 2 1 6

R&D simulations that prove the feasibility of product concepts and engineering designs 3 4 4

Personalized, automated and higher-value customer experiences 4 7 3

Mass customization of products and services 5 8 7

Real-time automated analysis of the company’s financial condition 6 9 2

Production/manufacturing operations that can switch rapidly from global to local supply 7 2 9

Highly trackable and traceable distribution 8 6 8

Sophisticated, automated post-sales support and troubleshooting 9 5 5

Manufacturing that can be shifted to customers’ premises (i.e., 3D printing) 10 10 10


49

What motivates German companies’ environmental sustainability efforts? • For leaders, it’s about attracting customers and talent. • Followers ranked these factors last. Instead, they are driven by shareholder perception (including the ability to raise capital)

and tax advantages.

How to Lead: Customers and talent drive Leaders’ sustainability efforts


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

All Survey Rank Leader Rank Follower Rank

Shareholder perception, including ability to raise capital 1 6 1

Public perception 2 4 5

Supply chain cost efficiencies 3 7 3

Ability to attract talent 4 2 7

Ability to attract and retain customers 5 1 8

Regulatory mandates 6 3 6

Tax advantages 7 8 2

Cost savings (facilities, employee travel, etc) 8 5 4


50

• When asked where they need to make the greatest improvements in employee experience between now and 2025, German respondents overwhelmingly pointed to performance management and improvement.

• The next highest priority is making remote workers highly productive, followed by compensation, benefits and workplace flexibility.

How to Lead: On employee experience, German companies need to improve performance management.


1. WHERE TO COMPETE



3. HOW TO COMPETE

1.03

0.64

0.59

0.58

0.56

0.56

0.49

0.42

0.39

0.33

0.31

Performance management and improvement

Making remote workers highly productive

Compensation and benefits

Providing flexibility in work schedule/location

Training and career development

Health and safety initiatives (mind and body)

Creating a sense of belonging

Promotion

Recruiting

Onboarding

Recognition and rewards (non-monetary)

Where is the most improvement in employee experience required

4. HOW TO LEAD



51

Even with massive growth in digital opportunities, most German companies are underestimating the amount of innovation in strategy, products and services, business processes, and leadership approaches they will need to compete.


The Big Takeaway


Appendix

53

0

50

100

150

200

250

300

350

400



352

51

151 150

50 50 6130 30

5317

6130

60 60

TOTAL: 1206

0

100

200

300

400

500401403

252

150

North America

UK & Europe

APAC LATAM



21%

12% LATAM

APAC



54


0

20

40

60

80

100

120

140

160






Investment Svcs 50)






(40)


(40)



(discrete, process)



(38)




# of Respondents

150

52

102

120

90102

75

122

100 98

115

80

TOTAL: 1206



Summer 2021

Netherlands: Key Findings report



56









WHERE TO COMPETE








supply




57

TCS 2021 Global Leadership Study: Netherlands Essential Takeaways at a Glance

1. WHERE TO COMPETE


4. HOW TO LEADDutch respondents are far more likely than the survey average to prioritize customer centricity as a cultural trait through 2025. Quality and innovation are also important. Shareholder value, risk tolerance and employee experience ranked last.

3. HOW TO COMPETE

60% of Dutch respondents consider cross-industry digital ecosystems when evaluating opportunities, compared to 45% in the overall survey. Ecosystems are key, as the strongest competition for two-thirds of Dutch firms will come from outside traditional borders by 2025.

Currently 42% of Dutch respondents’ revenue comes from purely digital products and services, rising to 52% by 2025. This aggressive pace of development will keep Dutch companies ahead of others in the survey, who expect to advance from 39% to 46% digital products.

Subscription models, such as SaaS and PaaS, offer advantages for both companies and customers. By 2025, Dutch firms’ revenues from subscriptions (34%) are expected to fall short of the overall survey average (42%), given relatively slow use of the strategy.


58

Dutch companies surveyed (50 in all)

0%

0%

0%

18%

30%

22%

20%

10%



Chief Strategy Officer (CSO)



Divisional/business unithead

VP/SVP/Head Operations


Roles32%

14%14%

10%6%

4%4%4%4%4%4%

0%0%0%0%0%

Securities & Investment ServicesInsurance

Manufacturing (discrete…Transportation and Logistics

RetailConsumer Packaged Goods

Media & EntertainmentLife Sciences

Hospitals & other healthcare…Technology

Oil & Gas (exploration and refining)Banking and Credit Institutions

Accommodation and Food…Mining

Utilities (electricity, gas, water)Telecom

Industries

54%

16%

18%

8%

0%

2%

2%

0%

USD $1 billion to lessthan $5 billion






USD $100 billion toless than $200 billion

USD $200 billion orgreater



59


Innovation


+65%net profit

These companies are

+73%




-15% -36%

These companies are


VS



and


60

• 60% of Dutch respondents consider cross-industry digital ecosystems when evaluating opportunities, compared to 45% in the overall survey.

• Ecosystems are key, as the strongest competition for two-thirds of Dutch firms will come from outside traditional borders by 2025.

Where to Compete: Most Dutch companies strategize with an eye on digital disruption


1. WHERE TO COMPETE




40%

46%

14%

Framework for evaluating opportunities





61

• When choosing where to compete, Dutch firms’ top criteria are alignment to the organization’s purpose, and market growth.• They rank environmental sustainability and government factors higher than the overall survey.• Market presence and brand recognition are less important in the Netherlands.

Where to Compete: Purpose and market growth drive competitive decisions


1. WHERE TO COMPETE




Netherlands All Surveys

Alignment to organization’s purpose 1 1

Growth rate of the market 2 2

Sustainability (i.e., environmental impact) 3 6

Existing sales and marketing capabilities 4 4

Political, fiscal and regulatory environment 5 9

Size of the market 6 8

Existing presence in those markets 7 3

Degree of competition 8 7

Brand recognition in those markets 9 5

Cultural fit with our company 10 10

Factors determining where companies compete (Ranked)


62

• Dutch respondents predict that 48% of their revenues in 2025 will come from businesses in industries or ecosystems in which they do not currently operate, signaling a high level of investment, innovation and expansion.

• This rate slightly exceeds the survey average (45%).

What to Compete With: Dutch firms pivot toward new offerings


1. WHERE TO COMPETE





48%

45%

52%

55%

Netherlands

All Surveys

% of 2025 Revenues from Existing vs. New Industries/Ecosystems

% of Revenues frombusineses in newindustries/ecosystems

% of revenues fromexisting businesses


63

• Currently 42% of Dutch respondents’ revenue comes from purely digital products and services, rising to 52% by 2025.• This aggressive pace of development will keep Dutch companies ahead of others in the survey, who expect to advance from 39% to

46% digital products.

What to Compete With: Big expansion in digital offerings is expected


1. WHERE TO COMPETE





42%

39%

52%

46%

Netherlands

All Surveys

% of Revenues from Purely Digital Offerings, 2021 and 2025

2021

2025


64

• Subscription models, such as SaaS and PaaS, offer advantages for both companies and customers. • By 2025, Dutch firms’ revenues from subscriptions (34%) are expected to fall short of the overall survey average (42%), given relatively

slow use of the strategy.

How to Compete: Dutch firms could profit more from subscription revenues


1. WHERE TO COMPETE




3. HOW TO COMPETE

30%

30%

34%

42%

Netherlands

All Surveys

% Revenues from Subscriptions, 2021 and 2025

2021 2025


65

• The capabilities that will have the greatest impact on Dutch respondents through 2025 include personalized, automated and higher-value customer experiences, mass customization, and highly trackable distribution.

• Dutch firms ranked trackable distribution 3rd vs. 8th for all surveys.

How to Compete: Dutch companies capitalize on automation and IoT capabilities


1. WHERE TO COMPETE




3. HOW TO COMPETE

0.74

0.72

0.70

0.66

0.66

0.60

0.56

0.50

0.32

0.32

0.71

0.63

0.51

0.56

0.73

0.59

0.65

0.60

0.48

0.35

Personalized, automated and higher-valuecustomer experiences

Mass customization of products and services

Highly trackable and traceable distribution

Sophisticated, automated post-sales supportand troubleshooting

Highly personalized sales and marketingcampaigns

Real-time automated analysis of the company’s financial condition

Improving employee satisfaction, productivityand team collaboration

R&D simulations that prove the feasibility ofproduct concepts and engineering designs

Production/manufacturing operations thatcan switch rapidly from global to local supply

Manufacturing that can be shifted to customers’ premises (i.e., 3D printing)

Ranking of Capabilities Impacting Companies through 2025

NetherlandsAll Surveys


66

• Dutch respondents are far more likely than the survey average to prioritize customer centricity as a cultural trait through 2025. • Quality and innovation are also important. • Shareholder value, risk tolerance and employee experience ranked last.

How to Lead: Culture emphasizes customers over shareholders and employees


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

1.10

0.72

0.68

0.62

0.46

0.44

0.42

0.40

0.36

0.34

0.30

0.60

0.45

0.70

0.48

0.62

0.62

0.50

0.53

0.35

0.48

0.59

Customer centricity

Quality driven

Innovation

Purpose driven

Diversity, inclusion andequal opportunity

Environmentalsustainability


Transparency

Shareholder value |Financial performance

Risk tolerant

Employee experience

Top Cultural Traits by 2025

Netherlands

All Surveys


67

• In managing leadership, generating demand and supply, and entering new markets, Dutch firms plan to optimize rather than innovate.• However, on product mix Dutch firms are determined to innovate.• Across all surveys, optimization is preferred.

How to Lead: Dutch firms prefer optimization to innovation, except on products


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

34%

66%

38%

62%

54%

46%

42%

58%

41%

59%

46%

54%

42%

58%

41%

59%

Innovate: Instituting new approaches toleadership, management and culture

Optimize: Improving leadership, managementand culture

Innovate: Creating new ways to generatedemand and supply

Optimize: Improving current demand andsupply generation

Innovate: Launching new offerings

Optimize: Improving current offerings

Innovate: Launching/acquiring businesses innew markets

Optimize: Improving existing businesses incurrent markets

Innovation vs. Optimization through 2025

Netherlands

All Surveys


68

Even with massive growth in digital opportunities, most Dutch companies are underestimating the amount of innovation in strategy, products and services, business processes, and leadership approaches they will need to compete.


The Big Takeaway


Appendix

70

0

50

100

150

200

250

300

350

400



352

51

151 150

50 50 6130 30

5317

6130

60 60

TOTAL: 1206

0

100

200

300

400

500401403

252

150

North America

UK & Europe

APAC LATAM



21%

12% LATAM

APAC



71


0

20

40

60

80

100

120

140

160






Investment Svcs 50)






(40)


(40)



(discrete, process)



(38)




# of Respondents

150

52

102

120

90102

75

122

100 98

115

80

TOTAL: 1206



Summer 2021

United Kingdom: Key Findings report



73









WHERE TO COMPETE








supply




74

TCS 2021 Global Leadership Study: UK Essential Takeaways at a Glance

1. WHERE TO COMPETE


4. HOW TO LEAD

3. HOW TO COMPETE

Despite strategizing using traditional boundaries, two-thirds of UK companies predict their most formidable competition will emerge from elsewhere between now and 2025.

Fewer than half of UK companies (45%) collaborate with competitors, although Leaders are much more likely to do so (70%) than Followers (21%).

Two-thirds of UK respondents (66%) prioritize improving how they use customer data for customer service, followed by half (51%) who target creating new products and services.

By a large margin, UK companies ranked innovation as the most important aspect of corporate between now and 2025. Overall, UK companies agreed that company leaders and middle managers have been key sources of innovation over the past decade. However, 47% of Leaders also cite customers (including data and analytics) as a top source.


75

UK companies surveyed (151 in all)

0%

0%

2%

19%

28%

25%

9%

17%

Chief Executive Officer (CEO)


Chief Strategy Officer (CSO)



Divisional/business unit head

VP/SVP/Head Operations


Roles24%

17%13%

9%7%

6%5%5%

3%3%3%2%1%1%1%1%

InsuranceLife Sciences

Banking and Credit InstitutionsUtilities (electricity, gas, water)

Consumer Packaged GoodsTransportation and Logistics

RetailTelecom

Securities & Investment ServicesManufacturing (discrete…Media & Entertainment

Hospitals & other healthcare…Accommodation and Food…

TechnologyMining

Oil & Gas (exploration and refining)

Industries

58%

13%

17%

11%

0%

1%

0%

0%







USD $100 billion toless than $200 billion

USD $200 billion orgreater



76




+65%net profit

These companies are

+73%




-15% -36%

These companies are


VS



and

77

• Companies increasingly compete in cross-industry “digital ecosystems,” but most UK respondents (61%) said they still strategize using traditional industry boundaries, compared to 55% in the overall survey.

• Even top-performing Leaders tend to plan this way (53%), although Followers are even more likely to do so (79%).

Where to Compete: Most UK companies strategize using outdated boundaries


1. WHERE TO COMPETE




61%28%

11%

Total




53%30%

17%

Leader

79%

13%

9%

Follower


78

• Despite strategizing using traditional boundaries, two-thirds of UK companies predict their most formidable competition will emerge from elsewhere between now and 2025.

• About a quarter (27%) see them coming from other industries, and 26% believe they will come from existing digital firms. • Leaders are more attuned to new digital competition. Half of Followers still see their biggest threats arising from within their industry.

Where to Compete: The toughest competitors are seen coming from outside industry boundaries


1. WHERE TO COMPETE




50%

20%

18%

7%

5%

Follower

10%

37%

33%

17%

3%

Leader

32%

27%

26%

12%

3%

Traditional industryplayers

Companies fromother industries

Digital companies(existing)

New companies(launched over the

next 5 years)

Not sure/competitionis unpredictable

Total



79

• 41% of UK respondents’ offerings are currently purely digital—meaning customers can download them or access them online; that figure is expected to rise to 49% by 2025.

• Leaders are currently 17 percentage points more digital than Followers (52% vs. 35%), but Followers appear determined to shrink the gap to 9 percentage points by 2025 (57% vs. 48%).

What to Compete With: The proportion of purely digital products is expanding


1. WHERE TO COMPETE





41%

49%

52%

57%

35%

48%

2021

2025

% of revenue predicted from products/services that will be purely digital, 2021 and 2025

Total

Leader

Follower


80

70%

30%

Leader

45%55%

Total

Yes No

13%

43%

44%

Total

Decrease collaboration Not much change planned Increase collaboration

• In the U.S., Netflix hosts its streaming services on competitor Amazon’s cloud, because it believes this is best for its business. Fewer than half of UK companies (45%) collaborate with competitors in this manner, although Leaders are much more likely to do so (70%) than Followers (21%).

• By 2025, greater collaboration is anticipated by bothLeaders (60%) and Followers (48%).

What to Compete With: Top UK performers are more likely to collaborate with competitors


1. WHERE TO COMPETE





21%

79%

FollowerCompetition Collaboration Status

Competitors collaboration in future

10%

30%60%

Leader

9%

43%48%

Follower


81

77%

63%

60%

57%

30%

47%

0%

Leader

• Two-thirds of UK respondents (66%) prioritize improving how they use customer data for customer service, followed by half (51%) who target creating new products and services.

• Across the board, Leaders see greater need for improvement, suggesting that they are capitalizing more aggressively on customer-data opportunities.

How to Compete: Leaders are more proactive in improving how they use customer data


1. WHERE TO COMPETE




3. HOW TO COMPETE

63%

36%

46%

38%

21%

29%

0%

Follower

66%

47%

51%

48%

25%

32%

1%

Providing bettercustomer service

Making improvementsto existing products…

Creating new productsand services

Improving marketingand sales

Selling insights from ourcustomer data to…

Selling additionalproducts and services…

None of the above

Total

Areas of improvement in how organizations use customer data


82

• UK companies report higher levels of automation in marketing (52% vs. 42% for all respondents), sales (49% vs. 39%) and post-sale service (47% vs. 36%).

• Companies plan to increase these levels six to ten percentage points by 2025.

How to Compete: UK automation levels are high and rising


1. WHERE TO COMPETE




3. HOW TO COMPETE

52%

49%

47%

60%

59%

53%

Marketing

Sales

Post-Sales

% Automated Customer Interactions 2021 and 2025

2021 2025


83

• By a large margin, UK companies ranked innovation as the most important aspect of corporate success between now and 2025. • Leaders ranked it third from last, instead prioritizing learning and shareholder value.• For Followers, Learning is a low priority.

How to Lead: Innovation is the top cultural characteristic, but not for Leaders


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

0.74

0.56

0.58

0.57

0.56

0.48

0.54

0.56

0.52

0.42

0.42

Innovation


Quality driven

Customer centricity



Employee experience


Transparency

Purpose driven

Risk tolerant

Total0.47

0.63

0.27

0.57

0.33

0.80

0.50

0.73

0.57

0.50

0.63

Leader0.86

0.68

0.66

0.61

0.57

0.38

0.64

0.55

0.38

0.32

0.32

Follower

Most Important aspects of the organization’s culture


84

40%

40%

29%

36%

21%

21%

15%

32%

1%

Our company’s leaders/executive team

Our company’s middle managers

Our front-line employees

Our customers directly (includingcustomer data and analytics)

Our suppliers

Channel partners that bring ourofferings to customers

Academia

Market research

Other sources (please describe)

Total

47%

40%

33%

47%

23%

13%

27%

40%

0%

Leader

• Overall, UK companies agreed that company leaders and middle managers have been key sources of innovation over the past decade.• However, 47% of Leaders also cite customers (including data and analytics) as a top source. • Only 20% of Followers successfully tap this source, suggesting they may have opportunities to improve their customer analytics

How to Lead: Leading UK companies look to customers for innovation to a greater degree than do Followers


1. WHERE TO COMPETE


4. HOW TO LEAD



3. HOW TO COMPETE

38%

39%

25%

20%

13%

20%

11%

23%

2%

Follower

Sources of digital innovations today


85

Even with massive growth in digital opportunities, most UK companies are underestimating the amount of innovation in strategy, products and services, business processes, and leadership approaches they will need to compete.


The Big Takeaway


Appendix

87

0

50

100

150

200

250

300

350

400



352

51

151 150

50 50 6130 30

5317

6130

60 60

TOTAL: 1206

0

100

200

300

400

500401403

252

150

North America

UK & Europe

APAC LATAM



21%

12% LATAM

APAC



88


0

20

40

60

80

100

120

140

160






Investment Svcs 50)






(40)


(40)



(discrete, process)



(38)




# of Respondents

150

52

102

120

90102

75

122

100 98

115

80

TOTAL: 1206



89

More TCS 2021 Global Leadership Study Content

Get more content here: www.tcs.com/perspectives/ceo

More related findings for key industries and countries will be released later in 2021.


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90

EXECUTIVE CHAMPIONS

Krishnan RamanujamPresident – Service Lines, TCSAnanth KrishnanExecutive Vice President & Chief Technology Officer, TCSSuresh MuthuswamiPresident and Global Head, Banking, Financial Services andInsurance Platforms, TCSK KrithivasanPresident, Banking, Financial Services and Insurance Business, TCSDebashis GhoshPresident, Life Sciences, Healthcare, Public Services and Energy BusinessGroup, TCSAkhilesh TiwariVice President & Global Head, Enterprise Application Services, TCSDave JordanGlobal Head and Managing Partner, Consulting & Services Integration TCS

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ContactIf you would like to have more information on the TCS 2021 Global Leadership Study, please visit https://www.tcs.com/perspectives/ceo

For more information or any feedback, email TCS Thought Leadership Institute at [email protected]

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Documents

TCS 2021 Global Leadership Study