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PricewaterhouseCoopers Company’s Innovation Report

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Updated: Apr 25th, 2021

Introduction

PwC has its employees and clients as the major sources of new ideas. Employees have technical expertise and experience, which can enable them to have a better understanding of products and application software. There are many strategies and tools that the firm can use to generate ideas from its stakeholders. The firm has to select a few simple tools and use them repeatedly to generate better results (Skiba & Herstatt, 2008).

Sources for generating new ideas

Customers

Customers are a major source of new ideas for firms that provide services. PwC offers a wide range of products in different segments. PwC offers about ten categories of products. One of the reasons for involving customers is to reduce the failure rate of introducing new services. Skiba & Herstatt (2008) explain that there is a failure rate of 80 percent for new services introduced in the financial service industry.

Customers may help the firm to understand the market needs from the customers’ perspective. It helps to eliminate the gap between internal beliefs and existing market demands (Skiba & Herstatt, 2008). There is a challenge that customers may lack new ideas, different from existing products. However, customers are an important source of ideas for incremental changes to make up for cultural differences.

The firm can select a group of lead users to help generate useful ideas about the firm’s products. The lead users are more innovative if they are experienced practitioners (Desouza et al., 2008). Customers can form groups that may be useful in generating new ideas. Grupo Eroski, a leading retailer in Spain, allows customers to elect delegates, who participate in the decision-making process (Ayuso, Rodriguez, & Ricart, 2006).

Employees

Employees form a crucial part in generating ideas because they are linked to routine activities in the firm. At PwC, employees interact closely with clients. Clients describe their needs and employees recommend different products that can solve the clients’ problems.

One of the reasons for using employees to generate new ideas is their technical expertise and experience. In the Saligna case study, employees were selected from different stakeholders to become part of the task force that was formed to resolve problems in the Saligna timber value chain (Tidd & Bessant, 2009). Employees have a clear understanding of the firm’s operations and can be used to outline the sources of problems. In the Saligna case, there was a need to outline the problems and set objectives for the Saligna Value Chain group.

Continuous improvement, which results from inefficient processes and high-quality products, is performed by employees. At PwC, employees listen to customers and should be able to translate customer expectations to superior products and improved customer service. In the Saligna case study, stakeholders in the value chain involved their employees in generating ideas to improve efficiency and value addition (Tidd & Bessant, 2009). Employees formed a problem-solving group.

At PwC, employees are in a better position to identify weaknesses in the tools they use and the services they provide, based on unmet customer expectations. In a different case, a bank based in South Bend, Indiana, was able to identify customer perceptions through employees. The bank realized that customers are attached to employees rather than to bank brands (Jones & Samalionis, 2008).

Employees are also important because of their involvement in turning ideas into reality. Ayuso et al. (2006) discuss employee involvement in the Caja Navarra case, where employees were involved in changing organizational culture. Jaruzelski, Loehr, & Holman (2012) explain that most ideas are generated, but fail to be executed. Employees hold a position of identifying the viability of an idea. PwC has to recognize that employee involvement may result in increased execution rates for new ideas.

Leading firms rely on their technical expertise to innovate and maintain a larger market share. According to Jaruzelski et al. (2012), technology drivers rely on the internal capabilities of their human capital and technology. PwC is a global market leader. It has to rely on the development of standards from its internal experts to remain competitive. As a leader, it has inadequate time for benchmarking and imitation. Jaruzelski et al. (2012) elaborate that technology drivers are likely to have outstanding financial performance.

In PwC’s services, labor is the major input. Technical expertise is necessary to keep PwC as a market leader. PwC has to retain the most valuable experts in the industry.

Suppliers

Suppliers are sources of ideas because they can understand their tools better than the user (PwC). Software developing companies may provide a deeper understanding of the functions of their tools. They can also elaborate on the weakness of their tools. PwC may give them time to find solutions to weaknesses found in their software. Some of the weaknesses may be a result of external limits of technology. PwC should think of using application software in all areas, provided it does not undermine the quality of service. Application software has the capabilities of increasing accuracy and reducing the cost of service. Brainstorming together with software manufacturers may help them develop software that may improve the firm’s performance.

Technical publications are necessary for benchmarking and for understanding the market. In the Saligna case, the SVC group relied on monthly publications to generate ideas on what needs to be done to solve existing problems (Tidd & Bessant, 2009). It may help the firm to give a report on whether there is an improvement in performance. PwC needs publications to know market trends, which help employees offer better services to clients. Companies that collect data may be in a better position to identify indicators that are not easily visual but are the source of the easily identified metrics. It can result in the firms directly targeting the sources of change for data collection. Suppliers may have a better understanding of the causes and sources of problems.

Partners

PwC has partnered with different firms to carry out surveys to obtain firsthand information. It can also partner with the government to increase efficiency in public services.

Partners can help the firm to generate new ideas when they are involved in problem-solving sessions. Partners bring their expertise when they are specialized in a particular field. In the Saligna case, the universities offered technical expertise in the evaluation of trends and assessing improvement (Tidd & Bessant, 2009).

Strategies and tools for generating information from the sources

Workshops

Workshops are effective in generating ideas from employees. The workshops can also involve a combination of employees and customers. In the Grupo Eroski case, the firm involves both employees and customers in its workshops (Ayuso et al., 2006). Employees can tell what they observe and customers can suggest what they expect from the products. PwC can form workshops, where employees and customers meet and discuss the expected results from the services offered. Sometimes, clients have a higher expectation than what financial models can assess. Clients can suggest ways to create products that are accurately predictive of the markets. Most firms would like to know accurate information about the markets. Market Information may be providing more data and little predictive analysis. Analysts may be afraid to make predictions because they do not want to make predictions that fail. The workshops can encourage more predictive analysis and making customers understand factors that may affect forecasts.

Diagnostic interviews

It involves problem identification and problem-solving processes, where employees are asked about their encounters with clients (Kasper & Clohesy, 2008). Diagnostic interviews may be used by PwC for continuous improvement of services. The tool allows employees to highlight existing problems and managers to form a task force to find solutions. They can also seek external expert opinions to find solutions to the existing problems.

Internal group of experts

PwC should strive to use an internal group of experts because they are a clear source of competitive advantage for market leaders. Kasper & Clohesy (2008) discuss the use of an internal group of experts to provide new ideas. Jaruzelski et al. (2012) recommend an internal group of experts for firms that seek to lead the industry and outperform financially. PwC should hire academics as well as leading practitioners. Their purpose will be to determine the functionality of the models and tools that the firm uses to make an analysis. Considering that accounting has a list of traditional models, they will continuously test the effectiveness of the tools and models used to make market evaluations. Internally, they can suggest modifications to enable models to accurately capture market information.

Connection to an external source of information

Experts can give better interpretations of information gathered from the market. In the Saligna case, academics created an external source of information (Tidd & Bessant, 2009). PwC needs information from external sources of information. According to a Timken Company manager, universities and third-party companies can be useful sources of ideas (Jaruzelski et al., 2012). PwC can form partnerships with learning institutions. Academics are continuously carrying out research that may give more insight into the best practices. They can recommend new findings that can compensate for the loss of accuracy in existing financial models.

Lead user method

The firm faces the challenge of selecting customers, who can be useful in generating new ideas. The firm has to categorize and select lead users (Skiba & Herstatt, 2008). Based on the level of their sophistication, PwC has to select some of its clients as lead users. Lead users can be used for testing disruptive innovation. Lead users have higher expectations and can be used to highlight solutions that need to be developed.

User groups

The firm can maintain a community of users, who may discuss their expectations and user-experiences (Skiba & Herstatt, 2008). PwC has a great opportunity in improving its existing services by using user groups. The firm has the advantage that most customers are corporations. Corporations expect the financial services to provide insight into the markets and offer information that can be accurately used for financial planning. The user groups can assess the accuracy and inaccuracy of the firm’s evaluations. If a higher level of inaccuracy is suggested, there is a need to assess the weaknesses of the models used for financial evaluation. The user groups are in a good position to suggest differences between outcomes and the forecast. The firm will be involved in explaining the reasons for variations.

Conclusion

PwC, as a market leader, should focus on expert groups, workshops, and diagnostic interviews to generate ideas from employees. It can focus on user groups and lead users to generate ideas from customers. Connection to external sources can also help the firm have a clear picture of the industry and market trends.

References

Ayuso, S., Rodriguez, M., & Ricart, J. (2006). Web.

Desouza, K., Awazu, Y., Jha, S., Dombrowski, C., Papagari, S., Baloh, P., & Kim, J. (2008). Customer driven innovation: To be a market place leader, let your customers drive. Research-Technology Management, 51(3), 35-44. Web.

Jaruzelski, B., & Loehr, J., & Holman, R. (2012). The global innovation 1000: Making ideas work. Strategy+Business Magazine, (69), 1-15. Web.

Jones, M., & Samalionis, F. (2008). From small ideas to radical service innovation. Design Management Review, 19(1), 20-29. Web.

Kasper, G., & Clohesy, S. (2008). Intentional innovation: How getting more systematic about innovation could improve philanthropy and increase social impact. Web.

Skiba, F., & Herstatt, C. (2008) Integration of innovative users as source of service innovations. Web.

Tidd, J., & Bessant, J. (2009). Building and sustaining learning networks. Web.

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