Deloitte SA Blog

When applying gaming principles to business operations, companies should seek to advance strategic objectives—not simply promote routine performance goals.

It’s likely that your company will try out gamification techniques throughout the organization during the next few years. In fact, Gartner predicts that by 2015, 40 percent of Global 1000 organizations will use gamification as the primary mechanism to transform business operations.¹ Gamification is about taking the essence of games—fun, play, and passion—and applying it to real-world, non-game situations. In a business setting, that means designing solutions using gaming principles in everything from back-office tasks and training, to sales management and career counseling.

Unfortunately, it’s also likely that your gamification initiatives will fall short of expectations: Gartner predicts that by 2014, 80 percent of current gamified applications will fail to meet business objectives, primarily due to poor design.²

What’s going wrong?

In many cases, organizations aren’t thinking boldly enough about their objectives for applying gamification. In seeking to motivate employees by using gaming principles, many organizations focus only on awards such as points, or a single routine performance goal. But gamification’s potential is much more strategic: Systematic adoption of gamification throughout the business and tight integration with the core systems that drive front- and back-office functions can be the source of a significant competitive advantage.

A Whole New Game

Gamification isn’t just about scoring points—it allows for new ways of imagining, designing, and implementing solutions. As business becomes increasingly social, more opportunities are arising to augment performance and promote strategic objectives by embedding gaming mechanics into traditional processes.

Organizations can harness gaming principles to improve morale, motivate behavior, and get stakeholders passionately engaged in finance, sales, HR, manufacturing, and customer service, among other functions. By aligning game objectives with their desired outcomes, organizations can promote the adoption of leading practices.

Even more powerfully, gaming mechanics can be almost imperceptible to users, who find themselves motivated to find new ways to work, collaborate, share ideas, and drive business outcomes. In this way, gamification will be a critical enabler of organizations’ “social business” objectives.

As an example of the possibilities, consider how Engine Yard, a platform-as-a-service provider, used gaming mechanics to build a self-help customer-support community. The company had been responding to customer issues through support tickets—a slow process that also didn’t promote the company’s strategic goal of getting customers engaged in its knowledge base and forums. The company moved the forums and related documentation to a customer-support portal, and then deployed gaming techniques to reward customers who use the portal. Customers can earn “achievements” for specific behaviors, such as searching the knowledge base, reading articles, and creating topics. They can also complete “missions”—where a series of customer-support tasks are grouped together—to win special rewards or badges. As users accumulate achievements or complete missions, they raise their experience status and reputation on the portal to a higher level.

Since deploying the gamification effort, Engine Yard has seen a 40 percent increase in forum engagement and knowledge base searches; a 20 percent reduction in tickets per customer, on average; and a 40 percent improvement in ticket response time by Engine Yard’s support team.

Putting Gamification to Work

To apply gamification effectively, companies should understand the organization’s inner workings, process interdependencies, and stakeholder behaviors, including the interplay between people and technologies. Success factors include the following:

Identify the relevant social networks. Given the interactive nature of gamification, social networks are the starting point for implementing initiatives based on game mechanics. Companies should identify the social networks relevant to a specific business objective. They can then explore incentives that will motivate members of those networks to engage in pursuing that objective. It is critical to identify constraints on the use of gamification to achieve the desired objective.

Form a multidisciplinary team to design the game. A game will likely touch on individual incentives, operational and organizational goals, analytics, end-user interfaces, and underlying IT systems. Companies should form a multidisciplinary team to represent these dimensions—including social scientists, marketers, game designers, line-of-business managers, data scientists, back-end systems engineers, and architects. When applying game dynamics to a business process or the business as a whole, designers should understand the complexity of the rules that govern the organization—and how to increase interaction and engagement with audiences. The game design should offer clear benefits to users—as well as to the organization.

Measure results and fine-tune the approach. To demonstrate tangible results, organizations should benchmark current performance, measure the outcome once the application is activated, and revise assumptions, approaches, or tools in response. To get past the pilot phase, it is critical to maintain momentum by encouraging users to continue participating. If the game dynamics are too difficult, participants will likely lose interest and disengage. The same is true if the dynamics are too simple. The new data generated by the game can be used to derive insights for adapting it in real time. Measuring outcomes and fine-tuning the approach should be continuous processes to enhance the model and keep players engaged over time. Organizations should consider how to keep this process exciting and interesting after the initial achievements and how rewards, incentives, and recognition might be changed in light of the data regarding behaviors and outcomes.

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Badges and leaderboards have their place, but they are a part of a larger, more interesting opportunity. Companies should seek to avoid becoming stuck with isolated one-off concepts that incrementally improve only a small part of the business. Instead, executives should rethink what a gamified business looks like from the ground up. Understand who you’re trying to engage, what motivates them, and how gamification can change the way they look at—and work with—the organization.

—by Doug Palmer, principal, Deloitte Consulting LLP and Andre Hugo, director, Deloitte Digital

Organizations can support their ambitions for gamification by leveraging available systems and making game mechanics compatible with their cloud, big data, social, and mobile solutions.

Some leading companies have bold plans to use game mechanics to promote employee and customer engagement and to encourage the adoption of new behaviors. But is their technology ready to support these ambitions?

Future generations of enterprise systems are likely to have game mechanics embedded in their designs. Until then, an effective approach is to layer game elements into established packages and custom solutions. It’s also important to make game mechanics compatible with the company’s cloud, big data, social, and mobile solutions.

The focus and pace of efforts to embed gamification will vary by industry and company. However, several topics should be on the radar of CIOs as they consider how the IT organization can best support gamification initiatives:

Game mechanics platform. Effective use of gamification depends largely on the design and user experience of the game itself: the rules engine, the approach to monitoring and triggering events, and the user interface. A number of solutions have emerged that provide plug-ins or third-party services for game elements. Many organizations are also building their own solutions that are tightly aligned with policy engines and digital content management systems for consistency and ease of maintenance.

Social business integration. Like traditional games, gamified business processes are inherently social. By adding game elements to internally focused collaboration and social enterprise tools, companies can motivate users, create support mechanisms, and tap into existing real-world relationships. These enhanced tools can also help to overcome organizational hierarchies and silos, thereby bringing together diverse teams to improve how they do their jobs. Linking gamified processes into public social media platforms is equally important—to increase enterprise connectivity and promote authentic interaction with customers and third parties.

Enterprise systems integration. To evaluate individuals’ performance and reward them appropriately, game mechanics will often require visibility into their day-to-day activities. Organizations can provide this visibility by tightly integrating gamification with enterprise systems, such as ERP and customer management solutions. As is true for other IT integration efforts, designers may find it hard to accomplish this, particularly if it entails providing access to users outside the company or the business unit that owns the system. Designers may also find it hard to embed gamification elements into platforms’ native logic or even determine which platforms are appropriate to use. If integration is not feasible, games rules can be run in a separate environment, with feedback relating to the relevant behaviors, incentives, and data provided through standard communications channels, such as e-mail.

Cloud and open external systems. By adopting clearly defined policies and governance structures, organizations can facilitate the use of flexible application portfolios (including hyper-hybrid clouds and open APIs), which are easier for gamified applications to reference. It is likely only a matter of time before customers and staff deploy their own applications, and organizations should make it simpler for them to add game elements. The enterprise should also develop the capability to extract data from these new applications to gain a broad view of users’ behaviors.

Big data and analytics. The use of badges, virtual gifts, rewards, and leaderboards, along with the accompanying social commentary, significantly increases the amount of internal and external data available to analyze. Companies can organize data for analysis by developing a taxonomy system that provides meaningful tags. Analyzing the data to identify patterns relating to behaviors, businesses, and products may point to opportunities for increasing agility throughout the organization. CIOs and governance officers will need to address issues relating to the storage, privacy, and accessibility of these large data sets. Finally, organizations will need to develop ways for measuring the usefulness of the data generated by gamification efforts, and then use the findings to fine tune their approaches. To measure ROI for a gamification initiative, organizations can collect a baseline of data relating to a type of engagement (such as contributions to a knowledge management platform). They would then compare the baseline to new data periodically and make adjustments to the initiative based their findings. In addition to the comparative view, the data itself can be informative. For example, the organization may find that it needs to collect more granular data or add or drop specific metrics.

Mobile. Increasingly mobile workers and customers creates many new opportunities to incorporate game dynamics into business processes, including geotagging, video, photo embedding, and social plug-ins. Maintaining security over what is published, stored, and recorded becomes critical for protecting the brand, reputation, and even business continuity. Mobile applications also allow for advanced techniques like appointment dynamics, where specific actions or rewards are available only if a user is in a predetermined physical place at a specific time.

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As organizations expand their deployment of gamification to include more strategic objectives, it will be increasingly important to have an effective technological foundation in place to support these efforts. CIOs will play a critical role in supporting the enterprise’s ambitions for the strategic reach of gamification.

—by Doug Palmer, principal, Deloitte Consulting LLP and Andre Hugo, director, Deloitte Digital

Gauteng road tolling is a certainty, organisational preparedness is not

The numerous benefits of Gauteng Road Tolling will no doubt be realised with an associated cost in that individuals and business will soon start to feel the impact of this cash outflow. In short, Gauteng road tolling is expected to place a significant financial burden on both organisations and individuals.

In a Deloitte Remuneration survey 63% of participant organisations stated that they are still to investigate the impact this will have on their employees and whether they will compensate employees for this cost. Furthermore, based on our ongoing client interactions in the market, we are also aware that several organisations have not yet assessed the impact further tolls could have on their distribution network and operating margins.

Without having visibility of this impact, numerous organisations have not yet decided what proportion of costs will be absorbed through their operating margin, what costs will be passed on to customers and what proportion of costs will be accepted from their suppliers.

Organisations need to assess how the business will be impacted by E-Tolling and craft strategies to minimise the negative effects on profitability and employee productivity

Road tax represents a significant change for both the organisation and employee. Understanding the quantitative and qualitative impact of this road tax on your organisation will ensure you are prepared to design and implement appropriate mitigating actions for both internal and external stakeholders.

Organisations need to identify . . . . Click here to download the article

For a more detailed discussion on e-tolling, how it will affect your business and how you can prepare for the impact of e-tolling, contact Chad Schaefer at chschaefer@deloitte.co.za or Clinton Houston at clhouston@deloitte.co.za

Lwazi Bam becomes Africa CEO while Kenya’s Joe Wangai chairs the board

Professional services firm Deloitte has announced a new Africa Board which sees Lwazi Bam, the Chief Executive Officer (CEO) of Deloitte Southern Africa also assume the role of Africa CEO. The seven member board will be chaired by Joe Wangai, Audit leader of Deloitte East Africa.

The Board will ultimately oversee operations across 15 countries in English speaking East, Central, Southern and West Africa. These include Botswana, Namibia, Mozambique and South Africa in Southern Africa, Zambia, Malawi and Zimbabwe in the firm’s Central Africa region, Nigeria and Ghana in West Africa, as well as the East African hub of Kenya, Uganda, Tanzania, Ethiopia, Rwanda and Burundi.

Bam and Wangai are joined on the board by Trevor Brown, Charles Larbi-Odam, Ben Mbanga, Kimani Njoroge and Allen Swiegers.

Deloitte has a presence in 34 countries in Africa and these firms have been clustered into English, French and Portuguese-speaking areas to better facilitate the service delivery for our clients.  Deloitte is very fortunate to already have very well established practices across the African continent, with most of them being the leading firms in their markets.  The legal integration of these firms will move Deloitte into a completely different league, further cementing its market leading position in Africa.  Deloitte in Africa is represented by over 350 partners, over 6 000 people and revenues in excess of R6.6 billion (in excess of US$ 664 million).

Bam says, “Our clients will be the biggest beneficiaries of this integration, we will now have the ability to deploy our specialists in every part of the continent where our clients require the service.”

Deloitte recently bolstered its presence in Zambia and opened new offices in Addis Ababa, Ethiopia. Both countries are strategically important and offer investment opportunities in agriculture, mining, infrastructure development and financial services.

Ethiopia is one of Africa’s most uplifting growth stories of the past two decades with its sizeable population of around 80 million people. Ethiopia is expected to join the World Trade Organisation within the next five years. The country recently hosted the 50^th anniversary of the African Union (AU).

“In line with the AU’s vision of an integrated, prosperous Africa, Deloitte sees itself as active partners in realising that vision,” says new Chairman Wangai.

Bam says the new structure will benefit Deloitte professionals through increased opportunities for cross-border work and broader client exposure. It will also afford clients wider access to the firm’s pool of expertise across the regions.

“It will permit the best expertise to be deployed on an assignment, regardless of country, for example,” Bam says, “We have a Pan-African Capital Projects team that is based in multiple locations, headed by a senior partner in Nairobi, which can be deployed anywhere in Africa.”

Wangai adds, “Our mining advisory practice, which has been strengthened through the Venmyn acquisition, will be bolstered by the transfer of senior international resources to Lusaka. This will be the base of our Central African Mining hub.” He further notes, “The history of Deloitte in Africa is longstanding and through this integration Deloitte aims to continue to deliver value-adding services during Africa’s rise.”

Bam has been the CEO of Deloitte Southern Africa and a member of the Deloitte Global Board since June last year. He has been head of the Corporate Finance division and is a member of the Deloitte Southern Africa Board.

Wangai is the Audit Leader for Deloitte East Africa. He is a Fellow of the Institute of Certified Public Accountants of Kenya and served as the Institute’s Chairman between 2005 and 2007. He is a past member and Deputy President of  the Executive Committee of Eastern, Central and Southern Africa Federation of accountants (ECSAFA). Wangai holds a Master of Business and Administration from University of Nairobi.

Are Leaders Born or Made looks at how organisations can identify and cultivate their future leadership talent.

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CLICK HERE for more information on the Deloitte Inspiring Leadership Commitment workshop and to register

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Nature Versus Nurture

The classic debate has raged for years. What skills and attributes are individuals born with? What skills and attributes can be developed over time?

This debate is at the heart of how an organisation acquires its leadership talent. Should companies let born leaders rise to the top? Or is it better to attempt to develop promising individuals into leaders – to treat leadership as a discipline that can be developed through knowledge and skill acquisition and the application of that knowledge and those skills?

Organisations fall on both sides of this issue. While there are good reasons to support each, both approaches have drawbacks . . .  click here to read the full article

Inspiring Leadership Commitment Workshop

Deloitte Human Capital is running a workshop called Inspiring Leadership Commitment where leaders will learn how to inspire total commitment by:

• Winning over people who resist things, such as change, plans, and suggestions
• Generating enthusiasm and inspiring commitment in order to make things happen
• Providing what people most value in the workplace, so they are motivated to perform

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CLICK HERE for more information on the Deloitte Inspiring Leadership Commitment workshop and to register

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Venmyn Deloitte’s Munyar Chirisa spoke at a Mineral Beneficiation summit in Sandton, South Africa, on “The Upgrade of Minerals Through Smelting”. The summit, which was attended by a Member of Parliament as well as several finance, human resources and technical role players from the industry, focused on mineral beneficiation in South Africa.

Chirisa’s presentation discussed the various smelting techniques used, the necessity of smelting and the various pre-treatment steps used. The presentation also brought to the fore the fact that smelting is indispensable to metal extraction industries, with no viable alternative extraction method.

Chirisa’s presentation also made it clear to the attending delegates that, although smelting is a means of extracting metal, it is the also a process in which most of the value is unlocked in the mineral processing chain and that mineral companies with smelters in their portfolios trade at much higher unit values as compared to the companies with no smelters.

Processes such as pelletising are also turning previously untreatable fines into feed for submerged arc furnaces. Whilst irreplaceable for the foreseeable future, major factors that weigh against smelters are the extremely high capital outlays (~ZAR1bn) as well as the high power inputs required to run these plants.

The trend going forward certainly favours bigger plants that can capture the economies of scale. However, the limited availability of electrical power in South Africa makes this trend unfavourable as bigger smelters require even more power to operate. This also means that smelter operators have to find ways of saving on power, which can contribute to as much as 45% of the total operating costs. These ways include the use of the off-gases to pre-heat the feed as well as the use of off-gases to generate steam to drive turbines and generate power. In this way, companies can save on the electricity bill and increase their margins.

In addition, the increasing popularity of Direct Current (DC) smelters appears to be a trend going forward given that these smelters can take a wide range of feed grade as well as fines, which cannot be smelted in submerged arc furnaces without agglomeration / pelletising.

For more information on mineral processing and metallurgical test work, contact Munyar Chirisa at +27 11 783 9903

Senior executives are often faced with a dual challenge. On the one hand, they need to demonstrate to the market – in commonly understood terms – that their enterprises are creating value for their shareholders. On the other hand, their effectiveness hinges on identifying and exploiting differentiated ways of serving customers faster, better, and cheaper compared to competitors.

Senior executives face this challenge very much in the public eye. Investors want to see how their investment can pay off. Lenders want to know how their funds will be used and returned. Analysts want to assess one company against others. Customers want a reason to bring their business, and assurances that their needs will be met. Employees want to know they will continue to have interesting work that pays the bills. And, finally, the Board wants to know the enterprise is prudently run while competing aggressively.

With the dual challenge comes a dual risk. If the company cannot differentiate itself from competitors, it may not be able to attract customers, and will cease to be in business. Yet, if it is too different, it may confuse lenders and investors, and not attract the funding necessary to stay in business.

Senior executives, therefore, should to be adept at both developing strategic plans that provide competitive advantage, and at communicating how they will provide shareholder value. They should be able to link strategy to value. The purpose of this article is to help executives understand these connections, and to provide them with a practical, systematic framework for tracing the impact of proposed strategic actions on shareholder value.

There is a significant body of knowledge covering how to identify value once it has been created or how to identify some of the actions that can create it. These actions apply generally to many organizations – they do not guide any particular organization regarding the critical decisions on where and how they should compete. That’s the role of strategy. Existing strategic frameworks can help organizations identify suitable industry segments, and define their competitive positioning, but don’t generally identify how shareholder value will be achieved. Although it is commonly recognized – or expected – that effective strategies result in value creation, there is no simple framework for connecting the two. This paper seeks to fill that gap.

Download the full paper . . . . Linking strategy to value

If you would like to have a more detailed discussion on how your company can benefit from the Deloitte Enterprise Value Map, contact Professor Rodger George at rogeorge@deloitte.co.za

We welcome you to subscribe to the Deloitte weekly newsletter where we share Deloitte opinion pieces with business decision-makers

Deloitte’s Global Energy & Resources group is delighted to introduce its 2013 issue of Oil and Gas Reality Check, which focuses on the five of the primary challenges impacting the oil and gas sector globally, and provides our view of the direction which these trends will follow. Issues covered in the report:

• Shale gas – a global or regional resource?
• LNG pricing – the end of oil indexation?
• Resource nationalism – entering a period of low tide?
• NOCs – capturing the playing field
• Managing market complexity

The report explores the industry fundamentals of each trend – the supply, demand, macroeconomic, regulatory, cost, price, and competitive behavior factors – allowing us to draw insights and describe what may unfold over the short and the long-term.

Click Here to download Oil and Gas Reality Check 2013 - A look at the top issues facing the Oil and Gas industry

If you have any questions or require a more detailed discussion, feel free to contact Anton Botes (Oil and Gas Leader at Deloitte Southern Africa) at abotes@deloitte.co.za

Click Here to learn more about what we do or visit the Deloitte Southern Africa Oil and Gas website

Just when you think the world is returning to normal after an earthquake, it hits: aftershock. As the earth’s crust resettles from the effects of the primary earthquake, aftershocks can continue to rattle the area minutes, days, and even months later.

It’s a feeling that may be familiar to risk leaders in many different industries these days. Following the latest global economic crisis, organisations of all types are still operat­ing in a volatile, highly changeable risk environment.

In a survey of 192 U.S. executives, Deloitte and Forbes Insights found that many are still working hard to make sense of this environment. In fact, a stunning 91% plan to reorganise and reprioritise their approaches to risk management.

Click Here to download the report

We also invite you to follow the Deloitte South Africa Company Page on LinkedIn and to join the Deloitte South Africa – Risk Management group on LinkedIn

As a result of the mobile device phenomenon, advertising via phones and tablets has emerged as an attractive proposition for global brands to promote their products and services. The mobile device with its high daily use, large audience-reach and media capabilities is now top of mind for many brand managers, agencies organisations looking to influence the digitally connected generation.

Revenues from mobile media are expected to reach $150 billion1 by the end of 2012. Advertisers are starting to utilise the possibilities of mobile advertising with spend expected to jump 85.4% to $11.6 billion by the end of 2012.

With the more intelligent mobile advertising platforms finding their way into market, advertisers are now profiling users with the goal of providing more contextual adverts and increasing the likelihood of consumer engagement with the advert.

Read more . . . .    How to advertise on a mobile phone and tablet

For a more detailed discussion, feel free to contact the Deloitte Technology, Media and Telecommunications Leader, Mark Casey, at mcasey@deloitte.co.za

We welcome you to subscribe to the Deloitte weekly newsletter where we share insightful and topical, business-related content prepared by Deloitte industry and subject matter specialists