Growing happier humans

Australia and New Zealand have been powering growth for Capgemini globally as the market displays “amazing resilience” through Covid, says ANZ CEO Olaf Pietschner.

The IT and consulting giant aims to steepen that trajectory, taking the fight locally to the so-called big four consultancies on digital transformation, particularly across growth markets such as financial services, public sector, consumer products, retail, energy and utilities.

Pietschner is talking about a major scale up, with RXP and its mantra of “happier humans”, central to the plan.

RXP, founded with six people in 2010 by former Telstra exec Ross Fielding, now has some 560 staff – and Fielding says the decision to throw in with Capgemini instead of other suitors is rooted in a desire to continue that charge.

The deal, says Fielding, is all about growth, not “ripping out cost” and the plan is to stick closely to RXP’s ‘three Es’ of expression, experience and enablement - a proposition the firm hit on soon after acquiring creative and digital agency The Works in 2018.

With an acquisition and delisting in process, Capgemini and RXP are touting “end-to-end” digital transformation, CX and systems implementation, even running IT operations for customers. Just the kind of things that advertising holding companies are trying to pivot toward – and there’s a strong argument that those holding groups have missed a trick, and opened the door to a new competitor, by not snapping up RXP before Capgemini could seal the deal.

“We’re really focused on changing the scale of Capgemini in Australia and New Zealand – and this is a significant building block for us” says Pietschner, who spent five years at News Corp and eight at Origin Energy prior to rejoining the consultancy in 2017. Earlier this year the firm snapped up MuleSoft specialist White Sky Labs, adding 150+ employees in Australia and Asia, along with clients including Energy Australia, Mynt, Blackmores, Qantas and 7-Eleven.

Pietschner won’t be drawn on what or who may be next on Capgemini's radar. But it seems the group is determined to make up for previously being “underweight” in the region.

 “Our ambition is to build up the presence of Capgemini in Asia Pacific and remain a key growth engine for the group, in particular in Australia,” he says.

“RXP enables us to use insights, design and tech to create … sustainable futures for our clients.”

Platform power play

The acquisition also creates a formidable local CRM footprint. Capgemini and RXP will become one of the biggest Salesforce partners – if not the biggest – in the region.

Meanwhile, RXP also has strong links with workflow cloud provider Service Now as well as Microsoft, “and that's certainly an area that we felt we needed to be stronger at,” says Pietschner.

Does Capgemini aim to bolster those specialisms, for example, by creating deeper capability across other platforms, such as Adobe, Google, Oracle – can it become a partner to all providers?

Pietschner says it could, technically, but probably won’t – given its strategy and the current market action.

“Capgemini is a global company. We're good at all these things. But the honest answer is we've doubled down on a couple of key focus areas. And our ambition is to be ‘the leader for leaders’,” says Pietschner.

“In order to do that, you need to be very good at what you're doing. Specialisation … is very important, because what clients are looking for is customer transformation or changing citizen experience in government, or core banking transformation in financial services – and they are often very specific around particular technologies.”

RXP’s Fielding says you can “never say never” in terms of platform partners - but the trick is always in timing. RXP “could have backed Adobe quicker than maybe we did,” he says, “but that’s okay, we’ve done well out of the ones we chose.

“We’ll be faced with that choice each and every year as to where do we want to go next. Clients will dictate that a bit, technology and trends will dictate it a bit. Then we have to make sure we don’t over promise and under deliver,” adds Fielding.

“If we’re going to go into a technology, we want to make sure we can do it well.”

The Works: Smart move

There may be some overlap between the two firms in terms of technology partnerships, but the creative smarts of The Works, the Sydney-based agency RXP acquired in 2018 for $33m, opens new doors to the consultancy.

“The Works – in terms of differentiated customer experiences, digital advertising and true advertising creative capability – that's certainly new for us here in Australia and will allow us to provide an end-to-end capability,” says Pietschner.

It also provides a new way in to clients, for example, through the marketing function, rather than technology, and a way to cross-sell to existing customers.

“We already have a customer experience capability, but certainly the interactions and the level of engagement that The Works has with CMOs, alongside the brand The Works has [built] will lift our game,” says Pietschner. “The potential for The Works to work with clients that we've traditionally been a technology partner to is a large part of the opportunity.”

Does Capgemini see that capability driving scale, presuming it goes well?

“Absolutely,” says Pietschner, “and there is no doubt it will go well”.

The decision to buy the creative shop now appears a shrewd move, one of a number of reinventions RXP has navigated in its relatively short history.

“We’ve been trying to be where the ball’s going to be, not where it has been, the whole time,” says Fielding. “Our logic was making sure that we didn’t just stay technologists, that we broadened ourselves – because there is plenty of money spent in business strategy, branding, branding strategy and the whole people-focused experience. And that's what we've done.”

“The ‘big four’ are now an alternative to us”

Capgemini consolidating tech partnerships and building out creative capability brings another heavyweight to the fray playing out locally and globally between consulting firms and advertising.

Fielding predicts that fight will intensify – and expects further market consolidation as a result.

“You've got big holding companies trying to get into consulting and consulting firms trying to get into the front end of the business. It’s a trend that's going to continue,” says Fielding.

“Being able to pull together the ‘three Es’ of expression, experience and enablement is going to be important – and businesses have learned through Covid just how critical that is,” he adds.

“There's no point in technology for technology sake. If it doesn't back up your brand and the experience you deliver, there's no point doing it.”

It’s not yet clear whether RXP will be integrated into Capgemini or remain as a standalone unit. Yet however the merger is structured, Fielding suggests RXP is no longer the indy ‘alternative’ for digital transformation projects – but the main game in town.

“That’s being a little bit cheeky, but [the deal] means we can hold our own to the point where maybe we're seen as an incumbent – and some of these others that you refer to as the 'big four' become an alternative to us, and not the other way around,” says Fielding. “It sure puts us in a new space, no doubt.”

Post-Covid boom

Since the initial Covid hit, there’s not been much overall drop off in spend, relative to the impact of the pandemic, says Fielding. What may have been pulled from advertising has been pushed into digital experience, he says, because “the importance of connecting what you say your brand stands for to what you actually deliver and what people experience through digital channels has never been more critical.”

Those decisions can take time, he says, but brands no longer have that luxury.

“They know they've got to do it and therein lies the opportunity. In January, February, March, as we get through Christmas and as restriction ease, we’re seeing it in the creative part of our business, where businesses are getting ready now. We're running a campaign around ‘Are You Ready’ for that reason. We're saying to businesses, don't wait, get ready now for when we come out of the other side.”

Likewise, Capgemini’s Pietschner sees ongoing opportunity from government sectors as they pivot to digital delivery and post-Covid experience, as well as the higher education sector, which with no students coming into Australia, “has been totally challenged”.

As such, HE providers are radically rethinking business models across student experience and delivery of learning while focusing “very, very strongly on cost and consolidation of IT providers, and potentially more outsourcing to improve cost and efficiencies”, says Pietschner.

He thinks this is where Covid may offer a silver lining across all sectors – as companies gain access to global digital resource without physical logistical challenges and expense.

“You can balance supply and demand much better. That changes the way consulting companies like Capgemini or RXP will work with their clients,” he says. “In the past, you had to find them, put them on a plane, you had to get a visa to get into Australia and you had to put them in a hotel.”

Pietschner thinks that will tip the balance in favour of big companies with flexible resource – and it seems clear that the company aims to be anything but “underweight” in Australia from here on in.