Kevin Entricken, Wolters Kluwer CFO, explains how a combination of continual evolution of offerings, a focused corporate business strategy and supporting inorganic growth strategy has helped unlock the full potential of digital
Kevin Entricken, Wolters Kluwer CFO, delivered his keynote address at Finance Director Europe (FDE) breakfast in Amsterdam yesterday to more than 40 European Finance leaders from such global brands such as Nike, ING, Heineken, ABN AMRO, Ahold and Philips. During the invitation-only event, Entricken shared his experience on how Wolters Kluwer adapts its operating model to unlock the full potential of digital.
Digital disruption and the drivers of change
The speed of change in technology, fast-evolving customer needs, the rise of new digital native competition and opening of new global markets all require fundamental changes in a company’s operating model if they are to thrive.
As Entricken noted during his address, five drivers of digital disruption continue to be particularly important for Wolters Kluwer:
- Continued pressure on professionals to improve outcomes and productivity
- Increasing volume and complexity of global regulation, risk and compliance
- High growth of professionals in developing economies
- Changing client needs: millennials think, and work differently, and seek a truly rich digital experience in buying and using information and software products
- Increased disruption from cloud, mobile, social media, Big Data & Artificial Intelligence
- As he went on to explain, Wolters Kluwer responds to these disruptive digital drivers with three main approaches.
Continual evolution of offerings
In today’s digital context, Entricken noted, ‘Only those who continually adapt their offerings in line with market and customer needs and opportunities will thrive’. Wolters Kluwer’s approach has included an incremental development of offerings around three broad transition phases:
- Static to Online: Traditional information offerings of static content (such as books and CD-Rom) evolve into online offerings
- Online to Workflow: Online offerings evolve into segmented workflow solutions integrated with end-to-end software and systems
- Workflow to Big Data: Segmented workflow solutions are enhanced to leverage artificial intelligence, mobility and cloud computing opportunities
To illustrate this approach, he shared several examples including:
- CCH Axcess: the tax profession’s only modular cloud-based solution
- OneSumX: an ecosystem of complementary and comprehensive solutions and services to manage the intersection of governance, finance, risk and compliance
- Kleos: the only product available that offers a next generation cloud platform supporting both the practice and business of law, and is fully compliant with local regulations
Corporate business strategy
With this in mind, Entricken went on to explain how the Company’s 2016-2018 Corporate business strategy of a) Expanding market coverage b) Driving operational efficiencies and c) Delivering expert digital solutions, is designed to help Wolters Kluwer capitalise on these approaches and so, realise the full potential of digital.
Mergers and acquisitions
Over the years, Wolters Kluwer has divested non-core assets and, at the same time, made acquisitions with revenues of around 1 billion—typically native digital and software businesses growing faster than the company’s traditional business. Wolters Kluwer’s recent acquisition of an adaptive learning technology in healthcare is just one recent example.
Overall, this approach has supported the Company's organic growth strategy, helped accelerate the Company’s overall digital transformation and improve portfolio focus, quality, and growth momentum.
The results, and future potential
Thanks to a continual evolution of offerings, a focused corporate business strategy, and strong supporting inorganic growth strategy, the Company has indeed improved efficiency and unlocked profitable growth in digital.
The company’s 2015 financial results showed revenues of €4.2 billion, growth of 3% with a 21% increase in margins, and a 5% improvement in digital and services revenues that now account for 83% of its total revenues. With less than 20% of its revenue now coming from print-based products the Company’s portfolio has been transformed.
However, the journey is not yet over.
Entricken went on to say, ‘We continuously strive for achieving competitive differentiation as a leading global digital organization. Our future story will be tightly coupled with ongoing successes in leveraging cloud computing by…
- Satisfying customers through productive and compliant digital solutions: allowing customers to access information and workflow from anywhere, via any device
- Delivering new products to market with greater agility and velocity: spinning up development and test environments within minutes, for example
- Achieving perpetual gains in corporate operating cost efficiency: by, for example, leveraging technology to serve markets near and far through localization of a single instance of software
“It is an interesting journey,” said Entricken, “Our business is information. And we aim to be domain experts in all the areas we cover. Every one one of the professionals we serve face increasing pressure on their time, and the sheer volume and velocity of information to which they have access is a major challenge. So we provide more than just knowledge. We provide expert solutions and fully workflow-integrated productivity tools. That’s why our journey is taking us towards being a digital solution company.”