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  • Fixing Software Complexity

    Fixing Software Complexity

    Military Information Technology, 29 November 2013

    An in-depth look at A.T. Kearney's step approach to building an IT application blueprint, designed to reduce the military’s software costs and increase long-term efficiency.

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  • Cost-Effective Green Mobility

    Cost-Effective Green Mobility

    How can India minimize the environmental impact of its auto industry while maintaining growth?

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    Car sales in India are going through the roof as the country continues to grow and prosper. More people with money means more goods and services and more cars to transport them. While prosperity is a welcome addition to the India economy, the impact on the environment is not. In fact, the environmental challenge raises some important questions: How can India minimize the environmental impact caused by the transportation sector without impacting the country's growth momentum? Which automotive technologies are environmentally friendly? How can Indian automakers sell "green" cars at a price that will suit cost-conscious Indian consumers?

    To answer these questions, A.T. Kearney and the Confederation of Indian Industry (CII) conducted a joint study to identify and prioritize key actions for cost-effective green mobility. This report explores various options available to India to move toward a green mobility paradigm with lower carbon dioxide equivalent (CO2e) emissions—and therefore less impact on global warming—and lower emission of regulated pollutants such as particulate matter (PM), monoxides of nitrogen (NOx), carbon monoxide (CO), and unburned hydrocarbon (HC).

    This report examines the opportunities available for a more cost-effective, greener mobility future for the consideration of all stakeholders: industry, government, and consumers.

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  • Making Sustainment Programs More Sustainable

    Making Sustainment Programs More Sustainable

    Government-industry collaboration can improve weapon system performance.

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    Many large sustainment programs use performance-based logistics (PBL) strategies to buy a level of maintenance performance rather than specific parts or components, and the arrangements have brought great benefits and savings to defense programs. Yet when funding is cut, programs can struggle to find solutions to maintain system performance at required levels, because so much of the day-to-day management responsibility has been outsourced.

    However, the tools for strong sustainment results are there, even in a time of austerity. By ensuring that they are shooting for the same goals and have a solid view of program performance, the government and its partners can build a culture of trust and collaboration that brings long-term success for all parties.

    For large military programs to succeed over the long term, the government and its contractors have two priorities: understand each other’s definition of success, and maintain a reliable view on program performance. These fundamentals lead to better collaboration and greater trust between the government and its suppliers and result in more informed and effective sustainment.

    While the benefits will not come overnight, they do not require an organizational restructuring. Rather, the government and industry can pilot a small number of focused efforts quickly to make an immediate impact:

    • Define the data required, not just what is provided.
    • Take advantage of existing data sources.
    • Bring change to operations.
    • Employ the right business intelligence.
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  • Setting Standards: A Strategy for Europe

    Setting Standards: A Strategy for Europe

    As emerging economies seek to influence global standards, Europe's role as a shaper becomes a priority.

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    Standards are the rules, guidelines, and definitions that describe repeatable ways of doing things. Standards are a crucial element in the EU's industrial strategy as Europe seeks to remain a shaper of global standards rather than a follower.

    The European Round Table of Industrialists worked with A.T. Kearney to study the issue of developing and implementing standards. We found six recommendations for establishing standards in European industry:

    • Establish performance targets to foster innovation. Standards spread collective knowledge, bringing together industry players in a working environment of sharing and collaboration. The use of standardized parts and business processes can reduce early investment costs and risks, and provide a platform from which industries can innovate.
    • Consult with experts. Involving technical and industrial experts, even when standards are initiated by governments, can help build standards on solid foundations.
    • Coordinate industry players. European standardization bodies can play a larger role in facilitating standard-setting along the value chain and across industries.
    • Balance speed and consensus. Standards must be put in place quickly in the face of accelerating technological change and market competition, and they must be built on a foundation of consensus to broadly address the requirements of all players.
    • Encourage a global approach. European companies that adopt and participate in setting global standards increase their market access to other countries.
    • Encourage SME participation. Despite their importance to the European economy, few small and medium-sized enterprises (SMEs) are actively involved in setting standards.
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  • Regulatory Fatigue in Financial Services

    Regulatory Fatigue in Financial Services

    Financial leaders met to discuss financial-services regulations in Europe.

    Financial leaders, policymakers, academics, and consultants discuss financial-services regulations in Europe.

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    Executives from leading financial institutions and think tanks joined policy makers, academics, and management consultants at the Brussels campus of Vlerick Business School for three spirited panel discussions on financial-services regulations in the European Union. Held under Chatham House Rule, this paper does not offer specific attribution on points raised, but draws selectively on the many valuable contributions.

    The gist of the debate is that scale and regulatory costs have increased dramatically in the European Union, and that while governments want to tighten control over the financial sector in general, financial institutions as a whole and banks in particular warn that more regulation threatens to become counterproductive, eroding their ability to lend and thus undermining the prospects of new investment and growth.

    Everyone seems to agree that strict regulations are both required and desirable, but they must be appropriate, adaptive, sufficient, and transparent. There is widespread doubt that current regulations embrace these qualities. Indeed, regulations really aren't all that appropriate, given the excess focus on retail banking and less on other financial industry segments, such as shadow banking. They may be adaptive, but in the wrong way, as pre-crisis regulations slowly enabled global integration, but post-crisis national tightening has led to fragmented, inward-looking and contradictory policy. Sufficiency is difficult to define, but the current approach may lead to overkill. Lastly, transparency—less since the involvement of various regulators in a single financial institution—leads to contradictory effects. Overall, the equilibrium between free market and regulation remains elusive—and the continuing crisis may affect it even more.

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  • The EU's Public Sector Spending Problem

    The EU's Public Sector Spending Problem

    A huge GDP gap haunts European governments as they seek to balance between government spending levels GDP trends.

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    Europe’s public sector has a problem. Government spending in the 27 member countries of the European Union (EU27) was almost 50 percent of gross domestic product in 2011. The result is a GDP gap of €247 billion—in other words, the amount governments overspent.

    What’s more, compared with other regions, Europe’s ratio of government spending to GDP is 9 percentage points higher than the nearest contender (the United States) and more than double that of China, primarily because of social security.

    The question is whether it will be possible for European countries to survive while preserving social security. To answer this, A.T. Kearney performed preliminary research on government spending in the EU27.

    The research finds that governments can take steps forward by closing the GDP gap through economic development initiatives, balancing public spending and GDP by reducing operating costs, optimizing procurement, improving employee productivity, implementing lean processes into the public sector, and incorporating shared services.

    Some EU27 countries face tremendous challenges dealing with the crisis, but the picture is not all bad. Many issues can be solved by optimizing procurement and improving productivity. Wise leaders will help their governments put the right strategies in place for a sustainable future for Europe.

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  • Can Mergers and Acquisitions Still Meet Future Defense Challenges?

    Can Mergers and Acquisitions Still Meet Future Defense Challenges?

    Aol Government, 26 November 2012

    In a debate between improved economies of scale and supplier concentration, will the benefits achieved through M&As meet future defense challenges?

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  • Russia's National Drug Insurance: Healthy Society, Healthy Economy

    Russia's National Drug Insurance: Healthy Society, Healthy Economy

    As Russia faces a declining population and a rise in chronic illness, a new pharma-focused healthcare system could be the cure.

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    As we know by observing other countries, effective healthcare systems are both possible and affordable. For Russia, such a healthcare system presents the government with a golden opportunity to provide a social and economic breakthrough for its people.

    Russia isn’t alone in its problems, and the lessons learned from the country’s current dilemma are instructive for countries seeking to reshape healthcare policy as a way to drive and support sustainable economic development. This paper examines a major aspect of the healthcare policy debate taking place in Russia today—national drug insurance (NDI).

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  • (re)Building a Post-Earthquake Japan

    (re)Building a Post-Earthquake Japan

    From the devastation of March 11, 2011, may come a new birth for Fukushima and Japan.

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    On the Richter scale, the quake is 9.0, the most powerful ever to strike Japan. Even as the aftershocks rumble, none of us imagines the approaching tsunami traveling behind the quake, across the Pacific, toward Japan's eastern coast. When the waves break, the news is immediately horrifying, and only grows more so. More than 20,000 people are dead or missing.

    The catastrophe is not over. Three reactors at the Fukushima Daiichi nuclear plant flood and suffer core meltdowns. Radiation levels rise. An estimated 150,000 people move out or are evacuated while municipal officials impose a 20-kilometer exclusion zone around the power station. Around the world Fukushima becomes a household name for the worst possible reasons.

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  • Paying More for Less in Defense Budgets

    Paying More for Less in Defense Budgets

    AOL Government, 21 May 2012

    Inflation in defense programs exceeds other industries because of perpetual budget and execution cycles and a lack of true competition.

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  • Achieving Affordability: A Smarter Approach to the Pentagon Budget

    Achieving Affordability: A Smarter Approach to the Pentagon Budget

    The Hill, 9 April 2012

    The defense industry must pursue an affordability path with a vengeance.

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  • Executive Spotlight on Jeff Sorenson

    Executive Spotlight on Jeff Sorenson

    Executive Biz, March 2012

    With 37 years in the Army and the past 20 years managing acquisition programs, Jeff brings a unique government perspective to A.T. Kearney.

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  • Affordability in the U.S. Defense Department

    Affordability in the U.S. Defense Department

    Budget pressures are triggering changes in the defense value chain. Commercial-sector success offers a way forward.

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    The defense value chain is on the precipice of significant change triggered by severe budget pressures. The Department of Defense is at a crossroads. Successes in the commercial sector offer the industry a way forward, but they also beg a key question: Can defense value chains respond similarly?

    Budget cuts are increasing pressure in every direction along the U.S. Department of Defense (DoD) value chain—from customers (PEOs, SPOs, war fighters), prime contractors, and sub-tier suppliers, to funding providers such as those on Capitol Hill and Wall Street. The pressure is forcing the government and its suppliers to dramatically challenge the status quo.

    A.T. Kearney interviewed 18 defense-sector senior officers and executives from various areas along the defense value chain. They presented a wide range of perspectives on improving affordability—suggesting that defense acquisition (buy side) and development, production, and sustainment (sell side) are ill equipped to meet today's new realities.

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  • The City of the Future

    The City of the Future

    Every city has different objectives to fulfill, and a wide range of strategic options available to achieve them.

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    A.T. Kearney's Global Cities Index—which measures the degree of openness, relevance, and global integration of cities around the world—underscores how cities are addressing the wave of globalization that has swept the world. City leaders, however, have many objectives, some far more pressing than globalization. Number one is to be a successful leader of a successful city and, thus, get reelected.

    Yet whatever the goals, achieving them requires a vision for the future—one that is inspiring, compelling, and credible. When outlining such a vision, city leaders face two distinct but interconnected goals: to protect and improve their citizens' well-being, and to become attractive to the external resources that are so vital for long-term growth. How to make this two-pronged vision a reality?

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  • Restructuring Defense Spending for Today's Budget Reality

    Restructuring Defense Spending for Today's Budget Reality

    The Hill, 11 November 2011

    Five principles for cutting the defense budget without harming national security.

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