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Monthly Archives: Jan 2017

Salesforce Services Blueprint 2017: Leaders demonstrate commitment, dedication, and investment

January 31, 2017 | Khalda De Souza

HfS has published its second analysis of the Salesforce services market. In the HfS Blueprint Report: Salesforce Services 2017, we analysed and positioned twelve Salesforce services providers according to their execution and innovation capabilities.

So, what’s changed since last year?

There has been some consolidation in the Salesforce services market since we published the HfS Blueprint Report: Salesforce Services 2015. For example:

Acquisitions continue to be an important way to gain consultants and certifications. They can also bring valuable approaches and mind-sets that understand the cultural aspects of enterprises adopting cloud applications, which is essential to succeed in this market.

Service providers in general have continued to invest in developing service capabilities and investing in tools to support clients’ Salesforce deployments. Salesforce’s recent products, including Marketing Cloud, Community Cloud, and Commerce Cloud, change the value proposition from being simply a set of CRM tools to a complete customer engagement platform. As we highlighted in the 2015 note, Salesforce.Com Service Provision Must Have Real Investment To Succeed, Salesforce service providers need to adopt a holistic, business-led approach, and bring all relevant skills to the table, including mobile, security and social capabilities to differentiate in this market. While most of the current market is for Sales Cloud implementations, enterprises often expect the delivery of a complete solution, for example including mobile access to applications.

Growth areas identified in the report include:

  • Consulting services: including cloud readiness services and organizational change management services.
  • Ongoing management services: including advice on new releases and functionalities.
  • Analytics services: whether it is the Salesforce Analytics Cloud or an alternative solution
  • International deployments: more than 60% of current Salesforce deployments are in NA.

Leading service providers are investing in developing these capabilities, ahead of the market demand.

So, which service providers stood out?

In general, service providers in the Winner’s Circle have made impressive investments to achieve certifications for technical architects, Fullforce Master, and Fullforce Industry solutions. Salesforce itself views these as differentiating strengths in the Salesforce services market.  These service providers also typically adopt a business outcome approach, supported by a strong vision for Salesforce effectiveness for clients. They have developed differentiating tools and services, and received among the highest client reference scores in the research. Accenture, in particular stands out as Salesforce’s biggest partner. As well as having impressive scale and bench strength, it continues to invest in services to further differentiate in the market. All the service providers in the Blueprint Report demonstrated a good understanding of the Salesforce service market and a desire to invest in innovation. Deloitte remains a strong contender for the leadership position, while Appirio, Bluewolf, PwC, Capgemini, Cognizant and NTT Data all impressed with their execution capabilities. All of the Blueprint participants had an impressive investment in innovation, including the relatively smaller practices. For example, Infosys, Tech Mahindra, Persistent Systems and VirtusaPolaris have developed proprietary solutions to support specific industry sectors. Moreover, Infosys and Tech Mahindra demonstrate good use of partners to develop solutions. Persistent Systems positions as a Healthcare specialist, and VirtusaPolaris is developing its analytics services.

What are we expecting next year?

The number of certified technical architect, Fullforce Master and Fullforce Industry solutions remains low in the market as a whole. Although they require a lot of time and effort, they represent an opportunity for all Salesforce services providers to differentiate in this crowded market. So, we expect all the players to drive certification programmes in these areas over the next year.

All of the service providers in the Blueprint Report have enhanced their service capability and proprietary solution development in the past year. Those who have made acquisitions, will solidify acquired entities and work on integrating offerings, and marketing new value propositions to clients. Others will continue to make prospective clients aware of their developing capabilities.

Bottom Line – Providers need to build market awareness to make a success of the Salesforce services market

Buyers need to prioritise technical skills as a selection criteria if they don’t already. As this combined with clear business outcomes are the main ingredients for a successful relationship. The path to success in Salesforce services market is clear: strong technical credentials, outcome based services and market awareness.

Indeed, lack of market awareness of capabilities was the most noted challenge in the service providers we profiled. Salesforce has thousands of service partners. In order to stand out, the service providers must make a considerable effort to increase awareness of their skills with prospective clients and with Salesforce, which often called upon to recommend partners to clients. Choice for buyers is increasing so building awareness and capabilities through certification is the best way not to be left behind. For more detailed recommendations for Salesforce buyers and service providers, see the HfS Research site.


Posted in: HfS Blueprint ResultsSaaS



Why the Time is Right to Evaluate Predictive Capabilities in HCM Systems

January 31, 2017 | Steve Goldberg


Every CHRO focus group or survey these days identifies “enhancing analytics capabilities” or “crafting a people analytics roadmap” as a top initiative. This, of course includes analytics of a predictive nature, as these generally have the highest impact. It’s now time-critical for both HR execs and HCM solution providers to think about what type of technology capabilities are needed to support these initiatives, which, if successful, clearly help make the case for HR having that proverbial seat.

So we’ve decided to put a stake in the ground and evaluate what most enterprise software vendors are describing as their “early” capabilities and customer experiences in this area.

Many HRMS (employee life cycle) vendors cut their predictive analytics teeth around the retention risk area. Some of those providers have progressed to predicting potential to succeed in different roles or factors that impact employee engagement and productivity. A few now forecast labor and skill set gaps and use that intelligence to optimize work schedules. One or two HCM solutions now even highlight potential compliance risks and recommend training to mitigate those risks or offer other examples of prescriptive guidance.

Is this the bulk of what HR leaders are looking for? Hardly, as any HR Tech vendor will tell you: “They are just getting started!”

One HR tech vendor exec we spoke with for this research said, “the ultimate vision here is to predict all employee-related outcomes that materially impact business performance, understand why the outcome is likely, communicate why this insight matters, and determine and pursue the key actions needed.” As a destination point, it’s probably better than most.

2 key indications the time is now for getting this research out there:

  • A few of the larger HCM solution vendors weren’t in such a hurry to discuss their predictive capabilities. Yes, this can happen with emerging technology areas; plus getting a read on “customer and market readiness” perhaps requires soothsayers as much as product managers.
  • HR buyers’ interests seem to be out in front of what a large swath of the HR tech vendor community is delivering when it comes to these capabilities. This is not a dynamic observed very often. Vendors have historically done a lot of the pulling in this relationship.

Finding the “homeostasis point” where HR tech customers and vendors can both see and derive business benefit from moving the ball forward on HCM predictive capabilities keeps us moving forward with this research, underlining its sense of purpose -- and urgency!

Bottom Line:  The value of predictive capabilities in major HR tech platforms, and understanding how providers’ plans are meshing (or not) with customer needs, will be covered in this first-of-its-kind research to be published in mid-February. We at HfS look forward to generating some lively discussions.

Posted in: Digital TransformationHR Strategy



Harman, Accenture and Atos are bossing emerging IoT Services, but we need real IoT algorithms and security standards

January 28, 2017 | Phil FershtPareekh Jain

I plugged my iPhone into my new (fuel-emission friendly) VW this week and - for the first time - my car was connected to by digital life.  Siri (finally) came alive and started sending my contacts voice to text messages, my favorite Spotify soundtrack was arranging itself in all its glory on my vehicle dashboard, and I didn't have to worry about tuning radio stations, pairing devices that barely talked to each other, or getting stuck using some horrible proprietary technology my previous car had forced me to use, or those awful attempts at being "appy" from the cable TV providers that look nice, but require months of frustration to figure out.

My car was finally seamlessly connected with my personal apps that run my life, and my suicidal urge to text and drive has been cured by Siri finally doing it for me! While it's been pretty cool to program the air-con using a mobile app or have automated replenishment of new coffee capsules... being able to take your digital life into your moving vehicle is what IoT is all about. It's high-time to get past the buzz about IoT being bigger than IT itself - it's really about sensors, data and most importantly what we can do with this data, and how we can create digital experiences outside of our traditional mobile and laptop screens.  

So, without further ado, let's take a look at the 2017 landscape for IoT service providers and have a chat with report co-author and manufacturing-engineering analyst guru himself, Pareekh Jain, about the emerging landscape for IoT services...

Click to enlarge

Phil Fersht, Chief Analyst and CEO, HfS: Pareekh, how do you see the IoT market evolving and what are the key IoT trends you have been observing?

Pareekh Jain, Research Vice President, HfS: Phil, the current state of IoT revolves around sensors and data collection and its use in sub-process or process optimization, but there is not enough visible thought or action by IoT service providers in exploiting the potential of data for the business reimagination of the Digital OneOfficeTM. Take the example of Amazon Go – the concept store where there will be no checkout queues (seriously). Shoppers can pick... and just go. The combination of IoT with artificial intelligence and machine vision is what makes Amazon GO possible. This is just one of the business reimagination possibilities of IoT, where these true digital experiences come alive, and we're finding this kind of conversation depressingly absent in our discussions with some of the service providers.

Having said that, we do see real progress with the foundations of IoT over the last couple of years and are observing five key trends in our IoT research.

1) IoT is for real, but is limited in scale and scope at present. We found many examples of PoCs and actual customer engagements. The customer engagements are small and limited in scope to a couple of business or geographical units. The organization-wide IoT strategy and implementations examples are rare. 

2) IoT update is pervasive and use cases are cropping up across all industry sectors. The highest number of IoT examples we have seen are in manufacturing or Industrial IoT, smart cities, and connected cars.

3) Efficiency or cost optimization are the major drivers in IoT projects at present. This is

Read More »

Posted in: Digital OneOfficeInternet of Things



Make Sure Your Managed Security Services Provider Keeps Current With Your Changing Security Posture

January 26, 2017 | Christine Ferrusi Ross

A company’s security posture changes often. The change can be company-created, for example, by opening an office in a new geography or entering a business with different regulatory requirements for data protection. Security posture also changes as new threats like previously unknown malware emerge, and more sophisticated techniques for hacking evolve.

When engaging a managed security services provider, it’s tempting to believe that keeping up with changing security posture is “being handled” by the provider. But is it?

Providers Often Forgo Innovation For Operating Efficiency

A very common complaint among outsourcing and managed services clients is that the providers rarely suggest changes unless the client brings it up – unless, of course, that change benefits the provider’s ability to run the process. In security environments, this heads-down approach goes beyond ineffective – it can cause significant damage to clients as threats and mitigation options change quickly.

Yes, providers generally do a security posture assessment before beginning the engagement. However, in our current blueprint research we found little evidence that providers re-assess security posture formally during the ongoing engagements. 

Recently, in fact, we even heard of one provider that regularly discovered threats in a client environment but didn’t report them to the client because the particular threat types were out of scope of the engagement. The client found out only months later, and by accident, about the omissions.

Even with such egregious scenarios of intentionally not alerting the client, many providers miss threats. They miss them because they’re not looking for them and their analytics engines aren’t detecting new patterns.

Be Proactive With Incident Monitoring And Reporting

There are many ways you can work with your managed security services provider to ensure that changes to your security posture are being addressed. From most quickly implemented to longest, here are some actions you can take:

  • First and foremost, monitor news and trends in security and threat intelligence. Don’t wait for your provider to flag new threats types to you.
  • Be proactive in asking questions about changes and new threats. Sometimes even a quick email asking the provider about a new ransomware technique that you read about will spur discussion about making changes to the service scope.
  • Include security market changes and news as part of monthly meetings. Make it an agenda item to discuss what’s happening in the market. And build into the provider’s mindset not to wait for the regular meetings to bring up new events.
  • Expand the scope of your engagement to include regular security posture re-assessments. This can depend on your industry and other factors, but it might be quarterly, semi-annual, or annual.
  • Include a new engagement metric on the provider’s ability to find and address new threats. The provider’s ability to keep your data and organization protected from threats even as those threats change needs to be part of the provider’s success metrics if it isn’t already.

Bottom Line: Don’t let inertia set in on your security managed services engagement—make sure your engagement includes specific, proactive approaches to staying current with your security posture.

Posted in: Security and Risk Mgmt.



VCU Health tests telehealth for shortening time to treatment for stroke patients (#telestrokecare)

January 26, 2017 | Barbra McGann

We hear a lot about how retailers are trying hard to bridge the online and in-store experience for customers, but have you thought about how this concept can help patients in healthcare?  VCU Health, for example, is a forward thinking hospital that is looking outside the hospital walls for how to create a better experience and outcome for stroke patients before they even reach the ER.  Partnering with the ambulance authority and technology providers, VCU Health is testing remote assessment of the patient during their ambulance journey to shorten their time to treatment.  Led by neurologist Dr. Sherita Chapman Smith, this hospital’s story involves a passion for modern and mobile patient care, a lot of collaboration, and some real outside the box thinking in order to fine-tune and bring the idea to life.

At the heart of the effort is empathy – making an effort to “get inside” the experience of each person involved, understand their needs, and how to address those needs both simply and effectively.

The group that Dr. Chapman Smith gathered to the table included individuals from the local ambulance authority, the VCU Health Telemedicine Center, and technology provider swyMed, to determine what was needed to have a secure and stable system that would work and work well for all users. To get a patient perspective, the hospital reached out to specialty actors who have been trained to act in patient scenarios with medical students and residents, to give feedback on how they should interact with patients. The team trained these patient “stand-ins” on how to act out symptoms for a stroke.

These “patients” were picked up in an ambulance and connected via teleconference to the vascular neurologist in the hospital, who conducted a remote assessment; and when they got to the hospital, the scenario had them quickly advanced to the next stage of treatment. Afterwards, each one shared feedback via survey and interview, such as, did they feel safe, did they feel connected with the neurologist, were they comfortable, what did they think of the audio/visual quality? Participants ranged in age and ability to take into consideration comfort with technology and levels of hearing. The hospital also compared the responses with bedside evaluations. The feedback, combined with the experience from the physicians and EMT has led to proposals for changes to protocol and to the solution.

As the project moves along, they keep zeroing in on what will make the patient comfortable, and whether that works for the physician and EMT in the ambulance.

What makes it work?

Internal and External Network of Active Participation: “It’s a small group of vascular neurologists at VCU,” said Dr. Chapman Smith, “so I just asked my colleagues – can we give this a try?” She talked to her department chair, who connected her to the Chief of Emergency Services Operations and Medical Director of a local EMS agency, and then reached out to the communication office, and then to the ambulatory authority, bringing in representation from groups that all have a stake in how it would work, and how easily, and how smoothly. A small community banded together to test—what will work for the hospital, the patient and the EMT, and provide feedback. They have roles in working through implications to protocol, simulations, and dry runs.

Steady Visual Connection: “We wondered if the patient really needs to see the physician or EMT from within the ambulance,” said Dr. Chapman Smith, “but a main comment from the patient simulators was that it put them at ease to see a face versus just hear a voice… just a voice can add to the anxiety.” So the ambulance clearly needs a steady and secure connection with high enough bandwidth as it makes its way to the hospital. A modem, antennae, and single carrier connection did not do the trick; in test runs, the ambulance encountered multiple dead zones.  “We want to be sure wherever we go, we can do the assessment/exam without a drop.”  So, as part of the solution under development, swyMed software monitors for connections and can switch cell towers and antennas to get the best quality signal at the lowest bandwidth.  It’s part of a portable solution the team developed to keep a live-video connection to a doctor all the way to the medical center.  

Ease of Use and Access: During the assessment, the neurologist wants to be able to see the patient, but not have to click arrow keys to move around a camera. Taking this into consideration, the team designed a set of predefined commands such that a command would move the camera to a certain spot to look at an arm or a hand with as few arrow clicks and mouse moves as possible.  Also, the physicians and EMTs want a mobile solution: physicians don’t want to be limited by being at a desktop computer; and the EMTs want something that is portable between vehicles, something not every ambulance has to have, since they are not all in service all the time.  These insights all came from interviews, observations and dry runs.

There are a number of healthcare providers working inside the walls to create a better and more effective experience for health and care, but what happens before and after that care can have significant impact on outcomes as well.  The work that VCU Health is doing is an example of a human-centered, not hospital-centered or technology/telehealth-centered care. The hospital is on a journey—still to finalize the protocols and rollout the remote assessment with real patients—but it’s a worthy example of forward thinking that shows how healthcare providers can step outside the storefront and provide real remote services that can really impact the quality of care.

Posted in: Healthcare and Outsourcing



HR Best Practice? Yeah, Right

January 25, 2017 | Steve Goldberg

A memorable exchange I once had with a former HR colleague went like this:

Me:  “When Workforce Planning accounts for cascading gaps because you filled some jobs from within, that’s commonly viewed as HR best practice.” Colleague:  “Oh really,  Well I think best practice is simply the practice that works best!” 

Borrowing a line from the classic movie Cool Hand Luke … his statement “helped get my mind right.” 

So one suggestion coming out of my initiation into the world of practical HR thinking: Whenever you hear someone say: It’s “HR best practice”, perhaps you should ask if they’re following a blueprint crafted specifically for their organization and business context. And if they’re not, odds are that particular practice will come under some scrutiny soon, and perhaps shortly thereafter, the individual that architected the practice.

Many of us were a bit taken aback when we heard highly regarded Zappos was generously paying new hires to quit if they were dissatisfied, and not just because it was likely deemed more cost-effective in the long run.  It was mostly because the company’s brand is totally about “best customer experience imaginable” and this is so much more than a tag line.  One of countless examples is that their customer service reps never use scripts.  Genius, common sense, or both.  You decide, but also think about whether this would work for a phone company.  Fat chance as they say.

 As With New Employees, Best is Mostly About Fit

Elsewhere, a number of well-known large companies including LinkedIn, Virgin America, Best Buy and Netflix have started experimenting with unlimited paid time off. The rationale: time away from the job helped with employee productivity; e.g., by avoiding burn-out. Beyond that benefit, trusting employees not to take advantage of the company can make them feel – and therefore act -- like part owners of the business.  This practice worked for these employers, particularly when employees and managers discussed adequate coverage for key duties in their absence, but clearly it’s not a universally great fit. Consider the impact on an impending re-start of a nuclear power plant if even one senior-level nuclear or safety engineer was in urgent need of some downtime. “Adequate coverage” is in the eye of the beholder. 

Outside the realm of potential life and death consequences, however, innovative crowd-funding company Kickstarter abandoned its unlimited vacation policy when they thought it was sending some type of message (subliminal?) to employees to take less time off. So a creative HR practice designed to minimize burn-out was actually burning people out!

As in the aforementioned exchange with that colleague, best practice does indeed come down to what works in a particular business context; and when you’re talking about a new HR practice under consideration, desired corporate culture might be the #1 element to focus on. In high-tech startups, a very informal, “we’re one family” culture and typically doling out some equity are used to attract top talent. Arguably it’s also to compensate for a lower salary initially. By way of contrast, when was the last time you saw someone’s canine companion taking a stroll inside a blue-chip investment advisory firm?

Bottom Line: HR practices are “best” when they support both a company’s culture and its workforce strategies designed to create a great customer experience.

Let’s not be wedded to any particular best practice within the HR / HCM domain, as best practices are really tools to effectively manage an ever-changing operating landscape.


Posted in: Digital TransformationHR Strategy



Why Customer Delight is Overrated

January 25, 2017 | Melissa O'Brien

Everywhere I turn, service providers are talking about how they’re going to enable services clients to delight end customers.  There’s nothing wrong with aspiring to delight customers; in fact it’s an admirable goal.  But let’s take a step back and talk about what really matters when it comes to customer experience.   Partly due to increased expectations set by our more digital world, customers want and expect things to be simple and easy.  When I order an Uber or an Amazon package, it arrives at my door in the time predicted.  Am I delighted?  Not really.  Am I really loyal customer who spends increasingly more money with these companies?  Yes.

Full disclosure, we talk about delighting customers in our OneOffice concept of using a customer focus to align business operations.  After all, in a customer-centric utopia, smiling, happy, loyal customers are the ultimate goal.  But right now, I think it’s time to talk more realistically and focus on the basics. As a customer, I want to get my package on time, my question answered simply and easily.

Here are some service provider promises in marketing materials out there now:

“Elegant creative designs that go beyond average usability to deliver individualized experiences that charm, delight and engage”

 “Utilizing the science of data and a unique approach and focus on the art of the possible, (we are) leading the way in designing transformative customer experiences that delight and engage”

 “Our vision is to make our customers experience the delight of their customers”

 It all sounds wonderful, but let’s get a bit more realistic.   Think about the last time you as a customer felt really thrilled by the service you received. 

We should take a good look at how we can start preventing bad customer experiences, which have a much greater potential to do business damage than great experiences do to have a positive impact.  I recently participated in 4- literally 4- online chat conversations regarding an order that arrived damaged.  None of the chats had record of the previous, or of the initial order. It was the most anti-omnichannel experience I’ve ever had. It seems everyone has one or more of these stories.  For many companies, there’s a lot of work to be done to improve basic customer service.

Take this as food for thought.  Satmetrix, the company which owns NPS (net promoter score) benchmarks customer satisfaction annually, using Net Promoter Score (NPS) which reports that the industry with the highest NPS is retail, with a 58 average.  That’s the highest.  The lowest is internet service providers at 2.  The standard for “world class service”? 75.   Even the top-rated customer service companies (i.e. USAA, Nordstrom, Apple) are hardly close.

 Aspire to delight, but focus on the results that really matter.

Let’s face it, as much as it’s a cheerful concept and inherently the right thing to do, how does delightful customer service translate to business value?  The business goals are to increase loyalty and repeat sales, and reduce churn in retail; lower admissions/re-admissions in hospitals and improve patient health in healthcare; reduce claims leakage in insurance, improve regulatory compliance in BFSI. So, the idea is you want to engage your consumers in order to impact these types of outcomes.

I do believe customer delight exists, and it’s certainly relevant and valuable.  But to try and put delight into some systematic, algorithmically programmed process is a waste of time if you don’t have the right design and talent.  So, yes, set everything up  – connect the front and back end systems so that employees have the information they need – set up digital channels for customers to communicate and then, the most important piece--  hire the right people who are empowered to act on it Make the goal to simplify communication and the ease of doing business to generate loyalty with your customers.

Bottom line: Make life simpler for your customers, and loyalty (and hopefully delight!) will follow

As I said about forgetting omnichannel when your basic customer service sucks, make the customer experience goals about personalizing, consistency and simplicity.  If delight follows, fantastic! Look to pivot operations toward OneOffice to become nimbler, more intelligent digital organizations that deliver on customer needs.  Now that would be delightful. 

Posted in: CRM and MarketingDigital OneOfficeCustomer Experience Management



The year of the HfS Infographic begins... in earnest

January 23, 2017 | Jamie Snowdon

In our bid to make our research more visually appealing we would like to post the first version of our IT Services market primer. This shows the first round of the 2017 HfS market size and forecast for IT Services for 2015 to 2021. We will be doing a full update of the forecast at the end of Q1. When we have a chance to analyze all the vendor results for 2016.

This chart gives our top level view of the IT Services market in numbers - the market we focus on here is our high-value market - by this we mean the outsourcing/managed services and professional services markets - we exclude standalone support and training from these numbers.

 Click to enlarge


The Bottom Line - Watch this Space

We will be producing more graphics such as this, the next will be a top line view of the BPO market. We'll also be writing up our thoughts on both markets in a PoV by the end of the month. 


Posted in: IT Outsourcing / IT Services



Offshore has become Walmart…as Outsourcing becomes more like Amazon

January 21, 2017 | Phil FershtJamie Snowdon

In the post-digital world, no one cares much about “offshore” as a strategy - it has become part of the fabric of managing a global operating model, where operations leaders just tap into whatever global resource they need to achieve their desired outcomes. This doesn’t mean that traditional “offshore” global delivery locations, such as India and the Philippines, are going bust overnight. But it does mean the playing field is leveling out as the need for emerging skills trumps the desire simply to reduce labor costs.

Our new State of Industry Study, conducted with KPMG (see above) of more that 450 major global enterprises – shows an increasing majority of customers of traditional shared services and outsourcing feel they have wrung most of the juice offshore has to offer from their existing operations, and aren’t looking to increase offshore investments.  When we compare enterprise aspirations for offshore use between the 2014 and 2017 State of the Industry studies, we see a significant drop, right across the board, with plans to offshore services. Organizations are now either looking to make their existing offshore operations more effective, or even reduce them where they can (especially in F&A and HR), using new technologies and smarter process management.

It’s all about future scalability without the linear resource investments

The difference between new style of automation-rich intelligent operations and offshore-centric traditional operations is growing. It’s a bit like comparing the growth of Walmart to that of Amazon – (although it has started to change with its belated online strategy and acquisition of Jet.com), for many decades, the success and growth of Walmart has largely been tied to

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Posted in: Business Process Outsourcing (BPO)HfS Surveys: All our Survey PostsIT Outsourcing / IT Services



Talking Blockchain Business Models and Network Ownership With HCL

January 20, 2017 | Christine Ferrusi Ross

Since we published our first report on blockchain, we continue to talk to players in the industry about how this fast-moving market is changing and growing. Compared to last year, there’s more discussion about security and privacy (evolving from the “blockchain is unhackable” talking point that was popular last summer,) there’s more talk about non-financial examples like using blockchain to help with supply chain compliance issues, and a hunger to get beyond POCs into valuable operational execution.

Recently we spoke to Santosh Kumar, Rob Ellis, and Mani Nagasundaram from HCL about blockchain trends. HCL shares many characteristics with the players we included in the report, such as:

  • Basing its blockchain expertise within its financial services practice
  • Building expertise in some key industry hot buttons like international money transfer, asset tracking, and trade operations
  • Creating POCs with global banks like one HCL did on cross-border money transfers across subsidiaries
  • Exploring partnerships with several key blockchain technology vendors like Ethereum and ERIS Industries

Regarding trends, HCL sees a lot happening in security and privacy, as well as regulatory agencies stepping up to help businesses form some governance policies around blockchain. We’ve seen in the past few months that while maybe the blocks in the chain aren’t hackable per se, there have been identity thefts, fraudulence, and further concerns about public blockchain networks.

The HCL team notes that transactions are well executed in blockchain, but identity validation and asset validation are less mature. And valuation of assets still needs to happen in the real world, so they caution over-optimism in moving quickly to broad blockchain adoption.

Also, adoption may be slowed down until we can answer the key question, “who owns the network?” HCL’s current thinking is that there’s likely to be one or two per industry and that moving or crossing networks will be difficult (HfS agrees that network interoperability is a big problem. See my prior blog on network interoperability issues here.)

They also believe that maturity in blockchain comes in three phases and that blockchain mirrors the Internet itself in this maturity curve:

  • Operating business processes better with blockchain
  • Changing operations using blockchain
  • Using blockchain to create new business models, processes, and activities

When you get to the discussion of new business models, HCL has a few scenarios that they share (see Exhibit 1 for an example.) We like HCL’s ability to not just explain the technology in-and-outs, but blockchain’s impact on business. In the blueprint guide on blockchain, we scored providers highly on innovation when they have strong business stories and the ability to demonstrate blockchain’s potential to prospective clients.

Exhibit 1: HCL’s Blockchain Ecosystem Example

Click to enlarge. Source: HCL, copyright HCL

Bottom Line: 2017 will be an important validation year for blockchain

As HfS continues to research HCL and its competitors, we’re looking for the following in 2017:

  • Movement beyond POCs into live implementations
  • An example of inter-company blockchain work (remember, most POCs right now are intra-company, which is why the network question didn’t come up much this year)
  • Some hardening lines in the partnership area as the winners and losers on the technology side become clearer and providers get pickier about which vendors they bring into client engagements

Posted in: Procurement, Engineering & Supply Chain OutsourcingThe As-a-Service EconomyBlockchain



Capital Markets Operations Blueprint Explores the Perfect Storm for Services

January 20, 2017 | Reetika Joshi

We started off the new year at HfS with the launch of the Capital Markets Operations Blueprint last week. This is our first coverage of the key dynamics in capital markets and furthers our BFS research on the back of the HfS Mortgage As-a-Service Blueprint mid-last year.

Policies, politics, and structural market challenges are plaguing capital markets firms, raising the stakes in partnerships with service providers

Going into 2017, we find banks and capital markets firms are cautious as they continue to endure a volatile environment with no signs of letting up. Policy ambiguity across the US and European markets, political uncertainty, and structural market changes continue to plague the capital markets industry. Meanwhile, low interest rates and as a consequence, bank margins across sectors have created new waves of cost pressures. Capital markets firms continue to struggle to generate more revenues to counter their rising cost of capital.

To add to this perfect storm, the revenue-generating aspect of this industry is under fire as well. Capital markets firms have had to abandon categories of products due to new regulations. They are more challenged to attract and retain clients that expect different, digitally enabled levels of service with faster turnaround times across the ecosystem, particularly in wealth management. As more big-ticket fines and penalties hit the headlines, public confidence and trust are continuing to erode, and at the same time, the competitor landscape is expanding for the biggest players with the continued success of community banks, regional banks, and fintech disruptors.

Overall, banks and capital markets firms are severely challenged in predicting strategies for long-term sustainability in a changing market and need to have several strategies in play to meet short-term cost pressures. Traditional cost management from cutting back trading desks and providing front-line compensation have not yielded results at the magnitude required to significantly balance profitability.

As a result, we believe that capital markets firms will undergo large-scale operational transformations in 2017 and beyond.

 Since the early to mid-2000s, global technology and business services providers have taken over large parts of the back and middle office processes for banks and capital markets clients. They are now in a unique position to help rethink and run more Intelligent Operations as capital markets clients figure out their strategies to tackle these market challenges. Some of the key buyer-service provider dynamics include:

Back Office Processes Continue to Dominate the Services Landscape: The capital markets operations market started a little over a decade ago with back-office BPO processes offshored to IT service providers. Today, these processes are the majority of work engagements, prominent in 63% of contracts in our analysis. Major service areas include clearing and settlement, corporate actions, reconciliations, fund accounting, collateral management, data management and reporting, investor operations, and product control.

  • Market Forces and Regulation Stimulating New Demand: With global regulatory bodies placing continual pressure on banks and capital markets firms, there are new areas of opportunity for service providers to step in to help clients meet regulatory compliance requirements in different ways. Regulatory data management and reporting and analytics modeling and model monitoring are some of the biggest areas of growth for service providers.
  • Industry Staring at Technology-Driven Change: We see multiple initiatives fighting for prioritization within client stakeholders and service providers’ strategies, all related to technology-enabled service delivery in capital markets’ operational processes. Platform-based services, provided as a utility, are sparking new interest from clients especially as these models promise consolidation and economies of scale across internal LOBs and asset classes. Similarly, clients are also driving automation initiatives within each business, led by robotic process automation and some level of machine learning and predictive analytics to improve operational performance for retained and outsourced functions.


What’s next?

Standardization: We see a sort of “gold rush” for standardization in the foreseeable future of the capital markets operations. Service providers, including new entrants and industry veterans, are in a race to find ways to bring more standardization to overcome the significant challenges in data management. The managing director at a midsize PE firm we interviewed remarked, “Although we all have to do reconciliations, everyone’s built up in a certain way. The challenge for a service provider or market utility is not the actual processing but standardization in the upstream data that has to be fed in from various systems and the downstream outputs to different stakeholders like regulators and clients where the reporting requirements may be different.” Even within the walls of one enterprise client, data metrics, logs, and audit terms and the systems that consume them across businesses are varied. The biggest areas of investment for clients in the next few years will be in consolidating and standardizing processes such as reference data management and reconciliations.

Robotic Process Automation: Along with potential cost savings, one of the biggest business benefits of using intelligent automation technologies is the higher level of accuracy and standardization due to the lack of manual errors. It is no wonder that the new breed of automation tools has caught the attention of capital markets clients. We see a strong appetite for automation with RPA at the forefront. In the next year, we anticipate many more implementations, particularly for processes that have not been offshored yet where big bang savings are more possible. In the medium term, the cognitive capabilities and machine learning projects under way today in areas like due diligence and inquiry management will have matured and created more confidence for conservative buyers. This is a big opportunity for new market entrants to come in with an automation-first strategy for displacing incumbents. The key will be in proving domain knowledge by coming to service buyers with industry-specific use cases and examples; don’t expect them to have done the homework in this emerging area.

Industry Expertise: On the subject of domain experience, we see emerging opportunity for providing ongoing guidance to capital markets clients for the changes in and the impact of regulatory reforms on their operations and compliance needs. They have traditionally sought consultative advice from risk advisories and consulting firms, and our primary research reveals that for many clients, most service providers are not perceived by key client stakeholders as experienced enough to take on those advisory roles. We anticipate more acquisitions and strategic partnerships by service providers to bridge this gap as multiple clients in our research state that they would find value in getting advisory input from experienced operations partners.

Overall, banks and capital markets firm in our Blueprint research highlighted – and evaluated—the need for a collaborative service provider that is willing to take risks on critical new initiatives that they plan to roll out in the next 12-18 months.  

Bottom Line: Whether it’s automation-led, pure-play BPO services, platform investments to drive BPaaS and/or market utilities, or bringing experienced consultants to address regulatory concerns, this high-stakes market demands service providers that are willing to take risks and invest for the long term.

For more details –including visuals of the market activity and analyses of the service providers—click here to access and download the HfS Capital Markets Operations Blueprint. The service providers included in this report include Capgemini, Cognizant, EXL, Genpact, HCL, Hexaware, Infosys, NIIT Technologies, Syntel, TCS, Tech Mahindra, WNS and Wipro.

Posted in: Finance & Accounting BPOBFSITrends Analysis



Meaningless data makes way for PCV: Pointless Crap Visualization…

January 19, 2017 | Jamie Snowdon

A couple of months ago we wrote about meaningless data – the seemingly endless spew of pointless information that just starts to grate. Recently, we’ve started to see another related category of pointless crap – which is probably going to become more prevalent as organizations seek to increase the ease with which information is conveyed to a public that cannot be bothered to read anything anymore.

The category that is pointless crap visualization (PCV). Where an attempt is made to visualize something, often a relatively complex concept and it fails utterly to get the point across. But looks nice and gets attention because they drop some names of big vendors in there.

We recently noticed a thoroughly confusing diagram from one of our analyst colleagues, NelsonHall, that caused us scratch our heads in utter bewilderment:

PCV From NelsonHall

The diagram is supposed to tell you something about the acquisition strategy of the companies in the triangle. We wrote down a couple of questions about what the chart meant, having not read the associated blog post.

It looks like Cognizant is more likely to make acquisitions than IBM?  Really? Which seems highly unlikely given the huge difference between the two companies in the past – and the fact that Cognizant has a much smaller war chest for M&As, especially after its massive $2.7bn investment in Trizetto. We suppose you could limit to purely IT services – but a tuck-in acquisition is just as likely to be IP based as it is additional niche skills. Although even then we’d expect IBM to spend a great deal more – its Software group having notorious deep pockets for acquisition. Cognizant have made some significant acquisitions like Trizetto, but like all the offshore firms have been pretty gun shy when it comes to inorganic expansion compared to the big traditional technology firms.

Cognizant/TCS are more likely to acquire than NTT or Fujitsu? Mmmm... Fujitsu has been fairly quiet on the acquisition front for a few years, but you cannot count them out of the acquisition game – they made a few acquisitions in 2016 and made some very large purchases in the past. Given their cloud capabilities in Asia, it seems likely it would want to build on consulting capabilities particularly in Europe and the US. And NTT – certainly we may see a lull in activity as Dell Services gets absorbed, but NTT has been one of the most acquisitive of the services firms over the years, so this again seems slightly at odds. This seems much more likely than TCS, the least acquisitive of the already reluctant offshore providers.

The inclusion of CSC using the CSC logo... er seems a bit unnecessary. In fairness it may just be the choice of CSC as the logo – but CSC is part of HPE and no longer exists - so we do wonder how useful it is to know they won't acquire...

Also, what is the difference between a "tuck-in acquisition" and active acquisitions? To say that IBM is not an active acquirer seems odd – again it may be a narrow view of just the IT services business, but we’re not sure that view really helps anyone considering IBM as a partner given that any software acquisitions bring IP which add to the richness of the services offerings.

Again the distinction between active and tuck-in is not clear for Accenture – which is certainly the most acquisitive and has a very active strategy with an acquisition made seemingly every week, but some of these will be tuck-in, maybe half of them? You can judge for yourself and look at the list of Accenture acquisitions we tracked in the table below. We did some work on which providers are making digital acquisitions – not with the same list of providers, but it illustrates the scale of Accenture’s acquisition activity, compared with some of the providers on the NH diagram. So we’re not sure the visualization really captures the huge difference in acquisition trails between Accenture and the other pure services companies on the list.

HfS - Just The Deals

It is a challenge to come up with good visualizations - that support data and summarize points being made. We have some way to go converting our list of contracts above into a statement about the different players - but I think if we do something around our acquisitions data we'll probably convert into an index and visualize as a quadrant (oh no) or a simple bar chart. So in a way you have to applaud NH for trying something new.

To be fair the associated blog made a lot more sense – but the chart fails to reflect what is said or adds much to the understanding – it just throws names at you without any clear reasoning. What the diagram needs to do is illustrate a point or, ideally, provide a short cut to understanding. This doesn’t seem to do either. Frankly, it just obscured any of the valid points being made.

The Bottom Line – in this era of fake news and poor information, analysts have more responsibility than ever to reflect reality

This year HfS is making a clear commitment to visualizing our information better and trying to make our perspective in as clear and concise a way as possible. Like the above chart we may not always get it right – but hopefully, that is where our community comes into play and you will let us know what we get right and what we get wrong.

Posted in: Confusing Outsourcing InformationIT Outsourcing / IT Services



The offshore shift left part 2 - Q4 better be good…

January 19, 2017 | Jamie Snowdon

Back in August 2016 we wrote about the shift left with offshore providers – we were recently reminded of this piece and asked to update the chart. Which we have done in the chart below. It’s interesting to see if things have progressed, and as a prelude to the new results season approaching rapidly…

These results add fuel to Phil’s thought in his Bandaid economy blog. With more traditional services markets slowing, largely because they support older business models. At the same time we see a rapid increase in wealth being generated by enterprises that are tapping directly into digital business models – with the digital pure plays like Amazon, Airbnb, NetFlix, etc. and the rapid adopters like Tesco’s, CapitalOne, Staples, The Gap, John Lewis…  Service providers need to find a way to tap into the money that is flowing into the technology and talent to fuel these increasingly ubiquitous digital business models.

We have been looking to quantify the total opportunity for the digital expenditure or the "flow of revenues over digital channels between business and consumers”. We have started by quantifying the digital retails sales, but will expand to include business to business digital sales, travel and financial services expenditure. But below is a taste of this exciting work – with digital retail center stage and some estimates of the other components for North America to the right.


The Bottom Line – let’s just say it again…

As we have said before long term success in the services market is dependent on inertia or the lack of it. Providers that are reacting quickly to the changing market conditions are still finding growth, and this growth is shifting from purely low-cost or offshore providers. This is starting to show up in the financial results more and more as services firms customers ambitions drop, revenue growth fades. The “cut until it bleeds” continuous cost-saving model for operations is creaking badly, especially in light of new technology solutions and an increasingly competitive environment for many traditional businesses.

We will be taking note of the full calendar year results that are coming up this month and next. But we expect the current shift left to continue as providers adjust to the market realities.

Posted in: IT Outsourcing / IT Services



ADP Crosses the Transactional HR/Payroll (Branding) Chasm in Acquiring The Marcus Buckingham Company

January 18, 2017 | Steve Goldberg

Maximizing team performance and improving employee engagement are both winners in their own right as HCM themes to focus on. Solutions that focus on either are correlated with better business results. ADP and its clients can now play in this arena with the strategic acquisition of The Marcus Buckingham Company.

By many accounts, including mine, ADP's past acquisitions of companies like Workscape, Virtual Edge and The Right Thing, while accretive to revenue (not necessarily a game-changer on a base of over $10 billion) and enabling a more diversified solution and customer portfolio, didn’t fully detach the company from its long-time transactional HR / Payroll branding. Yes, Workscape did bring cool technology around total rewards and portals, but ADP also talked a lot about their new benefits admin outsourcing capability after that acquisition.

The bold move of adding The Marcus Buckingham Company could pay off nicely for ADP, and in “multiplier effect” ways that, by definition, are much more consequential than incremental revenue or adding some new strategic customers.

Just as SuccessFactors was a clear catalyst in SAP’s embracing of the cloud, TMBC could do the same for ADP; not in terms of the cloud as ADP operates there already. The story here is adding a disruptive HCM solution, one that weaves together technology and services elements to help customers solve issues many HR tech products will never tackle.

Among other things, TMBC’s flagship technology StandOut distils the complexity of a team leader’s job into two fundamental questions: “what are my team members’ priorities, and how can I help them?”. As this will entail a new way of approaching the job for many team leaders, the transition is helped along by targeted and expert coaching, TMBC’s other strength that ADP plans to tap into.

TMBC’s technology and complementary coaching bring self-awareness to the performance management and career development process

Self-awareness/self-discovery is often the missing link in feedback and performance management models and systems. You could say that one exception is when an employee is told their self-ratings are very different than how others see/rate them; however that is “being told” rather than learning it through a guided process. Coaching is also advocated by more and more companies, but most aren't consistently adept at it enterprise-wide.  ADP customers can now benefit from Marcus Buckingham’s proven approach, one centered around individuals fully leveraging their strengths (motivating and energizing) vs. addressing their performance gaps (often de-motivating). The model also clearly fits organizations wanting to pursue a “learning organization” strategy and corporate culture.

While a talent management solution offering the type of capabilities TMBC brings can be ahead of many smaller company's adoption or strategic interests for some time, this acquisition should allow ADP to finally break free of its transactional HR/ Payroll branding constraints.

The Bottom Line:

The Marcus Buckingham Company found its mother ship to reach the next stage in its journey to greater revenue and broader market influence/impact; and ADP likely jumped on an acquisition that will put it on the broader HCM brand trajectory it’s been longing for. The pairing should bring even more value to ADP and TMBC customers, and broaden ADP’s strategic HCM footprint in those customers, over 600,000 strong worldwide.

Posted in: Digital TransformationHR Strategy



Digital Marketing Operations Services: Disrupting the Agency Model

January 18, 2017 | Melissa O'Brien

As we discussed in Part 1 of the digital marketing operations Blueprint blog, marketers are upping their spend and re-thinking the way they spend on services as a result of digital consumer needs. The market landscape for these services includes BPO/ITO providers, marketing technology companies, traditional agencies as well as a vast array of digital and niche agencies. This is a fast-evolving space that requires multiple players to come together and create an ecosystem for business changing solutions. Many buyer organizations (e.g., PepsiCo) have been very vocal about their dissatisfaction with the traditional agency model and are taking marketing work back in-house, or instead of consolidating providers they’re distributing work to several specialty providers. The opportunity for BPO providers to disrupt in this space is increasing; while it is critical for BPO service providers to partner with agencies, which still have and will continue to have a prominent place in the ecosystem, there is much more opportunity for BPOs to provide strategic level work than in the past. In addition, technology has disrupted the way companies go to market. “Martech” has grown exponentially in the last few years, and managing an increasingly complex stack is the norm while companies struggle with the pace of change to manage these varied systems.

So traditional ad agencies have not kept pace with market changes and thus have opened up opportunities for consultancies and BPO organizations to enter the market in some unexpected ways. The part where BPO service providers play in this ecosystem is often in a paradigm referred to as a “de-coupling” strategy: separating the creative from the production. In this model, agencies set the big picture tone for the campaign but can’t meet the needs for reduced cost and speed that BPO service providers can for services such as localization, translation, regulatory/compliance and re-imaging.  The service provider takes the agency campaign assets and reworks them for specific markets, devices, etc.

Sample Content Production Engagement Model

However, many of these services involve elements of creative design and require a blend of talent and automation to execute well.  And services buyers are increasingly looking to providers to have more strategic capabilities, especially where the convergence of marketing, sales and customer service happens in customer experience design.  Almost every services buyer we spoke to expressed an interest in more strategic, higher value services from their providers.

As in almost every market, buyers are increasingly looking to BPO service providers to get more innovative and hungry for their business. Most buyer references said their providers “do what I ask them to do well,” but these same references admitted there is much potential in the future for handling more strategic services: and many service providers have the capability. Even larger enterprise buyers see potential in moving away from the arrogant and set-in-its-ways agency model and embracing services with a fresher-thinking provider. As one client reference commented: “When you go with a big agency, you’re going to get their B team.”

So how are service providers coming to the table?

Players with smaller practices, such as EXL and Tech Mahindra, have some interesting vertically focused offerings and have the advantage of being able to give clients lots of attention and thought leadership. Customer experience management-focused companies (i.e., HGS, Concentrix, Aegis, Revana Digital) have the advantage of knowing their end customer’s requirements best through the connection of their contact center businesses. While these providers aren’t known as a marketing brand for new logos, with the convergence of service and marketing can often sell bespoke or smaller campaigns with an interesting value proposition to customer experience focused stakeholders. The same goes for ITO focused providers (i.e., HCL, NTT DATA Services), where these providers have solid operations engagements elsewhere in the organization, can leverage the strength of those relationships in the growing digital marketing space.

Companies like Genpact, Infosys and TCS have approached digital marketing operations with a strong stance around automation and analytics.  And clients seeking alternatives to the traditional agency model have enabled providers like Cognizant, Wipro and Accenture to excel at an overall vision for digital marketing operations– these providers are acquiring and integrating digital expertise– unlike the traditional agencies who buy up digital agencies and run them as separate entities without as much thought to leveraging the assets of each piece across the organization.

The Bottom-Line: In the rapidly changing marketing services landscape driven by the digital consumer, there is tremendous opportunity for service providers bringing their A team … and it’s anyone’s game

The HfS 2016 Digital Marketing Operations Blueprint covers market trends and direction as well as the analysis of 14 service providers: Accenture, Aegis, Cognizant, Concentrix, EXL, Genpact, HCL, HGS, Infosys, NTT DATA Services, Revana Digital, TCS, Tech Mahindra, Wipro. For more detail—including analyses and individual profiles of the service providers—click here to access and download the Blueprint.

Posted in: Business Process Outsourcing (BPO)Digital TransformationHfS Blueprint Results



Putting healthcare services at the fingertips of your patients and members

January 17, 2017 | Barbra McGann

“It is a truth universally acknowledged” that the healthcare experience needs to change – for consumers and clinicians. Part of this change is to make access to data, services, and transactions easier – more “at the fingertips,” if you will—and more relevant to their healthcare experience. In a word, mobility. Mobile is about the platform; mobility is about the journey, the movement of the person, and the experience while in motion. There are a number of mobile platforms on the market today, but who is using them to bring mobility to healthcare?

“…mobility is about understanding where I am, where I am going and what I want to accomplish, and helping to make that journey exponentially better,” said David Sable, CEO of communications firm Y&R in a Huffington Post blog.

Well said. There are a number of mobile platforms on the market today to help make this happen, from well-established technology providers like IBM, PegaSystems, and SAP as well as up-and-comers like Kinvey, Kony, and MobileSmith. And I recently had an opportunity to get to know one offering suite a little better – Skava, which was acquired by Infosys in 2015.

How can mobile platform technology providers bring mobility to healthcare?

Skava is well established as a mobile development platform in retail, powering mobile apps, kiosks, and mobile devices for Gap, Staples, ToyRUs, and others. Now Infosys is bringing this consumer engagement and e-commerce enablement platform to healthcare. It is developing a set of independent, modular, discrete functional units packaged as “Build Your Own Digital Platform” for healthcare providers and payers. (see Exhibit 1) Imagine consumers, patients, caregivers, pharmacists, and clinicians – among others in the healthcare community – being able to enroll, complete transactions like paying bills, scheduling, care management plans and alerts, etc. Then imagine having it integrated into the core healthcare management systems already in place.

Exhibit 1: The “Build Your Own Digital Platform” Play for Mobility in Healthcare

Infosys isn’t the only one with this capability, so if you are looking at walking down this path, take a look around for what best fits your needs. What I found with Infosys is that even though this solution set is not well established in healthcare, it does have a strong client base and proof points from retail, an industry that is heavily dependent on engaging consumers in transaction oriented interactions. The platform supported $1.5 billion in e-commerce revenues in 2015. Infosys also has depth in IT services across industries, including healthcare, so it has the capability to work with clients to integrated and customize apps and services as needed. The Skava platform does plug into current IT infrastructure. And, the service provider is also better integrating its business services and IT capability so that if you want on-going support that includes data management and analysis, you can tap into extended services and have a single provider.

One “miss” in the story line so far, though, is my earlier point about mobility and creating an experience versus offering a mobile platform. Infosys as a company is investing heavily in design thinking capability – an innovative approach to identifying and solving problems. Yet, when we engage in briefings and look at the materials associated with this solution set, there is no mention of starting first with – what problem are you trying to solve? What opportunity are you looking to address? How are you defining and testing out the proposed solution prototypes with the stakeholders – consumers and business? And that’s a critical first step to ensure that the use of the IT-based solution is truly to address the consumer experience and how that impacts the business outcomes.

Bottom line: If you want people to do something, make it as easy as possible for them to do it. Healthcare providers and payers need to make healthcare services easier for consumers to access, use, and pay for, and mobility plays an inevitable role.

Infosys can tap into its design thinking approach and IT services, and leverage the Skava platform in a flexible way to help clients get there. There are already a number of healthcare management apps and mobile capabilities on the market, so it isn’t new. It is something that if you want to truly be a healthcare consumer oriented organization, you’ll have to incorporate into your business, and partnering with a service provider with IT, business process, and analytics skills is a viable option.

Posted in: Digital TransformationHealthcare and OutsourcingMobility



Ramyam and Arvato – Raving Fans or Raving Mad?

January 16, 2017 | Reetika JoshiMelissa O'Brien

Arvato just announced its acquisition of Bangalore-based Ramyam Innovation Lab, whose stated mantra is to make customers “raving fans” by enabling contact center staff to have valuable customer information at their fingertips. Ramyam’s key asset is its omnichannel platform, Enliven CEM. The platform integrates various communication channels such as email, chat, voice and social media, and uses interaction information to generate individual customer profiles. This is layered with analytics and dashboards; the analytics model aspires to manage customer journeys with “context-based decisioning” in real time, helping agents more proactively solve customer problems.

Our research shows that in this race toward providing digital customer experience, most of the leading customer experience management companies are taking a stab at providing omnichannel customer services. Major CEM providers are starting to/have figured out their strategies for developing 360 customer views that would provide insights to improve contact center effectiveness. To provide progressive omnichannel service support, a CEM service provider needs a strong framework for the underlying data and technology, and that’s what this acquisition is about. Most are taking a third-party approach to enabling the technology, but Arvato’s move provides it an opportunity to have better integration and perhaps move towards providing CEM As-a-Service in the future.

Arvato’s approach is admirable, especially where it affords the company an inroad to one of its key growth markets in India. Ramyam’s highlighted consumer-facing verticals of telecom, retail, banking and travel are key industries for omnichannel customer communication. This also is some much-needed publicity for Arvato, which has fallen behind its customer experience management competitors in thought leadership and demonstrated investment in innovation.

However, all of these buzzwords around omnichannel are used so often and heavily (i.e. “next generation analytics-driven actionability, enabling service providers to deliver superior experience and engagement to their customers”) that they are becoming diluted, making it harder for service providers to carve out a real differentiator with these platforms. Arvato’s assertion that this capability creates “a distinct competitive advantage” is disillusioned. To create differentiation, it will need to use this acquisition to craft and articulate an As-a-Service on-demand, flexible strategy for providing customer experience management—one that provides a single contract with well-defined business outcomes by leveraging technology platforms, data and insights and omnichannel customer support functions.  

The bottom line: Kudos to Arvato for making an investment in a young, emerging tech startup with some solid customer experience thinking. But the messaging needs some maturing to really highlight the differentiation that Ramyam can bring to the table.

Whether the combination can help turn Arvato’s end customers into raving fans, we’ll wait and see.

Posted in: Contact Center and Omni-ChannelAnalytics, Big Data and BICustomer Experience Management



Trump Intel Story: A Stark Example Of A Predictive Security Management Dilemma

January 13, 2017 | Christine Ferrusi Ross

This week the Internet blew up based on news that Intel officials briefed President Obama and Donald Trump on the possibility that Russia had information on Donald Trump that was damaging to him personally and might even have implications for the entire US government. (And while one never expects a hashtag like #goldenshowers to trend on twitter, the feed was hilarious.) 

Politics aside, this story is a textbook case of problems with being proactive with threats. Notice: I wrote “threats” not “events” or “incidents” because the incident hasn’t happened yet, there’s just a high potential for it to be true and for it to happen.

You get lots of finger pointing in hindsight. The common question is “what did you know, and when did you know it?” Because, after something bad happens, anyone who knew of the potential for the event comes under fire for not saying something sooner, not being more forceful if in fact they HAD said something, and for not doing something to stop it from happening.  The fact is something happened and someone has to somehow get blamed.

And in the Trump intel story, you see the opposite of that, with everyone retreating to respective political corners, defending or dismissing the intel reports based on emotion and personal perspective. And since now that everyone’s already picking sides, it will be that much harder to make the right decision on how to treat the threat risk. So, how do you ask the right questions and take action in time to avoid the impending threat?

Here are the questions predictive security and risk management brings:

  • When do you flag a threat to executives? It’s important to have a policy in advance so there isn’t confusion later. It could be something like “a risk has been increasing steadily for the past 3 months” to “a risk increased very quickly in a short period” or similar idea. When you raise the flag may have a drastic impact on which actions you take to address the treat, since risks are often time sensitive.
  • How much do you tell them? Even if you’ve decided to tell executives, you must decide how much information to give. Too much detail and you may panic them unnecessarily, too little and they may not appreciate the implications of the threat. This question is usually harder to answer than the first one.
  • What do executives need to DO because of the rising risk? Another tricky area, what do you propose be done about the threat? Wait it out and seek more confirmation? Deal with it proactively, even if there’s potential for the threat to not happen? Take interim steps? This is the most important question to be answered when talking about predictive security management.

Focus Predictive Security On Remediation Not Reporting

We don’t know what advice the intel team gave to the government leaders, but we do know there are a few general ways you can deal with a threat or risk:

  • Accept the risk and go on with what you were doing. Sometimes there’s not much that can be done – or worth doing. For example, there could be a heightened risk of a terrorist attack, but you don’t want to be seen to be weak and encourage them further and choose to ignore it, safe in the knowledge airport security is already prepared for such a threat.
  • Try to remove or reduce the risk. In a political context, it might involve finding the people who are informants and stopping their ability to keep helping the other government. In a corporate setting, it might involve cutting a contract with a supplier you think has illegal dealings, for example.
  • Make a strategic bet to increase the risk. In a political context like yesterday’s story, increasing a risk strategically could involve cutting diplomatic ties, mobilizing troops or invoking sanctions, among others (these increase risk because they may cause the original threat actor to escalate further or move more quickly with the original threat.) In a corporate context, an example would be to work with a startup vendor even though you know it’s a highly risky supplier because that vendor has some amazing new technology that you want to use.

Unfortunately, if you didn’t have a remediation plan in place BEFORE the risk became likely, you’re facing much more confusion about what to do and even whether to do anything at all. This puts your company at risk and in fact, negates the value of having predictive security capabilities.

Bottom Line: Security professionals need predictive security management and prescriptive treatment plans to protect their firms from looming threats.

Security teams need clear treatment plans that address potential risks and how to mitigate them. As a simple example, if there is a threat of insiders giving information to third parties, then the remediation plan would involve something like “when someone downloads more than one file they don’t normally access, that person’s manager must ask why the person needed those files within 4 hours of the download.” Without this proactive treatment planning, companies likely do nothing and then get harmed even by risks they could have addressed.


Posted in: Security and Risk



2017: The year people are forced to learn new skills... or join the Lost Generation

January 13, 2017 | Phil Fersht

Let’s cut to the chase – there have never been times as uncertain as these in the world of business. There is no written rule-book to follow when it comes to career survival. The “Future of Work” is about making ourselves employable in a workforce where the priority of business leaders is to invest in automation and digital technology, more than training and developing their own workforces.

As our soon-to-be-released State of Operations and Outsourcing 2017 study, conducted in conjunction with KPMG across 454 major enterprise buyers globally, shows a dramatic shift in priorities from senior managers (SVPs and above), where 43% are earmarking significant investment in robotic automation of processes, compared with only 28% placing a similar emphasis on training and change management. In fact, the same number of senior managers are as focused on cognitive computing as their own people… yes, folks, this is the singularity of enterprise operations, where cognitive computing now equals employees’ brains when it comes to investment!

My deep-seated fear for today’s workforce is that we’re in danger of becoming this "Lost Generation" of workers if we persist in relying on what we already know, versus avoiding learning new skills that business leaders now need. We have to become students again, put our egos aside, and broaden our capabilities to avoid the quicksand of legacy executives no longer worth employing. We need to become hybrid corporate animals.

So let’s give some examples of these "new skills" we need to develop for ourselves:

Sales people: it’s no longer just about selling and relationship development, it’s about understanding evolving business models, understanding the impact of technology and the importance of smart marketing. You need to be a trusted consultant, not simply good with a 9-iron. Clients needs are increasingly complexifying and you need to be the arbiter of helping them simplify their requirements. Understanding business models is what will make you successful in the digital world.

Software people: it’s no longer about data management, security and making apps function, it’s also about understanding the desired business outcomes associated with these investments and helping your enterprise stakeholders articulate them better, so you can work with them to

Read More »

Posted in: Cognitive ComputingDigital TransformationHfS Surveys: All our Survey Posts



Making Industry 4.0 Real For Manufacturers

January 12, 2017 | Pareekh Jain

Industry 4.0 has become a buzzword in the manufacturing industry today. There is a reason for it. There has not been a full-scale change in the way we manufacture goods since the days of Henry Ford. The PLC (programmable logic controller), MES (manufacturing execution system), first generation robots have all made incremental improvements to efficiency but not to the same extent. Now with Industry 4.0 the change is beginning to happen.

But what is Industry 4.0? The danger of the buzzwords is that many service providers are trying to label their legacy services and solutions as Industry 4.0 and confusing clients. We at HfS Research believe that Industry 4.0—or the fourth industrial revolution—is the confluence of many technologies coming together in manufacturing for the creation of smart factories with significantly high efficiency, productivity, quality and flexibility than the current state. It will enable mass customization in manufacturing. While it will take few decades to enable promises of mass customization at scale, the journey has started. 

While most engineering, consulting, technology, and business process services in manufacturing industry offered today (even legacy services!) can help enterprises in their Industry 4.0 journey in some way, we have identified 13 enabling technologies that we believe are critical for any enterprise to accelerate its Industry 4.0 journey.

To make Industry 4.0 real for our enterprise clients, we are launching our Industry 4.0 study, which will focus exclusively on R&D, plan, implement and operate services around the 13 enabling technologies shown in the chart. Most of these technologies are in the early stages of adoption, as we will discuss in the forthcoming Blueprint Guide.

Bottom Line: HfS Research Blueprint Guide: Industry 4.0 Service 2017 will cut the chase and make Industry 4.0 real for our enterprise clients.

This study will help enterprise clients understand the real case applications of different Industry 4.0 offerings along with capabilities and offerings of the service providers in the market today. We will work to understand the different ways that this functionality is delivered and how it may evolve. We will evaluate about 15 service providers on their innovation and execution capabilities in this emerging and exciting space. If you have any interesting Industry 4.0 services story to share, please contact [email protected]

Posted in: Engineering