HfS Network

Monthly Archives: Feb 2017

NASSCOM 2017: Indian IT services paralyzed by Trump, but being a deer in the headlights is not an option

February 17, 2017 | Phil Fersht

When, in history, has there existed a market that keeps relentlessly growing at 5-10% each year, with profit margins consistently at a 15-20% level; and for well over a decade? Yet you attend the annual flagship Indian IT conference only to experience an atmosphere of acute paranoia and paralysis.  Is change really that frightening?

Even most clients are openly declaring they haven't had their budgets reduced - many simply aren't ready to make investments while there is such uncertainty surrounding the market because of an unpredictable US President.  Even NASSCOM itself adds to the uncertainty by deferring its usual business outlook... 

However, acting like a deer in the headlights is not an option.  The smart strategy is to expect the worst and make measures now to get in front of it.... don't let the juggernaut, that is a protectionist US administration, squash you flat in your tracks.  

Breaking out of this paralysis cycle

However negatively this could turn out for some of the Indian IT services industry – here are six simple ways to break out of this paralysis and reinvest some of these bloated warchests, before greedy investors who got rich off your spoils demand to cash in their chips...

1) Invest internationally beyond the US.  Those Indian IT majors in the strongest position are those that are least reliant on their US clientele for future growth.  In fact, HfS estimates $7 Trillion in B2B digital expenditure by 2020 - with only $2bn being in the US (traditionally 50% of worldwide IT spend came from the US, but digital spending - both B2B and B2C - is changing that picture dramatically). For example, the British PM is already deep in discussions with Modi about closening UK/Indo ties even further in the wake of Brexit. The UK has the potential to become a major digital hub, fuelled by Indian talent.  While Brexit appears like a terrible idea on paper, change forces action and these actions will be all about increasing the flow of trade and talent with emerging nations and creating new wealth. We also see a real appetite for digital business model investments and automation by Australian businesses - and many of the Asian nations are only too happy to move from zero to hero to take advantage of the humongous digital B2B expenditure in Asia/Pacific and the rest of the world.  

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In addition, many of the European regions, such as Nordics and Germany, are now rapidly exploring more global resources to support their digital growth. If America - as it appears - is on the path of becoming a protectionist anti-globalization country for the next four years, perhaps its time to broaden your horizons?  

2) Invest in a smarter onsite/offshore model that gets you closer to your customer's customer.  Yesterday's IT services model was all about helping legacy traditional enterprises keep their lights on by maintaining clunky old ERP implementations keep operating, adding extra sauce to spaghetti code and keeping an eye on server outages from afar.  Tomorrow's winners have moved all this stuff into the cloud and automated much of their infrastructure management.  The future growth is working much closer to your customers to help them design and implement digital business models by building mobile applications, testing customer sentiment, forging partnerships and developing APIs with new digital business partners and communities.  Technology skills such as DevOps, Agile, Hadoop, Blue Prism and Automation Anywhere are the watchword, and a global race is on to access these skills.  Moreover, the developers need to be closer to the business designers and customer strategies of the clients to make this effective.  So Indian IT majors need to focus on developing these skilled resources where all their clients are situated, in addition to India itself.  This will require re-investing some of that lovely cash sitting around - and, heaven forbid - take a small margin sacrifice for a few quarters.

3) Partner with digital agencies to get it done.  Be realistic for once and accept the fact that most customers are not going to come to you to design highly creative digital business solutions.  You have an IT services brand, not a creative digital brand.  Most clients will go to the advertising firms, the Design Thinking consultancies and the digital specialists for that work.  However, all those firms are pretty clueless when it comes to actually communicating their business designs to technology firms and having them just get it done. This is where you can really do well - by working with these agencies and consultancies as their IT partner - bring them into your clients and they will being you into theirs!  Believe me, most the digital firms worth acquiring have already been hoovered up by the Accentures and Deloittes... most the stuff left on the market is overpriced, too small, and most their nose-ringed designers will jump ship the moment you buy them. 

4) Become great intelligent automation intermediaries to manage broad automation and analytics environments for enterprises. Clients are crying out for providers to partner with them on their automation journeys – in fact, 45% of buyside operations leaders, when polled privately, view rolling out automation in tandem with their service provider as adding the most quality to their service relationship (see below). Several of the leading Indian heritage IT services firms are making impressive strides with their enterprise analytics and automation solutions – such as Infosys with MANA, TCS with Igneo and Wipro’s Holmes – the key now is their ability to twin their solutions with the cream of the third party intelligent automation apps, such as Automation, Blue Prism, Pega, UiPath, Workfusion, Redwood, Antworks etc to become their clients’ intermediary for automation and analytics value. While some proprietary tools and bots can add great value, especially when aligned to specific industry processes, clients want to have the choice of adding their own independents tools to enjoy the biggest impact on their process value. The Indian IT leaders need to become great partners and facilitators in these emerging environments – they have the development talent in spades and the passion to bulldoze their way to the front of this market.

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5) Keep investing in start-ups. One of the best cultural shifts in the Indian IT industry in recent times has been the emergence of the start-up scene in Delhi, Mumbai, Bangalore and other areas. Ambitious Indian IT talent is no longer desperate to walk that slippery steep treadmill of the IT juggernauts – many of whom are already too big, clunky and corporate for their own good. Moreover, tech investors are fed up having to invest $20-100m in US start-ups to develop one product or technology, when you can get the same value from the likes of India, China or Eastern Europe for a fraction of the cost. Having heard about the 400+ emerging startup firms who are already members of Saurabh Srivastata’s network (the original founder of NASSCOM), it gives me real hope for India’s future that the next generation of IT talent is already being healthily incubated.

6) Just make a plan and stick to it.  The one big element of NASSCOM which I found most infuriating was the lack of a plan from most of the service providers.  Most are simply playing a game of denial and react.  This is a recipe for failure.  Accept the fact there will likely be some uncertainty for six months before some new draconian measures are forced on businesses seeking to do business with the US.  Net-net, it'll be more expensive to deliver services to US clients and also harder to send your own talent over there to train US staff and manage projects. So set aside funds to hire more people in the US and budget for a margin squeeze on future US contracts.  And forecast a 10-25% hit on deal flow due to longer decision cycles and US clients veering away from using highly visible offshore services suppliers.  

Bottom-line: Take the tough blows now to roar to the front of the global IT industry when sanity returns

While the global IT world waits with baited breath, paralyzed by the ramblings of an unstable and determined US President, our beloved IT services firms can either remain numbed by fear, or actually use this opportunity to make some key strategic investments and initiatives. Those mountains of cash need to be used sensibly before those greedy investors demand their piece back, so act now, swiftly and decisively to organize an IT business that isn’t so reliant on lifting and shifting labor to and from the US, and puts you in the driving seat to lead in the $7 trillion dollar digital world, where automation is native and access to skills absolutely critical. India has a great shot at emerging as the world’s great IT pioneer, and so much more than a low cost labor provider for greedy legacy US corporates. Trump won’t be around forever, and he might actually be doing India a massive favor without ever realizing it…

Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services

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The Rise of Supplier Relationship Management

February 14, 2017 | Derk ErbéBarbra McGann

A smarter business operation is one that uses the right combination of talent and technology to impact business outcomes. Third party suppliers are an inevitable part of that right combination, and most effective when managed according to their potential impact on business results. There is, therefore, an increasing focus on the relationships with suppliers and investment across industries to standardize contract management and governance, centralize management of strategic suppliers, recruit and engage talent that has relationship building and critical thinking skills, and better leverage self-service platforms and automation in procurement and supplier management.

Based on our research, including discussions at the HfS Summit, our annual Shared Services and Outsourcing survey with KPMG, and 10 interviews with executives from financial services, healthcare, logistics, high tech and other industries, we’ve put together this picture of the “state of supplier and partner management” in the IT and business process services industry:

  • As organizations grow the business, they are increasingly standardizing and centralizing business operations functions, often incorporating outsourcing in hybrid / global business services models. IT has been the first mover here, with business functions following – F&A, Procurement, and HR as well as industry specific support. We expect centralization and shared services to continue, with selective and targeted use of outsourcing (on and offshore) and RPA in a model many are calling “no-shore.”
  • In the same way, there is a move to centralize supplier/partner management – if not the complete set of activities, then at least the governance and contract management separate from the relationship management. Relationship management is more difficult to centralize and typically happens when the suppliers are providing IT or BPO through a shared services unit. Once centralized, governance and contract management is increasingly automated; and relationship management gets more focus.
  • More mature or forward thinking Procurement / Sourcing leaders are working to position themselves as advisors – partnering with the business to define strategy; coordinating across business units, IT, and legal; defining standards for governance (reinforced through templates and automation); using training to ensure the more distributed relationship management is active and following a framework.

Exhibit 1: Top 3 Desired – and Hardest to Find – Capabilties for Business Operations

Source: HfS Research in Conjunction with KPMG, State of Business Operations 2017 N=454 Enterprise Buyers

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  • Talent for supplier management (and procurement/ sourcing in general) is increasingly oriented toward relationship building, decision-making, and analytical skills. Subject matter knowledge of the function is a basic capability that’s needed; negotiation and contract management “can be taught.” Executives are also increasingly interested in candidates with technical skills (or interest) in determining the right mix of talent and technology for managing optimal business results.
  • Procurement is setting the pace for evaluating and implementing robotic process automation and cloud-enabled platforms for more self-service. Some interviewees mentioned that processes, especially those associated with managing commodity or transaction-based activities and suppliers, are candidates for RPA.
  • Across the board, we found a move to consolidate, reduce, and prioritize/tier suppliers for better negotiation capability, more effective and compliant oversight, and a more collaborative and engaged approach to partnering versus managing “off the side of the desk.”
  • Talent will either enable or hinder your ability to have supplier relationships that support business objectives. It doesn’t matter what your operating model is if you don’t have the right talent. If you have the right talent, they will make the relationship with the supplier effective for the business.

The bottom line: There are three critical components to effective supplier management that stand out in our research

  1. Alignment and tiering of suppliers with business objectives
  2. Standardized and coordinated supplier relationship management and contract management and governance
  3. The “right” talent to broker and manage relationships and results

In general, companies are on a journey to have a more strategic approach to supplier management and believe it will take a matter of years to get there because of the cultural shifts required. We explore these themes further in our recently published POV, “The Rise of Supplier Relationship Management,” available for download (free with site registration).

Posted in: Procurement, Engineering & Supply Chain OutsourcingRobotic Process AutomationThe As-a-Service Economy

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The offshore shift left part 3 - Q4 wasn’t that good…

February 13, 2017 | Jamie Snowdon

Back in August 2016, we wrote about the shift left with offshore providers – we were recently updated in January. Below is the new chart that updates to include Q4 revenues – we always include a full year of data it is the trailing twelve months - now it represents the full calendar year view for all of the years.

 

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Hopefully, the new charts show the shift even more clearly. With the top chart zooming out to show the whole of the y-axis – giving the full margin picture and demonstrates quite how close together the firms really are and highlights the convergence even more. As you can see Q4 hasn’t halted the shift and we see these companies cluster around the high single digit growth mark.

The Bottom Line – we’ll have the full roundup at the end of the month

This is just a taster of the results, once all of the quarterly results have been published we will collate them and produce our full quarterly roundup. We can then see the offshore shift left in the context of the other providers.

Posted in: IT Outsourcing / IT Services

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See you at NASSCOM!

February 13, 2017 | Phil Fersht

Am looking forward to seeing many of you in the warmer climes of Mumbai this week... so having some "Beef Wellington" to protect myself against what threatens to be a mudslide of confusion this week! I hope many of you can attend our opening session "“The Digital OneOffice - Getting Ahead of Today's Disruption”... cheers PF

Posted in: IT Outsourcing / IT ServicesOutsourcing Events

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Ask the Experts: Security Gurus Offer Their Advice for Non-technical Buyers

February 09, 2017 | Christine Ferrusi Ross

A big challenge for sourcing specialists is needing to rely on security domain experts internally to judge provider quality. The internal team, already working on their day jobs, often doesn’t have as much time to devote to the selection and negotiation process as sourcing leaders want. It’s important for sourcing teams to get smarter about security themselves to lessen their dependence on domain experts for preliminary RFP screening and downselecting.

In our upcoming security services Blueprint, we asked the client references (themselves security experts) what advice they’d give non-technical teams on buying security services. Some of them are general sourcing best practices, and some are very specific to security. But they’re all important to ensuring the success of your security services engagement. Here are some of their key recommendations: 

  1. Make a map of your security landscape. You need to cover your bases regarding what kinds of security technology you’re using – end point, antivirus, etc. -- so you can ask the provider about its expertise in each one. Ask in-depth questions about what kind of expertise it has with those tools, and look for specific clients and places where it can demonstrate the details of its experience. Have the provider pull it all together into a diagram and one vision so you can see it and make sure it matches your expectations.
  2. Communicate. A lot. How you interact with the provider will have as much bearing on the engagement’s success as the technical security. Make sure you’re not so focused on technical questions that you ignore challenges in communication. Remember the provider’s on its best behavior during the RFP process and it’s unlikely that communication problems get better after signing the contract. As one client reference said, “if the communication is good, you'll get it right 90% of the time.”
  3. Ask references about mundane details. Beyond the technology expertise, talk to references about what their daily experiences are like. Ask about little things like how quickly the provider answers emails and responds to questions that aren’t part of a service issue. Talk to people who have direct experience with the processes and skills you’re buying to make sure what the provider wrote in the RFP response is actually borne out in client engagements. For example, one client we spoke with mentioned a situation where its incumbent provider proposed expanding scope based on its process for innovation – yet the process described in the proposal looked nothing like the process the client experienced every day with the provider. So even tactical steps within a proposed process need to be explored.
  4. Weight flexibility and potential highly when grading. One client reference expressed sympathy for his sourcing counterparts: “It's hard to know what questions to ask and know how to evaluate the answers,” he said. But he then explained that evaluating a provider’s flexibility is critical to engagement success. He points out that flexibility matters because even if you ask the right question, your questions will change over the course of the work. So flexibility and potential capability are better than specific current capability that may not be relevant in another year.
  5. Pick a supplier that can meet you in the middle. It’s been a truism of outsourcing to hire for areas where you’re weak. But this often leads to provider teams that can’t effectively work with client teams because they have no common skill sets. One client pointed out that she relies on her provider’s ability to speak “business language” when discussing security. Can the provider talk about security from a business perspective or are they expecting you to translate their technical discussions for your stakeholders? What you really want is a provider that can go deep in the technology but still have a business discussion, while you’ll match those skills with your internal security experts and stakeholders.

Bottom line: Don’t be intimidated by the lack of deep technical security knowledge. It’s important to bring in domain experts as much as possible, but sourcing teams can dramatically improve their own efforts by making sure they focus on the business side of security.

Posted in: Security and Risk

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Is there any sanctuary left from the robot these days?

February 08, 2017 | Phil Fersht

Posted in: Absolutely Meaningless ComedyRobotic Process AutomationIntelligent Automation

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EXL On A Journey to More Effective Engagement with Insurance Clients

February 07, 2017 | Reetika Joshi

 

On a recent visit back home to India, I had the opportunity to spend some time with EXL’s EXLerator team that is working on how to improve insurance operations and deliver more business value for its clients with a “version 2.0” of EXLerator. From what I saw, this team’s efforts couldn’t be more timely and are in line with what we have outlined in our research as its areas of improvement.

Like the HfS Buyers Guide on EXL suggests, the service provider pursues an industry-led approach to providing business processes, with strong vertical practices in insurance, healthcare, travel and logistics, banking and utilities. The 2015 Insurance As-a-Service Blueprint highlighted EXL’s domain expertise and scale and execution on BPaaS strategies. However, both the Buyers Guide and the Blueprint also pointed out that EXL needed to bring more technology enablement. It has struggled to find footing with technology-enabled BPO that will fundamentally change the way day-to-day operations are run, moving away from the legacy BPO model. In addition, we have heard from clients the message, “great story but give us examples of how it all comes together.” So EXL also needs to convince its clients to come on this journey.

The work-in-progress V2 of the ‘Business EXLerator Framework’ is EXL’s approach to delivering a change in customer and business outcomes for its clients. What stands out to HfS from the visit, is alignment on the HfS Eight ideals of As-a-Service delivery, which we see as the building blocks for more collaborative and business oriented engagements, including: 

  • Design thinking principles: The EXLerator team highlighted “effortless experience” for insurance customers as one of its key goals. The point, therefore, of EXLerator v2.0 is to give the EXL team a framework for helping clients create “effortless experience” for their stakeholders and clients. Instead of focusing on only traditional process views to make improvements, EXL is starting with comprehensive customer journey maps, taking an insurance customer/agent lens on, for example, lead-to-sale, and then working through the appropriate processes and where and when to use what technology to create that targeted experience.
  • Collaborative engagements working towards outcomes: EXL stressed its commitment to improving business outcomes, which are impacted by achieving process outcomes. In this way, EXL is making a distinction between efficiency (and KPIs) and business impact. Confusion between the two is what usually results in the “watermelon effect,” an industry challenge where the service provider delivers on its KPIs, but the services buyer is unhappy with the results of the engagement. Defining and delivering business outcomes comes with its own challenges, but we like the linkages that EXL is making with process outcomes as building blocks to overall business goals. For example, its client, a US personal lines insurer, outlined “cost per quote” as an outcome, which was reduced by 20% by EXL, through a 10% improvement in process accuracy using the EXLerator framework.
  • Actionable and accessible data and analytics in core processes: EXL is investing in machine learning and operational analytics as one of the key technologies that will improve core insurance operations with EXLerator v2. The journey maps we saw had clear points of decision making where analytics interventions could make a difference, such as the insights that agents and underwriters need in commercial underwriting. Its EXLerator analytics team sits on the operations floor and receives direct mentorship and guidance from EXL’s analytics practice.

The vision is gradually coming together for EXL as it evaluates how to change its traditional business and drive progressive services engagements that will survive the next 5-10 years of this industry. EXL has invested in developing or acquiring a lot of ‘pieces’ and is known for delivering on analytics, etc. but the EXLerator 2.0 framework looks like it is designed to bring it together to enable a journey with the clients.

Even with this progress, the hard work for EXL – like many of its competitors – starts now. The future is all about driving more intelligent operations that will help enterprises become digital customer-facing organizations. Technology enablement is a big piece of that puzzle and EXL has challenges to overcome in executing on its 2.0 vision. The EXLerator team is still fairly small and will be unable to hit EXL’s entire client base consistently, making those valuable “2.0” experiments slower to roll out. Additionally, its robotic process automation approach is currently hinged squarely on its partnership with Automation Anywhere, with which not all clients are willing to get on board. In its journey to create “effortless experiences” for end customers, EXL must keep working on how to make it easy for clients to join along for the ride.

Posted in: Business Process Outsourcing (BPO)Design Thinking

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Unveiling the first ever Digital OneOffice Premier League

February 06, 2017 | Phil Fersht

WATCH THE REPLAY

 

A digital organization has the ability to take all the cool social, mobile and interactive tech we use in our personal lives and create that experience for all the people in its environment: its employees, customers, and partners. 

The Digital OneOfficeTM Framework is all about creating the digital customer experience and an intelligent, single office to enable and support it. In a few months, we won’t be talking nearly as much about intelligent automation and digital technology as the critical “value levers” for operations, as they become an embedded part of the fabric of the future operations platform for new generation organizations. Instead, we will be talking about an integrated support operation having the digital prowess to enable its organization to meet customer demand - as and when that demand happens.

Everything about the digital organization is about engaging people by responding to their needs instantaneously, giving people their choice of medium to interact with it, be it voice, chat box, text, Facebook messenger, email, virtual agent, etc.

The OneOfficeTM Framework is wrapped around the needs of the people in its environment, where automation is completely native and decisions can be made on predicting events, not merely reacting to historical data archives. 

Myself and HfS analyst Melissa O'Brien, discuss the following during the webinar:

  • Why the Digital OneOfficeTM Framework is the Future of Outsourcing
  • How the new generation of enterprises are leveraging digital technologies to link the customer experience with the supporting operations
  • New dynamics we’re seeing in the market that point to a Digital OneOfficeTM future, based on 450 enterprise interviews
  • Our methodology for evaluating professional services firms to enable the Digital OneOfficeTM experience for enterprises – and how they stack in in 2017

 

You can read more about our vision for the future outsourcing framework, the Digital OneOffice, by downloading our complimentary POV here.

Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services

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Four Golden Rules to save the Indian IT Industry from Trump

February 04, 2017 | Phil Fersht

You must read my LinkedIn post and join in the discussion. Click here to access... go on, you know you want to =) 

Posted in: Policy and Regulations

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Digital Customer Service BPO: A Chat with HGS

February 03, 2017 | Melissa O'Brien

I recently caught up with Wendy Shlensky of HGS to talk about customer service trends on her blog. Here’s what we talked about:

Today’s companies are challenged to meet everyday customer service pressures while also building for the future. They must provide optimized customer service across various digital channels while also using new tools to better understand customer demographics and preferences, to deliver more personalized service.  The ability to simultaneously achieve these goals is really a differentiator in a world where many products and services are commoditized.

Wendy: Can you share the trends you’ve seen in customer service?

Melissa: Today’s customer service trends are being driven by customer expectations for really simple and straightforward communication. In many cases, this means self-service tools, although customers also sometimes need to pick up the phone and speak with a person.  Depending on objectives and available channels, customers will use various ways to communicate with companies to ask a question or give feedback. 

Balancing self-service and digital—including human assistance, when needed—is a significant customer service focus area. Customer service solutions that pre-empt and solve customer inquiries—before requiring agent assistance—are driving self-service as a solution to decrease customer effort.  Improving self-service is frequently put forward as a cost savings mechanism, but often has the most immediate impact on service quality and consistency. Most importantly, weaving all of the potential touchpoints to support an omnichannel customer experience is a design challenge for most organizations to undertake. 

Wendy: How essential are digital CX tools in today’s marketplace?

Melissa: These digital tools are critical. At HfS, we have been working on the concept of a digitally enabled contact center. We have produced a competitive assessment of service providers in this space.  Essentially, this means that a contact center is equipped to service today’s digital customer, who, as we all know, has increasing expectations in terms of communication channels.  At the most basic level, the start of the digitally enabled contact center means embracing “digital” channels: social media; web self-service, including mobile apps and visual IVR; video kiosks; and chat.  Also important is seeking to use automation to create efficiencies and the really smart contact center operators are trying to figure out how to involve increasingly intelligent automation into the mix.

However, it’s more than just implementing these channels, it’s the design of how each channel fits into the overall customer journey, and the understanding of how talent fits into the equation. This talent should not only be able to handle communication on varied channels that demand different styles (yet be consistent), but can also take contextual information from multiple sources and use that in a way that benefits the customer. From an analytics perspective, it’s all about using the data to better understand customers, enable personalization, and be more predictive.

Wendy: How is this changing BPO services engagements?

Melissa: Digital channels and the underlying technology will fundamentally change the way that service providers and buyers of BPO services engage. We have learned from our recent Intelligent Operations study that almost half of senior leadership buyers are using a “customer first” strategy to drive their sourcing models. This means embracing the change and solution ideals of “As-a-Service,” including design thinking. We see opportunity for service providers to use design thinking to help their clients develop better processes, especially around “customer journey maps.” Rethinking customer journey design is absolutely essential to the digital customer experience. 

For example, HfS recently spoke with a retailer that was struggling with efficient scheduling processes for an in-store service. The service provider took the approach of interviewing the staff members fulfilling the services to understand the areas where they saw inefficiencies and problems. The results included a scheduling process redesign that blended the digital self-service channels and those that were human assisted. Often, design thinking projects will involve an employee-centric approach—recognizing that employees are customers, too, who often hold the key to improving customer experience. 

The service provider-buyer relationship is also affected by buyers’ expectations of greater flexibility and value. Some service providers are looking to their BPOs to be really nimble, and scale, as needed. Additionally, they want their service providers to be thought leaders and help them figure out this puzzle of digital customer interactions. 

Wendy: What do you see as the future of digital BPO?

Melissa: In a customer-first digital economy, BPOs will strive to find the right balance of technology and talent, and deliver that as effortlessly as possible to clients. Contact center service providers’ strategies must be multi-fold—they must provide something more valuable in conjunction with traditional operations that addresses automation and self-service, built in with exceptional support (with a great talent strategy) to address the changing contact center model to derive more value out of clients’ investments.

What’s one of the biggest wild cards, with the biggest impact? It’s artificial Intelligence, or the development of “intelligent” virtual assistants. While right now most contact center automation is augmenting agent talent, we are seeing virtual agent pilots and POCs that can replace some contact center talent. Regardless of how quickly this evolves, eventually artificial intelligence will have a material impact on contact centers. Service providers, together with their clients, will need to figure out how to blend the best of human and artificial intelligence, and most importantly have a greater sense of urgency to understand how this will impact the customer experience. 

Posted in: Business Process Outsourcing (BPO)Digital OneOfficeCustomer Experience Management

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From Designing to Doing: Enabling Design Thinking into Solutions and Results

February 03, 2017 | Barbra McGann

We’ve seen a number of consulting and outsourcing firms making investments in design thinking over the last couple years.  The most visible approach recently has been the roll of acquisitions of design-thinking boutiques. A few representative ones that are being covered in our current research for the Design Thinking in the As-a-Service Economy Blueprint include:

  • Capgemini – Fahrehenit 212 (2016)
  • Cognizant – Idea Couture (2016)
  • Tech Mahindra –BIO Agency (2016)
  • Wipro – Designit (2015)
  • Accenture – Chaotic Moon (2015), Fjord (2013)

And while other outsourcing companies are not making acquisitions, they are partnering with design thinking firms  (e.g., Sutherland with UXAlliance, Genpact with Elixir Design) and academic institutions that offer design-thinking curriculum (e.g., Infosys with Stanford d.school).  Do their clients feel like it really makes a difference?  From what I’m hearing in my interviews with operations executives, product managers, and finance transformation leaders to name a few… Yes, it does.

Here’s how:

From designing to doing: Design thinking offers an approach for a diverse group of people to work together to identify and articulate a common problem, brainstorm ideas for addressing it, quickly prototype/wireframe/storyboard and test it, and continue to iterate on the idea as it takes shape into a proposed solution. While designers often operate within a “non-constrained world,” Consultants bring a healthy dose of reality check into the process, shared one interviewee. For example, a market-based and analytical approach adds context to the process of testing the ideas and prototypes for how well they could work in the business and how relevant they are to the market. Another executive described it as an “innovation agency” partnering with a “solution provider.”

Industrialization of methods and tools: Consulting and outsourcing firms have a rich history of standardizing what they have seen work in multiple instances. Many of them have been known to go to the extreme of “this way or the highway.” Most design thinking firms take a more creative, empathetic, and flexible approach, but are typically not as strong in analyzing, identifying, and setting standards. There are design-thinking agencies that are known for strictly adhering to standardized approaches and toolsets – IDEO comes to mind – but it is not the norm in the industry.  Likewise, there are pockets of creativity in consulting and outsourcing, but, again, not typical. These two groups are starting to find complements in one another. Clients are appreciating this emerging combination of creative, engaging, and simple (thanks designers) and standardized, contextualized (thanks consultants) approaches. 

Research depth: Design thinking can be a richer experience through thoughtful diversity – bringing together people at different levels (hierarchy) in a company, from different business units and functions, and from different professional backgrounds (e.g., ethnographers, CPAs, and programmers).  Design thinking firms are rich in creative professionals; and consulting and outsourcing firms can tap into industry subject matter experts, technology gurus, and change management leaders, as well, because of the breadth and depth of their organizations. They can help address needs from market sizing to industry expertise to rapid prototype development with new, emerging technologies because of internal experts or their own ecosystems. 

Recalibration underway 

A key theme we hear over and over in the outsourcing industry is the drive toward “recalibration.” Outsourcing firms that have been in business for years were built on the premise of providing lower cost, higher efficient processes using best practices: Lean six sigma, and ERP or now, increasingly, cloud-based/SaaS platforms. But to keep doing something basically the same way and expecting different results is insanity (a refrain often accredited to Einstein) – design thinking offers an approach to finding those new results. 

Bottom line: A design thinking led approach moves the focus of the operations executive and service provider partner off the process itself, off the internal, “what’s wrong inside of what we do” to “what do we actually want to achieve” (the business outcome), and what do we want people to feel and do naturally that will lead to further engagement and new—and different—results. 

After seeing the impact of the human-centered, flexible, creative, fast approach within “innovation centers,” “labs,” or “digital” business units, consulting and outsourcing firms are realizing that design thinking can help a company and its clients reimagine something that desperately needs a new way of working. Outsourcing and service delivery is an industry suffering from hitting thresholds on cost reduction, failing to meet expectations of innovation, and wondering how to use digital technology and overcome barriers in communication set up within and between clients and service providers.  At the same time, though, there are key aspects of rigor, process orientation, and service inherent in the services industry that fit well into enabling design thinking to move into solutions and results such as increased customer and employee loyalty and new revenue streams.

About 18 months ago, we thought – wow, what an interesting idea, using design thinking in the services industry. And we launched the first Design Thinking in the As-a-Service Economy Blueprint to explore whether it not it was feasible – if there were any examples of how design thinking was changing the way consulting and outsourcing firms work, internally with or for their clients. There were a few. As we go through the current refresh, we are finding that design thinking is actually changing the way many clients and service providers work, that there is a real complement between designers, consultants, engineers, and service delivery; and we will continue to share examples over the next few months.

Posted in: Design Thinking

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BPO Market Primer – Watch This Space For the Update in April

February 03, 2017 | Jamie Snowdon

As we mentioned in our recent blog on the IT Services Market we are looking to make our content more visually appealing. So we have below the companion primer cover the BPO market 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.

Click Here to Enlarge

This chart gives our top level view of the BPO market in numbers – this provides a top level look at the market as a whole. We will be looking at producing a number of cuts of this data over the next few months, especially as we roll out our BPO Top 50 report and our updates to our market forecast.

The Bottom Line - Watch this Space

We are publishing a point of view on market conditions over the next few days, which presents these charts again with some additional commentary. Please find the piece at www.hfsresearch.com.

Posted in: IT Outsourcing / IT Services

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Retail Embraces the Digital OneOffice and Optimizing the In-Store Experience (NRF report)

February 03, 2017 | Melissa O'Brien

HfS has been spending the past several months talking about the Digital OneOffice – a business model focused on placing the customer at the center of every internal operation, even those not normally considered customer-facing. Whether you consider your firm a “traditional” business or a digital native, you need better customer centricity.

Recently I saw evidence of how this new focus on customer centricity is affecting the retail industry. Retail is rife with brick and mortar giants struggling to pivot their operations to support omnichannel shopping, and online upstarts vying to make their voices heard amid the e-commerce din. After hearing yesterday’s news that Target’s Goldfish project -- its mysterious Silicon valley digital startup --  now swims with the fishes, I started thinking about the tales I heard at the recent NRF conference. From both retail giants and small retail innovators, moving to OneOffice is about enabling the ability to support heightened customer expectations and often strengthening business fundamentals in order to do so. 

Stepping into the Customer’s Shoes

Target’s stated reasoning behind abandoning the potential e-commerce spinoff was to renew a focus on the brick and mortar business, strengthening the personalization of the in-store shopping experience with greater personalization and payment options on its shopping app.  In doing so, Target is putting a stake in the ground about where it wants -- and doesn’t want -- to compete. In the case of this retail giant, leaders see greater value in digitizing and optimizing the experience of its in-store customers than in creating something new that doesn’t necessarily jive with what customers want from Target.  It seems counter-intuitive that focusing on brick-and-mortar stores helps in Target’s Digital OneOffice transformation, but this move shows that the retailer is honing in on its customers’ experiences where the customers want it.

This strategy had plenty of examples at NRF. I saw providers demonstrating solutions which have the potential for retailers to take their traditional businesses to the next level. These solutions ranged from getting real-time information from the store to engaging the shopper around product education to promoting promotions or specials while they’re making the product decision were top of the list for this kind of optimization. Specifically, here are some exhibitor examples: 

  • Wipro Intelligent Displays: Wipro had a retail in-store demo which featured the use of sensors to allow the shopper to get more information about the product on a display screen in the store.  For example, the shopper could pick up two items and compare them side by side as they would online or in a mobile app.  This could also be reconfigured with near field communication (NFC) to connect to the app for greater personalization. I think this would be even more effective. 
  • Infosys Home-to-Store Journeys: Infosys took a real customer-journey-centric approach with its immersive demo of a full home-to-store shopping experience.  The journey demonstration begins in the customer’s living room, with the customer shopping on a mobile app and noting preferences and upcoming events (birthdays, vacations).  The journey then moves to the store, and demo participants were greeted by name by the store employee who knew what items the customer shopped for at home.  The comprehensive booth also featured a demo of the possibilities for augmented reality in store.  Infosys is using a combination of technology and services to customize these journeys for its retail clients and showing what’s possible for the future of retail. 
  • Sutherland’s Predictive Chat: A demo at the Sutherland booth highlighted a chat solution which originated with a design thinking approach to bridging store and online experience.  The platform enabled more proactive engagement with customers by drawing customer data from various external and internal retailer sources, feeding insights into the chat which could pre-empt customer questions and concerns.  
  • Honeywell Employee Tools: There were also interesting products at NRF. I popped by the Honeywell booth where I saw demos of plenty of tools aimed at making the customer experience better through improving the employee experience.  This ranged from a software infused headset enabling pick and pack staff to more efficiently sort items in the warehouse (and move away from manual tracking!) to light, durable wearable scanners that employees can wear on the wrist or finger to enable more swift customer check out; all pointing toward creating better efficiencies in the entire process behind a shopping experience. 

The bottom line: being customer-focused means improving the customer’s experience in store as well as online. Remember that in store sales still represent the bulk of revenues in the retail sector. Optimizing legacy systems to make them complement new business initiatives in a way that supports customer experience is how retailers will successfully move to DigitalOne Office.

PS: If you’d like to know even more about Digital OneOffice, come to our New York City Summit on March 30!

Posted in: Digital OneOfficeCustomer Experience Management

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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

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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

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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

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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.

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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

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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

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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

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