HfS Network

Monthly Archives: Jul 2016

We are all outcome workers, whether we like it or not...

July 30, 2016 | Phil Fersht

If you run any type of business operation or P&L, you're quickly realizing your number one challenge is getting your people to help you achieve the results your business needs to be successful. Your strategy has to be about promoting a mindset where people focus on what they are contributing to the business, not the amount of hours they spend "at work".  

Whether you are a workaholic slogging an 80-hour a week, or a 20-hour a week work-at-home mom/dad, you are going to be measured on what you are contributing to the business - so it's really all about setting the right outcome expectations with your employer.  Simply sending through a weekly timesheet with a bunch of vague activities is a waste of everyone's time.  Agree in advance with your boss what outcomes are expected of you and focus your time on meeting them... and if you can achieve them working 10 hours a week sitting by a pool in the sun, or slaving away for 100 hours in your basement really doesn't matter anymore - it's whether you delivered those outcomes expected of you. You just need to decide whether that job suits you and your own goals in life.  Today's successful working relationships are being defined by employers and workers sharing outcomes that both are motivated to meet. If those outcomes do not gel, then that working situation will not survive. 

And this isn't some fancy new vision for talent only a few businesses are adopting - this is the only way firms can really function today, if they want to be successful. Everyone on the payroll needs to add tangible, easy-to-explain value… otherwise why are they on the payroll?  It’s easy to turn your PC on in the morning and forward emails around the place, but what is your real value?  

The only six questions that matter when it comes to outcome-based employee performance

  1. Which customers have you delighted recently?
  2. What new relationships have you made that add value to our business?
  3. What work have you done that excited people inside and outside of the business?
  4. How are you helping energize your colleagues and exciting them with new ideas?
  5. How have you helped add value to new business wins?
  6. How have you contributed to new initiatives that improve productivity and effectiveness?

Cutting to the chase, if you think all you have to do is turn on your PC on at 9.00am and shut down at 5.00pm, mindlessly immersing yourself in forwarding and adding to chains of emails between your hourly Facebook visits, bi-hourly LinkedIn visits and your twice-daily moronic retweeting of some crap you never really bothered to read (but the title sounded impressive), then you’re pretty much done.  Go check on your pension plan, because you may be hitting those funds long before you had anticipated.

As an employer myself, I gave up caring what staff do during the day – trust me, you’ll drive yourself insane if you go old-school with the old micro-management.  New school management is simply asking staff those 6 questions - and requiring answers to them. 

So what activities should outcome-centric employees do during the day?

  • Limit email activity to one email a time. Scan your messages and quickly decide which ones require a response.  The pick them off one at a time. Do not click out and re-check them all again.  Just answer then quickly one at a time until all the important ones are done.  The minute you start trying to multi-task your email your lose focus and you’ll spend all day faffing around your inbox like packing up your hotel room with a hangover…
  • Call people who matter. Remember when you actually spoke to people?  You got things done, you created friendships and new ideas.  Something nearly always happens when you speak to someone.  List the 5 people you need to talk to and focus on them for a couple of days.
  • Read something that makes you smarter. We all get loads of interesting stuff shoved at us and let’s face it, we probably ready 5% of it at best. Stop.  Pick out the one article you know will make you super damn smart at your key work task at hand and read the damn thing.  Make a decent cup of tea, go sit somewhere quiet and read it. 
  • Turn off Facebook. Seriously – there is nothing in there to help you do your job better.  Do it with a glass of wine in the evening if you have nothing better to do.  If HfS did a productivity analysis impact on the global economy due to Facebook-faffers, it’s probably in the billions…
  • Write something. We’re all analysts now, so focus on writing something that your think you are expert in.  It’s a great way to build credibility and if forces you to be a better communicator.  We all went to school, we can all type, we can all read, we can all talk, so why can’t we put out thoughts to print?  Just write like you talk, like you’re explaining your views on something to someone down the pub… or explaining to your Mom what you actually do.  Everyone is an expert insomething… hell, if you’re not, you might as well give up now.
  • Exercise. Not much is worse for you that staring into a 12 inch laptop screen 18 hours a day while guzzling caffeine and noshing last night’s pizza… so pick out the best time of the day to get your heart pounding. It’s the best thing ever, but organize when you do it, otherwise you’ll hit 5.00pm and you know full well it’s just not going to happen…

The Bottom-line:  we must change our work habits if we are to survive in this work-outcome environment

Personally, I never thought the work environment would reach some of the current depths it has today for so many people, but the impact of “digital” has not been very good, when it comes to the productivity and effectiveness of so many workers.  So many people are just burned out from picking up terrible digital work habits (and many at quite a young age).  So change how you work.  Just do it, and you’ll start to experience a very old feeling you’ve probably long forgotten:  job satisfaction.

Posted in: Buyers' Sourcing Best PracticesDesign ThinkingHR Strategy

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The HfS BPO Top 50: ADP, Xerox and Accenture lead the way

July 26, 2016 | Phil Fersht

Ever wondered who the leading 50 BPO providers are across the globe, when we add up all relevant revenues?  Well, you need look no further:

Source: HfS Research 2016 estimated from services provider financials. Revenues are fitted to nearest calendar year. We attempt to make the BPO services numbers as close to HfS definitions as possible. The market primarily used for this list is the horizontal BPO processes of F&A, HR, Customer Care/CRM, and Procurement. Some industry-specific back office processes are included but we have excluded specialist categories, for example, banking securities.

We have segmented the providers into 5 broad categories: HRO specialists, Customer Care specialists, Multi-process BPO, Multi-process IT & BPO and document management providers. The specialist areas: document management, customer care and HRO should be fairly clear—the vast majority of the services these company provides in BPO is related to this category. The IT multi providers and BPO multi providers—divides the companies that provide multiple types of BPO services into those with an IT heritage and those without. These categories are subjective; we based these splits partly on the type of services they provide and individual company background. For example, Accenture provides multiple types of BPO service and has a sizable IT services business so we have described as a IT multi.

HfS subscribers can download the full report, authored by Jamie Snowdon, Barbra McGann and Phil Fersht by clicking here

Posted in: Business Process Outsourcing (BPO)HfSResearch.com Homepage

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It's cognitively conjugal as Amelia and Accenture renew their vows

July 19, 2016 | Phil Fersht

The most "tangible" value of cognitive automation, in today's consumer-centric enterprise, is the use of the virtual agent, where customer engagement is increased without heavy incremental investments in support staff. This isn't about simply replacing a real customer service rep with an avatar, it's augmenting the existing customer experience, usually using the same or similar resources.  

For example, if you have a bad travel experience, or purchased a product that wasn't quite what you expected, the chances are you would simply shrug it off and get on with your life - and probably avoid using those same sellers again in the future, if given the choice. However, if those sellers used interactive technologies that were very familiar, or very easy to find and use, where you could simply type in your issue, in your own time, without the need to pick up a phone and wait in some queue (or write some email to some anonymous address), you may just find the effort to input a couple of lines saying "my experience just wasn't that good". 

That information is critical to the seller - and how they choose to deal with it could make the difference between them winning out or losing in this market.  Just think about how easy Uber, AirBnb, Amazon et al make it for you to deal with them - you will continue to use those services because the digital customer experience is just so much better... they make you feel like they listen.   Customers today like effortless interaction, where they just need to click and type what they want in their own time - and what makes it come alive is when they feel they are engaging with someone and not merely sitting in a queue as an open help desk ticket number waiting to be closed. 

If you get a chance to kick the tyres with one of the most exciting cognitive virtual agent solutions, IPSoft's Amelia, you start to realize that customer service can be radically improved by incorporating the virtual agent to augment the real one.  And the beauty of this is, the sellers do not need to spend huge incremental sums to increase their consumer engagement - they are essentially doing a lot more with what they currently have using smart cognitive technology.  

So it's no surprise that I got just a little bit excited when Amelia's mothership enterprise, IPSoft, announced a comprehensive partnership with Accenture to build an industry leading practice in the cognitive customer experience.  So sit back, relax, and enjoy this discussion between myself, IPSoft's CEO, Chetan Dube and Accenture's Chief Technology Officer, Paul Dougherty.

Phil Fersht, HfS CEO and Chief Analyst: So let's get straight to the point here, Chetan and Paul. Why have you come together and what is so unique about this partnership? 

Paul Daugherty, CTO, Accenture
Paul Daugherty, Chief Technology Officer, Accenture

Paul Daugherty, CTO, Accenture: Hi Phil - great to be here. Let me start and then Chetan can add in. You know that the immediate reasons we've come together, the obvious reason we came together is we see a real market with our enterprise clients for artificial intelligence based solutions. And we've been working with Chetan the team at IPsoft for a while and with Amelia we see a real potential to be at the vanguard of working with IPsoft  to pioneer new use cases in terms of using AI to tackle business problems in a new way. So the first reason is we see the market we see the technology being ready. We are excited about what IPsoft  has done with Amelia and we see an opportunity. I guess, stepping back from that, this is also to me a very important step in what we are seeing in the evolution of enterprises really transforming to the digital economy.

And Chetan will remember a lunch we had when we met for the very first time. We got very excited as we talked to each other a couple of years ago about what we saw as AI evolved and as the digital technology revolution continued, we saw a point coming where AI would allow companies to really rethink the way that they do business and rethink the way that they conduct business processes within their organizations. And that's I guess why this is such an important relationship from my perspective strategically, because we are starting to see as we move through the digital revolution as we help clients transform they need new approaches and new solutions to deal with the speed of business, to deal with the masses of data that they have, to deal with the new demands that they have as they move to the digital wave. And we see Amelia really serving a purpose there and helping to really rethink and revolutionize the way we conduct some of the business processes. That’s the way I’d answer it. Chetan, I’d be interested in your view on it, too.
 

Chetan Dube, CEO, IPsoft
Chetan Dube, CEO, IPsoft

Chetan Dube, CEO, IPsoft: Yeah. I would echo what Paul said. Yes, I remember that lunch, Paul, when we had brainstormed. AI is totally disrupting everything. But what is required for true value creation for the companies? Some have realized tremendous value and the others have been somewhat slow to realize value creation in their digital quest. What is required? Well, you do need the digital labor component.

But that's not all that you need. You need business transformation—and Accenture brings business transformation brilliance. And there are many companies that are experts in strategies and there are many companies that are experts in implementation. Accenture is one that amalgamates both. Couple that with cognitive technologies and you have the potential of realizing the true outcomes that were promised by the digital age. So that's what brought us together. How high the technology is going to allow some people to soar is going to be determined by the people who are captaining the ship. And in this case we have an incredible deal of confidence in Paul and his team at Accenture and how much transformation they will be able to bring by harnessing true cognitive abilities together.

Phil: So Chetan, for our global audience which might not be so familiar with Amelia, can you briefly summarize its value and potential? What can Amelia do which other cognitive solutions cannot?

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Posted in: Cognitive ComputingRobotic Process Automation

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OneOffice or DumbOffice? Service providers are bifurcating again

July 16, 2016 | Phil Fersht

In the old days of labor arbitrage centric outsourcing (which of course doesn't happen anymore) we had two quite clearly defined sets of service provider -

  • The offshore providers, which rarely interacted above director level and did the low end lift and shift routine work.
  • The integrators, which worked primarily with the IT and operations leadership to do the higher end work the ERP integration, often overseeing some of the offshore service providers to make sure they were doing their job. 

Then the likes of Accenture, IBM and Capgemini realized the offshore firms had eaten their lunch and they rolled out their own offshore delivery functions in 2005-2010 to circumvent the heavy flow of dollars to the Indian-centric majors. Accenture and IBM managed to catch up and compete on price when they needed to, while Capgemini really needed to acquire IGATE last year to be more effective as an offshore provider, in addition to being an integrator. Meanwhile, you had the likes of Deloitte, PwC and E&Y, which chose to stay out of the offshore game and sell integration capabilities as consultants, rather than managed service outsourcers. The losers in all of this were the traditional IT/BPO services providers, such as HP(EDS), CSC, Xerox(ACS) et al whose lunch was eaten by the offshore providers, struggling to compete on price, scale and flexibility.

Then along comes Digital and Automation as the new value drivers and suddenly the game is changing again – labor arbitrage is still a key cost lever, but it needs to be balanced with automation to drive down the cost and increase the productivity even further, while the broader goals of the ambitious C-Suites are to create real digital capabilities to create their markets, not play constant catch up to avoid being disrupted.:

So what are these two emerging groups of service provider?

OneOffice Enablers - focused on designing and enabling the digital customer experience and tying the front to the back to make it all happen (see below).  This is

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Posted in: Business Process Outsourcing (BPO)HfSResearch.com HomepageIT Outsourcing / IT Services

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Will you really have to retire at 50? Not if you're smart about marketing and repackaging your skills

July 11, 2016 | Phil Fersht


I think I just read one of the most (brutally) honest and practical articles by a guy called Len Kendall, an LA-based marketing executive with a clear penchant for writing. His piece is based on two premises:

  1. The market no longer allows for employing older workers who deserve higher salaries
  2. Technology is killing jobs at a very fast pace that will only continue to accelerate

OK – we all kind of know this.  But where this gets interesting is where the discussion shifts to what he constitutes “expensive” workers. 

"Thanks to advancements in technology, jobs are becoming more automated. Assuming that we can eventually automate all basic jobs and allow artificial intelligence to conduct more skilled work, there will only be a need for a small group of educated, experienced, but inexpensive workers."

So what counts as “expensive” workers?

  • Group A – low-skilled, but still expensive.  Large populations of low-skilled workers (varying in age) who require lots of benefits. Companies will look to replace groups of ten or even hundreds of people with one computer to reduce costs.  This is the premise

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Posted in: Design ThinkingHR Strategy

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Automation Impact: India's services industry workforce to shrink 480,000 by 2021 - a decline of 14%

July 03, 2016 | Phil Fersht

Last week (see post) we revealed the true impact of the emergence of Intelligent Automation on the global industry of 15 million IT services and BPO workers, revealing a net decrease of 9% and ~1.4 million jobs.  

The HfS future workforce impact model predicts the likely impact of the most recent wave of automation on the IT Services and BPO industry. We estimate that the current total IT Service and BPO industry employs c15 million in 2015, with ~3.5 million in India, ~1 million in Philippines, ~5 million in North America and ~4 million in Europe. 

The workers within the worldwide industry have been divided into 3 categories: low skilled, medium skilled and high skilled. Low skilled workers conduct simple entry level, process driven tasks that require little abstract thinking or autonomy. Medium-to-High level workers undertake more complicated tasks that require experience, complex problem solving, ability to learn on-the-job and to work autonomously. The model then applies underlying growth rates for each category linked to market growth. Each scenario has a different set of parameters that will impact each level of worker setting out likely degree of automation for each group and the probability that the job will be automated and in what time frame this is likely to happen. You can read a fuller description of our methodology for our future workforce impact model here.

The low-skilled United States and Indian services workforces are most impacted 

So what does this look like when we drill down to the country levels of the main global delivery locations:  UK, US, India and Philippines?  Let's start with the low-skilled positions, greatest at risk from robotic process automation (RPA): 

Click to Enlarge

(Click to Enlarge)

As the graphic illustrates, India is set to lose 640,000 and the US 770,000 low-skilled positions by 2021 - these are decreases of 28% and 33% respectively. This is largely because there are a large number of non-customer facing roles at the low-skill level in these countries, when you take into account the amount of back office processing and IT support work that are likely to be automated and consolidated across a smaller number of workers.  On the flip side,

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Posted in: Cognitive ComputingRobotic Process AutomationSourcing Locations

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