Monthly Archives: Aug 2021

Don’t let digital burn-out kill your career

August 31, 2021 | Phil Fersht

The days of everyone talking about the “new” culture of working from home are so over

This isn’t new, it’s the way we do business today across all industries and job functions where physical office visits are non-essential.  If it gets done over Zoom it stays on Zoom.  Most people travel for vacations and personal needs, not business anymore.  18 months in, and we’re not going back – we’re efficient, we’re intense, we get things done in a much faster, cheaper, and family-friendly manner. 

A recent study of service provider staff in India showed that 90% do not want to go back to an in-office culture, with staff getting 10-20 hours a week back from their nightmare commutes; in the UK staff are furious about being forced to commute to work and in the US conferences are being canceled en masse and most offices are virtually empty, despite staff having the option to go to work.  Of course, when the pandemic eventually fades there will be more conferences and physical meet-ups, but the days of many people traveling and commuting regularly for their jobs are over.

As our Pulse Data of 800 major organizations shows, 40% of workers are going to be home-based for the foreseeable future:

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People just don’t want to put their career before their lifestyle anymore... and we have to adapt

We are in serious danger of our careers becoming subdued and de-emphasized in the current climate.  While I am one of the first people to laud the increased focus on family commitments and having a pragmatic approach to the highs and lows of our professional lives, I am seeing clouds of demotivation gathering and sapping much of the passion and excitement out of our industry.  You only need to see the pathetic levels of enthusiasm for digital conferences, webinars, thought leadership right across the industry to realize that many people are just not as engaged with their jobs as they used to be.

I love the fact that so many employers are giving their staff “mental health breaks” (such as Nike recently following similar initiatives from the likes of LinkedIn, Bumble, Mozilla, and Hootsuite).  We’ve even been giving a few Fridays off for staff at HFS to allow them to take long weekend breaks.  However, we won’t be very effective businesses if we grant our staff 6+ weeks of PTO each year! 

In short, mental health at work is a massive issue, and something employees need to tackle head-on.  Employers can offer as much support as they can, with time off, counseling, good management, and good resources, however, there comes a point where staff have to figure out how to keep themselves motivated.  Let's be honest, we're living in a world where your work experience runs the risk of becoming yet another digital channel to fit alongside Facebook, Netflix, Instagram, and whatever else consumes your digital time these days.

The Bottom-line: 10 ways we can re-motivate our careers

  1. Prioritize non-Zoom time to focus yourself.  At HFS we have “no meetings Wednesdays” where we insist staff use the time to get their written / cerebral work done without the constant distraction of video meetings.  It’s impossible to execute well on your work when you don’t have chunks of time to focus your thoughts.  We used to use plane time/hotel time a lot for this type of work… not we need to carve it out.  If your employer won’t sanction a no-meeting day, then create one for yourself and block off you calendar.  If there is push-back, you should seriously question the mentality of your leaders and whether this is a company adapting to the virtual economy.
  2. Embrace change and explore new roles with your leadership.  Many people are discovering/developing new skills in the virtual economy – things they thought they were bad at, they are improving dramatically at.  The fear of change is dissipating from so many, and the ideas of trying new things are so important today.   Careers can go stale and this environment may have accelerated your sell-by date for doing a certain activity, and it’s time to freshen it up.  So talk to your bosses and your mentors… have a look at jobs going in other firms.  It’s time to embrace change and put yourself in a position to do new things that could energize you and refocus your skills.
  3. Meet fellow workers and clients local to you.  Nothing is more energizing than merely seeing faces familiar to you from 18 months ago… just do it.  And don’t sit in an offering staring at PowerPoint, go to lunch or dinner.  Start enjoying meeting folks local to you where there is little stress, and the time investment is minimal.
  4. Orient your work effectively around your family commitments.  It’s been a hard time for so many Moms (and Dads) taking care of our families, and some have been amazing at finding the time to become more focused, efficient, and flexible to get work done.  The nice-to-five is over folks and we need to find times like late evenings / early mornings where we can deliver.  The key is to make sure your employer gets this and judges you on outcomes… not simply that you were online during “office hours” every day.
  5. Spread meetings out over longer periods.  The lockdown intensity of packing your calendar with 10 back-to-back Zoom meetings all day have to end.  You will burn-out and become a jabbering idiot.  It’s OK to book meetings 3-4 weeks out, and you must create mental breaks for yourself during the day.  We aren’t robots and if we don’t manage our time better we will start to become them.
  6. Keep learning new things.  There probably hasn’t been a more critical time to stay ahead of market developments, new business models, new technologies etc.  You must find time to read and network.., the only two ways you will keep learning.
  7. Keep networking and stop making virtual excuses.  The excuses of “I can’t develop relationships over video calls” are done.  If you can’t, then you’re toast.  Find time to keep in touch with key people and also to get to know new folks who can help you. 
  8. Get a decent webcam.  If your laptop camera sucks then buy a webcam.  You can get one for $25 on Amazon for chrissakes.  And get rid of the up-nostril view… please.
  9. Keep exercising and keep healthy.  Sit on a yoga-ball all day… buy a Peloton.  The days of lockdown are over and you don’t have excuses for the expanded girth, the excessive booze consumption, or whatever bad things you do to keep yourself amused.  Poor physical health eventually means poor mental health and your employer giving you mental health breaks won’t cut it forever.
  10. Reevaluate your own goals and stop living off past glories. I know so many people clinging onto their past work glories, which may never return in this very different work culture.  Trying to cling on to an inflated salary is not a strategy - it's potentially asking for trouble down the road if you're failing to innovate your capabilities and value to your organization. The cost of living has changed for many of us - we don't need two cars in the family, we save a lot on commuting and eating out... on all sorts of things.  So why not evaluate what you want to do with your career, the type of organization you want to work for, and whether you can afford to rationalize short-term earnings to chase future opportunities for yourself?  

Posted in: HR StrategyDigital OneOfficeGlobal Workforce and Talent



Cyber Ralph serving up some sparkle for HFS

August 29, 2021 | Phil Fersht


We're thrilled to let you all know that HFS is blessed with the presence of Ralph Aboujaoude Diaz (see bio) as Practice Leader for Cybersecurity strategies with a keen eye on Horizon 3 technologies.

Ralph has expensive experience as a risk management consultant for PwC and EY before leading Core Tech for Life Sciences giant GSK.  Many of you will know Ralph from his extensive LinkedIn humor and his flirtation/obsession/hatred of RPA.  He is based in London and spends time when he can with family in Lebanon... and now he's an analyst!  So let's find out a bit more about what makes Ralph tick...

Welcome to HFS, Ralph!  So what gets you up in the morning? 

Hi Phil! Personal life: my 2 kids (a 6-year-old boy that is driving me crazy these days and a 3-year-old girl that only loves her daddy). I love my wife by the way!

Professionally: Believing in the work I do but more importantly enjoying what I'm doing. You need to work with “Meraki” (a Greek word to describe doing something with passion and creativity).

You've been a Big-4 consultant and an enterprise tech leader... why become an analyst now?  And why with HFS?

I have been lucky and grateful to work with brilliant minds and I never stopped learning along the way. Without all these great leaders and mentors, I will not be where I am today! However, the only thing that I always missed is the inability to speak my mind. I am a proud non-conformist and not a big fan of political correctness. But always pragmatic and respectful.Transitioning to the analyst world is for me the natural evolution of my professional career. I will finally be able to utilize all the hard/soft skills that I have acquired during the past 15+ years but saying things my way. I want to provide direct, unfiltered, and actionable insights. But in a funny way too as I firmly believe that conveying a serious and honest message in a humorous way is much more impactful.

Why and I joining HFS Research? Because HFS is just like me, and I love that. Working with the iconic Phil and a diverse team of talented, bold, and friendly people is what gets me up in the morning.

And why do you think you'll bring something a little different to the analyst industry?  What will you be writing about?  What is it you care about?

The little different thing that I will bring to the analyst industry is quite simple: no previous analyst experience! I have spent more than 10+ years running large-scale tech-enabled security transformation projects. My last 5+ years on the buyer side have been focused on embedding and sustaining processes post-transformation, which in all honesty, is the most difficult part of the journey. So, the little different thing that I will hopefully bring is that mixed experience from the seller/buyer side, allowing me to understand what really matters for enterprises and position the right products/ services. My research agenda will be focused on Cybersecurity and Horizon 3 technologies (with an initial focus on 5G and Quantum Computing).

I am not pretentious enough to say that I will be covering the entire cybersecurity spectrum. My research agenda will concentrate on 6 topics that matter, on real problems that cybersecurity professionals and enterprises, in general, are currently facing. I will be talking about the role and challenges of the CISO, how to reduce the cybersecurity skill gap, how to secure the cloud environment, how to govern identity and access management, how to augment the capabilities of cybersecurity professionals with intelligent automation, and last but not least how to respond to security incidents in this Hyperconnected world.

I will not disclose more for now…

I love Tech and I will be also writing about Horizon 3 Technologies. Exploring and understanding how potentially disruptive technologies could transform existing business models in the next 5/10/15 years. I am very excited about that!

You got a huge following in social media when you dabbled in RPA before you made a hasty exit from the space... can you share what you were doing, what you learned, and where you see that market going in this environment?

Back in 2018, RPA was one of the hot topics that the Office of CEO at my previous employer was keen to explore. I was initially tasked to build the business case and drive the vendor selection process. I then led the design and deployment of a global RPA program across all Business Units (including the implementation of a global Automation Centre of Excellence and enablement of regional scalable Automation Deliver Hubs).

I have learned one very important thing: RPA is just a great tool in the wider automation toolbox that serves very well a specific business case (UI integration). However, RPA is, by nature, a brittle technology. In order to truly scale and operationalize RPA, enterprises need to invest a significant amount of time and resources. Without any doubt, RPA can help organizations rejuvenate their substantial legacy landscape by injecting much-needed automation. But rejuvenating does not mean modernizing. Rejuvenating does not mean transforming. Putting RPA at the center of the digital transformation is like trying to win a gunfight using a knife.

The RPA market is here to stay. As we can see now, ISVs have started to enter the RPA space by acquiring niche RPA vendors. The objective is straightforward: extend their integration capabilities and ultimately offer a holistic framework to customers. The big 3 RPA players are actively transforming their existing offering to include more integration, analytics and AI capabilities. But will this be sustainable and affordable in the long run?

So, finally, what do you think we'll be talking about in a year?  Can many of today's enterprises survive if they don't change their legacy habits?

We will be talking much more about “Enterprise Process Orchestration”. There is an urgent to unify and manage the increasing number of individual tasks, managed by humans and non-human identities, into an end-to-end process that can be easily visualized, monitored and recalibrated. The concept has been floating around in the last few years, but I feel that organizations are now ready to embark on ambitious projects and not just targeted pilots. And I use the word “enterprise” because the platforms that will support such macro-orchestration will be robust, secured and scalable.

Welcome to HFS Ralph - I can see you are already pushing our some insights =)

Posted in: Security and Risk Mgmt.Cyber-security



Accenture, Capgemini, Cognizant, Infosys, HCL, TCS and Wipro adapting to the Virtual Economy; Atos, IBM and Tech M flat; DXC trends downwards

August 26, 2021 | Phil Fersht

We've never seen a boom in demand for tech and business process services since the dot-com days (hopefully some of you can still remember those when we texted on flip-phones with 12 keys and thought it was cool to put an "e" in front of everything we did).  However, we believe the services market for the virtual economy is only just ramping up, and this is merely the hors d-oeuvre before the real feasting starts...

What is driving this new phase of growth in IT services?

1) A frantic race to the cloud to function in this virtual economy;

2) A worrying shortage of available 'digitally fluent' talent to support both complex and mainstream IT transitions;

3) A high confidence in the outsourcing model as enterprises choose flexibility in unpredictable markets;

4) Aggression from many service providers to win more of the Global 2000 IT pie.  We're in a 'landgrab market';

5) Many firms using this virtual economy to make the shift from legacy shared services to outsourcing models;

6) The German market, along with other European regions, rapidly scaling up their service provider relationships.

So which of the major providers are taking advantage of this?

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Accenture has performed quite the pivot since the pandemic rocked up, de-emphasizing themselves as an advertising firm and reinforcing their prowess in cloud and IT services.  Capgemini has raced on since its acquisition of Altran and making some long-overdue leadership changes internally, which has reflected in a strong uptick in performance that actually saw the French firm sneak above TCS last quarter.  Cognizant has quietly picked up its performance after taking a write-down of its Samlink Finnish nightmare in Q4 last year and has bedded in several new leaders right across the organization.  After a challenging pandemic that included a ransomware attack, the firm is finding some stability to support this renewed growth curve.

While IBM sold-off of its commodity services business lines, it is still struggling to post any significant growth, but at least this is a major improvement from its difficult years where the firm posted declines for several years.  The business is stable, its focus on retaining and growing complex engagements is bearing fruit, but there seems to be an eternal conflict from its leadership on whether IBM's long-term future lies in services or software. With the future of services tied intrinsically to the intersections across SaaS solutions and the services to enable them, IBM needs to forge a clearer path for itself and the role it wants to play.

TCS' performance going into the pandemic was lackluster, after being the market's most consistent, aggressive and dominant Indian-heritage performer - and by some margin - for several years. The firm seems to be ingesting these last few years of heavy growth, but struggling to pivot as quickly as some of its competitors in this market, where responding to demanding clients and aggressively investing in new engagements are the watchwords. There was a time when TCS could win any large IT services deal in the world if it wanted to... those days seem to be from a different era in this environment.  However, the TCS rebound is strong since last year and the "Walmart of IT services" definitely seems to be finding it feet again in this virtual economy.

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When comparing the growth over the pandemic itself, comparing Q2 2020 performance with Q2 2021, the two standout performers, in terms of revenue growth, are Wipro and Infosys.  The first year of Thierry Delaporte at Wipro couldn't have gone more smoothly, where much of the old guard were jettisoned in quick-time to make way for a host of new leaders from within the firm and externally.  In addition, a restructuring of the firm around geographical locations seems to be paying dividends, despite some challenges, and the major acquisition of financial services consultant Capco has really improved the perception of the firm and encouraged several enterprise clients to increase their investments.

Infosys simply sailed into the pandemic after a series of impressive quarters and has continued unabated.  It has a reputation for delivery reliability and has demonstrated real stability in leadership and focus.  Moreover, investments in locations such as Germany and Ireland have helped pivot Infosys as the leading Indian-heritage provider from a perception standpoint. Pre-pandemic investments in its onshore US locations have also paid dividends as the firm continues its impressive growth across both IT services and BPM (BPO) lines.  Infosys is arguably the leading Indian-heritage provider at present, giving the likes of Accenture and Deloitte and real run for their money on major deals.

HCL has continued to command a strong presence as an infrastructure and engineering-focused IT heavyweight, but hasn't been quite as impressive with its performance over the past year, compared to its rise to prominence over the five years prior.  Tech Mahindra has struggled greatly to command a market position and communicate to the industry where the firm's direction is pointed, but its performance is at least stable and 2021 has been a better year for the firm from a financial standpoint. Atos promised a lot leading into the pandemic but seems to be drifting somewhat, as it continues to lose ground to the Indian heritage providers and hasn't done much with its expensive acquisition of Syntel.  Moreover, its weak US presence continues to plague the firm, not helped by a failed takeover attempt of the industry's performer struggling the most:  DCX.  As for DXC? The firm continues to struggle to find any sort of foothold to stem the bleeding... maybe Atos needs to take a second bite at the apple when the stock prices level off...

The Bottom-line: The Pandemic has changed the IT service provider landscape quite significantly... and it'll change even more as the Virtual Economy takes hold

Just observing the world of services providers over the past 18 months, we've witnessed a dramatic sea change in which firms are driving the market, and which ones are losing steam. Am pretty certain we'll see yet more movements occur in the coming months and some firms come back more aggressively, while others get stuck ingesting their recent wins.  I also expect to see consolidation as the impressive wave of mid-tiers continue to snap at the heels of the majors - and the dearth of talent will force inevitable mergers between service providers.  The services market for the virtual economy is only just ramping up, this is merely the hors d-oeuvre before the real feasting starts!

Posted in: IT Outsourcing / IT ServicesService Provider Analysis



Teleperformance, Concentrix, Telus, Sitel/Sykes and Tech Mahindra kept the CX lights on during the Pandemic

August 21, 2021 | Melissa O'BrienPhil Fersht

If there was one corner of the services market which got severely disrupted overnight by lockdowns and unpredictable customer demand, it was customer engagement.  For example, when Philippine's President Duterte locked down the world's call center capital Manila with 24 hours' notice, there was an almighty scramble from the CX service providers to shift their agents to other locations, such as nearby Cebu, or to work at home agents in the United States or other locations.  As the pandemic dragged on it became clearer than ever that this industry was in dire need of a long-overdue transformation from legacy people-heavy models to smarter use of automation and AI tools.  

One thing I always struggled to understand was why several of the leading IT service providers turned their backs on the customer engagement market, such as when IBM sold off its CX division to Concentrix in 2013 and Capgemini exited the market.  When the full value of automation and AI is realized in the revenue-generating processes driving customer engagement and predicting spending patterns, then the need to couple customer experience services and digital transformation is critical.  This is why Infosys acquired Eishtec in 2019 (1400 seats in Ireland) and Tech Mahindra's Business Process services has risen to number 5 in the rankings this year with 30%+ growth - these firms are able to manage the intersection between traditional BPO delivery and digital capability.  This is also why the number one ranked call center provider, Teleperformance, is known to be exploring an IT services acquisition to supplement its global CX business.  Simply acquiring more call center is no longer reaping exponential dividends as non-linear growth is only possible when embracing AI, automaton and digital workers.

So let's check out the 2021 rankings (download report here), which clearly show which providers kept the wheels of customer services moving throughout the Pandemic and get the insights from the report's lead analyst, Melissa O'Brien...

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Melissa – what on earth happened to the CX services industry over the last year and a half? Was it pandemonium?  What worked and what didn’t?

There has been a considerable boom in CX services in the past 18 months.  This market was already in the midst of a significant revolution, and the pandemic forced a lot of changes and accelerated decision-making that had stagnated.  As with every other industry, the most significant change was the end of resistance to work from home.  The contact center providers we covered in this report largely succeeded in the shift to work from home and made it work really well, much to many of their clients’ surprise. What made the difference is that WFH was an already established and fast-growing business model in CX services, representing almost a quarter of FTEs in January 2020.  A year and a half into almost entirely remote work, many enterprises say they’ll never go back to brick-and-mortar --- in fact, most we spoke to said they don’t care whether agents go back to the office and will leave that decision up to the BPOs.

But there are dynamics at play in the contact center that will even out the WFH balance over the next year.  The CX services providers have long known that employee experience (EX) is king, and employee engagement does not work the same in a remote environment, especially for particular demographics and geographies.  Service providers reported lower attrition and absenteeism levels in the early stages of remote work. These have gradually increased as people lose patience and crave the engagement of working in the center (many of which were explicitly designed to attract and delight employees.)    So while we don’t expect office staffing to go back to pre-pandemic levels (on average, providers said that 2022 will be a 50/50 split), the agent engagement aspect, which ultimately drives customer service excellence, will end up dragging a lot of operations back to the center.

The other big change was an acceleration of the adoption of digital tools – with all the disruptions in staffing and unpredictable volume fluctuations, digital associates (i.e., intelligent chatbots and IVRs) also had their burning platform in the past year and a half.  But we also saw this interesting paradox: while volume volatility significantly increased the adoption of digital assistants, there was also a tremendous demand for traditional voice (human-based) interaction.    The CX services industry now has an increasingly difficult challenge of balancing the right blend of digital and human interactions in a volatile pandemic environment. Enterprises now rely on their service provider partners more than ever to help them find the right balance and differentiate through a dual focus on employee and customer experience.

So who came out on top – and were there any specific examples of heroism/failure along the way?

On the execution side we see the "usual suspects," the big boys like Teleperformance and Concentrix  flexing their brawn with the global scale and breadth of services that many of the other providers can't hold a candle.  They are tops as far as robust global operations models, sheer breadth of delivery locations, and process consistency.  So while shuffling work around and getting capacity sorted out was by no means an easy task, these guys are the ultimate pros. 

Then you have the innovation leaders. As in the past, we were struck with Sutherland’s co-innovation and design capabilities but this time they were utilized to help clients get through this difficult time.  We were impressed with how much proprietary technology Conduent is using in its service delivery, including a COVID-19 outbreak management tool. We also have new criteria for OneOffice alignment where Tech Mahindra and Sitel came out on top, demonstrating the pillars of OneOffice, including collaboration and internal transformation. 

"Voice of the customer" was a tight category because virtually all the customers we spoke to were really pleased with their providers, particularly their ability to shift to remote work with minimal disruption.  The pandemic separated the haves from the have nots in this market. Those that were just making their foray into work from home grappled with the shift.  But firms that had made significant investments significant prior, particularly in the cloud, security, and remote employee engagement, were able to mobilize the work from home environment faster. SYKES stood on the tremendous foundation that is 2016 Alpine Access (a pure-play work from home platform) afforded it as an advantage of being WFH experts. 

Of course, there were hiccups along the way which the providers largely were quick to course correct.  Poor call quality as a result of inconsistent connectivity in certain geographies was the most frequent issue we heard from customers and was often resolved by pivoting calls to chats and sometimes by sending out 5G devices to augment agents’ internet.  Analytics and engagement tools played a huge role in ensuring process adherence but, more importantly employee health and well-being.  There were some examples of heroism for sure, particularly as these firms empowered employees to deliver on CX in spaces directly impacted by the pandemic – think of all the interactions fraught with real customer distress and anxiety in industries like healthcare and financial services during a global public health and humanitarian crisis.

We’re now seeing a lot of consolidation in the space, and while we expect the usual “just buy more call center” attitude from some, I am hearing that we may see some actual consolidation across the IT services / CX services space. Does this make sense to you?  I thought the IT services firms were eager to offload their call ctr business in the past?

Yes, many IT services firms were eager to offload or de-emphasize these capabilities in the past due to their reputation as low-margin services anchored by labor arbitrage and mired in low-value interactions.  But now, there’s a paradigm shift reversing this trend.   As enterprises increasingly adopt a OneOffice mindset, barriers are breaking down between IT and business with ‘experience’ as a common goal.  The leading and most serious CX services firms have known for a long while that having a holistic and technology-enabled capability including design, software development, etc. is required to have a value proposition beyond commoditized contact center services, even if it meant cannibalization of traditional business process revenues.  Providers' investment and focus have been very real and largely organic, but adoption from clients is still tepid – and it’s very hard for these firms to differentiate when literally each of them has a flavor of "digital contact center" offering.   Close to 3/4 of the 50+ enterprises we spoke to as references for this study said they are not using their CX service provider for any technology or innovative solutions, opting for pure operations delivery.  One CX executive put it well: “It’s not that the CX partners don’t have the capabilities, it’s that the enterprises are not open to using them.  The number one problem is perception… I can’t convince my CTO to look at (a CX services provider) the same way she looks at a technology services provider or vendor.”

So, as much as we’ve seen some IT services firms bulking up their CX capability for a more holistic value proposition, I think we’ll see it happening on the other side too with the serious CX services firms buying their way into the IT side of the house -- for example, Telus International’s acquisition of IT services firm Xavient.  These kinds of moves will help to bridge both the perception and capability gap.

In your view, Melissa, what should CX leaders do to be effective in this hybrid work / business environment?

Firstly, have a relentless and continuously evolving focus on EX.  The top providers know very well how important EX is to delivering quality CX services.  The required expertise will inevitably change hybrid remote and WFH emerges, and as automation and self-service continue to take a bigger piece of the customer interaction pie.  Well-designed CX and well-trained customer service agents are always going to be a part of the equation.  Plus, the labor market is changing.  There are pockets of staffing shortages, employee expectations have shifted, and gig work is going to be an even bigger part of the workforce of the future; all this demands an ongoing re-evaluation of how to recruit, onboard, train, retain and motivate people.

My second piece of advice is related to the first because people today care a lot about the values and philosophy of the companies they choose to work for.  “Profit with a purpose” is becoming a mantra in our business environment, and it’s more than paying lip service to ‘feel good’ causes; so be very clear about what you stand for as a firm and take bold action to ensure you live these values. CX Services providers traditionally have awesome CSR programs that involve employees from the bottom-up; allowing employees to choose what programs to donate time and money to has been a staple of the top providers' strategy to attract and retain talent.  But this is becoming a bigger part of retaining and winning new business also.  CX buyers have always cared about how their partners approached ESG efforts but are now devising ways to measure and assess potential providers in the RFP process.  Diversity and inclusion are at the very top of the list, and sustainability is catching up.  We saw some awesome examples of how CX services companies and clients are partnering to jointly address ESG initiatives.   Bottom line, CX executives will not buy from firms that don't share their core values beyond revenues and profit, and act upon them.

Click here to access the full report:  HFS Top 10: CX Services in the Pandemic Economy—The Best of the Best Service Providers

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



Meet the billion-dollar baby process miner who steered clear of buying an RPA product

August 11, 2021 | Phil FershtDavid Cushman

It's been a good two years since a young German man sought me out to excitedly tell me about a process mining tool that was set to change how process wonks approached their operations.  After a couple of beers he then 'fessed up to driving around Germany in a crappy old car - as a twenty-something passionate process software entrepreneur - to deliver software demos driving a whole new area.  This area is process mining - a novel analytical discipline for discovering, monitoring, and improving processes by extracting knowledge from event logs readily available in today's information systems. While his firm smartly developed much of its earlier business courting customers of SAP, it is now evolving far beyond the traditional ERP platform to inspire process execution initiatives enterprise-wide as businesses move rapidly into virtual environments. 

With a post-money valuation of $11b following a Series D round earlier this year, an impressive partnership with IBM, and a number 1 ranking in our September 2020 HFS Top 10 Process Intelligence Products, I was thrilled to end a forced 18-month separation with Celonis Co-Founder and Co-CEO Alex Rinke to get a real update of how his firm has driven incredible forward momentum - and investment - during this period of crazy... 

Meet Alex, soon to become the youngest process software billionaire (who avoided buying an RPA product) to focus on adding value to CxOs much higher up the enterprise food chain...

Phil: Tell me how you got started in this game. Is this what you always planned to do?

Alex Rinke, Co-Founder, and Co-CEO, Celonis [Laughs]. Absolutely not, Phil. There was a lot of planetary alignment – a fancy way to say we were very lucky. I was a math student 11 years ago - and I read a paper about process mining and got really excited about the idea of extracting data from information systems and figuring out how an organization operates, and where they’re inefficient. At the time there was no practical adoption of it. I talked to my two friends, who later became my co-founders, Bastian (Nominacher) and Martin (Klenk), and we decided it had so much potential, we had to learn more about it.    

We had an opportunity, through the university, to work with a business on a research project, and we applied process mining to one of their processes in the customer service and IT service domain. We were able to help them to cut their resolution times by 80% just through better process execution. Then we got so excited about it that we decided to start a company.

From boot-strapped to $1billion Series D Round

Phil: So how did you build out the firm, Alex?  How has it evolved for you?

Alex: Early on, we bootstrapped the company. We raised the first round of funding in 2016 when we wanted to expand to the US market. We grew in three waves as the product has evolved. The first was an x-ray system so that any business can do an x-ray of their business processes with process mining. Then, as that got momentum, the second big evolution was to build a process data platform, to not just x-ray, but also to monitor the processes and connect to all the different data sources in a company. And then the third evolution is our execution management system, which takes this process intelligence, and turns it into more intelligent execution of your core processes -  data-driven execution of your core processes.

We raised a Series C round, exclusively from private individuals. That helped us in establishing our brand further and building an executive team of seasoned enterprise leaders. We acquired Integromat, to boost our automation capability. The Series C funding round was really maturing the brand, the product, the company, to move beyond process mining. We crossed 1,000 people in headcount.

We launched our Execution Management System, in October of last year. That, plus the investments made from the Series C funding round, led to explosive growth momentum, so we decided to double down again, and raised this very large $1 billion Series D round to grow the company even faster.

We are working towards building more than a product and a company, but an entirely new software category and an ecosystem around it.

Phil: Where are you looking to invest to get you to IPO, Alex?

Alex: We have heavily invested in our go-to-market and are continuing to do so. That includes strengthening our ability to serve customers directly, but also investing in the partnerships we’re building - with IBM, and the global BPOs and SIs.

The third big area of investment (not in order of priority) is R&D. We have opened an international R&D hub in Madrid, and in the US we are expanding our resources from a product perspective. From an engineering perspective, we continuously evaluate whether to build or buy. We also continue to invest in the infrastructure of the business - HR, finance, all those things.

Meeting customers with an old Opel car to running a global enterprise company – the problems remain the same

Phil: What’s it like to start off driving to customers in an old Opel car, growing a very small business, and now being a hyper-growth enterprise software market shaper? How does that change how you work?

Alex: It’s obviously a little bit different, in terms of what you deal with every day. But it's also not that different. Ten years ago, I woke up every morning thinking, “What do we need to do from a product perspective? What do we need to do to grow? Who do we need to hire?” The problems are very similar now - just at a very different scale.

We’ve got a really strong leadership team now, Phil, so I’m much less focused on the current quarter or the next quarter. I try to focus on doing the things that will help us in 18 months to three years from now. My focus is on building a company that stands the test of time.

Phil: You are just 32 years old. When you make a huge amount of money when you go to IPO, do you plan to stay in the technology space for the rest of your career?

Alex: An IPO is not really an exit event. It is a milestone on the journey. We had multiple opportunities to sell the company to big corporations. We just never thought that was the right thing for us. When the three of us wake up in the morning, we think about Celonis, and when we go to bed, we think about Celonis, and, personally, wouldn’t know what else to do. There is no plan B, at this point in time.

On a (fun-filled) mission to fix peoples processes

Phil: [Laughs]. It’s not all about the money, then?

Alex: Absolutely not. It’s just so much fun to be part of and to build Celonis. I always say our purpose is to unlock the world’s processes. So many processes are frustrating for people and are highly inefficient. And processes are an incredibly horizontal thing, everywhere, in every organization, touching so many consumers’ and employees’ lives. It’s both motivating and fun to be able to have a really big impact on something so pervasive.

Phil: So your life’s mission is to fix people’s processes. I love it. [Laughs].

Alex: [Laughs]. It’s pretty good, don’t you think? [Laughs].

Phil: Yes! You’ve identified something that is in dire need of fixing, and you’re out there doing it with incredible momentum. It’s great to see an independent organization building out both a successful platform and a thriving ecosystem.  Am sure all of us here are excitedly watching you guys to see what's next in this fast-moving market...

Posted in: Intelligent AutomationProcess Mining



The OneOffice Wheel of Fortune: Where Data is the Strategy, Automation the Discipline, AI the Refinement

August 02, 2021 | Phil Fersht

However which way we look at things, we're becoming realists and the old days of technology hype and fear of change are receding into the past.  Over the past year, we've gradually let go of the many shackles of the past and started to realize we're in a new reality, a wholly new environment, where we're all trying to focus on achieving real business outcomes, on values that are important to us, and a new work reality where its intense, high-touch and very real.  The change in the enterprise mindset towards technology has gone through a genuinely pragmatic revolution over the past year.  The realization that being able to function in a virtual model has gradually drained the remnants of hype of the technology value propositions.

In short, data has become the strategy to be successful in this new virtual world, and achieving that data is based on these two factors:

  • No more flashy bullsh*t. There is no room for solutions that are confusing, designed to make people look special, but ultimately pathetic in real value and execution.  
  • Data and processes are inextricably linked. The focus on value has shifted firmly to the strategic value of data and how designing processes can help you achieve the data outcomes that create the value.

We need to understand that data is the strategy and how the data cycle works to get us ahead of our markets. Here are five steps we must take:

  1. Get The Data to Win In your Market. This is where you must align your data needs to deliver on business strategy.  This is where you clarify your vision and purpose.
  2. Re-think processes to get the data, Then you must re-think what should be added, eliminated, simplified across your workflows to source this critical data.
  3. Design your new operational workflows in the cloud. There is simply no option but to have a plan to design processes in the cloud over three-tier web-architected applications.  In the Work-from-Anywhere Economy, our global talent has to come together to create our borderless, completely digital business.  This is the true environment for real digital transformation in action.
  4. Automate processes and data.  Automation is not your strategy.  It is the necessary discipline to ensure your processes provide the data - at speed - to achieve your business outcomes. Hence you have to approach all future automation in the cloud if you want your processes to run effectively end-to-end.
  5. Apply AI to data flows to anticipate at speed. Once you have successfully automated processes in the cloud, it is easy to administer AI solutions to deliver at speed in self-improving feedback loops.  This is where you apply digital assistants, computer vision, machine learning, and other techniques to refine the efficacy of your data.  AI is how we engage with our data to refine ourselves as digital organizations where we only want a single office to operate with agility to do things faster, cheaper, and more streamlined than we ever thought possible.  AI helps us predict and anticipate how to beat our competitors and delight our customers, reaching both outside and inside of our organizations to pull the data we need to make critical decisions at speed.

Bottom-line: You can't get the data you need need you don't have the people, partners, processes, technology - and desire to change - to make this possible

You can lead a horse to water, but can you get it to drink? OneOffice is about understanding and discovering the data you must have to win in your market - right now in real time - and in the future - as the market environment keeps changing. Then you need to make your data ubiquitously available, accessible, and mineable - embedding a mindset into your leadership to inspire your people to work together to create an organization that can flip its business model to exploit these seismic market changes. You can't get the data you need if your critical data is not in the cloud and you don't have the people, partners, processes, technology - and desire to change - to make this possible

Posted in: Digital OneOfficeAnalytics, Big Data and BIIntelligent Automation