Melissa O'Brien
 
Research Vice President, Customer Engagement, Retail and Travel Strategies 
Learn more about Melissa O'Brien
Genpact gets Right to the Point to bring the front and back office together... as OneOffice
October 20, 2019 | Phil FershtMelissa O'Brien

Did you hear the one about the GE finance captive spinoff which ended up as a Top 6 AI Services firm before making a bold move into the front office with the acquisition of the respected Right Point Group?  And did you hear it broke into the world of digital service capability without ever succumbing to the delights of acquiring an IT services shop?  Welcome to Genpact, folks, the former BPO firm which has been breaking the mold of business services for the past two decades.

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This is a serious digital acquisition that brings Genpact right into the customer paradigm

Genpact has been slowly but steadily building thought leadership and capabilities around “experience innovation” over the last few years.  Genpact’s 2017 acquisition of Design Thinking consulting firm TandemSeven was its first demonstration of the firm’s appetite to develop a OneOffice capability, aiming to move beyond its back office roots and help its clients develop more holistic experiences.  It has now announced an agreement to acquire digital consultancy Rightpoint, with a focus on digital transformation, with capabilities for CX, commerce, and mobile application development.  

A highlight of the acquisition and one of Rightpoint’s most distinctive features is its expertise for designing and implementing digital workplaces – its work with Aon, for example, demonstrates Rightpoint’s capability to reimagine the workplace.  This is such an important element that many companies need help with, as they struggle to connect experiences across the organization and align to the customer. 

While TandemSeven gave the firm a flavoring of customer experience design, the sheer size and scale and depth digital tech implementation across North America puts Genpact right on the digital map, with a unique value proposition of leading with process transformation, enabled by AI and digital capability where we can expect a significant jump from its current position, which we assessed earlier this year in our 2019 Design, Sales and Marketing Services Top Ten report.  Genpact landed at #14 in the rankings, largely as it just begun developing

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Fishing for digital dominance... meet Brian
April 11, 2019 | Phil FershtMelissa O'Brien

Brian Whipple, CEO Accenture Interactive, describes the evolution of the world’s premier experience agency

The term “digital” has become overused, diluted and - in many ways - rendered useless.  After all in 2019, what ISN’T digital, and what’s the point in distinguishing? We have instead moved to a world that’s comprised of integrated and immersive experiences – as consumers, or as patients, as employees, etc – experiences that shape our buying habits and our quality of life. The recent announcement of Accenture's acquisition Droga5 has raised the stakes of creating immersive customer experiences to a whole new level (read our POV here). 

Companies that are really seeking to align themselves to experiences need to break down their silos and better understand what their customers want... and really execute on that.  We caught up with Brian Whipple, Accenture Interactive’s CEO (and recent winner of an HFS Disruptive Award), to learn how his firm’s massive acquisition appetite has helped build a company embracing an entirely new philosophy, helping its clients align to customer needs in the post-digital world.  Accenture is integrating technology, design, commerce and content to help clients develop “living” experiences that meet customer needs today and are ready to evolve in the future – requiring a wide breadth of talent, expertise and even cultures within cultures to deliver on those experiences.  The bits and pieces that have come together at Accenture Interactive over the last several years, most recently with Droga5, are all adding up to Accenture’s mission to “create the greatest customer experiences on the planet for our clients.”

Phil Fersht, CEO and Chief Analyst, HFS Research: Can you talk to us a little bit about how digital came to be, and how Accenture Interactive came in to the space? Because you were really the first of the service providers to coin the "Digital" phrase, and really put it together, industrialize it, etc. Could you give us a brief history about how it came to be, how it got started, and what the original philosophy was, and how that may have changed in the last five or six years?

Brian: Sure. There are three distinct phases to date, for Accenture Interactive. The original philosophy was that the world needed digital diagnostic tools that work in the arena of digital marketing; things like online campaign optimizers, A/B testing it, “I’m going to present offer A, with this creative treatment online, and I’ll test it against offer B,” or, “I’ll move it on a placement

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Are call centers cool again? Teleperformance, Concentrix and SYKES lead the first Top Ten for customer engagement operations
March 16, 2019 | Phil FershtMelissa O'Brien

Ever since IBM sold off its Daksh business to Concentrix in 2013, "call center" has been something of a dirty word to traditional service providers and software aficionados alike. 

Since then, traditional IT services have flatlined as the focus has shifted to digital solutions, where the customer is front and center to emerging interactive ("digital") technologies. Having that ability to lead the customer front line and support those customer needs with real-time speed and intelligence is core to business operations.... and service partners which can deliver this has never been so crucial.  So are call center providers back in vogue, or is this merely a blip as we transition to a world where we don't need many human beings anymore?

The contact center operations (BPO) services industry is growing at 4% globally, despite razor-thin margins and intense competition. So, why do pundits declare the call center on the brink of implosion into a piece of software, while the stagnant IT services market escapes criticism for perpetuating a “people-centric” model? While contact center BPO growth is hardly setting the world on fire, it’s been steady over the last several years, even though the majority of contact centers worldwide are still in-house. The fact that there’s still a $65 billion market for outsourcing this work begs the question why these investments are simply going away. Contact center leaders like Teleperformance and Concentrix have recently made sizeable investments in bolstering service delivery (acquiring Intelenet and Convergys, respectively), reflecting the relative importance of this market segment. The recent development in which SYKES acquired Symphony demonstrates the optimism that automation can grow, not cannibalize, the contact center business. The latter, in particular, signals a promise that contact centers can use RPA expertise to scale and complement traditional contact center services business as they pivot to become more strategic providers.

Other large business services firms are gravitating into the customer engagement market, sensing an opportunity to disrupt deals with a hybrid intelligent automation/global talent approach. Most of the Indian-heritage IT services firms with strong BPO delivery arms are gravitating back to contact centers, as they see the potential for aligning intelligent automation and cognitive assistant solutions with their global base of talent for supporting their enterprise customers. Some examples of this are with the likes of Tech Mahindra in telecoms and Infosys with order management. Cognizant, Wipro, and HCL - for example - are also competing for call center work. BPO firms that have been more focused on non-customer centric areas are gravitating aggressively back into the market, such as WNS, EXL, Hexaware, and Genpact. Even IBM has recently flirted with a few opportunities, despite selling its call center business, and we even cam close to featuring Accenture in our new Top Ten, but the firm was very adamant that is did everything but the contact center piece.

Contact centers are ripe for a renaissance, and automation is a big piece of this transformation. The common retort that a contact center with automation is an oxymoron is false. Perhaps it’s our legacy view of contact centers and automation that is oxymoronic—and it’s time to let go of that legacy. When “digital” is ultimately about new ways of doing things, the contact center is in a more precarious and important position than ever. The contact center for companies that want to stay competitive in a hyper-connected economy must learn how to embrace intelligent engagement, using the key change agent of automation to become a strategic hub that empowers both customer service professionals and the customers they support.

Enterprises must navigate the changing of the guard for intelligent customer experience services

There is a changing of the guard happening, as HFS analyst Melissa O'Brien analyzes in her new report Top 10 Front Office Customer Engagement Services, 2019.

Click for detailed view

As the dust settles on our latest Top Ten, an assessment of the Customer Engagement Operations market, we’ve been fielding lots of questions about what this ranking means from a competitive standpoint.  Our final top ten chart was chock full of what you might consider to be the usual contact center suspects, but also sprinkled with some interesting up-and-comers, as well as familiar names that aren’t necessarily known for competing in this space --  the intelligent customer engagement services that are evolving out of the contact center. The

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SYKES acquires Symphony becoming the first call center provider with significant automation capability
October 22, 2018 | Phil FershtMelissa O'Brien

Disruption is more ripe in the call center space than any other corner of the services industry, and $1.6bn provider SYKES just upped the ante to feverish levels by becoming only the second-ever service provider to acquire deep RPA and intelligent automation expertise, since Accenture picked up Genfour 18 months ago. And $70m cash is a not insignificant sum to invest in consultative talent in this fast-emerging space in desperate need of experience and scale.

More significantly, Accenture is not a call center provider, SYKES actually is one - and now has the unique capability of attacking the market with automation-led customer experience engagements. While the market recently cogitated on the impacts of Concentrix/Convergys and Teleperformance/Intelenet,  neither of these mergers had a genuine focus on intelligent automation (IA).  And our new global study on AI covering 590 Global 2000 firms worldwide (conducted with KPMG), clearly shows  intelligent automation is in unique demand across IT and customer service areas more than any organizational function:

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So why is SYKES acquiring Symphony meaningful? 

None of the "traditional" call center providers have upped the ante with automation. Until now.  We have found this bizarre, as there are so many opportunities to improve broken processes, speed up customer response capabilities with both Robotic Process Automation (RPA) and Robotic Desktop Automation (RDA).  There's no surprise many of the Indian-heritage providers are jumping back into call center, sensing an easy opportunity to take business from vulnerable traditional call center providers with a disruptive automation-centric approach.

SYKES is not beset by legacy enterprise deals choking the life out of it.  Call center providers that got too beholden to legacy clients with dinosaur FTE pricing models are really struggling.  This was one of the prime reasons Convergys (despite being one of the industry's finest purveyors of customer care) struggled to maintain market growth and ended up being acquired for an extremely attractive price by Concentrix earlier this year. SYKES is currently the 7th largest player in the contact center space (3% market share) with revenues of $1.7bn - enough to compete at the high-end, but still nimble enough to build a base of automation-led clients, chase strategic deals and be a disruptive nuisance in a market with razor-thin profit margins.

The OneOffice is here and Symphony can link the front to back office with its approach to digital operations.  Digital organizations must have an operating framework that maps out how they have to operate in the future. Traditional operating models, while creating some incremental productivity value, if managed effectively, struggle to drive the unification of digital business models with emerging technologies across a business's operations. The only true way to create a OneOffice experience is to be able to integrate the front office processes and interactive technologies (most of which are embedded in the call center) with the operations of the organization:

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The Digital OneOffice is where teams function autonomously across front, middle and back office functions to promote broader processes with real-time data flows that support rapid decision making. It’s where front, middle and back offices will cease to exist, as they will be, simply, OneOffice.  SYKES has a unique opportunity to consult to enterprises to make these front to back connections and weaves these capabilities into their managed services offerings.  The merged entity can offer real expertise to provide automated processes as-a-service and help their clients through the journey. The only missing pieces, in the short-medium term, may be to diversify further into the middle office areas and analytics to add some real end-to-end process value, but much of this can also be accomplished through some smart partnerships.

SYKES has already been making serious investments in digital capability. The Clearlink acquisition gave SYKES capabilities in the digital marketing space, which is complementary to its core business and also a differentiator from its peers in the contact center world.  SYKES’ strategy here is to connect across the customer lifecycle for an “omnichannel” solution— really digital CX. Qelp is another acquisition that expanded SYKES’ value proposition outside of core contact center services — a call center software firm specializing in self service on mobile phones, a real boon for its telecom clients.

SYKES has a sizeable WAHA delivery workforce (acquired through Alpine Access in 2012) which is a particular strength for its retail clients. The scalability and virtual training of this program is particularly effective. OneSYKES, its cloud delivery and WFM platform enable this capability. The platform also enables customer interaction analytics.

SYKES' strength in the retail and telecom businesses.  These are two of the most prime industries for automation-centric offerings, and where demand is very high (see earlier post on vertical focus in RPA).  Added focus in the financial services sector would also be beneficial post-merger.

What does a SYKES/Symphony really bring to the table?

One of the last remaining automation services independents with credible global scale.  With Genfour long out of the picture (and submerged somewhere inside Accenture) there are very few independent automation consultancies left worth evaluating that can impact a business the size of SYKES.  Sure, there are some boutiques, such as Virtual Operations, Mindfields and Roboyo, that add some domain expertise, but nothing close to the scale of Symphony, which has 200 FTEs across Europe, North America, India and Mexico.  It will be hard for any of SYKES' competitors to respond in kind, and we are quite amazed that only one of them had made a serious move to acquire Symphony prior to SYKES' interest.

Skill+Scale. Enterprise clients want the skill of the small guys (but not the risk), the scale of the big guys (but not the baggage).  This sends out a shot across the bow to the likes of Accenture, Capgemini, Cognizant, Deloitte, EY, Genpact, KPMG etc., all competing in the quasi-consultative / managed service market... that is automation-led capability.

Appeals to the RPA software firms. The likes of Automation Anywhere, Blue Prism and UiPath will welcome any deal like that that takes them more into the front office of enterprises.  This will also attract the attention of Nice, which has a strong call center automation focus.  Other aspirational RPA firms, such as Pega, WorkFusion and Kofax, will also take notice and want to engage with this new entity.  

Streetwise expertise. The four founders all bring a "hands-on" credibility to the table, which most organizations like to deal with:  David Poole, Ian Barkin, David Brain and Pascal Baker.  Many enterprises are already frustrated dealing with some of the usual suspects and may be tempted to switch to this new entity to take its OneOffice play to a new level. Obviously, much depends on SYKES leadership's ability to retain the Symphony talent and engage them with a compelling global story.

Hands the Symphony team significant enterprise access.  This will catalyze growth and disruption by giving Symphony access to a unique portfolio of 200+ enterprise clients including more than 50% of the world’s top 100 brands.  While the Big 4 RPA experts struggle to convince their global partner colleagues to let them near their deep-pocketed clients, SYKES should have no problem opening the kimono to its finest differentiator that none of its competitors can (currently) boast.

Can start to heal the 'scale disease' threatening to derail the RPA and Intelligent Automation industry. As our (soon-to-be-unveiled) global study of 590 leaders of Intelligent Automation initiatives reveals, barely more than one-in-ten enterprises has reached a place of industrialized scale with RPA - and the word from so many clients is loud and clear that they need help:

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This struggle to get to a point beyond pilot exercises and project-based experimentation could prove to be a serious point of failure for the whole industry drivthese solutions.  There needs to be a much stronger melding of enterprises with implementation and consulting capability to fix these issues.  This has to be an area where a SYKES/Symphony can profit.

The Bottom-line: Kudos to SYKES for making a bold bet, which has real potential.  But it needs to move fast and aggressively post-acquisition to make this bear fruit

If I had to count the number of truly successful services / consulting mergers over the past decade, it wouldn't take me very long, or require too many fingers. In so many cases, the acquiring firm is checking a box before moving onto the next shiny new object. What excites me about this move is the size of SYKES to make this really significant for the firm, the fact Symphony gives it a capability truly differentiating and hard for its competitors to replicate, and the fact it becomes the first customer-centric service provider to tackle the unquenched thirst for automation across customer processes to drive genuine OneOffice endstates.

But this is a market that simply refuses to stand still... this has to be a merger that both parties fully embrace with the verve and energy that took Symphony from a great idea in 2013 to one of the most disruptive and exciting consulting businesses in the business operations industry. That means SYKES needs to do a much better job of articulating to the world what it brings to the table, especially in the cut-throat world of customer experience BPO. SYKES leadership needs to make Symphony front and center and refuse to blunt its edge in driving narrative - staying ahead of the curve and forging great industry relationships.

In addition, SYKES needs to add to the OneOffice capability, search the globe for expertise in regions such as China, Philippines, Japan,South America and Canada. This can be with further tuck-in acquisitions and smart organic talent acquisition. It will also need to work extremely hard defining its brand and articulating the new generation of OneOffice solutions to industry.  This is an exciting merger, but the hard work really starts now...

It's Bots-in-Seats as IBM, Cognizant, Accenture, TCS, Infosys and Tech Mahindra lead the HFS TOP 10 Cognitive Assistants
September 07, 2018 | Phil FershtMelissa O'Brien

The word "Chatbot" is officially banned:  they treat conversations like they're a game of tennis: talk, reply, talk, reply.  There is little to no context and zero intelligence, just pre-programmed responses only set up to deal with a pre-set finite number of frequently asked questions.  It's a  legacy customer experience that most of us go out of our way to avoid.  To be blunt, it's easier to be redirected to an FAQ page, or even some online Q&A forum than try and engage in a dumb one-dimensional conversation.  I've had more intelligent conversations down my local pub after a 3.00am "lock-in"... So let's shift the entire conversation towards chatbots with some form of intelligence...cognitive assistants.

HFS Research sees cognitive assistants as the combination of conversational interaction and process execution capabilities; they combine characteristics of smart analytics and artificial intelligence. These services can include front-office facing elements (e.g., conversations with end customers) and internal employee use cases (e.g., help desk, HR onboarding, assisting contact center agents).These cognitive assistants can self-learn, self-remediate, and execute business processes. They can also often understand structured and unstructured data and then use natural language processing to learn, comprehend, and recommend next steps. Advanced cognitive assistants can also enable predictive decision making using real-time analytics. This distinction is significant as many people use the terms “cognitive agents” and “chatbots” synonymously. While cognitive agents are a less mature capability, interest and adoption are growing rapidly—and their impacts are far greater than traditional automated tools.

So who's delivering these services most effectively today?  Well, who better to consult that HFS customer experience connoisseur Melissa O'Brien, who's just launched the industry's first deep-dive report on the services market for these cognitive assistants:

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We based this research on interviews with 300 enterprise clients of IT and business services from the Global 2000 in which we asked specific questions about innovation and execution

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Concentrix gets up close and personal with Teleperformance with its Convergys acquisition
June 29, 2018 | Phil FershtMelissa O'Brien

One of the worst-kept secrets in the world of call centers finally went from gossip to reality as Synnex Corp added Convergys to its acquisition portfolio to roll under Concentrix.  As we covered here in 2013, IBM spun out its call center business to the Concentrix brand and - almost five years on - will merge forces with Concentrix under the leadership of Chris Caldwell (recently interviewed here).

So, from 10,000 people (just 5 years ago) to being very close behind the market leader, let's see how the call center market is shaking out right now:

Let's just get right to the nub here... what's good and not-so-good about this lovely marriage?

Pros

  • The price tag is extremely attractive - especially when compared to $1 bn for Intelenet, which is a much less heritage firm in the market.  At these investment levels, this appears like an amazing deal for Synnex, especially with its track record of making sound investments over the past couple of decades.
  • We now have a very strong rival to Teleperformance at the top of the market.  If Teleperformance had made this move, it may have been game over for a lot of these firms.
  • Convergys was stuck and needed a new direction - and here is one with an exciting young firm.  Convergys is a great, traditional contact ctr firm, very dedicated to its craft, but has been hurt by  low-cost competition and struggled to maintain its edge in recent years.
  • Scale can be priceless in a commodity market. When an industry is commodotizing like call center, it's often better to operate at a larger scale, so you can ringfence your legacy business and invest in strategic clients who want to work with a co-investment mentality. Geographical expansion and diversification will help the merged entity drive greater cost synergies and variety for clients.
  • Similar business ethos. As both core contact center service providers, both have a strong global operating model for consistency of services as well as a training and employee-focused culture. The challenge will be integrating the two together, but are generally aligned in terms of employee centricity and ops excellence.
  • Convergys has a very loyal client base that identifies with the firm, its culture, understanding of call center agents, and its understanding of their needs.
  • Microsoft partnership. Convergys has a very promising partnership with Microsoft and capabilities to harness Cortana and other apps.  CNX will need to nurture this relationship.
  • Good technology assets. Convergys brings a solid IVR business and some very popular agent portal platforms.
  • Gives Concentrix strong market visibility and helps shed its "we used to be IBM" tag. For Concentrix, this could help them carve out the message of what they’re doing and want to be in the market. For Convergys, lends some sense of direction in the post Andrea Ayers era.
  • An injection of fresh thinking and new ideas.  Chris Caldwell has a terrific opportunity to take his ideas to a very significant level if he can get this right, especially with acquisitions such as Tigerspike in the digital design space, and Minacs in marketing analytics and support.  Chris has a bold view of where the industry needs to go - this should be a terrific challenge for him and his team.
  • M&A can buy time to take control in a commodity marketplace. Large mergers like this create the perfect distraction to make some discreet investments, keeps the shareholders at bay for a few quarters and can (potentially) help them focus on retooling the offerings and sharpening the whole approach. However, this depends entirely on decisive leadership and swift, focused transition and very strong communication to investors and shareholders.

Cons

  • Is bigger really better? This acquisition seems to be more about bolstering scale and size, with Convergys having little to show in terms of proprietary IP or differentiated offerings (Contrary to Concentrix's investments in Tigerspike and Minacs). However, in a market that has been largely stagnant for years, any movement like this can help shake things up.
  • Convergys lacks a diversification in clientele with AT&T/Comcast being an enormous piece of CVG’s business. Telcos are typically the epitome of butts on seats deals—why choose a company that’s practically half telcos?  Maybe this explains why the price was so attractive.
  • Client overlaps in large accounts will impact some revenues, i.e. Cisco.
  • The potential for culture clash. Concentrix comes out of IBM business and Convergys is essentially a traditional telco out of Cincinatti Bell … one has a background of tech and innovation and the other a very conservative and risk-averse culture. 
  • Convergys’ revenues have been decreasing the last couple of years.  Call volume fluctuations and trying to compete with cost-focused customers and several butts-in-seats service providers in low-cost geos, has made it very challenging to focus on value-based deals.
  • Appetite for automation in Convergys core industry puts ever more pressures on sustain margins and growth. For example, Convergys' strongest vertical, telcos, are increasing their self-service interactions and automation, and have the strongest appetite in the industry for increasing Robotic Process Automation investments, in addition to their outsourcing focus.
  • Desperate mid-tier providers. Many of the midtiers service providers may make the whole situation worse, by forcing price points even lower out of sheer desperation. Let's be honest, we're in a rat-race and the game is all about who can survive the next 18-24 months to emerge ontop.  
  • Low-cost IT/BPO offshore providers making subtle moves into the contact center space as digital customer needs accelerate. We're already seeing many of the Indian heritage firms chasing after call center deals they would not have looked at a couple of years ago. They can be especially effective with "chat-only" engagements and with clients wanting to buy into a strong cognitive / automation story.  Large IT-centric outsourcers, such as Techmahindra, HCL  and Cognizant have been seen picking off some impressive wins with clients, especially where there are very strong IT elements.  BPOs such as EXL and WNS have been much more active in the customer service segment, and EXL is making an impressive repositioning of itself as a digital intelligence provider, with some impressive depth in insurance, utilities and healthcare sectors.

The Bottom-line: As long as this "traditional consolidation" is short-term, this could pave the way for a OneOffice future for the winning contact center providers

Let's cut to the chase here - Convergys is a great call center provider, but lacked the leadership and investment to break into the digital era effectively.  This merger may just provide that opportunity for a very talented employee base with a terrific customer culture.   For Concentrix, they needed one big play to get up-close-and-personal with Teleperformance, and this is the move.  Plus, the price was really damn good, and we're surprised why others with huge financial backing didn't make the move, such as Sitel or Arvato.

On the negative side, these contact center heavyweights appear to be doubling-down on size and scale, rather than pursuing a true OneOffice vision for digital customer engagement. We are more excited about some of the smaller acquisitions happening in the space, such as Webhelp’s recent Sellbytell acquisition from Omnicomm and SYKES’ pursuing digital marketing with Clearlink – connecting the pieces in the front office as marketing, service and sales continue to overlap and converge, and using the vast amounts of customer data they process to better engage with customers. 

The large contact centers can’t seem to get out of their own way—they talk about providing digital, analytics and CX consulting focused services, but the reality is that the bulk of their business is still traditional contact center. Despite some real capabilities, salespeople aren’t incentivized to sell a different way, and customers aren’t ponying up to partner and buy a different way.  Continuing in this paradigm is a short-sighted view… look at what is happening with eroding revenues from the telco sector now, the most mature of the contact centers will eventually happen in other sectors, such as retail and banking. In addition, the wave of "chat only" deals are increasing and threatening the life out of the traditional voice business. Providers like Teleperformance and Concentrix don’t have to disown their core business – there’s always going to be a huge market for traditional interaction management, however, adding some truly differentiated digital offerings would be a much smarter long-term strategy.

Net-net, this is a massive coup for Synnex and the Concentrix management teams - and Convergys has found a good home to focus on the future with confidence.  However, we would like to see some significant investments in intelligent automation and digital technologies to drag contact center BPO into the OneOffice era. Let's hope these guys can work it out, as there is a real war on between the legacy cost-obsessed approach and the OneOffice approach...

Accenture, IBM, Cognizant, Infosys, Wipro and TCS lead the first Digital OneOffice Blueprint
June 10, 2018 | Phil FershtMelissa O'BrienAnirudh PillalaSaurabh Gupta

Digital is all about an organization's ability to respond to the needs of their customers as those needs happen - or even be smart enough to anticipate those needs before they happen. This is all enabled by interactive technologies to create those touchless interfaces with the customers.  Smart analytics and AI enable organizations to anticipate these needs based on the ability to recognize patterns and inferences over time, but nothing can really substitute for human intelligence to bring customers, suppliers and employees closer together, unimpeded by frustrating silos and legacy processes. 

Remember, every broken process chain, or poorly converged dataset, slows down an organization's ability to do business in real-time and stay ahead of its market.  Traditional barriers between front, middle and back offices hinder the true ability of companies to operate in this real-time, responsive and anticipatory digital fashion, which is why we coined the term "OneOffice", where the unification of digital business models, intelligent automation, analytics and creative talent is happening before our very eyes.

The HfS Digital OneOffice Framework (see below) describes how organizations must integrate their digital customer interfaces with their operations in order to fulfill and anticipate their customers' needs. It is the organizational end-state to survive and succeed in a world where digitized processes dictate how responsive, agile, cost-effective, predictive and intelligent firms have to be to stay competitive.  

To this end, we have delved deep into all the four dimensions of the Digital OneOffice, and conducted deep analyst discussion to aggregate service provider performance at delivering the sum of the Digital OneOffice parts:  

  1. Digitally driven front office
  2. Digital underbelly
  3. Intelligent digital support functions
  4. Predictive digital insights

HfS Premium subscribers can click here to access their full copy of the 2018 Blueprint Report: Digital OneOffice Services

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So how did the Winner's Circle service providers fair?

Accenture

Strengths

  • Well-rounded portfolio across OneOffice: Accenture has the best performance overall across the OneOffice portfolio, and a breadth of industry expertise to complement it. Accenture placed in the Winners' Circle for each of the Blueprint studies used to compile this OneOffice assessment.
  • Strong marketing operations capabilities to support integrated digital OneOffice offerings.  Accenture has 16,000 business-focused staff dedicated to delivering digital marketing assignments - a considerable asset that goes well beyond the firm's IT delivery.
  • Strong intelligent automation capabilities. Acquisition of GenFour and exciting partnerships, with significant investments, with the likes of Automation Anywhere, Blue Prism and IPSoft.
  • Winning with thought leadership: Accenture is well-known as a thought leader across many of the change agents as well as within individual industries. 
  • C-Suite relationships beyond IT.  Digital business and intelligent automation decisions are largely being driven by both IT and business C-Suite executives in the Global 2000.  Accenture has the combination of strategic relationships outside of IT, in addition to the managed services execution. 
  • Leveraging creative assets for CX and UX design: Accenture has developed an industry-leading focus on becoming a customer experience expert, as evidenced by its 30+ design agency assets, by the broadest portfolio of digital design assets in the services industry (click here for a full list of digital M&A in services.)

Challenges

  • Size can work in its disfavor: Its size and success have given Accenture a reputation as a premium, high cost, and less responsive organization. In particular, for smaller companies, just this perception in the market can steer buyers instead toward more niche specialized agencies and the attention, flexibility, and experience they receive from a smaller provider.
  • Finding the right culture balance: Accenture is well known for its results-driven, traditional consultancy culture, which will need to be balanced out or effectively blended with the more left-brain focused acquisitions in order to retain creative talent and remain generally effective.
  • Proving to the industry it can deliver the end-to-end Digital OneOffice portfolio: There is no doubt that Accenture can pick up strategic work and execute for clients, but being able to demonstrate to the industry it can deliver both the strategic design integrated with complex operational delivery - at scale - is still in its infancy.  Many of its competitors will fight hard for execution work where Accenture is delivering the high-end design and consulting. It needs to demonstrate the "one-stop OneOffice shop" is where it wins.

IBM

Strengths

  • Strong intelligent OneOffice offering: Market leading capabilities to drive the OneOffice underbelly (automation, security, cloudification) and neural networks (AI, smart analytics, blockchain, and IoT). Impressive development of credible global automation capability and several notable early wins.
  • Portfolio breadth: End-to-end and scaled IT and business process services across front, middle, and back-office.
  • Horizon 4 investments: Very strong investments and IP in horizon 4 (and beyond) technologies that will shape the future (e.g., Quantum Computing).
  • Design Thinking: Has made some considerable investments in recent years, but needs to align more aggressively with OneOffice approach
  • Watson: The analytics/cognitive powerhouse has a significant role to play as a cognitive virtual agent, an analytics resource that has huge scalabiity and a long-term investment area for firms with deep interests in their cognitive capabilities.

Challenges

  • Size can be a disadvantage: IBM is a large and complex organization, which makes it hard to seamlessly deliver all that it has to offer.
  • Translating tech to business outcomes: IBM is often perceived as a technology powerhouse, but one lacking the business translation and context to successfully apply emerging technologies.
  • Agility: Lacks the nimbleness and flexibility of smaller players.
  • Focus on cognitive may impede its ability to compete for design-focused end-to-end deals:  IBM has substantial credibility to drive analytics-driven, cognitive/automation projects, but its lesser focus (over the last couple of years) on true digital design may see it lose out to firms such as Accenture and Cognizant, where digital is firmly established at their core.

Cognizant

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How Data and Technology Shape our Experiences as Humans, an interview with Kate O'Neill
August 29, 2017 | Melissa O'Brien

We are excited to welcome Kate O’Neill, marketing guru, cultural strategist, and technology humanist, to keynote at our upcoming Chicago event. As HfS brings together the industry community to exchange ideas and experiences, Kate will be leading the discussion about how data and technology shape our experiences as humans. Kate will also be running a digital OneOffice breakout session with me.

I recently caught up with the “Sandra Bullock with brains by Microsoft” to hear what she’s working on and what to expect from her session at the summit. 

Melissa O'Brien, Research Director, HfS: Kate, we are really excited to have you joining us next month in Chicago.  Our attendees are curious-- you describe yourself as a “tech humanist”-- can you tell us what you mean by that?

Kate O'Neill, Founder, KO Insights: I mean that data and technology is increasingly shaping our experiences as humans, and with every technological advancement, with every innovation, I want to encourage us to think about the impact on humans and the human experience.

In my last book, for example, Pixels and Place, I examined the convergence of physical and digital space, and how that convergence fundamentally happens through human interactions. I’m now working on another book in the same spirit.

Melissa: Tell us about the next book.

Kate: It’s coming together around AI, predictive analytics, and other forms and components of automation, and, again, how those are and will shape our experiences as humans. The world has been changing toward this automated systemic society for some time now, and I’m examining what that will look like for us, from a human-centered bias, as it continues.

One of the key questions, of course, is around the future of work and the workplace, since there’s a lot of anticipation and anxiety about the impact there. We’ve traditionally derived a great deal of our sense of accomplishment and contribution — our sense of meaning, really — from our work, and as the nature and composition of jobs change, it’s important that we consider what that will look like.

The big question in all of this is how we make sure we are emphasizing humanity and creating value for ourselves — both for humanity and for profit.

Melissa: What do you think this will mean for businesses as increasingly intelligent automation start to transform our human experience?

Kate: Well, one of the recurring areas of focus in my work is the alignment between two forces: the insights that well-modeled, data-rich experiences can provide to business about human behaviors and motivations, and the integration of data and technology into business and organizational processes. People talk a lot about digital transformation, but this is what it means to me: keeping human experience at the center, but taking advantage of the gains and efficiencies that data and technologies have to offer.

In addition, business needs to be responsive to and mindful of what’s happening at the intersections of the physical world with the digital experience layer. Because for the most part, where those worlds meet, it happens through us: through human interactions and transactions. Our movement through the world, our purchases, our interactions online — all of these create a data trail that is compelling and rich with patterns businesses can mine for clues about how to sell to people more effectively. And machine learning will continue to improve on how to harness that data.

Which means, on one hand, there’s huge opportunity for business growth and acceleration, but there’s also this huge looming economic question mark about the accelerating impact of automation on the workforce, and how that will change the mechanics of employment and of income, and even the fundamentals of value. I expect that we’ll increasingly place a premium on human interactions — and those that feel like human interactions.

That’s a lot going on! And I think it’s a tremendous opportunity for businesses to step out ahead of the competitive set and really bring all these forces into alignment — the customer experience, the data model, the operational deployment of smart and automated technologies. To do that really takes a deep understanding of what the business offers at a fundamental level, and dimensionalizing that purpose throughout all of these other parts and processes.

Melissa: That certainly is a lot… and I know our summit attendees will be eager to have these discussions next month. What can the folks attending our Chicago summit plan to learn about in your session?

Kate: I want to encourage people to think about all kinds of data and emerging technology like automation, artificial intelligence, chatbots, connected devices, and so on as opportunities to deliver more meaningful human experiences at scale. We’ll talk about why and how that can work in practice. There will probably be one or two mentions of cats, too, but I haven’t figured out yet how or why.

Melissa: Presentations are always better with cats…. Thanks for the preview, Kate! We are looking forward to your next book and hearing from you directly at the Chicago Summit.

 


Learn more about Kate's session and the rest of the agenda for HfS' Future of Operations Summit in Chicago (September 19-21).

Can virtual assistants help to heighten the value of customer interactions? CSS Corp looks to Yodaa for wisdom.
July 18, 2017 | Melissa O'Brien

In a world of inflated hype around chatbots and where customer service interactions solutions claiming to be AI or cognitive are popping up at a feverish pace, it’s up to service providers to take a stance and articulate a strong value proposition. Most pure play contact center service providers don’t have much of a strategy for Intelligent Automation in general and in AI in particular. Many are exploring partnership options or allocating tiny budgets to develop their own chatbots and lower level machine learning tools. CSS Corp has decided to flex some muscle and use its own IP to develop a virtual assistant, “Yodaa,” claiming to be an AI tool capable of “human-like” interaction. Combining NLP and machine learning, the SaaS-based solution can be used as a standalone support interface across contact center channels or as a platform integrated with Amazon Echo, Apple Siri, Microsoft Cortana and Google Now. It also has the ability to understand customer intent and learn from its interactions. CSS Corp is piloting Yodaa across 3 clients and 1 client has already gone live with the virtual assistant. 

While the broader market gets excited about chatbots, the best way to discuss Yodaa’s capabilities is to look at the evolving landscape of service agents across a continuum (see graphic below) from more basic back office automation of processes all the way through to process execution on interactive channels. Without seeing specific use cases just yet, our best guess is that Yodaa falls somewhere on the spectrum between chatbots and virtual agents. It's self-learning capabilities take it beyond the traditional bot to integrate with enterprise systems and learn from conversations, as well as combine both human and machine learning in what CSS Corp calls a “cotelligent” platform. Its multi-channel capabilities plus ability to integrate with existing consumer virtual assistants is another important feature. What remains to be seen is whether Yodaa’s capability extends to process execution the way that IBM’s Watson and IPSoft’s Amelia have demonstrated: to help front office professionals make better decisions with insightful, predictive data and analysis or routing customer requests to execution, or interact (in the case of Amelia) with some level of “emotional” intelligence. 

 

Augmenting the agent experience: adding value to customer engagement

At the far right of the continuum, virtual agents are not only automating tasks to support the digitally-driven front office behind the scenes but also using cognitive intelligence to have meaningful, secure, and efficient interactions with customers. But, cutting through the hype, we’ve yet to see a virtual agent that really can replicate a true human interaction or execute processes the way a human can. IPSoft’s Amelia is the closest we’ve seen to be able to execute at a close to human capability.They’re getting more sophisticated, and ultimately these tools may replace some customer interactions, but not all. Ideally, virtual assistants and agents can help human agents do their jobs better to support the customer experience-- by providing context and recommendations to agents, promoting more valuable interactions.This opens up the door for cross-selling and upsell opportunities, as well as promotes loyalty and satisfaction with customers, whereas lower level chatbots and automation simply replace repetitive tasks and automate basic functions without adding much value. 

The Bottom Line:  Virtual assistants have the potential to help transform the contact center if used correctly.   

As Yodaa’s namesake famously said, “you must unlearn what you have learned.” Cognitive agents are not going to work well if they’re slapped on top of or inserted into broken and bad customer support processes. Customer service executives need to re-think and re-design the processes that contribute to customer experience across the board, which means “unlearning” bad habits, throwing away legacy thinking about “this is how we’ve always done it” to embrace making the contact center a much greater strategic entity within the enterprise-- one which doesn’t continuously solve simple, repetitive issues (at great cost) but finds ways to build value. We explored this concept with CSS Corp in a POV last year, where we discussed the ways in which contact centers can transform from a cost center to a profit center—most notably, we looked at how enterprises can drive more revenue by analyzing their real-time customer interaction data and support contact flows. Virtual assistants like Yodaa contribute to this strategy by making data and context easily available and automated, becoming a valuable tool for marketing and sales as well, by learning from customer conversations to better understand their needs and expectations.

The lynchpin of success in the contact center for virtual assistants like Yodaa is the capability to fulfill a very important customer need for simplicity. It all boils down to making things easy for the customer while looking for opportunities to add value when appropriate.The Yodaa tool claims to understand customer intent and be able to learn from its conversations, which can provide a huge benefit to making customer service easier. CSS Corp’s Yodaa is onto something with its learning and integration capabilities, and looking forward we will see if customer stories pan out to show this is a capability which stands out amid the din that is the topic of service agents today. 

In Q4 we will be exploring the world of service agents in more depth as we launch our first Cognitive Agents Emerging Market Guide. 

Accenture Expands its Digital Frontier with Intrepid – Another Pearl in the String of Acquisitions
July 04, 2017 | Melissa O'Brien

Last week, Accenture announced the latest in its 2017 $1.8 B shopping spree with Boston-based mobile design and development company Intrepid. This is a part of Accenture’s strategy to dominate the Digitally-driven Front Office with the vision to offer its clients a model with no business silos where the barriers between the front and back office are removed forever; as described in HfS’ Digital OneOfficeTM. Accenture’s strategy goes beyond the ambitions of growing and maintaining the largest digital agency in the world. It’s about building capabilities to impact its clients’ transformation, finding unique capabilities in opportunistic Geos, opportunities for pull-through with its other services, and a keen focus on impacting the customer experience. 

Intrepid’s 150 employees will join Accenture Digital, the division where many of Accenture’s customer experience focused services reside.  Intrepid’s engineering talent and capabilities, such as it’s work with Saucony Stride lab -- an app that helps runners analyze their stride for better performance--  falls right in line with the kind of digitally-driven customer experiences Accenture is looking to help its clients achieve.  There are also great client synergies between Accenture and Intrepid, in particular around P&G, Accenture’s marquee client for front office services and an organization which is at the forefront of value creation from front office services. 

Accenture was recently placed in the Winner’s Circle of our Digital Marketing Operations Blueprint. This acquisition will further solidify its position, in a space where Accenture’s ability to replicate its Digital Front Office services across industries is also emerging as a competitive differentiator. The ‘string of pearls’ M&A strategy across the core pieces of digital transformation is illustrative of the service provider’s forward thinking vision for the evolution of this market. These acquisitions span across various core pieces of digital transformation, such as include aVVenta for content, Cimation for IoT consulting and Chaotic Moon for digital technology design and prototyping, complementing customer experience services and helping the service provider double its digital marketing operations business over the last two years.

Accenture is putting together a differentiated and bold story for the digitally-driven front office. In fact, Accenture accounts for approximately 50% of the M&A activity since January 2017. Let’s look at some of the more recent Accenture recent acquisitions in 2017:

  • MediaHive, May: Digital commerce strategy and design to platform delivery and managed services
  • Monkeys and Maud, May: Creative ad agency, Australia and New Zealand
  • Kuntsmaan, April: Belgian communication agency focused on customer experience
  • SinnerSchrader, February: German digital agency

What is the common theme in each of these selections?  A clear focus on digital customer experience and design. Accenture also stands apart from the competition in the sense that it seems to avoid falling to the temptation of talking immediately about technology and software (in spite of the strength of its technology assets and partnerships), and instead focuses on the business value.  This management consulting legacy and mindset is part of the company’s DNA and a big part of how it builds trust with its clients. 

This flurry of M&A activity is bold, but not without risks and potential problems.  One of the greatest potential issues is addressing the clashes of so many disparate and vastly varying organizations both operationally and from a cultural perspective.  Accenture’s culture is built on thought leadership, delivering operational excellence, and not necessarily in sync with more “creative type” cultures that will inevitably come with the acquisitions, it’s been targeting.  For now, the strategy seems to be running these entities independently, almost using them as R&D centers wherein their original cultures remain intact.  But inevitably over time, some cultural transformation will occur, morphing the digital giant and its entities into something new-the question is whether legacy Accenture becomes a more creative, innovative organization-or it’s subsidiaries turn more corporate, potentially snuffing out some of the creative fire and losing key talent in the process.  It also risks its size becoming a deterrent for buyers who prefer the niche specialized agencies and the attention, flexibility, and experience they receive from a smaller player.

Another potential threat is that Accenture might become complacent in delivery and execution given its dominance from a capability perspective in this space. This acquisition moves it up on our innovation versus execution grid, but will Accenture also move toward the right? We will be watching that as Accenture continues to enhance its capabilities with these innovative firms.

 

As Anatoly Roytman, head of Accenture Interactive for Europe, Africa, Middle East and Latin America said (of the Kuntsmaan acquisition): “Together, we’re bringing our unique model to the market: part creative agency, part business consultancy and part technology powerhouse – all laser-focused on creating the best customer experiences on the planet.”  The refrain we hear constantly from service buyers — Accenture’s included—is “more innovation!”  Accenture has certainly amassed an array of building blocks to address this demand globally; now the hard work begins to pull these pieces together – a ~$10B digital agency with many moving pieces, specialized skills and domain capabilities – to execute on transforming the digital customer experience for its clients.