Phil Fersht
 
CEO and Chief Analyst 
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SBA: Please stop spanking bots
April 30, 2020 | Elena ChristopherMiriam DeasyPhil Fersht

What better to blame - when all goes wrong - than the evil robotic thing you just inserted into your system.  Many of you saw the recent article in ABA Banking Journal where they blamed RPA for the "burden on their processing system and diminishing of its capabilities".  We will discuss this debacle in a more detailed POV (stay tuned) but the crux of the issue here is a poorly run government IT function tinkering with software to try and process a mad scramble for many thousands of small business handouts from the recent Covid-19 stimulus package - and most likely in some weird virtual lockdown vacuum.  And it appears woefully understaffed. 

In short, APIs + humans + bots need to work within system parameters, or we're always going to have failures of scale like this one.  

RPA is a highly useful tool to support this environment, but please let's start deploying it as part of the overall tool-box 

As we’ve said of late, the digital workforce that wasn’t finally has its burning platform chance to shine. Since global lockdown commenced, we’ve been tracking, talking, and learning about the ways in which enterprises and their service and technology partners are using automation to help them function. One of the most prevalent use cases in recent weeks is in the banking and financial services sector where lenders are using automation, largely, RPA, to support loan processing for government-backed loans. RPA is helping lenders grapple with massive loan volumes and get them submitted quickly so loans can be approved and dispersed.

Insert monkey wrench.

The U.S. government’s Small Business Administration (SBA) application and approval portal was overwhelmed with demand as a second tranche of government funds were made available on April 27. The funds are intended to support loans for small and medium-sized businesses (administered via banks) as part of the Payroll Protection Program (PPP) during the Covid-19 pandemic. The SBA E-Tran system receives the loan applications and then the SBA processes and approves them. The system struggled to handle the new surge of applications coming through and repeatedly crashed. As of Tuesday, April 28, the SBA prohibited the use of RPA bots in the application process.

RPA fail, right? Not exactly. It is actually the overwhelming success of a blunt instrument.

The HFS team dug in and spoke with a variety of ecosystem players - banks, software companies, and service providers to get the straight scoop. We also reached out to the SBA, but they have not responded. We view this as a case of RPA being used as a blunt instrument allowing any bank that invested in RPA to automate loan application submissions. RPA very legitimately helped banks and lenders process scads of PPP loans. This presented two immediate issues:

  1. The SBA E-Tran system crashed – it was way overburdened with hundreds of thousands of loan applications.
  2. Banks with automation were potentially able to submit more loan applications than those without thus more effectively accessing a limited pool of stimulus funds.

The SBA responded in a super butt-covering mode with its "NO RPA!!" edict. It will still allow loans to be automatically processed through APIs. So now banks are scrambling to convert their RPA processes to API-led. And the SBA assigned one person. Yep, one person to field all requests for API access. We hope this poor beleaguered contact has some help, but banks have reported the API access option is “very slow”. To address the potential of access bias for those firms with automation – deemed to be the larger banks - the SBA designated an eight-hour window on April 29 for lenders with less than $1 billion in assets to submit loans.

Bottom line: This SBA debacle is why you need nuance and a toolbox approach to automation to get desired results.

It’s too easy to say RPA failed. It’s more complicated than that. Really RPA was a blunt instrument here – for its speed to solution and ability to swiftly process loan applications and it worked remarkably well. Too well. It swiftly overwhelmed SBA’s E-Tran system – which was doomed to be overwhelmed anyway by these unprecedented volumes in a short period of time. But RPA exacerbated it and potentially gave access advantage to automation-savvy firms. While access through SBA’s XML API may allow for more efficient loan submission rather than the RPA model of going through the user interface and clogging the narrow pipes, this did not have to be an ‘either or’ situation. APIs versus RPA is not the point. Automation always lives in an ecosystem with upstream and downstream impacts and these were not adequately addressed. A better approach would have been a toolbox approach that leveraged RPA for loan preparation and access into legacy systems in the lenders’ shops, APIs for submission and humans for oversight with some substantial volume throttling to give the SBA’s system half a chance at doing its job. Automation cannot live in a vacuum.

Welcome Ram... he'll get you out of a jam
April 26, 2020 | Phil Fersht

For those of you who follow HFS closely, you'll know we have a small but extremely focused and competent analyst team in Bangalore. And if one region has shown all of us in the services industry how we can pivot fast to keep the wheels on IT delivery... it's India.  So we couldn't be more excited to add Ram Rajagopalan to the team who will lead many of our consulting studies in addition to getting stuck into our coverage of AI, IoT and supply chain.  And one thing I love about this guy... have can he smile with actually smiling?  Maybe he learned that during his time with IBM, Wipro and Genpact...

Welcome, Ram! Can you share a little about your background and why you have chosen research and strategy as your career path?

Thanks Phil! I am excited to be part of HFS.

I am a professional with 18 years of experience spanning across strategy consulting, market research, business development, and executive program management of initiatives. Most of my experience has revolved around consulting assignments for either opportunity growth or internal issue resolution. I have worked with hi-tech clients in banking, automotive, electronics, public sector, and instrumentation industries in Europe, North America, Japan, and India.  

I have always loved strategy consulting irrespective of the variety of roles that I have done in my career, and have been keen to get back into strategy and research after gaining experience in marketing and business development roles in the industry.  

What are the areas and topics that you’re initially focusing on with your HFS analyst role?

Initially, I am focusing on the impact of COVID-19 on IT companies. This involves understanding how IT/ITES enterprises are responding to the COVID-19, and planning to counter COVID-19 in short to medium term. I will also be working on a consulting project on Automation. This will focus on the future of automation in the new normal situation.

What trends and developments are capturing your attention today in technology and business operations?

I believe that companies will explore automation and security solutions. This is attributed to the adversity due to COVID-19. The large companies will look at an integrated approach to leveraging automation, artificial intelligence and analytics based on their client needs. Permutations and combinations of these activities will result in new use cases to serve the evolving needs of customers. This will take a while as the enterprises are focusing on their impending needs to sail through the stabilization phase of COVID-19 effectively.

How are the India-heritage IT service providers dealing with the current COVID-19 crisis, Ram?  Do you foresee some major issues with clients occurring as a result of moving so many staff into home-working situations?  And do you see this eventually returning to the same delivery model as before when all this is over... is will we see something different emerge?

We should look at this aspect by tiers of IT companies, end-user businesses and the types of services.  Clients in industries such as BFSI, government, and manufacturing will not want this situation forever. They would be keen to see their supplier side employees back in the onshore, offshore and nearshore centers. The nearshore focus might increase as clients would want to stay closer and adopt new ways of working with the suppliers. Secondly, the large companies have the advantage to convince their clients and get more of regular application development and maintenance work transitioned to them. Clients will have a lot to handle after the current situation. IT suppliers can help them by sharing their load in regular IT services. This may not be easy for mid-tier and small IT companies due to the typical challenges around cash flow management and scale of operations.

Secondly, “Work from Home” situation will depend on the level of trust established with the client and the lack of time-tested security solutions.

When the COVID-19 ends, the IT world will be business as usual. This does not mean that the companies will not carry the lessons learned from the current situation. The large and mid-tier companies will start in-house activities to improve the ways of working remotely. Large companies have already started looking at strengthening their security solutions either organically or inorganically. We will get to see Agile increasingly becoming mainstream across the majority of suppliers.

And, what do you do with your spare time (if you have any...)

I watch cricket, specifically test cricket. I also love outdoor jogging, and reading books on a variety of subjects. One thing that I have been trying since my college days is to understand more about this world from a non-linear perspective than just feeling convinced with linear theories.

Well... certainly an interesting time to make a career change Ram... we eagerly await the result of our COVID-19 work and seeing your first pieces!

Don’t you wish you’d done more? The digital workforce that wasn’t finally has its burning platform chance to shine
April 18, 2020 | Phil FershtElena Christopher

Well, we can’t deny it was noisy, loaded with more hype than a Vegas heavyweight boxing match, and backed by more investment dollars than the GDP of a small country. Yes, folks, that was quite the automation ride we all recently experienced. And what a dogs' breakfast that all turned out to be...

Sadly, nearly nine out of ten enterprise adopters simply didn’t get past piecemeal projects, pilots, and lots of very drawn-out evaluations. In fact, most simply didn’t have a burning platform to do very much at all with it.  The lethargy to do anything more than hype up RPA at conferences with bullshit such as "a bot for every desktop" drove us to proclaim (quite correctly) that the RPA value proposition was dead.

However, if there’s ever been a time we needed a digital workforce to augment humans, it’s now as 54% of major enterprises we surveyed this month seek to increase their process automation investments.  Yes, people, there is a realization of the importance of process automation technologies to support these rapidly evolving digital workplaces, which is only superseded by the need to invest in cybersecurity:

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 As we all adjust to the new abnormal, this is finally the time for the digital workforce to shine

The COVID-19 global pandemic is challenging our fundamental ability to keep businesses across all industries up and running while ensuring employee safety, preserving employees’ livelihoods, and meeting customer needs. Massive portions of the global workforce are being told to work from home, creating the most widespread operational crisis in modern business history. These rapidly emerging, globally distributed, remote, virtual workforces are creating a huge need for effective automation and a digital workforce. Yes, folks, the burning platform has arrived, and it’s literally ablaze.

As the following data from a few months ago reminds us, we’ve seen far less scale of Triple-A Trifecta (automation, AI, and smart analytics) technologies than we’d like (and need). Despite having spent the better part of a decade investing in digital transformation and loads of slick emerging technologies, we missed the boat on addressing process debt and replacing moldy legacy systems. It is what it is at this point, as we have no time to lament what we should have done. Now it’s all hands on deck to leverage what we do have to help businesses function during the pandemic. The need of the moment is operational impact; thus, the implored imperative is to get creative and figure out how to quickly re-use and, more broadly, deploy your proven digital workforce assets.

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Learning to share during the pandemic—toilet paper, hand sanitizer, and automation assets

We’ve all seen unsavory images and headlines showcasing human nature at its self-centered worst—hoarding toilet paper, buying up 10 years’ worth of hand sanitizer (just in case!), and creating a dearth of surgical masks when healthcare professionals urgently need them. We need to remember how to share and be equitable despite the uncertainty. As we evaluate how enterprises built their automation programs over the past few years, we see loads of siloed activity—functional groups fending for themselves. On the one hand, there has been a notable surge of business operations leadership playing an active role in technology-led change. However, many of these siloed initiatives are those that have stalled or plateaued, stuck at low levels of task automation with little to no process change. The pandemic has presented an urgent need to break down enterprise silos and share proven digital workforce assets.

Operations leaders currently don’t have time to develop new digital workforce solutions. Anything that’s in the planning, pilot, or implementation stage is on indefinite hold while operational triage takes place. Enterprises need to take swift inventory of what they have amassed in terms of Triple-A Trifecta assets, determine cross-functional potential, and deploy them. This task-focused rollout is not fulfilling the grand vision of orderly enterprise digital transformation; it is being practical and opportunistic when we need it the most.  And practical and opportunistic is what is clearly on the minds of many enterprise leaders as they realize they should have paid a lot more attention to changing and automating processes to support real business needs.  But better late than never...

Tactical, practical task automation inspiration from the trenches

For those enterprises who have invested in Triple-A Trifecta technologies and have proven assets to work with and disseminate, here are what some of your compatriots are doing as part of their now and near-term strategies:

  • Cross-functional assets are king. Operations leadership from one global financial institution described deploying cross-functional AI platforms to new functions or similar functions in new departments for tasks such as document digitization, email management, and automated exception resolution. We are playing a leverage game at the moment—take the proven digital workforce assets you have and find ways to deploy them to a wider user base, generating leverage through repurposing.
  • Bots built with reusable code and accelerators. Reusable components are helping enterprises in a diverse array of sectors, including airlines, healthcare, financial services, and retail, deal with massive spikes in volumes of calls, emails, and forms. The replicated skills cover functionality such as reading, categorizing, routing, prioritizing, responding, and consolidating, and enterprises (or helpful service partners) can spin them up relatively quickly to address massive peaks and atypical working conditions. Here is a link to a public domain example from the NHS. There are also loads of downloadable assets available on various marketplaces to complement existing implementations, such as UiPath’s health-screening bot.
  • Donated resources. We’ve seen some examples of service providers and automation technology firms offering gratis access to their resources and technology to help those in need. We could use more of this! Accenture supported the NHS example above; Appian is offering complimentary access to its COVID-19 Response Management application for customers and any enterprise over 1,000 people, and Blue Prism just announced it would donate resources and digital workers to automate processes related to COVID-19.
  • Digital assets can remain on site. We’ve heard a few instances where remote workers are unable to access legacy systems off-site and are leveraging onsite bots to remotely manage access systems, enabling work to continue.
  • Cloud-based business process platforms with intelligent workflows. Many service providers have sizable operations centers in offshore, nearshore, and onshore locations. Aside from a lack of laptops, many service providers have been successful in allowing client-facing resources to work from home due to secure access to cloud-based business process platforms enabled by Triple-A Trifecta-enabled technologies. Resources are supporting functions such as finance and accounting, procurement and sourcing, and customer experience.
  • Leverage analytics and process mining to understand what’s working. Meanwhile, while you are more broadly disseminating your digital workforce, you can leverage analytics to help you quickly understand what’s working and what’s not so you can make informed choices about where to spend your time and effort. Tools such as workforce analytics, process mining, and predictive analytics are proving particularly helpful here for many enterprises.

The Bottom Line: This wasn't the digital workforce revolution we'd hoped for, but let’s harness what we can now and ensure we make re-invention happen post-pandemic

The global pandemic is making us realize just how reliant we still are on humans and antiquated processes and technology. Despite having spent the better part of a decade investing in "digital transformation" and loads of slick emerging technologies, we missed the boat on addressing process debt and replacing moldy legacy systems. Thus, here we are, knee-deep in the most widespread operational crisis in modern business history, and we’re being laid low by our unwillingness to change how we execute work.  Which has now come back to slap us in the fact with one very slippery wet kipper... and over half of you intend to do more with automation than any other tech investment bar cybersecurity. 

We're definitely not building the digital workforce revolution we thought we were, but now we have no choice but to digitize global digital workplaces and technologies such as process mining and RPA are crucial to support these transformations. But we need to leverage what we do have, so get to work and repurpose task automation and algorithms and other gems you may have cultivated. Remember to share and get creative across your enterprise and externally where needed. And, above all, when we start to have a line of sight to the other side of the pandemic, we must be resolute in changing. For real this time.

Digital Associates finally have their flaming platform
April 12, 2020 | Melissa O'BrienEmily CoatesPhil Fersht

Sometimes platforms smolder, sometimes they burn, and sometimes they even rage with flames... and one example that's genuinely flaming in this current paradigm shift is the world of chatbots and their more sophisticated cousins, Digital Associates.  With this urgent need to augment customer-facing services with the locking down of call centers and corporate offices across the world (or even just keep them functioning at all), to keep IT help desks operating, or even internal needs such as basic finance,  procurement HR and payroll services, the opportunity to have digital "workers" with whom to engage is in high, high demand.

Our analysts Melissa O'Brien and Emily Coates have released introduced our first Digital Associates top ten products report, which ranks and analyzes 13 of the leading tools on the market for creating these conversational tools we call digital associates.  

Melissa, which products have the capabilities to develop really effective digital associates, and quickly? 

Our recent report analyzed voice of the customer feedback on the most important elements of enterprise products and platforms for developing digital associates, from functionality to the ability to embed intelligence. The 13 software products we have included in this study highlight the vendors that play in the three most important ecosystems for digital associates: developer tools and platforms, enterprise products, and niche products:

I am assuming, in today’s environment, ease of deployment trumps intelligence?

At this moment, the most important element for digital associates is the ease of use and relative ability to get up and running quickly. Google’s Dialogflow scored at the top overall and also is #1 for ease of use and functionality.  Our VOC survey respondents indicated that the ease of implementation was a major strength for Dialogflow and its “out of the box” capabilities that are able to be quickly plugged into communication channels like Slack and Twitter.  Runners-up for ease of use were Conversable and IBM Watson, where pre-trained modules and solid UI make it easier for users to stand up the DA’s in shorter amounts of time.

The pandemic will drive adoption of digital associates in the short term, and enable a greater acceptance of them as communication tools as part of business strategy in the future

Since the outbreak, there have been a plethora of chatbots that stood up in varied use cases.   Perhaps the most felicitous ones we’ve seen have been the Coronavirus ‘self-checker’ bots created, which are actively in use in chat functions by major health organizations.  We’ve also heard of digital associates being deployed by HR departments to run through work from home ‘checklists’ with employees.  And as the rush to work from home begins to stabilize, we’ve also been hearing a lot more about customer-facing bots being deployed for contact deflection in customer service functions.

In the coming weeks and months, we’ll continue to see companies of all shapes and sizes rustle up some digital bandaids to throw on a very big wound.  At some point when the dust settles and a new normal emerges, companies will be re-assessing and designing everything from their customer engagement models to BCPs to internal processes.  And that’s when it will become clear that a digital-first approach is likely the easiest, most sustainable and least “disrupt-able” approach for many processes and communications.

And, it’s also the time that the ease of use for digital associates will become hygiene and digital associates tools will need to be agile and intelligent. This is where vendors’ investments in creating digital associates tools that can adapt quickly, learn and apply more advanced techniques like sentiment detection.  A standout in the innovation category is IPsoft, which ranked at the top across the board all innovation categories of embedding intelligence, scalability, and flexibility.  Dialogflow is well poised to rise to the challenge as well, with powerful abilities for modeling large and complex flows using intents and contexts.

The Bottom Line:  A ‘digital first’ approach could become the post-pandemic new normal.  The tools that are being quickly developed now need the potential to become more intelligent.

As companies start to move out of survival mode, we will start to see a much more strategic use of emerging technology.  People need to start thinking in new ways – not just about today’s problems at hand – but also about responding to future disruptive events in a way that uses important technological tools like digital associates in effective ways.

HFS Research premium subscribers click here to download your copy of the Digital Associates top ten products report

Leaders embracing an infinite mindset can flourish during these times
April 05, 2020 | Phil FershtSarah Little

As a leader, it’s so easy to obsess with operational functions of the business during times of disruption or distress - in this case, a global pandemic – that it can create knee-jerk, often short-term decisions that could inherently damage your long-term vision, your business’ culture and your raison d'être.  

Having lived and worked through four recessions, I personally understand the rapid change in leadership mindset that can occur when a firm goes from peacetime and growth to one of survival and all-out war.  According to author Simon Sinek, people look to leadership to serve and protect, to “set up their organizations to succeed beyond their lifetimes1.” But in the modern landscape, most organizations place an unbalanced focus on near-term results that may ultimately prove to be self-defeating, like casting aside your umbrella in a storm because you haven’t been getting wet. In short, business is no finite endeavor. This pandemic lays plain for all to see the game we are really playing.   

Finite vs. the Infinite: What is the Infinite Game?

A finite game is one with fixed rules, objectives and time horizons, the goal quite simply is to win1. But how do you “win” in business, or against a virus for that matter? Did Singapore “win”, or did they have strategic measures in place that allowed them to move through the disruption more smoothly? Is New York City “losing;” has Italy “lost”? Of course not – there is no metric or rule by which a city or country would lose to this disruptor. They can be battered, bruised, decimated even, but they will persist and stay in the game.

With no defined time horizon, no clearly-defined rules, and with players that may enter and exit at any time, the primary objective of an infinite game is quite simply to keep playing1. The goal for businesses, just like cities and countries, is to have the will and resources to stay in the game, through thick and thin.

Getting through the thick of it: running towards bad news

Forget about technology for the moment, bad news is the preeminent change agent. Even Winston Churchill espoused the transformative powers of bad news with his dictum, “never waste a good crisis.” Let us not be mistaken – we are in brutal times, and I would prefer not to have this type of bad news for anyone to run towards, but let us continue…   

“People take their cues from the leader, so if you’re okay with bad news, they’ll be okay, too. Good CEOs run toward the pain and the darkness; eventually, they even learn to enjoy it.”

~ What You Do is Who You Are, Ben Horowitz

In business, we have to open ourselves and our teams to embrace bad news to get ahead of it. From bad news, roadblocks are revealed and underlying issues come to light, many times sparking momentous shifts in approach and innovation. But it is the initial willingness to dive into discomfort that is the defining characteristic of personal leadership, it shows up “in all kinds of essential ways: making difficult decisions; taking responsibility for them; apologizing for mistakes.2

Welcoming bad news fosters resiliency and allows transparency to appear through a different lens. And with that, trust flourishes. According to Sinek in his 2019 book, The Infinite Game, “Trusting Teams, it turns out, are the healthiest and highest-performing kind of teams.” He continues, “Good leadership and Trusting Teams allow the people on those teams to do the best job they can do. The result is a culture of solving problems rather than putting Band-Aids on them1.”

So get going, start running.

Building trust, resiliency and culture through a bias for people and an “experience” architecture

There is much to be said about driving culture in an organization, and at the very core of culture, is human nature. People are hard-wired to feel that they are valued and are part of something bigger than themselves; that they are contributing to the core purpose, or “Just Cause1”, of the company.

“When hard times strike (and hard times always strike), in companies with a bias for [people], the people are much more likely to rally together to protect each other, the company, the resources and their leaders. Not because they are told to, but because they choose to. This is what happens when the will of the people is strong.”

~ The Infinite Game, Simon Sinek

It is no wonder we are seeing employee experience a critical component to success within the enterprise today from two different consideration sets – the heart and the mind.

At the heart of the impetus is the foundation of trust, enablement, and partnership that truly fulfills not just the Way people work but the Why.  When people are given responsible freedom and provided with the support to flourish, when they can work within a trusting team – safe to express ideas, ask for help and be open to learning – people will put forth the will to give their all. Likewise, the business reciprocates and fosters the relationship, their environment and their growth.

The mind on the other hand is the model linking customers to the core of the business – its purpose for the services and products it provides - which is essentially service-oriented, i.e. customer-centric.  The Digital OneOffice is the "experience" architecture, bringing customers and employees together into a unified state where supporting customers and anticipating their needs is native to the entire organization. At its core, OneOffice is about making customer, employee and partner experiences the centerpiece of the strategy, playing host to the new duality between who is servicing the customer and who is the customer:

Service is the tie that binds the heart and mind. Teams who are connected to the company, its leadership, its customers and each other are far more likely to come together for the greater good in the face of adversity and hardship. “The same things that help the company survive and thrive during good times help make the company strong and resilient in hard times.1

Beware the “imposter cause” as your point of purpose

According to Sinek, finite-minded companies espouse what he considers to be an “imposter cause,” confusing growth, arbitrary metrics, or successful products and services with a strong company, which may very well become obsolete. They understand customers change, but safeguard resources and existing operating models in the face of disruption. These elements can be particularly true in the enterprise technology arena, where deep resources and services are modeled around two interconnected enterprises – the client and the service provider itself.

Just Cause

 

Imposter Cause

Directs the business model, with products and services advancing the cause. Its attributes are durable, resilient, timeless, beneficial and idealistic.

 

Examples

Whole Foods: Our Purpose is to Nourish People and the Planet

 

Netflix: We want to entertain the world. If we succeed, there is more laughter, more empathy, and more joy. (Netflix > Culture)

 

 

Business model is directed by existing resources or the relevance of current products and services

 

Examples

Garmin: We will be the global leader in every market we serve, and our products will be sought after for their compelling design, superior quality, and best value.

 

Vizio: To deliver high performance, smarter products with the latest innovations at significant savings that we can pass along to our consumers.

We are riding the massive new wave of outsourcing transformation – changing the way services are delivered. Who can guide us through the new abnormal? Who is prepared for the future?

An infinite mindset is crucial to current and long-term success. As noted by TCS’ Rajesh Gopinath in my recent “…In the flesh” interview, “The formula that has worked, and which will continue to work, is this unrelenting focus on the customer and unwavering belief in our own talent. The waves will keep changing, but you need to define yourself as surfing the current wave. And, as the wave changes, you’ve got to keep on readjusting yourself. But the value proposition is unwavering in its focus; it’s to make technology work for our customers.”

Partnering in this space is critical for the current wave and those to come. Even as the pace of digital-first has vastly accelerated, we are in a journey - not a race. In today’s environment, enterprises and provider partners need to stay tuned to the vision, look at business continuity in a virtual model and then apply the technologies that can best advance the organization through the turbulence and beyond. “An inifinite-minded leader does not simply want to build a company that can weather change but one that can be transformed by it.1

The Bottom-line: Transformation finally has its flaming platform. The phoenix has arrived.

Did you ever think your enterprise could move to a 100% work-from-home environment with less than three weeks’ notice? This crisis is forcing businesses to flex – vastly accelerating the digital-first environment, dramatically cutting redundancies and improving processes at scale. There is a massive amount of change happening, and out of change comes real transformation. After years and years of complacency due to the relentless growth (and papering over the cracks of 2008), all of today’s organizations now finally have a burning platform to change how they operate globally.  In fact, the platform is positively on fire!

Within the chaos of transformation, even a highly disruptive one, the core is steady and still; it is what you ultimately serve through your work - the direct connection between the business, what it purposefully provides, and its customers. An infinite mindset in business is essentially customer-centric, it’s your model, resources and processes that will shift in response to the environment. Technology, quite simply, is the great enabler.

As borders close and cities continue to shelter in place, the alarming and far-reaching impacts from this pandemic can ultimately be seen as a unifying event. If our goal is truly to stay in the game, then let go of what needs to go, embrace the brutal, protect and empower your people and restructure the new normal with laser-focus on the Cause and your customers – all of them. “Disruption is not going away anytime soon, that’s not going to change. How leaders respond to it, however, can.1

Pictured: HFS CEO Phil Fersht with The Infinite Game author Simon Sinek, circa 2017

References

1 The Infinite Game, Simon Sinek

2 How Great Leaders Deliver Bad News, Erika Anderson (Forbes)

Sorry Folks...
April 01, 2020 | Phil FershtReetika Fleming

Coronavirus cruelly exposes the fragility of the offshore outsourcing industry: Will clients trust all their eggs in one basket again when this is over?
March 22, 2020 | Phil FershtOllie O’Donoghue

The outsourcing industry is fast-becoming be the first vital piece of the global economy to come under the microscope as nations, businesses, and societies try to build a blueprint for what the post-coronavirus economy may look like.

India and Russia, in particular, are now being widely seen to have the slowest response to the coronavirus pandemic across all the major economies, and the situation is forecasted to worsen rapidly in the coming days and weeks - perhaps at the most alarming scale of all the current major global economies.

In addition, the current curfew (just announced) in India is going to have serious and immediate consequences for the smooth delivery of IT and business process work conducted for both overseas and local clients. Many IT support staff are poorly equipped to support work-at-home staff, not owning laptops, often living in unsuitable accommodation for work, and often with poor internet / wireless connectivity.

In short, like our governments and healthcare systems, the offshore outsourcing industry just wasn't prepared for this.  All the warnings were ignored and now some very sick chickens are coming home to roost...

We're running out of global locations to source service delivery, while work-at-home measures are proving woefully inadequate for offshore IT service provision

In short, the global industry is quickly screeching to a halt as a consequence of this pandemic. Most of the leading service providers have been instilling "safe distancing" in their centers, increasing onsite medical facilities and sanitary measures. However, with the death rate spiraling massively in Italy (almost 800 per day and rising) and US and UK expected to accelerate significantly because of their slow response to locking down public gatherings, workplaces and travel, the increased curfew measures just announced in India render these efforts from services firms pretty much moot.

In short, all global businesses are being significantly disrupted because of major restrictions mandating employees to work at home, and not having sufficient resources in India is going to exacerbate the situation for supporting critical IT delivery. Global enterprises may be forced to source local service providers to plug critical gaps, such as security monitoring, disaster recovery etc. which is going to put a strain on their budgets and my least to some major contract disputes (although many of the IT service contractors should be protected by Force Majeure provisions). In addition, service providers with strong delivery resources in locations such as Russia, which is resisting a lockdown, may take on additional business at this time, though most nations with strong IT delivery, such as Poland and Ukraine, are already in lockdown situations. The Philippines is also seemingly open for business, which is keeping the lights on for delivering a lot of voice-based services, but we expect them to shut down their centers soon with Duterte discussing emergency measures with the Philippines Congress on 23rd March.

Finally, the robustness of outsourcing will be tested to its maximum.  And - most likely - well beyond its maximum 

Discussing the issue with multiple executives in leading offshore IT Services firms paints a telling picture of how broad and painstakingly detailed business continuity plans are now. And, by inference, how woefully inadequately designed they were for a situation of this magnitude. Executives are telling us they have never seen such widespread implementations of business continuity in their multi-decade long careers. For their clients, while more measures from key offshore locations are understandable and, frankly should be applauded given their laissez-faire approach thus far, could still not come at a worse time. Outsourced service desks are already overwhelmed as they move to support huge volumes of end-users trying to access systems remotely and, in some instances, using technology stacks with which they have no training or familiarity. While it's not clear how the curfew will impact these engagements, one possible outcome is enterprises - out of desperation - start to develop and stand-up their own in-house capabilities to handle the glut in core IT work.

In terms of outsourced customer support, leading call center firms are showcasing their ability to shift a lot of work to their WAHA (Work at Home Agents) if the need arises, and most are still able to utilize their large Philippines centers because of Duterte's confusing attempts at a lockdown. However, we will only witness the true reliability of whether WAHA can actually deliver at a massive scale, when these workplaces are finally locked down... which is surely coming very soon.  In addition, after more than a decade of hype surrounding crowdsourcing, we will finally witness whether that can really do more than plug a few gaps for occasional developer needs.

The Bottom Line: Will enterprises still have an appetite to keep outsourcing when this is all over, or are those days fading fast?

Should this become widespread - we may emerge from this situation with a very different outsourcing landscape and a reluctance from enterprises to put all their eggs in one basket again - in-line with broader comments about de-globalizing supply chains. In short, the outsourcing industry may be the first vital piece of the global economy to come under the microscope as nations, businesses, and societies try to build a blueprint for what the post-coronavirus economy may look like.

Keeping enterprise clients' critical support services functioning is becoming the biggest challenge ever facing India's IT industry as it tackles this exacerbating health crisis. Provisioning laptops to essential IT staff, ensuring internet infrastructure is functioning under the strain while enforcing staff takes the necessary self-distancing and hygiene precautions are the critical functions of service provider management at this time. They have to operate on an immediate short-term footing to keep the lights on for enterprise clients, and with a medium-term focus on surviving the next few weeks with the right emergency provisions in place to keep staff healthy and a financial fallback to keep the wheels on the track as we go through these very painful motions. Whether governments will be bailing out outsourcing firms and laid off contract staff is very fuzzy right now, and the concern is whether there is an outsourcing industry to save after all this is over - even if there are some emergency financial relief measures in the interim.

In times like these you need to pivot your business model... now!
March 20, 2020 | Phil FershtTom Quigley

Quarantine... there is no choice
March 20, 2020 | Phil Fersht

Covid-19: Learn to live and work with it... Fast
March 15, 2020 | Phil Fersht

Firstly, we are not going to shut ourselves at home and lose our minds for the next few weeks.  This is the first time we are experiencing a truly global pandemic and we’re all learning what the hell to do.  However, rather than staring into a paralyzed abyss of a suspended reality of virtual conference calls, binge-watching the entire five seasons of the Wire (again) and watching your son’s best friend’s mom forbid them sharing Pokémon cards, take a deep breath.  This thing is not going to ruin our lives.  We just can’t let it.

Getting from abnormal to normal... quickly

The next 3-4 weeks we’ll figure out what’s going on.  Firstly, we just don’t have all the data points yet.  We don’t know how many people will get infected, and the speed that this will move – but it’s getting clearer everyday.  In 3-4 weeks, we’ll all have much better data on the longevity of this thing, and how to manage ourselves accordingly for our families and our jobs.

We must quickly find our steady-living-state where 'abnormal is normal'. Once we have a clearer picture, and we’re all taking sensible measures of self-distancing and avoiding risky gatherings, we can start planning our life again.  We’ll know many people with whom we can meet, the houses we can visit, have small gatherings with colleagues we all know are observing sensible routines, even clients we can visit with in non-crowded sanitized offices, meeting rooms for hire which are Covid-19 compliant – or even each other’s houses, if the relationship is that good.  We won’t be hopping on planes for a few weeks, but we can make the most of our social and professional networks around us.

Its time to get to work rapidly framing our new future, or we could quickly get left behind. Economies are changing, and most clients’ needs are radically changing with it.  Business models that may have worked just a couple of weeks ago may already be dead in the water.  Emerging technologies such as effective automation suites and the need to redesign processes will be more needed by companies more than ever.  The hyperscale cloud will be the platform where global business is done.  Turmoil forces change, and the current maelstrom will create rapid opportunities for some, and significant challenges for many caught in the headwinds.  Keeping right on top of this is critical, and having research, advice and validation to support quick decisions has never been so critical.

This may not be going away anytime soon, so we just have to learn how to live with this.  When reading what the experts in viruses are researching, it’s pretty clear that things thing will probably dissipate in warmer weather, but is highly likely to return again in the winter.  In fact, it may just become a really nasty strain of flu that comes back in phases – and many of us will become immune because we had a strain of it, while there will also be preventative drugs and (touch-wood) a “Covid-19 shot” we can take that will negate our catching this.

We’ll emerge into a more virtual, hygiene-conscious world, and I really hope we’ll all be wiser for the experience as the whole value equation of society changes for the better

I’d be very surprised if this comes and goes in several weeks and we never hear from it again.  It will take weeks to dissipate, there’ll be recurrences in various geographies, and there’ll be constant speculation about new strains emerging.  Yes, this is a huge pain in the backside.  But it’s here and will likely lurk around our lives and society for much longer than we expect.  However, it has raised awareness of core hygiene issues so many people always ignored, and it has made the issue of fake news and lack of real, credible data the most critical issue today. It is also forcing many countries to address their woefully underfunded health systems and may even create a new value system where critical issues like climate change become more important political issues than merely the growth of the stock market.

The Bottom-line: it’s time to face up to this new normality… and we hope a new societal value equation

We’ll be back on planes eventually and grandstanding the next awesome technology innovations at conferences.  But I hope we’ll all emerge a little more humble, human and socially conscious than we once were. 

However, what we can’t do is wallow in paranoia, fear and allow ourselves to get sucked into a vortex of negativity.  The stock market will most likely get hammered, we’ll tackle a difficult recession and many people will likely lose their jobs.  However, our global economy will recover and we’ll find prosperity again.  Let’s just hope it’s a world where we care more for our people, our health, our education, and our planet.