Finally, you’re free from the house-slavery! You escaped and are now back in conference land. While it barely feels like the last 2.5 years of your life just happened and you’re right back in the swing of physical interaction, there is something weird lurking around your inner consciousness:
1. Those Zoom and Teams calls have become a plague on your life
For chrissakes, I am back in the world of humans, people. Just f***ing leave me alone with the soul-crushing Zoom calls. I am at a REAL CONFERENCE talking to REAL PEOPLE. No, I do not have hours and hours to stare into that video-call abyss… I am back in the real world and that’s really IMPORTANT!
2. Everyone’s lacking stamina
What happened – we used to be such a youthful bunch, hanging around the hotel bar, sneaking off to a nightclub/cigar club etc. Now people can barely make it through three boring panels without having to take a sneaky nap. “Just going to say goodnight to the kids ” is the last thing you’re hearing from loads of people these days as they discretely slip into the elevator…
3. You just don’t hate people like you used to
Oh those people you avoided eye contact with are now chatting to you like long-lost friends… omg am I enjoying human contact? Did I just press the flesh with people?
4. Content takes a backseat as Covid may have actually killed PowerPoint (gasp)
Seriously, this could be one pandemic benefit we hadn’t noticed, but no one likes staring at cardboard PPT anymore – we actually like talking and engaging with each other. We’ve had enough watching people reading off scripts. Let’s cut loose and TALK!
5. Noone’s talking about bloody Covid
Yeah, the topic-du-jour is now taboo… it’s just mind-numbing to engage in yet another conversation about everyone getting sick… yet again.
6. The end of the world is nigh, so let’s just enjoy what we have left
After that apocalypse that was posing as some faded version of Davos, where nuclear war and hyper-stagflation were combining with the fact no-one’s doing squat with this net-zero stuff to destroy the last remnants of humanity… most of us are trying to focus on more positive dynamics in the world. Like the fact that recessions can breed more focused behaviour and investments from enterprises. Plus the fact that enterprises are starting to use technology more effectively and not simply buying up licenses of software with no idea how to deploy it. And let’s not forget the fact that our employers have to pretend to be nice to us and actually want us these days. And we can always talk about the Metaverse…
7. Oh… and we can always talk about the Metaverse
Yeah – from blockchain to VR goggles, that thing the Metaverse, where we’ve already been spun several definitions, is going to save us. Yes, folks, it will because everyone says so. Service providers will start reporting “metaverse revenues” soon… Gartner will surely come out with “Meta-automation” next and HFS will be handing out mandatory VR goggles at its September Super Summit… surely?
According to the 33rd President Harry S, Truman, “It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.”
In the case of the IT services and outsourcing industry, it’s the neighbors who are in trouble, and service providers are in pole position to take full advantage. There will be no services depression… and recessions only last a few quarters.
A recession may just be a blessing in disguise for IT and business services
It pains me to say this, but a recession could drive a healthier long-term outcome, not only for the IT and services industry but for economies in general. We’ve been living on printed money for 14 years, venture capitalists have bankrolled billions in business plans that make no sense (and will leave a trail of destruction), and many people can’t even motivate themselves to leave their houses to go to the office. Let’s be honest folks, the global economy is unsustainable on its current trajectory and we need a big reality check.
Moreover, the IT and business services industry is likely to benefit considerably from a global recession as cost-control takes center stage, in addition to the urgent need from enterprises to migrate securely to the cloud, automate processes and get cleaner, quicker access to data. Let’s examine why this is a likely scenario…
Slowing attrition will repair fractious client relationships and stem the bleeding
Staff turnover in IT and Business Process services deals has reached levels where many customers are screaming at their service providers to stem the bleeding, and we’re seeing some contentious situations developing, including some supplier switching. While some providers claim to have their attrition more “under control” than others, the problem is massive and widespread, and having (almost) entire project management teams take flight midway through complex cloud migrations has become all too common over the past few months. In short, if this situation persists, many clients will just bite the bullet and bring more IT back in-house.
Economic recessions have historically driven growth in services and outsourcing and this time should be even more aggressive as cost reduction becomes hugely significant
As attrition slows, there will be enough scale in India to respond to the needs of enterprises in dire need of reducing costs and accessing capabilities. While wages have increased in services (likely 10-15% on average), there is easily enough profit margin from all the TWILTCH providers to compensate and be able to offer clients 30%+ cost savings, on top of whatever innovations they provide. After the 2008 crash, we saw a significant spike in offshore IT services, in particular application development, which has pretty much carried us through to this 2022 recession. Since pandemic times, focus has shifted more to the frantic rush to the cloud and the focus on cost savings has been overshadowed by this great “hurry” to move enterprises into these critical virtual environments. However, we see a swing back to cost as the major impetus to outsource as industries like hi-tech, financial services, and healthcare have no choice but to improve their profitability to survive.
The Bottom-line: Cost reduction has traditionally been the conversation starter for outsourcing… and it’s back again in spades.
However, deep customer scrutiny on attrition and execution capability will dictate which providers come out on top. We know service providers can keep pushing the cost reduction capabilities, but they have to get ahead of these critical attrition issues fast – and they have that opportunity with the global economy tightening.
The turmoil in global supply chains and challenges of remote workers should work in favor of using smart outsourcing models, especially for enterprises that are struggling to retain their own key talent in areas such as cybersecurity, hybrid cloud migration, app dev etc. The leading outsourcers are those which have a depth of resources in critical areas (and at less expense) which make themselves such critical partners for their clients. I would add a huge caveat here that service providers have to get their own attrition under control, but a recession will slow down the great resignation and should stabilize this work environment.
Cost is king when recessions bite, and outsourcers that can deliver 30%+ cost savings via access to lower-cost labor at scale, combined with strong cloud delivery and automation, will be sitting pretty.
We’ve talked a lot about the shift to the full-on digital workplace, and now we’re in this “phygital” purgatory where we’re trying to find the right balance between the delights and convenience of digital with the real-world excitement and empathy of engaging with real people in real physical settings again.
Publicis Sapient is driving this new era of physical/digital experiences for major enterprises
This is driving a dire need for partners who can really address this balance right across our customer lifecycles. And when we look at the changing needs of enterprises to engage their customers with experiences that will create new business opportunities for them, create new data assets, or disrupt stagnating business models from the pre-Covid era, we are seeing some digital experience firms taking this head-on with innovative skillsets to help them.
One firm that is now past the $10bn mark and really making its name for enmeshing advertising with digital tech design and execution is Publicis Sapient, which represents the is the digital transformation hub of advertising giant Publicis Groupe. The company really is unique in this world of designing and executing blended digital/physical experiences, so let’s dig into this some more…
Enter the new CXO… the Chief Experience Officer
HFS Research Leader, Melissa O’Brien (pictured top right) got time with Publicis Sapient’s new Chief Experience Officer, Abby Godee (pictured top left), who joined recently from Deloitte Digital where she led the firm’s Customer Strategy, Design and Innovation team… Over to you, Melissa:
As we hurtle toward our new OneEcosystem reality, experience is king. As such, many companies are taking a call to put one person in charge of all things experience. Enter the CXO. I met my first CXO at a Genesys event in 2011 and was thrilled to hear about how these custodians of experience were cultivating experiences across enterprise stakeholders. But back then the world was a lot different and more …. well, physical. Now as we grapple with this new “phygital” reality, creating experiences that blend remote and bricks and mortar seamlessly, where people are eager for real connection yet weary of endless Zoom calls are so important. Now we need real leadership that understands human needs and wants and aims to develop experiences, digital and physical ones, on a very human level.
There’s no time like the present to create and invest in roles like this, now when we are more in need of genuine engagement and strong leadership, and we have found that diversity of all kinds is critical to success. Abby Godee (see profile), 3 months in at Publicis Sapient and bringing a tremendous background of experience design, shed some real light on what it means to be a CXO in 2022, and her vision for enabling experiences for Publicis Sapient’s employees, customers, and the greater community.
Melissa O’Brien, Research Leader, HFS: Abby, the CXO role is still relatively a new one but is rapidly maturing. What is a CXO? Can you tell us what it entails, and the vision Publicis Sapient has for you?
Abbye Godee, Chief Experience Officer, Publicis Sapient: It depends on the maturity of the organization, Melissa. Publicis Sapient has been in the experience business for many years, it gives me the opportunity for my role to be more expansive. At Sapient my role is about strengthening and scaling the impact of experience. There are traditional design capabilities like UX, product design and other core capabilities, but we also have strong design strategy and CX strategy. So it dovetails into transformation strategy on one end of the spectrum and on tech execution and platform execution on the other end. My role is to guide the impact experience can have. We are ensuring our approach to technology is not just best in class but informed by human needs. I see my role as being the custodian of the human in experiences. I don’t think we design experiences; we design the opportunity for people to have great experiences. It’s up to us to deeply understand our employees, our partners, the patients, the citizens and so forth, so we can design ways for them to have the right experiences. You have to embrace skills way beyond core design skills to enable that.
Melissa: Can you share some of your background with us, Abby, and what do you consider to be your greatest influence?
Abby: My educational background is in cultural anthropology and that has always informed my approach. I studied design and was art minor, and can design my share of products, but what’s always driven me is “why do people do what we do?” So there’s a lot of overlap with behavioral design. I worked at Smart Design where we were busyRead More
Self-insured or self-funded employers underwrite the medical risk of over 84 million of their employees and their families in the US. In 2020, self-insured enrollment by employers themselves surpassed the enrollment in health plans underwritten by health insurers, becoming the single largest market segment for healthcare. I caught up with our healthcare practice leader, Rohan Kulkarni, to learn more…
The 2020 inflection point at the start of the pandemic is a seismic event that passed off with little attention given our combined attention was on COVID-19, the economy, and yes, the 2020 US elections. Still, the growth of enrollment in self-insured employer plans holds tremendous promise of systemic change in US healthcare without the drama of national politics. It opens new opportunities for service providers, technology enablers, and consumers. It will unleash new business models, better health outcomes, and potentially address the runaway train of healthcare costs.
Health insured enrollment decline is offset by self-insured employer enrollment growth
If there’s one industry that has struggled with its identity over the past two decades, there’s no bigger culprit than Business Process Outsourcing (BPO). Ten years ago India’s IT body NASSCOM* voted among its BPO council leaders to rename itself “Business Process Management” (BPM) to amplify the nature of services being undertaken as “managed” by service providers as valued business partners, and not merely low-cost providers of outsourcing via cheap labor. However, most of the tech industry associates BPM with Business Process Management software and it’s arguable that the nomenclature only served to confuse enterprises further.
The value is in the Data. Processes provide the underlying execution to get at it
Data and processes are inextricably linked. The focus on value has shifted firmly to the strategic value of data and how designing processes can help you achieve the data outcomes that create the value. Enterprises must re-think what should be added, eliminated, and simplified across their process workflows to source this critical data. In short, enterprises want to buy continuous access to data outcomes and experience great service partnerships to achieve them. That is what BPO is all about why HFS has termed the phrase “Business Data Services”.
Despite the obvious brand identity challenge, BPM did represent the emerging era of BPO beyond cost savings (see 2010-2020 below), but after a decade, surely it’s time to revisit the very identity of business services to address the most critical need 600 of the G2000 enterprises really want… data:
Smart enterprises want to buy services that provide them with specific types of data. They care less about buying “effort”
When we reflect on the phases through which BPO has evolved we can clearly identify three different eras: (1) Globalization, (2) Digital Pontification, and (3) Business Data Services:
A brief history of BPO… from ‘people and process’ to ‘data outcomes and experiences’
We can date BPO back to Adam Smith’s Wealth of Nations in 1776 where he discussed the “gains from the trade that exists in dynamic, free markets. Companies and countries that overcame the barriers to trade would reap the rewards. Those that did not overcome the barriers would forever be beholden to those that did.” He also declared that “Wealth is created through productive labor, and that self-interest motivates people to put their resources to the best use”. Was he thinking about core/non-core? Had he planted the very kernel of partnerships to drive customer impact and competitive advantage?
However, we have to fast-forward to the 1940s when ADP started handling payroll for companies outside of their own operations, and the ’60s when EDS developed an integrated system to process health insurance claims. In the ’70s and ’80s, we saw the rise of call centers first in UK and US before work was shifted to Ireland and Canada in the 1990s because of cheaper salaries and lower employment benefits. We also saw American Express, British Airways, and GE open ‘captive’ units in India to take full advantage of moving non-core work out of the main enterprise to have the work executed at a much lower cost over the medium-long term. Basically, any processes that couldn’t be tied to an ERP rollout – and executed as such – became a target for outsourcing. The advent of the Internet and real-time access to data had made many news things possible to run a virtual business that could access talent and technology anywhere in the world.
Old school BPO (pre-2010). Once the ambitious Indian entrepreneurs saw how effectively these major globals could run operations out of India, upsprung hundreds of BPO delivery firms over the next decade, with India at the heart of functional data-centric work, the Philippines becoming the epicenter of voicework. From customer services, to finance and accounting, to HR, to procurement to insurance claims processing and payment processing… the half-trillion-dollar a year BPO business was born with offshore labor at the core, and getting the work shifted as expediently as possible the hook to the eager enterprise clients.
Digital ponitification (2010-2020). This was the era where we cogitated and really saw the art of the possible. We saw the value and potential of end-to-end processes bringing employees closer to their customers aligned by common goals (OneOffice), and the blurring of the boundaries between business and technology as business executives invested in the value of SaaS and automation, helped by advancements in low-code technologies. In short, these BPO providers were making the shift from order-takers to partners. However, there needed to be a catalyst to drive the rhetoric to reality – we knew what was possible, but there wasn’t much of a burning platform for change during these years of economic growth.
Business Data Services (2020++). The collision of disruptive forces has provided the catalyst to take BPO from its pontification decade to enacting these ideas into reality: the rush to operate in a global business environment, the pandemic-induced talent crunch upping the ante to invest in an automation backbone, and providing a more challenging and rewarding work environment. Throw in spiraling inflation, a military conflict in Europe, and a desperate need from enterprises to hurry into functioning virtual models and hyperconnected supply chain ecosystems, and enterprises need more help than ever from third-party outsourcers and their armies of millions of staff to keep their businesses moving forward.
The Bottom-line: Today the onus for enterprises to buy services is to get the data they need to be effective operationally and make decisions to be competitive.
When enterprise leaders look at their operations, they need data on their people and performance, their accounts and cash flow, their spend management, their customer engagement and satisfaction, their inventory levels, their sales effectiveness, their marketing impact etc. Do ambitious business leaders really care about the effort levels being made to get this data anymore? Whether it was 150 FTEs, 50 RPA licenses, some smart AI feedback loops, and a few chatbots? Of course not. What they care about is getting the data they need to stay in the game and be successful. Having the best possible partnerships to achieve that data on an ongoing journey provides them with the ecosystem they need to be competitive.
*HFS is partnering with NASSCOM to study these dynamics of business services in-depth to shape the future of this industry
All the excesses of the past 14 years are colliding into a maelstrom of converging dynamics – the likes of which we have never experienced in such a worrying combination. The US economy is contracting and we’ll soon learn about many major economies following suit. The post-pandemic growth bubble has burst and we must open our eyes to the new reality of our business environment. Anyone who claims they can clearly visualize what the world will look like in a year simply isn’t human. Or isn’t a robot either…
Moreover, 43% of today’s US workforce is Gen-Z and Millennial and only the older Millennials may have some recollection of what it’s like to work in a contracting economy. A good tranche of today’s w0rkforce simply has no idea what’s likely to hit them in the coming months as corporate belts tighten.
My only words of comfort are that recessions rarely last more than a few quarters and we will re-emerge from this – and (hopefully) learn from this.
So how best can we prepare ourselves in the meantime?
Think twice before hopping your job
We are entering a recession and we don’t know how deep/long it will last. 8% inflation doesn’t equate to a 50% payrise, so be wary that you could find yourself in a precarious position with your new employer. The current wage-hike situation is not sustainable, and businesses struggling in a recessionary economy will have no choice but to downside/shed costly staff, and “last-in/first-out” could well apply. We are already seeing many staff seeking to return to their former employers as they quickly discover the shiny new laptop and paycheck didn’t really equate to stability and happiness. There might be a talent shortage, but when businesses struggle, they’ll look to lower their headcounts in any case. Loyalty still means something and many of those who kept the faith will be glad they did so.
Be very careful – many early-stage start-ups will fail
The champagne days of the post-pandemic start-up bubble are over. Savvy start-ups are looking to conserve cash to ride this out and come out the other side. Most mature start-ups have delayed IPO plans. Sure, they all let you work from home, but will they keep you employed in-between Netflix binges? In my view, everyone should experience the start-up thing at some point in their career, but you gotta question the wisdom of doing it right now.
Leaders must get laser-focused in the short-medium term
Spare a thought for the business leaders having to keep the wheels on their businesses with this collision of disruptive forces threatening to derail them. Employees demanding to work from home; salary demands to retain key staff; mental health of staff; cost and scarcity of people with specific skills; fractured supply chains; unscalable automation models; massive challenges to mine and manage data; broken process flows; corporate politics and executing reral change in a remote environment; customers needing immediate help; the impact of war on the European mainland… I can go on and on, but leading people in this quagmire of disruption is a huge challenge. The key is to stay focused, develop short-medium plans to keep the wheels on. Long-term planning is almost impossible amidst such business and economic uncertainty. But you can see ahead a few months to tackle these issues head-on until the fog clears.
Adjust your lifestyle for inflation
This is a huge worry for economies and our living costs, and something not experienced for decades. Inflation is one of the world economic diseases: once it kicks in it’s almost impossible to keep a lid on it, especially with broken supply chains, rising energy costs, rising food costs etc. We have to refocus on how we manage our finances and look at making real changes to our lives to compensate, such as where we live, being astute with our energy consumption, cutting back on overpriced food (learn to cook?), and saving more money for the future as this could get worse – or investing our money in things that hold their value in line with economic fluctuations.
Bottom-line: We must recognize these are highly abnormal times and grind through them.
We’ve got pretty used to tackling uncertainty since March 2020, and one thing is clear today – the only certainty is that these times are uncertain. It’s a shame that we have to face up to a global recession just as we are enjoying seeing colleagues and clients again, but things need to cool off and economies need to return to normal. My hope is that we – as people and workers – become a little bit less selfish, and a little bit more appreciative of working in the technology industry which is essential for the very continuity of business. If everyone’s simply out for themselves, this isn’t going to end well for many people and many organizations. We need to be better collaborators, better empathizers, and better communicators if we are to pull through the next few months and come out the other side on top.
Anyone close to the coal-face of IT and business process services engagements knows it, but few are admitting it: staff attrition is out of control and threatening to destroy the whole fabric of outsourcing if service providers fail to get ahead of it.
And it’s abundantly clear what the biggest catalyst behind attrition is: remote working, especially in the services providers whose staff are predominantly based in India. Throw in a spike in demand for people with tech / business services experience and this is the impact:
Four reasons why we need services staff back in the office
1. Most developing staff struggle to learn to be innovative or creative stuck at home. Most staff will only focus on doing the basics of their job when they have no people around them to learn from, share ideas, test theories, etc. Let’s be honest, if people get their basic deliverables done by lunchtime, will they really make time to learn new things, call their colleagues to share ideas, etc when they have so many other distractions to absorb their time? If they are in an office, they will find other work-related things to do, they will talk to their teammates, ask questions of their managers and become far more productive. These staff will quickly develop themselves and warrant ongoing salary increases.
2. Many experienced staff can deliver their current jobs from home, but run the risk of their activities being automated away. There are very impressive platforms to manage call center work, basic IT support, accounting tasks, insurance claims, etc in remote environments, and we can be secure knowing these remote working platforms will keep the wheels on service delivery if/when future pandemics – or other crises – force us back into Zoom-land. However, if repeatable tasks are run at scale remotely, pressure to keep costs to a minimum will drive ambitious providers to invest in more sophisticated automation that can keep staff numbers low and combat wage inflation. Employees who choose to work remotely have to keep training themselves to keep improving their value, otherwise they may find their jobs gradually disappearing. Net-net, work tasks are being automated regardless of whether or not staff are present in the office, however, people who do predictable, rules-based roles remotely are more prone to automation than those who are office-based and developing their creative/innovative skills through team building and collaboration.
3. Most managers pushing for “hybrid” work environments were hybrid workers pre-pandemic in any case. How many people have told you they “intend to go into the office 1-2 days a week”? Yes, am sure many have and you may be intending the same for yourself. But these folks pre-2020 spent a good deal of their time on planes, visiting clients, attending conferences, visiting other global offices in any case. So they are really just looking to continue the hybrid office/remote lifestyle they were accustomed to in the past. The only difference now is there is less reason to travel, and travel costs are a lot higher than before. This will level out as the pandemic fades and the world returns to something similar to 2019. The main difference today is that we’ve become more efficient with our time and take much better advantage of video calls and a better-disciplined home/work life. We also focus a lot more on our mental health and a better work/life balance these days, which is a good thing for most of us who are becoming smarter and more creative, with a healthier appetite to develop our skills with less fear of change.
4. Work cultures are suffering in today’s remote-confusion, which has been a major factor driving up attrition rates. When your employment becomes servicing a brand from a corporate issue laptop with little interaction with your colleagues, you lose much of the emotional ties you may have had for your organization. So why not jump for another faceless employer offering more money, longer holidays, and a promise of “learning new things”? Service provider leaders need to accept that they will struggle to retain many remote-based employees for long, as they simply cannot create a culture that drives loyalty and long-term commitment. They have little choice but to get these folks back to the physical workplace, or plan to replace them with staff willing to work in-office.
The Bottom-line: Service providers with armies of developing people must bite the bullet and recreate dynamic work environments
The harsh reality is this remote-working culture simply is not working for most service providers. The numbers do not lie (and may actually be even more severe than reported). Service provider leaders worry that forcing staff back to the office will exacerbate their situation even further – and they may be right in the short-term. However, in the medium-long term, they cannot scale people and execution to satisfy the rampant client demand in today’s complex environment (as we discussed recently here). Smart service providers are biting the bullet and pushing hard to bring back their physical work cultures, as they already realize they are playing a dangerous zero-sum game trying to deliver critical services to huge global customers when a third of their people aren’t sticking around to keep the very fabric of their service delivery ticking along. They have to get the balance between adding freshers, expanding into Tier 2 and Tier 3 cities, and investing in keeping the talent they need to retain. People, ultimately, are not a commodity…
Even before the pandemic, business decision-makers were looking for new and unique ways to achieve growth in an increasingly connected, rapidly changing, unpredictable and complex business environment. The current global crisis intensifies the need for businesses to cooperate with each other more broadly and develop new business models to stay in the game.
Enterprise innovation is moving beyond the walls of an organization as the “OneEcosystem” emerges, where like-minded organizations with common objectives collaborate to find entirely new sources of value. We introduced the concept of the “OneEcosystem” earlier this year (read here), and now we are double-clicking on it:
“OneOffice” is the core of the “OneEcosystem” as people and culture even trump technology in today’s talent-starved environment
While “digital transformation” focuses on resolving (often) decades of technology debt, the OneOffice mindset (end-to-end organizational alignment across the front, middle, and back offices to drive a great stakeholder experience) allows enterprise leaders to manage the ballooning talent and process debt that continues to be overlooked by many. It is one thing to invest in the shiny new tech, but if you fail to bring your people together with shared goals and incentives, motivated by a common set of values and mission, you will struggle to survive in today’s business environment. The pendulum has swung firmly towards talent and culture over technology in most organizations that are hurrying into this new future.
The clearest barometer that shows the major changes facing Global 2000 enterprises over the next 12-18 months (see below) are the clear priorities to develop “Digitally Fluent” workforces to be best equipped to function effectively in the cloud.
Digital Fluency describes the ability to drive the seamless interplay between business and technology:
Ability to translate the understanding of digital tools to create new ways to serve customers’ needs and drive value;
Ability to consider how digital technology will impact every aspect, every functional area of the organization;
Ability to examine the organization’s business model, strategy, and operations in the context of digital technology.
In our obsession to deliver the best CX in pre-pandemic days, we ignored EX, and the current talent retention predicament which is creating unprecedented challenges to keeping many enterprises functioning. Hopefully, the “Great Resignation” has already become the burning platform in 2022 to resolve our talent equation as enterprise leaders. But we are still missing an important stakeholder – the PX (Partner Experience). No-one-can-be-everything-to-anyone and the OneEcosystem brings our partners to the forefront, along with customers and employees.
Enterprise innovation is also defined at the intersection of Customers, Employees, and Partners.
Supply chain (or supply network) innovations such as servitization of manufacturing or direct-to-consumer in CPG are increasingly aimed at getting closer to the customers to deliver unmatched CX.
Enterprise processes need to be designed around employees as well as enterprise partnerships with hyperscalers, SaaS vendors, IT and business service providers.
The ability for employees to not only react but anticipate Customer expectations is the key to driving product / service innovation
“Data-as-an-asset” is the OneEcosystem strategy and rapid technological innovation is making it a reality
The scalability, flexibility, and faster speed-to-market promised by a hybrid cloud and edge computing environment is allowing enterprises to get a handle on their large underlying data-sets that previously required huge investments in storage and servers. Machine Learning (ML) and more advanced Artificial Intelligence (AI) algorithms allow enterprises to make sense of their humongous data-sets that makes humans far more efficient, drive data-based decisions, and enable autonomous processes. The emergence of blockchains is starting to make the vision of OneEcosystem a reality by enabling distributed and trustworthy information. Blockchain’s “six-pack” makes it an attractive ecosystem technology – distributed shared data, automated smart contracts, hash-based cryptography, consensus-driven trust, permissioned and permissionless options, and immutable transactions. Ubiquitous connectivity from 5G with much faster speed and lower latency allows for the creation of virtual networks where large amounts of data can be shared at real-time speed. The exciting emergence of Web 3.0 will allow further allow decentralization of data.
Don’t forget culture and mindset
The pandemic has further exacerbated the need for ecosystems. The escalating global crisis requires us to cooperate with each other and develop new models that enable us to succeed as a society. Post the pandemic shock, the individualistic capitalist economy (where shareholder value supersedes stakeholder value) is also starting to get questioned. People want to partner with (or work for) organizations that have a purpose beyond profit, whether it’s aligned to philanthropic goals and/or highly invested in sustainability or diversity or other purposes.
Organizations must be designed to develop a sense of community
Organizations will become more networked (decentralized and flexible where managers coordinate both internal and external relationships), matrixed (where people with similar skills are pooled together, resulting in more than one manager), and flatter (eliminating many levels of middle management). Finding common ground and designing shared goals and incentives for all partners are critical success factors to establish the OneEcosystem.
The Chief Executive Officer should be the leader who drives the infinite mindset across the organization and its ecosystem
He/she must continuously define the purpose for the organization and relentlessly drive a fearless collaborative culture that values stakeholder value beyond shareholder value. 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. 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 playing. The goal for businesses is to have the will and resources to stay in the game, through thick and thin.
Having lived and worked through four recessions, we 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 lifetimes.” 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.
The CEO is the ultimate collaborator, forcing the change that is needed and balancing the desires of the various stakeholders (the board, key clients, key partners, the employees). His/her team to make this happen must be responsible for the full gamut of their customers, employees, and partners, working with a transformational wizard to bring together the process and technology with the real innovation ingredient: the people.
The Chief Transformation Officer must link front to back office and ensure processes run smoothly across functions to deliver the data/outcomes the organization needs
This should ideally be someone who understands the challenges of enterprise operations, and how to align them with the market facing/client impact areas of the firm. Forget the old GBS head / shared services head role, as this just has repeatedly failed to get out of the transactional back-office world and the “finance factory”. This person must oversee both technology and operations, understand the value of automation and AI, be able to design and implement change programs and work closely with the employee experience leader to eliminate the back office mindset from antiquated business functions into one that is aligned with the direction of the business.
The Chief Customer Experience Officer lives and breathes the world of the customers and obsesses with how to engage them as effectively as possible – right across the entire customer life-cycle
This ideally is someone who understands how to design customer interfaces, how to service customer needs leveraging both digital tools and physical support and ensuring the entire employee base is unified around (and incentivized on) driving customer impact. In addition, the CCXO must ensure the marketing mindset is to communicate with the customer, educate the customer, and to develop specific programs that have a real impact on driving customer engagement and business growth.
The Chief Employee Experience Officer is responsible for making the company a great, energizing place to work, where staff of all backgrounds, ages, experience levels cultures are energized by the values and desired outcomes of the firm
This individual must be the person who can manage the expectations of the board, the CEO, the shareholders to create a company culture and values that everyone believes in. Moreover, the CEXO must be intimately involved in the creation and execution of training programs across the firm to attract talent who want to work for a company that will develop them, as well as establishing a culture and values they can identify with. This should ideally be a strong leader with broad experience of the business and staff development, who knows what it takes to be successful, and who understands how to motivate people beyond pure compensation. The best leaders today are also great people managers – and the CEXO role must be at the core of the business leadership, not some ancillary executive painting lip service and not having any real impact.
Chief Partner Experience Officer must become a prominent leader in the OneEcosystem organization
As the OneEcosystem environment evolves, the need to collaborate with entities with common objectives, across the entire customer value chain, has never been so prominent. Net-net, your partners are no longer just your suppliers. Suppliers are essential partners to deliver your goods/services, but the OneEcosystem looks at the collective organizations more holistically, where they play critical roles in providing the customer experience across the entire customer lifecycle.
Bottom line: EcoSystem is not some sci-fi movie. It is happening right now.
Building a successful ecosystem strategy is challenging. Creating the elusive network effect is not easy. Then there are regulatory and compliance issues, fear of the loss of proprietary information, and concern over the ability of competitors to cooperate. However, these challenges are not insurmountable if there is a business case, shared goals, and common purpose. Consider the following examples:
Decentralized Trials and Research Alliance (DTRA) enables collaboration of stakeholders to accelerate the adoption of patient-focused, decentralized clinical trials and research within life sciences and healthcare and boasts of 60+ members across pharma, medtech healthcare, technology providers, and service providers.
trade is a joint venture owned by 12 European banks and IBM focused on trade finance.
Known Traveller Digital Identity (KTDI) is a World Economic Forum that brings together a global consortium of individuals, governments, authorities and the travel industry to enhance security in world travel.
Gaia-X is focused on creating the next generation of data infrastructure: an open, transparent and secure digital ecosystem, where data and services can be made available, collated and shared in an environment of trust.
Fnality has a core objective to create a digital coin that can be used to settle international money transfers instantly, cutting out intermediaries and lowering transaction costs. It now boasts 15 major institutions as shareholders.
OneEcosystem is unraveling right in front of our eyes if we are willing to open them and see the change.Don’t be an ostrich with your head in the sand. Start collaborating. Get going. EX+CX+PX = Innovation…
