Don't dog nod your way to unemployment. Read this and get on your soap box

August 08, 2018 | Phil Fersht

After yesterday's slightly risqué rant, I received an interesting comment from Nigel Barron (pictured) this morning, an avid follower of HFS over the years, who spent much of his career with CSC and subsequently DXC before recently going independent (and clearly off the leash and wagging his tail!):

"Since 2008 every job has become a hustle and analysts are no different. Authenticity is not a winning attribute. To survive, being the nodding dog is the difference between having a paycheck and not having a paycheck and when they’ve got mortgages to pay and kids to put through college truthful, honest and clear research might not be the best bet. That’s not to say its the right thing to do, just an observation. I speak from experience also."

I refused to become a nodding dog. It's simple if you keep at it...

Nigel Barron:  Nodding Dog Sympathizer

Well, Nigel, I also speak from experience here. I used to work for Deloitte Consulting back in the day, and my lead Partner demanded I take my blog offline (having initially been fine with me continuing with it, during the interview process).  The firm literally could not tolerate one of its consultants having freedom of thought and bypassing its painful thought police (aka "risk") process.  I eventually left the firm after that... I just couldn't stomach an employer putting the muzzle on thought leadership.  Especially mine!

A couple of years later, I was working for AMR Research (now part of Gartner) and a huge debate ensued among management whether "Phil should keep his blog up".  Many of the clients insisted one of the reasons they stuck with the firm was because of my blog, so money eventually spoke - they felt they got some real views of the industry and wanted to call me to discuss as part of their research contract. In fact, our Chief Research Officer, Bruce Richardson,

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Posted in: Global Workforce and Talent

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Rant Warning: Nodding dogs and vendor marketing – this is all our industry deserves

August 06, 2018 | Phil FershtOllie O’Donoghue

As an analyst, you spend your time with a lot of other analysts - for better or for worse. And, recently, worse is taking up more than its fair share. It just seems like, as an industry, we've lost our collective teeth, our ability to question, challenge and find out the truth.  We'd even go as far as questioning whether we've lost out soul.  

When HFS launched ourselves  onto the market over eight years ago, the cornerstone of the firm was a blog that was revered as one place you could get the real truth about the industry, where people were safe to make a (gasp) controversial comment where we could all call a “spade a spade”.  One industry leader (from IBM of all places) even went as far as describing this blog as the “Wall St Journal editorial section of the industry”.  More recently, we've been called “Blue Collar” research, which I guess we’ll take as a compliment.  Anything is better than being seen as fully paid and played by the dirty vendor dollar... which is sadly how so many recent pieces of "research" have been described.

Today, most analysts and advisors use hype as their comfort blanket – even if they don’t understand it, they just circulate it because it makes them feel relevant

Sadly, at HFS, we doubt we’d have succeeded with our honesty and bluntness if we launched today.  The industry is too controlled by vendor marketeers who shower their lovely budgets at analysts and advisors alike to keep them all in line… where most just regurgitate the same hype as each other because they just don’t care anymore.  Most barely understand the hype, but

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Posted in: None

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Passionate about #AI? Then look no further...

August 05, 2018 | Phil Fersht

Posted in: Intelligent Automation

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Tinker, experiment, explore, then disrupt: The Hyper-Connected Enterprise will be driven by Intelligent Automation.

August 02, 2018 | Phil FershtSaurabh Gupta

As business operations have advanced through several inflections points over the last three decades, the core component at the heart of these changes has been the emergence of digital interactivity driving the hyper-connected global business – only made possible by intelligent automation.

Digital connectivity has transformed both front and back offices over the last three decades. The key now is to integrate and automate these activities to place the customer at the core of business operations

As you can see in our (below) "voyage to hyper-connected, interactive enterprise" we have leveraged digital connectivity to drive productivity and innovation across both the back and front offices of our organizations. Offshoring and outsourcing became a huge bi-product of digital connectivity to run business processes and apps remotely to save Western businesses huge costs through global labor and centralization of resources.

However, until recently, most of these activities have been restricted to improving efficiencies and reducing costs.  At the front end of the business, the advent of ecommerce hit its stride in the late '90s, where customers could communicate digitally with organizations to make purchases, make genuine inquiries and get connected with others with like-minded business interests. Where automation comes into play is being able to pull together these disparate front and back office activities into one single office (aka the HFS Digital OneOffice), where customer needs are placed front and center across all business processes, where staff performance can be measured on delivering customer driven outcomes, where the entire business operations are in-tune with their customer needs... and superior to those of their competitors to stay ahead of the game.  

The urgency to be Hyper-Connected dictates why we have to drive Automation with real Intelligence

“Basic digital” capabilities (where most companies are today) make it possible for business operations to respond to their customers as those needs happen.  Emerging capabilities in data analytics tools, machine learning and cognitive computing are making it possible to anticipate changing customer needs before they happen, where shifts in global supply chains, market and competitive dynamics, economic or political changes, compliance or regularity issues, all combine to change customer behavior. 

The more intelligent your business operations, the more you can stay ahead of the game, but none of this is possible if your processes are not automated effectively to create this knowledge for your business operators:

Click to Enlarge

Once the digital baseline is created, enterprises need to create more intelligent bots to perform more sophisticated tasks than repetitive data and process loops. This means having unattended and attended interactions with data sources both inside and outside of the enterprise.  

From Experimenting to Disrupting:  Cracking the Intelligent Automation code in Four Stages

The industry is struggling to solve challenges around the process, change, talent, training, infrastructure, security, and governance. There is deafening noise and hype around Intelligent Automation, but there are very few enterprises that have cracked the code of driving transformative impact by leveraging Intelligent Automation at an industrial scale. Why?

Our research and ongoing conversations over the last six years (remember our ‘Greetings from Robotistan’ in 2012?) in the automation space has allowed us to interact, help, and follow automation initiatives at several global 2000 enterprises. And we leveraged this extensive experience to develop HFS’ Intelligent Automation Maturity Model (see exhibit below).  Our experience suggests that the organizational maturity and the resultant impact from intelligent automation typically follow four stages of evolution:

  1. The experimenter – trying out new ideas, methods, or activities. The intelligent automation journey often starts with some maverick individuals in some corner of the organization playing with different technologies. There is no real strategy at this stage, just passion. The objective is simply driven by automating a particular task that is innately boring or transactional but still time-consuming and inefficient. Different experimenters start at different places across the Trifecta. It is not necessary to start with basic automation and then advance to AI-based automation, but experimenter’s automation solutions are typically piecemeal.  
  2. The tinkerer – trying to improve something in a casual or desultory way, often to no useful effect. The early successes from experimentation often result in the most frustrating stages of the intelligent automation maturity model. The tinkerers start to copy and paste what worked in experimentation for everything else. But if all you have is a hammer, everything looks like a nail. Failures are widespread at this stage, but tinkerers who don’t give up are the ones who eventually succeed to move to the next step. This is the stage where enterprises are trying to find some method to the madness but often with limited success. The tinkering stage is exemplified by rhetoric winning over reality!
  3. The explorer – charting out new territories. As reality dawns after extensive tinkering, enterprises start to realize the different pieces of the puzzle. They start investing in organizational management (often through COEs and a hub-spoke model), recognize that they need to invest in multiple technologies across the trifecta to solve problems and start tackling end-to-end processes versus individual tasks.
  4. The disruptor – radically changing the status quo. Intelligent Automation transcends from a program and becomes an enterprise-wide movement at this stage. Disruptors can bring to bear integrated solutions that combine the power of automation, analytics, and AI. Several automations at this stage are scaled up, and there is a high degree of confidence in scaling up others. It is only at this disruptor level when the promise of intelligent automation starts to become a reality.

Click to Enlarge

The Bottom-Line:  The more hyper-connected we get, the more this is about people, purpose, and planning - and less about whichever shiny new gadget is the flavor of the month

While the industry is busily adding fancy new words to their résumés and job titles, we have to remember that our technological journey is gradual.  Change comes slowly and incrementally and you can't just rip off the proverbial BandAid, hire a bunch of Millennials and Gen-Z kids... and it's mission accomplished. As the Hyper-Connected journey illustrates, it took 30 years to get where we are today - and that's because both front and back offices needed to go through major, secular changes to become efficient and digitized.

But the next phase is not a trade-secret - this "Future of Work" is merely a phased transformation of the present.  Dumb robots evolving into intelligent assistants... ineffective supply chains plagued with manual breakpoints becoming fluid, autonomous and intelligent - with the ability to interact with other supply chains.  Quantum computing and blockchain emerging to challenge the very logic of TCP/IP and computing architectures. But to get there, we need to be experimenting, tinkering, exploring and disrupting with the kit that available today to get our organizations in a place where all these far-flung innovations can have some real possibilities.  

So let's have less talk about the future of work and focus on the present... we know where we are and what we need to do.  So let's do it!

Posted in: Digital OneOffice

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The Cambridge University FORA Summit recap...

July 31, 2018 | Phil Fersht

Posted in: Outsourcing EventsRobotic Process Automation

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It's time to give these poor Millennials a break

July 28, 2018 | Phil Fersht

What is wrong with us old timers these days?  We go to conferences where we make sure no one under age of 40 comes near the place, and we spend half our time bemoaning the lack of a "digital mindset" from our colleagues because we all have these world-class digital mindsets ourselves. And can someone please explain what the f*** a digital mindset actually is?  And can someone explain why everyone blathers on about their company's inability to change with the times, but never admit they don't really want to change anything either...

But let's be honest, we treat our beloved Millennials like some sort of obscure species whose members only communicate digitally with each other, like to wear these really big expensive headphones, drink far less than we did at their age, and no longer go to bad discos to find romance. Not to mention an unhealthy love of avocado toast that helps their quest for a purpose in life because of failed parenting strategies leaving them permanently depressed because of low self-esteem.  

In addition, we're now accusing them of lacking ambition and only caring about their next vacation. But how can we blame these poor folks from feeling like we stitched up the world before they came along... as most cannot come close to affording the cheapest shoebox in any half respectable neighborhood, the poor folks in the UK are going to get cut off from working in Europe soon, and the lost Millennial souls in the USA had to choose between two septuagenarians as their president, who hardly represent the emerging mindset of the digital youth (even though you do have to be impressed with the President's twitter skills...).

So imagine the refreshing impact when HfS analyst Ollie O'Donoghue, a proud representative of the Millennial race when he's not trying to annoy Amazon, piped up on LinkedIn with the following staunch defense of his species:

Click here to Enlarge

Click here to join Ollie's LinkedIn discussion

The Bottom-Line:  Love them or loathe them, Millennials are the Future

So to quote Ollie directly: "Entitlement goes both ways. It's just previous generations got what they were entitled to. They worked hard, bought a house, paid a mortgage, got relative financial and social security. The reason so many Millennials are checking out of the economy is because they work hard and get, well, nothing. Home ownership is the stuff of legend, even job security is a thing from a bygone era - and something a lot of 'future of work' commentators are making worse."  So let's use this opportunity to bring Millennials into our inane conversations about a future of work with less need for people, about our businesses being persistently disrupted by imaginary digital competitors, about blockchain's emergence to destroy whatever we have left... because if we don't, we'll have a big hole left in our corporate legacies that we'll struggle to fill, as all the talent will be checked out on the beach dreaming of their next avocado latte.

Posted in: HR Strategy

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Clear communication to leadership has never been more critical in today's business environment

July 24, 2018 | Phil Fersht

Posted in: None

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Is Syntel worth $3.4bn? And does this bring Atos to the adult’s table?

July 23, 2018 | Phil FershtJamie SnowdonOllie O’Donoghue

Syntel brings to Atos a larger platform into the North American market, stronger IT automation capabilities to augment its data management and analytics heritage and, above all, access to quality long-term engagements. And not to mention a mighty Indian offshore IT depth that fills a lot of delivery holes for the firm.  And don't forget, this firm tends to know what it's doing when it comes to acquisitions and making them work:

However, even with all this combined, $3.4bn seems like a hefty price to pay, albeit a price that will likely set both industry valuations, and other acquirable mid-tier service provider hearts’ racing. Not only that, competitors with banking pedigree, such as Capgemini, Cognizant, DXC and IBM will not welcome a stronger Atos being welcomed to the dance at a time when competition is already reaching a cut-throat breaking point.

We haven’t seen any meaty M&A in IT Services for over two years... So why now?

We’ve been predicting an increase in merger and acquisition activity across the business process and IT outsourcing space for some time, but these IT services monster marriages are like London buses – you wait ages for yours to arrive, and suddenly several appear right behind it.  

To this end, the only real action of late has come in the call center realm with the feasting of Teleperformance on Intelenet and Concentrix on Convergys.  Not since the dinosaur mating noises of HPE and CSC in 2016, or Capgemini’s nuptials with IGATE in 2015, have we had anything much to chew on in IT services bar lots of digital agencies being round up for slaughter.

Let’s be realistic, there really aren’t too many “heritage” mid-sized offshore-centric IT services providers left in existence which can get you an immediate seat at the adults’ services table, which explains Syntel’s fantastically lucrative exit, and the disappointment of several other suitors which had been eying picking the firm up on the cheap for several years.  Moreover, providers like Atos are feeling the pressure like never before to force their way forward in terms of growth and breadth of offerings and believe the pressure point has been reached and it’s time to act.

A drought in traditional client wins for some firms is literally pushing them to acquire as a way to drive market share.   The IT services industry is no stranger to firms buying out rivals to gain short-term respite from the market in the face of poor market performance – buying time to regroup/transformation, an injection of new clients and scale.

Atos’ recent announcement of its intentions to acquire Syntel has already set tongues wagging in the industry, but before we get caught up in the inescapable hype, let's dig into the facts!

At $3.4bn this could be the start of the M&A silly season where “Everyone’s up for Sale”

It’s hard not to get lost in the number of zeroes in this deal and, frankly, the price tag has left us all scratching our heads a little. At a recent press conference, an investment analyst asked whether Syntel was happy with the deal…why wouldn’t they be? And it’s this sort of seller's market that’s getting a lot of the mid-tier firm’s excited about a potential takeover from a major firm in the space.  “Everyone’s up for sale” proclaimed the CEO of the of the leading service providers recently in a private conversation.  

With some of the world’s biggest IT services firms looking to shore up revenues, capabilities, and access to clients, a lot of firm’s are adjusting pricing expectations, setting the bar far higher than they would have a few years.

And the market is undeniably tough right now, and many firms are struggling to find their way. Recently, brighter horizons have been on the cards for some firms as the HFS Digital tipping point theory started to yield results, with enterprises investing in technology to drive their transformation ambitions. But the same theory argued that many firms would struggle to pivot their business models and offerings to meet the changing demands of the market. In this winner takes all market, it stands to reason that firms will shore up their capabilities through acquisition, at the same time that smaller firms that struggle to gain market traction become more attracted to the idea of a buyout.

Is chasing a “$250m a year synergy target” realistic, or just merger charm?

But, according to Atos, the hefty price tag is supported by some strong arithmetic. The firm stands to gain access to a lot in the deal, including strong long-term banking and financial services engagements and a decent launchpad into North America – a geography the firm has struggled to position itself in from its European stronghold – in spite of its 2014 acquisition from Xerox. But let’s start with what the firm has championed as the main selling point to investors, a $250m boost to annual revenues by 2021 from the synergy of the two firms.

On the face of it, this seems a challenging target to hit. Revenues in Europe have been hit just as hard as everywhere else in the IT Services space, more so in Atos’ strongest line – infrastructure and enterprise cloud. And Syntel’s revenue growth has disappointed financial analysts for years – even if its operating margin is aspirational to many. If the firm can export Syntel’s processes and embed them across Atos, it may stand to drive greater operating margins. Moreover, if it can leverage Atos’ Syntbots RPA technology in new and existing engagements, it could drive out some serious costs. But an increase of $250m a year is perhaps a little more ambitious than the numbers can accommodate. Even with Atos assuring investors that if its current bookings stay put, it should be more than capable of reaching its objectives.

The real motivation behind the price tag is likely to be tapping into Syntel’s existing client base and cross-selling between the two firms. In the current market, where new deals are few and far between, the adage of ‘if you can’t beat them, join them’ has never been truer. For the princely sum of a few billion dollars, Atos has gained access to some major financial institutions and enterprises that Syntel has managed to keep on its books for years (over 30 years in some cases). And many of these are big spenders, Syntel is always pleased to mentions that it has grown a handful of its clients to build out up to half of its overall revenues.

However, the challenge for Atos is to keep these clients happy. We’ve chewed over the pitfalls of some of the major M&A activities in recent research. And in many cases, these clients may be even tougher to please. Syntel’s ‘customer for life’ no questions asked approach has built a fervent loyalty among its client base – while its too early to say now, the sentiment from this client base may prove to be less than enamored with the recent announcement than either Syntel or Atos are willing to admit. 

It is also worth pointing out that the oft-stated criticism of Syntel has been its overexposure to a small handful of large clients, should one get acquired or kick them out.  However, with a massive new owner in Atos, surely there is now some air cover from this long-discussed risk.

A nice deal for Syntel's shareholders, but what’s in it for the clients?

As usual, the bit that’s often missed from the narrative when a big deal like this rears its head is ‘what’s in it for clients of both firms?’ At an early stage like this, we can only be speculative, but there are a few things that enterprise clients of both firms should be cautious and excited about. First of all, for Atos clients, there is the opportunity to get your hands on some real RPA capabilities. Atos has struggled over the past few years to find its place in the market, but Syntel has positioned itself nicely with Syntbots – an intelligent automation platform that while lacking some of the bells and whistles of the others has proven itself time and time again to be a solid cost-reducer. Existing financial services clients can also look forward to more verticalized expertise, and a stronger proof-point around delivery as Syntel brings in its considerable experience to engagements. Finally, Atos’ multinational clients can consider leveraging some of Syntel’s North American and Indian delivery capabilities to expand engagements or move work closer to home or further offshore dependent on the circumstances.

For Syntel clients, it’s a different kettle of fish. Foremost on their mind must be the protection of the partnership culture they have become accustomed to. That’s not to say Atos is miles from the culture of Syntel, but long-term partnerships have been the building block of the mid-tier firm since its inception and may be a tough hurdle to overcome after the firm’s combine. But they can expect some of the benefits that the firm will bring, such as strong credentials in the enterprise cloud space, and the scalable heft that a larger provider can offer over mid-tier players.

Bottom Line: Market conditions and appetite for acquisition mean we’re sure to see more activity like this in the future

Ultimately, there’s a lot of areas where the two firms can create synergy, and cross-sell offerings into each others client bases. But there’s also a huge amount of risk that this engagement is akin to the appetite of the day, which is to stop trying to outbid rivals for engagements and simply buy up rivals. In some of these engagements, clients may come out on top, with access to more experienced and capable delivery partners – but equally, they could lose out on the cultural alignment, and agility that they looked for in a smaller partner.

However, Atos management has a historically strong track record for acquiring and integrating business in both the long and medium term. The firms have a long history of large acquisitions across borders and huge integration challenges, starting with Origin in 2000. Plus we see relatively successful integrations of Siemens Business Services back in 2010, Bull and Xerox IT Services in 2014. Indeed you can trace it’s acquiring prowess back to decent purchases of SchlumbergerSema in 2004 and UK and Dutch KPMG Consulting business in 2002. 

The issue as ever for successful acquisition is making the most of synergy – so that the whole organization is greater than the sum of its parts. This is always a hard trick to bring off measured financially, by the value it can deliver clients and increasingly important, culturally. If the financial boost is only $250m on a $3.4B investment let’s hope gains in the last two are worth it.

What does this say about future mid-tier IT services acquisitions?

The fact remains that in spite of the turbulent market we’re now in, Syntel has attracted a big price tag. This can only mean many of the larger firms are on the acquisition trail. Which means this is unlikely to be the only major M&A activity we’ll be seeing in the coming months. Possible mid-tier targets we can expect to come under the spotlight of some of the big players (if they’re not already) include:

Hexaware – possible price tag $1.50 / $1.25bn: Hexaware is gaining ground quickly and building a narrative that seems to resonate well with clients – however the firm remains small enough for some of the bigger players to see it as a valuable route to inorganic growth.   Has good hybrid BPO and IT capabilities, a strong specialization in HR Tech and promising potential in RPA services. 

Mindtree - possible price tag $1.75 / $2.25bn:  Mindtree has had a scratchy few quarters at the start of 2017, but since then have posted rapidly improving revenue growth – over 20% in Q2 2018. The firm’s strong digital offerings make the firm a good prospect for bigger firms looking to shore up capabilities as well as build out market share.  Has managed to make a strong shift from BI and analytics to adding digital prowess and has a capable suite of offerings and loyal clients to boot.

Mphasis - possible price tag $2.25 / $2.75bn: Has made a strong market impact since freeing itself from a decade-long HP hell... plus CEO Nitin Rakesh is credited a lot for his fine work at Syntel, getting the place in better shape financially.  Strong financial services presences could make this firm the next IGATE/Syntel-esque pick up.  

Virtusa Corporation - possible price tag $2.00 / $2.50bn: Virtusa’s strong consulting background – gained from the acquisition of Polaris – puts this firm as a valid target for large providers looking to build up talent and onshore delivery capabilities in North America.  Very strong offshore business built from the ground up by the irrepressible Kris Canakeratne, with deep presence in insurance IT.

Posted in: IT Outsourcing / IT Services

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Who needs a digital strategy to reinvent themselves...

July 23, 2018 | Phil Fersht

Posted in: None

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HfS slam dunks with Stevie!

July 16, 2018 | Phil Fersht

We've run twenty leadership summits at HfS over the last few years and am sure most of you who've been to some of them love the candid conversation, the zero-selling ethos and absence of plastic booths and cardboard PowerPoint presentations.  However, what most people haven't realised is we've never dedicated staff to running these fulltime, and all we really had to do was invite our network, put together great people to speak and provoke some terrific debates.

However, we really want to start having a series of intimate regular roundtables across New York City and London, where we can drill into the hot topics du jour that we all love so much, such as Intelligent Automation, Blockchain, the Digital OneOffice etc.  But to do that, there are precious few characters in the world who have the tenacity, network and charm to make these happen... and we managed to snag one of the very best, Steve Dunkerley (see bio), to run these for us.  

I have known Steve for 15 years and have always enjoyed some of his terrific CXO roundtables, where he has this uncanny knack to bring some serious hitters together in one room.  So when we had the opportunity to bring in the best guy in the biz to lead our summits and roundtables, we had to convince him join the HfS family and not rekindle his karate career...

Steve - it's just terrific to be working with you at HfS after all these years!  Can you share a little about your background and why you have chosen C-Level events, research and strategy as your career path?

Hi Phil, it is a pleasure to join the HfS family. 

In terms of my background, my life really began in 1999.  This was the year I met my wife to be, got married and started my B2B media career having earned a degree in communication studies a while before that. 

From 1999 until the end of May this year, my employer was the company that is now known as Compelo.  I was initially responsible for industry specific publications in the textile, water, food

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Posted in: Digital OneOffice

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Why AA's investment windfall locks up the RPA market for the Big Three

July 02, 2018 | Phil Fersht

 

We've now seen three pretty small software firms demonstrate 20x valuations... Blue Prism went public on the London Stock Excheng, UiPath received $150m in series B funding and Automation Anywhere has now announced $250 in series A funding.  So it's pretty clear there are three established leaders at the front of the RPA market and investors are convinced that RPA is the start of something much bigger for enterprises. Not only that, it's becoming pretty clear that the barriers to entry are high, and we're unlikely to see new players bulldoze their way into this space in the foreseeable future. So why is this?

RPA is kick-starting the true digital journey for many enterprises by helping create a digital process baseline

People love to espouse that RPA has quickly become commodotized and we'll barely be talking about it in another year, when we all suddenly become experts so good at building algorithms, we can actually train systems to build their own algorithms on the fly. Suddenly, RPA will be some pervasive capability that is so devoid of value, it will disappear somewhere into insignificance. Utter garbage: anyone who's got deep into RPA and tried to incorporate it into processes knows immediately that this type of thinking is naive, and likely coming from someone with no experience of the real world outside of their ivory tower. Firstly, RPA and RDA are not apps you sell to IT people to "rollout", they are low-code solutions, designed for business operators to replicate, fix and digitize their manual processes, or scrape "static" data from screens to integrate into a dynamic workflows. And secondly, "low-code" does not mean "no code".  Talk to anyone with RPA battle-scars and they will tell you about the amount of code customization that was needed in certain areas. 

Digital today is all about an enterprise being able to respond to the needs of its clients as an when those needs happen. Today's RPA and RDA provides integral building blocks that digitizes processes to enable businesses to process the data they need to have business operations support customer needs in real-time. Sure, they may simply be performing dumb tasks, such as running process workflows in recording loops, or scraping data from screens into automated scripts.

The commodization of RPA breeds familiarity - and familiarity breeds innovation.  The market is already established

Commoditization is good for bots, but remember that most enterprise folks have had to train to use the products and we already have very loyal followings for AA, Blue Prism and UiPath.  The tech needs to be simple, low-code and easy to install, scalable and manageable.  Noone wants highly customized solutions these days, so please do not confuse the devaluation of commoditization with the value of familiarization.  You think Workday and Salesforce are not "commodity" apps?  They are successful because they have crushed their markets through effective channel relationships, the creation of cult-like followings and years of building familiarity with their customers.  I've even heard of HR people threatening to quit their jobs if their firms refused to invest in Workday - it's an important part of their entire career path.  You think you can't find quality alternatives to Saleforce, such as ZoHo and Hubspot that are lower cost and even better in some areas, or likewise for Workday with SAP Successfactors and Ultimate? I predict we are already settling on AA, Blue Prism and UiPath as the RPA platforms of choice, as so many business users have already been through the pain barrier of training to understand the whole RPA paradigm.  We'll actually see more "micro-solution" firms, such as Thoughtonomy, which is building a service layer over Blue Prim and reselling that solution with positive results.  Another example is Antworks, which is impressing a lot of people with its data ingestion capabilities and integration with automation needs.

AA, Blue Prism and UiPath already have 700-1000 customers each (depending on what you believe) and have energized many new careers for many people - it can take a couple of years for non-IT people to really learn these products (and many experiment with at least two of them).  This market is only going to get stronger and more robust over the next three years - and beyond that, it's really all science fiction as we observe the speed of development and macro changes to our business environments. Like with all other technology-driven markets where the key stakeholder is the business executive, once they are familiar with a platform, getting them to retrain on something else is a massive effort.  Remember WorkFusion's attempts to offer "free RPA"?  People don't want something just because it's cheap - or even free, they want some skin in the game. 

The Bottom-line: Today's "Dumb RPA" provides a baseline for the development of intelligent bots in the future

You have to start somewhere, and for enterprises fixing their manual process messes, these three tools have provided the answer, with 70% of Global 2000 clients now expressing satisfaction, according to our new 2018 State of Operations study results.  However, if these firms rest on their laurels, this market dominance will be short lived.  Once the digital baseline is created, enterprises need to create more intelligent bots to perform more sophisticated tasks than repetitive data and process loops. Basic digital is about responding to clients as those needs occur, while true OneOffice is where enterprises need to anticipate customer needs before they happen (see below).  This means having unattended and attended interactions with data sources both inside and outside of the enterprise, such as macroeconomic data, compliance issues, competitive intel, geopolitcal issues, supply chain issues etc.  

Click to Enlarge

So we have some clarity for now with three dominant solutions, and enterprises can invest more in learning these tools with more certainty and peace of mind. Some stability, after so much change in the world of business operations, is more than welcome.  Now let's hope these firms will wisely invest in taking their products into the world of intelligent bots, and not splurge all the newfound capital on yet more sales and marketing. 

Posted in: Robotic Process AutomationIntelligent Automation

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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...

Posted in: Contact Center and Omni-ChannelDigital OneOffice

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The definitive RPA product benchmarks: The overall picture across 359 superusers

June 24, 2018 | Phil Fersht

In case you've been asleep for the last month, we recently announced the industry's most comprehensive analysis (by far) of RPA product functionality, covering AntWorks, Automation Anywhere, BluePrism, Kofax, Kryon, NICE, Pega, Thoughtonomy, UiPath, and Workfusion.

Premium HfS subscribers can access the HfS Benchmarking Report: Detailed Assessment of the 10 Leading RPA Products here

We interviewed 359 superusers of RPA products (172 enterprises, 87 RPA advisors and 100 service provider RPA practitioners) across 40+ customer experience dimensions across the following 6 key dimensions: 

  1. Features and functionality
  2. Integration and support
  3. Security and compliance
  4. Flexibility and scalability
  5. Embedding intelligence
  6. Achieving business outcomes

Here is how the overall satisfaction for RPA customer experience came out looking across the products

Click to Enlarge

 Key Highlights

  • RPA’s core functionality works but deployments are not as easy as promised.
  • RPA products offer adequate client support and training but IT skills are required. Some RPA products have made significantly more investments than others around client support.
  • Most RPA products performed well on security and compliance related assessment.
  • RPA products have shown satisfactory flexibility but clients are still confused about pricing models.
  • RPA products are not as intelligent as they claim to be (at least not yet!).
  • RPA satisfaction is middling. Clients have largely realized cost savings, but speed-to-market has not met expectations.

Take time to delve into the realities of RPA and some of the findings may just surprise you:

Premium HfS subscribers can access the HfS Benchmarking Report: Detailed Assessment of the 10 Leading RPA Products here

Posted in: Robotic Process AutomationIntelligent Automation

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You just can't lose... with Chris Boos. Time for an AI reality check

June 22, 2018 | Phil Fersht

There aren't too many people you can listen to today where you feel all those sticky layers of hype just fall away from your brain, as this guy actually knows what he's talking about and (as we English love to put it) he just doesn't mince his words. So, after a terrific meeting with Hans-Christian (Chris) Boos, Founder, and CEO of leading AI platform vendor arago, I pinned him down to share some of his views with the HfS crowd...

Phil Fersht (Founder and CEO, HfS Research): Chris - you've been a terrific guy who adds so much energy and colour to the intelligent automation industry... but can you shed a little light on your story?  How did you find yourself setting up the business in 1995?  Was the focus on intelligent automation back then?  I thought we were all going nuts about ebusiness!

Chris Boos (Founder and CEO, Arago):  Phil - I originally wanted to do AI research at a university and then I saw how slow academic research is today with the way it is financed. I chose to do it inside a company instead. We could control the pace there. We setup arago to research general AI and my belief has always been that general AI is all about automation. If it is intelligence – even the quite boring artificial version – I guess you could say that smart automation was my goal, then.

Most people are surprised about the research phase. But if you look at most people who are doing significant work in AI they all plan or have done a roughly 20-year research phase. The

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Posted in: Cognitive ComputingIntelligent Automation

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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

Click to Enlarge

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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Posted in: Digital TransformationDigital OneOffice

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To keep receiving HfS updates, make sure you register now!

June 10, 2018 | Phil Fersht

Still enjoying life now GDPR's cleaned up your inbox, but now realize HfS is the one you just cannot live without?

Let's be honest, you probably do need to keep up-to-date with the finest change-agent research on RPA, blockchain, AI, and much more, right? Then you really must register here to receive HfS' content, or update your email subscription to keep receiving us.

Posted in: Digital TransformationDigital OneOfficeIntelligent Automation

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And time for a real Infosys Saliloquy...

June 07, 2018 | Phil Fersht

Salil Parekh, recently appointed CEO and Managing Director for Infosys took some time out of his busy schedule during his client partner conference to catch up with me to talk about his vision for all things Infosys and the future of services…

Phil Fersht, CEO and Chief Analyst, HFS Research: Welcome to your first HfS interview Salil! Maybe you could take us a little bit back to your early career. When did you get the appetite to lead one of the largest IT services firms in the world? You know, was this something you always wanted to do? Was this planned, or have you always been an opportunist?

Salil Parekh, CEO, Infosys: Thank you, Phil, this was quite an un-planned scenario for me. So, maybe when I finished with Engineering, a Master’s in Computer Science, and I was working with a consulting firm for years. Then we got acquired by a consulting and tech company, so I’d basically been in the same company for 25 years. And then this opportunity showed up a few months ago. It’s a tremendous privilege to have this opportunity. It’s one of those things you dream about, in your career, as you sort of think, ‘Maybe it’s possible,’ but when it happened, at least, for me, it was completely unplanned. So I’m delighted to be here, I wish I could plan such things, but I can’t [laughter].

Phil: So, how would you compare this new Infy experience with Capgemini, you know, both global services powerhouses, one with a Parisian epicentre, the other one Bangalorian, so – what haves been your observations?

Salil: Well, I think, Cap’s a fantastic company. I think I would focus much more on the strengths

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Posted in: Buyers' Sourcing Best PracticesDigital Transformation

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Finally the industry has credible RPA product benchmarks from 359 superusers

June 01, 2018 | Phil Fersht

As am sure most of you noticed, HfS quietly released the most comprehensive customer satisfaction benchmarking of the 10 leading RPA solutions, authored by Saurabh Gupta, myself and Maria Terekhova.  We covered 359 super users of RPA products (enterprises, advisors and service providers) across 40+ customer experience dimensions across the following 6 key dimensions: 

  1. Features and functionality
  2. Integration and support
  3. Security and compliance
  4. Flexibility and scalability
  5. Embedding intelligence
  6. Achieving business outcomes

As an example, here is how dimension 6, "Business Outcomes" came out looking across the products:

So why did we undertake this research?

Our industry is plagued by many consultants with limited depth in RPA, who have no access to product level data that supports the tough decisions facing enterprises. In addition, most analysts deliver these 2 x 2 matrices which offer very limited insight or value (and all look remarkably similar). It’s time to dispel myths and provide enterprises with unbiased, credible and highly statistically significant data. The HfS RPA customer experience benchmarks are designed to help enterprises with RPA product selection as they formulate their intelligent automation roadmaps.  

It's more than a report... it's an online RPA decision-support tool

In addition to the report, HfS is also launching an online RPA decision-support tool for enterprises to enable client-specific due diligence on RPA providers. This tool will allow HfS clients to customize the decision criteria and associated weights from the available 40+ customer experience dimensions. It will provide clients a customized report detailing the top three RPA products that the client should consider, based on the rich insights that HfS collected as a part of the RPA study. HfS analysts are also supporting RPA clients through collaborative ThinkTank sessions, half-day workshops designed to problem-solve and validate strategies. These ThinkTanks go beyond the data where HfS analysts can share HfS IP, perspectives, and experiences on RPA tool selection, best practices, and common pitfalls to avoid.

So take time to delve into the realities of RPA and some of the findings may just surprise you

The industry is still struggling to solve challenges around the process, change, talent, training, infrastructure, security, and governance. Our mission at HfS is to dispel this confusion and uncover the truth to successful RPA deployment. It's time to separate the hype and propaganda from reality - and here is the reality!

Premium HfS subscribers can access the HfS Benchmarking Report: Detailed Assessment of the 10 Leading RPA Products here

Posted in: Robotic Process Automation

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The G2000 is still cost-obsessed, but getting there now depends on process robotics, predictive data, OneOffice alignment and a whole lotta pain

May 27, 2018 | Phil Fersht

However which way we look at it, driving out costs from business operations still dominates the directives of C-Suites across the Global 2000 - just revisit our 2014 study to see how little has changed. Fast forward to today, and the only real differences, since then, are the methods to slake this thirst for cost elimination, as traditional operating models are no longer delivering much more than incremental value.

Our new State of Operations and Outsourcing Study, conducted with KPMG, covers the dynamics of 381 operations leaders from the Global 2000 and reveals these rapidly changing C-Suite directives to drive out their number one nemesis: cost.

Click to Enlarge

Traditional cost savings models are running out of steam, as robotics, predictive analytics, OneOffice and cognitive become the new operating value levers

Little tweaks here and there to delivery locations and headcount allocations are becoming less and less effective, as it becomes clear only the fundamental rewiring of underpinning data repositories - and the digitization of manual processes - are going to progress operations to a place where real efficiencies can be enjoyed. In addition to fixing data and manual processes that clearly hit that old cost button, C-Suites are also recognizing the dire need have their customer needs being addressed by their employees as and when they occur (OneOffice), and also to invest more in cognitive tech and machine learning to drive more value from their current pool of talent:

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Cost reduction mandates still fall well short, but expect to see them improve as data-driven initiatives bear fruit

The perennial issue here is clearly one where C-Suites rarely feel exhilarated by the cost reduction impact of their operations leaders.  Of all their mission-critical directives this year (see above), none disappoints them as much as their ability to impact cost reduction (only 28% are very satisfied), while there are much larger numbers of C-Suite leaders already a lot happier with their robotic process investments (40% 'very satisfied' and a further 30% 'satisfied').  However, as we continue to see this strong impact in these areas aligned to robotics, OneOffice, and predictive analytics, surely it's merely a test of time until we see these initiatives having greater visibility, in terms of ironing out unnecessary costs and inefficiencies in the system.

The Bottom-line: It's taken several decades, but our enterprises finally have no choice but to make fundamental changes to the very make up of their processes, data, and people if they are going to survive 

Ever since my first blog 11 years ago (right here), we've pretty much repeated the same conversation that's been continually refined over the years.  The only game changers have been the gradual need for less people to run operations as cloud-based software platforms take-hold, offshore talent is optimized, and the more recent introduction of robotic process automation solutions to remove manual workarounds and create broader digital processes, that can be aligned with common business outcomes and metrics. 

However, these changes are more fundamental than merely slimming down the number of cooks in the kitchen and making the food taste better:  it's forcing a complete rethink from ambitious firms to redesign operating frameworks where revamped business processes are enabling true digital business models, where emerging AI capabilities can be weaved in... where innovation is native to the culture of the firm and its people. Yes, it's redesigning the entire kitchen, not merely hiring some better chefs with better recipes. 

The toughest challenge is fixing many years of poorly-constructed data repositories, where the corporate IT ancestors that built them have likely long-since departed, and other IT stormtroopers from the midst of time have plastered on countless workarounds and spaghetti coding to keep the back end (somehow) functioning.  These are the deep, murky areas where it's frighteningly difficult for many firms to take the risk of investment and change to find their way out of the dark data ages.  Somehow ripping out the very fabric of what got you here is what you may have to do to survive in the future... and that can be one very painful, risky and costly experience.  Sure, you can keep papering over those yawning cracks, but the wallpaper just isn't working like it used to... 

Posted in: Analytics and Big DataDigital OneOfficeRobotic Process Automation

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The why, the what and the how of the HfS Digital OneOffice

May 21, 2018 | Phil FershtSaurabh Gupta

We've talked a lot about the HfS Digital OneOffice operating framework - it's the HfS vision for the business operations endstate for digital organizations:

Click to Enlarge

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.

Why Digital OneOffice?

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:

  • A true digital business cannot succeed without unifying front, middle, and back office
  • Traditional approaches (organizational restructuring) have failed to have a purpose beyond incremental efficiency / productivity 
  • The Digital OneOffice is the organizational end-state to survive and succeed

What is the Digital OneOffice?

The Digital OneOffice focuses on real-time customer and employee engagement. OneOffice is:

  • Collaborative (Collective outcomes)
  • Unified (Without silos and hierarchies)
  • Dynamic (Agile and scalable)
  • Intelligent (Predictive, not reactive)
  • Responsive (Real-time)
  • Simple (Touchless and autonomous)

How to achieve Digital OneOffice?

The Digital OneOffice is the framework for achieving a true digital organization:

CX is not just fancy UI. Make CX the core of all your business operations from front to back.
Cost reduction is not a strategy. Drive organizational alignment and metrics that measure value creation, not only cost reduction. 
Weed out the people unprepared to change. Invest in an inclusive talent strategy, based people who want to learn and share.
Your tech infrastructure is everything. Automate, digitize, cloudify, and secure your organizational underbelly.
Build co-innovation relationships and shed legacy relationships. The partners who got you’re here may not be the ones to take you where you want to go.
Stop kicking the intelligent technology can down the road. It’s all here and now you need to make decisions on where you go with it
Stop thinking about the Future of Work. It’s already here...act now!

The Bottom-line: Traditional operating models have been focused on incremental improvements, not creating genuine frameworks for digital organizations

While traditional models such as outsourcing, shared services and global business services promote incremental efficiencies based on centralization of support functions and use of offshore to lower operating costs, none of these models have provided an ideal endstate for ambitious digital organizations.  Without having a true picture of how you want to operate in the future, you will be perennially be searching for short-term fixes to drive out further costs, and never be able to map out a strategic journey that will bring together your two most critical assets: your customers and employees.

Posted in: Digital TransformationDigital OneOffice

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