On the surface, not much has changed… we go to work, we try to do what we did before without physically engaging with each other. We talk a lot about a “return to normal,” but deep down, we’re starting to suspect those days are gone for good. So what’s changed?
1. Most of us now have a work-from-home mindset ingrained, whether we like it or not. We have become so efficient working from home, and we don’t have time to commute/travel unless there is some urgent need. If anyone hasn’t already noticed, most folks in the East coast of the US, London, and other major cities have had the green light for several weeks to meet up. And while the brave few have had a few socials, people aren’t exactly champing at the bit to “renormalize.” It’s not a fear of Covid as most folks in our industry in the US are fully vaccinated, it’s the new intensity of the virtual work culture – we just don’t have the hours in the day to give up Our calendars are constantly clogged up for immediate needs weeks ahead and our businesses will struggle to function if we started to block out entire days for conferences and meetings. While many employers will try and force an in-office culture, it will prove very challenging, getting many people to break from their ingrained work-from-home mindset.
2. The hype days of technology are over. It’s all about what enterprises need, not what vendors are trying to sell them. The change in the enterprise mindset towards technology has gone through a genuinely pragmatic revolution over the past year. The realization that being able to function in a virtual model has gradually drained the remnants of hype of the technology value propositions. Our Pulse study of 800 Global 2000 enterprises clearly illustrates two factors that dominate the focus of leaders: moving operations into the cloud at speed and training staff to understand how to balance digital business needs in a virtual environment:
Whether we talk about automation, AI, blockchain or quantum… every business leader will answer with “So what? we need data to be relevant… and it needs to be accessible and immediate in the cloud. Once we have that we can consider how to get smarter, faster and more efficient”.
3. We are not so afraid of change as Horizon 3 unfolds before our eyes. The last 12 months were the most significant change in our lifetimes, but we are still standing. Change does not sound so scary anymore. Embracing change has also made us more ambitious as business leaders. Are we satisfied with slightly cheaper, slightly better, or somewhat faster, or are we searching for fundamental new sources of value? The OneOffice approach now resonates with practically 99% of enterprise leaders. Horizon 3 initiatives to develop hyper-connected enterprises are also no longer five years away…Horizon 3 is now unfolding right before our eyes:
4.Locations have become irrelevant, as access to talent takes center stage. The days of resistance to offshoring are over as Global 2000 enterprises literally cannot function without access to IT and operations talent. In pre-pandemic times, many US politicians advocated against offshore resources, but this is no longer an option as the talent shortages in the US are a serious issue. We see a continued growth period for hybrid offshore/onshore outsourcing over the next few years, which will accelerate as we gradually emerge from the pandemic over the next few months. As the Pulse data shows us, enterprise leaders are looking at all business talent models to get what they need, whether offshore, nearshore, onshore, or from a location-agnostic model where they may have no idea where they are that resource is located. We also expect crowdsourcing to (finally) emerge as a significant model for access specific talent, especially in crucial areas where deep skills are scarce, such as cybersecurity, machine learning, and data science.
5. Values and philosophies beyond capitalism increasingly dictate where our emerging talent chooses to work. This forced embrace of change has had a positive impact on pure capitalism ideals. We have seen a big boost to a profit with a purpose philosophy with initiatives like sustainability and diversity becoming far more ingrained in enterprise-wide goals than just CSR initiatives. Three-quarters of major organizations are centering investments in emerging technologies to support initiatives around sustainability. We expect many employees to choose employers that stand for important values, beyond merely profit. CEOs’ personal views will become increasingly important to set the tone for their organizations as people increasingly look to leadership for purpose and motivation.
The Bottom-line: We’re ready for change, we’re truly virtual and we’re pragmatic about achieving real business outcomes
However which way we look at things, we’re becoming realists and the old days of technology hype and fear of change are receding into the past. Over the past year, we’ve gradually let go of the many shackles of the past and started to realize we’re in a new reality, a wholly new environment, where we’re all trying to focus on achieving real business outcomes, on values that are important to us, and a new work reality where its intense, high-touch and very real.
What Covid has taught us is there is no reason to fear change, and how important we are to keeping our organizations moving forward. We just need to keep our eyes wide open that the world has changed, we have changed and we have to accept and adapt. Onwards an upwards folks =)
As you all know by now, no one gets a prize for coming last at HFS… but you can now get one for coming first in each of eight different categories!
This Awards program is close to our hearts at HFS. It allows us to showcase and laud organizations who have embraced the opportunities presented by our new business reality, those that have taken a transformational leap rather than a simple step-change. Denise Colgan, the OneOffice Awards program director, spoke with me to learn more about the story behind the awards and the timing of the launch.
Denise Colgan, Director, Awards & Strategic Programs, HFS: Hi Phil – and thanks for your time. Nominations are now open for the OneOffice Awards and we are all very excited that the program is live. How are you feeling about it? And why has HFS launched an awards program in the first place?
Phil Fersht, CEO and Chief Analyst, HFS Research:Hi Denise. I am also excited that the OneOffice Awards are now live. HFS has always been a trusted resource for clients looking for data, information, and informed opinions about what is happening in the market, but we wanted to add another layer – real-life examples of truly transformational projects and programs. People want to be inspired. Being able to learn from the journeys of others and see the real, quantified results they have achieved can help spark the flame of their own transformation. And those who have led the way and taken those leaps of imagination and commitment should be applauded. So, it’s a win-win situation really – we can celebrate the great results achieved by visionary companies and their provider partners while inspiring and informing the next wave.
This is a great fit for HFS. We always strive to think differently and are passionate about combining knowledge with impact to help organizations realize long-term value rather than simple incremental improvements. I can’t wait for people to send in their nominations so we can see some of the great work people are doing – and their results!
Denise: It sounds really exciting – and such a great idea. But why now? Is there any significance to the timing of the OneOffice Awards launch?
Phil: Yes, there is – our research has shown that the pandemic has added another level of urgency to the need for transformation. Pre-Covid-19 organizations talked about transformation but were stuck doing so alongside legacy dragons and embedded thinking. The pandemic has flipped that one-track corporate mindset of resisting change to one of demanding change overnight. Business resilience is now front of mind rather than the old trope of quicker, faster, cheaper.
We are now seeing the dawn of the OneOffice organization, bringing together connected, global talent and intelligent, automated processes and data running in the cloud. The bold enterprises, who design their organizations to thrive in this era will be the winners – and we can’t wait to share their stories.
Denise: That’s wonderful to hear Phil. It’s great to hear that the OneOffice Awards are focused on the creative use of technology, data, and people skills to keep businesses relevant and successful in this new world. What award categories are being included?
Phil: We have decided on eight categories, each of which is close to our hearts and can bring about real and lasting business change.
Data and Decisions: Recognises organizations and teams that create a culture of data that drives new opportunities through interactions, insights, and predictive capabilities, giving the ability to access data at a speed that drives critical decisions for their business
Native Automation: Rewards organizations and teams that leverage a range of emerging technologies to create intelligent and automated workflows in the cloud, enabling the new “native” standards for consistent cross-functional enterprise operations
People and Process Change: Applauds organizations that develop and manage talent to build OneOffice skillsets, address process debt by eliminating wasteful activities that plague our organizations, and manage change across the organization to make a meaningful impact
Horizon Three Innovation: Identifies organizations that find completely new sources of value by collaboration across multiple organizations with common objectives and who demonstrate organizational characteristics like an infinite mindset, data monetization, and autonomous processes, while leveraging horizon 3 technologies such as blockchain, 5G, and/or quantum computing
Innovation Ecosystem: No one can be everything to anyone! This category recognizes the service provider that embraces collaboration across start-ups, technology providers, academia, industry bodies, researchers, influencers, and even competitors to drive unmatched value for its clients
Sustainability: Celebrates organizations that meet the triple bottom line: social, financial, and environmental. An enterprise that has a positive effect on the global or local environment, community, society, or economy
Diversity: Applauds organizations and teams that unleash human potential by getting serious about people diversity to maximize the potential of every person and drive real innovation
OneOffice Mindset: Recognizes an enterprise that runs processes end-to-end across the organizational value chain, focuses on employee experience as a significant component of the overall customer experience, and drives organizational alignment and metrics that measure value creation, not just cost reduction. It represents an organizational mindset that breaks down front-to-back legacy silos to create the only “office” that matters.
Denise: I can’t wait to see the entries flood in! Who can get involved? And where/how can they get started on nominations?
Phil: Everyone is welcome! Nominations are open to client-side organizations and their key partners worldwide and across all business sectors, including the public sector. Technology and service providers are also encouraged to nominate their own clients and share their success stories. All of the information needed can be found on our OneOffice awards homepage. We have a dedicated, easy-to-use awards platform where entrants can register and start their awards entry. It’s a really simple process. Everything can be saved in progress, so start your entry here.
Denise: Well, good luck to all entrants! Are there any key dates or considerations they should be aware of?
Phil: That’s a great question – thanks. The OneOffice Awards are open to enterprises from across the globe and must have been live at any point between January 1st, 2020, and the date of entry.
Nominations are now open, and we encourage people to get started as early as possible, especially if they need to gather information from different sources or get executive sign-off. Key dates for the OneOffice Awards are:
Nominations Close: Monday, 24th November 2021
Finalists Announced: Friday, 24th December 2021
The winner in each category will be announced at a celebratory event to be held in London on Thursday, 24th February 2022. We will share more details about that event nearer to the time.
Denise: Do you have any advice for companies considering getting involved?
Phil: Yes – just do it! Sharing our successes and inspiring others is so important. There is so much hype out there, so real stories about real projects and quantified results are a must-have for organizations who want to make lasting change. So, my advice is – just get started. And if people have questions or need any help, they can contact you at [email protected].
Many industries are experiencing more change during these times than they ever have… anticipating customer demand, staying ahead of emerging ecosystems, grappling with constantly-changing supply channels, regulations and logistics… the list of challenging for supply chain leaders is endless. So who’s helping enterprises stay ahead of these secular shifts in supply chains? Let’s hear from our very own Saurabh Gupta, who led our recent Top 10 research into supply chain services.
Saurabh – you’ve been researching supply chain services for 15 years (sorry, but I can remember when you started!)… how have they developed over the years, and why has the pandemic created the burning platform for the market?
Yes, Phil…about 15 years since my first report as an analyst … you’ve made me realize that I am getting older! The very definition of the supply chain has changed over the last two decades from linear supply chains (input, process, output) to circular sustainable supply chain (to re-use, re-make or refurbish). But I feel that the term ‘supply chain’ is a misnomer for meeting the realities of today’s world. It connotates constrained thinking. We need to break free. It’s time to unchain your supply chain.
For too long, supply chains have been shackled by the idea that they must be linear—a “chain.” But the pandemic shock changed the supply and demand equation. Business priorities changed overnight, creating new opportunities for some and threatening survival for others. Enterprise leaders finally recognized the need for supply networks. Supply chains need an ecosystem approach—both internally and externally. Organizations will need to collaborate across industries to pinpoint sources of disruption, where to disrupt, and how to keep reinventing themselves.
How have service providers evolved over the years to drive supply chain innovation? Which ones impressed in the recent study?
First, I’ve seen a convergence of third-party technology, business, and consulting services for the supply chain. They were three different market segments, but leading service providers realize that they need to operate at the intersection of all three. Second, the budding romance between the supply chain and emerging technologies is exhilarating. For instance, supply chain provenance (track-and-trace) is the no. 1 use case for enterprise blockchain technology adoption today. And third, the scope of third-party supply chain services has expanded beyond traditional areas like order management, inventory management, and sourcing & procurement into emerging areas like supply chain planning and design, aftermarket services, and sustainability services. Improving supply chain resiliency, transparency, and sustainability emerged as the top 3 areas of focus across 200 supply chain executives that we surveyed as a part of our 2021 OneOffice Pulse study.
We assessed 11 leading supply chain providers with robust supply chain credentials across a defined series of innovation, execution, and voice of the customer criteria.
The Top 5 service providers in the HFS winners circle were:
EY brings together the capabilities of all its service lines (Technology Consulting, Business Consulting, PAS (People Advisory Services), Tax and Strategy and Transactions) for the supply chain practice to offer services that cut across consulting, managed services, and technology products.
Accenture is delivering the promise of intelligent supply chains with its new “One Accenture” organization structure oriented around three markets (North America, Europe, and Growth Markets) that allows it to bring together all its services (strategy consulting, technology, and operations) to its clients in a simple and easy to consume way.
Infosys has developed “Live” supply chain solutions designed to make supply chains adaptive and resilient, resembling living organisms’ ability to sense, reason, respond, and evolve to uncertainties
TCS’ large scale, MFDM (Machine First Delivery Model) powered and end-to-end SCM offerings to deliver resilient, adaptable, purpose-driven, and future-ready supply chains
IBM brings to the supply chain a triple-A trifecta (automation, AI, analytics) powered intelligent workflow along with exponential technologies such as Blockchain, IoT, and Quantum, as well as championing open supply chain innovation through investments like RedHat.
Other notable performances that stood out for me included:
Genpact’s Barkawi Consulting acquisition enables it to deliver to clients global, end-to-end supply chain services bolstered by domain, digital, and data science expertise.
Capgemini’s frictionless supply chain vision is strongly aligned with our OneOffice mindset
HCL’s integrated digital portfolio and Inorganic strategy to build a services + product offering
PwC’s industry-focused approach and investments in digitally fluent talent
GEP’s expansion from sourcing & procurement provider to consulting, managed services, and products for supply chain
So finally, Saurabh, what will we talk about in the next couple of years as we see organizations become increasingly “hyper” connected? How fast is this new market moving, in your view?
Extremely fast, Phil! We are rapidly approaching Horizon 3 (the Hyper-Connected enterprise) of HFS’ Innovation framework. The scope of innovation is quickly expanding beyond the functional silos. It needs to extend beyond the four walls of your organization, and it requires collaboration across multiple organizations with common objectives around driving entirely new sources of value. Even the traditional boundaries of industry definitions are blurring, and new industries are getting created.
The scramble for talent and resources triggered by the virtual environment has thrown the world of global sourcing on its head. Our new HFS Pulse study covering 800 Global 2000 Enterprises clearly shows us enterprise leaders are evaluating all options (offshore, nearshore, onshore, WFH, crowdsourcing). Simply put, the need for tech talent and niche specialization is at an all-time high and we need more options available than merely the traditional vehicles:
Dr. Truong Gia Binh, Chairman of FPT Corporation, has a vision to bring Vietnamese capabilities to serve the world and make Vietnam one of its premier AI hubs. FPT has charted its roadmap to enter the Global Top 50 digital transformation provider list in the coming decade – the key drivers to this being FPT’s experience across multiple sectors, its focus on emerging technologies, a whopping 76% demand for digital transformation within Vietnam as a result of COVID-19, and a young population that excels with numbers. FPT formally launched its transformation consulting practice FPT Digital in February and raised its overseas transformation revenue targets by 50% for 2021.
Here are 5 key highlights about FPT you need to know:
FPT’s desire to be at the top of the game In the initial years, FPT started off by democratizing Office Computer Skills across all backbone sectors of Vietnam. FPT’s global presence now covers 26 countries around the world, with the goal of becoming one of the Global Top 50 digital transformation providers within the next ten years.
Vietnam: An Aspiring Digital Nation Vietnam is a young nation, and FPT desires to make Vietnam an AI hub of the world and bring Vietnamese quantitative capabilities to the world through implementations of Digital Transformation. Through encouraging support of the government, he is hopeful that the digital economy will contribute to 30% of the overall in the next 10 years.
COVID-19 as a catalyst for digital transformation Vietnam has been highly resilient during the COVID-19 pandemic, and technology has played a key role. Vietnam’s Government adopted innovative digital tools for contact tracing and disseminating information.
To respond to the COVID challenge, FPT transformed internally and changed the approach towards customer delivery. They became a comprehensive digital transformation partner of various industry leaders, enhanced their consulting capabilities through acquisitions, and set up new delivery centers in 2020 to expedite the new approach.
Emerging Technologies and Made-in-Vietnam Software FPT plans to bring its synergy of methodology and industry experience to the world. In the first 3 industrial revolutions, Dr. Binh notes they were busy fighting for survival whereas today, as the world embraces Industry 4.0, Vietnam has the opportunity to join the race from the same starting point – just as any leading country in the world. A lot of enterprises in Vietnam do not have legacy technology and are hence making a start directly in digital.
The Rise of Digital Platforms The world post-COVID-19 will look very different, and Dr. Binh believes a platform economy is on the rise. Most business leaders in Vietnam have planned for digital transformation, which is an indicator of huge market potential for FPT and digital platforms such as FPT.AI.
To go deeper, we invite you to dive into the full details of the discussion between FPT’s Chairman, Dr. Truong Gia Binh, and Phil Fersht:
Dr. Truong Gia Binh, Chairman FPT Corporation
FPT’s desire to be at the top of the game
Phil Fersht, CEO and Chief Analyst, HFS Research: Dr Binh, tell us a more about yourself and how you came to be Chairman of Vietnam’s premier IT service provider? Was this what you had always planned when you were starting out with your career?
Dr Trương Gia Bình, Chairman, FPT Corporation: Starting a business was not in my initial plan, Phil. In the late 1970s, the wars left Vietnam as one of the poorest countries in the world, with GDP per capita less than $100. Food was not sufficient to feed the population.
As a research fellow in Russia at the time, I noticed that Vietnamese people were often looked down upon. So I gave up pursuing my research career and joined 12 fellow scientists to found FPT. My strongest desire at that time was to get out of poverty, and entrepreneurship was the way.
Phil: How did FPT become a leader in the market?
Dr Bình: In the first 10 years, FPT democratized Office Computer Skills across all backbone sectors of the economy.
In the following 20 years, we decided to go global. Our strategy was to stand on the shoulders of giants. We partnered with global disruptors such as Microsoft, IBM, Siemens, and so on, and today, more than 100 of our customers are in the Global Fortune 500.
“Our strategy was to stand on the shoulders of giants.”
From easy projects worth $1,500 USD a month, we’re now charging up to $40,000 a month for complex projects that involve digital transformation (DX) consulting. FPT has entered the world’s most demanding markets: Japan, US, Europe. Today our global presence covers 26 countries around the world. But we won’t stop. Our next big goal is to become the Global Top 50 digital transformation provider within ten years.
Vietnam: An Aspiring Digital Nation
Phil: Can you share with us some insight into the business environment in Vietnam these days?
Dr. Binh: During the time FPT was set up, Vietnam changed to the policy named “Doi Moi”, which is a kind of market economy. And for the last 35 years, Vietnam grew by 7% annually. Vietnam is quite a young nation, with an average age of about 27 years, and every year we have 1 million more people in the labor resources. Vietnamese are very strong with numbers, and that is why we are trying to leverage the love of logic, love of math, and now it is Artificial Intelligence.
For the last 20 years, my dream is that Vietnamese intelligence should serve the world, and now I have another big dream that Vietnam should be kind of an AI hub of the world. We operate with the Mila AI Institute, and we are sending the PhD students there. We are developing our capabilities in new technologies like cloud, IoT, big data, robotics, etc.
Vietnam has decided to catch up with the world in the Fourth Industrial Revolution, and therefore digital transformation is the focus area for us. The government requests that every ministry and every province must have a program for digital transformation.
“The digital economy will contribute to 30% of the overall economy in next 10 years. They also plan 1.5 million of youth to be the resources for digital development. Although this is a challenge, it has been so far so good.”
The digital economy will contribute to 30% of the overall economy in the next 10 years. They also plan 1.5 million of youth to be the resources for digital development. Although this is a challenge, it has been so far so good.
Phil: How had things developed in Vietnam in recent years, especially prior to the COVID era?
Dr. Binh: We had grown at around 6 to 7% between 2016 and 2019. Last year, despite being affected by COVID-19, Vietnam still posted positive GDP growth of 2.8%. High tech exports were higher than competitive regional peers in APAC (60 B USD) in 2019 (World Bank, WEF 2019)
Phil: When compared with other countries, in which areas do Vietnam lead, and where do you see the country needs to develop further?
Dr. Binh: Vietnam is a rising digital nation. Vietnam’s digital economy is the second-fastest-growing market in Southeast Asia, according to a recent report by Google, Temasek, and the US-based global management consultancy Bain. However, the challenge is in shortage of digital workforce: we need an additional 190,000 IT engineers by the end of 2021. However, FPT is very optimistic and looking to become one of the leading companies in DX consultancy, bring Vietnam to the same level as technology giants.
Phil: Do you believe there is a pivotal role for the government to play?
Dr. Binh: The Government has shown its commitment to reinventing the country. An example of it is the National Program for Digital Transformation, which involves targeting the following by 2030:
Digital economy to account for 30% of GDP
Universalize Fiber and 5G cables
100,000 digital businesses
Digital workforce of 1.5 million people
COVID-19 as a catalyst for digital transformation
Phil: How has Vietnam coped with the Covid era, Dr Binh? How has this impacted the provision of services to clients? Have you seen business struggle during this period?
Dr. Binh: Vietnam has been one of the few highly resilient countries during the Covid-19 pandemic. It is the only economy in ASEAN that is able to hold onto a positive growth rate in 2020 (+2.8%).
“Vietnam has been one of the few highly resilient countries during the Covid-19 pandemic. It is the only economy in ASEAN that is able to hold onto a positive growth rate in 2020 (+2.8%).”
Technology played a key role in Vietnam’s COVID-19 success, besides bold and early measures such as targeted testing and tracking. Vietnam’s Government adopted innovative digital tools such as the contact tracing app BlueZone and an e-Government portal to disseminate information. E-government portal saw a 300% increase in traffic during the height of COVID-19 in Vietnam.
Phil: How did FPT bring about this change?
Dr. Binh: FPT enhanced its consulting capabilities through 90% acquisitions in US consulting firm Intellinet. Our global workforce is working round the clock. In 2020, we set up new delivery centers in India, Costa Rica, Middle East, and Canada, and we have a highly competitive pricing model which helps customers save 50% costs.
Data facts on how FPT responded to the COVID challenge:
Transforming FPT
Activated “wartime” mode.
Focused on improved productivity with 685 digital initiatives, maintaining double-digit growth in 2020.
Transforming FPT’s customers
US-leading automotive service firm with a customer base in 100+ countries.
FPT beat against 193 other vendors including Infosys, Tata, IBM, to become their Champion partner
We are their first choice in key projects worth 150 million dollars in total.
For example, during COVID-19, customer vehicle wholesale was affected. Fewer shoppers due to social distancing. Revenue down 90%.
Within 2 months, FPT upgraded its online bidding platform to give vehicle shoppers a full sight and sound experience with a 360-degree view and engine vibrations. Helped customer recover wholesale revenue.
It was just one of three deals worth more than 100 million dollars each (US, JP, Malaysia) that FPT won in 2020.
HelpingVietnam
Became comprehensive digital transformation partner of industry leaders in telco, real estate, aviation, fishery, power, manufacturing, etc.
Explored their pain-points and shared the best practices acquired from 30+years of experiences in IT services
Emerging Technologies and Made-in-Vietnam Software
Phil: What makes FPT uniquely different from other global business and technology service providers, and can you see the firm challenging the traditional service providers in the Fortune 1000? Or do you see a different set of emerging clients for the firm?
Dr. Binh: Over the past 3 years, FPT has focused on core technologies that are driving digital transformation such as AI, Big Data, Blockchain, RPA, IoT, etc. We’re on track to build a comprehensive ecosystem of world-class software to transform businesses around the world.
FPT is highly focused on new technology and on digital transformation. We have a methodology named FPT Digital Kaizen™. The ex-CIO of Dupont, Mr Phuong Tram, has developed this methodology together with FPT, based on the practice Dupont did for the last ten years very successfully. At the same time, we are developing new technologies, new products, digital products, to accelerate the process of digital transformation.
I think, so far, FPT, besides being the champion on competitive pricing, we are also trying to differentiate ourselves in new technologies, experience, and digital tools. An example of this is the akaBot, an RPA solution that automates repetitive back-office tasks. In 2020, we deployed 75 virtual bots for TPBank, helping the bank save workload for 45 employees. This year, we’re planning to double the scale, expecting to help the customer improve productivity by 20-30%. akaBot has served 40 businesses in 8 countries, automating 250+ processes/tasks in business operations and freeing thousands of employees for more creative and valuable tasks. In the last 3 years, akaBot’s revenue has increased 50 times, helping businesses save 90% processing time, 60% operational costs.
The Rise of Digital Platforms
Phil: As we slowly move out of the pandemic, do you see the world returning to the way things were, or do you envision the business landscape being different? And how will this impact the role of the IT services provider?
Dr. Binh: The post-COVID-19 world will look very different. Virtual and reality will become one. E-commerce, e-Government, digital businesses, and cash-less, contact-less, touch-less transactions are booming. There is going to be a rise of the platform economy.
“The post-COVID-19 world will look very different. Virtual and reality will become one. … There is going to be a rise of the platform economy.”
In Vietnam, 76% of business leaders have planned digital transformation as a result of COVID-19 which indicates a huge market potential for us.
In closing
Phil: With all that you are doing, can you close with some insight into your leadership influences?
Dr. Binh: I really admire Jack Welch, former Chairman, and CEO of General Electric. He insisted that GE must become a “No.1” company in its field, or get out. FPT also has big dreams. We wanted to put Vietnam in the world’s digital map. And we want to be on top of the game.
Phil: Thanks for the time, Dr. Binh, and fascinating to get your insights on the Vietnamese potential in the emerging new services environment.
It’s been a couple of years since we’ve seen any major consolidation in the contact center BPO top ten providers with Concentrix acquiring Convergys, but last week Sitel made it clear that large contact center acquisitions are still in vogue by announcing its intention to buy peer SYKES.
As for the $2.2b price tag, Sitel now expects to generate $4b in revenues from the combined entity. The combined revenues will be biting at the heels of their next-largest competitor, Concentrix, which is second only in revenue and scale to contact center BPO giant Teleperformance. In 2020 SYKES revenues grew 6%, whereas Sitel’s grew 18%. With this acquisition, Sitel jumps ahead of the now 4th largest competitor, TTEC:
WFH leadership is the significant boost behind SYKES’ appeal
SYKES has arguably been the work-from-home (WFH) contact center leader since pre-pandemic days, with the foundation of its 2012 Alpine Access pure-play home-based contact center acquisition. Since, SYKES has further developed this core capability into a very sophisticated recruiting, onboarding, training and collaboration platform – fully virtual. The long-standing WFH expertise and the capability of its OneTEAM platform enabled a successful shift to remote in early 2020 and continues to be one of SYKES’ major differentiators.
With 40% of staff expected to be working from home across Global 2000 organizations over the next year (see below), having the broadest geographic experience and depth will surely align the merged entity with the strategic resourcing desires of many leading customers. If Newco leads with WFH, customers will surely entrust more with them.
In addition to the WFH and tech capabilities, SYKES offers an attractive and complementary geographic footprint, including a European multilingual hub with delivery out of Egypt.
SYKES brings the only scaled-up global automation services capability that could position Newco at the heart of OneOffice
Its other key capability, which we touted as the first real automation investment by a contact center in 2018 is the RPA strategy and implementation capability of Symphony ventures. While the Symphony resources have largely been held together by SYKES, the firm declined to embrace automation into its core value proposition and failed to excite the market by rebranding this unique capability as the bland “SYKES Digital Services” last year. If Sitel can embrace automation to drive front-to-back processes and a OneOffice mindset for its clients, it’s not too late to revitalize the former Symphony team to create a genuine edge for itself in the market.
In a OneOffice organization (see Exhibit 4), automation becomes a native competency, where human performance is augmented by unleashing creativity and personal interaction, where the immediacy of data creates insights to support decision-making that can make or break the firm. The only true way to create a OneOffice experience is to be able to integrate the front office processes and interactive technologies (most of which are embedded in the call center) with the operations of the organization:
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. Sitel+SYKES has a unique opportunity to consult to enterprises to make these front-to-back connections and weaves these capabilities into their managed services offerings. The merged entity can offer real expertise to provide automated processes as-a-service and help their clients through the journey.
Bottom line: While scaling up to compete with Teleperformance and Concentrix is clearly the game-plan, Sitel/SYKES needs to focus on the value of the parts and integrate at speed
Sitel is virtually unrecognizable from the firm it was six years ago. A debt restructuring plan following its sale to French conglomerate Groupe Acticall was completed in 2018, opening up the firm to footprint expansion, digital investments, and a major rebrand which unified the company and all of its complementary assets. Sitel has recently made major investments in growth. Its design thinking and discipline organically, including hiring design experts and developing its MaxHub and EXP + model.
This latest major announcement sets in stone the firm’s intentions to be a leader in this global, remote, and increasingly digital contact center market. Now speed is of the essence to integrate the two firms, and we can expect an aggressive competitive response to this. Sitel and Concentrix were widely rumored to have come close to a merger, and neither top two firms will stand still and take this new competitive threat lightly. There are several mid-tier CX providers which will struggle to maintain growth in the coming short-medium term, and we will be surprised if we do not see some more large-scale CX services mergers over the next 6-12 months.
Not only is a clearer picture of the “future of work” emerging in today’s new reality, but its very nature is also changing day-by-day. In short, no one can paint an accurate picture of what the emerging work environment will eventually look like, but we can develop scenarios to understand how this will play out in the coming months and years. What is clear is enterprises are grappling with the need to drive unprecedented innovation in a work-from-home culture, and are figuring out how to arrive at a more predictable, acceptable, and effective work culture as we look beyond this pandemic era. Developing a work-from-home capability is the table-stake to survive in today’s environment, but innovation will only thrive in a hybrid work environment where people can inspire and motivate each other.
There is only so much you can achieve remotely – the smart way forward is a hybrid work model
We’ve talked to hundreds of executives over the past year, and they all complain about the same thing – they are managing an almost unmanageable amount of internal meetings over video calls, simply to keep the wheels on basic task management and accountability. Simply put, it’s becoming increasingly complex and awkward to run business operations in a remote model where training is a huge challenge, where motivating people is almost impossible, where getting beyond the basics of keeping activities functioning is a huge challenge. Communicating, collaborating, idea-sharing, white-boarding, etc are critical for taking businesses forwards and driving real innovation. They are also critical for helping employees become comfortable with change, to be comfortable with automating mundane elements of their jobs, and to become adept at embracing ways of accessing the data needed to exploit market opportunities.
With industry lines blurring, supply chains fragmenting and new opportunities and challenges springing up at a breathtaking pace, the time to bring people back together is fast-arriving, and so many enterprise leaders are now seeing this in spades.
Embedding digital fluency into your workforce is paramount to drive a truly cloud-enabled business architecture
The clearest barometer that shows the major changes facing Global 2000 enterprises over the next 12-18 months 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.
While the magic number from the new HFS Pulse study of 800 Global 2000 indicates that 60% of staff will return to the office over the next year, we must recognize that this is not a static metric — this will be fluid in the coming months as we grapple with the complexity of a pandemic recovery and fluctuating hybrid workforces.
These undulations of work-from-home can be viewed at three levels: organizational, functional, and individual.
Organizational cultures. There are dictating some return-to-office mandates, with Goldman Sachs ordering employees back in the office and JP Morgan CEO Jamie Dimon saying that WFH is a problem that needs to be fixed, citing business lost to competitors due to lack of focus in a remote environment.
Functional needs. Some roles and departments that have depended on socialization (we dove in on this in call centers here), or on collaboration (such as design experts), are eager to get back to in person.
Individual preference. Some of us are just more social creatures that miss the camaraderie, whereas others perform and focus better at home or are still wary of offices given the pandemic-induced fear, or have been based at home for so long they struggle to “snap-back” to going back to an office environment. This varies generationally as well, with a widespread sentiment that millennials prefer to see their colleagues in the flesh, whereas their older and younger colleagues are more content to work remotely. While we’re confident that the 9-5 is dead, and companies have learned to keep the wheels turning in remote environments, the question remains how to sustain innovative mindsets to remain competitive regardless of where the dust settles for our hybrid workforce.
We’re entering a hybrid reality, where digital and physical work cultures are blended
The digital exuberance of 2020, where declarations from many leading enterprises – the likes of Unilever, Hitachi, Mastercard, Google, and Amazon – that they had become “work-from-anywhere enterprises” is clearly losing steam as so many enterprises have struggled to maintain a motivating, dynamic culture. From leadership down to interns, employees are burned out with the sheer monotony of a 100% digital environment and the inability to whiteboard ideas, share ideas, collaborate on process design, and embrace emerging tech. This is especially the case with Gen-Z and Millennial staff desperate to get back to an office environment. In fact, many are choosing to work for firms embracing an in-office culture – something we have already seen happening aggressively in the call center environment (download POV here).
Leadership has a laser focus on the employee experience in a remote environment
The pandemic ushered in a new wave of thinking about how leaders approach staff management and motivation, and our recent HFS Symposium showcased the breadth of thought from leaders across industries. As Debjani Ghosh, President, NASSCOM, rightly called out on our “Power of One” panel, the industry’s focus during the pandemic shifted completely to wellness and health. And as Paul Papas called out in our “People Process, Change” discussion, leadership at IBM turned into looking at colleagues and direct reports through a more empathetic lens.
While the early stages and stabilization of Work-from-home focused on immediate needs, as lockdowns dragged on for months into a year plus, business leaders are thinking forward to making remote/ hybrid optimized in the long term. The focus of employee experience and performance management continues to shift, or instead broaden as if climbing Maslow’s hierarchy of needs toward self-actualization. With ensuring security and wellness as a baseline, employers then began ensuring employees had collaborative tools and virtual workspaces that attempted to emulate physical environments that promote camaraderie. They focused on ‘unleashing’ talent by giving them ‘satisfying’ work, empowering people to perform at their highest capability. Companies also dug deep to talk about culture, mission, vision, and what kind of “profit with a purpose” values are important to them. As we continue up this ladder, an element seems to hang in the balance: how can you nurture innovation in a remote environment?
What’s next? Unleashing innovation-from-anywhere
For many during the pandemic, jobs became a “tick the box exercise,” moving from task to task, and once completed, preparing for the next Groundhog Day. Despite the efforts above, what seems to have been lost for some firms and individuals is the element of innovation. While innovation may seem to flourish in a physical environment, we can do things to ensure we innovate as individuals and as organizations.
Innovation as a culture. Whether remote or physical, adopting innovation as a culture is critical. An innovative culture encourages new ideas and doesn’t punish failures (unless done with incompetence). This applies to companies as a whole as well as individual contributors. As Marie Myers of HP (noted, companies must not let having a fear of failing to impede innovation. Sharing success stories of ideas coming to fruition supports this culture. Individual incentivization plays a role as well; Kaushal Mody of Accenture noted that their staff is rewarded for transforming their own roles.
Innovation as a discipline and a mindset. It may sound counter-intuitive at first – isn’t innovation born out of spontaneous, imaginative ideas? No, innovation is developed and cultivated. Innovation doesn’t have to be a group of creatives in a room solving giant problems. Innovation doesn’t have to be grand. Often it can come from the most straightforward thought of, ‘what if we did it this way?’ This can come from anyone in any role and at any level of the organization. The trick is to get in the habit of training our brains to think this way. Are all of your staff meetings focused on blocking and tackling problems at hand, or is there time set aside for brainstorming new ideas and ways of working? As an individual contributor, are you too focused on checking the tasks off your to-do list to wonder how we can improve this process or what new service or product we could be offering?
As Manish Sharma of Accenture operations boldly declared at our symposium, “Work-from-home innovation is here to stay.” We are optimistically in agreement with his sentiment, particularly as the OneOffice experience mindset matures and employee and customer experience get more tightly aligned. As people increase embracing change, have better data (that they trust!) at their fingertips, ideas will flow more easily. As we reskill our workforces for digital fluency, we’d be remiss not to adopt innovation as a culture and discipline to take full advantage of innovation at scale.
Work-from-home innovation is here to stay if we make It a discipline, and a fabric of our culture
We can’t deny the experience of the last year has driven a genuine need to configure business operating models to function in a remote virtual environment, as most businesses simply can no longer limp along with on-premise systems, fragmented processes, and an inability to operate in the cloud. However, as we evolve towards a new reality where we can visualize a physical future for businesses, it’s also become clear that companies are struggling to function entirely in the cloud and depend more than ever on a people-driven culture.
In this vein, organizational leaders today must be thinking more about how to innovate in a virtual and physical hybrid model and align your people to the needs and goals of the business across remote teams. Even more importantly, do your innovation goals engage diversity, sustainability, and purpose? We are stepping into a new era of cultural innovation in a work-from-home environment.
This is the time for leaders to provide the vision and the tools to innovate from anywhere, and for individuals to figure out how they can unleash their creativity and motivation to work toward a shared goal. Leaders must not assume that innovation will happen spontaneously, and individual contributors must take the responsibility to be diligent about their innovation.
Bottom-line: Much can be achieved in a pure remote model, but it’s simply not sustainable for a healthy, energizing work environment in the medium-long term
While many businesses struggled – or failed completely – during the pandemic, many have thrived as costs have been decimated and a return to growth has created so many new markets to exploit and customer demand to satisfy. This has also created a highly fluid job market, where people can get hired rapidly over Zoom and staff can dictate where they want to work. Companies with strong, dynamic leaders who inspire staff to learn new things, collaborate, and focus on purposes beyond mere profit and efficiency are fast becoming venues where ambitious staff want to apply themselves.
While much can be achieved in a pure remote model, it’s simply not sustainable for a healthy, energizing work environment in the medium-long term. Running data and processes in the cloud is critical to keep companies operating effectively, but those are merely the baseline table-stakes to survive in this new hybrid reality. Technology is essential to provide the infrastructure to exist, but it doesn’t dictate the business model… people do.
Talking to Manish Sharma is like going through a karma carwash – you feel pretty fresh and sparkly at the end. But don’t take the effervescence lightly – Manish has cultivated his career at Accenture over three decades, now leading “the largest operations business on the planet.” I had the opportunity to catch up with Manish during HFS’ OneOffice Symposium, in addition to a behind-the-scenes catch-up call. He uses words without embellishment, so when he speaks of dramatic mindset shifts, super compressed transformations, and the multiplier impact, you know this era has been a stunning one.
Both RohanKulkarni and Sarah Little captured key highlights from our Symposium “Digi-side” chat (think “greatest influencers” and alignment with the OneOffice mindset).
You can create your own karmic takeaways from the closed-door call below:
Phil Fersht, CEO and Chief Analyst, HFS Research: Good afternoon Manish. It is great to see you again. You’ve been traveling for some time, right? Great to have you on here. For some of the folks not so familiar with you personally, maybe you could just give us a little bit about you and your background, and how you came to be in your current role. Did you always want to be leading a multi-billion-dollar P&L within Accenture? Or did you have other plans when you were starting out?
Manish Sharma,Group CEO of Accenture Operations: First of all, Phil, it’s always good to chat with you, and catch up about the industry trends. In terms of my own journey, I have been with the firm now for 27 years. When I joined, it was a small consulting office in Mumbai. That is where I joined, and my background, funnily enough, is an engineering background, and never in my life, in my early years, did I ever think that I will be in an operations business or a BPO business. My dream was to design the best ever machine tool, whether it is the boring machine tool, or for cutting, or any other stuff, but that was my original plan, with my background. I joined because, at that time, it was Arthur Andersen in 1995, and I joined for setting up a manufacturing excellence practice in India, including supply chain, and everything else. That is where I spent all my years on, and I was always. I lived in Mumbai.
After a few years, when the outsourcing started, we got our first few clients, and I was told that “Can you help with one of the clients for few weeks?” I said, “Okay,” and I did my Monday to Friday from Mumbai to Bangalore, as we were setting up our business. Now, that two or three weeks, or two or three months, has got converted into virtually a decade, two decades out there. Right? That is the funny part of it. I have always enjoyed my journey in this. ’95 to 2002 consulting, 2002 onwards in this business, right from the formative years.
“It is exciting to lead the largest operations business on the planet. Right?”
It is exciting to lead the largest operations business on the planet. Right? When I think of it, what inspires me is our people. I think the best thing for me has been that I have seen people who joined us, when they came in, in early 2000, and now they are having families, and great infrastructure where they live in, great careers, growth of their people. It has been fascinating to just see the people grow, along with our client portfolio.
Phil: Excellent. You took the role of Group Chief Executive for Accenture Operations just over a year ago now, right? Was it February last year, something like that?
Manish: Yeah. It was announced in January, and on March 1 I took over. It is just more than a year now.
Phil: Wow. You’ve spent your entire first year in a completely different business environment than you were expecting, right? [Laughs].
Manish: Yeah. [Laughs].
“The good thing was that I have been in the business right from the beginning, so I know all of our leaders, I have traveled to almost every single center of ours, probably selected the site of each of the centers, and everything else. I knew our leaders and our people really well before the pandemic started. In that way, it was much easier for me, even during the COVID times.”
The good thing was that I have been in the business right from the beginning, so I know all of our leaders, I have traveled to almost every single center of ours, probably selected the site of each of the centers, and everything else. I knew our leaders and our people really well before the pandemic started. In that way, it was much easier for me, even during the COVID times.
Phil: How different has it been for the business that you’ve been running, compared to what it was like before? I mean, you’ve got the perfect comparisons. But how different has it been for you guys?
Manish: I would say, for me, while I think personally, and for our people, we have tried to do everything keeping people at the center with people’s safety at the center of everything that we do.
After making our people secure, and our clients’ work secure, if I look at the business, I think we have seen some dramatic mindset changes from the clients. I use the word dramatic not lightly because it is what I am seeing in terms of our growth, sales volumes, the number of clients, which I have never seen that before.
I have never seen the kind of demand for super compressed – I am not even using the word compressed, I mean super compressed transformation timelines, and we have done some of the most complex transformative deals in the last one year. It shows the appetite, where the clients have understood that there is no way to get around the digital transformation and relentless focus on creating business value. There is no way around it. I think the appetite for some of these things has really grown up.
“I have never seen the kind of demand for super compressed – I am not even using the word compressed, I mean super compressed transformation timelines, and we have done some of the most complex transformative deals in the last one year. It shows the appetite, where the clients have understood that there is no way to get around the digital transformation and relentless focus on creating business value. There is no way around it. I think the appetite for some of these things has really grown up.”
I will give you very simple examples. Earlier, you had to go and talk to the clients, and ask, “I want to do automation, I want to do this stuff,” and they would say that they would put you through the security, this, that, which used to take huge timelines for doing even simple stuff. Now, guess what? In these times, people understand the value of time. People understand the lead time has to be crushed for doing and enabling digital transformation. So, the realization is very high.
“The absolute super compressed transformation is now the stuff that the clients want. They do not want a journey of five years. They want a journey of next two to three years, and what can be achieved in that timeline.”
The absolute super compressed transformation is now the stuff that the clients want. They do not want a journey of five years. They want a journey of the next two to three years, and what can be achieved in that timeline.
Phil: Wow. And what do you think is the biggest change that they’re having to go through, to go through such a rapid transformation? What are they having to overcome, themselves?
Manish:
I would say that there is some bit of inertia. I think the inertia got virtually shaken up because of COVID. That was one thing.
The change part. Is everybody on board? Is everybody still aligned?
The third important piece is the silos that they operated in, because now it is an enterprise play. It is not a functional play. There is a correlation between different parts of the enterprise. How do you get integrated enterprise coming together?
I think these are some of the key things that the organizations have to think through.
What has really happened is that operations have now become central to the CEO and the board agenda, and there are more conversations which are involving the CEOs and the board than ever before. Five years back, or even three years back, we used to speak to the GBS owners and the functional leadership. Last couple of years, we are talking to the CFOs, CMOs, CHROs in the C-suite.
“What has really happened is that operations have now become central to the CEO and the board agenda, and there are more conversations which are involving the CEOs and the board than ever before. Five years back, or even three years back, we used to speak to the GBS owners and the functional leadership. Last couple of years, we are talking to the CFOs, CMOs, CHROs in the C-suite.”
Given the transformational nature of the deal, size of impact to the core business, including revenues, expedience, and cost, we are now talking to several CEOs and boards, because they need to move towards overcoming the inertia and changing the siloed behavior, which is not a functional thing. It is something at a board level, that the discussions are taking place.
Phil: Right. How much is trust becoming a factor here, Manish? I don’t get the feeling you can walk into a client you’ve never worked with before, and take on a deal this size. Is this, very much, years and years of working together, and suddenly it’s, “We know these guys, we’re going to go with them”? I mean, how is that playing out? Or is every client very individual, at this point, and very unique with their own needs?
Manish: No, I think trust has become more important in these times, Phil. I think relationships have become more important in these times. When you think about pure outsourcing, it is a transaction. I think the difference what we are seeing now is that people are not doing transactions. They are trying to build partnerships. The trust and the relationships now certainly matter. The kind of people that are involved, from your team, and from their team matter. I would say trust has become a huge part of the buying pattern from the clients, along with the partnership levels and our ability to help during tough times. I think how we reacted when the pandemic hit us, held us in good stead, because we put everything for the clients, while making our people safe. I think that really solidified our relationship and trust with the clients.
Phil: How has this changed the Accenture Operations approach to taking on additional scope, additional business? Because, I mean, I’ve seen you guys aggressive in the market, more aggressive than I’ve seen you in a long time, and some of these deals feel quite strategic, in that it’s maybe you’ve got to win the baseline work, to start with, that might not be the most profitable work in the world, but that will lead to some much broader transformation with those clients in 18-24 months. Are you taking that type of view now, that sometimes you need to compete for some of the commodity stuff, to really up the value in time? And how is that shifting, in your mindset?
Manish: Let me put two points in terms of how we are shaping and what is the approach that we are taking.
“I think the speed and the scale of impact is seen as what I call as a multiplier impact, as process transformation is now coupled with technology disruption.”
I think the speed and the scale of impact is seen as what I call a multiplier impact, as process transformation is now coupled with technology disruption. Right? Let us talk about some of the examples. One is integrated solutions across automation, analytics, and AI, which I know HFS has always highlighted as a key development in the industry as the Triple-A when I read some of your stuff. The second one is no-code, low-code, and AI on unstructured data, and data science on the big data. That is the second, you know, in terms of what we are trying to do. All the above, when combined with functional and industry-leading practices and implementation, create a multiplier effect on the speed and scale of outcomes. That is the one point that I will certainly say that we go aggressive in the market because we are seeing a huge impact on this.
The second one, I think you touched on that, Phil, is data is becoming central to driving the intelligent operations for us, powered by SynOps. SynOps is, like, one end-to-end transformation play that we are really proud about. We have invested hundreds of millions of dollars in that. There is a lot of talk about some of these things to be a mere statement, but I think for us it is real.
“SynOps is, like, one end-to-end transformation play that we are really proud about. We have invested hundreds of millions of dollars in that. There is a lot of talk about some of these things to be a mere statement, but I think for us it is real.”
At last count, I will give you some figures, because data is something which I know you and I have a huge passion towards, right?
We have processed 1 trillion data elements annually with increasing variety, whether it is contacts, emails, documents, pictures, calls, inventory data, invoice data, and the list that can keep on going. Secondly, we continue to respect how we treat client data, but continue to harness the power of data within those limits through aggregation and anonymization, which is the way we get that. We are leveraging data-driven process discovery, data-driven benchmarks for the clients’ business cases, and data-driven automation diagnostics, data-driven knowledge graphs for complex AI.
“We are leveraging data-driven process discovery, data-driven benchmarks for the clients’ business cases, and data-driven automation diagnostics, data-driven knowledge graphs for complex AI.”
Now, I am just saying that the power of what we can do, and along with these three things, processing the 1 trillion stuff, and, you know, data points, and what we are doing with end-to-end data is creating value as we work on more comprehensive scope for clients, across functional and industry value chains. Then, what we are doing on top of these layers is mixing external and internal data optimally, as only one of them is not much of use without the other. That is kind of what comes in our SynOps platform as the benchmark, when we start any particular study. Before I start doing any diagnostic this and that, right, get the level of details around the benchmarks, and with the data that we have. But that kind of leads us to a very different approach, as we approach the market, Phil.
Phil: As you look at the development of these solutions, and maybe over your career, since you have been at Accenture, in particular, who have been the major influences on you personally, Manish, in terms of shaping your thinking, and the way you carry yourself, and your leadership?
Manish: Sure. You know, I have always been driven more by people who are on the ground, and on the floor. They are always driven to shape my thinking. When I look at it, I remember when you were there in Bangalore once, and we were starting this journey, and I do not know whether you remember when we were sitting in the band 9 innovation floor. If I look at even the automation journey, we have now got 82,000 robotic solutions, the world’s largest robotic workforce, I will say in terms of what we have within SynOps. What really inspired me to convert this industry from an MRPT, measurable, repeatable, predictable, and transactional work into a value-driven work, was driven by one of our employees, who came once to me in 2014 or ’15, and she said, “Why are you making us do this kind of work? I know how to do this work much better, and much faster, and I don’t even need to be involved.” But that kind of shaped my thinking, that what are we doing. Are we really utilizing the human potential?
“I have always been inspired by my discussions, by walking around. And even in these times, I go around with our people even virtually, because that inspires me, and that gives me most of my ideas and my thinking around this.”
I have always been inspired by my discussions, by walking around. And even in these times, I go around with our people even virtually, because that inspires me, and that gives me most of my ideas and my thinking around this. Then, when we started the discussion, that idea came, and she is still an employee with us.Human beings should not do any work which is measurable, repeatable, predictable, and transactional.
Now, if I just go back two months again, we started this. Quickly we started, “Okay. Let us go and automate it.” You know, it was not a great journey. Because a lot of the folks were doing task-automation, which is the worst form of automation. They were not looking at end-to-end. You know, it was all like, I would say hardwiring your organizations to waste, and we didn’t really want to do that. Again, the idea came from someone suggesting that anybody who automates their job gets promoted. Thus, imagine the paradigm shift. This way, you are not instilling fear about job losses. Instead, you are creating a different feeling that you will get promoted when you actually get an automation done. That is the second thing, again, coming from our employees.
“It is always the people on the floor who have the best ideas, and always the thing for us, as a leadership team, is how do I really harness them, and actually create client value from those ideas?”
If I just continue to weave through my journey, the thought has always come from a discussion from the people on the floor who are closest to the work. It has never got super inspired from some other thing. It is always the people on the floor who have the best ideas, and always the thing for us, as a leadership team, is how do I really harness them, and actually create client value from those ideas?
Phil: Well, I think it’s making people secure and excited to innovate, versus to protect and to stay on top of tasks, because the more you can remove the breakages, the link… anything that slows down the business is what you want to move away from. And I feel speed is the new watchword of our industry. It’s how do we move fast? You know? We’re finally seeing deals signed that we… we used to call them, d’you remember, multi-tower deals, back in the day, and things like that, but we’re now seeing these engagements that we could only really dream of, 15 years ago, 15, 20 years ago, so it’s fascinating to really feel them coming into the market.
I think a final question I have for you, Manish, is, as we look out to next year, and I know we’re having a difficult time with COVID… India’s having a really bad time, I’ve been hearing, this week, the last couple of weeks, as well. But as we eventually move beyond this, we vaccinate everybody, we get used to this, do you think that we’ll go back to something like we had before? Or do you think we’re going into a very different environment now?
Manish: I think we are for sure moving into a different environment. I don’t think so it is going to be one way or the other. It is not like all the people will be working from offices, or all of them working from home. As you have rightly said, the situation is very tough, as we speak. I do think that once things come back to normal, it is going to be a mix. I am seeing people really craving an office environment. We can say all the good stuff that we want to say, about the convenience, and everything else, but I think there is some learning opportunity which people are missing, which they get when they are together.
It is like when you talk about our team leader in the organization, you learn by being a leader, in the earlier stages of your career, by watching, by being with the folks, by managing a team, and everything else, and trying to do it virtually. You know, there is stuff that we need to do. I think learning is great, in a virtual fashion, but I think learning, again, has got to be in a class participation mode. I believe the reskilling and the relearning agenda is going to be a topmost thing, whether it is for us or for our clients.
“For us, reskilling and relearning is now a major initiative across the firm, and I think we will see more of that. …Right now, for our clients, we are opening our own academies, so that they can actually participate, whether it is automation, AI, blockchain, or any of those things. I do think that the world will be a mix. ”
For us, reskilling and relearning is now a major initiative across the firm, Phil, and I think we will see more of that. …Right now, for our clients, we are opening our own academies, so that they can actually participate, whether it is automation, AI, blockchain, or any of those things. I do think that the world will be a mix. Hopefully, we will get over this time, and once we get through this, it will be a mix of everything. But reskilling and relearning will be a major part, along with the mixed model that we have of home and office.
Phil: Yeah, I think you are absolutely right. I mean, if you look at even the call center market right now, on average, call centers outside of the US are back up to 70% capacity, and in the US I think it’s, like, 60%. A lot of this is younger generation folks. They want to go to an office, want to actually mix, want to work with people, and if your company is not offering it, they will go and work somewhere else. This is a hot job market. I think it is the older generation who is probably a little more comfortable with work at home – okay, it’s not ideal, but I can live with it, I get more time with the kids, I travel less, I can eat better food, whatever – but the younger generation is helping make decisions for us; they want to be in an office, they want to be in an environment where they can learn. You can’t have this very remote environment working, I think, functionally forever.
I think there has to be a hybrid mix between maybe a little less travel, a little more focus on health. I just bought my whole team Apple Watches for doing Q1, blowing it out of the water, but only because they can monitor their health now. But I really believe this is a generational-driven issue that we are going to see more of, as we come out of this. Well, this has been a fantastic conversation. I look forward to sharing this with our readership, and I really look forward to you sharing your views at our symposium in just under two months’ time. So, I will pause here, Manish! Cheers
Click to Register and make a voluntary donation to India’s Covid-19 fight
The countdown has officially begun for the first HFS One Office Digital Symposium on June 8 and 9. This is an exclusive digital symposium for industry leaders in business and technology to gain access to the most expansive global community of pioneers, practitioners and peers.
HFS CMO Nischala Murthy Kaushik spoke with me to learn more about the complete story around the symposium…
Nischala : Firstly, Thanks for your time Phil. We are a few days away from the HFS One Office Digital Symposium. How are you feeling about it?
Phil : I am excited about hosting the HFS One Office digital symposium. As a company, our events are well known and popular in the industry as we bring together executive leaders for thought-provoking discussions and unfiltered dialogues – in the unique and exquisite HFS signature style.
However, the reality is that we are far from doing live events yet! And so, as a company, we felt it was a good point in time to host our first digital symposium. I am personally excited about the amazing speaker line-up of 70+ speakers from across the world, the topically relevant agenda we have curated, the sponsorship support we received from our clients, and also the phenomenal response from the industry in terms of registrations.
When I last checked, we had more than 800 sign-ups and are still counting and expect to surpass 1000 before registration close on Monday! And the interesting insight is that we have registrations from across all industries, geographies, roles and functions. The best part is that doing a digital symposium presents us the opportunity to connect and engage with a wider section of the global industry and ecosystem; it’s almost ~4X the numbers we typically host in our live events!
Nischala: That’s wonderful to hear Phil. And I am sure there is excitement in the air at HFS around the upcoming HFS OneOffice Digital Symposium. I also know that you have committed to use the proceeds from the HFS One Office Digital Symposium towards the COVID-19 relief response work in India. Can you please share more about it?
Phil: Yes, Nischala, a lot of our business and clients are based in India – it is the heartbeat of the global services industry. Over the past few weeks, we have seen and heard of the ground reality of the situation in India. And we made an executive decision to make immediate donations from the Symposium proceeds for the collective fight against the pandemic in India.
I am incredibly happy that the funds we have given are making a real difference on the ground. A facility for pregnant women with COVID-19 needed $7,000 to open. We just made that happen. We also funded a 200-bedded hospital in a small town in Tamil Nadu and have just helped a maternity center become operational for women with Covid-19. So it truly gratifying to see the realization of our passion for a purpose to make a real difference.
In addition, HFS commits that the symposium proceeds will also be used to support causes we believe in – especially the importance of accessible college education for all racial minorities..
Nischala: That’s great to hear Phil. What is personally heartwarming is to see and read the immediacy of the impact of how the symposium proceeds are making a real difference on the ground in the lives of people.
Phil: yes. Every time I get a direct update on how the symposium proceeds are being used – it is personally very satisfying.
So attending the HFS One Office Digital symposium is really a win – win for all.
One, we all collectively make a positive difference in life of someone through what we do at work.
Two, anyone attending the HFS OneOffice digital symposium stands to only learn and gain.
So, anyone associated with the HFS OneOffice digital symposium is part of the conversation and the solution
Nischala : So, what is the theme for the HFS One Office Digital Symposium?
Phil: The theme for HFS is OneOffice. OneOffice is a really a “mind-set” which we strongly believe organizations need to consciously institutionalize for them to have a fair chance of long term survival, sustenance and success.
Thanks to the global pandemic, organizations have just taken a rapid drive down an unprecedented channel of change. It’s been a shock for many and a calling card for accelerating digital transformation.
This forced transformation is a final reckoning to create a collaborative, cross-functional, enterprise operation that natively automates your processes, propels your people, and powers your decisions – breaking down your front-to-back legacy silos to create the only “office” that matters: OneOffice
And we are almost at the half year mark in 2021. And we already see many organizations have embraced this mindset. For those who haven’t, it is a good time to start. Hence, we felt the combination of the timing and theme was appropriated to bring together industry leaders, business titans, decision makers and influencers to have an open authentic dialog on the future of industry, ways of working and navigating change.
Nischala : So, who should attend the HFS One Office Digital Symposium?
Phil: Any industry and anywhere in the world, if you are a business leader, decision-maker, or influencer in the area of business process, emerging technology, innovation, diversity, data, people, change management – you should sign up for the HFS One Office Digital Symposium.
Nischala : It is a power-packed speaker line-up and an equally power-packed agenda you have there. What are the Top 3 sessions you are really looking forward to and Why?
Phil: It’s hard to single out any one session as they are all so awesome across all aspects of people, process, technology, and change – just check out the agenda =)
Nischala : Our last interview was for International Women’s Day in March 2021 around the topic of gender diversity. As part of our conversation, you highlighted that for all HFS events we actively and consciously identify women who can be invited to speak. How does the speaker lineup look at the HFS One Office Digital Symposium in terms of gender diversity?
Phil: I am so glad you asked this question. We made a public commitment and I am happy to share that we have honored that commitment.
So for the upcoming symposium, we have a line-up of 18+ women speakers. They are all very senior women leaders, mostly C-suite and from across roles/functions and also across industries. I must confess that as a company, we do spend a significant amount of time as part of the event planning exercise ensuring that we identify and invite the right speakers based on their experience and expertise.
And the good news is that all these women are out there. So we believe it is our responsibility to give them the podium to share their ideas, insights, and inspiration.
Nischala: Anything else about the HFS One Office Digital Symposium that you would like to share with any reading this piece?
Phil: We really need to come together as an industry to shape the world we’re moving into at a speed we have never experienced before. We have so many more complex issues to grapple with that will impact us, such as our brittle infrastructures that are being exposed, especially in the wake of unprecedented cyber-attack escalations, getting ahead of subconscious biases with gender, race and sexual orientation, learning to innovate in this work-from-anywhere environment and paying much more than lip-service to climate change… where there is no vaccination to get us out of trouble. Please do try and join us and a voluntary donation to our Covid-19 relief organizations is deeply appreciated. Cheers!
One platform which has scaled new heights over the past year, geared to orchestrating processes in the cloud, is ServiceNow. One area that is becoming increasingly critical for these platforms is driving up the excitement of the leading – and emerging – services providers to train their staff to deploy, develop and help manage the solutions. Hence, it is no coincidence that we’re seeing SNOW rise in prominence with the service providers with ex-SAP chief Bill McDermott at the helm.
HFS’ IT services leader, Dr Tom Reuner, supported by analyst Martin Gabriel, have spent the past few months talking with an exhaustive quota of end-customers of ServiceNow, in addition to drilling into HFS’ customer perception surveys, to draw up the definitive Top Ten guide to ServiceNow Services in 2021. Premium HFS subscribers can access their copy of the report here.
So let’s hear a bit more from Tom about this evolving market…
Phil Fersht, CEO HFS: Tom – why has ServiceNow become the orchestration platform of choice for so many enterprises in recent times? What has changed to drive such a level of interest?
Dr Tom Reuner, SVP IT Services Research, HFS: Suffice it to say, Phil, the attraction of ServiceNow is in the eye of the beholder. For me, it is one of the key enablers for operationalizing the OneOffice. Let me peel back the HFS nomenclature for a moment. ServiceNow is the operational layer that helps organizations to deliver digital customer and employee experiences. In a nutshell, it is achieving this by offering workflows in the cloud that are underpinned by a single data model. But crucially, these workflows are cross-functional and organizations are looking to obtain that single pane of glass with all the operational data.
So what does cross-functional really mean? Many organizations started their journey with ServiceNow with IT workflows as they got fed up with the lack of agility of their often highly customized ITSM solutions such as Remedy that are still on-prem. But many organizations are expanding ServiceNow beyond ITSM toward IT Business Management or SecOps within IT, while others are literally taking the platform and leveraging it in business functions such as customer service, HR, and procurement. Thus, ServiceNow is a conduit for overcoming the organizational silos that we at HFS keep talking about. As one service provider put it, you have to earn your right in IT workflows to expand the platform to other business units.
Another strong alignment with the OneOffice mindset is that ServiceNow is delivering digital customer and employee experiences that delight folks rather than frustrate them. Those experiences could come from portals but increasingly are coming also from mobile devices. A good example is returning to work projects and even vaccination management as we are hopefully getting toward the tail end of the pandemic. You only get to high levels of customer and employee satisfaction if your operations are underpinned by consistent data sets and actions can be adapted easily.
How is the service ecosystem evolving around the NOW platform, Tom? What are you seeing from the major providers and the emerging niche firms?
There is an immense dynamism in the broader ServiceNow ecosystem. I would point to three major trends. First, clients are starting to scale the cross-functional journey with ServiceNow. We are seeing organizations managing GBS operations with ServiceNow end-to-end. They are taking the platform across HR, F&A, procure, and beyond. This is a far cry from the beginnings of ITSM. Second, ServiceNow is pushing an industry-led go-to-market. Thus, service providers have built out deeply verticalized offerings. Compelling examples are Operational Resilience in the financial services space and on the telco side, Network Performance Management offerings that get deeply integrated with the OSS/BSS landscape. And you can see those two trends clearly in ServiceNow’s financial performance. In Q4 2020 only 62% of new contracts were around IT workflows. And many of the leading service providers have an even lower percentage of contracts around IT workflows.
The third trend is the war for talent and with that, the unavoidable acceleration of M&A activity. Given the scarcity of talent, ServiceNow pure plays are being acquired by the GSIs. The most recent examples are NTT DATA acquiring Acorio and Cognizant gobbling up Linium. Both pure-plays had a strong focus on the US market. But we have also seen private equity (PE) firm Sunstone Partners acquire three ServiceNow pure-plays (Evergreen Systems, Cerna Solutions, and Novo/Scale) to create a new pure play challenger with global ambitions. It will be intriguing to see how this new company called Thirdera will fare.
So against the background of those trends and developments how are service providers reacting to this and who is standing out from the crowd?
Pivoting to broader transformational programs where the platform is being taken beyond IT workflows into what ServiceNow calls ESM ( i.e. customer and employee workflows) and more recently even into industry-led solutions is where the wheat is being separated from the chaff. It is here where the leaders like Accenture, Infosys, KPMG, EY, and DXC Technology are standing out. Many clients are looking for more than just implementation services that are commoditizing fast and that are often driven out of offshore factories. Put in other words we are seeing the OneOffice mindset come through. Organizations are progressing toward a more holistic data model and are looking to drive workflows across organizational boundaries. Beyond the leaders Atos stands out as the leader in the “Voice of the Customer”, IBM has made significant progress and is building out deep industry solutions while LTI gets strong client references for highly scaled IT workflow projects.
However, outside of the usual suspects, the unsung heroes of the ServiceNow ecosystem are often the leading pureplays or boutiques. For example, Enable Professional Services is the champion in Australia and Asia with strong ESM credentials while Plat4formation is at the cusp of innovation in manufacturing and beyond. Cask excels with a transformation focus in the US market while GlideFast has a strong sales momentum in the same market as well as a high CSAT score. As an analyst engaging with these organizations is immensely rewarding as you glean so much more information about the market.
Has Bill McDermott made a big difference, in your view?
There many ways of looking at it, Phil. For starters, he is a brilliant sales guy. I remember him from my days at Gartner donkey’s years back when he was heading up sales there. Looking at it from the ServiceNow angle, Bill’s tenure marks a new phase in their corporate development. His predecessors built the core functionality and established the brand. The next phase is strongly accelerated growth. You can compare this to the evolution of Salesforce. Therefore, the next logical step is verticalization. Bill hasn’t devised the strategy but he is excellent at communicating it. He keeps talking about ServiceNow being the platform of platforms. Which is a clever way of emphasizing cross-functional workflows. Yet, those workflows only happen through integration with all the applications and toolsets.
Having said that, there is a bit of a cult cropping up. Almost all the service providers we talk to point to “having discussions with Bill” and quite frankly just drinking the Kool-aid. But as the platform is being expanded into completely new use cases, having this communication “magnet” is immensely helpful. And we should keep in mind that ServiceNow has always avoided being pigeonholed. It was never the ITSM company. If anything, not too long ago it positioned itself as the “cloud company”. Now the positioning crystalizes around “Workflows for the Modern Enterprise” and as mentioned, the notion of the platform of platforms. Given the heterogeneity of the capabilities, having a highly visible figurehead is immensely helpful.
We recently saw ServiceNow acquire one of the small RPA providers, IntelliBot. What was that all about Tom? Why did they opt for a small firm in this space and not go for one of the larger RPA firms?
What appears to get lost in much of the ‘excited’ commentary of the Intellibot acquisition is that we have to move beyond a siloed mindset. This is not about RPA or AIOPs. This should be about moving toward cross-functional workflows. Put another way, ServiceNow is not entering the RPA market. As with all its acquisitions, it is looking to re-platform the capabilities of Intellibot. Or put yet another way, it will not offer Intellibot as a stand-alone offer. The aim is to expand the workflow experience toward the automation of legacy systems. Intellibot’s low code credentials have the additional bonus of allowing users to create automation. Therefore, comparisons to the leading RPA provider are misguided. This is a tuck-in acquisition that allows the integration of legacy applications and data sources. As such, this is more akin to SAP acquiring Contextor. For SAP the direction of travel is opposite to ServiceNow. Rather than allaying concerns of clients to migrate to the new world of HANA, ServiceNow is the cloud-based innovation that is aiming to integrate with the plethora of legacy systems. They aim to offer a connector to all leading applications and tools etc. Deeper process intelligence capabilities are the next logical steps, but again only focused around ServiceNow data, not as a competitor to the likes of Celonis.
You invented the “Intelligent Automation Continuum” during your earlier days with HFS. Is that still relevant, or have you changed your thinking? Are enterprises starting with basic RPA before graduating to more sophisticated technologies or is something else happening?
As a failed historian, it is always a tad indulgent for me to go down memory lane. To some degree, I am amazed that the Intelligent Automation Continuum is still being talked about and that clients still find value in it. While the market has moved on, the thought-process behind the Continuum remains valid, I would argue. But as with many things, automation really is in the eye of the beholder. For me, Intelligent Automation was always about end-to-end process automation and the need to integrate and orchestrate both legacy technologies as well as innovative offerings such as the cloud. But I was expecting a convergence of IT and business scenarios. So much so that I declared “RPA is dead” back in 2016 just to make a point.
Looking at some of the more detailed discussions on the Continuum, the idea was never that you have to start with basic RPA to progress to more sophisticated technologies as you put it, Phil, but rather two other fundamental points. First, that all the approaches and technologies plotted across that Continuum are both overlapping and interdependent. Therefore, clients have to find ways of orchestrating those. Second, the direction of travel is toward unstructured data and probably less obvious toward less well-defined processes. Cognitive and artificial intelligence is meant to overcome the limitations of these two dimensions.
And with that, we are back to ServiceNow. The cross-functional workflows and the integration capabilities of ServiceNow’s Integration Hub are taking us back to those discussions to progress toward end-to-end automation and decouple routine service delivery from labor arbitrage. We have to re-focus on those outcomes rather than getting side-tracked by the task automation pushed by the RPA incumbents. It is here where the ever-expanding capabilities of ServiceNow are coming in. But to be frank, I don’t think the RPA camp has taken too much notice of how much ServiceNow has changed.
So finally, Tom, what will be we talking about in the next couple of years as we see AIOps matures and other data-centric technologies become more prominent? How are operational process solutions going to take shape?
For me, it is really building on the points that I was just trying to make. The focus should be on the convergence of IT and business and enabling this cross-functional mindset to overcome organizational silos that we keep discussing in the context of the OneOffice. But to get there, we need enterprise-wide service management and monitoring. Yet, we are still miles away from getting even close to that. There are many missing pieces on that journey. But I expect deep investments around operationalizing Data Science, be it around process intelligence or AIOPs. The focus must be on integrating disparate inputs including metadata from logs or data that is adjacent to the actual process. However, the ability to ingest disparate sets of information has to be matched by the ability to execute and ultimately automate actions. Over time we have to progress to the non-deterministic application of dynamic scripts. Thus, this is also more about the platforms such as ServiceNow and Celonis, rather than about all those points solutions. I am tempted to close out with the thought process behind the Continuum: the focus on end-to-end automation and the need for integration and orchestration. But then again, markets rarely evolve rationally.
HFS Premium subscribers can click here to access their full copy of the 2021 ServiceNow Services Top 10 Report
What a difference six more months of staring into the digital abyss has made
When we interviewed leadership from 400 Global 2000 enterprises at the end of last year only 37% saw them returning to an in-office environment. Our very latest HFS Pulse study, covering 800 Global 2000 enterprises, clearly shows a marked shift towards sending staff back to the office, with a 60% ratio of staff expected to be office-based over the next year:
We’re entering a hybrid reality, where digital and physical work cultures are blended
The digital exuberance of 2020, where declarations from many leading enterprises – the likes of Unilever, Hitachi, Mastercard, Google and Amazon – that they had become “work-from-anywhere enterprises” is clearly losing steam as so many enterprises have struggled to maintain a motivating, dynamic culture. Employees – from leadership down to interns – are burned out with the sheer monotony of a 100% digital environment and the inability to whiteboard ideas, share ideas, collaborate on process design and embrace emerging tech. This is especially the case with Gen-Z and Millennial staff who are desperate to get back to an office environment. In fact, many are choosing to work for firms that are embracing an in-office culture – something we have already seen happening aggressively in the call center environment (download POV here).
Bottom-line: We’re seeing a significant “digital-flip” towards an in-office model
We can’t deny the experience of the last year has driven a genuine need to configure business operating models to function in a remote virtual environment, as most businesses simply can no longer limp along with on-premise systems, fragmented processes, and an inability to operate in the cloud. However, as we evolve towards a new reality where we can really visualize a physical future for businesses, it’s also become clear that businesses are struggling to function entirely in the cloud and depend more than ever on a people-driven culture. Why is this?
Businesses thrive on people and technology empowers us, not dictates how we work. While many businesses struggled – or failed completely – during the pandemic, many have thrived as costs have been decimated and a return to growth has created so many new markets to exploit and customer demand to satisfy. This has also created a highly fluid job market, where people can get hired rapidly over Zoom and staff can dictate where they want to work. Companies with strong, dynamic leaders who inspire staff to learn new things, collaborate together, and focus on purposes beyond mere profit and efficiency are fast becoming venues where ambitious staff want to apply themselves. While much can be achieved in a pure remote model, it’s simply not sustainable for a healthy, energizing work environment in the medium-long term. Running data and processes in the cloud is critical to keep companies operating effectively, but those are merely the baseline table-stakes to survive in this new hybrid reality. Technology is critical to provide the infrastructure to exist, but it doesn’t dictate the business model… people do.
There is only so much you can achieve remotely. We’ve talked to hundreds of executives over the past year, and they all complain about the same thing – they are managing an almost-unmanageable amount of internal meetings over video calls, simply to keep the wheels on basic task management and accountability. Simply put, it’s becoming increasingly complex and awkward to run business operations in a remote model where training is a huge challenge, where motivating people is almost impossible, where getting beyond the basics of keeping activities functioning is a huge challenge. Communicating, collaborating, idea-sharing, white-boarding etc are critical for taking businesses forwards and driving real innovation. They are also critical for helping employees become comfortable with change, to be comfortable with automating mundane elements of their jobs, and to become adept at embracing ways of accessing the data needed to exploit market opportunities. With industry lines blurring, supply chains fragmenting and new opportunities and challenges springing up at a breathtaking pace, the time to bring people back together is fast-arriving, and so many enterprise leaders are now seeing this in spades.