Since we published our first report on blockchain, we continue to talk to players in the industry about how this fast-moving market is changing and growing. Compared to last year, there’s more discussion about security and privacy (evolving from the “blockchain is unhackable” talking point that was popular last summer,) there’s more talk about non-financial examples like using blockchain to help with supply chain compliance issues, and a hunger to get beyond POCs into valuable operational execution.
Recently we spoke to Santosh Kumar, Rob Ellis, and Mani Nagasundaram from HCL about blockchain trends. HCL shares many characteristics with the players we included in the report, such as:
Basing its blockchain expertise within its financial services practice
Building expertise in some key industry hot buttons like international money transfer, asset tracking, and trade operations
Creating POCs with global banks like one HCL did on cross-border money transfers across subsidiaries
Exploring partnerships with several key blockchain technology vendors like Ethereum and ERIS Industries
Regarding trends, HCL sees a lot happening in security and privacy, as well as regulatory agencies stepping up to help businesses form some governance policies around blockchain. We’ve seen in the past few months that while maybe the blocks in the chain aren’t hackable per se, there have been identity thefts, fraudulence, and further concerns about public blockchain networks.
The HCL team notes that transactions are well executed in blockchain, but identity validation and asset validation are less mature. And valuation of assets still needs to happen in the real world, so they caution over-optimism in moving quickly to broad blockchain adoption.
Also, adoption may be slowed down until we can answer the key question, “who owns the network?” HCL’s current thinking is that there’s likely to be one or two per industry and that moving or crossing networks will be difficult (HfS agrees that network interoperability is a big problem. See my prior blog on network interoperability issues here.)
They also believe that maturity in blockchain comes in three phases and that blockchain mirrors the Internet itself in this maturity curve:
Operating business processes better with blockchain
Changing operations using blockchain
Using blockchain to create new business models, processes, and activities
When you get to the discussion of new business models, HCL has a few scenarios that they share (see Exhibit 1 for an example.) We like HCL’s ability to not just explain the technology in-and-outs, but blockchain’s impact on business. In the blueprint guide on blockchain, we scored providers highly on innovation when they have strong business stories and the ability to demonstrate blockchain’s potential to prospective clients.
Bottom Line: 2017 will be an important validation year for blockchain
As HfS continues to research HCL and its competitors, we’re looking for the following in 2017:
Movement beyond POCs into live implementations
An example of inter-company blockchain work (remember, most POCs right now are intra-company, which is why the network question didn’t come up much this year)
Some hardening lines in the partnership area as the winners and losers on the technology side become clearer and providers get pickier about which vendors they bring into client engagements
We started off the new year at HfS with the launch of the Capital Markets Operations Blueprint last week. This is our first coverage of the key dynamics in capital markets and furthers our BFS research on the back of the HfS Mortgage As-a-Service Blueprint mid-last year.
Policies, politics, and structural market challenges are plaguing capital markets firms, raising the stakes in partnerships with service providers
Going into 2017, we find banks and capital markets firms are cautious as they continue to endure a volatile environment with no signs of letting up. Policy ambiguity across the US and European markets, political uncertainty, and structural market changes continue to plague the capital markets industry. Meanwhile, low interest rates and as a consequence, bank margins across sectors have created new waves of cost pressures. Capital markets firms continue to struggle to generate more revenues to counter their rising cost of capital.
To add to this perfect storm, the revenue-generating aspect of this industry is under fire as well. Capital markets firms have had to abandon categories of products due to new regulations. They are more challenged to attract and retain clients that expect different, digitally enabled levels of service with faster turnaround times across the ecosystem, particularly in wealth management. As more big-ticket fines and penalties hit the headlines, public confidence and trust are continuing to erode, and at the same time, the competitor landscape is expanding for the biggest players with the continued success of community banks, regional banks, and fintech disruptors.
Overall, banks and capital markets firms are severely challenged in predicting strategies for long-term sustainability in a changing market and need to have several strategies in play to meet short-term cost pressures. Traditional cost management from cutting back trading desks and providing front-line compensation have not yielded results at the magnitude required to significantly balance profitability.
As a result, we believe that capital markets firms will undergo large-scale operational transformations in 2017 and beyond.
Since the early to mid-2000s, global technology and business services providers have taken over large parts of the back and middle office processes for banks and capital markets clients. They are now in a unique position to help rethink and run more Intelligent Operations as capital markets clients figure out their strategies to tackle these market challenges. Some of the key buyer-service provider dynamics include:
Back Office Processes Continue to Dominate the Services Landscape: The capital markets operations market started a little over a decade ago with back-office BPO processes offshored to IT service providers. Today, these processes are the majority of work engagements, prominent in 63% of contracts in our analysis. Major service areas include clearing and settlement, corporate actions, reconciliations, fund accounting, collateral management, data management and reporting, investor operations, and product control.
Market Forces and Regulation Stimulating New Demand: With global regulatory bodies placing continual pressure on banks and capital markets firms, there are new areas of opportunity for service providers to step in to help clients meet regulatory compliance requirements in different ways. Regulatory data management and reporting and analytics modeling and model monitoring are some of the biggest areas of growth for service providers.
Industry Staring at Technology-Driven Change: We see multiple initiatives fighting for prioritization within client stakeholders and service providers’ strategies, all related to technology-enabled service delivery in capital markets’ operational processes. Platform-based services, provided as a utility, are sparking new interest from clients especially as these models promise consolidation and economies of scale across internal LOBs and asset classes. Similarly, clients are also driving automation initiatives within each business, led by robotic process automation and some level of machine learning and predictive analytics to improve operational performance for retained and outsourced functions.
What’s next?
Standardization: We see a sort of “gold rush” for standardization in the foreseeable future of the capital markets operations. Service providers, including new entrants and industry veterans, are in a race to find ways to bring more standardization to overcome the significant challenges in data management. The managing director at a midsize PE firm we interviewed remarked, “Although we all have to do reconciliations, everyone’s built up in a certain way. The challenge for a service provider or market utility is not the actual processing but standardization in the upstream data that has to be fed in from various systems and the downstream outputs to different stakeholders like regulators and clients where the reporting requirements may be different.” Even within the walls of one enterprise client, data metrics, logs, and audit terms and the systems that consume them across businesses are varied. The biggest areas of investment for clients in the next few years will be in consolidating and standardizing processes such as reference data management and reconciliations.
Robotic Process Automation: Along with potential cost savings, one of the biggest business benefits of using intelligent automation technologies is the higher level of accuracy and standardization due to the lack of manual errors. It is no wonder that the new breed of automation tools has caught the attention of capital markets clients. We see a strong appetite for automation with RPA at the forefront. In the next year, we anticipate many more implementations, particularly for processes that have not been offshored yet where big bang savings are more possible. In the medium term, the cognitive capabilities and machine learning projects under way today in areas like due diligence and inquiry management will have matured and created more confidence for conservative buyers. This is a big opportunity for new market entrants to come in with an automation-first strategy for displacing incumbents. The key will be in proving domain knowledge by coming to service buyers with industry-specific use cases and examples; don’t expect them to have done the homework in this emerging area.
Industry Expertise: On the subject of domain experience, we see emerging opportunity for providing ongoing guidance to capital markets clients for the changes in and the impact of regulatory reforms on their operations and compliance needs. They have traditionally sought consultative advice from risk advisories and consulting firms, and our primary research reveals that for many clients, most service providers are not perceived by key client stakeholders as experienced enough to take on those advisory roles. We anticipate more acquisitions and strategic partnerships by service providers to bridge this gap as multiple clients in our research state that they would find value in getting advisory input from experienced operations partners.
Overall, banks and capital markets firm in our Blueprint research highlighted – and evaluated—the need for a collaborative service provider that is willing to take risks on critical new initiatives that they plan to roll out in the next 12-18 months.
Bottom Line: Whether it’s automation-led, pure-play BPO services, platform investments to drive BPaaS and/or market utilities, or bringing experienced consultants to address regulatory concerns, this high-stakes market demands service providers that are willing to take risks and invest for the long term.
For more details –including visuals of the market activity and analyses of the service providers—click here to access and download the HfS Capital Markets Operations Blueprint. The service providers included in this report include Capgemini, Cognizant, EXL, Genpact, HCL, Hexaware, Infosys, NIIT Technologies, Syntel, TCS, Tech Mahindra, WNS and Wipro.
A couple of months ago we wrote about meaningless data – the seemingly endless spew of pointless information that just starts to grate. Recently, we’ve started to see another related category of pointless crap – which is probably going to become more prevalent as organizations seek to increase the ease with which information is conveyed to a public that cannot be bothered to read anything anymore.
The category that is pointless crap visualization (PCV). Where an attempt is made to visualize something, often a relatively complex concept and it fails utterly to get the point across. But looks nice and gets attention because they drop some names of big vendors in there.
We recently noticed a thoroughly confusing diagram from one of our analyst colleagues, NelsonHall, that caused us scratch our heads in utter bewilderment:
PCV From NelsonHall
The diagram is supposed to tell you something about the acquisition strategy of the companies in the triangle. We wrote down a couple of questions about what the chart meant, having not read the associated blog post.
It looks like Cognizant is more likely to make acquisitions than IBM? Really? Which seems highly unlikely given the huge difference between the two companies in the past – and the fact that Cognizant has a much smaller war chest for M&As, especially after its massive $2.7bn investment in Trizetto. We suppose you could limit to purely IT services – but a tuck-in acquisition is just as likely to be IP based as it is additional niche skills. Although even then we’d expect IBM to spend a great deal more – its Software group having notorious deep pockets for acquisition. Cognizant have made some significant acquisitions like Trizetto, but like all the offshore firms have been pretty gun shy when it comes to inorganic expansion compared to the big traditional technology firms.
Cognizant/TCS are more likely to acquire than NTT or Fujitsu? Mmmm… Fujitsu has been fairly quiet on the acquisition front for a few years, but you cannot count them out of the acquisition game – they made a few acquisitions in 2016 and made some very large purchases in the past. Given their cloud capabilities in Asia, it seems likely it would want to build on consulting capabilities particularly in Europe and the US. And NTT – certainly we may see a lull in activity as Dell Services gets absorbed, but NTT has been one of the most acquisitive of the services firms over the years, so this again seems slightly at odds. This seems much more likely than TCS, the least acquisitive of the already reluctant offshore providers.
The inclusion of CSC using the CSC logo… er seems a bit unnecessary. In fairness it may just be the choice of CSC as the logo – but CSC is part of HPE and no longer exists – so we do wonder how useful it is to know they won’t acquire…
Also, what is the difference between a “tuck-in acquisition” and active acquisitions? To say that IBM is not an active acquirer seems odd – again it may be a narrow view of just the IT services business, but we’re not sure that view really helps anyone considering IBM as a partner given that any software acquisitions bring IP which add to the richness of the services offerings.
Again the distinction between active and tuck-in is not clear for Accenture – which is certainly the most acquisitive and has a very active strategy with an acquisition made seemingly every week, but some of these will be tuck-in, maybe half of them? You can judge for yourself and look at the list of Accenture acquisitions we tracked in the table below. We did some work on which providers are making digital acquisitions – not with the same list of providers, but it illustrates the scale of Accenture’s acquisition activity, compared with some of the providers on the NH diagram. So we’re not sure the visualization really captures the huge difference in acquisition trails between Accenture and the other pure services companies on the list.
HfS – Just The Deals
It is a challenge to come up with good visualizations – that support data and summarize points being made. We have some way to go converting our list of contracts above into a statement about the different players – but I think if we do something around our acquisitions data we’ll probably convert into an index and visualize as a quadrant (oh no) or a simple bar chart. So in a way you have to applaud NH for trying something new.
To be fair the associated blog made a lot more sense – but the chart fails to reflect what is said or adds much to the understanding – it just throws names at you without any clear reasoning. What the diagram needs to do is illustrate a point or, ideally, provide a short cut to understanding. This doesn’t seem to do either. Frankly, it just obscured any of the valid points being made.
The Bottom Line – in this era of fake news and poor information, analysts have more responsibility than ever to reflect reality
This year HfS is making a clear commitment to visualizing our information better and trying to make our perspective in as clear and concise a way as possible. Like the above chart we may not always get it right – but hopefully, that is where our community comes into play and you will let us know what we get right and what we get wrong.
Back in August 2016 we wrote about the shift left with offshore providers – we were recently reminded of this piece and asked to update the chart. Which we have done in the chart below. It’s interesting to see if things have progressed, and as a prelude to the new results season approaching rapidly…
These results add fuel to Phil’s thought in his Bandaid economy blog. With more traditional services markets slowing, largely because they support older business models. At the same time we see a rapid increase in wealth being generated by enterprises that are tapping directly into digital business models – with the digital pure plays like Amazon, Airbnb, NetFlix, etc. and the rapid adopters like Tesco’s, CapitalOne, Staples, The Gap, John Lewis… Service providers need to find a way to tap into the money that is flowing into the technology and talent to fuel these increasingly ubiquitous digital business models.
We have been looking to quantify the total opportunity for the digital expenditure or the “flow of revenues over digital channels between business and consumers”. We have started by quantifying the digital retails sales, but will expand to include business to business digital sales, travel and financial services expenditure. But below is a taste of this exciting work – with digital retail center stage and some estimates of the other components for North America to the right.
The Bottom Line – let’s just say it again…
As we have said before long term success in the services market is dependent on inertia or the lack of it. Providers that are reacting quickly to the changing market conditions are still finding growth, and this growth is shifting from purely low-cost or offshore providers. This is starting to show up in the financial results more and more as services firms customers ambitions drop, revenue growth fades. The “cut until it bleeds” continuous cost-saving model for operations is creaking badly, especially in light of new technology solutions and an increasingly competitive environment for many traditional businesses.
We will be taking note of the full calendar year results that are coming up this month and next. But we expect the current shift left to continue as providers adjust to the market realities.
Maximizing team performance and improving employee engagement are both winners in their own right as HCM themes to focus on. Solutions that focus on either are correlated with better business results. ADP and its clients can now play in this arena with the strategic acquisition of The Marcus Buckingham Company.
By many accounts, including mine, ADP’s past acquisitions of companies like Workscape, Virtual Edge and The Right Thing, while accretive to revenue (not necessarily a game-changer on a base of over $10 billion) and enabling a more diversified solution and customer portfolio, didn’t fully detach the company from its long-time transactional HR / Payroll branding. Yes, Workscape did bring cool technology around total rewards and portals, but ADP also talked a lot about their new benefits admin outsourcing capability after that acquisition.
The bold move of adding The Marcus Buckingham Company could pay off nicely for ADP, and in “multiplier effect” ways that, by definition, are much more consequential than incremental revenue or adding some new strategic customers.
Just as SuccessFactors was a clear catalyst in SAP’s embracing of the cloud, TMBC could do the same for ADP; not in terms of the cloud as ADP operates there already. The story here is adding a disruptive HCM solution, one that weaves together technology and services elements to help customers solve issues many HR tech products will never tackle.
Among other things, TMBC’s flagship technology StandOut distils the complexity of a team leader’s job into two fundamental questions: “what are my team members’ priorities, and how can I help them?”. As this will entail a new way of approaching the job for many team leaders, the transition is helped along by targeted and expert coaching, TMBC’s other strength that ADP plans to tap into.
TMBC’s technology and complementary coaching bring self-awareness to the performance management and career development process
Self-awareness/self-discovery is often the missing link in feedback and performance management models and systems. You could say that one exception is when an employee is told their self-ratings are very different than how others see/rate them; however that is “being told” rather than learning it through a guided process. Coaching is also advocated by more and more companies, but most aren’t consistently adept at it enterprise-wide. ADP customers can now benefit from Marcus Buckingham’s proven approach, one centered around individuals fully leveraging their strengths (motivating and energizing) vs. addressing their performance gaps (often de-motivating). The model also clearly fits organizations wanting to pursue a “learning organization” strategy and corporate culture.
While a talent management solution offering the type of capabilities TMBC brings can be ahead of many smaller company’s adoption or strategic interests for some time, this acquisition should allow ADP to finally break free of its transactional HR/ Payroll branding constraints.
The Bottom Line:
The Marcus Buckingham Company found its mother ship to reach the next stage in its journey to greater revenue and broader marketinfluence/impact; and ADP likely jumped on an acquisition that will put it on the broader HCM brand trajectory it’s been longing for. The pairing should bring even more value to ADP and TMBC customers, and broaden ADP’s strategic HCM footprint in those customers, over 600,000 strong worldwide.
As we discussed in Part 1 of the digital marketing operations Blueprint blog, marketers are upping their spend and re-thinking the way they spend on services as a result of digital consumer needs. The market landscape for these services includes BPO/ITO providers, marketing technology companies, traditional agencies as well as a vast array of digital and niche agencies. This is a fast-evolving space that requires multiple players to come together and create an ecosystem for business changing solutions. Many buyer organizations (e.g., PepsiCo) have been very vocal about their dissatisfaction with the traditional agency model and are taking marketing work back in-house, or instead of consolidating providers they’re distributing work to several specialty providers. The opportunity for BPO providers to disrupt in this space is increasing; while it is critical for BPO service providers to partner with agencies, which still have and will continue to have a prominent place in the ecosystem, there is much more opportunity for BPOs to provide strategic level work than in the past. In addition, technology has disrupted the way companies go to market. “Martech” has grown exponentially in the last few years, and managing an increasingly complex stack is the norm while companies struggle with the pace of change to manage these varied systems.
So traditional ad agencies have not kept pace with market changes and thus have opened up opportunities for consultancies and BPO organizations to enter the market in some unexpected ways. The part where BPO service providers play in this ecosystem is often in a paradigm referred to as a “de-coupling” strategy: separating the creative from the production. In this model, agencies set the big picture tone for the campaign but can’t meet the needs for reduced cost and speed that BPO service providers can for services such as localization, translation, regulatory/compliance and re-imaging. The service provider takes the agency campaign assets and reworks them for specific markets, devices, etc.
Sample Content Production Engagement Model
However, many of these services involve elements of creative design and require a blend of talent and automation to execute well. And services buyers are increasingly looking to providers to have more strategic capabilities, especially where the convergence of marketing, sales and customer service happens in customer experience design. Almost every services buyer we spoke to expressed an interest in more strategic, higher value services from their providers.
As in almost every market, buyers are increasingly looking to BPO service providers to get more innovative and hungry for their business. Most buyer references said their providers “do what I ask them to do well,” but these same references admitted there is much potential in the future for handling more strategic services: and many service providers have the capability. Even larger enterprise buyers see potential in moving away from the arrogant and set-in-its-ways agency model and embracing services with a fresher-thinking provider. As one client reference commented: “When you go with a big agency, you’re going to get their B team.”
So how are service providers coming to the table?
Players with smaller practices, such as EXL and Tech Mahindra, have some interesting vertically focused offerings and have the advantage of being able to give clients lots of attention and thought leadership. Customer experience management-focused companies (i.e., HGS, Concentrix, Aegis, Revana Digital) have the advantage of knowing their end customer’s requirements best through the connection of their contact center businesses. While these providers aren’t known as a marketing brand for new logos, with the convergence of service and marketing can often sell bespoke or smaller campaigns with an interesting value proposition to customer experience focused stakeholders. The same goes for ITO focused providers (i.e., HCL, NTT DATA Services), where these providers have solid operations engagements elsewhere in the organization, can leverage the strength of those relationships in the growing digital marketing space.
Companies like Genpact, Infosys and TCS have approached digital marketing operations with a strong stance around automation and analytics. And clients seeking alternatives to the traditional agency model have enabled providers like Cognizant, Wipro and Accenture to excel at an overall vision for digital marketing operations– these providers are acquiring and integrating digital expertise– unlike the traditional agencies who buy up digital agencies and run them as separate entities without as much thought to leveraging the assets of each piece across the organization.
The Bottom-Line: In the rapidly changing marketing services landscape driven by the digital consumer, there is tremendous opportunity for service providers bringing their A team … and it’s anyone’s game
The HfS 2016 Digital Marketing Operations Blueprint covers market trends and direction as well as the analysis of 14 service providers: Accenture, Aegis, Cognizant, Concentrix, EXL, Genpact, HCL, HGS, Infosys, NTT DATA Services, Revana Digital, TCS, Tech Mahindra, Wipro. For more detail—including analyses and individual profiles of the service providers—click here to access and download the Blueprint.
“It is a truth universally acknowledged” that the healthcare experience needs to change – for consumers and clinicians. Part of this change is to make access to data, services, and transactions easier – more “at the fingertips,” if you will—and more relevant to their healthcare experience. In a word, mobility. Mobile is about the platform; mobility is about the journey, the movement of the person, and the experience while in motion. There are a number of mobile platforms on the market today, but who is using them to bring mobility to healthcare?
“…mobility is about understanding where I am, where I am going and what I want to accomplish, and helping to make that journey exponentially better,” said David Sable, CEO of communications firm Y&R in a Huffington Post blog.
Well said. There are a number of mobile platforms on the market today to help make this happen, from well-established technology providers like IBM, PegaSystems, and SAP as well as up-and-comers like Kinvey, Kony, and MobileSmith. And I recently had an opportunity to get to know one offering suite a little better – Skava, which was acquired by Infosys in 2015.
How can mobile platform technology providers bring mobility to healthcare?
Skava is well established as a mobile development platform in retail, powering mobile apps, kiosks, and mobile devices for Gap, Staples, ToyRUs, and others. Now Infosys is bringing this consumer engagement and e-commerce enablement platform to healthcare. It is developing a set of independent, modular, discrete functional units packaged as “Build Your Own Digital Platform” for healthcare providers and payers. (see Exhibit 1) Imagine consumers, patients, caregivers, pharmacists, and clinicians – among others in the healthcare community – being able to enroll, complete transactions like paying bills, scheduling, care management plans and alerts, etc. Then imagine having it integrated into the core healthcare management systems already in place.
Exhibit 1: The “Build Your Own Digital Platform” Play for Mobility in Healthcare
Infosys isn’t the only one with this capability, so if you are looking at walking down this path, take a look around for what best fits your needs. What I found with Infosys is that even though this solution set is not well established in healthcare, it does have a strong client base and proof points from retail, an industry that is heavily dependent on engaging consumers in transaction oriented interactions. The platform supported $1.5 billion in e-commerce revenues in 2015. Infosys also has depth in IT services across industries, including healthcare, so it has the capability to work with clients to integrated and customize apps and services as needed. The Skava platform does plug into current IT infrastructure. And, the service provider is also better integrating its business services and IT capability so that if you want on-going support that includes data management and analysis, you can tap into extended services and have a single provider.
One “miss” in the story line so far, though, is my earlier point about mobility and creating an experience versus offering a mobile platform. Infosys as a company is investing heavily in design thinking capability – an innovative approach to identifying and solving problems. Yet, when we engage in briefings and look at the materials associated with this solution set, there is no mention of starting first with – what problem are you trying to solve? What opportunity are you looking to address? How are you defining and testing out the proposed solution prototypes with the stakeholders – consumers and business? And that’s a critical first step to ensure that the use of the IT-based solution is truly to address the consumer experience and how that impacts the business outcomes.
Bottom line: If you want people to do something, make it as easy as possible for them to do it. Healthcare providers and payers need to make healthcare services easier for consumers to access, use, and pay for, and mobility plays an inevitable role.
Infosys can tap into its design thinking approach and IT services, and leverage the Skava platform in a flexible way to help clients get there. There are already a number of healthcare management apps and mobile capabilities on the market, so it isn’t new. It is something that if you want to truly be a healthcare consumer oriented organization, you’ll have to incorporate into your business, and partnering with a service provider with IT, business process, and analytics skills is a viable option.
Arvato just announced its acquisition of Bangalore-based Ramyam Innovation Lab, whose stated mantra is to make customers “raving fans” by enabling contact center staff to have valuable customer information at their fingertips. Ramyam’s key asset is its omnichannel platform, Enliven CEM. The platform integrates various communication channels such as email, chat, voice and social media, and uses interaction information to generate individual customer profiles. This is layered with analytics and dashboards; the analytics model aspires to manage customer journeys with “context-based decisioning” in real time, helping agents more proactively solve customer problems.
Our research shows that in this race toward providing digital customer experience, most of the leading customer experience management companies are taking a stab at providing omnichannel customer services. Major CEM providers are starting to/have figured out their strategies for developing 360 customer views that would provide insights to improve contact center effectiveness. To provide progressive omnichannel service support, a CEM service provider needs a strong framework for the underlying data and technology, and that’s what this acquisition is about. Most are taking a third-party approach to enabling the technology, but Arvato’s move provides it an opportunity to have better integration and perhaps move towards providing CEM As-a-Service in the future.
Arvato’s approach is admirable, especially where it affords the company an inroad to one of its key growth markets in India. Ramyam’s highlighted consumer-facing verticals of telecom, retail, banking and travel are key industries for omnichannel customer communication. This also is some much-needed publicity for Arvato, which has fallen behind its customer experience management competitors in thought leadership and demonstrated investment in innovation.
However, all of these buzzwords around omnichannel are used so often and heavily (i.e. “next generation analytics-driven actionability, enabling service providers to deliver superior experience and engagement to their customers”) that they are becoming diluted, making it harder for service providers to carve out a real differentiator with these platforms. Arvato’s assertion that this capability creates “a distinct competitive advantage” is disillusioned. To create differentiation, it will need to use this acquisition to craft and articulate an As-a-Service on-demand, flexible strategy for providing customer experience management—one that provides a single contract with well-defined business outcomes by leveraging technology platforms, data and insights and omnichannel customer support functions.
The bottom line: Kudos to Arvato for making an investment in a young, emerging tech startup with some solid customer experience thinking. But the messaging needs some maturing to really highlight the differentiation that Ramyam can bring to the table.
Whether the combination can help turn Arvato’s end customers into raving fans, we’ll wait and see.
This week the Internet blew up based on news that Intel officials briefed President Obama and Donald Trump on the possibility that Russia had information on Donald Trump that was damaging to him personally and might even have implications for the entire US government. (And while one never expects a hashtag like #goldenshowers to trend on twitter, the feed was hilarious.)
Politics aside, this story is a textbook case of problems with being proactive with threats. Notice: I wrote “threats” not “events” or “incidents” because the incident hasn’t happened yet, there’s just a high potential for it to be true and for it to happen.
You get lots of finger pointing in hindsight. The common question is “what did you know, and when did you know it?” Because, after something bad happens, anyone who knew of the potential for the event comes under fire for not saying something sooner, not being more forceful if in fact they HAD said something, and for not doing something to stop it from happening. The fact is something happened and someone has to somehow get blamed.
And in the Trump intel story, you see the opposite of that, with everyone retreating to respective political corners, defending or dismissing the intel reports based on emotion and personal perspective. And since now that everyone’s already picking sides, it will be that much harder to make the right decision on how to treat the threat risk. So, how do you ask the right questions and take action in time to avoid the impending threat?
Here are the questions predictive security and risk management brings:
When do you flag a threat to executives? It’s important to have a policy in advance so there isn’t confusion later. It could be something like “a risk has been increasing steadily for the past 3 months” to “a risk increased very quickly in a short period” or similar idea. When you raise the flag may have a drastic impact on which actions you take to address the treat, since risks are often time sensitive.
How much do you tell them? Even if you’ve decided to tell executives, you must decide how much information to give. Too much detail and you may panic them unnecessarily, too little and they may not appreciate the implications of the threat. This question is usually harder to answer than the first one.
What do executives need to DO because of the rising risk? Another tricky area, what do you propose be done about the threat? Wait it out and seek more confirmation? Deal with it proactively, even if there’s potential for the threat to not happen? Take interim steps? This is the most important question to be answered when talking about predictive security management.
Focus Predictive Security On Remediation Not Reporting
We don’t know what advice the intel team gave to the government leaders, but we do know there are a few general ways you can deal with a threat or risk:
Accept the risk and go on with what you were doing. Sometimes there’s not much that can be done – or worth doing. For example, there could be a heightened risk of a terrorist attack, but you don’t want to be seen to be weak and encourage them further and choose to ignore it, safe in the knowledge airport security is already prepared for such a threat.
Try to remove or reduce the risk. In a political context, it might involve finding the people who are informants and stopping their ability to keep helping the other government. In a corporate setting, it might involve cutting a contract with a supplier you think has illegal dealings, for example.
Make a strategic bet to increase the risk. In a political context like yesterday’s story, increasing a risk strategically could involve cutting diplomatic ties, mobilizing troops or invoking sanctions, among others (these increase risk because they may cause the original threat actor to escalate further or move more quickly with the original threat.) In a corporate context, an example would be to work with a startup vendor even though you know it’s a highly risky supplier because that vendor has some amazing new technology that you want to use.
Unfortunately, if you didn’t have a remediation plan in place BEFORE the risk became likely, you’re facing much more confusion about what to do and even whether to do anything at all. This puts your company at risk and in fact, negates the value of having predictive security capabilities.
Bottom Line: Security professionals need predictive security management and prescriptive treatment plans to protect their firms from looming threats.
Security teams need clear treatment plans that address potential risks and how to mitigate them. As a simple example, if there is a threat of insiders giving information to third parties, then the remediation plan would involve something like “when someone downloads more than one file they don’t normally access, that person’s manager must ask why the person needed those files within 4 hours of the download.” Without this proactive treatment planning, companies likely do nothing and then get harmed even by risks they could have addressed.
Let’s cut to the chase – there have never been times as uncertain as these in the world of business. There is no written rule-book to follow when it comes to career survival. The “Future of Work” is about making ourselves employable in a workforce where the priority of business leaders is to invest in automation and digital technology, more than training and developing their own workforces.
As our soon-to-be-released State of Operations and Outsourcing 2017 study, conducted in conjunction with KPMG across 454 major enterprise buyers globally, shows a dramatic shift in priorities from senior managers (SVPs and above), where 43% are earmarking significant investment in robotic automation of processes, compared with only 28% placing a similar emphasis on training and change management. In fact, the same number of senior managers are as focused on cognitive computing as their own people… yes, folks, this is the singularity of enterprise operations, where cognitive computing now equals employees’ brains when it comes to investment!
My deep-seated fear for today’s workforce is that we’re in danger of becoming this “Lost Generation” of workers if we persist in relying on what we already know, versus avoiding learning new skills that business leaders now need. We have to become students again, put our egos aside, and broaden our capabilities to avoid the quicksand of legacy executives no longer worth employing. We need to become hybrid corporate animals.
So let’s give some examples of these “new skills” we need to develop for ourselves:
Sales people: it’s no longer just about selling and relationship development, it’s about understanding evolving business models, understanding the impact of technology and the importance of smart marketing. You need to be a trusted consultant, not simply good with a 9-iron. Clients needs are increasingly complexifying and you need to be the arbiter of helping them simplify their requirements. Understanding business models is what will make you successful in the digital world.
Software people: it’s no longer about data management, security and making apps function, it’s also about understanding the desired business outcomes associated with these investments and helping your enterprise stakeholders articulate them better, so you can work with them to fashion and build the right solutions. Design Thinkwith your business colleagues, to make sure you are truly working in tandem to achieve the goals that you are setting for yourselves…. envisaging the desired outcomes and working backwards from there, is the smart way to do things with technology investments.
Marketing people: forget spending all your time dredging up useless metrics to justify your existence, and focus more on learning new methods to drive awareness and new revenue, using all the evolving channels at your disposal. Really learn about the desired outcomes of your customers, prospects and your internal sales team to make sure you can be a true business partner to them and not a one-stop shop for them to check boxes. Marketing has to evolve into both a strategic and a tactical function that intelligently ties all the channels to market together.
Finance people: this is less about churning out reports and data, but working with the key business stakeholders to understand the desired business outcomes of the organization and the evolving business models to produce relevant data and analysis. Simplification of data, as opposed to the production of it, is the watchword.
Procurement people: this isn’t only about policing expenditure, but much more about understanding your enterprise stakeholders’ needs and desired outcomes to make sure you can help them access what they need to achieve them. You are a business-savvy relationship builder, not the guardian of the corporate coffers. You need to understand the whole sales, production, and marketing cycles of your organization if you really want to be a valuable asset.
HR people: you need to make a significant shift away from being the guardians of your firm’s legal counsel, to a function that develops a genuine understanding of the business needs and the desired outcomes… as you will be tasked with finding the talent described above. Learn to identify talent with can learn on the job with an open mind, not simply finding “silver bullet” candidates who come locked and loaded with all the relevant experience. In the digital business world, the latter no longer exists. You need to be the football coach who unearths the rough diamonds with the potential your enterprise needs to achieve its outcomes.
The Bottom-line: It’s one thing to describe the skills you need, but how do you go about developing them?
If you can figure out how to demonstrate answers to these six questions, you’re probably on the right track:
1. Which customers have you delighted recently? 2. What new relationships have you made that add value to our business? 3. What work have you done that excited people inside and outside of the business? 4. How are you helping energize your colleagues and exciting them with new ideas? 5. How have you helped add value to new business wins? 6. How have you contributed to new initiatives that improve productivity and effectiveness?
Net-net, think of your firm as Walmart morphing into Amazon. Just a few short years ago, Walmart would judge its growth and success on how many new stores and how many new employees it created in a given year. Today, Amazon has completely disrupted Walmart’s business by focusing on how many new customers it acquired, without making any investments to its existing human or physical infrastructure. You need to be thinking like Amazon does… how can you be more valuable to your firm – without having to add heaps of staff to support you – by managing your time better; by reading (a lot) more; by making the effort to forge relationships with people who can make you smarter; by looking after your health better.
So turn off that Facebook – and stop checking your bloody email every 5 minutes and focus on investing your time in making yourself a smarter, more hybrid, versatile, employee. Don’t become part of this Lost Generation…
The bold move of adding The Marcus Buckingham Company could pay off nicely for ADP, and in “multiplier effect” ways that, by definition, are much more consequential than incremental revenue or adding some new strategic customers.
