What a September that was the industry formerly known as “outsourcing”!
An “industry” still searching endlessly for an identity, a purpose and a value proposition, founded on more than dredging up cost savings through lower wages, tortuous conferences for bored sourcing advisors and pompous analysts who ask idiotic “questions” which end up confusing themselves… but finally we finding some salvation for our industry! Finally outsourcing doesn’t have to fester on the scrap heap of legacy commoditized business models, akin to what happened to the telecom industry…
The State of Denial is over in the States. In White Plains for the HfS Cognition Buyers’ Summit, the mood was the most upbeat I have experienced in a long time – clients were peeping above the bed covers and saying “I want real examples, I want to touch and feel this automation stuff… tell me what I need to know and how this is done”. There as a stark admission that “our kids will be alright, they live and breathe what is needed in organizations today, its us mid-career folks who need to be worried – we’re the ones who need to reinvest ourselves if we are to stay relevant”.
Many of the Indian providers want to extend their stay in Denial a while longer. Then we took the HfS team over to Bangalore, India for NASSCOM’s 19th BPM (BPO) Strategy Summit, where most of the local service provider dignitaries were firmly hiding under their bed covers asking the same old question: “How can we sell higher value deals to the same clunky big enterprises without doing anything differently since we started doing this stuff 19 years ago?”. Clearly most of these guys won’t change course while they’re still enjoying a (diminishing) 5% revenue growth and still making (diminishing) healthy profit margins…
The Problem dogging the outsourcing industry: Too many buyers simply aren’t looking to their providers with the expectation they can receive more than the basics
Perhaps most telling is this data point from our brand new industry study of 343 industry stakeholders, conducted with NASSCOM for the summit, where it’s clear over half of today’s buyers do not view their providers as purveyors of the new high value capabilities that will help them break out of their legacy tail-spin. This is in stark contrast to the views of the service providers themselves and sourcing advisors, where the vast majority clearly view the role of the service provider as pivotal to help clients advance their capabilities in areas such as Design Thinking methodology, automation, cognitive computing, analytics and process redesign:
The Solution to making outsourcing great again: Supporting and enabling disruptive business models
The big issue today, in my view, is that the outsourcing industry is too focused on the wrong things, such as staving off the “threat” of automation and protecting traditional headcount-based delivery. So let’s break down the issues to come up with some ideas for preparing for the future:
Automation is not the threat to outsourcing, it’s Digital Disruption. The real threat comes in the form of disruptive competitors using digital platforms and cognitive computing, that can wipe out your enterprise overnight. Imagine a new bank appearing, with a great mobile app, immediate customer service via chat / phone etc. Or a rival insurance firm that delivered everything you needed at half the premiums, but twice the usability? You’d switch in a heartbeat wouldn’t you? And these capabilities are here today, they’re not coming tomorrow. Today’s clients are under incredible pressure to be more nimble, more intelligent, more scalable and more digital than ever. And this is right across industries, where the threat and opportunity posed by digital disruption is rife. Remember, it’s recessions that destroy jobs, not robots:
Outsourcing is the perfect solution to help scale and operate disruptive business models
BPO and IT services provide the modern business with the ability, not only to survive and thrive in today’s disruptive market, but it’s here for today – not just tomorrow. BPO is not some legacy service that’s going the way of the robot, it’s a very real solution that is more imperative than ever for the survival of our most advanced digitally-savvy businesses.
I recall one of our analysts recently coming back from a visit to AirBnb’s new BPO contact center and she was actually shocked – “Phil, it’s just your classic BPO center providing traditional customer support services.” Digital businesses actually need BPO to function – why do they want to going out and hire armies of support staff and processing people when they need to attack their markets at warp speed?
Digital disruption is driving an unprecedented level of urgency and paranoia among enterprise leaders – and outsourcing can really help
In many industries today, digital business models can completely take established legacy enterprises out overnight. If you are an insurance firm with 10,000+ people processing claims onshore using green screen computers, or a bank which still has hundreds of branches employing tellers from the 1970s, or a retail outlet with no mobile app strategy, you are at dire risk of competition coming at you with a completely mobile app-driven, user friendly, intuitive and cognitive business model, supported by intelligent, affordable BPO and IT operations. So you need partners who can help you pivot fast, and combat these potential fatal threats to your business model… and where better to look than BPO and IT services firms which can provide the scale, talent and analytics you need to operate with the flexibility you need, without the burdensome capital investments?
Outsourcing can make itself great if it can pivot between helping today’s traditional enterprises and tomorrow’s emerging digital businesses
When we look out into the future of the world leading companies, the Global 2000 in five years time will look very different to what it does today. As we’ve discussed many times before, enterprises are looking to focus on their core and stop adding size and scale to grow. With businesses which interact with their customers, partners, suppliers and employers using apps and collaborative tools, the focus is quickly shifting to growing profitability through smart scalability of customer base, as opposed to linear revenue growth. This means a $100m digital business in the future could command $10-20m in outsourcing spend a year to drive its business forward. But the crux of the problem today us today’s outsourcing providers are still obsessing around pursuing $5bn+companies because they only see their success in going through the initial labor arbitrage, as opposed to pursuing clients which to not have the legacy back office burden and just need agile services they can plug into quickly and effectively.
The emerging outsourcing customer needs a very different approach to account management, sales and service delivery
Outsourcing providers need to completely revamp their account management models to cater for the evolving digital business – but this something well within their capabilities… just go hire forward-thinking sales leaders and build teams of people who can work with the emerging companies of the future, not just the ones of the past. In addition, providers need to ensure they have the ability to cobble together smaller delivery teams which can quickly grasp the needs of these evolving clients. Hence, they need large investments in training and Design Thinking to help with outcome and goal setting with clients. The old “master/slave” delivery model will be a thing of the past with the emerging digital business, which will demand much faster ramp-up times and staff who can quickly respond to their unique business needs.
The Bottom Line: It’s time to embrace our Scary Bright Future – we have the tools to make it happen!
So it’s time to be smart, time to be prepared to help our clients combat, and ultimately win this war with digital disruption. BPO and IT services provide a critical foundation, so let’s prepare to reinforce to the world what we stand for and the sustained value we deliver every day to thousands of clients around the world.
Phil reminded me recently of my piece on the Automation Crystal Ball and then challenged challenged me to take a longer (and bolder) view as to where Intelligent Automation (IA) will be in 5 years’ time.
Here’s the interesting piece: to do that, we have to know where we are now. IA isn’t well defined today and stakeholders struggle to find any common ground. So in the midst of that confusion it might be difficult to see a clear path forward. But I’ve already accepted Phil’s challenge so I’ll start first by offering my views on where we are today so to have better clarity on where I think IA will go.
Blurred Perceptions Rule Right Now: Today’s Game Is To Create Shared Understanding and Definition
First, it’s NOT about tools, technology, and hollow promises to solve the most pressing issues of mankind (although who doesn’t want to save mankind?). Instead, at HfS we believe the relevant context for discussing IA is service delivery. Most approaches to IA involve decoupling routine work from labor arbitrage. At it’s core, it means IA is about automating mind-numbing, repetitive pieces of everyone’s jobs – giving companies two benefits:
Lower costs by reducing the number of people needed for “grunt work.” This savings goes way beyond what could be achieved simply by swapping out higher paid workers with lower paid ones (even if the lower-paid workers were equally or more talented.)
Increasing opportunities for workers to do creative work, develop new avenues for revenue creation and skill growth, and improving the job satisfaction of workers who no longer have to suffer through boring, routing tasks.
Our research shows that the IA is still a nascent market amidst the confusion we discussed earlier. But as the market begins to firm up around this service delivery perspective on IA, we see exponential growth coming. The seeds of that growth have been planted by suppliers and buyers. The supply side has built out strong capabilities by setting up IA centers of excellence and by continuously integrating the plethora of IA tools. The picture of the demand is much more difficult to assess as IA clients tend to shy away from discussing their projects in public. They often don’t want to give away perceived competitive advantages or are concerned about the socio-economic implication of the topic. However, in private buyers tell us they’re piloting, testing, building and otherwise beginning to engage in IA.
Suppliers And Buyers Must Co-Create A Consolidated Understanding
Against this background of an extremely blurred perception of IA, what are the issues that need to be addressed in order to see an acceleration in the market development? The following points provide a high level call to action:
Buyers need to:
Work with service providers and other third parties to educate the market on use cases and implications of IA.
Address the issue of governance. How do these highly automated environments need to be managed?
Create scenarios to understand the implications on talent and affected workers so they don’t cause unintended consequences in their automation efforts.
Service providers need to:
Better understand the impact of IA on their revenue models so they can make better decisions about what to offer the market and how to change their businesses to be successful in the automated environment.
Discover the right testing methodologies to guarantee the quality of service delivery in an environment of self-learning and self-remediating engines.
Look at their own talent, not just the talent of clients. Are robots taking over the workplace and how is the way services firms work going to change?
Suffice it to say, much of the future development is dependent on how stakeholders are going to address the issues that we have raised. Therefore, in this context we will focus on two top level issues that encapsulate the future of IA. First, what is the direction of travel for the build out of IA? And second, how is IA impacting knowledge work?
IA’s Growth Will Come From Vertical Evolution
HfS believes in 2020 we won’t talk about RPA anymore as it will be just a reality in the back-office. But we will continue to talk about the broader notion of IA. Yet, in the context of how of industrialized, highly automated service delivery will interact with Deep Learning, Neural Networks and Artificial Intelligence to generate highly verticalized insights. That is where both value will be created as well as differentiation be provided. We see early examples in Watson Health or UK startup RAVN which offers enterprise search and machine learning in legal environments. At the back of my head I keep thinking about the comparison to high frequency trading. In a market where standardized platform don’t offer differentiation anymore, value will be disseminated through new business model on top of those platforms (as well as the continuing informal practices).
Bottom Line: IA Will, Yes, Bring About A Virtual Workforce. Eventually.
In 2020 we will be in the midst of a disruptive transformation of knowledge work. Already now we see the emergence of virtual agents that are underpinned by broad scale automation capabilities. Those agents range from the big beasts Watson and Amelia to OpenSource avatar and Amazon’s Alexa voice integration. Those approaches will make a broad range of activities superfluous. Take RBS in the UK who has announced to introduce robo advisors with the sole purpose of taking out FTEs. Thus, we will see a mix of mainstream human augmentation through the use of IA but equally cold hearted job elimination. The impact will be most prevalent on the supply side. As we are working in the sourcing industry we have to stop dressing up the issue and start an open and honest debate on the discussion of knowledge work. Just like offshoring, automation will severely disrupt the industry – and clients need help in addressing those issue. Therefore, these projects should be paid for work and not pre-sales engagements.
IA will be a blended but mainstream reality in the various service delivery strategies. The focus will have changed to connecting front and back-office through the rise of virtual agents that will integrate the requirements and capabilities for what HfS has termed the Intelligent One Office. Those virtual agents will be tangible part of the transformation of knowledge work. However, unless the industry is addressing the implications head on, we wouldn’t be surprised to see widespread demonstrations against some industry practices on IA as the fervent discussion on the ethics of Artificial Intelligence that is already raging through the developer community and more customer facing businesses such as Google and Facebook will disrupt the B2B space. Thus, Virtual Workforce could be both a euphemism as well as a broad placeholder for a blend of human and automated work.
A pervasive theme in the HRO market today is the need to improve employee satisfaction. This requirement to nurture and retain employees stems mainly from a concern that there is a scarcity of talent in the marketplace. Personally, I have often written on themes relating to talent shortage, and while this situation is backed to some degree by statistics, is it in fact overstated?
Is the shortage of talent self-induced by organizations?
My recent research has focused on the RPO market and never have I seen such a disconnect in the maturity level of both provider’s capabilities and also client policies.
No wonder your talent pool is limited if your hiring policies are outdated and your RPO provider is still using the yellow pages.
So let’s begin with the organization. It’s scarcely a surprise you can’t find talent if you are still stuck in the age old practice of sourcing either top performing or ivy league candidates. This issue is compounded further by hiring departments alienating candidates who are not successful in their first application. The simple fact is; we have growing global economies requiring an ever-increasing workforce. Supply can simply not meet demand if we continue to use the old model of hiring what we perceive as “the best.” Your sales team look to continually expand its target market, so why isn’t your recruitment department doing the same?
At this stage, you might be asking, “Don’t we hire RPOs to advise and assist with this?”
Well, firstly outsourcers can only be as good as the processes they are permitted to follow. And secondly, the disparity in RPO service provider’s capability is massive. On the one hand, there are providers offering traditional RPO support that balk at the idea of using analytics and simple automation, beyond interview scheduling, to enhance the selection process. Then there is the modern leader in the RPO market, using machine learning and intelligent analytics to enhance the candidate selection process thereby expanding the available talent pool. Here the “ideal candidate” is constantly updated through the ongoing analysis of interview and employee performance data. These systems can then identify the best, and most likely to succeed in an interview, candidates from available talent pools.
How do we address this talent shortage then?
Address your legacy recruitment policies: Firstly, start with the organization itself. Companies need to realize that what was previously viewed as “the best” is no longer entirely accurate. Targeting a wider pool of targets is key for success in today’s recruitment department. Ernst & Young has been a forerunner here, with its UK hiring department dropping its minimum academic requirement for graduates after it found no correlation between academic performance and on the job performance. Also, psychologists now need to be a key member of the recruiting department. Assessing candidates via skillset as opposed to behavioral characteristics seem counter-intuitive. Skills can largely be taught, behavior and culture are more generally ingrained in one’s nature. A great case study to highlight this point was a contact center which changed its hiring approach and realized an 80% improvement in first month KPI adherence from candidates hired through a purely behavioral based methodology, against counterparts hired via a traditional skills based assessment.
Foster your unsuccessful talent pool: Secondly, organizations can no longer simply forget about unsuccessful candidates. By unsuccessful we mean they might not be a fit for the one job, but keeping them engaged for future opportunities can shorten the recruitment cycle for a potential future match. Sales and marketing have been doing this for years, continually engaging and challenging its target audience, so why not recruitment? Accenture has developed a talent community which continually provides updates for suitable available positions and further candidate development, thereby keeping its talent pool engaged and aligned for future job openings.
Your RPO needs to embrace automation and analytics.
RPO service providers have a crucial role to play here. If organizations are open to expanding hiring policies, service providers need to be able to deal with a larger and more diverse talent pool. One of the reasons RPO’s have not embraced automation is simply because automation in the recruitment market needs to be cognitive to offer true value. Automation at its most basic level relies entirely on rules-based, preconfigured processes. As we have discussed here, hiring practices need to be increasingly fluid, making cognitive automation a better fit. As such recruiting platforms that utilize automated processes need to learn from prior hires and adapt “ideal fit” accordingly. Very few providers yet have this ability. What is crucial to realize here is that cognitive does not remove the role of the recruiter, it merely means recruiters can spend more time in the assessment process with a better candidate.
The Bottom Line
Our key takeaway here is that after companies initially address internal hiring policies, they then need to partner with providers that offer both the technology AND the people needed, to identify and engage a diverse talent pool.
This is my inaugural blog post for HfS Research, an analyst firm I’m very pleased to now be part of.
I joined HfS because of the deeply held belief that HCM solution vendors could be bringing more clarity to the buying decision and even drive more compelling business outcomes for customers, and that a certain type of analyst firm could help pave the way.
I also joined HfS because, like hockey players go where the puck will be vs. where it is, HfS struck me as a firm that is not only going where the puck will be, but arguably laying down the ice for a new arena. And in the spirit of “I’ll try almost anything twice,” I had an opportunity in 2011 to work with someone I (and legions of others) greatly admire, Josh Bersin, and I also covered the HR Tech landscape then.
Attending the annual HR Tech Conference, as I’ve done 12 of the last 15 years, is like going to a family reunion for me, only a bit less gossip and lamenting about getting old (given tech sector demographics). Re-nourishing the relationships cultivated over the years is frankly as important to me as the intel gathering done at the conference, although the latter makes for a much easier cost justification.
I started going when I served as PeopleSoft’s HCM Product Strategy head, and would have gone when I was an HRIS practitioner from the mid-80s to late 90s but no equivalent conference existed in my view. This one rules the roost.
My esteemed colleagues at HfS, Phil Fersht (founder and CEO) and Barbra McGann (Chief Research Officer), asked me to do a pre-event post on what I’d like to see, and then a post-event post on how much of my wish list was fulfilled – AND BY WHICH HCM VENDORS IN PARTICULAR.
My list follows, and I strongly encourage appropriate vendor contacts to reach out to me at [email protected] so you can brief me in Chicago on the extent to which your offerings align with any of the items mentioned here:
HR-user configurability of the solution, even not-very-technical HR users.
Prescriptive analytics (i.e., analytics that also guide the user in addressing or solving a problem vs. just reporting the news).
Examples of cognitive computing that demonstrate real machine learning such as pattern recognition and appropriate actions automatically initiated at either the micro (employee) or macro (workforce) level
Product innovations that can drive significant business results for customers without major operational dependencies (e.g., change management, process changes, competency re-alignments, etc.), or innovations that will be central to solving customer business problems or pains that are likely to become more acute over the next 5 years. Examples of the latter might relate to the impending mass exit of baby boomers from the workforce, more reliance on freelancers, etc.
Technology that mirrors the way end-users think and solve problems, often in idiosyncratic ways.
Evidence of how a vendor’s customer success model is helping customers achieve measurable user adoption and business value targets.
… and in general, more acknowledgement that no matter how great the solution is, technology by itself is no more than perhaps 40-50% of the answer to solving business challenges in the HCM domain.
Bottom Line
I’m genuinely excited about once again navigating the HR Tech vendor and solution landscape at the annual HR Tech event, culling and calling out nuggets that buyers will find valuable; and very keen to do so on behalf of HfS Research.
You’re not alone in thinking that the age of the physical long service award is well and truly dead. A trophy, medal or pin for long standing service now seems horribly outdated, doesn’t it? However, this is not the case. Far from it, actually: There has been an evolution in the way firms in the long service award space now operate with most having expanded into the service reward market whereby employees can be rewarded for great work accomplished as well as the traditional long-service awards.
In a recent piece of research, Can HR be an Innovation Incubator?, I identified how the right people can be sourced, assessed and incentivized to deliver enterprise wide innovation. For organizations looking to stay ahead of the curve, it is essential to have the right people and to also provide incentives for these people to behave in a way that drives revenue and profitability growth.
Now it’s all well and good investing in new assessment criteria, interview techniques and bonus schemes. But if your workforce doesn’t hang around for long, these new measures are worthless. Voluntary employee churn is incredibly pricey, both in terms of opportunity and replacement cost—not to mention the loss of IP. Increasing employee engagement is a key means with which to drive employee engagement and therefore retention. The simple act of recognizing great work, and in some cases physically rewarding it, goes a long way toward building and incenting a motivated workforce.
Service providers doling out long-standing awards are still alive and well but are now, by and large, evolving service provision into Recognition-as-a-Service.
At a recent event, I had the opportunity to go under the bonnet, so to speak, of one of these employee rewards and recognition service providers—OC Tanner. The company is looking to modernize rewards and recognition—both the practice of it, and the services that support it. In its early days, OC Tanner simply provided “thanks for your years of service” awards, which it still manufactures. The company added recognition awards and now also provides end-to-end recognition solutions and services with a design lab and SaaS.
Although it keeps evolving, OC Tanner, like the HR industry, is having an identity crisis
The company has evolved with the market but it’s not clear where it is headed over the long term. Is it now a software company? What does it want to help its clients achieve and how? The development of its SaaS offering and its continued development of additional HR bolt-ons would suggest it’s moving into the talent management software space. That said, at present SaaS only makes up one tenth of revenues and clients can use differing software and channels to run rewards and recognition programs that OC Tanner fulfills. This seems to disenfranchise the service provider’s SaaS offering. OC Tanner has also made extensive investments in an on-site storage, fulfillment and distribution service for employee rewards. With the Amazons of the world freely available, and with a global reach, this seems unnecessary.
So, while it has branched out into the digital world with SaaS-based services and mobile capability, OC Tanner seems a bit stuck in its roots. The founder of the company put the organization in a 100-year trust in which it could not be sold or offered to IPO, and family members continue to hold positions on the board. Perhaps these two factors keep it emotionally tied to its manufacturing origination. However, the company drinks its own medicine, running an extensive in-house employee recognition program.
It is important to note that the service that organizations such as OC Tanner provide do not simply reward great work but they actively encourage and facilitate it. As such, Recognition-as-a-Service can be a crucial arrow in today’s CHRO’s quiver. In order to continue to speak to the member of the C-Suite, OC Tanner needs to continue down the path of Recognition-as-a-Service and steer clear of diluting itself and its go to market with IT based HR services that are already supported by other providers.
Lisbon, Portugal is the home of contact center giant Teleperformance’s crown jewel of consumer research, its CX Lab. I was fortunate enough to visit this center back in 2012 and to return again earlier this month. What’s different for Teleperformance since that last visit? This market leader has retained all of the features that made its Portugal operations special, while expanding its consumer research and keeping an eye on upcoming industry disruptors. Teleperformance’s size is making it harder than ever to move the needle on growth, but the service provider is continuing to invest in analytics and talent to continue on the path of innovation.
So what’s new?
Internal Recruitment Analytics: Teleperformance’s R&D team based in Lisbon conducts 130,000 consumer interviews across 11 countries annually. A noteworthy addition is its effort to study and analyze its own recruitment efforts; leveraging its analytics engine to assess a candidate pool of applicants. As one attendee adeptly put it, they’re “drinking their own Merlot.” The candidate assessment algorithm was performed on 300,000 candidates and achieved much higher accuracy rates in predicting employee success than the recruiter’s decision making alone. The service provider has also noted lower absenteeism, better employee experience and customer experience as a result.
Acceleration of Social Media Expertise: There were also great examples of the e-Performance and social media command center in action. The center employs researchers specializing in buzz monitoring, social media strategy design and best practices. The company is looking more at social media as a verticalized offering and taking into account the maturity of its clients as well as some of its clients’ status as “born digital” companies to create the most effective campaigns. For example, Teleperformance implemented buzz monitoring and social engagement for a retail client where their social SMEs were able to respond to 95% of customer responses within 2 hours. They were also able to increase the retailer’s following on Facebook by 500%.
Consumer Research with a Security Focus: On this trip I found the same level of keen focus on understanding consumer experience—what was different this time around is a newfound appreciation of the complexity that understanding customer dynamics entails. Along with this healthy paranoia about understanding consumer behavior is the staunch devotion to protecting that consumer data. This is particularly important for a service provider that employs 190,000 people across 65 countries. Especially for Europe, the new standards imposed by the GDPR legislation will significantly elevate the requirements to comply with security regulations. Teleperformance’s goal is to get operations up to those standards globally to stay out in front of future changes. The service provider prides itself on keeping rigorous security measures ahead of its competitors.
The future of omnichannel is immersive client experiences
Analysts tour the Teleperformance CX Lab in Lisbon, Portugal
An investment in integrated omnichannel strategy is about connecting the consumer research with clients, and bringing those insights directly from the end consumer. Teleperformance will be rolling out “Customer Journey Showrooms” over the next 6 months, looking at ways to showcase the potential for omnichannel experience, where clients can touch and feel what omnichannel could be for them. This will also include experimentation with intelligent automation and bot channels, as they progress in pilots with those solutions.
One aspect that hasn’t changed is Lisbon’s resolute status as a hub for attracting talented multi-lingual professionals from across Europe to service clients in 29+ languages. Comments from this tour echoed that of four years ago, in that Teleperformance is committed to recruiting talent from around Europe to service its multinational customers. About half of the Portugal staff has been recruited from abroad, and the service provider helps significantly with relocation and assimilation in Portugal. Floor tours of the Lisbon multi-lingual offices have a laid back hipster vibe you might expect from the kind of “born-digital” logos we saw there, and clearly they are attracting the talent to match.
Moving forward, a reality check
However, I sensed from this return visit a palpable and healthy sense of discontent among leadership—one that comes from being the biggest player in an industry facing disruption. The most obvious change was the announcement of a committee formed to study the impacts of artificial intelligence on the industry. For this BPO leader to say “we need to become more of a software company” and admit that they’re constantly nervous and on their toes, signals a big shift in the industry. Teleperformance is backing up that strategy– doubling the number of software developers in the next 12 months to enhance proprietary platforms like TP Observer, CCMS and TP Client. For the largest BPO organization in the contact center space, this kind of focus on potential disruption is incredibly important right now, and needs a lot of further development, in particular in partnership with clients.
The feel of the commitment to research and thought leadership at the CX Lab is what resonates in my memory from both visits. My favorite quote from the event was from Paolo Righetti, founder of Teleperformance-owned GN Research: “We’re teaching clients how to work differently, and they’re teaching us. We’re learning together.” This is the kind of collaborative approach that is needed to move this industry forward, regardless of location.
How many of you go to a store without a list of what you need? Personally, I never go out to the store without a specific need. I guess I am not the type of clientele the retailers are looking for since I don’t buy just because there’s a discount. And definitely, don’t go shopping randomly.
Recently, I needed some new pillows and ended up at Ikea, which is a great store if you ask me. I was done within 15 minutes because I grab what I need, and off I go. But whenever I go to Ikea I love to hang around in the parking lot for another 15 minutes just to see nature at work. I just love to see the stupidity that I claim it is. You come to Ikea for napkins or a bag of tea lights, and you go out with a new couch or side table. And then the fun begins. People start the process of blaming each other. The first complaint is about the car: it is a piece of sh*t and far too small. Then we blame it on the kids; we could have used the back seats, and this would not have been a problem. And so on. I think we get the point; people just don’t think too often about consequences when they lack focus.
In business, we see it all the time, and without strong leadership, this happens very quickly. People make a plan, talk about it and come to the conclusion that this is the way forward. Very soon people start tweaking agreements to make it more perfect. But for who? “Yes, but I think we need to be flexible?” or “Yes, we need this to be less black-and-white because otherwise, we will lose!” It is all in your minds, folks. Focus is the word you are looking for, and that is why we made a plan. Make sure you go back to that plan and stick with it.
When you focus, and others get sidetracked, you need strong leadership to remind you and your team what the plan was all along
You can use the Ikea example for everything in life. The car is your business, and the folks in your vehicle are your personnel, the space left is growth—and it is not unlimited in the current setup. The same goes for spending the money on that couch or side table. Did you really budget for it? If so, you could have used the extra service Ikea offers at a very small fraction of the price to deliver that same couch or side table to the place you need it. Saves you a fight in the parking lot and keeps you focused because you do not have space at that point in your current plan.
We all know that switching tactics all the time is not a good way to run a business. You need focus to reach your end goal. We are not only talking material discomfort here—it causes a lot of mental distress. When people make plans, they often see and measure that with success. Personal success and business success are not always the same. The moment you switch the focus you get contradictions, and that means people will get hurt in the process of making that switch.
Bottom Line:Focus and contradiction do not go hand-in-hand. When you focus, and others get sidetracked, you need strong leadership to remind you and your team what the plan was all along, and there is no room for excuses, just focus. Change as often as you want, but remember that means there will be zero focus, and that means the results will be disappointing as well. My tip: follow one course until successful.
Why do the eyes of HR people always light up when you mention the word “Workday”? Has Workday become the “complete suite” for the HR function, in a similar vein that SAP did with the CIO in the 1990s?
Well, judging by the feverish excitement from the leading service providers to scoop up the best and brightest of the star niche players, the battle for Workday services supremacy has hit fever pitch, with Accenture following IBM’s and KPMG’s recent acquisitive forays in the space with the purchase of DayNine.
Accenture’s latest move in this competitive game has potentially check-mated its closest competitors, at least in the short-term. Instead of just acquiring a set of specific technical or geographical delivery capabilities, Accenture has targeted one of the leading Workday services partners in the market. Both service providers did very well in the recently published Workday Services Blueprint 2016 report. We positioned Accenture and DayNine in the Winner’s Circle because they both demonstrated depth of experience and capabilities, impressive investment in tools and technologies to support deployments, and a focus on talent retention, all supported by strong client references. In fact, we positioned DayNine as the best executor in the Blueprint.
We estimate that the combined entity has a total of 1,275 people in the new Workday practice, including an estimated 1,152 certified Workday consultants. This is bigger than the largest Workday practice we have seen so far at Deloitte. Moreover, Accenture consultants hold an average of 2 Workday certifications each, and at DayNine this figure is 3.5, among the top 4 in the Blueprint.
Of course, it’s not all about pure scale. DayNine gains access to Accenture’s broader consulting capabilities and innovation around service development. Accenture gains access to medium sized enterprises and additional skills in Europe, which is a hot growth area for Workday services next year. This initiative also aligns neatly with Accenture’s Cloud First growth agenda. It acquired Salesforce services partner, Cloud Sherpas last year (see: Why Accenture’s acquisition of Cloud Sherpas is both an offensive and defensive move) and more recently, Italy-based Salesforce solutions provider, New Energy Group.
The Bottom Line: DayNine was one of the last “hidden Workday jewels” waiting to be snapped up… now Accenture needs to make 1+1=3 to deliver
By acquiring DayNine, Accenture will have the opportunity to create genuine synergy from this acquisition, if they can realise the ’1+1=3’ value proposition that this appears to be on paper. Yes, there is a lot of work to do as there always is when acquiring any IT services entity. But if the strategic alignment and energy from Accenture Cloud First Applications lead, Saideep Raj, Accenture Workday practice lead, Beth Boettcher, and DayNine CEO and co-founder, Tim Ramos (who will lead the new Accenture DayNine group), is anything to go by, the main recommendation for competitors is to Watch Out!
Premium HfS subscribers can access the new HfS Blueprint Report: Workday Services 2016 here.
How can enterprises make automation core to their operations strategy and not merely a peripheral activity? Let’s be blunt here, many service providers have been automating routine tasks with their clients for years, yet as my HfS colleague, Tom Reuner, has noted, the innovations referenced by the notion of RPA and Intelligent Automation are “often at sub-process levels…not at the heart of a delivery backbone.” We are seeing the momentum pick up here, though, particularly when automation is a shared strategy between service providers and their clients. We heard one such case highlighted by Peter Quinn, Managing Director of Automation at SEI Investments Co., (NASDAQ: SEIC) a wealth management solutions company, at the recent NIIT Technologies Industry Analyst/Advisor Day.
Service buyers want to partner for automation, but where – and how – is it actually working?
When we asked 53 service buyer executives what would improve the quality and outcome of their current outsourcing engagement, 45% of them selected “roll out an automation strategy in tandem with our provider.” (see Exhibit)
Exhibit: Service Buyers Could Improve Quality and Outcomes by Changing the Nature of Their Engagement
There are risks to be taken by buyers and providers – but is the greatest risk avoiding core automation?
For service buyers, challenges include getting the IT department on board and addressing concerns about data security while selecting and licensing the appropriate software. Service providers also face the investment challenge of taking hits to their existing FTE-based revenues and margins in order to safeguard existing clients and win new ones. So, how can buyers and providers truly get to a shared automation strategy that’s genuinely core to the engagement? It’s simple: both need to be willing to take risks to drive new business outcomes. But you can also look at the risk of not taking the risk – failure to achieve effectiveness through automation could ultimately lead to the buyer enterprise leaders falling on their swords, while those service providers clinging to the legacy FTE model will eventually be displaced by those with a genuine automation capability and offering.
The SEI and NIIT Technologies Experience with Governing Core Automation
Here’s one such story: It starts with SEI getting excited about the potential impact of automation on security, quality, speed to results, and employee engagement.
Peter Quinn, Managing Director of Automation at SEI, set out the expected outcomes for an extensive use of automation:
Improve SEI employee quality of work experience by eliminating the repetitive, mundane tasks, thereby transforming the culture and eliminating the revolving door in certain departments
Reduce risk of off-shore data privacy breach – corporate investment to ensure all offshore access to data is secure was still being met by the question of “what if”… no matter what the effort to address it
Eliminate risk of geopolitical event impact on BPO
Reduce human error and associated costs (financial, client impact, SEI industry image)
Achieve rapid deployment
Create instant and profound scalability: license robots versus on-board and train people
Achieve cost reduction through staff savings
“Yes, of course we are looking for lower cost,” as Peter Quinn, Managing Director of Automation, SEI says, “but if you can get rid of human error… that’s key, because errors have financial, client experience and brand impact.” A data security breach or other human error on an investment portfolio of a client can have expensive short- and long-term consequences on customer experience and brand loyalty, for example, for a company that builds its business on its clients’ trust. And it seems like no matter how much is invested in time, money, and resources on security, it’s never quite enough for regulators. Automation helps drive more predictable and reliable results.
To get full benefit from the use of robotic process automation, end-to-end processes need to be automated to the fullest extent possible. SEI would be evaluating all the work they do from end-to-end, including considering what is done in-house, what is outsourced, and where the hand-offs are. That means work that had been outsourced and managed by its partner, NIIT Technologies, would be in scope. NIIT Tech, for its part, typically evaluates the work it does, looking for opportunities to increase efficiencies, including the use of automation.
This is the point at which the two parties come together in a more strategic approach to automation
“We will automate as much as possible, and that includes potentially repatriating work that had has been outsourced for years,” Peter Quinn of SEI told NIIT Tech. Pause. The response from NIIT Tech: “How can we help?” This response may or may not have been immediate – perhaps there was a little surprise involved—but the point is that NIIT Tech took a step forward to stay involved. Yes, NIIT Tech would lose current work, but from their perspective, this move takes their efforts to the next level of efficiency and relevance to SEI’s business; it also gives their own organization the same benefits as those listed above by Peter Quinn regarding employee quality of work and business results. Participating in discussions about what and how SEI wants to run their business and the supporting operations also gives NIIT Tech the context and opportunity to share new ideas for their role going forward.
A critical part of the automation strategy – governance – includes representation from internal stakeholders and external partners
While as an industry we agree automation is increasingly integral to business operations and outsourcing roles and results, how to bring automation into outsourcing partnerships and engagements – from strategy and governance to contracting – is still a work in progress.
Quinn, reporting to SEI’s CIO, chairs the Automation Governance Committee, which includes NIIT Tech so that they can be an active participant in all discussions. It also has representation from all market, geographic, and operating units, and includes business managers, legal counsel, and IT. The committee serves as a forum to:
Exchange ideas and needs, find commonalities, and build the business cases
Assess new requests
Determine best tool / best fit
Prioritize 90-day inventory for each tool (e.g., company impact, ROI)
Review tool capacity saturation
Evaluate new products as the market changes
The intent of the Automation Governance Committee is to weave intelligent automation into the fabric of the company. Too often, we hear stories of automation being used piecemeal in different areas of companies, which can lead to the use of it being sub-optimized at a point in a process versus as part of an end-to-end strategy, and complicated and expensive with separate licenses and approaches. The automation strategy should drive the ecosystem of partners within and outside a company to ensure that all the participants supporting the operations of a business are aligned and integrated.
The Bottom Line: The challenge for service providers is pivoting to meet clients’ future goals
Can NIIT Tech develop the capabilities to achieve the clients’ goals, still deliver value as a long-term partner, and realize margin for their business by having “sacrificed” the FTE-based work? “I believe the days of FTE-based work are coming to an end,” says Dan Spaventa, NIIT Tech’s client partner for SEI. Looking ahead, the service provider is developing automation-based solutions in targeted market areas like “SmartTransfers” in financial services, to bring automation into the core as part of the regular cadence of work in the service industry. These are moves that NIIT Tech – and other service providers – have to make to be a viable service provider partner in the future of outsourcing in the As-a-Service Economy.
