It suddenly dawned on me what the core issue is with the future of the workplace: the simple fact that company leaders and their stakeholders started viewing employees as walking costs at some stage over the last 30 years, and have devoted a huge amount of focus and energy trying to figure out how to remove as many of them from their business as possible… without it impacting the top line.
Surely, people, human labor should be viewed as a valuable commodity that adds value to a business, not some burden on the profit margin that needs to be eliminated at all costs? So what’s really gone amiss here?
Enterprises hired people into jobs they no longer value. Over the decades, our enterprises have ballooned with staff hired to provide inputs into process chains to keep them ticking over – whether they were writing lines of spaghetti code to make processes flow from one subtask to the next, or producing reports out of SAP for a historical view of the business some manager will archive away somewhere. Or taking customer orders over the phone… or faxing insurance claims from doctors’ surgeries and inputting the data into some system. Today, many of these jobs could have been avoided, if these enterprises had simply invested in a better suite of software applications (which may not have been available 10-20 years ago), or cost-effective service providers were on hand to do the work – and were trusted enough to take it on. Today, the vast majority of enterprises are trying to figure out how to eliminate these jobs that they themselves created in the first place.
People have just stayed consistent to performing tasks that now fail to align with today’s desired outcomes. Many of the staff hired to produce these tasks just haven’t evolved into doing anything else. The only innovation in their lives is going from Windows 8 to 10, or adjusting to the latest Oracle upgrade. On the surface, this isn’t their fault – they are merely performing tasks they were hired to deliver. In reality, they should be smart enough to realize their job is becoming legacy and should be working with their employer to find areas of the business to work on where they can add real value. “Let’s talk about my role” is usually a welcome discussion to have with your boss to work out additional areas you can focus on that align with the evolving goals and desired outcomes of the business.
People have grown entitled to being employed and lost sight of their value in the workplace. Some people simply think they deserve a chunky paycheck because they turn on their laptop and forward around a bunch of emails, perform a series of rudimentary tasks that just about check the “enough not to get fired” box. It amazes me how some people have hugely over-inflated views of their own self-worth and self-importance to the business. People need to take a serious look at the value they deliver to their employer – do they help bring in new clients? Do they go out of their way to keep existing clients delighted? Do they produce work that is unique and differentiated? Do they do things that are very distinctive and hard to find in the workplace today? Are they proactive and actually do things on their own initiative that they were not merely instructed to do? Get a reality check, people…
The workplace ethos is no longer about creating a safety net for people. Ugh – but it’s true. Employers, by and large, only care about themselves and pay lip service to their staff to make them think they really care. Just look at people who quit their jobs after years of service and wind up being sued by their former employer who they thought cared about them… This is not a loving, caring, fluffy work environment, people… and this goes both ways for both employee and employer. The same can be said for employees who pretend to love their employer, then shaft them over when something better comes along. This is not a love-fest, this is business. Let’s just be honest with each other about our goals and expectations.
Governments have lost touch with reality. Just watching this US election in full swing baffles me. Politicians are out of touch with the realities of the modern workplace. Make it attractive for employers to hire people again and curb draconian labor laws and payroll taxes. And create tax incentives for businesses to employ and train people… seriously. It’s no wonder so many firms only want to add headcount offshore, where they are not subject to all the risks of hiring locally.
Academic institutions are not aligned with economic reality. Sad, but so true. Are most kids coming out of college truly trained and ready for this workplace? Or do today’s enterprises have to manage all the orientation to mould them into an effective working style? I look around so many industries today and only see aging management teams and pathetic succession plans in place.
The millennial generation mentality is a poor fit for many legacy businesses. When the meritocracy in many firms is still based on the length of service performed, they are going to struggle to create a fruitful environment in which most ambitious millennials can flourish. They want a sense of purpose and a flatter organization structure, a more collaborative style of working that encourages creative thinking and a broader set of work activities that align them with the goals of the business. Apologies to many legacy businesses bending over backwards to change their cultures to adapt to more of a “startup” culture… but my client interactions are not giving me the warm and fuzzies that things are really changing… all that much.
Bottom-line: Fear the next recession, when it comes, as this could get really ugly
The thing I hate about these long, sustained periods of economic growth is the simple fact that enterprises just paper over the cracks of their failings and only deal with them when disaster strikes. And when disaster strikes, the solutions are usually draconian short term measures, like wide-scale damaging layoffs, travel freezes, marketing cuts etc. My fear is the last 6 years of (largely) false economic prosperity has instilled a sense of denial that we need to make deep, painful changes to how we manage people, and how we run our enterprises. When employees are largely viewed as “costs to be reduced” (which is all I pretty much hear from leadership today), as opposed to “people from whom we can source real value”, there is only going to be one likely outcome when the xxxx hits the fan…
Now enjoy your weekend and forget I wrote this cynical distribe =)
The market for talent has seen massive fluctuations over the last eight years. The 2008-9 global recession caused massive employment contractions across all major regions, however, the tide has really turned to turn after one of the longest sustained periods of economic growth in the last 200 years, with the need for fresh talent is on the rise.
Coupled with the rise of the intelligent digital business, these dynamics have forever changed the way organizations have to approach their HR function as seek new expertise and mindsets. As such, optimization and smart thinking across the entire HR stack is a critical requirement to attract, onboard and nurture talent within organizations.
As more and more millennials enter the workplace (now making up a third or staff), employee interaction has to change. The always-on, always-connected workforce is here. Organizations need to adapt HR functions accordingly and embrace mobile and cloud technology that can be accessed anyway and anytime.
Cloud HCM platforms have developed user interfaces that speak to this new workforce, but with ~50% of buyer organizations still using on premise legacy HCM systems, there is still a long way to go for many organizations. By partnering with proven service providers, organizations can now make the migration to the cloud quickly and efficiently. Also by leveraging the managed service expertise of these providers, organizations are more enabled to focus on key moments of truth with employees thereby reducing employee churn and having a more aligned, motivated and focused workforce.
Knowing the importance of these solutions for the very future of HR, we put our best and brightest on this. And the result is HfS Human Resource Services Research Director Mike Cook’s first Blueprint for HfS: HfS Blueprint: HR Operations As-a-Service 2016. So we invited him in to tell us all about it.
How did this Blueprint take shape, Mike?
In this HR Operations HfS Blueprint, we take a look at the evolution of MPHRO to “As-A-Service”–a services market that is increasingly agile, collaborative and employee-centric. HfS considers this transition in outsourcing a move to the As-a-Service Economy, placing increasing value on diverse talent, analytics, and collaboration, as well as increasingly on platform-based services.
To develop this Blueprint, we spoke to service buyers and service providers to understand the innovation and execution capabilities of thirteen multi-national, multi-functional service providers with MPHRO business process support capability in their portfolio: Accenture, ADP, Aon Hewitt, Capgemini, Capita, Ceridian, IBM, Infosys, Neeyamo, NGA HR, OneSource Virtual, Xerox and Wipro.
And how did the service providers perform, based on your research with the buyers?
We want to understand a variety of different things in order to compile this Blueprint. How do service buyers approach business process outsourcing—what is working well and what could use a “rethink” or refresh? How are service providers extending their capabilities for data management, analytics, talent development and management? And how are digital technologies such as automation, social, mobile, and cloud being approached and used; what value are they providing for BPO? In short, how is this market changing to become more “As-a-Service”—business-outcome oriented and flexible through the combination of capable people and digital technology. As-a-Service Winner’s Circle:
Accenture has proven to be extremely forward thinking and innovative in the way it brings MHRO services to market. The service provider has made extensive use of automation, integrated services and technology across its MPHRO stack. The development of HR apps that address multiple HR touch points across the employee lifecycle are a differentiator for the service provider. Accenture also has the “critical mass” to deliver on large multi-country, multi-language deals.
Xerox has focused its MPHRO practice on operational and customer experience excellence. The service provider has received high praise from clients for its on-demand and proactive account management. Xerox leverages it in-house HCM consulting capability, partnerships with “best of breed” HCM implementation organizations and proprietary HR technologies including, Life@Work and DiscoTM, to overcome client’s legacy technology.
NGA HR has proven tactically excellent on delivering the minutiae of contracts. The service provider has made extensive investments in making ResourceLink a plug and play platform as well extending its SuccessFactors, Workday and Oracle HCM implementation capabilities. NGA is also aiming to further evolve into an As-A-Service provider through its ongoing development of automation initiatives.
Aon Hewitt is a well-established and reliable MPHRO service provider. Clients have praised Aon Hewitt’s account management team for its proactive nature and the wider organization for its adaptive and collaborative business model. The service provider has a well-established Workday implementation practice in addition to the development of in-house tools including Total Benefits Administration (TBA) and UPoint.
ADP is the largest global provider of payroll services. The service provider has embraced the As-A-Service ideal of Design Thinking through the launch of its two innovation labs. Through the employee first focus of these labs ADP has launched its ADP Mobile Solutions application, aimed at improving employee experience and reducing frustration.
As-A-Service High Performers:
Capgemini is establishing itself as an up and coming service provider and is a one of the market leaders in delivering on innovation initiatives in the MPHRO market. The organization is implementing elements of plug and play digital business services, analytics and automation within its MPHRO stack. Capgemini now needs to fully develop its RPO offering to transition into the Winners Circle.
The extensive internal changes at IBM have renewed the company’s focus on HR. The service provider is an implementation partner for all the tier-1 HCM platforms and is leveraging its Watson platform to enhance analytics and cognitive automation across client’s operations. IBM does have gaps in its MPHRO portfolio, specifically benefits admin and workforce development services, which it will need to address to enhance its position in this market.
OneSource Virtual (OSV) has a strong As-A-Service mentality in its DNA and has polarized itself through its sole Workday services practice. The service provider has received praise from its client base for its responsiveness to client demands and the way it adapts to new business challenges. OSV has made extensive use of automation in its MPHRO practice through its proprietary Atmosphere Workday automation platform.
Ceridian, a previous heavy hitter in this industry, appears to be moving its focus away from MPHRO service delivery and instead focusing on its proprietary Dayforce sales and implementation practice. The service provider has developed a well-established analytics component into its service delivery. However, feedback from clients has been sub-par on the organizations recent performance.
Neeyamo has proven to be an operationally efficient and responsive service provider. The organization has effectively introduced design thinking into MPHRO service delivery through its innovation hub which has designed the company’s HR tools including Aloha, VMS and White Glove. As-A-Service High Potential:
Infosys is aiming to become an MPHRO service provider of choice. The company has made extensive investments in automation and next level analytics, through feedback received from clients. At present, however, Infosys has been lacking in effectively communicating and implementing these As-A-Service ideals to its client base.
What do we see changing in the future?
In general, HfS believes that the MPHRO market is fragmenting, especially in the Western world, as buyers of services look to implement specific transformational point solutions from service providers as opposed to the previous practice of acquiring end-to-end solutions. This is not to say the MPHRO market is contracting, HfS forecasts the market to grow at 4.5% through to 2017, although it is at a slower rate than the overall HRO market which is currently growing at 6.5% through to 2017.
HfS is also of the opinion that buyers are increasingly seeking support in HR transformation from their service providers. Therefore, service providers, such as Accenture and Xerox, which have a robust consulting practice, are leading the way in this market.
The development of cloud HCM platforms has lowered the entry point to new entrants in the MPHRO market (for example OSV) which has taken advantage of tailoring processes specific to one platform. However, in order for these new entrants to be successful, an in-house, or bought in, application development practice is still needed to deliver on client’s expectations across automation and analytics delivery as the majority of cloud HCM platforms available are still not up to the job.
And what do you see along the road, for MPHRO, Mike?
HfS sees a few areas taking shape where service providers can play a valuable role, although it must be said that it does require a buyer to be willing to collaborate as opposed to traditional directive outsourcing arrangements. Therefore, both parties need to be willing to share the risk and investment. These Include:
Recruitment: This is increasingly becoming an area of focus for MPHRO service providers as there is significant opportunity in the market for process improvements, specifically around the onboarding function. Losing candidates at this stage of the hiring process is both costly and frustrating, although minimal focus has traditionally been aimed at this crucial juncture. The likes of Accenture, Xerox and IBM have all developed services around onboarding which have reduced attrition from successful candidates in client’s organizations.
Analytics: While all service providers have, or are in the process of, developing analytics offerings in support of HR functions, the majority of clients interviewed in this Blueprint still require greater workforce and HR insight. A key point raised by buyers has been the need to link HR data to business outcomes. At present few service providers, with Infosys, Accenture and Capgemini been exceptions, are delivering this next level insight.
Automation: The HRO market has been slow to embrace wide scale automation within service delivery. At present most of the automation available is for simple transactional processes such email actioning. More intelligent automation such as workflow routing and prescriptive HR management functions are beginning to come to market and are in the development or pilot stage with numerous service providers including: OSV, Neeyamo, Infosys, Capgemini, NGA, Aon Hewitt, Xerox and Accenture.
As more than one service buyer pointed out, innovation is often kept back by their own internal resistance to change. The development of innovative HR solutions is fully underway within all leading service providers, although challenges are arising in MPHRO deals in which there are often numerous stakeholders, and therefore opinions, on the buyer side (HR department heads, etc.) and large organizations that are holding onto legacy platforms and processes.
The way forward in this market needs to start at the negotiation phase of the contract, whereby both c-level and departmental execs are included to act as sponsors for change within the HR function and contracts are priced in a way that promotes constant innovation from service providers. Pricing models that have proven most effective include an element of per employee/transaction in addition to outcomes pricing, FTE pricing is dead in the MPHRO As-A-Service environment! Furthermore, there needs to be more collaborative engagement and ongoing industry discussion with clients, in ongoing contracts. The only way for the As-A-Service environment to really take hold in this industry is for organizations to interact in meaningful dialogue with both peer organizations and service providers.
If someone called you “back office”, I’d imagine you’d be a little bit offended. It’s probably not much worse than being called “useless”, or “about to be automated out of existence”…
But I have good news for you back-office rebels – your time spent festering in the backend of yonder is finally coming to an end. Why? Because the onset of digital and emerging automation solutions, coupled with the dire need to access meaningful data in real-time, is forcing the back and middle to support the customer experience needs of the front.
Our soon-to-be-released study on achieving Intelligent Operations, which canvassed 371 major buy-side enterprises, reveals two key dynamics that are unifying the front, middle and back offices:
A “customer first mindset” is the leading business driver driving operations strategies. Over half of upper management (51%) view their customers’ experiences as impacting sourcing model change and strategy, which is placing the relevance and value of the back office in the spotlight.
Three-quarters of enterprises (75%) claim digital is having a radical impact. We can debate the meaning and relevance of digital forever, but the bottom line is that enterprise leaders need to (be seen) to have a digital strategy – and a support function that can facilitate these digital interactions and data needs. The old barriers where staff in the back office don’t need to think and merely oversee operational process delivery, and those in the middle, which only venture a part of the way to aligning processes to customer needs, are fading away.
Consequently, we’re evolving to an era where there is only “OneOffice” that matters anymore, creating the digital customer experience and an intelligent, single office to enable and support it:
Introducing the Intelligent OneOffice, where the barriers between front, middle and back are forever going away
The Digitally-driven Front Office drives everything. Digital, in its purest form, is all about transforming the business to create, support, and sustain the digital customer experience. It’s about leveraging the omnichannel (mobile, social, interactive tech, etc) and accessing meaningful analytics to make it happen. But then you need a support function to service those customers, get their products/services to market when they want them, manage the financial metrics, understand their needs and future demands, and make sure you’ve got the talent that truly understands the outcomes of their work.
The Digital Underbelly creates the building blocks. Digitally-driven enterprises must create a Digital Underbelly to support the front office by automating manual processes, digitizing manual documents, and leveraging smart devices and IoT where they are present in the value chain. You just can’t do digital without automating smartly – forget all the hype around robotics and jobs going away; this is about making processes run digitally so we can grow our businesses and create new jobs. Think about a central nervous system that incepts and processes all the elements necessary to make the enterprise function.
Intelligent Digital Support breaks down the legacy functional silos. You need your support functions (like an enterprise circular system), such as IT, finance, HR, and supply chain, to be aligned with supporting the customer experience, as opposed to operating in some sort of vacuum. Hence, we are terming this “Intelligent Digital Support,” where broader roles can be created. Today’s college graduates are simply not coming out of school willing to perform mundane routine work: operations staff proactively need to support the fast-shifting needs of the front office. So the focus needs to shift towards creating a work culture where individuals are encouraged to spend more time interpreting data, understanding the needs of the front end of the business, and ensuring the support functions keep pace with the front office. This is especially the case in industries that are more dependent than ever on real-time data, using multiple channels to reach their customers and being able to think out-of-the-box with disruptive business models. Of course, we all need to make sure we can keep the operations functioning by paying the bills, responding to customers, processing the claims etc, but if we can’t be proactive and look at how we can create a better customer experience using digital channels, or challenging the logic of running a process a certain way, we’ll never create work cultures that will attract the bright minds to take us forward. People want to feel a part of something and that their work matters – and the best way to do this is to move away from rigid corporate structures of the past, with too many management layers and departments run siloed like mini-empires. We need to invest in driven managers which understand how to motivate and collaborate across business functions. Sales, marketing, customer service, IT, finance, HR and supply chain are functions that all depend on each other to be effective. Smart enterprises are already breaking down the silos and creating multidisciplinary teams, using collaborative tools and Design Thinking methods across delivery centers to help their staff be more motivated, creative and challenging the old way of doing things.
Intelligent Digital Processes can help us predict as opposed to react. And finally… it’s all about designing business processes that align with your desired digital customer experience. It’s not about throwing off historical data just to discover what went wrong… it’s about being able to predict when things will go wrong and finding clever ways to get ahead of them. It’s about embedding smart cognitive applications into process chains, about learning from mistakes and new experiences along the way. This is the enterprise neuralsystem.
The Bottom-line: OneOffice is the real alignment of operations with the business end of the organization
We’ve been talking about aligning support functions with the goals / mission of the firm for decades now, but digital is realigning us all with the true uberlord of the organization – the customer. If our supporting technologies and people can finally respond to, interpret, predict and be part of our digital customer experience, we’ll finally see those barriers stagnating organizations come crashing down.
In 1588, the English dramatist John Lyly, in his Euphues and his England, wrote:
“…As neere is Fancie to Beautie, as the pricke to the Rose, as the stalke to the rynde, as the earth to the roote.”
In other words, “Beauty is in the eye of the Beholder”, which just about sums up how buyers perceive consultants when they need some serious rethinking and rewiring done to their operations to make them more intelligent:
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So what’s actually surprising here?
In the past, you may have expected to see the pureplay strategy houses rule the roost, however, when we break down the Change Management and Solution Ideals enterprises need to achieve more Intelligent Operations, the focus shifts much more to using consultants with real change management, process transformation, analytics and automation chops… this is less about strategy, and more about just driving through the changes. Most company leaders know where they want to go – it’s now more about executing a plan to get there:
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The Bottom-line: We’re moving to a world where the expertise enterprises need to be successful is really changing
One of the above firms asked me recently if it should start an automation practice. My response was “If you’re only asking me this now, then you’re already too late to the game”. In a nutshell, enterprise operations functions need genuine expertise in adopting a mindset to write off their legacy systems and obsolete processes – and a real understanding of how to approach automation and embrace digital opportunities.
A lot of this is about prioritizing what not to automate and learning where digital transformation actually makes business sense. This is about creating an operations function that can pivot and support the rapid changing needs of the front office with actionable data, that is secure and available in real-time. This is about defining and devising a digital strategy that has the customer at the forefront of the business and an operational support function that has the customer experience at its core.
Hence, consultants need talent that can not only think creatively with their clients, but also create an ongoing environment for writing off legacy, embracing change and being smart and proactive about leveraging automation and real digital strategies effectively. The speed at which some of these advisors must make the pivot from merely brokering transactional contracts, or spouting off some high level fluffy strategy, to supporting real change is critical – I’d imagine we’ll know in the next 9-12 months which ones will genuinely be helping their clients achieve these ambitious ideals.
Our latest research into intelligent operations reveals a customer first strategy is the biggest driver for C-Suite leaders today, so where more important to focus than what’s going on at the call center? Has there ever been a more compelling time for call center service providers to step up and prove to their clients they can do a whole lot more than execute basic customer services?
Call center services have matured significantly in recent years, where you can find a plethora of providers doing a masterful job managing resources all over the world to deliver affordable voice services – but choosing between them has often never been so difficult. However, with the need for so many enterprises to focus on the omnichannel customer experience to differentiate themselves, we’re now in a critical bake-off between those call center providers delivering real customer value versus those still walking the treadmill of proving legacy voice services at ever-cheaper rates. Plus, we still have many enterprise buyers who squeeze the life out of their providers on cost, and then expect the provider’s A team to show up. Hence, there is a fine balance between the value clients need, the investments they are prepared to make to achieve this value, and the ability of smart providers to invest in As-a-Service models that take advantage of talent, digital technology and automation to deliver high value, without huge increases in headcount investments. Sounds easy, right?
In this vein, we’re excited to announce the release of our first Contact Center Operations Blueprint, authored by HfS Research Director and contact center veteran, Melissa O’Brien, the only contact center analyst who’s actually lived in the Philippines running a call center operation herself. Melissa’s been exploring the cluttered competitive landscape, talking to a huge number of clients and leading providers, to help shed some light on the competitive landscape and where this market is truly heading:
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Melissa, please give us a flavor for the current state of the contact center operations market
This is a market undergoing a pretty dramatic transformation, in part due to increasing end-customer expectations – ambitious service providers are looking for ways to continue delivering operational excellence, while adding value and innovating to meet the expectations of their clients’ increasingly digital end-consumers.
In the past, contact center service providers were valued for providing basic interaction services at a lower cost. As enterprises are more often now looking at the contact center in a much more strategic way, they are putting greater scrutiny and expectations on their service providers, looking to them to add value to their customers’ experiences. Forward-thinking contact center service providers are not only aiming to help clients support customers using newer channels, but also to provide thought leadership and platforms that facilitate an “omnichannel” view of the customer, which includes consulting capabilities to design the customer experience, and actionable analytics that support predictive and proactive decisions with customer interactions.
These providers are embracing the opportunity to deliver value beyond cost reduction, by transforming the contact center to an engagement and profit center with sales through service, increased levels of CSAT and customer loyalty. This has a profound impact on the needs for contact center talent, generating a major shift in the mentality and approach to recruitment and retention in contact centers.
Melissa O’Brien is Research Director, Contact Center and Omnichannel Operations, HfS (Click for Bio)
Despite these new dynamics, scale, flexibility and vertical expertise are also still key buyer requirements in the contact center space. Buyers commented, “it is their job to know the industry and help me figure things out”, and “we view contact center staffing like Uber when we need a ride.” Service providers are addressing these needs with flexible workforce solutions such as work-at-home agents, and with workforce management and optimization tools. Robust and holistic security measures are also incredibly important, especially considering some of the contact center security disasters that have been very public in the last few years.
We covered 18 service providers in this Blueprint and interviewed many of their customers. One thing that struck us was that almost all of the buyers we spoke with were very pleased with account management and the execution of ongoing operations, but, on the whole, buyers found innovation and proactivity lacking, even in the leading service providers.
There was a frequent disconnect between the service provider stories of innovation and the unvarnished client feedback from many of the reference calls. Despite many of the provider-offered case studies, most of the reference call discussions with buyers were examples of FTE-based engagements, heavily focused on traditional channel interactions. Clearly, this is a very mature market for servicing basic interactions on traditional channels, however, real life examples of omnichannel capabilities are few and far between. We are going to be doing a deeper dive on the Blueprint participants that are really implementing new channels, embracing automation and more advanced analytics in our upcoming “Digitally Enabled Contact Center” Blueprint.
Who are the leading service providers in this market today?
Teleperformance, Concentrix and Sutherland landed in our As-a-Service Winner’s Circle. Teleperformance is, by far, the largest provider in this space in both headcount and revenue, growing at an above industry average rate, and continues to invest in research and thought leadership to stay ahead of the game. Both Concentrix and Sutherland stood out for their endeavors to embrace the As-a-Service ideals, with Concentrix attempting to help clients write off legacy with technology partnerships and Sutherland demonstrating a real focus and vision for omnichannel customer engagement. One other common theme for the As-a-Service Winners Circle leaders was an effort to embed Design Thinking in client relationships.
Each of the High Performers are approaching the market in innovative ways as well. Aegis, HGS, HPE, TeleTech, and Xerox are all working toward an omnichannel vision with clients. Conduit Global and IBEX Global both have solid execution and approaches to talent. Infosys, WNS and Webhelp are all broaching automation in unique ways.
The Execution Powerhouses demonstrate strength in delivery execution, with Alorica, Convergys and Sitel boasting excellent talent strategies, and HCL and EXL performing well with solid account management and a focus on moving up the value chain.
Moving forward, Melissa, what recommendations do you have for ambitious contact center service providers?
Contact center service providers must have their thought leadership and innovative ideas front and center of everything they do. Even many clients of our As-a-Service Winners complained of a dearth of innovation and proactivity. Buyers are no longer expecting providers merely to meet service levels—they are expecting insight and leadership as well, not just for process improvements, but also ideas around the bigger picture of improving customer experience. This can lead to better, and ultimately, expanded relationships.
We also think there is real potential for Design Thinking to have a profound and positive impact on relationships in the contact center operations space, especially as it relates to the customer experience design needs, such customer journey mapping. Almost all the clients we spoke to scored their providers well in collaborative engagement, but Design Thinking presents an opportunity to take that collaboration to another level—and it just fits so well with the present needs of omnichannel design and customer journey mapping. Embedding Design Thinking into client/provider relationships can help facilitate ongoing discussions between (formerly) siloed groups to re-imagine business models that embrace digitally-enabled contact center operations. The leading service providers are starting to step up and embrace Design Thinking, but we need to see more focus on outcomes that have an impact on clients’ business. We also need to see Design Thinking embedded in the way call centers engage with clients from the outset, as opposed to a project-based billable consulting service. You don’t buy Design Thinking – it is a mindset change that focuses everyone on defining, prioritizing and achieving desired outcomes.
Most importantly, and something that the leading service providers understand well, is to continue to invest in and evolve a robust talent strategy. With all the movement toward self-service and all this talk about automation, people will still remain the most important part of the contact center, whether by designing customer experiences, analyzing customer behavior and demands, or having higher value real conversations. Contact center service providers need to work toward writing off the industry legacy brand, both as providers and employers. In order to do this, service providers need to change the perception of the industry, offering enticing career paths and focusing on analytical talent, and continue to increase strategic importance to clients. The service providers that can help their clients find the right balance of talent and technology in an omnichannel vision will be the future leaders in this market.
Soon there will be nowhere left to hide. Everyone’s value is under the microscope from colleagues and management alike. Whether you turn widgets, manage a process, a set of processes, lead teams or manage team leaders leading teams… or run a whole division… or even an entire organization, you are under constant scrutiny in today’s open workplace.
Everyone has to prove they are useful, add real value and are worth their salaries… or they are toast. But most importantly, people need to prove they can be trusted. Employee trust in today’s workplace is about proving you are doing more than just enoughnot to get fired.
Loyalty is legacy
Most heritage enterprises no longer want to give out gold watches for your turning up everyday for last 30 years… I mean, “thanks for showing up and coasting here for 30 bloody years and making it really hard to fire you”. I don’t think so… Loyalty means little, but value means everything. The more legacy work we automate/digitize, outsource, replace with software, or just write-off, the more we have to focus on our human skills to justify our existence in today’s workplace.
Tomorrow’s successful workers are those who use their initiative to perform activities, on their own volition, to find new value for their enterprises. You can’t get any progress or value from methods like Design Thinking if your staff are only checking the boxes to perform their rudimentary employment functions. Design Thinking is about going beyond the norm to challenge the status quo, to think outside the boxes, not just checking them.
You are who you are – your reputation is everything, your ability to forge relationships with colleagues, peers, industry influencers and company leaders who appreciate your value, your perspective and your personality is, really, all you have. The days when you could get away with hopping from job to job because you were great at bullshitting your way through interviews are dying – any employer with half a brain isn’t recruiting through traditional channels any more. It’s all about people engaging with people who have established a reputation for adding value, going beyond the basics, and being great to work with.
You need to find new problems, not just solve old ones
But adding value is not just about solving known existing problems, it’s about finding new ones to solve in the future. You can always find a contractor or an outsourcer to fix a broken set of processes, or correct lines of badly written code. But finding people which can challenge whether those processes or lines of code are even still relevant to meeting your desired outcomes… people who care enough about their jobs and their company’s success to go beyond performing “just adequately enough not to get fired” is the secret sauce for future value. And that is what new workforce trust is all about – initiative, attitude, personality and trust.
The Bottom-line: There is no secret sauce to staying relevant – it’s about putting our egos aside and becoming students again
Frankly, I’m sick and tired hearing about “Digital Skills” and “Creative Capabilities” being some far-flung capabilities which you need to go to Millennial school to develop (whatever that is). Digital skills are about understanding your customers’ current experiences and intelligently leveraging every traditional, social and mobile channel touching your business to make them richer. Creative capabilities come from collaborating and challenging yourself with your colleagues and partners.
So correct me if I am wrong, but being successful today is about using capabilities we already have. It’s simply making ourselves students again, finding that hunger to learn about what’s out there and engaging with everyone around us to prove and challenge our theories. We must ditch this sense of entitlement that dictates we don’t need to go back to basics and force ourselves to think, collaborate and learn all over again – or we’re going to be done before we know it.
Enterprises need to behave like start-ups, where their people group together for the common cause of making their collective group successful – only willing collaborators with a desire to learn and challenge need apply. We’re all part of the Digital Generation – we just need put our egos to one side and own up to the fact we’re all students rediscovering what we’re all about and what we’re capable of…
Growth in offshore-dominated services may be slowing for traditional IT support services, but for multi-process Finance and Accounting (F&A) services engagements, 2015 saw the market continue to grow at a 10% clip.
Why? Because F&A outsourcing is about 10 years behind IT outsourcing – in terms of adoption – and is a market that can quickly take advantage of more experienced governance executives, capable service providers that have ironed out many of their past mistakes, and notable advances in analytics, robotic process automation (RPA) and digital technologies.
In short, the shift from enterprise clients approaching F&A engagements largely as a labor-obsessed cost-driven solutions towards outcomes-centric value-obsessed solutions, is now really happening. Yes, we’re finally starting to talk about F&A being delivered “As-a-Service”. To this end, for 2016’s F&A Blueprint, which covers over 1500 multi-process F&A relationships, we’ve reoriented the performance innovation and execution scores to reflect each service provider’s alignment with the HfS As-a-Service Ideals:
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So, what’s new about this year’s F&A Blueprint?
We’ve gone deeper than ever before in really getting to the essence of buyer/provider F&A relationships. In the past, we were as guilty as the rest of the industry of focusing too much on engagements being operationally effective, when we should have placed even greater emphasis on the measures being taken by both service providers and buyers to evolve beyond meeting the decimal points in service levels, the obsession with legacy methods like Six Sigma, and the fact that achieving adequate delivery and meeting cost budgets, were considered the only desired outcomes.
“Innovation” has previously been focused more on future plans and investments (as, let’s face it, there really hasn’t been a lot of genuine innovation in F&A BPO). We’ve grown tired of people describing future models of what great looks like, and, instead, are focusing on the current willingness and commitment from service providers to work with their clients to break from the legacy mindset of preserving obsolete processes and technologies to meet prehistoric metrics that were agreed in a bygone era when cost-savings from offshoring of labor were the watchword.
In this vein, we conducted exhaustive interviews with F&A service buyers to align their current service provider relationships with the Eight Ideals of Being As-a-Service; we really put the emphasis on buyers and providers changing how they behave with each other, their appetite and mindset to start writing off their legacy processes and technologies:
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Why are some service providers being more “As-a-Service” with their F&A clients?
When you talk with most the service providers today, they are all claiming they are:
a) Willing to cannibalize existing revenues to invest in the As-a-Service delivery model;
b) Willing to share risks and gains with clients;
c) Willing to shift away from FTE pricing and move to consumption-based models with built-in outcome pricing.
The reality is that these claims are only really happening with a small handful of service providers – and only with some specific clients which are willing to have a deeper, more collaborative and trusting relationship. The most common claim from clients is that many have been stuck managing a certain number of FTEs for several years, and their service provider has no incentive to reduce that number, as that is how they get paid. There are instances where service providers are very willing to invest in robotic process automation on their own delivery staff resources, but are unwilling to pass on these productivity gains to their clients.
Essentially, F&A outsourcing is caught in two worlds – preserving legacy and embracing As-a-Service:
1- Preserving legacy. Most service providers are far too comfortable maintaining margins with legacy engagements. The sad reality of legacy F&A BPO is there are hundreds of engagements, signed over the last decade, based purely on an FTE cost model, where the service provider is paid for managing a set number of people; reduce the headcount, and its profit margins go down. What’s happening here, is when these deals come up for renewal, many clients are pushing for new productivity gains, only to find their service providers unwilling to take margin hits, unless there is a true competitive situation. Unfortunately, for most clients, it’s hugely costly and complex to swap out an incumbent F&A service provider – and finding a willing competitor to invest in their business can be enormously challenging. It’s much harder to develop a competitive mix of providers in F&A than it is in IT, where we’re dealing with complex people and processes issues, not commodity application support. We’re going to need to see some truly disruptive offerings from ambitious service providers to change the model here, such as Robotics-led BPO, however, this also means service buyers must entrust their providers with more intimate data access.
2- Embracing As-a-Service. Ambitious service providers going after greenfield F&A opportunities with automation and analytics front and center. Many of the new deals being negotiated are where the As-a-Service action is much more prominent. Service providers are much more willing to invest in new opportunities, than make sacrifices in existing engagements. We are now witnessing the emergence of automation-led human augmentation solutions, where some deals are partially funded by the expected headcount reduction and productivity improvements over the course of a multi-year engagement. We believe this will be especially relevant in F&A contracts, which form the baseline of the BPO market today. However, buyers need to be much more willing to enter into deep collaborative relationships with their service providers, where they stop forcing their providers to only access their systems using Citrix, which limits the effectiveness of RPA overall and encourages an “us versus them” mindset between buyer and provider. Both parties cannot enjoy the full benefits of RPA and Intelligent Automation, without genuine collaborative engagements and a holistic security model that aligns the capabilities more effectively. In addition, greedy buyers need to stop treating RPA like legacy offshore BPO and demanding all the productivity savings up-front, before the RPA benefits have been formalized – and without realizing that RPA often drives up service provider costs in the short term for increased testing and QA.
Who are the standout performers for F&A As-a-Service?
The outstanding two service providers are Accenture and Genpact. Accenture leads the market in terms of sheer size and scale (we estimate its annual F&A BPO revenues now exceed $1 billion), and has made considerable investments in its analytics and RPA capabilities. Most impressive are its on-demand FP&A apps that really create an As-a-Service mindset for its delivery staff and clients. We would like to see a mid-market approach to emerge from Accenture in this space, considering its As-a-Service approach and ability to plug new clients into its massive global delivery model.
Genpact has really re-emerged in the market over the past 18 months, winning a host of new deals which have deep commitments for future productivity improvements through RPA built in. The firm has also made good progress evolving relationships with existing clients which were originally signed up in the legacy lift-and-shift model. Its focus on LeanDigital and CFO consulting has helped the firm move up the value chain with a proven reputation for consultative process capabilities. We do hope, however, that Genpact can stay more consistent with its offerings in the future, as it does have a habit of confusing the market with too many product launches, using too much jargon.
IBM‘s Global Business Services team has convinced the industry it is still very committed to F&A, and is aggressively looking to embed Design Thinking and Intelligent Automation into its engagements. It’s commitment to RPA and cognitive could be huge differentiators for the firm as it embeds these into its engagements – and Watson’s “Buying Assistant” tool signals the potential of further expansive cognitive capabilities for F&A. We would, however, like IBM to embed its technology portfolio better with its F&A offerings – too often they come across as standalone tools.
EXL makes winners circle in F&A for the first time with a genuine top-down determination from its CEO to embrace the ideals of As-a-Service. The firm is a real example why some mid-size service providers are adapting much better to As-a-Service than some of the monolithic Tier 1’s – it can scale down to pick up mid-market engagements and is big enough to play at the big table. EXL also has a genuinely collaborative client centric approach which really helps it deepen relationships in areas like process improvement and analytics – and has stayed true and consistent to its product offerings over the years, with EXLerator, for example, effectively supporting process improvement for several clients. We would like to see it build on its nascent RPA capability with its recent partnership with Automation Anywhere.
TCS also makes its first F&A winners circle, with a determined focus on RPA in O2C and P2P processes. TCS is proving highly determined to prove the RPA model to its clients by taking risks and making revenue sacrifices. Moreover, its diverse portfolio and vertical depth in BFSI, manufacturing and utilities are starting to bear fruit in F&A. We would like to see the firm clearly articulate its overall focus and mission moving forwards, as TCS currently has so many initiatives in areas such as automation, cognitive, digital etc., that it sometimes comes across as a confederation of multiple businesses than one integrated enterprise.
Capgemini continues to be a leading F&A provider with its renowned global process model and real focus on operational excellence in finance delivery. Moreover, its acquisition of IGATE could deliver real potential for the firm’s “As-a-Stack” approach to F&A by marrying IGATE’s ITOPS platform and bringing much-needed vertical industry depth. We would like to see greater urgency and focus on integrating the BPO components of IGATE and the firm would also benefit from increased focus on analytics.
WNS makes up the winners circle – also a first-time entrant – with a very effective outcome-based pricing approach and CFO framework, popular with many clients. Not unlike EXL, being a mid-sized provider is playing to WNS’ advantage, with its aggressive sales approach and client-first mentality. We would like to see WNS expand its footprint further – both geographically and vertically – as the company continues to grow and perform well in the As-a-Service era.
Other standout As-a-Service performers include: Sutherland, which has quietly won some impressive new deals and has been an early mover with RPA; HPE‘s well articulated approach to RPA; arvarto‘s order-to-cash focus; OneSource Virtual‘s entry into the market with it’s Workday model and RPA-native development environment; Infosys‘ unique focus on Design Thinking; Wipro‘s deployment of it’s Holmes platform in processes such as AP and fraud detection.
And finally, what developments can we expect to see in this market over the next year?
Two Ideals are dominating the F&A As-a-Service space – Intelligent Automation and Actionable and Accessible Data, and I expect these to continue to differentiate the service providers. While I see capabilities around RPA becoming fairly commonplace in the coming months, the ability to support the data underbelly for the finance function will come to the fore – and clients will need to let their service providers into their intimate systems and data repositories for them to be truly effective together.
With all this pressure coming from the front office to embrace digital business models, the onus is moving to the middle/back offices to keep pace with the changes happening at the business end of organizations, with the finance function being the fulcrum for future agility and responsiveness to market conditions. I also believe we will start to see Design Thinking start to emerge as a methodology for buyers and providers to make the shift to As-a-Service, and the finance function is a place where many organizations need some serious re-imagination if they are ever going to break from legacy habits.
This market has a long way to go, and the real work of making the shift to As-a-Service is still in its very early days.
HfS readers can click here to view highlights of all our 37 HfS Blueprint reports. See our plans for 2016 Blueprints here.
HfS subscribers click here to access the new HfS Blueprint Report: F&A As-a-Service 2016
When your enterprise is increasingly dependent on hiring “Millennials” with digital skills and lower wage needs, you’d better figure out a plan for creating exciting, challenging career paths, or you’re pretty much already doomed.
Sadly, our Talent in BPO study from last year tells a very depressing tale when you ask BPO delivery executives what they think of their BPO career:
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What’s alarming is the failure of enterprises to create and communicate a viable BPO career path for seven-out-of-eight professionals with under two years’ experience. And – while 63% of newbies strongly agree their job is vital to business performance, a depressing one-in-eight are actually excited by their career choice. When people get past the first couple of years, their experience clearly improves, but the concern here is how can we attract top (or even middling) talent into BPO careers, when there is such a negative perception of the potential of the job. If we can’t attract the talent, the industry will never progress beyond a cost/efficiency play.
What can we do to attract the “Digital Generation” into the BPO business?
Start new hires on activities that require creativity and critical thinking. Working in BPO has to be about delivering capabilities beyond rote, operational processes. Today’s college graduates are simply not coming out of school willing to perform mundane routine work. Just look at the new WEF jobs report to see how skills requirements are quickly shifting, as business needs evolve – especially the need for creative skills, going from number ten to number three in merely five years:
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In the past, for example, an accountant would often earn his/her chops processing accounts and doing routine GL work, before progressing to controllership activities, such as budgeting, quality audits, FP&A, forecasting and risk assessment work. With much better technology and offshoring available, the days of people doing highly-automatable / offshorable processes are fast dying. Everyone knows they will be irrelevant in the future if that is all they do.
Operations staff proactively need to support the fast-shifting needs of the front office. So the focus needs to shift towards creating a work culture where individuals are encouraged to spend more time interpreting data, understanding the needs of the front end of the business and ensuring the back/middle office can keep pace with the front office. This is especially the case in industries that are more dependent than ever on real time data, using multiple channels to reach their customers and being able to think out-of-the-box with disruptive business models. Sure, we all need to make sure we can keep the operations functioning by paying the bills, responding to customers, processing the claims etc, but if we can’t be proactive and look at how we can create a better customer experience using digital channels, or challenging the logic of running a process a certain way, we’ll never create work cultures that will attract the bright minds to take us forward.
Driven managers, multidisciplinary teams and flat structures essential to drive collaboration and Design Thinking. People want to feel a part of something and that their work matters – and the best way to do this is to move away from rigid corporate structures of the past, with too many management layers and departments run siloed like mini-empires. Both buyers and service providers need to invest in driven managers which understand how to motivate and collaborate across business functions. Sales, marketing, customer service, IT, finance, HR and supply chain are functions that all depend on each other to be effective. Smart enterprises are already breaking down the silos and creating multidisciplinary teams, using collaborative tools and Design Thinking methods across delivery centers to help their staff be more motivated, creative and challenge the old way of doing things.
The Bottom-line: Enterprises need to create broader “business manager” roles to challenge the Digital Generation
Beyond just moving up the ranks, there is a certain clout attached to becoming some kind of subject matter expert, taking pride in the ownership of a certain area of expertise. In my viewpoint, there should be two roles for BPO staff in their first two years: associate business manager leading to business manager. This individual needs to oversee a process, or set of processes, with the task of constantly seeking out ways to do things better by interpreting data, collaborating with colleagues and service partners, delighting customers and understanding the business. The onus in on the operations leaders to appoint and train team leaders to inspire junior staff to take ownership of their areas and not feel like “back office” process jockeys.
This blog could have been the start of a very long book about how “Businesses should be Designed for the Digital Generation” but instead is a starting point for how we can rethink operations jobs to attract better talent and deliver much more value beyond merely keeping the lights on. These may be early days, but if today’s business are not already thinking this way, they could already be doomed…
Shantanu Ghosh, SVP CFO Services and Consulting, Genpact (Click for bio)
Digital, digital everywhere, but what about the finance function? It took a decade for accountants to make the seismic shift from Lotus 1-2-3 to MS Excel… so how much focus is our favorite business function putting on today’s advances in analytics tools, interactive and collaborative solutions, mobility and automation?
Can finance executives really embrace digital to break away from some of the legacy mindsets, processes and technologies that have plagued the function for decades?
Not too many people have been driving the digital agenda as aggressively with the CFO’s office than Genpact’s Shantanu Ghosh, with his firm’s own methodology “lean digital,” so we thought it high-time we caught up with him to get his viewpoint on the impact of digital o the finance function.
Phil Fersht, CEO and Industry Analyst, HfS: Shantanu, it’s been a couple of years since we’ve had you on here. Can you tell us a bit about what you’re up to in Genpact today?
Shantanu Ghosh, Senior VP & Business Leader – CFO Services and Consulting, Genpact: Actually, my remit remains pretty similar to what it was two years back. I lead the financial accounting, sourcing and procurement service lines, globally. I also lead consulting across Genpact.
But I’ll tell you, the complexities, the scale and the type of solutions involved in all three have changed pretty dramatically in the last two to three years. So it feels like I’m doing a new job every day, even though broadly the remit remains the same.
Phil: I’ve seen Genpact has been on a real tear, particularly over the last 12 to 18 months. I’ve seen a real uptick, especially in Europe, where you’re winning a lot of deals. What’s going on? What are you doing differently?
Shantanu: I think there are four things at play, Phil. One, I think it’s a result of there or four years of sustained investment in our domain capability and our front-end capability. Obviously, in this business it takes a little bit of time for that to result in winnings in the marketplace, because you have to start engaging with clients at a different level. Then you get into a virtuous cycle, because as you get engaged with more and more clients they see the differentiated value that you’re bringing to the table—and the advisors see that as well. You get involved in more dialog and, as a result, you get in on bigger deals.
Let me share a data point. Our big deals—deals that are worth at least $50,000,000 in total contract value—have gone up five to seven times over the last four or five years. Obviously, the growth, other than GE has been pretty robust.
We have really focused our attention on a few verticals and a subset of clients. So, in terms of mining our existing clients, we have focused on a few and we have gone deep with them. We’re spending far more quality time with them. And, therefore, we’ve been far more proactive in terms of solutions and business opportunities, than just reacting to demand that is coming out from the market.
The last thing is that we’re combining much more technology, analytics, traditional strengths of Lean and Six Sigma into our process solutions. That’s creating a differentiated view in the market, which we’re branding as Lean Digital. Lean Digital wasn’t done over night. The branding is more recent but we have been on this journey for the last three to four years.
Phil: What would you say is the secret sauce that you can share that differentiates Genpact? What do you think makes your culture unique compared to maybe some of your competitors in the market?
Shantanu: That’s an interesting question, Phil. I’m not so sure that it’s a really secret sauce. I think it boils down to three fundamental factors. One is the real focused investment and persistence in building deep domain expertise, in a few chosen verticals and a few chosen service lines. We’ve been extremely insistent and persistent on that for the last three to four years—to the exclusion of everything else. We go very deep, and create differentiated capabilities.
The second thing is the bundling, which we talked about. Our focus on leveraging new digital technologies and what you can do to leverage data and analytics, has gone up 10 times over the last three to four years. That’s obviously resonating very well with clients, because the value equation has changed from just cost to many things outside cost. Third, we come back to the cultural point that you’re making. There are some pieces that have been consistent for the last 15 years, which is the maniacal focus on customers. Our Net Promoter scores have continued to go up. Last year we ended at 67%, which is our highest level ever. So that’s been consistent.
I think what has changed in the culture is the level of experimentation that we’re able to now do, both in terms of solutions as well as commercial constructs—because of the confidence that we have built up in our vertical and service mind domain expertise, and in our capability to try really large fundamentally, transformational programs for our clients. I think it’s about our interest in experimentation, our co-innovation mindset with customers. We go out and put a stake in the ground and continuously push the boundary and commercial constructs in terms of getting paid for results and performance, rather than just for effort. I think that’s been a big change over the last few years. If you look at us five years back and today, I think you’ll see a pretty significant change.
Phil: So we did a recent study that looked at the impact of digital on finance. Were you surprised when we saw that three quarters of the finance professionals fundamentally view digital as changing the way the function operates? Where do you see digital impacting finance in the medium term?
Shantanu: No, Phil, I wasn’t surprised at all. Actually, I am surprised that more people didn’t say that. I would have almost thought 100% would say the same thing, but I’ll give you two different dimensions to this. I think most people think of digital as having a very, very significant impact in cost and cycle time. There are lots of stories on what’s happening on the financial services world with fintech, what’s happening with robotic automation and stuff like that.
I think what is less appreciated today is the level of flexibility or agility, that this is bringing to operating models in finance, one. Two, with a greater level of data leveraging, analytics, predictive modeling, and forecasting means you’re really becoming a better business partner. I think that’s under appreciated and possibly not viewed as a fundamental shift. So no, I’m not surprised. But I think if you dig down, you will find all the dimensions are possibly still to be discovered in their entirety.
Phil: Shantanu, I’m really starting to see a growing, stronger link between automation and digital in the back/middle office. You can’t really develop a strong digital capability without a smart, actionable roadmap. I’d almost go as far as saying we’ll even cease using this term RPA soon because it’s just becoming a core component of digitizing the business. So do you agree with this viewpoint? Are you expecting this robo hype to continue? Or do you think it’s just going to become mainstream in the offerings very quickly?
Shantanu: Two different questions, Phil, so I’ll answer this separately. One is, I 100% agree with your world view. In fact, our entire positioning of our solution structure and the whole lean digital platform that we have taken, is fundamentally based on the premise that a lot of digital disruption and innovation so far has happened in the front office—changing the way customers interact in a B2B environment or a B2C environment. However, one of the biggest learnings from that innovation in the front office is that after the initially hype it causes severe customer dissatisfaction.
And it causes severe business problems if the middle and the back office does not get streamlined, does not get digitized. So we have focused exclusively on making that middle office and back office transformation become real for our customers, ensuring that the front-end transformation that many of them are on is something that they can deliver and they can actually delight the customer. That’s my answer to the first point, which is in 100% agreement with your view.
We’re seeing the customers are getting into that mindset now, they’ve understood that linkage. While many of them started from the front end, now the focus is coming back to the middle and the back end. Obviously, the evolution of the technology and the platforms that are happening, are allowing them to get over the historical impediments of cost and inflexible systems.
To come to your second question on the robotic automation piece: I think the hype will morph from the concept of robo today, which is primarily mimicking of a human task, to the application of bundled digital technologies, which is robotics, plus machine learning, plus cognitive algorithms, plus visualization and stuff like that, that transforms a process very fundamentally. When robotics came in initially, it was really just making an inefficient more efficient. But it’s not a fundamental transformation, but it takes out human beings and just mimics what the human being was doing, even if the process was inefficient.
What we’re seeing is increasing application of purpose-built solutions across the whole value chain of a commercial operation, which has various pieces of bundled digital technology, to really great differentiation. Our entire focus on the digital element and the process solutions that we’re developing, is about bundling rather than focusing exclusively on robotics, which would cater to just the hype. .
Phil: I think that’s a very good point. I’ve had some interesting conversations about the term “digital labor”—so getting away from the term “robotics” because it’s a little toxic. But I take the attitude if you’ve taken a manual process and digitized it using robotics software, it’s no longer labor, it’s a digital enabler. So that’s one of the reasons why I think we’re going to start to get away from that term. It’s like outsourcing was the act of moving services to a third party, RPA is the process of moving certain processes into technology.
I have a final question, Shantanu, about the impact on talent, and this has come out hugely in some of our recent client group sessions. I think some clients are scared today, they’re worried about what’s going on and are they still relevant. How can they stay ahead of the curve and be successful? How is the workplace changing finance professionals? What’s your advice here in terms of how to handle a lot of this disruption, to many of your peers and colleagues and clients?
Shantanu: Phil, this is possibly the most common question I face when I interact with senior finance professionals across our clients and potential clients. So I’m exactly on the same boat as you are. So let me give you some reflections, but I’m not sure it qualifies as advice. I think if you look at traditional finance skill sets, there was a lot of emphasis on the technical aspect of finance, then grounding your experience in the operational delivery of finance. So the traditional management training to senior leadership model was you go through practice, you go through sales offices, you go through profit centers, you go through corporate offices and you learn how operational finance happened in each of those places.
Then you did it in treasury, you did it in this company, you became a CFO–for the people who made it, that’s really how you went through the pyramid. With what is happening in the fundamental finance operating mode of transformation and digitization of operations, three things are becoming more important. The first one is analytical literacy, and that’s different from visual literacy. So how do you use data to be a true business partner? Phil you and I both know, almost every research study done with finance professionals has always shown serious dissatisfaction on the potential to be a business partner and the reality.
I think that has fundamentally changed, given the sheer amount of data that gets spewed out of the systems—and what you can do with that data in terms of modeling, forecasting and stuff like that. So that’s one. Two, with that data comes the whole concept of risk management. Risk management is going from the static view of controlled definitions and one-time control set up, and then auditing to really far more dynamic risk management—and also multivariate risk management across the globe.
The third is really the mindset shifting from cost-to-serve and managing cost-to-serve and cycle time, to creating really agile and flexible operating models—not just in finance, but in the core supply chain and being a partner to that.
So if you think of those dimensions, traditional finance does not cater to that. So it is a very live issue and I don’t think I have a ready made answer. But as we go through a lot of this, the sources of the talent will possibly have to change. So the curriculum will have to change. So I think there are more questions out there than answers.
Phil: That’s has been a very rich discussion, Shantanu, and I look forward to sharing this with our audience and the network on the blog very soon. We really appreciate your time and the thought that you’ve put into this.
If you weren’t able to make our excellent buyers summit at our research partner Cambridge University, we managed to crack the code (finally) on surviving in these disruptive times – in twelve simple steps. Just download our report and all will become crystal clear:
It suddenly dawned on me what the core issue is with the future of the workplace: the simple fact that company leaders and their stakeholders started viewing employees as walking costs at some stage over the last 30 years, and have devoted a huge amount of focus and energy trying to figure out how to remove as many of them from their business as possible… without it impacting the top line.
If someone called you “back office”, I’d imagine you’d be a little bit offended. It’s probably not much worse than being called “useless”, or “about to be automated out of existence”…
Soon there will be nowhere left to hide. Everyone’s value is under the microscope from colleagues and management alike. Whether you turn widgets, manage a process, a set of processes, lead teams or manage team leaders leading teams… or run a whole division… or even an entire organization, you are under constant scrutiny in today’s open workplace.
When your enterprise is increasingly dependent on hiring “Millennials” with digital skills and lower wage needs, you’d better figure out a plan for creating exciting, challenging career paths, or you’re pretty much already doomed.
