Businesses have traditionally embraced new technology in order to create efficiencies and lower costs. However, the stakes and rewards are significantly higher in the digital era. Companies have an unprecedented opportunity to increase revenue by engaging digitally savvy consumers at every touchpoint across the customer experience lifecycle. At this point, going digital is no longer optional, it’s essential for survival. If established companies want to stay in business, executives need to adopt new strategies and technologies or risk obsolescence. If your organization does not have a clear digital strategy, there’s no time to lose. Here are some important things to consider as you create a roadmap for your transformational journey.
Millennial outsourcing is here, are you ready for it?
Organizations, service providers and advisors share thoughts on millennial outsourcing and the other latest trends within the outsourcing industry.
Last month I participated in numerous events in North America with clients, service providers and advisors – primarily discussing the many changes we are facing within the outsourcing industry. We are indeed going through some fundamental changes and exciting times for all parties.
Below is a summary of the latest thinking, which I call millennial outsourcing, and the facts we should be aware of:
• Change is imminent: There are several outsourcing contracts expiring within the next year – most of which will not likely be renewed exactly the same way as a traditional outsourcing deal is. During the Wall St. Technology Conference hosted by the Outsourcing Institute on June 2 in New York City, ISG President and Conference chair, Mr. Anubhav Sanexa, disclosed a staggering finding: the numbers of contracts facing significant changes are in the thousands.
• The as-a-Service model is here to stay: The technological advancements with software technologies and cloud now enable organizations to effectively multisource for both standard and project-related services. Although premature, this trend is set to continue to evolve – as buyers are becoming more experienced. A key component to an effective as-a-Service model is Governance, since the “handshakes” required are within the critical path for an effective service delivery.
• The labor arbitrage dilemma: As the middle class in emerging economies continues to grow, the labor benefits will commence to erode. A recent trend on nearshore and onshore locations has already begun, although there are other considerations driving that forward. For now, the basic measure that offshore is cheaper remains sustainable, however no one is certain on how long it will take for service providers to reach an offset.
• The automation optimum: As service providers and clients look to benefit from automation as a service, there are some constraints/key considerations to be taken into account. During a recent event hosted by Wipro and The Outsourcing Institute in New York City, Mr. Nicholas Carr, a renowned speaker and author talked about his latest book ,“Automation and Us.” The comment that did resonate with me was the fact organizations like Toyota are “Humanautomating Things” – which is basically to bring the best from machines and humans to obtain the best possible outcome, not one vs. the other.
Another important consideration to automation is the implication to traditional pricing models. In the near future, organizations and service providers may define the new acceptable way for pricing structure at the unit rate level. A potential approach will be to disclose the percentage of automation and labor applied to a specific tower or service within a unit rate. This will help to determine the “automation appetite” of organizations and service providers before they enter into an outsourcing relationship. In addition, this will also influence some potential gainsharing targets/goals for the agreement.
• The orchestration becomes real: The art of a good workflow to manage services from end-to-end through a multitude of service providers is very complex to achieve. Great examples of success have been obtained by some service providers – CapGemini’s state of Texas case study the first one that comes to mind. What is interesting about this is that different organizations have different perspectives on who should be orchestrating their services. There is no right or wrong here – rather an organization’s preference for managing some strategic considerations or involving an external party to do so. In addition, governance protocols and processes will be more strategic rather than operational – as organizations will need to put stronger emphasis on relationships at all levels, not on tasks or dashboards.
• The dependency on data and analytics rises to the top: Regardless the organization’s target operating model, data and analytics will become a major driver on how organizations’ assess services being provided – and where the organization should focus. The standard reporting and metrics provided today will continue to be enhanced – up to a level organizations’ have not seen yet. This will determine a much more factbased approach, linking organizations trends internally with external factors. The focus will be direct tied to customer experience, not only tasks being completed on time. The old saying, “all of my SLAs are green, however, my clients are still unhappy with services” is no longer acceptable. In the near future, organizations and service providers shall be able to understand and address issues proactively.
• The new client-facing focus: As discussed,customer experience will drive the organization’s perception of services being provided, not only the standard metrics and SLAs. The fact that services providers, either for software or infrastructure, have already invested a great amount of development and time on it is a major step forward.The integration of software and tools with mobile technology is becoming essential to the service providers business and client experience. The important factor is that organizations are heavily concerned with client-facing elements of services – as that is where the opportunity exists for them to make a difference from the client’s point of view.
• The risk considerations can no longer be evaluated in silo: The integration of technology tools from procurement to risk will provide greater visibility to risks that would otherwise be hard to assess in a timely manner. As organizations are constantly looking to protect their brands, the dependencies on service providers, regulatory requirements, and client expectations can no longer be assessed separately. During the Wall St. Technology Conference, I had the pleasure of moderating a panel discussion on this exact topic – the message I got from our speakers was simple: if you do not manage risks effectively, you will not survive.
• The market consolidation is taking shape: As margins for outsourcing deals are in decline, a consolidation among the service providers is already taking place. Most recently, CapGemini acquired iGATE, setting a precedent for greater competition with IBM, Tata and others. The strategic nature of acquisitions going forward will be a strong factor for organizations while assessing their upcoming contract renewals.
• The workforce generation gap: With the increased use of automation to commodity-like activities, a new generation will grow knowing how to monitor activities but lacking execution knowledge. As such, some skills and talents will become extremely valuable both to organizations and service providers. Therefore, it will be important for organizations and services providers to start laying out some of the required foundations sooner than later, so this can become a non-issue.
As you can see from above, our industry is going through fundamental changes. All parties involved are trying to anticipate the right solutions/responses to the items listed above. The upcoming months shall provide greater clarity on where we go from here. As an advisor myself, I believe these are exciting times as we learn to navigate in this new outsourcing world – welcome to millennial outsourcing and enjoy the ride.
Smart Process Automation: The Why, What, How and Who of the Next Quantum Leap in Enterprise Productivity
Robotics, aka Robotic Process Automation, is a buzzword in every Fortune 1000 boardroom and a headline at every conference. But just like that “new” actor you suddenly see in every movie, it’s been around for over a decade, and it’s already showing signs of age. Regulatory compliance, competition to deliver the best customer experience and the relentless drive for shareholder value have made automation a mandate. Now, the enterprise needs a more powerful lever than pure desktop robotics to achieve operational transformation and business breakthroughs. Enter smart process automation.
IT Outsourcing is not about Cost Savings
The driving forces of change are the speedier, more e cient and more agile delivery of services that
transform the business. This is having a huge impact on the way IT professionals and business leaders see the role of outsourcing in helping their organizations transform to become digital businesses.
Executive Interview: The Changing BPO Marketplace with Concentrix President Chris Caldwell
BPO isn’t what is used to be. Clients pushing for digital transformation, changing labor models & the introduction of automation technologies are changing the Customer Engagement landscape…or are they? The Outsourcing Institute’s Daniel Goodstein recently sat down with Chris Caldwell, President at BPO firm Concentrix, to discuss the changing BPO marketplace, new client demands for Customer Engagement and Digital Transformation, and the challenges currently facing BPO providers.
The interview explores:
- Changing Customer Engagement expectations
- Moving up the value chain & being more than a commodity
- Innovation vs. Cost-Save
- Effects of Digital Labor, RPA & Automation
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IT Outsourcing is not about Cost Savings – Lessons from IT Leaders
Successful IT outsourcing calls for a collaborative partnership between an organization and its IT provider in which everyone works towards defining and delivering higher levels of business value. When the primary focus shifts from cost savings to creating business value, the outsourcing relationship moves away from solely contract terms and service-level agreements towards a fully integrated, forward-thinking model that is directly aligned to the business strategy.
IT leaders often struggle to align outsourcing activities toward driving better business outcomes. This webinar will offer real perspectives from IT leaders including Mike Lang, former CIO at Honeywell International about how companies can leverage outsourcing as a catalyst for transformation and will demonstrate how outsourcing can become a vehicle to transform the service delivery model, bring new levels of speed and agility, and accelerate the journey toward becoming a digital business.
The webinar will provide actionable insights to:
- Liberate people from commodity tasks, allowing them to realign toward improving the customer experience, addressing exploratory technologies, and moving confidently into the digital enterprise.
- Discover new ways to deliver services that boost the agility, speed, and flexibility at which the organization operates.
- Go beyond cost savings by enabling the organization to achieve greater competitive advantage.
NelsonHall’s John Willmott Talks ‘Digital BPO’ & 2016 Marketplace Outlook
NelsonHall CEO John Willmott recently sat down with Outsourcing Institute President Daniel Goodstein to discuss Transformation within Outsourcing and Digitization of BPO services. Hear NelsonHall’s research data which takes on the hype and tells the real story of where outsourcing is going, effects of digital technologies, process improvements, pricing & governance models.
In addition to founding analyst firm NelsonHall, John is the Chairperson of The Outsourcing Institute’s ‘Digital BPO’ Webinar Series and Keynote Speaker for its ‘OAISS’ Outsourcing, Automation & Innovation Seminar Series.
RPO Client Satisfaction
Ask the Expert series with Frank Casale, OI, John Younger, Accoio, David Pollard, Talent Fusion and Larry Heckathorn, Human Capital Group.
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Frank Casale
Frank Casale
Founder & CEO, IRPA AI
Frank J. Casale is Founder and CEO of The Outsourcing Institute (OI) as well as the Institute for Robotic Process Automation & Artificial Intelligence (IRPA AI). Established in 1993, OI is a global marketplace and community of 70,000+ executive members including leading practitioners, service providers, advisors, thought leaders, industry observers and analysts. The mission of OI is to leverage the collective wisdom and best practices of this evolving outsourcing ecosystem along with the latest abilities of internet technologies to enable powerful alternatives for learning, networking, career development, publishing, transacting and relationship management for those in the outsourcing arena.
A pioneer and visionary leader with more than 15 years of outsourcing expertise, Mr. Casale continuously monitors industry and business trends to better identify new ways to increase the overall efficiencies, speed and success of outsourcing transactions and relationships.
He is noted for designing innovative industry tools, such as The Outsourcing Index, the premier state-of the-industry report on U.S. outsourcing, and for reliably anticipating market developments, such as the emerging role of the Chief Resource Officer (CRO), Outsourcing 2.0, and OI’s new Intelligence Network a virtual outsourcing community and marketplace.
His ability to identify industry needs and anticipate trends has led him to recently form the Institute for Robotic Process Automation. IRPA is an independent professional association and knowledge forum for the buyers, sellers, influencers and analysts of robotic process automation. The network and advisory services offer leading-edge market intelligence, industry research, best practices, latest trends, expert interviews and commentary from the pioneers and thought leaders of robotic process automation. IRPA offers alliance-building opportunities for stakeholders across service industry functions and helps business leaders position themselves at the cutting edge of knowledge work technology. As the CEO for the Automation Accelerator, a new business unit that harnesses the vast ecosystem of IRPA, Frank leads a team of seasoned professionals that help companies fast-track their assessment, integration and implementation of RPA, artificial intelligence and cognitive computing technologies.
Featured on CNN and CNBC, Mr. Casale is a leading commentator on outsourcing issues by major business and news organizations including The Financial Times, The Wall Street Journal, Business Week, FORTUNE magazine and The New York Times. An expert on the strategic utilization of people, processes and technology, Mr. Casale is a leading advisor to hundreds of organizations in their efforts to leverage internal and external resources efficiently and effectively. As creator of the first, largest and only neutral professional association in outsourcing, Mr. Casale continually sets the standard for outsourcing best practices.