Monthly Archives

December 2017

2018: The Year When Faking Digital Won’t Work Anymore | Sherpas in Blue Shirts

By | Blog, Digital Transformation

Since the global financial crisis nearly 10 years ago, many enterprises have been riding high on the “free money” made available to them through endless central bank bond buying and low or even negative interest rates.

But there’s zero doubt that this capital bubble will burst. And as the flood of money recedes, some organizations that have been “faking” their digital transformations, i.e., taking a non-strategic approach to digital, will falter. Others will likely fail.

Does lack of a digital strategy really equate to such doom and gloom? You bet it does. Because digital isn’t just about technology. In fact, Everest Group’s definition of digital specifically looks beyond technology and focuses on how digital dramatically enhances the experience of users – customers, employees, and partners alike.

Need to be convinced of the importance of a superior digitally-based experience? Look no further than the alarming number of retail stores that have closed and gone bankrupt because they haven’t been able to provide an Amazon-like experience. Of course, it’s just not the retail industry facing challenges. True digital transformation is and will cause future disruptions in the healthcare, financial, pharma, and other industries.

Against that back-drop, here are my top five predictions for 2018, and what you should do to address them.

Top five digital predictions for 2018

  1. Digital agility will be the basis for competitive advantage: Your business value will increasingly come from making things easy, reliable, and fast for your customers. To win in 2018 and beyond, your focus must not be on the functional attributes of your product or service, but instead on the context for how customers purchases and use them, and how you manage their relationship and interactions with your company. These will be the critical proof points for building and sustaining customer loyalty.
  2. Delivering the right experience will become your organizing principle: The structural limitations of legacy organizational models – where functions and insights into customer needs and behaviors are fragmented and siloed – severely impact delivery of an enhanced customer experience. In order to effectively compete, you need to adjust structures, internal processes, incentives, reporting, and other levers to directly align to the customer experience. Imagine the impact if you took 20 percent of the team members in each of your functional departments and had them report to a newly-established customer experience department?
  3. Success won’t be about the information you have, but what you do with the insights: Your organization has most likely built and analyzed large sets of data about your customers, products, operations, etc. But data is only valuable if you take action on the insights you gain from the information. In the words of Jack Welch, former chairman and CEO of GE: “An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.” And, borrowing Nike’s trademark: “Just do it.”
  4. This won’t be your grandfather’s job: The increasing impact of technology and the acceleration of change will have dramatic impact on how humans are utilized and managed by companies. Success will mean increasingly virtualizing your employee and career models. These could take various shapes, including using talent free-agency models to staff initiatives, and replacing the concept of a career path with skill dashboards whereby individuals accumulate related sets of experiences and expand those experiences into new areas.
  5. There will be seamless interaction between humans and automation: Don’t fret about the FUD around automation replacing human workers. RPA, analytics, and other new technologies are accelerating the need for humans to evolve their roles and skills, which means less effort on collecting and manipulating information and more focus on identifying insights, understanding needs, developing new ideas, and applying judgment to make decisions. Empowering your employees with knowledge on how to use these new technologies for higher value activities will provide you with a distinct advantage over your competitors.

Three no-regret actions to ensure you aren’t left entirely behind

  • Understand beyond your immediate competitive landscape. You can gain all kinds of gems and jewels on how to leapfrog the competition from businesses in sectors other than your own. Make the ask of enterprises you respect: most are generally willing to share, as long as you are too.
  • Get your digital technology degree. Educate yourself on how available technologies can be applied to competencies, processes, and activities that are relevant to you. What types of problems do they help solve? What are the new tools in the tool box, and how can they build upon each other?
  • Don’t go it alone; invite your friends. Every one of my above predictions have big implications that go well beyond one function or process. They’re enterprise-level initiatives that need the collective to succeed in a meaningful way. Silos need to develop a shared need and vision, which is generally the biggest barrier to fundamental digital change.

2018 may not be the year the money bubble bursts. But it is the year that you must make highly strategic digital investments. So, the question your enterprise should be asking itself is, “am I ready for it, or am I faking it?”

Wipro Launches Hybrid Crowd In Move To Capture Digital Expertise | Sherpas in Blue Shirts

By | Blog, Digital Transformation

The stakes are high for service providers trying to transition to digital technologies and business models. Currently there is no clear leader in the space. One of the biggest barriers to providers rotating to digital is gaining experienced digital talent.

I’ve been watching providers’ strategies to acquire the necessary talent, and Wipro just made a move that puts a new twist into the race to digital leadership. Wipro just launched Hybrid Crowd, a first-of-its-kind platform enabling companies to crowdsource digital projects to certified experts. It’s a relatively new technology service, and I believe it has the potential to be quite disruptive.

Read more at my Forbes blog

Don’t Be an RPA Loser – Making the Most of Your RPA Deployments | Virtual Roundtable

By | Webinars

Thursday,  December 14, 2017 | 11:00 a.m.  – 12:30 p.m. ET

Register for the Virtual Roundtable

Robotic Process Automation (RPA) offers great potential for efficiency and yet many organizations fail to move beyond a simple Proof of Concept (POC). Everest Group research shows that many POCs do not represent the full complexities of deploying RPA in real operational environments, leading to difficulties in scaling up. And yet, it is only by scaling up RPA that organizations can maximize its benefits. How do organizations address this problem and get the most value from their RPA investment?

Following introductions, we will offer a very brief, context-setting best practice session on how we have seen organizations accelerate RPA benefits. The bulk of the time will be dedicated to group discussion, with participants sharing how they are approaching their automation programs, including the role of POCs, deployment approaches, and other relevant topics as they arise.

Who should attend

Enterprise global services and outsourcing executives who want to share and discuss practical hints and tips to move beyond the POC stage to make the most of their RPA deployments.

What you will learn

Learn about the typical challenges peer organizations have faced in deploying RPA and how they have overcome them
Share thoughts on best practices for deploying RPA

Presenter

Sarah Burnett, RPA Research Lead, Everest Group

Register now for the Virtual Roundtable

Retrospective on the 2017 Global Services Market | Sherpas in Blue Shirts

By | Blog, Shared Services/Global In-house Centers

As I look back on this year, it’s impossible to unplug digital from the determinants of the year’s most significant business changes. A review of how the rotation to digital impacted the global services market in 2017 provides a glimpse of factors that will be at play in 2018 as companies seek to be more competitive. In this blog, I’ll focus on three of the top factors that affected businesses this year.

Global Services Market Deceleration

Both the global services market and the Indian sector further decelerated this year. When we made projections for 2017, Everest Group was the only firm to make that call. In fact, although we were overly criticized for being overly pessimistic, the market decelerated even more than what we forecasted.

Deceleration is not the same as shrinkage. In the legacy space, the offshore labor arbitrage talent factories went from a growth space to a three percent contraction this year. Also, there has been portfolio rationalization and industry consolidation in that space. As the space shrinks, the larger firms do better than the smaller firms.

Related: 2018: The Year When Faking Digital Won’t Work Anymore



This year brought the rotation to digital with companies moving from services based on labor arbitrage to services based on disruptive digital technologies. The digital space now constitutes 25 percent of the overall market and is growing at 20 percent. The legacy arbitrage factory is 75 percent of the overall market and it’s shrinking at three percent. Within the shrinking, the big five Indian players are consolidating the market to take share; so they eked out a 1.5 percent growth while other providers shrank.

Interestingly, the compression driven by the cannibalization of digital and legacy environments is partially offset by new workloads coming into the legacy environment due to changes in market segmentation.

Market Segmentation Changing

A major factor at play in the services market in 2017 is the market beginning to segment between (a) digital transformation and (b) modernization of IT and business process services (BPS).

The digital market began splitting this year into two pieces: digital transformation vs. modernization. We clearly see two distinct, separate markets emerging in digital. This year we also saw digital transformation pilots go into programs. Pilots that ranged in size from $500,000 to $2 million in size now consistently hit between $50 million to $500,000,000 billion.

The legacy environment is also splitting into two markets: work that will be modernized and work that is too risky or expensive to modernize. We’re now 30 years beyond the inflexion point of where the market began moving from mainframe to client-server environments. Many companies still have a portfolio of applications remaining on mainframes. This is a classic example of legacy work that is too expensive or risky to modernize. As a result, companies are content at this point to let that work remain in the legacy structure. However, this year clearly brought movement in this space of companies building APIs and microservices to connect with that work, whether it is in an internal legacy infrastructure or in an outsourced legacy talent factory. This enables the companies to turn their attention to the work that they need to modernize.

What we haven’t seen is business process services (BPS) modernization take hold. IT is leading the pack currently. At the beginning of the year, we thought that BPS might lead the modernization, but it turns out we were wrong. The IT segment is moving much faster than the BPS segment in modernization work.

Rise of Small Firms

Also in 2017, we saw the rise of small provider firms. Where we see industry consolidation on the legacy side, we see vendor proliferation on the digital side. We believe this proliferation is because companies are looking to new firms to do new work. They believe the incumbent service providers are distracted and have a conflict in interest in moving to digital – a self-interest in preserving their profitable legacy arbitrage-based work. Consequently, this year brought a surge in companies looking to smaller, new service provider firms to help them understand and drive both digital transformation and IT modernization.

Accenture passes Cognizant as top IT outsourcer | In the News

By | In The News

The top six outsourcers on Everest Group’s second annual ranking of the best IT service providers of the year remained unchanged since 2016. But Accenture rose to the top of the list in 2017, besting last year’s No. 1 Cognizant.

“Both are largely neck to neck,” said Abhishek Singh, IT services practice director at Everest Group. “However, this time, Accenture broke away from the pack because of what they achieved on IoT, SaaS implementation, and private cloud enablement.”

Read more in Computerworld

What Is Driving the Momentum in Digital Transformation Projects? | Sherpas in Blue Shirts

By | Blog, Digital Transformation

One of the remarkable IT trends in 2017 is the increasing size of digital transformation projects. I recently blogged about this phenomenon, especially as evidence refuting Gartner’s claim of these projects hitting a trough of disillusionment. The reason this growth in projects in the digital space is remarkable is that we saw no evidence of it in prior years. I believe it’s especially worth paying attention to because of what’s driving the momentum.

In 2017, we see evidence of companies shifting from digital transformation pilots to programs. 2016 brought a lot of experimentation with small pilots, but they stayed in the range of $500,000 – $2 million. Companies moving from pilots to larger, more substantial programs in 2017 are investing in the range of $10 – $50 million in these projects.

Let’s dig deeper into what is driving this momentum. The first factor in the growth in size of digital transformation projects is that the programs are sponsored by the C-suite (usually the CEO, CMO, or CFO).

Read more at my Forbes blog