Monthly Archives

January 2018

Is Your GIC the Secret Weapon for Digital Enablement? | Sherpas in Blue Shirts

By | Blog, Uncategorized

You might recall, back in December we identified digital agility as a key 2018 initiative. In that blog, we discussed how you can create business value by making things easy, reliable, and fast for your customers. The question I would ask GIC organizations for 2018: In realizing that goal, are you part of the problem? Or are you part of the solution?

Our research, Digital Maturity in GICs | Pinnacle Model™ Assessment 2018, seeks to answer those questions.

Most GICs started small and expanded over time as they proved their value. Now that most GICs have realized the fundamental benefits of labor savings, quality and process improvement, and – in some cases – business outcome improvement, it’s time for them to look to their next act.

Our central thesis is that a GIC can be a critical driver in building and running new digital competencies. But we want to hear from you about the functions and processes that are getting the most attention and investment. Which digital technologies are you focusing their efforts on? And what capabilities did you deploy to build out these capabilities?

There are plenty of digital surveys that you can participate in, so – why Everest Group’s? Because we take a different approach that results in more meaningful, useful outputs. Our Pinnacle Model™ approach asks questions about what the very best GICs are doing in terms of real impact and then correlate the capabilities required to achieve those results. And we go beyond the online survey, talking with some respondents to understand their journeys – what worked and what didn’t.

With that information in hand, we identify a set of Pinnacle Practices™ that you can consider deploying in your GIC.

Yes, there is a ton of hype around digital; let’s get beyond the headlines and talk outcomes and practices in your GIC.

Take the survey

Digital Transformation: Five Steps to Better Metrics | Sherpas in Blue Shirts

By | Blog

Everest Group’s recent Enterprise Digital Adoption | Pinnacle Model™ Assessment suggests that the organizations that are having the greatest success in achieving outcomes from their initiatives have a focus on a set of success metrics the extend well beyond cost savings. They include a focus on things that are relatively easy to quantify such as reduction in process cycle times. However, they also include an emphasis of more nebulous goals such as improving customer experience, introducing innovative offering, and engaging in disruptive behavior in the market.

Measuring this latter set of goals is a far departure from the familiar service level agreements (SLAs) and key performance indicators (KPIs) that IT organizations and their internal business customers are accustomed to using to determine success. Not only are SLAs and KPIs insufficient to measure the strategic impact of digital efforts, they also fail to capture the real essence of what business customers desire. While every SLA and KPI can be met, enterprises on digital transformation journeys tend to find those metrics unsatisfactory.

Five steps enterprises need to take to establish a meaningful set of digital performance metrics

1. Ensure a clear set of business objectives have been established – an objective to improve customer experience is not a clear enough metric to guide a focused set of activities and investments in a digital effort.

Within the customer experience realm, an enterprise could focus on increasing the level of consistency of the experience. In this case, the digital effort may be around automating a set of processes to reduce the variability in results and decrease the dependence upon the knowledge and experience of individuals.

If the desired improvement is to create a personalized experience, the enterprise may be more focused on ways to leverage analytics to consolidate the customer’s activity with the enterprise, make recommendations based upon the behaviors of similar customers, and predict the likelihood of purchasing.

In addition to defining the objectives, a business value should be attached to each. What is the anticipated benefit to the business, in terms of dollars and cents, were the objectives to be met.

Related: See our latest research on digital transformation readiness

2. Develop a quantifiable baseline for the business objective – even with a goal as vague as improving an experience, enterprises who want to ensure their activities are leading to results will find a way to quantify them. For example, if you are trying to improve customer experience through consistency, you may want to measure and set improvement targets for the level of variability in the time to serve a customer or whether the customer experience is similar regardless of the channel through which the customer engages.

3. Track the progress of adoption – while getting a technology solution implemented or a new process defined is clearly the first step, enterprises that get results from their efforts also focus on the level of adoption. These enterprises understand that without behavioral changes to use the technology and follow the new procedures the value potential of the digital efforts cannot be realized.

4. Track the achievement of the quantifiable results – once it is clear that there is a high level of adoption of the technology and redefined business processes, enterprises can begin to track the achievement of the quantifiable objectives identified in step two. Until adoption is achieved, tracking these results is futile.

5. Determine whether the desired business impact is being achieved – a critical and oft overlooked step is to ensure the achievement of the quantifiable results is delivering the desired business impact. In the age of digital transformation, the level of certainty  in effectively achieving outcomes is much lower than in times past. Additionally, the pace of change is greater, meaning that an approach that worked last month might begin to lose its effectiveness this month. Enterprises that want to achieve business results are wise to continuously monitor the impact of their efforts on their desired business results and make the necessary adjustments to both technology and business process to sustain the desired business impact.

Even in the digital era, the adage that what gets measured gets done remains solid advice for enterprises interested in not merely engaging in digital transformation activities but in achieving business results.

‘Unprecedented’ Hiring Could Make The Amazon HQ2 Shortlist Much Shorter | In the News

By | In The News

Amazon’s HQ2 bidding process has advanced to a shortlist of 20 locations.

That narrowing field has some questioning how feasible creating a 50,000-person office from scratch will be for smaller contenders not known for their tech base.

“When this first came out, our reaction was: ‘Holy cow. That’s big, and it’s quick. Can they do it?’” Everest Group Managing Partner Eric Simonson said.

Amazon’s aggressive HQ2 building plans, coupled with its desire to hire 50,000 employees, would be a difficult task for any city to fulfill, Simonson said — but particularly those smaller markets like Columbus, Ohio; Raleigh, North Carolina; Nashville, Tennessee; and Indianapolis. An Everest Group report on HQ2 bidders said Amazon is going to struggle with filling seats if it considers regions with populations of less than 4 million people.

Read more in Bisnow

Service Providers Basing Margin Expectations on Flawed Math Assumptions | Sherpas in Blue Shirts

By | Blog

As legacy service providers excelling in the labor arbitrage-factory model look to participate in the digital world of cloud, automation, agile, DevOps and AI technologies, they are basing their prices on flawed mathematics assumptions. They expect that they not only will be able keep the same margin structure they now have but also that those margins will increase. Their thesis is that digital work is more valuable and worth more to clients; therefore, they should make more money for doing the work.

Inconveniently, this assumption is flawed. Margins have very little to do with the value a company creates; they have everything to do with the underlying market structure.

New Digital Work Will not be at a Higher Margin

I think it’s fundamentally unrealistic that the new digital work will be at a higher margin. It may be at a higher price person, but not a higher margin. There are many reasons for this including:

  • The providers’ inability to utilize offshore factory, as digital environments demand close collaboration of business and IT teams that are located onshore close to a client’s business
  • The talent required to deliver these digital services is much more expensive than the talent base in the old factory model
  • The more automation a company introduces, the more the client captures the financial benefit, not the service provider.

New Margins at a Lower Rate

All these and other reasons suggest that the new natural margins for digital services will be at a lower rate than the margins of the offshore factory model that currently dominates the marketplace.

I also want to point out offshore margins are structurally higher for services than we’ve seen in previous generations. So, it shouldn’t be surprising that the new model would be lower because this is an aberrant model to begin with.

So, why should service providers’ clients care about this issue? I believe service providers are likely to exaggerate their DevOps, agile and other digital capabilities yet not make the system changes necessary for delivering these services. They won’t make the changes because they’ll make less money. Delivering digital services requires a fundamentally different business model. If they do not make the necessary structural changes and business model changes, they will under-deliver services in the new digital models.

 

With All The Talk of Transformation, Are RPA Projects Bad? | Sherpas in Blue Shirts

By | Blog

This past week, I had the opportunity to deliver a keynote speech at the Dallas RPA and Cognitive Summit that focused on the difference between digital projects (in this case, RPA projects) and transformations. In a nutshell, here are the key takeaways:

  • Your Why Matters: RPA implementation by itself is not a strategy but an enable of a specific objective(s) the organization is trying to accomplish
  • What you want to accomplish can be far reaching: The outcomes of your RPA effort have the potential to range from IT operations improvements, business efficiency, or improvements in the customer experience. The closer to the customer, the more transformative the effort is likely to be
  • How you choose to execute determines your impact: Since technology is rarely a barrier to success, the alignment of the business stakeholders, the cultural adjustments, and the approach to risk management will be the determining factors in the ability to scale and to capture the intended value

While my talk was purposefully focused on pushing the group’s thinking around transformation, the world in which most of the attendees current live is all about projects. The dichotomy between my focus and their reality led one of the attendees to ask whether projects were a bad thing and what they as mid-level manager could do to encourage transformation.

RPA projects are not bad

RPA projects are by no means bad or inferior to transformation efforts. In fact, most transformation efforts are implemented through a series of projects. However, it is important to know that projects implemented outside of the context of a transformation effort will have limited impact. It is perfectly acceptable to do standalone projects – just do not expect them to deliver results that will be significant enough for customers or the marketplace to notice.

On the other hand, understand that you cannot run a transformation as though it were a project and expect good results. Given the level of complexity and need for executive sponsorship, transformation run as projects usually do not scale well beyond the initial pilot, take excessively long to implement, and rarely achieve business impact. If it is a transformation, run it as such.

Use RPA projects to ready your organization for true transformation

Realistically, if your title is Director of RPA, Business Process Improvement, Operations Excellence, etc., the chances of you being able to initiate a digital transformation in your organization are slim. That is not to say, however, that you cannot have some influence on the organization through you work you do with your RPA projects.

RPA adoption is still relatively new and most business stakeholders are not familiar with the potential impact it can have, comfortable with the different type of risk it brings, nor aware of the level of effort required to use it for transformation. An approach that starts with a project focus that creates a pull in demand from the business side of the organization could be just the early experience an organization needs to begin to consider RPA and other automation technologies as a part of its digital transformation efforts company-wide.

View the full presentation.

Q1 2018 Market Vista™ Briefing: 2017 in Review & 2018 Predictions — On-Demand | Webinar

By | Webinars

Thursday, February 15, 2018 | 9 am CST, 10 am EST, 3 pm GMT, 8:30 pm IST

Download Presentation Slides

Many of us want to put 2017 quickly behind us – but let’s not move forward too hastily. For the global services industry, the year brought positive changes that are worth reviewing. Most interestingly, as an industry, we witnessed a yin and yang of the old and new. While there were clear signs of recovery in traditional services – there was significant movement away from the long-established arbitrage-first model, as leading firms pushed forward their digital transformation agendas.

In this one-hour moderated webinar, hear our experts discuss these shifts and other findings from our renowned Market Vista™ quarterly report.

They’ll put the changes and trends in context, as they cover the key forces and metrics defining the market, including trends in outsourcing, digital adoption, and the Global In-house market, as well as insights into location activity in offshore and nearshore geographies.

But don’t worry, we won’t stay mired in the past!
We promise a lively discussion as CEO Peter Bendor-Samuel, Chief Research Guru Michel Janssen, Managing Partner Eric Simonson, and H. Karthik, Partner share their 2018 predictions.

Get your questions ready.
We’ll save time at the end to answer the best of the submitted queries.

Who should attend?
Executives planning their next global services move and want to understand the latest key developments across the offshoring and outsourcing market.

Everest Group speakers

Moderator: Alan Wolfe, Senior Vice President, Everest Group

Everest Group IDs 11 North American Retail Banks That Are Delivering Superior Customer Experiences via Digital Technologies | Press Release

By | Press Releases

These ‘retail banks of the future’ will rely on an ‘ambient fabric’ that connects people and businesses to holistically impact the consumer lifecycle

 Everest Group has studied 30 leading North American retail banks and identified 11 Pinnacle Enterprises™ that are leading the way with new “experience first” business models, delivering business results through the effective use of digital technologies.

In its recently published report—“Digital Effectiveness in Retail Banking | Pinnacle ModelTM Assessment 2018: Journey of North American Banks to Build SUPER Experiences”— Everest Group examines how these banks employ digital technologies to provide superior customer experiences, establish stronger customer engagement and produce higher business growth. The assessment focuses on multi-channel digital technologies that are used in consumer interactions – both online and offline.

Digital Banking Pinnacle Enterprises™ have a major competitive edge across a breadth of digital functionalities offered and adoption of channels. The following Digital Banking Pinnacle Enterprises stand out for making a strategic impact through their digital transformation efforts: Ally Bank, Bank of America, Capital One, Chase, Citi, PNC,Suntrust, Wells Fargo and USAA from the United States, and CIBC and RBC from Canada.

Collectively, the Digital Banking Pinnacle Enterprises outperform their peers, delivering:

  • 22 percent higher adoption of online banking platforms
  • 13 percent higher adoption of mobile banking platforms
  • 20 percent higher mobile banking application rankings
  • 3 percent higher growth in deposits
  • 9 percent lower efficiency ratio

“Over the last three years that we have conducted this assessment, we’ve documented an increasing correlation between banks’ digital capability maturity and business outcomes,” said Jimit Arora, partner at Everest Group. “For example, banks with more mature digital capabilities have superior brand standings; their customers express high degrees of trust and strong perceptions of transparency and accountability. Also, banks with more mature digital capabilities have better efficiency ratios, higher staff productivity and larger deposit growth.”

“Everest Group is establishing indisputable evidence that effective investment in digital technologies and strategies contributes significantly to business success,” adds Michel Janssen, chief research guru at Everest Group. “Our Pinnacle Model assessments show organizations exactly who is succeeding and how. Armed with this clear point of comparison, organizations are better equipped to prioritize where to invest their time and resources and plan their own path to the top.”

Everest Group predicts the retail banking industry soon will witness a sea change as banks move to a co-creation model—joining with allied businesses to combine, package and offer products and services to orchestrate consumers’ full financial lifecycles. Consequently, banks will move away from being perceived as just a physical structure that offers financial services and products to being an “ambient fabric” connecting people and businesses.

Consumer preferences are the impetus for this sea change; banks are compelled to shift to an “experience first” business model to respond to customer demands for a “SUPER” banking experience:

  • Secure: consumers demand transparency in fees, products and personal financials and expect high levels of security without significant friction in the customer experience.
  • Ubiquitous: consumers demand access to banking services anytime, anywhere and from any device. They expect high digital channel availability from their banks.
  • Personal: consumers demand that their banks not only understand their current needs but also detect potential needs and offer relevant, customized solutions
  • Easy: consumers demand a seamless user experience across channels and types of transactions. They expect integrated financial solutions (e.g., payment processing) with their activities.
  • Responsive: consumers expect quick responses to their queries across the channels of their choosing. They expect context-aware responses in real time.

“Traditional banks are being forced to reinvent themselves to compete with FinTechs and other non-traditional providers and to deliver what customers demand,” said Arora. “Digital technologies are at the heart of this transformation. By weaving together digital technologies, experience-first strategies and new alliances across industries, banks ultimately will become the underlying, connective fabric that unites the global ecosystem.”

 About the Pinnacle Model

Everest Group’s proprietary Pinnacle Model™ assessments, which include input from executives from leading Fortune 1000 companies, compare internal capabilities to desired business outcomes, such as disrupting the industry, improving customer experiences, increasing market share, and launching innovative products and services. By highlighting what the best—Pinnacle Enterprises™—are doing, these performance studies help organizations plot a journey from their current position to where they want to go, prioritize investments of time and resources for maximum impact, and accelerate change.

Driving RPA from GICs? Learn from the Best-in-class | Sherpas in Blue Shirts

By | Blog

The shift towards a “digital-first model,” in the wake of technology-led disruption, has given GICs an opportunity to become strategic entities that can drive innovation across the enterprise, instead of an arbitrage-first-oriented low-cost set-up delivering back- / middle- office services at scale. A very positive move for GICs and the enterprises they support.

Robotic Process Automation (RPA), among other digital technologies, is gaining popularity across enterprises and GICs thanks to its many business benefits. And enterprises are increasingly leveraging their GICs to drive RPA usage. This is largely driven by factors such as GICs’ tighter integration with the core business, increased endorsement from the enterprise, shift toward insourcing, higher visibility to enterprise leadership, lower costs, and availability of talent.

So what factors enable best-in-class GICs to drive RPA programs successfully? We’ve identified eight:

How GICs drive RPA

Successful GICs, through dedicated RPA CoEs, have gone beyond exploring RPA technology for in-house consumption. From educating various stakeholders across the enterprise on capabilities and benefits of the technology, to executing RPA solutions across functions and locations, these CoEs are playing a key role in transforming processes across the enterprise. CoEs in best-in-class GICs have gone a notch higher, and are focusing on creating an ecosystem that enables businesses to independently explore RPA opportunities.

While GICs are well positioned to drive RPA across the enterprise, successful implementation requires dedicated focus on factors including governance and business continuity. They must also be on the lookout for advanced technologies, such as AI and cognitive, that can augment existing RPA technology and enhance overall automation business benefits.

To learn more about the best practices employed by best-in-class GIC adopters of RPA, please read our recently published report, “RPA Implementation in GICs – Learnings and Best Practices.” We developed it based on interactions with 100+ global enterprises’ GICs and a range of automation technology vendors.

If you are driving RPA from your GIC, I’d love to hear your story. Feel free to share your opinions and stories on how your GIC is evolving in its RPA journey directly with me at [email protected].

And/or, join in on our research on how enterprises design their GIC journeys to drive their enterprises’ digital agendas. Click here to take the survey; responses will, of course, remain anonymous.

Digital IT contracts now come with tough liability clauses | In the News

By | In The News

The newer IT contracts involving higher levels of automation and New-Age digital components like cloud, analytics, and artificial intelligence, often get service providers better prices, but they also come with more stringent liability clauses.

This is because the work either impacts the front-end operations of clients, and hence the overall business — or they are aligned to delivering specific outcomes. Traditional IT contracts were based on the time-&-material model, under which clients simply paid for the number of hours spent on delivering a project.

Rahul Barwe, a senior analyst with IT research firm Everest Group, says a global consumer goods company’s outsourced robotic process automation (RPA) solution malfunctioned. “It took six months for the base product to be updated and fixed. The company could not recoup the lost opportunity costs from the service provider because such a scenario was not adequately incorporated into the contract terms and conditions,” he says.

Read more in ETCIO.com

Robotic Process Automation to create 2 lakh jobs by 2021: Dines | In the News

By | In The News

India is in prime position to become a Robotic Process Automation (RPA) powerhouse because of its growing talent pool and cost advantage and an estimated 2 lakh jobs can be created by it in the country by 2021. Daniel Dines, CEO and Co-Founder of UiPath, the leading enterprise Robotic Process Automation (RPA) software company said RPA had been gaining traction as a way of automating repetitive, tedious tasks to handle higher-value analysis and decision-making.

Sarah Burnett, Vice President, Global Research Company Everest Group, said that automation was the way to go. ”It will create incredible opportunities in the IT sector. In a recent study by Everest Group, 80 per cent of companies that we surveyed rated RPA to meet expectations and even exceed them. RPA addresses many areas including regulatory compliance, process automation and more. Also it is secure and most importantly, it is scalable.”

Read more in webindia123