Monthly Archives

November 2018

Using AI to Build, Test, and Fight AI: It’s Disturbing BUT Essential | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Experts and enterprises around the world have talked a lot about the disturbing concept of AI being used to build and test AI systems, and challenge decisions made by those systems. I wrote a blog on this topic a while back.

Disquieting as it is, our AI research makes it clear that AI for AI with increasingly minimal human intervention has moved from concept to reality.

Here are four key reasons this is the case.

Software is Becoming Non-deterministic and Intelligent

Before AI emerged, organizations focused on production support to optimize the environment after the software was released. But those days are going to be over soon, if they aren’t already. The reality is that today’s increasingly dynamic software and Agile/DevOps-oriented environments require tremendous automation and feedback loops from the trenches. Developers and operations teams simply cannot capture and analyze the enormous volume of needed insights. They must leverage AI intelligence to do so, and to enable an ongoing interaction channel with the operating environment.

Testing AI Biases and Outcomes is not Easy

Unlike traditional software with defined boundary conditions, AI systems have very different edge scenarios. And AI systems need to negate/test all edge scenarios to make sense of their environment. But, as there can be millions of permutations and combinations, it’s extremely difficult to manually assure or use traditional automation to test AI systems for data biases and outcomes. Uncomfortable as it may be, AI-layered systems must be used to test AI systems.

The Autonomous Vehicle Framework is Being Mirrored in Technology Systems

The L0-L5 autonomous vehicle framework proposed by SAE International is becoming an inspiration for technology developers. Not surprisingly, they want to leverage AI to build intelligent applications that can have autonomous environments and release. Some are even pushing AI to build the software itself. While this is still in its infancy, our research suggests that developers’ productivity will improve by 40 percent if AI systems are meaningfully leveraged to build software.

The Open Source Ecosystem is Becoming Indispensable

Although enterprises used to take pride in building boundary walls to protect their IP and using best of breed tools, open source changed all that. Most enterprises realize that their developers cannot build an AI system on their own, and now rely on open source repositories. And our research shows that 20-30 percent of an AI system can be developed by leveraging already available code. However, scanning these repositories and zeroing in on the needed pieces of code aren’t tasks for the faint hearted given their massive size. Indeed, even the smartest developers need help from an AI intelligent system.

There’s little question that using AI systems to build, test, and fight AI systems is disconcerting. That’s one of the key reasons that enterprises that have already adopted AI systems haven’t yet adopted AI to build, test, and secure them. But it’s an inevitability that’s already knocking at their doors. And they will quickly realize that reliance on a “human in the loop” model, though well intentioned, has severe limitations not only around the cost of governance, but also around the sheer intelligence, bandwidth, and foresight required by humans to govern AI systems.

Rather than debating its merit or becoming overwhelmed with the associated risks, enterprises need to build a governing framework for this new reality. They must work closely with technology vendors, cloud providers, and AI companies to ensure their business does not suffer in this new, albeit uncomfortable, environment.

Has your enterprise started leveraging AI to build, test, or fight AI systems? If so, please share your experiences with me at [email protected].

Are You Effectively Leveraging Provider Relationships to Drive Better Customer Experience? | Webinar

By | Webinars

Complimentary 60-minute webinar held on Thursday, November 15, 2018 | 9 a.m. CST, 10 a.m. EST, 3 p.m. GMT, 8:30 p.m. IST

Download-View Presentation

Questions we’ll address:

  • How do Pinnacle Enterprises leverage Contact Center Outsourcing (CCO) to drive a better customer experience, and what uptick in business impact do they realize?
  • What key practices and capabilities do Pinnacle Enterprises deploy to realize higher business impact?
  • How do Pinnacle Enterprises’ expectations of, and engagement with, CCO providers differ from other enterprises, and how is that improving results?

Pinnacle Enterprises™ have achieved 2.4X improvement in customer satisfaction, through their CCO provider engagements, compared to other enterprises. In the webinar, we will discuss Pinnacle – or best-in-class – strategies for leveraging their CCO relationships to drive better business outcomes. By expanding scope of traditional CCO relationship into broader Customer Experience Management (CXM) services, Pinnacle Enterprises™ have transformed it into a strategic differentiator rather than a cost center. This webinar provides insights into the leading CXM models, practices, and capabilities that contribute most to business impact, based on our Pinnacle Model peer research.

Who should attend, and why?
This webinar will offer market-tested insights into how organizations can effectively leverage COO to deliver a better customer experience … and ultimately business impact.
The content is geared to senior executives –
Enterprises: Heads of CXM, Heads of Contact Center, Global Sourcing Managers, Heads of Outsourcing, IT/BPO Strategy Heads, Vendor Managers
Service Providers: CXM/CCO practice head, Senior BPO and CXM/CCO sales executives

Presenters
Michel Janssen
Chief Research Guru
Everest Group

Shirley Hung
Vice President
Everest Group

Skand Bhargava
Practice Director
Everest Group

 

SAP Accelerates Experience Pivot with a $8 billion Bet on Qualtrics | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Just days before 16-year old Qualtrics was due to launch its IPO, SAP announced its acquisition of the customer experience management company in an attempt to bolster its CRM portfolio. Qualtrics, one of the most anticipated tech IPOs of the year, and oversubscribed 13 times due to investor demand, adds to SAP’s arsenal of cloud-based software vendor acquisitions.

Delving into SAP’s Strategic Intent

Seeking transformational opportunities, the acquisition will allow SAP to sit atop the experience economy through the leverage of “X-data” (experience data) and “O-data” (operational data). Moreover, the acquisition will enable SAP to cash in on a rather untapped area that brings together customer, employee, product, and brand feedback to deliver a holistic and seamless customer experience.

SAP had multiple reasons to acquire Qualtrics:

  • First, it combines Qualtrics’ experience data collection system with SAP’s expertise in slicing and dicing operational data
  • Second, it sits conveniently within SAP’s overarching strategy to push C/4 HANA, its cloud-based sales and marketing suite.

SAP’s acquisition history makes it clear it seeks to achieve transformative growth by bolting in capabilities from the companies it acquires. It has garnered a fine reputation when it comes to onboarding acquired companies and realizing increasing gains out of the existing mutual synergies. Its unrelenting focuses on product portfolio/roadmap alignment, cultural integration, and GTM with acquired companies have been commendable.

Here is a look at its past cloud-based software company acquisitions:

SAP has taken a debt to finance the Qualtrics acquisition, making it imperative to show business gains from the move. With Qualtrics on board, it seems SAP’s ambitious cloud growth target (€8.2-8.7 billion by 2020) will receive a shot in the arm. However, the acquisition is expected to close by H1 2019, implying that the investors will have to wait to see returns. Moreover, SAP’s stock price in the past 12 months has dropped by 10.6 percent versus the S&P 500 Index rise of 3.4 percent. While SAP has seen revenue growth, its bottom-line results have been disappointing with a contraction in operating margins (cloud revenues have grown but tend to have a lower margin profile in the beginning.) This is likely to be further exacerbated given the enterprise multiple for this deal.

Fighting the Age-old Enterprise Challenge

Having said that, SAP sits in a solid location to win the war against the age-old enterprise conundrum of integrating back-, middle-, and front-office operations and recognize the operational linkages between the functions. Qualtrics’ experience management platform, known for its predictive modeling capabilities, generating real-time insights, and decentralizing the decision-making process, will certainly augment SAP’s value proposition and messaging for its C/4 HANA sales and marketing cloud. In fact, the mutual synergies between the two companies might put SAP at an equal footing with Salesforce in the CRM space.

While it may seem that SAP has arrived a bit early to the party, given that customer experience management is still a niche area, the market’s expected growth rate and SAP’s timely acquisition decision may allow it to leap-frog IBM and CA Technologies (now acquired by Broadcom), the current leaders in the space. Indeed, over the last couple of years, Qualtrics has pivoted beyond survey and other banal customer sentiment analysis methods to create a SaaS suite capable of:

  • Analyzing experience data to derive insights about employees, business partners, and end-customers
  • Democratizing and unifying analytics across the back-, middle-, and front-office operations
  • Delivering more proactive and predictive insights to alleviate experience inadequacy.

Cognitive Meets Customer Experience Management – The Road Ahead

SAP’s Intelligent Enterprise strategic tenet, enabled by its intelligent cloud suite (S/4 HANA, Fiori), digital platform (SAP HANA, SAP Data Hub, SAP Cloud Platform), and intelligent systems (SAP Leonardo, SAP Analytics Cloud), has allowed customers to embed cutting edge technologies – conversational AI, ML foundation, and cloud platform for blockchain. SAP is already working towards the combination of machine learning and natural language query (NLQ) technology to augment human intelligence, with a vision to drive business agility. Embedding the experience management suite within next-generation Intelligent Enterprise tenet will play a key role in achieving the exponential growth targets by 2020.

Please share your thoughts on this acquisition with us at: [email protected] and [email protected].

Big 4 Becoming Formidable Challengers In Digital Transformation Services | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

The pivot of third-party services firms to digital is disrupting the entire services industry. Times of disruption always give rise to new competitors, and challengers among service providers can shift share. This is clearly happening now in the demand for digital transformation services. The Big 4 accounting and auditing firms – Deloitte E&Y, KPMG and PwC – are emerging as formidable challengers to Accenture, IBM and the Indian service providers. Here’s what’s happening and what it means for competitors and enterprise customers.

Read more in my blog on Forbes

Telematics in Insurance – A Big Opportunity yet to be Fully Explored | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Price competition used to define the competitive dynamics of the P&C insurance industry. However, as margins started squeezing with low interest rates and rising claims costs, it became imperative for insurers to focus on product differentiation in order to attract new customers and drive premium growth.

This is when usage-based insurance (UBI), an insurance product model where the premium varies according to the risk of claims that the insured’s policy-related behavior poses, started gaining traction. UBI is noteworthy as it offers a remarkable opportunity for insurers to deliver hyper-personalization and evolve from a product-centric to a customer-centric business mindset.

To date, the auto insurance segment has been the most aggressive adopter of the UBI model, which is enabled by the underlying telematics infrastructure. Telematics technology enables insurers to capture each customer’s driving data, which is then used to continually update the customer’s risk profile and compute the payable premium. Data collection devices have evolved from black-box to OBD-II dongles to in-built telematics units in automobiles and smartphones.

UBI’s Business Case is Strong; however, Sourcing Gets Complicated for Insurers

We expect the market for UBI to grow substantially at a CAGR of ~40 percent during 2018-2020, with an estimated 35-40 million UBI policies in force by the end of 2020. This is certainly impressive growth.

However, to launch UBI products, insurers must make substantial investments in connected devices and data infrastructure. Moreover, not all insurers have the scale, risk-appetite, investable capital, or technology expertise to make significant inroads into UBI. Thus, insurers are leveraging third-party vendors to support their telematics journey.

Yet, the vendor ecosystem is fragmented, making it challenging for insurers to determine what organization to partner with.

Here’s the breakdown of the three major categories of telematics vendors:

Telematics Service Providers (TSPs)

These have the capability to manage the entire value-chain, from telematics device sourcing to device deployment and maintenance to end-customer engagement to telematics data management. However, as a single TSP might not be able to provide access to all the underlying connected devices, insurers must pre-strategize their requirements for data depth and breadth. There have been cases where insurers have entered into partnerships with multiple vendors with varying competency to leverage connected devices and technology maturity.

Data exchanges

The core value proposition of this class of vendors lies in their access to huge volume of data and their data handling capabilities, which reduces the burden of data management at the insurer’s end. Players that have entered this market also have developed a modest understanding of the insurance sector, which enables them to provide risk assessment support to insurers. However, while data exchanges typically can augment insurers’ telematics journey, they cannot provide end-to-end support.

OEMs

OEMs have emerged as significant competitors to the other classes of vendors due to their direct control of the point-of-sale. As the telematics unit is prebuilt into the automobile, insurers do not have to worry about the entire infrastructure management of telematics devices. However, partnering with an OEM could also mean loss of revenue from value-added services.

Telematics in Insurance – A Big Opportunity yet to be Fully Explored - potential impact

Service Providers as the Orchestrator – Big Opportunity Waiting to be Capitalized

With each of the categories of vendors specializing in specific parts of the telematics value-chain, insurers face a big challenge in connecting with different parties for different values, and in managing the multi-vendor ecosystem.

This is where IT/BP service providers can enter the picture. To date, they have failed to establish a competitive differentiation for themselves in this market. However, considering they have a sound understanding of insurers’ businesses, operations, and IT systems, they could provide significant value as the orchestrator of this branched ecosystem.

They could look to source the best value from different classes of vendors by tying partnerships with select technology vendors across the ecosystem. Then, they could serve as a specialist to help insurer wrap their operations around telematics technology to drive product differentiation.

In this model, service providers could – potentially – offer an integrated value proposition that would involve: owning the implementation risk; providing value-added services such as risk assessment and customer management support; managing the complexity involved in coordinating with multiple classes of vendors; and assuming responsibility for the risks (e.g., business risk, technology lock-in, etc.) associated with engaging with niche firms.

This could be a win-win-win scenario, for insurers, end-customers, and providers.

How service providers ultimately decide to capitalize on the telematics opportunity remains to be seen. However, they should be cognizant of not frivolously trying to compete where their expertise does not lie, and instead leverage their strengths to make themselves most relev

Why TCS Entering Digital Marketing Space is Significant in Digital Transformation | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Two champions have emerged among service providers in digital transformation: Accenture and TCS. Accenture is driving business transformation, and TCS is doing a marvelous job of driving IT modernization. TCS’ recent acquisition of W12 Studios, a London-based digital design agency, is worth noting for its implications in the digital marketing space.

Motivation

 W12 will be part of TCS Interactive, TCS’ digital design division. Digital marketing is an attractive, high-impact growth area in digital transformation. It is pivoting toward greater and greater use of technology, clearly calling out for technology companies such as TCS to participate in it more fully. Accenture is building big business in this space quickly. Even so, this acquisition is surprising.

Unlike Accenture, TCS has not driven its success by acquiring companies. But the digital marketing space is growing very quickly, so TCS felt it needed to break its mold and gain a foothold in the space by acquisition. The increasing need for sophisticated technology such as AI and automation to execute well in this space makes it more attractive for TCS. This technology sophistication is well beyond the capabilities of customers for third-party services.

Cautions

Two factors may be growth hindrances that affect TCS’ strategy for entering the digital marketing space.

First, TCS is late to this party. Companies such as Accenture, Capgemini, Infosys and others already created very large, formidable businesses in this space. Accenture is the prime example and has a big lead. TCS historically proved effective at closing market gaps once it established a foothold. But the firm has a big gap to close in digital marketing. It seems unlikely that TCS will succeed in closing this gap purely without further acquisitions.

Overall, the Indian services firms are late entries and are losing share to Accenture and the domestic players. For the Indian players to challenge for leadership, they will need to invest heavily and continue to grow inorganically.

The second possible growth hindrance involves the delivery model. It seems reasonable that much of the support of digital marketing technology can be delivered from an offshore model. But it’s not clear that the creative aspects are best delivered from a remote location. However, given that the technology and technology support is growing in importance it makes sense that TCS distributed model will work well for this part of the equation. Despite a growing and rich source of creative talent in India, I am skeptical that customers will move their creative work offshore. Why? Because proximity to the business and cultural emersion are critical aspects of the delivery.

Alternative View

I think it’s important to recognize that TCS’ goal may not be to enter digital marketing in a big way. At this point, there is such a fundamental disruption happening in the space that even capturing a small part of this marketplace might be a welcome and lucrative component to the broad portfolio that TCS offers. Even with a small market share, TCS can create a nice book of business given the growing market and secular trend toward technology.

Yoh 360 Workforce Forum — November 12-13 | Event

By | Events

Vice President Arkadev Basak will be speaking at the 2018 Yoh 360 Workforce Forum held on November 12-13 in Philadelphia, PA. Arkadev will provide some of the latest analytics and insights from Everest Group in the realms of recruitment process outsourcing, next-generation HR practices, and total talent management.

About the Event

Join workforce experts,analysts,and fellow peers at this VIP event to network 1:1, learn about Total Talent Management and gain the tools to evolve your contingent workforce or RPO program.

When

November 12-13, 2018

Where

The Rittenhouse Hotel
210 W Rittenhouse Sq.
Philadelphia, PA, 19103

Speaker

Arkadev Basak, Vice President, Everest Group

Impacts From Changing Administrative Rule For H-1B And L1 Work Visas | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

The US Labor Department’s recently announced new regulations for H-1B and L1 work visas focus on the Trump Administration’s ongoing effort to tighten regulations and increase administrative hurdles. Viewed individually no new regulation is a show-stopper; but it’s clear that, collectively, they will have a more material effect. Here’s my take on the significant issues for service providers and their customers.

Read more in my blog on Forbes

The Future of Life Sciences Clinical Trials: Take-Aways from Medidata NEXT | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Now in its 12th year, Medidata NEXT brings together several thousand life sciences professionals across seven global events to discuss the future of clinical trials. Here are my take-aways from the New York City edition, which occurred over two days in late October.

  1. Clinical + commercial data is the future: As the life sciences industry moves toward outcome-led business models, companies can unlock significant value by collapsing the silos between clinical and R&D and sales and marketing. Bringing together commercial and clinical / R&D data allows them to generate more meaningful insights into patient behavior and preferences, and spark the discovery process for newer therapies and approaches. A number of life sciences firms have already begun tapping into this powerful data combination. For example, Medidata earlier this year acquired SHYFT Analytics, the maker of a cloud data analytics platform specifically designed for the pharma and biotech industries. And IQVIA started down this path with the OCE platform after the merger of Quintiles and IMS and subsequent company renaming.
  2. Platforms are becoming mainstream: Everybody’s jumping on the platform bandwagon. Examples include the Accenture-AWS-Merck research platform, ZS’s REVO Analytics, and Medidata’s Intelligent Platform for Life Sciences. The hallmarks of these and other platforms in this space are the combination of products and services in a utility-based construct, where customers can plug in and plug out based on need. Customers at Medidata’s NEXT event voiced a pressing need for technology partners to underwrite the risk of innovation by orchestrating the ecosystem (aka guaranteed outcomes).
  3. Moving from real world data to real world evidence: Life sciences enterprises are starting with low hanging fruit such as EHR-to-EDC integration through various sites to unlock value from data. To truly move the needle from data to evidence, and thereby help life sciences firms navigate outcome-based contracts, ecosystem participants – including enterprises, technology vendors, service providers, data providers, intermediaries/brokers, and patient advocacy groups – need to put more skin in the game and focus on end outcomes, such as patient experience, satisfaction, and clinical/health impact.
  4. CROs Are A-Changing: The CRO market is at an interesting inflection point as the traditional model has a limited runway for growth. The IQVIA model of combining clinical and commercial expertise is a sign of things to come, and CROs are doubling down on technology adoption to navigate this change. Another example is Medidata’s announcement of a five-year agreement with Pharm-Olam to unify operational systems to support study executions on the Medidata Cloud, providing a single, unified view of clinical trials to all stakeholders.
  5. Crowdsourcing clinical trials – are we there yet?: The industry is abuzz about the possibilities resulting from developments that aim to advance patient engagement, such as ePRO and advancements through Apple Watch and ResearchKit. While a crowdsourced clinical trial is some time away, several important steps have already been taken to help bring patients to the center of the clinical trial design and process, and assume greater ownership of their health outcomes. One particularly interesting use case is that, following GSK’s and its partners’ Patient Rheumatoid Arthritis Data (PARADE) study, Apple has obtained FDA clearance (not approval) to investigate the feasibility of using a mobile app to recruit and enroll patients in a study and gain insights about rheumatoid arthritis in a real-world setting.
  6. Accelerating cloud adoption: While life sciences firms have been putting an increasing number of enterprise applications and data on the cloud, they have been hesitant to do so with R&D and clinical data. However, the recently announced Accenture-Merck-AWS research platform signaled a changing wave of initiatives. For example, AWS and Google’s and Microsoft’s cloud platforms were prominently present at Medidata NEXT. We expect these lead steers in the market to accelerate the cloud movement in the life sciences industry.
  7. Partnerships are key to unlocking value in the digital ecosystem: Life sciences firms need to forge closer bonds with payers, providers, patient advocacy groups, etc., to truly bring the vision of a converged ecosystem to life. Several prime examples of this shift have emerged in the past year or so. One is the outcome-based contract struck between Amgen and healthcare services company Harvard Pilgrim for the cholesterol drug Repatha. Another is Medidata’s work with the Biden Cancer Initiative (BCI) community to coordinate a consortium of clients to share IoT data in order to analyze determinants such as quality of life and disease progression.
  8. The pivot to patient-centricity hinges on trust orchestration: While life sciences firms have been trying to become more patient-centric, there’s a sizable trust deficit with their core constituents. In fact, as the following exhibit illustrates, the pharmaceutical industry ranks at the bottom of the perception scale among adults in the U.S., second only to the federal government. As life sciences companies collaborate more closely with payers and providers, the ecosystem needs to reaffirm trust with patients and other stakeholders. Trust assurance is going to be key for the future of a converging healthcare ecosystem. In this context, how life sciences firms coordinate care with payers and providers will be crucial in reinstituting trust with patients and enabling care coordination.

The life sciences industry stands at the cusp of change. To truly move towards a patient-centric and outcome-based ecosystem, stakeholders need to collapse the traditional stack, break through silos, and embrace collaboration.

Market stakeholders, including Medidata, have made an interesting set of investments, on a platform of growth, in these areas.

Check back here often to see our analysis of how various life sciences stakeholders are collaborating to coordinate care and assure patient outcomes, ultimately to advance the future of life sciences.

Wipro has to Think beyond Enrolment to Keep HPS Healthy, Feel Analysts | In the News

By | In The News

Indian IT services major Wipro may have to look at building solutions beyond healthcare enrolment-based services for its Health Plan Services unit to remain competitive amid legislative changes in the US, say analysts.

The Donald Trump-led US administration has pushed consistently to repeal Obamacare, which extended health insurance benefits to a large chunk of low-income people in the US.

At this juncture, Wipro should look “to double down quickly (to) address the re-pivot issues,” Peter Bendor-Samuel, chief executive of global IT advisory firm Everest Group, told ET.