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Priyanka Birla

GICs are Evolving from “Delivery Centers” to “Capability Centers” | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Historically, companies have leveraged the GIC model to deliver business process (operations) and IT services. However, as the model is maturing and incremental demand for these services is declining, enterprises are increasingly looking to their GICs to build more strategic Research & Development (R&D) and digital capabilities, drive innovation, and focus more on value-added services. In other words, they want their GICs to be “capability centers,” not just “delivery centers.”

There’s clear evidence that this is happening. In 2017, there was a significant increase in set-up of such capability centers focused on R&D and digital skills, especially in areas such as design, innovation, automation, Artificial Intelligence (AI), Machine Learning (ML), and cybersecurity. Indeed, our recently released GIC Annual Report 2018 shows that the share of centers supporting R&D/engineering services – including digital services – increased by almost 150 percent during 2017, as compared to 2016. And these centers accounted for more than 50 percent of total GICs setup in 2017.

Breakdown of new GIC setups by services delivered

These capabilities are expected to be the key differentiators and success drivers for global enterprises going forward. In 2017, ~46 percent of all new centers were focused on developing or expanding digital capabilities for the enterprise. There are multiple examples where offshore/nearshore GICs have been given a global mandate to lead organizational initiatives in new and emerging areas such as automation and blockchain.

Related: Simplifying skilling in Global in-house Centers (GICs)

So, how exactly are GICs becoming the global capability centers? What are the key enablers? Another of our recent research studies shows that GICs need to take a FORCEful approach:

FORCEful approach to becoming the global capability centers

  • Foster innovation: GIC leadership needs to invest in developing a customer-centric culture, and test small-scale Proof-Of-Concepts (POCs) to demonstrate end-client value and build credibility
  • Orchestrate transformation: GICs should leverage their well-established foundation by identifying their core strengths and upshifting the value they deliver through improved operational excellence with productivity enhancements, optimized pyramids, and better managed external spend. Simultaneous focus on leveraging these new capabilities to drive both growth and efficiencies will be critical to deliver true value to the enterprise
  • Reskill and upskill workforce: GICs must radically change their reskilling/upskilling initiatives to ensure talent readiness for next-generation skills. They also need to adopt a bespoke approach for specific requirements, and undertake pilots in areas with the highest skills gaps to assess the effectiveness and relevance of the capability centers model
  • Collaborate with ecosystem: GICs should proactively leverage the external ecosystem – specialist providers, startups, educational institutions, etc. – to develop holistic solutions, increase agility, and reduce go-to-market time
  • Expand existing capabilities: GICs have a unique insider’s view that enables them to provide strategic insights to orchestrate enterprise-wide digital/technological transformation, facilitate integration between IT and operations, and break functional siloes to achieve truly breakthrough results

To learn more about the research behind our FORCEful approach, please click here. And if you’ve already established a capability center, or are in the process of doing so, write to us at [email protected] or [email protected]. We’d love to hear your thoughts and experiences!

AI projects in Insurance are Moving from Pilots to Business Programs | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

Insurers are rethinking their business ethos to become protectors instead of payers. The insurer of the future is aiming to develop a customer-centric value proposition. Carriers are looking at developing innovative products that are contextualized to meet evolving customer needs. And the insurance distribution strategy is shifting to adapt to new product offerings, client needs, and digital technology-led disruption in the ecosystem.

Not surprisingly, insurers are adopting AI and related technologies to drive these capabilities. According to our just released Insurance IT Services – Annual Report, the top three business objectives insurers are trying to achieve with AI projects are customer experience, process optimization, and product innovation.

AI Ins BlogAI Trends in the Insurance Industry

Our annual report studied 80 unique AI initiatives by global insurers to unearth AI trends in the insurance industry. Here are the top ones we identified.

Capabilities

Approximately 53 percent of insurers are developing in-house capabilities for their AI initiatives. But many have large skills gaps that will inhibit their ability to scale pilot projects and realize the expected value from AI initiatives.

Embedded intelligence

Insurers have accelerated their focus on embedding intelligence across the value chain, with higher adoption of AI for sales & distribution and underwriting processes.

Self-service

Insurers are adopting intelligent self-service AI tools to enhance the customer experience.

Mid- and back-office process value

The value delivered through front-office AI initiatives such as chatbots is limited. But real value can be unlocked when AI is applied to optimize mid- and back-office processes such as agent support and claims management.

Data

While structured enterprise data remains the major source of data for insurers (52 percent, per our research), the connected ecosystem – i.e., data from IoT-based devices – is gradually gaining traction, at approximately 35 percent. As insurers evolve in their AI journey, deploying AI and machine learning (ML) to leverage unstructured data from third-party sources and connected ecosystems is likely to increase. But as of today, enterprise data silos, legacy systems, and lack of interoperability standards to tap into the connected ecosystem and third-party data are slowing down insurers’ AI initiatives.

Some Standout Examples

Many insurers have made progress in deploying AI and ML to their data and are starting to see quantifiable results. For example:

  • Zurich Insurance deployed AI in its personal injury claims process. The company claims that AI has helped it save 40,000 work hours, and reduced claim processing time from 58 minutes to five seconds per medical report
  • ICICI Lombard launched a chatbot called MyRA to underwrite two-wheeler, fire, and burglary insurance for SMEs. Since its launch, MyRA has been engaged in 65,000 customer interactions, and has sold more than 750 policies without any human intervention.

AI has the potential to deliver significant value to insurers and their customers. To learn more about how it can impact your business, our recent Insurance IT Services – Annual Report is packed with data and our take-away insights from 80 unique insurance firm AI projects. In it, we outline how AI implementation is impacting the insurance industry, and present various AI use cases across the insurance value chain.

Please write to Ronak and Priyanka to discuss how you’re adopting AI in your insurance business processes.

GICs Accelerating the Automation Gear in Their Digital Drive! | Sherpas in Blue Shirts

By | Sherpas in Blue Shirts

In the beginning of the digital revolution, GICs were primarily used as hotspots for analytic services. But in their quest to deliver more value-added services to the parent organization, many are accelerating their ability to serve as strategic innovation partners by significantly expanding their portfolio of digital-focused activity. In fact, our most recent Market VistaTM report showed that digital activity in new setups and expansions jumped 900 basis points between Q4 2016 and Q4 2017.

Automation GIC blog_1

Like most organizations dipping their toe into the digital pool for the first time, GICs initially focused on automating processes through technologies such as Robotic Process Automation (RPA). However, in last couple of years, they have also started leveraging Artificial Intelligence (AI) to improve in areas such as customer experience, operational efficiency, risk management, and development of digital products and services for the market. After realizing the benefits of RPA and AI, some of the mature GICs are also now testing the waters for cognitive computing.

Here is a sampling of the digital use cases coming out of today’s GICs:

Automation GIC blog_2

Of course, changes and challenges abound in the rapidly evolving digital environment. Here are several that will impact GICs in 2018.

  • War for talent: Although they’re upskilling/reskilling their existing workforce, GICs will still need external talent for critical skills such as intuition and innovation, design thinking, pattern recognition, leadership, and problem solving. They’ll struggle to find this talent due to demand-supply imbalances.
  • Ecosystem partnerships: We expect GICs to accelerate their technology adoption through increased partnerships with service providers, technology vendors, start-ups, and educational institutions to deliver new forms of value, such as innovation, automation, and speed to market.
  • Delivery locations beyond India: While India will remain a favored location for enterprises to introduce new technologies, our GIC market activity tracking (see our recently released Market VistaTM report) suggests that other locations such as Brazil, Ireland, Israel, Romania, and Singapore may gain traction in near future. Israel is already progressing to support a range of digital functions such as IoT, AI, and data analytics for customer experience and cybersecurity services.

There’s no question that GICs have the ability to drive the digital agenda for their enterprises. To gain a deep-dive understanding of how they’re doing so today, and what they plan to do in the near future, Everest Group is conducting an online survey. This first-ever assessment will be based on our proprietary Pinnacle ModelTM, which identifies what the best performers are doing to achieve strategic business objectives and deliver increased value. We invite you to participate in this survey.