Category: Blog

Is 2024 a Year of GBS Reckoning? | Blog

From any vantage point, COVID was good to the global business services (GBS) model. For the first time in its short history, the model was tested, and it passed with flying colors. Show the enterprise how to work globally? Check. Prove that collaboration doesn’t have to happen in a conference room? Check. Exploit technology to the extent possible to close the books on time and resolve people queries? Check.

Because of stellar performance, and perhaps a better understanding of what the model actually is and does, leading GBS organizations have enjoyed respect.

But underneath, what’s really changed? Today, few GBS organizations have absolute mandates. We still fret about the state of our processes. Experience is illusive. The list goes on.

For all of us, January’s a clean slate, a new beginning. The beginning of the year always engenders hope that the world will be better/proverbial ships will come in/we’ll lose those stubborn 10 kilos. But other than the hype that generative AI will indelibly change the way GBS operates, I haven’t seen many prognostications, even out of some of my favorite running buddies (c’mon guys, put something on paper). Truth be told, I question whether the sugar rush we might call GBS optimism is warranted this year. Conditions have changed. As enterprises find out they can’t hike prices anymore, cost has reclaimed its crown. The implications of our current geopolitical mess won’t abate anytime soon, creating a distressing new normal. The funding for business services innovation is showing signs of drying up. In short, my thesis is the euphoria that GBS experienced as the hero of the enterprise is over, and the heady trajectory of more people, more scope, and more change is likely on hold in 2024.

So, what does this mean for GBS? I think it will be a year of reckoning. We’ll step back, perhaps fix what we ignored the past few years. Our growth trajectories will slow. GBS may be dislodged as a corporate savior.

Your guess is as good as mine—so here are nine guesses—or what my tea leaves are suggesting:

1.Cost containment will drive strategy and decision-making: Get ready for the return of the mandate to cut costs 5% or more each year, deemphasized during COVID and its immediate aftermath when keeping the enterprise wheels on was priority 1, 2, and 3 for GBS operations. GBS will be seen less as a pillar of enterprise transformation, and more as an instrument to keep margins as close to target as possible. As a result, GBS will likely put most of its eggs in the efficient and effective buckets, eschewing massive change in experience and ways of working unless their respective business cases are air-tight

2. Transformation funds will be scarce on the ground: Easy-ish money for GBS investment will dry up. This year, enterprises are going to have an exquisite focus on investments and change that drives growth, expecting GBS to do more with less and not get too fancy when it comes to change. And, as a byproduct, GBS professionals who brand themselves as transformers may find themselves experiencing “DJO—days job outstanding”—for much longer than they envisioned

3. Growth in new scope will mitigate somewhat: Moving to a GBS model costs money, and if the cash isn’t there, it can’t be created in thin air. GBS COVID momentum will no longer persuade the business owner who does not “get” GBS. Circulation of “GBS screwed up” stories will find new audiences. The ever-present belief that the business can do it better and cheaper, with more control, will get in the way of scores of migrating heads. Perhaps a breather isn’t a bad thing

4. Supply chain will grab the GBS headlines: There’s always an exception to any rule, and for me, that exception will come from the supply chain catalog of services. It’s not only fertile ground for GBS value creation, as most operations are only dealing with the tip of the scope iceberg, but the greatest opportunity to further institutionalize GBS as a partner to the business

5. Talent mobility will decline: The feeding frenzy for external talent has already started to tail off, and post-COVID euphoria continues to tamp down. GBS operations will focus on redirecting and upskilling talent in-house rather than chasing pricey external rock stars, not only as a cost containment measure, but finally as a result of the recognition that understanding stakeholders and the culture drives success as much as fancy dance moves. This is great news for GBS incumbents whose career progression may have been stymied by the belief that only an outsider can make change, not so good for those who change jobs every two plus years

6. Process improvement will become GBS’s primary fixation: The elephant in the room will no longer be ignored when appetite for scope and transformation declines and the threat of GBS dissolution becomes real. This year, GBS organizations likely will go back to basics, admitting that process excellence is the foundation of GBS performance. Investment in governance and business relationship management won’t pay off without decent processes. Investment in experience platforms has no ROI without seamless underlying processes. The ambition to craft end-to-end processes is merely a pipe dream without the basics. Perhaps this year, GBS will get the memo—it’s back to basics

7. The landlord model will get another look: GBS leaders will start to stop turning up their noses at a model many think isn’t sufficiently “GBS” in the quest to both show some value to the enterprise and cozy up to those in the business that still don’t understand GBS model fundamentals but know that offshore costs less than San Francisco or London. As leaders admit publicly that they are running blended models with a degree of success and can show the evolution to other forms of GBS delivery, perhaps 2024 will be the year of the landlord

8. Outsourcing relationships will continue to morph: The days of shipping 3000 jobs to your favorite BPO provider will continue to sunset in favor of more strategic, even temporal relationships. We’ll see more build-transform-operate-transfer relationships and at-risk contracts. Providers will complete their value chains by creating partnerships with new players, some tech, some focused on fulfilling an end-to-end requirement. Short-term transformation consultancy assignments may give the traditional advisory practices a run for their money. Providers who can successfully replicate a captive delivery experience will succeed, while those who continue slavish devotion to an FTE rate card will be the odd man out

9. The GBS construct/deconstruct soap opera will continue: It’s a fact of life, folks—GBS as a model ebbs and flows as CXOs change, business outlooks evolve, and most critically, how GBS is perceived as adding value to the enterprise (often not tied to reality). In 2024, we will still see stellar blow ups of organizations we thought were bulletproof, as well as new or returning entrants on the GBS bandwagon

Am I too negative? Will all of these trends come to pass? I’ll bet you six out of 10. In any event, however it manifests itself, 2024 will challenge the model and the professionals who drive its evolution. Count on it—we’re facing a year of GBS reckoning.

Don’t miss the webinar, Charting the GBS Course for 2024: Accelerating and Sustaining Success. We’ll examine what lies ahead for the GBS model and participants will gain valuable insights into the changing dynamics of GBS and how it plays a pivotal role in shaping enterprise-level strategies.

Accenture to Acquire OnProcess Technology: Unleashing the Potential of Integrated After-sales Services | Blog

Accenture aims to enhance its supply chain prowess by acquiring after-sales services provider OnProcess Technology. The deal can create opportunities for both firms, their clients, and the overall supply chain business process services market. Discover the key drivers behind this union and its potential impact in this breaking blog.

Reach out to us directly to discuss this acquisition further.

Accenture’s plan to acquire OnProcess Technology, announced on Oct. 31, 2023, aligns with Accenture’s inorganic growth strategy to expand its supply chain management capabilities. As a leading managed services provider, Accenture provides a wide range of services and solutions in strategy, consulting, technology, business processes, and operations.

OnProcess Technology specializes in after-sales services, one of the fastest-growing supply chain business process services. This segment is expected to grow even further due to its close ties to sustainability and its potential to impact revenue and customer satisfaction directly.

Based on our research and analysis, we view this acquisition as a good business move for Accenture. This is due to the segment’s strong potential and the opportunities it gives Accenture to leverage OnProcess Technology’s after-sales capabilities to enhance its supply chain offerings. Read on to learn more.

Key drivers of this acquisition

Three main factors are behind this deal. Let’s explore each further.

  • Creation of a single entity with the breadth and depth to meet end-to-end supply chain needs

Supply Chain Management Business Process Services (SCM BPS) has grown 15-20% over the past few years. The market encompasses four major processes: planning, making/manufacturing, delivery, and one of the fastest growth areas – after-sales services. Though each company has the strength and capabilities to manage aspects of after-sales services, the combined entity enhances Accenture’s end-to-end supply chain coverage by augmenting existing capabilities and filling specific gaps within their portfolios.

While OnProcess specializes in after-sales services, it lacks the operational scale and broader end-to-end capabilities Accenture offers. Accenture holds a Leader position in the Everest Group SCM BPS PEAK Matrix® Assessment 2023. OnProcess Technology is also a prominent Major Contender, supported by a strong vision and focused investment.

Combining the capabilities of both firms could provide enterprises with a one-stop supply chain solution. Additionally, OnProcess Technology’s existing clients can access Accenture’s broader capabilities in supply chain and other synergist functions. This will give clients a comprehensive ecosystem to seamlessly access their business process and IT services needs.

Exhibit 1 shows the findings from the 2023 SCM BPS PEAK Matrix® Assessment, where Accenture and OnProcess Technology are positioned strongly.

Supply Chain Management (SCM) BPS – PEAK Matrix® Assessment 2023

The combined entity will extend Accenture’s leadership position with strong end-to-end supply chain management services.Slide3

This exhibit shows a high-level view of Accenture’s and OnProcess Technology’s key capabilities/offerings

  • Aggressive expansion strategy to strengthen supply chain capabilities through inorganic growth and other investments

Continuing its concerted efforts to boost its supply chain capabilities both organically and inorganically, Accenture has made significant investments and more than 40 acquisitions in recent years. This latest acquisition will significantly boost and enhance Accenture’s after-sales capabilities within the supply chain.

The below exhibit outlines Accenture’s inorganic investments since May 2020.

Slide4

Accenture’s supply chain investments

Accenture has invested in the entire supply chain value chain across plan, make/manufacture, deliver, and after-sales services and has also acquired multiple sustainability-focused companies in the past few years to meet clients’ demands in this space.

OnProcess Technology has also been in a growth phase over the last couple of years. It has significantly invested in developing its after-sales capabilities, including appointing a new executive team, sustainability head, and chief product officer, launching a cloud-based platform, and expanding in regions such as Latin America.

The exhibit below outlines OnProcess Technology’s key milestones since its inception.

Slide5

OnProcess Technology’s key milestones since inception

Given the firms’ investment appetite and strategic alignment, this latest acquisition is a logical
step to strengthen Accenture’s positioning in the supply chain market.

  • Supply chain portfolio diversification in the rapidly growing after-sales services market

After-sales services is the fastest-growing SCM BPS segment, with a forecasted compound annual growth rate of about 20%. Many SCM BPS providers have tried to develop end-to-end after-sales capabilities, yet none have fully achieved this. The OnProcess Technology acquisition will help Accenture fill its missing after-sales services capability gaps and pave the way for comprehensive supply chain management capabilities.

Furthermore, OnProcess Technology has a large number of long-term clients, many with relationships spanning more than eight years. This gives Accenture opportunities to expand its existing engagement scope in established accounts with high customer satisfaction.

Additionally, more than two-thirds of OnProcess Technology’s revenue comes from clients in the high-tech and technology sector, one of the fastest-growing segments within supply chain management BPS. This sector is focused on sustainability and enabling circular supply chains through repairing, recycling, and refurbishing electronic devices. Accenture’s acquisition of OnProcess Technology opens access to an attractive client base to support its broader vision of fostering sustainable supply chains.

One-stop solution for all the supply chain needs of enterprises

The combined entity will address enterprises’ demand for end-to-end supply chain services.

In the rapidly evolving SCM market, demand for end-to-end SCM offerings is on the rise. Given the urgency to rapidly develop capabilities, many providers are expanding inorganically to gain a head start in capturing the growing market. With the acquisition of OnProcess Technology, Accenture stands to augment its ability to offer integrated SCM services and customized after-sales offerings at scale to clients.

If you have questions or would like to discuss supply chain management strategies, trends, or insights, reach out to Vignesh K, [email protected], or Amir Khan, [email protected].

Catch our webinar, Adapting to Change: Boost Value in Outsourcing and Software Contracts When Uncertainty Persists, to learn how enterprises can drive more savings from their outsourcing contracts.

Content Supply Chain – The Time is Ripe to Reimagine the Content Ecosystem Lifecycle | Blog

Content is key to creating connected and engaging experiences. By effectively managing the content supply chain, enterprises can achieve greater productivity and scalability and produce high-impact content. Discover how the content ecosystem has evolved, explore the potential of generative Artificial Intelligence in reshaping the content supply chain, and gain insights into what’s next in this blog.

In today’s hyper-connected world, where customers interact with brands across multiple touchpoints, the demand for seamless experiences and one-to-one personalization has reached unprecedented levels. This has exponentially increased the desire for all forms of quality content that aligns with customer expectations.

The increasing appetite for content, coupled with rising customer expectations, poses a challenge for marketers to create, share, and track quality content at scale. Marketers need strategies and implementation mechanisms that can streamline the workflow, deliver content at scale, and track results to gain a competitive differentiation.

Evolution of the content ecosystem – then, now, and forever

The content ecosystem evolution has been nothing short of transformative. The 1990s saw the emergence of the internet, leading to the inception of digital content (mostly text-based with limited interactivity) and its eventual breakout from traditional media.

The dawn of Web 2.0 brought dynamic and user-generated content. This coincided with the rising popularity of blogging platforms in the 2000s, the proliferation of smartphones, and the dominance of social media platforms in the 2010s. These factors significantly boosted the content ecosystem.

The advent of the COVID-19 pandemic provided further fuel to accelerate into the next generation of content preference – short-form, engaging, and snackable content.

In this multi-form content phase, ranging from text and videos to virtual/augmented reality (AR/VR) content, the ever-changing ecosystem dynamics continue to redefine content consumption behavioral shifts.

As we step into the connected future, consistent omnichannel content might not only define which form survives but also lead to the emergence of newer and more engaging content formats.

Content supply chain – another jargon in the marketing world?

One might question the need to adopt a content supply chain when the current content ecosystem seems to function smoothly. However, the demand is driven by the ever-evolving content lifecycle with fast-changing consumer preferences and demands. The need to create personalized omnichannel experiences that can grab customers’ eyeballs in today’s crowded internet adds to the challenge.

A content supply chain is essentially a process to streamline content ideation, creation, management, and distribution in a structured and efficient manner. It ensures a seamless workflow, from ideation to delivery, optimizing collaboration, maintaining quality, and meeting diverse content delivery platform demands.

Effectively managing the content supply chain enhances productivity, enables scalability, and ultimately allows organizations to consistently produce and deliver impactful content in today’s dynamic digital landscape.

Exhibit 1: Defining a content supply chain lifecycle

Picture1

While the term “content supply chain” might be new and gaining traction, consolidating multiple components of the content ecosystem lifecycle has become increasingly important over the past few years.

Enterprises and marketers also face technology and internal enterprise challenges beyond content. These include the lack of quality content, plagiarism, siloed communication, high manual involvement, omnichannel inconsistencies, and a fast-evolving landscape. To adopt a content supply chain at scale, the inefficiencies surrounding the fragmented content landscape need quick resolution.

The absence of a content supply chain greatly impacts content developers, marketers, enterprises, consumers, and other stakeholders involved in the content lifecycle. Without key performance indicators (KPIs), developers lack sufficient information and feedback on content to gauge effectiveness. Similarly, marketers are unable to precisely target their desired audiences due to a lack of relevant content. Enterprises also cannot tap into potential leads and manage content quickly at scale. Ultimately, without a content supply chain, end consumers would be barraged with an excess of irrelevant and annoying information, leading to a reduced experience.

Exhibit 2: Benefits of adopting a content supply chain

Picture2

Generative AI and the content supply chain – reshaping the content ecosystem lifecycle

Generative AI (gen AI) has brought about a technology revolution. Touted as the next chapter in human-machine interaction, its impact on the content supply chain is extraordinary.

Gen AI can potentially revolutionize the content supply chain by assisting humans across the proposal, development, activation, and insights stages. It also can automate many manual tasks involved in creating and distributing content.

This technology could significantly reduce costs, improve efficiency, and produce better content quality and consistency. As a result, many enterprises have already invested in gen AI tools and solutions to supplement their workforce across the lifecycle stages.

Exhibit 3: Optimizing the content at scale for increased efficiency of marketing teams

Picture3

Almost 50% of marketers either use or experiment with gen AI during their work according to our report, Content Supply Chain – Revolutionizing the Content Development Lifecycle. With the increasing adoption of gen AI in the content ecosystem, analyzing its degree of adoption and complexity provides deep insights into its usefulness as illustrated below.

Exhibit 4: Comparison of the complexity with the adoption of creative use cases

Picture4 

It is not just about the content supply chain platform, but how it must be implemented

The content supply chain product market is heating up, with newer entrants joining well-established tech vendors, offering organizations many new options. However, it becomes imperative to ensure any new products enterprises adopt can be seamlessly integrated into their existing infrastructure and content pipeline.

With very few major tech vendors providing professional services for content supply chain product offerings, Global System Integrators (GSIs) have become essential. While GSIs offer consulting, implementation, or managed services for individual content supply chain components, the fragmented nature often can lead to integration issues. Thus, GSIs must develop end-to-end capabilities across the content supply chain ecosystem to meet growing enterprise needs and preferences.

GSIs must adhere to a strict framework that will enable them to offer strategy planning, design and implementation, run and operate, and manage services across the four content supply chain layers. This will enable GSIs to partner with enterprises to transform their content workflow process. A detailed framework can be found in the report, Content Supply Chain – Revolutionizing the Content Development Lifecycle.

What does the future hold?

Connected experiences will power the future. Overall, the personalization and interactive experience landscape has become increasingly complex and diverse. This requires brands to constantly adapt and stay up to date on the latest trends and technologies to reach and engage customers. Content is key to achieving connected experiences.

Having a predefined clear vision and strategy before adopting a content supply chain is essential to avoid wasting organizational resources. A thoroughly defined content strategy, optimized activation and delivery pipelines, and investment in proper content creation solutions and business KPIs are crucial for success.

Overall, a well-designed content supply chain can help enterprises stay ahead of the curve and break down internal siloes between different teams. This promotes consistency and responsiveness to changing market conditions. By implementing a content supply chain, enterprises can reduce duplication of efforts and meet KPIs in a standardized manner.

For questions about selecting the right content supply chain platform or to learn more about personalization, interactive experiences, or developments in this space, contact the Everest Group team at [email protected], or [email protected].

Register for our webinar, The Generative AI Odyssey: A Year in Review and What’s Ahead in 2024, to learn more about future themes across gen AI.

Global In-house Centers (Captives) on the Rise and Challenge Core vs Non-core | Blog

Global In-house Centers (GICs), which were first known as “captives,” are on the rise. There are hundreds of new startups, and existing captives are significantly expanding their capabilities. It is very clear that companies are more aggressively taking advantage of offshoring, and many are doing it by building their own capabilities. What accounts for this acceleration in companies building their own capability rather than taking advantage of a third-party service provider’s capability?

Read more in my blog on Forbes

Elevating Customer Experience through Data-driven Excellence | Blog

The combination of Artificial Intelligence (AI) and data and analytics (D&A) can deliver superior, efficient, and personalized customer experience (CX). This synergic union of digital technologies can help enterprises maintain customer loyalty, provide a competitive edge, and improve top and bottom growth. Learn more about how AI and D&A can work together to deliver exceptional CX in this blog.

Reach out to us to discuss AI and D&A in customer experience further.

In today’s digital era, AI and D&A play a vital role in enhancing customer experience (CX) in businesses. Data forms the basis of CX strategies, providing valuable insights into customer behavior. Analytical tools extract insights and meaning from this data, identifying patterns and trends to make informed decisions, ultimately boosting customer satisfaction. AI takes CX a step further with instant support from chatbots, personalized recommendations, and task automation.

Let’s next explore the current market conditions, compelling results from our research on organizations that have recently embarked on CX transformation initiatives, and eight key reasons enterprises report investing in these digital solutions.

Market challenges

The macroeconomic landscape was fraught with substantial challenges in 2023, including recessionary pressures, an energy crisis, inflation, labor market disruptions, geopolitical tensions, and trade barriers.

According to Everest Group’s recent report, Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM), more than 60% of the surveyed companies grappled with changing customer demand, pricing pressures, rising costs, and heightened risk exposures like cybersecurity and data privacy.

In response, enterprises focused on enhancing customer experience through digital solutions for customer acquisition as well as retaining and optimizing customer journeys by resolving friction points. Notably, 94% of surveyed enterprises identified D&A as a crucial lever for CX objectives. About 91% were in the advanced stages of deploying these D&A solutions for CX operations, conveying the maturity of D&A solutions within this market.

Enterprises continue to invest in these digital solutions to realize the following key benefits:

  • Gain actionable insights for enhanced customer experience by leveraging advanced analytics in data management, reporting, and customer analytics
  • Improve employee productivity, enhance agent experiences, and reduce attrition by adopting agent-assist solutions, including AI-powered knowledge bases and call summarization
  • Optimize costs and achieve higher efficiency in business processes by automating transactional tasks and maximizing value from existing intelligent automation investments
  • Cater to the flexible remote work solution demand by partnering with cloud-based providers, offering Contact Center as a Service (CCaaS), Unified Communications as a Service (UCaaS), and Cloud Platform as a Service (CPaaS) integration
  • Explore the potential of generative AI and Large Language Models (LLMs) in transforming conversational AI by focusing on hyper-personalization and platform-based approaches while considering data privacy and accuracy concerns
  • Integrate CX consulting by adding services like journey mapping and process optimization
  • Address emerging customer preferences, including self-service portals and multimodal, immersive experiences across voice, video, and chat channels during a single interaction by making targeted investments in omnichannel platforms

Developing trends

D&A and AI solutions play a vital role in digital CX transformation by offering valuable business and operational insights into customer interactions and agent performance throughout the customer journey and associated touchpoints. These insights, in turn, help optimize self-service tools and conversational and generative AI-based solutions, enhancing the overall CX.

In the current CX landscape, enterprises are divided in their investment approaches to D&A and AI capabilities. About half of the respondents are proceeding cautiously with CX D&A and AI initiatives, focusing on small-scale projects to minimize risk and ensure targeted outcomes. Conversely, 40% of organizations are displaying a strong inclination for aggressive investment in these solutions, aiming to secure a competitive edge by harnessing deeper insights into customers, market trends, and internal operations.

Among the exhaustive list of D&A and AI tools, workforce optimization, customer analytics, and Voice of the Customer Analytics (VoCA) solutions are garnering substantial investments. In fact, over 83% of the respondents are deploying, expanding, or maintaining the implementation of these solutions.

The exhibit below shows surveyed enterprises’ investment trends in D&A tools.

Picture3

While enterprises are implementing CX D&A and AI solutions, many have not fully embraced next-generation analytics that involve advanced technologies to extract deep customer insights. These potential growth areas include predictive analytics that foresees trends, prescriptive analytics that proactively suggests next-best actions, and cognitive analytics that emulate human thought processes by applying AI, Machine Learning (ML), and Natural Language Processing (NLP) to unstructured data.

Impact of CX D&A and AI initiatives on enterprises

CX D&A and AI strategies have demonstrated the potential to significantly impact business outcomes by helping organizations realize significant cost savings, increase top-line revenues, and reduce agent capacity.

More than half of the enterprises responding to the survey reported they had already realized a return on investment (ROI) of 10% or above by leveraging these initiatives to increase revenues and drive efficiency improvements.

Furthermore, 52% of the surveyed enterprises have realized total cost savings of at least US$1 million, while 44% have seen top-line revenue growth of over US$1 million, and 30% reduced their required agent capacity by more than 100 full-time equivalents (FTEs.)

Enterprises that adeptly employ fundamental AI practices can generate extensive value while concurrently addressing risks and fostering AI-ready workforces. Despite achieving expectations in some areas, untapped opportunities still exist in many enterprises for D&A and AI initiatives. Concentrating on high-impact use cases is certain to guide CX strategies, ultimately leading to quantifiable business value.

The following exhibit highlights the percentage of enterprises and the average ROI they have attained in their business objectives through D&A and AI initiatives.

Picture4

Obstacles to realizing benefits from D&A and AI

The rapid digital transformation accelerated by the COVID-19 crisis exposed a shortage of digital expertise due to misaligned talent strategies among many enterprises. This scarcity of suitable skills presents a significant obstacle for organizations to effectively implement CX analytics and AI.

Identifying and acquiring the necessary digital skills, along with essential soft skills that encompass technology competencies across various functions, proves to be challenging for enterprises. This is where outsourced CX service providers are pitching in and increasingly creating value for the enterprises.

Beyond skills gaps, additional barriers exist, such as outdated technology, data security concerns, integration challenges, talent-related issues, poor data quality, resistance to cultural change, and other roadblocks stemming from the rapidly evolving technological landscape and misaligned risk tolerance levels. These factors collectively impact organizations’ abilities to realize their CX D&A and AI vision.

At the foundational level, while enterprises are keen on addressing data encryption and masking, compliance, validation, and auditing aspects, they have to significantly ramp up their investments in addressing AI biases, AI governance and explainability, data profiling, and data stewardship to achieve robust results from D&A and AI strategies.

Securing executive support, fostering leadership capabilities to act on insights, nurturing workforce capabilities, and ensuring the availability of suitable technology and tools are deemed essential for successfully implementing CX D&A and AI strategies.

While using CX D&A and AI has noticeably progressed, the potential for more comprehensive adoption of advanced analytics, such as predictive and prescriptive models, remains untapped.

Enterprises are seeking increased support from third-party providers, particularly in areas such as consulting on implementation strategy, partnering on shaping digital CX operations, leading digital strategy execution, and providing ongoing technology support.

In today’s evolving climate, where organizations recognize the vital role of CX as a market and brand differentiator, enterprises must swiftly develop and sustain a robust D&A and AI strategy to supercharge their CX operations.

Read Everest Group’s Unleashing the Power of Data and Artificial Intelligence in Customer Experience Management (CXM) to gain a deeper view of how D&A and AI solutions contribute to deliver exceptional CX. If you have questions or would like to discuss digital CX strategies and solutions, reach out to Anubhav Das, [email protected], or Joshua Victor, [email protected].

Learn about our CX Excellence Membership for new insights and our latest research into the market.

“IT in a Box” Edge Model: The Next Frontier of Edge Computing | Blog

Edge computing has great potential beyond local data centers. By integrating the Internet of Things (IoT), Artificial Intelligence/Machine Learning (AI/ML), and neuromorphic chips with edge computing, a revolutionary shift toward a comprehensive distributed cloud model, “IT in a Box,” could be on the horizon. Learn about the 3E design principles of this advanced edge model and its many benefits in this blog, and feel free to reach out to us to explore this topic further.

Edge locations are often associated with local data centers and primarily involve deploying idle servers closer to end users, facilitating data localization, and minimizing latency. However, a critical question arises: Does the existing edge solution offer differentiation from a conventional data center? The answer, unfortunately, is a resounding no.

Conventional edge model = data center

Today, edge locations are commonly perceived as sheer extensions of availability zones, employed to reduce latency through data localization. Despite major players’ efforts to integrate edge with advanced technologies, questions persist about the processing capabilities and scalability of these edge locations and more.

  • Hyperscalers integrate IoT, AI/ML, and next-generation security and network capabilities with edge, yet questions linger about the potential of these edge locations
  • Telecom providers leverage 5G to enhance edge networks and deploy radios and computing capabilities but again face deployment and scalability challenges
  • Technology vendors also struggle with enhancing processing, managing complex edge devices, storing data at edge locations, and developing industry-specific use cases. Still, the question remains, is that all an edge location could do?

Deficiencies in the conventional edge model

While efforts have consistently been made to enhance the intelligent edge, the current edge model falls short in establishing distinct features that could elevate it beyond its current limitations. The prevailing challenges associated with the edge include:

  1. The proliferation of edge locations around the globe has inadvertently led to increased real estate demands, hardware costs, energy consumption, and carbon emissions
  2. Due to limited edge storage and processing capabilities, there is a constant need to shuttle data back and forth between the edge and centralized cloud data centers. This poses a significant hurdle in use cases requiring real-time decision-making
  3. The distributed nature of the edge environment also adds complexity to management and orchestration

Reimagining the edge model beyond a local data center

Edge computing’s promise extends far beyond a “mere data center in your neighborhood.” The current issues require an AI and IoT integrated edge with substantial data processing, large storage capacity, efficient network connectivity, and tight security. This type of solution should replicate at scale and thwart modern cybersecurity threats, all while delivering superior speed information to the end user.

Enter the game-changer in next-generation computation: neuromorphic chips. These chips process information in a human brain-like manner, offering a revolutionary leap in edge computing capabilities. Imagine compressing edge real estate without compromising processing power – that’s where the neuromorphic chip can be the key element for the intelligent edge.

In the not-so-distant future, the fusion of IoT, AI/ML, and neuromorphic chips with edge could signal a paradigm shift, consequently forming a comprehensive distributed cloud model or “IT in a Box.”

The 3E Design Principle of “IT in a Box”

The 3E design principle underpinning “IT in a Box” is based on three core principles that form the foundation for its design and implementation: balancing efficiency, economy, and empowerment. This creates a powerful and adaptive edge computing model that effortlessly weaves together the threads of sustainability, scalability, accuracy, and security.

Let’s look at each of these principles in more detail.

  • Efficiency – This principle of “IT in a Box” takes center stage, redefining processing, storage, and information delivery at the edge. Imagine a symphony of sensors, intricately integrated in the edge environment, tirelessly collecting and sending data. These sensors gather information that is sophisticatedly analyzed right at the edge location. The result? Swift, precise, and accurate insights without the need for a laborious journey to centralized cloud hubs
  • Economy – This principle emphasizes the importance of cost-effectiveness and sustainability working together. At the heart of this lies the strategic integration of advanced technologies with neuromorphic chips and efficient platforms. “IT in a Box” aims to create a world where the edge requires less physical footprint, reducing real estate requirements. This cost-efficient proposition also aligns with the broader goal of sustainable expansion. It’s about making high-performance computing accessible not just to giants, but to a broader spectrum of industries and applications
  • Empowerment – This principle promises intelligent autonomy and tailor-made solutions. It is not only about processing, storing, and delivering data but also about empowering edge locations with accelerated decision-making abilities that reflect the unique needs of diverse businesses. Hence, this principle uncovers a vast landscape of industry-specific and micro-vertical use cases from healthcare and manufacturing to retail and finance. Picture a smart factory where edge devices autonomously optimize production processes based on real-time data analysis, or consider a healthcare system where patient monitoring happens seamlessly at the edge. “IT in a Box” becomes a strategic partner, enabling businesses to swiftly respond to changing scenarios

Benefits of the “IT in a Box” Edge Model

The benefits of “IT in a Box” are wide-ranging, contributing significantly to the operational efficiency, strategic value, and overall success of enterprises. Among the advantages are:

  • It not only ushers in a new era of accessibility but also facilitates the rapid and cost-effective deployment of smaller edge locations, transcending the boundaries of metropolises and extending to tier X cities
  • The power of “IT in a Box” lies in its ability to process and store vast volumes of data at the edge. This equates to unprecedented speeds in delivering crucial information and, more importantly, provides a welcome relief for central cloud data centers burdened by heavy loads
  • The deployment of highly autonomous edge devices is a reality for “IT in a Box.” Devices are equipped with the capability for large-scale analysis, intelligent decision-making, and real-time reporting – all taking place immediately at the edge
  • With “IT in a Box,” most of the data no longer needs to travel to centralized infrastructure, boosting privacy and security as it stays close to the source
  • “IT in a Box” isn’t just about efficacy but also sustainability. It paves the way for a greener tech future with mindful energy use and low carbon emissions

The future of “IT in a Box” revolutionizing industries

In the not-so-distant future, “IT in a Box” holds immense potential for micro-vertical applications that can revolutionize various industries, such as:

  • Autonomous vehicles – Imagine a driverless car enabled by the above elements. It would process data in proximity, resulting in improved sensor fusion, adaptability, and learning, making driverless cars more efficient, safe, and responsive
  • Virtual healthcare – These benefits facilitate effective remote monitoring of vital signs and health parameters with immediate analysis of data, resulting in quick health anomaly diagnosis
  • Smart cities – Video feeds from surveillance cameras can be processed locally, identifying potential security threats in real time and promptly alerting concerned local authorities

These micro-vertical use cases cut across the 3E design principles of “IT in a Box.” As the convergence of various technologies matures, the potential for innovation and micro-vertical use cases across industries becomes vast. Indeed, the future holds the potential for sensors with embedded neuromorphic chips that can process and analyze information on-the-spot, rather than near the source.

Please feel free to reach out to [email protected] or [email protected] to share any questions and your thoughts about the potential of this evolution in edge computing.

Sailing Through Tech Talent Market Turbulence: Optimize and Fortify the Talent Supply Chain for Superior Talent Readiness | Blog

Navigating the volatile tech talent market is crucial, but service providers are discovering that finding talent with the needed skillsets is challenging. Read on to discover how leading IT service providers are managing the tech talent turbulence to build a future-ready workforce.

In recent years, the tech talent market has experienced heightened volatility, reflecting the rapidly changing dynamics of the technology landscape. A notable trend during this period has been the record-high attrition rates, especially in niche and specialized roles, indicating a significant turnover of skilled professionals within the industry. Simultaneously, there has been a marked increase in wage inflation, reflecting growing competition for top talent and a scarcity of skilled individuals.

The rapid advancement of technology has created a surge in demand for skilled professionals with expertise in emerging technologies such as artificial intelligence (AI), cybersecurity, cloud computing, and data analytics. However, the supply of qualified talent is struggling to keep pace with this demand, leading to a widening talent demand-supply gap. This gap is further exacerbated by the mismatch between the skills required by employers and the skills possessed by potential employees, demand for industry-specific expertise, geographical imbalances, and the untapped potential of underrepresented groups.

To learn insights into the technology talent market, key trends and emerging skills, and the current landscape, explore this session: Thriving in the Competitive IT Talent Market: Best-in-Class Approaches.

As per Everest Group’s Enterprise Pulse for Technology Services 2023 Report, the percentage of enterprises satisfied with their service partner dropped from 75% to 69%. Twenty-five percent of enterprises remain dissatisfied with the technology and domain expertise of the resource, and 30% express dissatisfaction with their service provider’s talent management capabilities. The key challenges for service providers in building a next-generation ready IT workforce include (listed in order of severity):

  1. Shortage of talent skilled with next-generation IT skills
  2. Long cycles required for upskilling/reskilling
  3. Low project readiness quotient for next-generation IT skills
  4. Difficult to integrate alternate talent (gig workers and non-STEM talent) pools in the workforce

In the face of these challenges, the call for talent readiness emerges as a strategic imperative for service providers aiming not just to survive but to thrive in the competitive tech talent market. Talent readiness encompasses more than the ability to recruit; it involves proactive measures to upskill existing employees, anticipate emerging skill requirements, and foster a culture of continuous learning and adaptability.

To assess the talent readiness of IT service providers, we recently launched the Talent Readiness for Next-generation IT Services PEAK Matrix® Assessment 2023. In this PEAK report, we have assessed 26 IT service providers’ workforce management and development practices and their ability to consistently provide quality and hyperproductive talent for next-generation IT services to the client.

In this blog, we’ll delve into the findings of the Talent Readiness for Next-generation IT Services PEAK Matrix® report and highlight best-in-class talent management and development practices adopted by service providers to stay ahead.

In response to the evolving demands of the tech talent market, service providers have demonstrated a proactive approach by making substantial investments to optimize and future-proof their talent supply chain.

  • Service providers are adopting non-conventional channels and geography-specific strategies and strengthening ties with institutions to acquire talent

Service providers are increasingly adopting innovative approaches to attract and acquire candidates with next-generation skill sets. Embracing non-conventional channels, such as hackathons and case competitions, has become important to identify and engage top talent in a competitive market. Strengthening ties with educational institutions, advocating for close collaboration with academia to align curriculum with market trends, and ensuring that graduates possess the skills in demand will be paramount to shaping the next generation of the tech talent market. Additionally, there is a growing focus on apprenticeship-based hiring, helping service providers with project-ready candidates. For example, one of the leading IT service providers has reported that apprenticeship hires constitute 20% of its entry-level hiring in North America. Furthermore, service providers are tailoring their strategies to specific geographical regions, recognizing the diverse skill landscapes across the globe.

  • Service providers are adopting a data and AI-driven approach to drive precision in skilling, building personalized career programs and learning pathways, and focusing on experiential learning

As per the Talent Readiness for Next-generation IT Services PEAK Matrix® report, more than 50% of the service providers mentioned that strengthening the learning and development ecosystem remains their top strategic priority.

Leaders are weighing high on experiential learning, embedding Hackathon, Codeathon, and capstone projects in the learning journey, which will involve the implementation of real business use cases within deadlines, provide the experience to work as a team, and enhance project readiness of the employee. Organizations are leveraging data and AI-based solutions to assess skill gaps and build personalized career and learning pathways to align individual aspirations with broader organizational goals.

To make the learning experience more engaging, gamification and social learning are being embedded into training programs. This not only adds an element of fun but also stimulates healthy competition, motivating employees to actively participate and excel in their learning journeys.

  • Leading IT service providers are tracking a robust set of key performance indicators (KPIs) to gauge the effectiveness and impact of learning initiatives,

These metrics include tracking learning hours per employee, the number of employees advancing to higher roles post-upskilling, and cross-skilling efforts. Internal mobility is closely monitored to evaluate workforce adaptability, while an employee quotient measures overall competency and deployment. Organizations also assess success by tracking the number of niche skills acquired annually, ensuring they stay abreast of industry trends. Financial considerations, such as spending per employee per year on learning, provide insights into the alignment of investments with skill enhancement and organizational growth. These comprehensive KPIs collectively offer a 360-degree perspective, guiding organizations in refining and innovating their talent development strategies.

  • Service providers are taking a holistic approach and leveraging technology to build a more engaged and motivated workforce

According to the Talent Readiness for Next-generation IT Services 2023 report, 22% of the service providers mentioned enhancing employee engagement as their top strategic priority.

In the contemporary workplace landscape, there is an increasingly pressing need for robust employee engagement strategies that prioritize various dimensions of employee well-being. This holistic approach encompasses the physical, mental, financial, and social aspects of an employee’s life.

Leaders have either built or are leveraging third-party AI-based tools to capture employee sentiments, employing advanced sentiment analysis techniques to interpret emotions expressed in various communication channels, including emails, chat logs, and surveys. This continuous tracking and analysis provide organizations with real-time insights into employee morale, satisfaction, and engagement levels. By identifying potential issues such as stress, burnout, or disengagement early on, providers are able to make informed decisions and implement targeted interventions to enhance overall employee well-being and cultivate a positive work environment.

One leading IT service provider utilized AI-based employee engagement solutions, employing a personalized chatbot to conduct pulse and ad hoc surveys and address grievances, thereby performing real-time sentiment analysis and calculating a happiness score in real time.

Beyond internal initiatives, providers are increasingly partnering with technology providers, offering platforms and solutions that can support their talent management efforts. These platforms typically leverage next-generation technologies such as AI and data analytics to enable internal talent mobility, career-pathing, and learning management.

As the pace of technology continues to accelerate, talent is going to be a critical differentiator for providers. To further discuss how you can better prepare your organization, contact [email protected], [email protected], and [email protected]

To learn more about the current IT talent market landscape, check out our session on: Thriving in the Competitive IT Talent Market: Best-in-Class Approaches.

Declining Headcount at Major IT Service Providers: Are Macroeconomic Factors the Sole Reason for the Tech Hiring Slowdown? | Blog

From increased hiring growth after the pandemic to recent layoffs, the tech talent market has experienced great volatility. Recognizing the need for a more sustainable approach, top employers have increasingly focused on building and developing talent internally. In this blog, we examine the major factors contributing to declining tech hiring and the outlook for IT services talent.

Reach out to us to discuss further.

The demand for IT tech talent has fluctuated widely in recent years, moving from a post-COVID hiring surge as enterprises accelerated digital transformation to the challenging Great Resignation, marked by record-high attrition rates and wage inflation.

IT service providers grappled with the dual challenge of retaining skilled professionals and attracting new talent. Now, the pendulum has swung the other way, with organizations implementing rounds of layoffs, imposing hiring freezes, and reducing overall headcount.

This rapid shift underscores the dynamic nature of the tech talent market and the evolving challenges both employers and professionals in this field face. The exhibit below shows the cumulative downward trend in headcount for major IT service providers.

MicrosoftTeams image 64

Over the past five quarters, from the second quarter of FY23 to FY24, 56,000 positions were eliminated, translating to an overall 3.26% headcount reduction for this period. This decline contrasts with the significant headcount growth in FY22 and the first half of FY23.

Let’s examine the following major trends contributing to this downward trend and take a look at the talent outlook in the IT services industry:

  • A tectonic shift from hiring to building and developing talent internally

According to Talent Readiness for Next-generation IT Services PEAK Matrix® Assessment 2023, the strategic priority for the majority of service providers for the next 12 to 18 months from a talent perspective is learning and development. Employers are focusing more on providing best-in-class opportunities for internal talent to upskill/reskill. This effort is backed by implementing structured frameworks to accelerate career progression through internal movement within the firm, aligned with the associates’ aspirations and business requirements.

Consequently, service providers have made significant investments to drive these efforts, including Artificial Intelligence (AI)-based internal talent marketplaces, AI-enabled skill profile matching platforms, personalized skilling recommendations based on an associate’s skill profile, roles, and projects, among others.

The combined result of quality upskilling initiatives and robust internal movement frameworks is that service providers can fulfill a substantial portion of niche talent requirements with specialized skills from their internal talent pool.

One leading service provider reported it has filled 60,000 open positions through upskilled and cross-skilled employees. Additionally, internal mobility also offers multiple other professional benefits, including higher retention rates, lower employee costs, and enhanced succession planning, to name a few

  • Strategic pivot from external hiring to optimal resource utilization

Service providers are focusing on increased internal workforce utilization and optimizing resource allocation to projects. This is evident from the increased utilization rate most service providers have reported in the last few quarters.

Some notable examples include Infosys, where the bench utilization rate increased from 76.6% in the second quarter of FY23 to 80.4% in the same period this year, and Wipro’s bench utilization rate increased from 79.8% to 84.5% during the same period. Additionally, TCS, HCLTech, LTIMindtree, Tech Mahindra, and Persistent Systems also indicated higher bench utilization rates

  • Hiring recalibration amid shifting dynamics in enterprise client demands

Due to the ramped-up digital transformation initiatives of enterprise clients during FY22 and the first half of FY23, most service providers ramped up hiring, resulting in significant net new additions to meet the surge in demand.

With the current demand slowing, service providers are focusing on upskilling and rotating already-hired resources. They are cautiously approaching hiring, delaying onboarding, and planning to forego hiring recent college graduates for the current year

  • Service providers navigate margin compression, opt for prudent cost management

Even with the headcount reductions, employee costs are at an all-time high for most of the top service providers. As illustrated in the exhibit below, employee costs have grown faster than revenues in the last few quarters, adversely affecting margins

Apart from this, multiple other factors are affecting margins, including service providers’ back-to-office initiatives. To counter these effects, service providers are focusing on the current internal workforce and significantly ramping down net new additions to lower overall recruitment and onboarding costs.

MicrosoftTeams image 65

  • Macroeconomic headwinds impact demand drivers in the IT services industry

Current global macroeconomic conditions are significantly contributing to the downward trend. The IT and business process services industry is expected to grow at a slower 2.7-3.2% in year-over-year organic constant currency terms (base case), a deceleration from the 4-6% growth in the last 12 months.

The global economic slowdown, supply chain disruptions, elevated inflation, geopolitical instabilities, wars, and oil conflicts, among other factors, are driving this decline and contributing to a negative outlook.

Hence, enterprises feel obligated to decelerate the pace of transformation initiatives and focus on cost optimization. This leaves the services industry dealing with challenges such as project cancellations, delayed ramp-ups, tougher negotiations, pricing wars, settling for new deals with lower margin profiles, a lack of long-term client commitments, and so on

Tech talent outlook

Over the past few years, service providers have come to a crucial realization that merely relying on external talent acquisition to match enterprise demand is not enough.

Recognizing the need for a more sustainable approach, they have increasingly focused on building and developing talent internally. This shift has given rise to the need to strengthen internal talent development processes.

Consequently, service providers have now started reaping the rewards, efficiently managing a substantial demand volume by leveraging their internal workforce. The benefits extend beyond the organizations themselves, positively impacting employees through enhanced career growth opportunities, skill development, and a sense of loyalty fostered by internal mobility programs.

To gain further insights into how leading IT service providers are tailoring internal talent development and management strategies to drive optimal workforce utilization, manage associate aspirations, and efficiently meet client needs, reach out to Arpita Dwivedi [email protected], Amit Anand [email protected], and Abhigyan Kumar [email protected].

Striking the Right Balance: The Dynamics of Cloud Discounts in Enterprise Software Agreements | Blog

To prevent the pitfall of aggressively pursuing discounts on cloud platforms without other considerations, enterprises should implement a holistic procurement and negotiation strategy that takes into account four key factors. In this blog, we share our analysis of a Salesforce contract for a major customer. Continue reading to uncover tactics for negotiating enterprise software agreements.  

The webinar, Adapting to Change: Boost Value in Outsourcing and Software Contracts When Uncertainty Persists, also explores how enterprises can drive more savings from their outsourcing contracts.

In the intricate landscape of negotiating enterprise software agreements, securing the best possible discounts often requires a delicate balancing act. We recently witnessed the interplay of aggressive discounting and product portfolio when helping a multi-billion-dollar brand optimize its contract with Salesforce. The process of obtaining discounts on different Salesforce Cloud platforms (Core Cloud, Marketing Cloud, and Commerce Cloud) proved to be both intriguing and complex. It led us to consider: Does achieving best-in-class discounts on one cloud come at the expense of suboptimal discounts on others?

Assessing the large Salesforce customer’s existing contract with Salesforce presented a fascinating dichotomy. Price benchmarking of their contract for two Salesforce cloud platforms revealed their current prices were very competitive, and the discounts on most of the products were in the highest tier Salesforce offers. It seemed like a sweet victory for the client, securing substantial savings that underscore the power of negotiation and the value Salesforce attributes to retaining a significant customer.

However, as we progressed with our analysis, the third Salesforce cloud platform revealed a huge gap in their existing prices and the prices offered to organizations of a similar size and total spend with Salesforce. Through our rigorous normalization and benchmarking process, we identified a savings potential of up to 35% on their current annual spend on the platform.

Our analysis presented a very interesting and intriguing scenario. The best-in-class discounts Salesforce offered to the client for two cloud platforms indicated that their spend with Salesforce was optimized. But closer inspection indicated they might not be getting the best deal from Salesforce after all.

Is this a tactic used by large SaaS companies to ensure that the overall revenue from an account remains intact? While this is an important question that enterprises must strive to answer, the scenario also prompts a critical reflection on the intricate dance of negotiation within enterprise software agreements. Does the pursuit of extraordinary discounts in one arena inadvertently lead to less favorable terms in others? The answer, it seems, lies in the complex interplay of perceived value, strategic importance, and Salesforce’s bottom line.

Salesforce, like many enterprise software providers, employs a nuanced strategy where discounts are tailored based on the perceived value of each cloud service. In this approach, a particular cloud platform becomes the focal point for driving loyalty and retaining major clients, justifying the high discount percentages. Meanwhile, other cloud platforms, though integral, might be subject to a different calculus.

Adopting a holistic approach

To avoid the pitfalls of a purely discount-centric approach, organizations should adopt a holistic procurement and negotiation strategy that considers the following factors:

  1. Overall spend: Evaluate the total spend across all Salesforce cloud platforms and benchmark it against similar deal sizes to identify areas for potential optimization. A larger deal size might result in better negotiation power for the enterprise customer
  2. Business needs and priorities: Prioritize cloud services and usage patterns that align with the organization’s strategic goals and operational requirements
  3. Negotiation expertise: Leverage benchmarks provided by a specialist firm to elevate negotiation strategy and secure favorable terms across all Salesforce order forms and contracts
  4. Strategic timing: Acknowledge that certain months, especially year- or quarter-end, may present higher chances of securing extra discounts as sales teams aim to meet targets. Additionally, negotiating yearly or upfront payments can potentially result in additional discounts

The above case on enterprise software negotiations often echoes a cautionary sentiment – the importance of a holistic approach. Striking a balance between the immediate gains in one segment and the long-term relationship across the entire suite of services is paramount. It prompts organizations to assess not just the magnitude of discounts but the overall value proposition, ensuring each SaaS cloud or module’s role and strategic importance are properly valued.

Achieving best-in-class discounts in one domain may indeed come with trade-offs in others, emphasizing the need for a comprehensive understanding of the software landscape and strategic collaboration between enterprises and their software providers. The dance of discounts is delicate, requiring astute negotiation skills and a keen awareness of the broader software ecosystem.

To discuss software contract negotiation and for a detailed analysis of your software contracts, please reach out to [email protected]. Explore more about Everest Group’s contract benchmarking offerings.

Why Choice of Tech Service Providers Becomes More Strategic with Operations Platforms | Blog

Digital technologies brought the promise of an operational platform that enables companies to run their business differently and compete better in the marketplace. It is more automated, more self-service, more efficient, and more effective. And it is designed to continually evolve as business needs change. Looking at companies with mature operational platforms shows us what becomes essential to continually creating value through operational platforms. This essential understanding is explained in this blog.

Read more in my blog on Forbes

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