Tag: customer experience

Digital Transformation Benefits Beyond Cost Reduction | Blog

This is an intriguing time for digital transformation. For the past few years, many companies held back in the extent of digital transformation they were willing to undertake because the change management effort was huge. But the COVID-19 crisis and subsequent recession changed that picture and companies now look to accelerate digital transformation. Why? Because digitized processes deliver robust value-creation opportunities that go way beyond cost savings.

Read more in my blog on Forbes

Automation + Conversational AI | Webinar

Everest Group CEO Peter Bendor-Samuel will join IPSoft’s webinar to discuss how enterprises are reinvigorating their customer service, especially within the context of the post- COVID-19 next normal. They’ll discuss how companies can leverage enterprise automation and conversational AI together to augment customer care.

When

Thursday, July 16, AM EST

Where

Watch the replay

Presenters

Peter Bendor-Samuel
CEO
Everest Group

Mickey Davis
Global Vice President, Digital Workplace Services
Unisys

Jonathan Crane
Chief Commercial Officer
IPsoft

Why Retirement Plan Defined Contribution Recordkeepers Need to Modernize Their Plan Administration Systems | Blog

The retirement savings gap in the US – meaning the difference between the amount of money people should have and actually do have to retire on – stands at around US$40 trillion currently. To put this number into perspective, it is roughly 187 percent of the US GDP and 124 percent of US retirement asset holdings. Dwindling revenues for retirement plan administrators due to fee compression, high costs for servicing retirement plan participants, and the COVID-19 crisis are exacerbating the gap. And participant experience has degraded over the years, leading to inadequate savings for retirement and making the shortfall grow continuously.

Recordkeeping businesses in the Defined Contribution (DC) space are particularly struggling in the current environment. They’re facing multiple challenges, including: an influx of regulatory requirements involving fiduciary responsibilities; sustained low interest rates; pandemic-induced uncertainty; legacy technology systems; increasing costs; and the lack of agility to respond to customer demands and compliance requirements.

Our recently-published report, Making a Business Case for Modernizing Core Systems for the US Retirement Industry: Value Beyond Cost Savings from a Cloud-enabled Recordkeeping System, identified that the root cause behind profitability and customer experience issues for recordkeepers is the high incidence of home-grown, legacy, and mainframe-based recordkeeping systems. Eight of the top 10 US DC recordkeepers, which hold 73 percent of the total DC assets and serve 66 percent of plan participants, are on custom-built recordkeeping systems that are predominantly mainframe-based. The high cost of running and maintaining these systems has bulked up recordkeepers’ total cost of ownership and squeezed their operating margins. Additionally, these systems have not been able to respond quickly to constantly evolving and complex compliance mandates such as ERISA, Section 404(C), Secure Act, and the Department of Labor’s (DOL) fiduciary rule. These challenges are causing a host of fines, lawsuits, and sanctions from the Internal Revenue Service and DOL. Further, there is an acute talent crunch in servicing these systems for recordkeepers.

What should recordkeepers do to combat these challenges?

They need to design cogent strategies to modernize their plan administration systems. A cloud-first core platform is at the heart of this modernization. From a cost savings standpoint, taking a cloud-first core platform approach can effectively halve the technology and operations cost base. On an annual basis, this change results in a cost yield of roughly 20 percent.

The benefits of modernization extend far beyond cost savings as it entails use of a combination of technology levers to improve the plan participant experience. Modernization:

  • Enables migration to the cloud, which enables adoption of analytics tools for plan providers to better identify each participant’s financial wellness needs, optimize plan management, and redesign plans to deliver competitive retirement options. And analytics can help maximize the return on investment through predictive trend analysis of investment options
  • Helps recordkeepers integrate automation solutions to improve retirement applications processing speed, enhance efficiency in managing participant transactions, and reduce manual interventions in plan administration tasks
  • Allows recordkeepers to employ agile solutions for better and quicker compliance with regulations, to quickly meet participants’ needs, and improve the agility of recordkeeping applications
  • Lets recordkeepers offer self-service tools to manage contributions and investment allocations, AI-based robo-advisory solutions to address plan participant questions quickly and drive personalized plan recommendations, and a digital UI/UX to simplify the participant enrollment process while improving customer experience
  • Enables recordkeepers to expand services scope in the investment advisory and asset management space, which can unlock new revenue sources and lets them subsidize their recordkeeping costs through provision of these ancillary services.

The benefits of modernization of recordkeeping systems to a microservices-based, data-driven, cloud-first core platform cannot be overemphasized. Driving down costs and improving the participant experience will play a critical role in helping recordkeepers survive the pandemic and thrive in the next normal. Using the pandemic as a catalyst to modernize plan administration systems will not only make recordkeeping businesses resilient for the future, but also help support the nation’s retirement readiness and narrow the retirement savings gap.

To learn more about the dire need for transformation in the retirement industry, please see our new report titled “Making a Business Case for Modernizing Core Systems for the US Retirement Industry: Value Beyond Cost Savings from a Cloud-enabled Recordkeeping System.” And to drill down even further, please reach out to the report authors, [email protected], [email protected], and [email protected].

The Need to Consolidate the Vendor Ecosystem to Deliver Great Customer Experience | Blog

Delivering new customer experiences has become the centerpiece of many enterprises’ strategies to achieve sustainable growth. In fact, our research indicates that 89% of enterprises are using digital technologies to redefine customer experience, allocating as much as 30-35% of their marketing budget to experience design. And this share is expected to increase to 50-55% by 2022.

Enterprise approach to experience design

Designing a successful customer experience is an intricate play of many enabling factors, including a well-planned strategic roadmap, a well-defined organizational structure, strong creative execution, the right mix of technology solutions, and use of the right channels, as illustrated in the exhibit below. 1 Given this complex interplay of multiple factors, enterprises are actively engaging with service/technology providers, such as design agencies, consultancies, IT service providers, and technology providers, to deliver an enhanced customer experience. However, the number and range of providers involved in delivering the desired experience are creating an extremely fragmented vendor ecosystem; our research shows that an enterprise might work with as many as 100 design agencies across various customer experience initiatives globally. While the aim is to partner with players best suited to deliver on a particular aspect of an engagement, a fragmented ecosystem results in a siloed, disconnected approach to design and lack of success metrics ownership. Let’s take a look at the area of website design, where one service provider could be responsible for User Interface (UI) design (including user research, defining user flows, creating wireframes, etc.), another for content creation (animations, text, videos),  and a third IT service provider for platform selection and development. A website’s key success metrics are as closely linked to UI as to the underlying technology and a persuasive content strategy. Thus, if the website does not bring these aspects together seamlessly and does meet user expectations (in terms of the bounce rate and time spent per page, among others), which service provider should be held accountable? Thus, defining and owning the success metrics are the key to any experience engagement’s success.

How are service providers – and enterprises – responding?

Realizing that they can no longer cater to just one aspect of the value chain, both design agencies and IT service partners are bolstering their design and technology portfolios to deliver business value and act as strategic, one-stop partners to their customers. Thus, design agencies are ramping up their technology expertise to build data, analytics, and platform capabilities, while IT service partners are actively acquiring design agencies to build UI/UX, content, digital media design/execution, and design consulting capabilities. To take an example, over the last six years, Ireland-based digital agency Accenture Interactive has carried out 30+ acquisitions to boost its media, digital, and creative credentials across the globe. Another example is the London-based design agency WPP, which appointed its first-ever CTO in October 2018, committing itself to build a robust technology and data strategy. However, even as service partners rush to build end-to-end capabilities, buyers remain largely unconvinced. They are continuing to partner with individual service partners for their experience engagements. Some doubt the ability of their IT service partners to deliver a strong creative impact, while others believe that design agencies cannot truly understand underlying platforms/technology solutions to deliver viable solutions.

2

Is a solution in sight?

It is imperative for enterprises to understand that experience design is KPI-led design. Hence, they must push service providers to define and own KPIs that reflect the overall engagement’s success. Moreover, buyers should engage with service providers that possess robust end-to-end experience management capabilities. Service providers can acquire such capabilities by offering a broad solutions portfolio (either developed in-house or through a partnership network) across creative and technology execution. Doing this will pave the way to successful experience design, consolidation of the vendor portfolio, and higher service provider accountability. What has your journey been? Share your thoughts on designing experiences for your customers with me at [email protected].

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