Digital Pinnacle Enterprises™ – the best digitally performing manufacturing organizations – differentiate from the rest in five key areas
The Internet industries are playing fast and loose with people’s personal data. It’s clear that self-regulation is merely wistful thinking and governments are forced to act. The European Union is clearly leading the change with GDPR and other regulations. The Facebook fiasco is a rude wakeup call for all data-driven enterprises, billions of internet users and governments/regulatory bodies all over the world. Mark Zuckerberg’s apologies seem sincere and heartfelt, however, the problem is large and very complex, hence there are no easy fixes, says Peter Bendor-Samuel, CEO and founder of Dallas-based Everest Group in an exclusive interview with Financial Chronicle just after Mark Zuckerberg testified on Capitol Hill early this morning.
ADP’s Meeting of the Minds event in late March brought together approximately 1,000 of its clients for three days of networking, continuing education, and showcasing of some of its latest thinking and newest capabilities. In back-to-back sessions throughout the day I was there, I met with leaders across the company’s different offerings to gain insights into how they were addressing important marketplace issues.
Three major areas stood out during these conversations:
- Rising expectations: These days, clients are expecting their service providers to deliver benefits extending far beyond cost savings. To address this, ADP is leveraging DataCloud – its big data platform – and taking advantage of millions of employee records to deliver benchmarking and insights through analytics, including those that help its clients gauge the risk of losing valued employees. In the coming months, clients will also be able to pull in data from outside sources, and attend “Benchmarking Bootcamps” to help them understand data and what they can do with it. To provide the “proof in the pudding,” the three-day event featured 25 ADP clients sharing their stories on how ADP was enabling HR to become more involved in their company’s overall business strategy.
- Addressing the pay gap: One of ADPs newest capabilities – the Pay Equity Explorer – is aimed at doing away with still rampant pay gaps. (Note: According to the US Census Bureau, the average woman earns 20 percent less than her male counterpart.) This dashboard, backed with analytics, identifies roles and geographies in which potential pay gaps exist, negatively impacting women and minorities. Once a potential pay gap is identified, the tool has drill down capabilities to pinpoint specific people, quantify their pay gap, review their past performance, and mark them as potentially needing corrective action via an off-cycle market adjustment to pay. When you consider the looming talent shortage – there are 6 million fewer resources ages 40 to 49 than there are in the starting-to-retire 50 to 59 age group – not to mention hiring and training costs, retaining resources by ensuring they feel valued and appreciated is critical.
- Orchestration over outsourcing: At Everest Group, we believe that the next generation HR service delivery model needs to be focused on a seamless employee experience, often referred to as the “Amazon experience,” rather than the traditional model of siloed HR processes that lead to a poor employee experience. The approach requires all of the components of Human Capital Management (HCM) be brought together, including payroll services, talent management, HR management, time and attendance, and benefits administration, and then delivered as an integrated solution via BPaaS. ADP seems to have grasped the importance of delivering an end-to-end solution that improves the user experience and harvests information across multiple processes from a single platform, making it easier to apply analytics to uncover cause and effect relationships. The company also developed a mobile app via which users can access and print pay, manage their teams, track and approve time, and review their 401K.
My takeaways from the event are that it appears ADP is building upon its strengths to satisfy market requirements, and making strides to improve its consultative approach to HR services and better leverage ADP DataCloud across offerings to provide more insightful and advanced analytics.
The current tumultuous times represent significant opportunities for service providers that continue to invest in end-to-end capabilities and analytical tools that drive insights to enable better business outcomes.
A critical factor behind the Wells Fargo fiasco was the incentivizing of employees based on their ability to achieve their sales targets by cross-selling products. While this is the easiest and lowest cost model for defining and measuring sales team performance, it can lead to fraud if left unchecked. In Wells Fargo’s case, over 5,300 employees were fired for fraud that occurred across multiple years and led to the exit of CEO John Stumpf.
The scandal raises serious questions. Did Wells Fargo not have the data and analytics tools needed to identify fraud that had been going on for so long? Did the bank’s processes not have a channel to capture customer feedback on transactions to raise a flag for the fraudulent activity? Can we create employee performance measures other than sales targets?
To answer these questions, I believe banks need to go back to services marketing basics 101:
- Measure customer acquisition costs
- Develop mechanism for measuring customer satisfaction (in almost real time, on an ongoing basis for consumers in the age of connected ecosystem)
If Wells Fargo had measured the cost of acquisition per customer and had the ability to drill down at the sales representative level, it would have realized that the 5,300 fired employees had unbelievably low cost of customer acquisition for the sales they made over the years – meaning they were doing amazing, or fraudulent, work. Whichever the case, the bank would need to explore further.
These days, measuring customer satisfaction after every transaction is the norm in many industries. After every call I make using Skype, the application asks me to rate my experience. The same is true for every Uber ride I take, and each time I book a flight online.
Can’t banks do this? I believe they can. It makes sense for multiple reasons:
- In the age of agile development and DevOps, driving continuous integration and continuous deployment the customer feedback loop needs to be real time for the customer experience and service design teams to actually drive continuous improvement of their systems
- This helps banks develop a rich data set that can be used to drive process and product design and improvements, and also identify fraud
- The data can help improve the customer experience, and demonstrates to consumers that their feedback is valuable. Customers can be enticed to leave feedback through offers of loyalty points, which in turn can help improve customer retention
- This approach drives customer centricity, and ensures designing processes that are aligned to the needs of customers
- Banks can use this data to predict the need for different segments of customers, and help drive personalization of user experience
While there are many more reasons why measuring customer satisfaction is valuable for banks and customers alike, let’s dive a little deeper into the idea of using it to measure sales team performance.
Banks can use the customer satisfaction measuring mechanism to capture feedback that enables measurement of the effectiveness and value added by the sales team member across the customer lifetime journey, from being on-boarded to systems to purchasing products to retiring products.
By embracing a customer-centric design philosophy for all its internal processes (not just for its products and services), including performance appraisals of all employees, with every KPI being linked to customer satisfaction, banks will be able to create a consumer-centric enterprise.
True that Wells Fargo’s case has made the idea of cross-selling a villain. But we must realize that its debacle was also caused by other more pressing issues such as top management failure to respond to the matter in time, lack of data and analytics solutions to identify fraudulent transactions, and the organization culture that promoted unethical behavior.
FinTech players in the market are looking to disrupt traditional financial services players by leveraging technology and designing for customers. However, they face challenges in terms of gaining customer trust and loyalty while building scale. Traditional banks boast of having scale and years of customer trust. But, we are witnessing erosion of that trust. While financial services enterprises are investing heavily to embrace the wave of digital disruption from FinTechs, they need to ensure while they pursue this strategy they continue to protect their competitive advantage of years of customer trust.