Tag: Digital Transformation

Invest to Grow or Invest in Efficiency? | Blog

Most IT technology in organizations focuses on helping to improve the efficiency of the organization. However, as digital transformation takes hold, we can now see that a significant portion of these new IT investments focus on building technology platforms that allow organizations to compete for customers. These new “growth-focused” investments behave differently than their efficiency-focused cousins. They create a more dynamic relationship between technology and the business and evolve at a faster rate, often in less predictable ways. This new relationship between the business and technology increasingly calls for a different governance, investment, and management philosophy.

Will Service Delivery Change in the IT BPO Industry If They Say Goodbye to WFH?

The entire world responded to the sudden arrival of the pandemic in early 2020 by setting up mandates and reflex policies to keep people from gathering and exacerbating the virus. To keep the IT BPO industry running seamlessly, government guidelines for on-site working were relaxed worldwide so employees could work from home. After few initial hiccups, almost all the major global service delivery geographies e.g., India, Philippines, Poland etc. quickly adapted to the remote working delivery model, ably fulfilled services, and resolutely maintained service quality levels.

As  we return to post-pandemic norms, how are organizations, and employees, reacting to having to go back to the office?

Restoring pre-pandemic economic activity

With two years of the pandemic under our belts, governments are preparing for workers to head back to the office. The rationale provided by the governments is that getting workers out of their houses and back into the office, especially in larger cities, will help support local businesses and boost the economy as more workers visit restaurants and shops while they’re out in the towns and cities. However, most countries are finding that workers prefer a hybrid work model, enabling the benefit of getting people back into the bustling life of the city while also supporting those who need to work from home. In most countries the remote working experiment of the last two years has also led to the exponential growth of digital businesses models such as e-commerce, digital content, gaming, delivery services, online education, and others, which have as much of a multiplier effect on the economy as the traditional physical shopping centers and stores.

Organizations have taken very individual paths when it comes to workplace models in response to the ebb and flow of the pandemic. Some are choosing to stay in a WFH environment, others will be heading back to the office, and some are taking a middle ground approach by offering a hybrid model of each scenario. For example, Google has recently asked its employees to head back to the office this month (April), opting for a hybrid working model of three office days a week.

Regions are currently working with government leaders to determine next steps

There is a lack of clarity in government regulations in most countries on next steps and long-term acceptance of remote or hybrid working. In major global service delivery countries such as India, Philippines, Colombia, etc., the current set of monetary incentives for the IT BPO industry are tied to a physical space, or an office, in a specially designated area (e.g., SEZ in India, PEZA in the Philippines). While the employers have been granted special pandemic-related exceptions for availing these incentives even while working remotely, these exceptions are not long-term and are due to expire in the coming months in most countries. In the absence of permanent policies to support remote work, the industry will be susceptible to uncertainty and pressure of upcoming deadlines on the current exceptions.

For example, in the Philippines, the temporary relaxation for allowing tax incentives while remote working will expire on March 31, 2022. The IT BPO companies were asked to have employees back in the office from April 1, 2022, to qualify for the fiscal incentives once again. This sudden and major change led to many a sleepless night for industry executives. The industry was able to leverage a legal exception in cases of a “national state of calamity,” which allows for employees to work in the office 70% of the time and remain remote 30% without losing incentives. With this exception in place, most of the Philippines’ based IT BPO companies will be able to continue their hybrid workforce models till September 12, 2022.

In India currently, the IT BPO sector is working with the government to ensure that some form of hybrid work is drafted into the new legislation that will replace the Special Economic Zones (SEZ) Act, which is currently being rewritten to revive activities in SEZ areas. Similarly, key service delivery countries in the Latin American region are facing uncertainties with regard to government policies.

The need of the hour is clear for effective policies that allow remote or hybrid workforce models and decouple monetary incentives from the physical office location requirements. Knowing now what to expect in the coming months, whether employees are expected to work in the office or are able to move to a hybrid work environment, will help them better prepare.

How could back-to-office mandates affect the IT BPO industry?

Companies that rely on the global delivery models for technology and business process services should not make any changes right away but should consider a continuity plan and keep a close eye on how events play out. One possible risk to keep in mind is the chance that attrition rises as employees adjust to the new working circumstances if they are asked to return to the office.

Enterprises should also consider the possible ways the industry could be affected without a WFH element for IT BPO employees, not only to protect the population from the ongoing pandemic but when other emergencies come along, such as geo-political disturbances, natural disasters, etc.

A Reimagining of working models could be in order

The return to work dilemma begs the question of whether it’s time to rethink laws and policies, most of which were developed years ago at a time when working outside of the office wasn’t even considered a possibility. We may start to see policies changing globally as countries allow more opportunities for employees to work in a hybrid work fashion if they choose. Countries that fall behind in adapting to new workforce models will risk losing business to countries that make it attractive to employers.

Incorporating the possibility of a permanent WFH or hybrid workplace model in many regions would require a reimagining of policies and tax breaks so that business doesn’t become more expensive for companies and to support employees who need to continue working from home. The opportunity could bring even more success to the industry. The IT BPO industry, with 14% revenue growth in 2021, was one of the fastest growing industries and contributed to millions of new jobs.  Many firms around the globe will likely continue to have employees work remotely or in hybrid models as productivity, customer satisfaction, and new business continue to stay the same or improve.

For more information or recommendations on the status of service delivery in the IT BPO industry, reach out to Prashray Kala, or contact us directly.

Learn about how to create an experience-centric workplace in our webinar, Top Strategies for Creating an Employee-focused Digital Workplace.

Metaverse eCommerce: The Next Logical Step in the Evolution of Immersive eCommerce

Metaverse is here to stay, and it’s going to play a significant future role in how we experience brands virtually. Industry giants are investing big in this space, and it is creating new opportunities for service providers to build feature-packed solutions for their customers entering the Meta world. Read on to learn about the potential and pitfalls of Metaverse eCommerce and why gaining a first-mover advantage is critical.

Digital commerce owes its maturity to the ever-evolving technology ecosystem – starting with the first online dial-up transaction on a modified television to a plethora of innovations over the past decade like mobile commerce, voice search, and social commerce. Emerging concepts such as gaming commerce and recommerce or reverse commerce are further defining the ecosystem.

Digital commerce is also witnessing an era of hyper-personalization powered by Artificial Intelligence (AI). According to Everest Group research on the Top 15 Start-ups Redefining Shoppable Experiences, 70% of the start-ups in the ecosystem are leveraging AI to offer enhanced solutions.

Enterprises are offering immersive buying experiences through Augmented Reality and Virtual Reality (AR/VR). To continue progressing on this trajectory, technological alignment is inevitable for a futuristic eCommerce strategy, and the next logical step for attaining this is Metaverse.

Defining metaverse and its significance in eCommerce


Exhibit 1: Definition of Metaverse

In simple terms, Metaverse is an extension of technologies such as AR, VR, blockchain, cryptocurrency, and social commerce coming together to form a virtual world, where customers can shop, play games, and socialize with friends.

Popularized by video games and fiction novels, the idea of Meta has been around since the early 90s, but recently, the industry has become extremely bullish on Metaverse primarily due to two major contributors. Firstly, technologies backing the concept of Meta (blockchain, crypto, and affordable VR) have attained significant headway in the past decade. Secondly, the idea has gained mainstream momentum because industry giants such as Facebook (Meta), Google, and Microsoft are pouring huge investments into Meta-platforms. Experience management leader, Adobe, has also put its best foot forward towards the Meta world by offering tools specific to 3D content creation, experience delivery, asset management, and commerce.

The Meta wave began in the early 2000s with games like Second Life and World of Warcraft, which were based on centralized economies where the value of owned assets was limited to those games. Aiming to overcome this deficiency, Decentraland came into existence in 2020. This platform offered a decentralized economy, where along with building virtual worlds, trading assets, and hosting events, users could transfer purchases to other Meta platforms like The Sandbox. Although the latest version of Meta provides numerous opportunities for users, we are still far away from creating an Omniverse like the movie “Ready Player One.”

Despite the technology being in its infancy, Metaverse holds significant potential in the digital commerce space. In the current 2D eCommerce model, information is consumed rather than experienced, restricting brands from creating physical connections with users.

Metaverse can solve this problem to a very large extent. In Meta-commerce, shoppers can truly experience a company’s culture, design, and branding elements. This will create huge brand differentiation beyond what is currently limited to logos and banners.

Although the technology backing Metaverse is still at a nascent stage, it holds immense potential to build an immersive commerce platform where products will come alive and personalized customer engagement will create brand loyalists.

Brands advocating metaverse are already pioneering virtual commerce

Envisioning the macro future implications of a single worldwide Metaverse, forward-looking brands have already started creating virtual commerce experiences at the company level. Here are some examples:

  • DRESSX – Designers and fashion enthusiasts can enter their Metaverse and create clothes from scratch. Users can try clothes on through their avatars and convert their fashion non-fungible tokens (NFTs) into actual garments
  • Gucci Garden Metaverse and Louis The Game – Gucci and Louis Vuitton have each launched their own NFTs where everyone has the freedom to create and modify their apparel
  • Charlotte Tilbury Virtual Beauty Gifting Wonderland Users can connect with make-up artists in virtual rooms to discuss their skincare concerns and also invite friends to help them find the right product through an integrated video feature in the same session

Potential challenges in realizing metaverse


Exhibit 2: Challenges pertaining to Metaverse implementation

To make Metaverse a reality, several challenges need to be overcome. These include:

  • Consistent user experience and interoperability – A singular global decentralized Metaverse with shared data, computation, and bandwidth can only be achieved with collaboration between several global parties. Unless features are aligned and intellectual property is shared, we’ll never get a true Metaverse
  • Dearth of skilled talent – Talent for developing design tools and headless systems for businesses to prepare their stores for different media and virtual formats is in high demand and short supply
  • Cybersecurity and privacy – Metaverse users could experience incidents related to fake NFTs and malicious smart contracts that access personal data and crypto-wallets. Since personalized virtual experiences will create an endless need for countless customer data points, industry giants will likely prioritize competitive advantage over user data privacy

 Along with these obstacles, challenges related to hardware, use-case identification, slow adoption, lack of capital, a fragmented tech landscape, unpredictable Return on Investment (ROI), and legal implications will surely make it difficult to turn the virtual world into a reality.

But on the brighter side, the foundational infrastructure is already in place in the form of a sophisticated global blockchain network, ergonomic VR design, scalable AI, and last-mile internet connectivity in most parts of the world. Therefore, Meta is no longer a far-fetched dream. And with most industry giants strategically investing in the concept, the challenges associated with it will get mitigated very soon.

Opportunities for eCommerce service providers in this meta wave

This new world is pushing IT service providers, consulting firms, and design agencies towards attaining Metaverse eCommerce capabilities. These industry players will be able to add several new digital service offerings through Metaverse. A few of these services include:

  • Metaverse consulting – With Pwc buying land in The Sandbox, it is evident that consulting firms will play a pivotal role in the world of Meta. Enterprises entering Metaverse will need significant hand-holding and a relevant knowledge base about the concept to formulate their Meta-business strategy. Consulting firms can leverage their expertise to advise and direct clients who wish to embrace Meta with its full range of challenges
  • Metaverse applications – Exclusive applications will be required for users to interact with the Meta world for virtual shopping. IT providers will need to build development expertise in the AR/VR technology stack to deliver these capabilities
  • Design and NFT – Design agencies will be essential for creating 3D models of virtual artifacts in the Meta world. Along with that, designers also create NFTs that play an extremely vital role in the Meta economy. Therefore, Metaverse will bring a plethora of lucrative business opportunities for design agencies around the world
  • NFT marketplaces – With the increasing popularity of cryptocurrencies, from digital paintings to Twitter hashtags, NFTs are being bought and sold everywhere. Since sellers will have the power to tokenize everything in Metaverse, a marketplace that supports NFT transactions through blockchain will be needed. Because of this, demand for IT service providers specializing in the NFT marketplace and blockchain development technology will rapidly increase

An exciting future

Brands are already implementing core technologies essential for Meta in silos. Soon, we will witness their integration to create an alternate world full of endless possibilities.

Metaverse is here to stay, and it will bring a multitude of opportunities for service providers to build feature-packed solutions for their customers entering the Meta world. Enterprises need to seize the first-mover advantage now by swiftly evaluating the future impact of Metaverse on their businesses.

Discover more about how organizations are increasingly finding ways to incorporate elements of the metaverse in our blogs: Enterprise Metaverse: Myriad Possibilities or Problems for the Hybrid Workplace? and Metaverse: Opportunities and Key Success Factors for Technology Services Providers.

To further discuss Metaverse eCommerce opportunities, contact us.

Will Anyone Love Legacy IT? | Blog

I shared my perspectives on various service provider firms many times over the years in blogs, especially at times of industry consolidation, or when new technologies and business models impact the market, as economic cycles ebb and flow, and as relationships and contracts change because of new expectations of the providers’ clients. My intent in these observations is to help enterprise clients understand how trends can affect their decision-making regarding third-party services. I now want to share my updated opinion on a service provider firm that I have closely monitored since its CEO changed in September 2019.

Read more in my blog on Forbes

Strategic Decisions in Managing Legacy IT Services | Blog

My recent blog about the “Legacy Technology Dilemma” explained how and why companies have unrealistic expectations around managing their legacy systems and applications. As companies contemplate the fate of their legacy estates – whether they currently reside in house or are currently outsourced to third-party service providers – executives face both tactical and strategic issues. It’s easier to deal with the tactical choices (cost, price, and service levels). However, the issues of stability, risk, and the ability to extract full value from legacy estates are much more nuanced.

Read more in my blog on Forbes

Legacy Technology Dilemma | Blog

Companies are migrating applications to the cloud, looking to reduce or shutter their legacy data centers. Many soon realize they have a portfolio of legacy applications that are just too expensive and too risky to move to the cloud. However, they have unrealistic expectations regarding the possibilities for those applications, and that leads to a dilemma in deciding how to handle them.

Read more in my blog on Forbes

Multi-cloud and Modern Applications: Doomed to Fail | Blog

Are multi-cloud and modern applications a panacea or problem? As the cloud journey scales and newer ways of building workloads get adopted, the industry is divided over the value of these initiatives. With increasing concerns about their viability, enterprises need to address some key questions before moving forward. Read on to learn more.   

In our previous blogs, we covered the dichotomy of multi-cloud and explored choice or strategy and interoperability. Let’s now dive into the debate over these approaches.

While enterprises understand the new digital business models require them to fundamentally change the way they consume cloud and build software, they aren’t necessarily aligned on the best models for the future. Not everyone is completely sold on multi-cloud and some doubts by large enterprises are emerging.

The top five questions enterprises ask are:

  1. Is there a better way to solve business challenges than assuming that multi-cloud and modern applications are the panacea?
  2. Is multi-cloud now a distraction to our technology teams?
  3. Is multi-cloud a “fear uncertainty and doubt” created by the nexus of cloud vendors and their partners?
  4. How can we succeed in multi-cloud when we barely have skills for one cloud to build, manage, and optimize workloads?
  5. Why should we build modern applications this way if they are so complex to build, operate, and sustain?

These questions are understandable – even if not always correct. However, unless enterprises become comfortable and address these challenging issues, they cannot proceed in their cloud or modern applications journey.

What should enterprises do?

Based on our research, we recommend the following three steps to succeed:

  • Acknowledge: First, acknowledge that multi-cloud and modern applications are not a cakewalk but very complex strategic initiatives. Moreover, they may not be relevant for all enterprises or use cases. Stress testing the current operating model, development practices, and existing investments are important before charting this journey. In addition, performing analysis to understand the operating cost of multi-cloud and modern applications is critical
  • Assess: Next, discovering existing technology and business estate, aligning with future priorities, and understanding in-house talent, program risks, and funding capabilities become important. Once these decisions are made, enterprises need to consider architectural choices and technology stacks. Wrong choices on these critical input areas can derail the multi-cloud and modern applications journey
  • Act: Finally, understand it is not a foregone conclusion that multi-cloud and modern applications will always benefit or harm your enterprise. In addition to the technology challenges, operating models must change. Therefore, rationalizing tools, realigning teams, prioritizing funnel funding, and transforming talent are critical. Simulating these workloads before they are built and holding cloud vendors and partners contractually accountable is important. Enterprises should also understand that some existing technology investments will be irrelevant, and they will need to buy newer tools across design, build, and run

What should vendors do?

In the complex landscape, cloud providers, service partners, and technology companies have their own incentives and businesses to run, and none have the client’s best interests as their core agenda. Vendors need to build data-driven models to show the value of multi-cloud and modern applications initiatives and help remove as much subjectivity and intuition from this process. Moreover, building platforms that can simulate these workloads across the lifecycle, as well as the talent, funding, and process transformation needed for this journey, are important. If the returns are underwhelming, enterprises should not bother going down the multi-cloud and modern applications route.

Suppliers should be proactive enough to let clients know of the operating model changes needed to adopt multi-cloud and modern applications. We believe system integrators have a more strategic role to play here because cloud or tech vendors do not understand the client landscape and have less incentive to drive such fundamental operating model transformation.

In the end, it boils down to the conviction enterprises have in multi-cloud and modern applications initiatives.  Using tools and platforms to stress test can move the decision from being a gut feeling to fact-based.

Please share your experiences with multi-cloud and modern applications with me at [email protected].

Discover more about our digital transformation research and insights.

How Small Banks Can Accelerate Digital Transformation | Webcast

Digital banking is on its way to worldwide adoption, and digitalization will be a growth catalyst for the industry. In this webcast, Ronak Doshi, Partner at Everest Group, and Suresh Ranganathan, Global Head of Banking Services at Aspire Systems, give insights on:

  • How digital banking and digital transformation can unlock significant business value
  • How to ace the digital race in the era of purpose-driven banking
  • The steps for a small bank to be digital-ready

Watch Now


Ronak Doshi
Everest Group

Suresh Ranganathan
Global Head of Banking Services
Aspire Systems

Watch Now

Understanding Digital Platform Costs | Blog

These days, nearly all companies assemble digital platforms so they can better compete in the marketplace. Platforms enable companies to better serve their customers and their employees as well as orchestrate their ecosystem. A platform integrates technology and services in a way that allows a company to operate differently. Hence, the platform world is vastly different from the current IT paradigm. Let’s look at the differences in aspects, including the cost to build, cost to maintain, cost of engineering and IT talent requirements, and need for retiring technical debt.

Read more in my blog on Forbes

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