Indian IT Companies Pull Plug on Russia | In the News

April 15, 2022

Indian software services companies are moving their limited operations out of Russia over geopolitical tensions arising out of its invasion of Ukraine, while helping clients maintain business continuity by shifting work to other locations.

“We don’t expect technology services demand to cool down in the short to medium term because of the war. Pent-up digital transformation spends by large global 2000 clients is a secular trend and continues to aid pipeline and revenue growth for most IT and digital engineering service providers. However, some deceleration in growth is expected in 2-4 quarters as recession and inflation-related fears become more prominent,” said Nitish Mittal, Partner at Everest Group.

Ukraine IT Sector: Resilient, Agile, and Hopefully Here to Stay | Blog

April 14, 2022

The Ukraine IT sector has grown as a result of, and not despite, its humble, post-Soviet origins, and characteristics of agility and resilience appear to be serving it well. Read on as we share the viewpoint of our expert who traveled to Ukraine after the dissolution of the Soviet Union in this blog.

In March 1992, four months after the dissolution of the Soviet Union, I traveled to Ukraine to attend a hastily convened conference on the liberalization of post-Soviet telecommunications in the Commonwealth of Independent States. Delegates flew into Simferopol on a Swiss Air charter, and we took a rickety bus ride across the Crimean Peninsula to Yalta, the site of the eponymous wartime conference.

The conference was chaotic but enlightening: Soviet telecommunications had been so Moscow-centric that at independence, Ukraine did not have a singular, state-owned telecom carrier and virtually no direct international circuits. Disparate local networks loosely managed by the Ministry of Transportation and Communications were spread across Ukraine’s 22 administrative districts. These networks became Ukrtelecom in 1994, but outdated and inefficient fixed-line service was overtaken by rapid mobile take-up from the mid-1990s.

The results? A generation of Ukrainians grew up with mobility as their default. And the legacy of decentralized infrastructure led to a fragmented internet marketplace with ten or more internet service providers. Mobility and decentralization spawned an entrepreneurial and healthy, if not spectacularly large, IT services sector that now has some 290,000 professionals – 79% of them “individual entrepreneurs,” that was worth over $6.83 billion in export revenue in 2021, according to industry association IT Ukraine.

The Ukraine IT sector, innately agile and resilient, was in many ways prepared even more thoroughly for the dislocation caused by the Russian invasion, having endured 20 months of pandemic-enforced remote working. Anecdotal evidence, popping up in podcasts, on LinkedIn, and in mainstream media, suggests that the Ukraine IT sector is very much still working. Companies like Intellias and Sigma Software in Lviv, GeeksForLess in Mykolaiv, Reface in Kyiv, and many more, have contributed, according to IT Ukraine, quoted in an April 6 article on DOU.ua, to “almost 85% of [IT] companies operat[ing] in a normal business rhythm.”

How long the Ukraine IT sector can maintain that normal business rhythm, of course, remains uncertain. While some look to post-war opportunities in an independent Ukraine, created by the outflow of business from Russia and possibly Belarus, the current reality is that the reduced appetite by foreign businesses for risk and the execution of business continuity plans have meant that work has started to move outside Ukraine.

That said, I expect a significant share of work that is currently being delivered, and that can continue to be delivered remotely, will remain longer-term with Ukrainian companies or contractors, irrespective of whether specialists are operating in western Ukraine or outside of the country.

Indeed, Lviv IT Cluster, a body representing business, academia, and local government, claims that upwards of 40,000 IT specialists have relocated to Lviv in western Ukraine since the invasion, swelling the available talent headcount in the city to between 70,000 and 100,000. For now, internet and power in Lviv still function, and as long as they do, the Ukraine IT sector will find a way to continue its normal business rhythm.

To discuss the Ukraine IT sector further, please reach out to [email protected] or contact us.

Learn more about the current impacts in the Ukraine region in our LinkedIn Live session, How to Manage the Ukraine-Russia Impact on Service Delivery.

Global Supply Chain Management Strategy in Times of Disruption | Blog

April 12, 2022

The Russia–Ukraine war is further disrupting already deteriorated global supply chains. With the high political tensions, service providers need to implement a mix of short- and long-term approaches like reshoring, ally shoring, and partnerships to overcome the crisis. Read on to understand Global Supply Chain Management Strategy and the global supply chain issues and strategies to build greater resiliency in times of disruption.

Global supply chain issues and strategies

The global supply chain has been upset over the past two years, starting with back-to-back global economic setbacks that impacted nearly all goods and services in every industry around the world.

While the supply chain hit on essential goods and medical services from COVID-19 is now plateauing, rising tensions between Russia and Ukraine have only added to the already strained global channels and delivery.

The ripple effects of the Russia-Ukraine war can be seen in rising oil prices, trade restrictions, and financial sanctions. Even though Russia is receiving economic penalties, countries that depend on Russian goods and services have to begin looking for an alternative supply. Similarly, countries depending on Ukraine’s IT outsourcing services are suffering as well.

With these recurring global shocks unsettling global trade dependencies, the changing dynamics of international relations, and the growing uncertainties, governments across the globe are moving to implement policies to make supply chains more resilient.

Impact on service providers

During the pandemic, the Information Technology Sourcing (ITS) industry observed a dramatic 3% fall in overall growth, and the Business Process Sourcing (BPS) industry growth lagged. The Russia-Ukraine conflict is estimated to impact between 70,000 and 100,000 service professionals in Ukraine, Russia, and Belarus, including highly-qualified workers with digital engineering and IT skills.

The immediate concerns go beyond ITS to Engineering Services (ES) since Ukraine has been a go-to-market with a mature talent pool for both sectors. The full trickle-down effect on BPS is yet to be fully seen. Although BPS’ dependency on Ukraine is minimal, the conflict’s escalation to neighboring countries is expected to more noticeably impact Eastern Europe, which forms the third-largest outsourcing location, following India and the Philippines.

Eastern Europe hosts several service providers across industry verticals, including Banking and Financial Services (BFS). Sixteen major service providers already directly engaged with Everest Group are located in this region, enabling different processes across the BFS vertical, including capital markets, banking operations, and financial crime and compliance. Outsourcing adoption across the payment vertical had been growing as well and could be impacted.

The conflict majorly derails Ukraine’s focus on driving Fintech and tech and banking collaboration that started in 2018 with major FinTechs in Ukraine raising US$7 million in funding. In addition to the growing concerns among service providers, the increasing sanctions have already resulted in volume spillover, and firms are starting to become more vigilant in their strategies to brace for the future.

Global supply chain management strategy to consider

Given the latest scenarios and rising political tensions, countries increasingly are investing in shifting their shoring operations to form leaner and more robust supply chains. This move has been underway since nations began reducing their dependencies on China following the COVID outbreak. Japan has been incentivizing such shifts and encouraging private companies to move operations to countries like India, with friendlier ties than China. Taking a similar approach, the US is now limiting its dependencies on Russia for oil and looking to be self-sustainable in the longer run.

On the financial services front, long before the Russia–Ukraine war, countries have been encouraging citizens to limit dependencies on foreign platforms for their financial transactions. This can be seen by Russia’s MIR and China’s UnionPay advocating for using Rupay for all card payments and lessening its dependence on Visa and Mastercard. Yet, Rupay’s technology operations are partially sourced by an American technology provider. Thus, the question of complete independence, reshoring, or nationalization of financial services is rather difficult.

With rising global tension and the downturn of cyclic economic globalization on the horizon, firms need to consider remediation action for the future. Let’s explore some of the global supply chain management strategies to consider for the near- and long-term.

Five global supply management strategies

Below we have identified popular global supply management strategies and their impact on costs and investments:

	Strategies	Impact
1.	Friend shoring or ally shoring: This form of outsourcing where countries with friendlier diplomatic ties leverage their connection to ensure business continuity is growing. Post-pandemic, it has been imperative for enterprises to focus on business continuity, especially with growing outsourcing demand across industries such as banking, healthcare, insurance, etc., and for a wide range of capabilities, including financial accounting, customer experience management, and human resource management.	Short-term strategy
2.	Reshoring: While not a new concept, reshoring is increasingly being explored now. In 2010, US firms brought back more than 1 million jobs post the economic downturn. Reshoring helps save costs, strengthens a firm’s supply chain, and can even bridge language and cultural gaps. But reshoring is not possible for everyone if resources are limited.	Long-term strategy and investment
3.	Talent upskilling: Given the rising talent shortage, upskilling internal resources should be in the cards to provide better leverage and control over internal resources – even without the current tensions.	Long-term investment
4.	Partnerships: Partnerships within existing firms in the country should be explored to bring capabilities and processes nearer to home. In addition, partnering enterprises can leverage existing service provider relationships to fill gaps in capabilities. Firms also can form public-private partnerships with governments and state-funded universities to provide skills training and then hire new talents.	Long-term investment
5.	Automation: Given the rise in digital transformation and the adoption of newer technologies, an automation-first strategy is imperative. Automation of high-frequency tasks can speed up processes and decrease human dependency on outsourcing partners.	Long-term investment

In today’s volatile environment, service providers need to assess and weigh the options before making shoring decisions to maintain a balance between cost competitiveness and labor shortages.

With the current disruptions, reshoring and friend-shoring strategies should be explored in the short term. Moving forward, when the climate is more stable, cost optimization and efficiency should be prioritized. Understanding the issues and balancing short- and long-term global supply chain management strategies will help firms get through this disruptive period.

For more about the successful mix of approaches the industry has been using across various domains, see our State of the Market reports.

Read more about the Russia-Ukraine conflict and potential impacts to nearshore European countries and the larger global services industry in our blog, Will Ukraine’s Invasion Have a Domino Effect on Other Geopolitical Equations?

To discuss global supply chain issues and strategies, contact us.

Deconstructing the Future of Work | In the News

April 12, 2022

Four-day weeks, on-demand pay, “rural” talent, digital workers… in recent times, we’ve heard these ideas accompanied by seemingly teleological questions about work as a construct.

The timing is understandable given the confluence of factors at play – the rise of digital, labor pyramid issues, and the after-effects of a global pandemic, including a desire for more meaning in work and convenience through remote work. After years of navel-gazing, society is finally waking up to the fact that our jobs, the way we do them, the time we spend, and the very fundamentals of the nature of work itself are perhaps incongruent with the world we now live in.

This realization opens up the very promising possibility of re-examining and perhaps reconstructing work for the new era. But, beyond the clarion call, what exactly does it entail, how do we understand the future of work, and how do we design for it? Fundamentally, we can break it down into three distinct components: the how, the where, and the who.

Read the full article on Business Reporter

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

April 7, 2022

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

April 6, 2022

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.

Number of New Offshore Centers Rises to 62 in Dec Quarter | In the News

March 30, 2022

About 62 new offshore and nearshore centers were set up in the December quarter of 2021, while 23 came up onshore, showed a report by IT research advisory Everest Group. The report also showed that outsourcing demand held steady from September to December quarters, with 404 transactions reported in each quarter.

How the Russia-Ukraine Crisis Can Impact Customer Experience Management Services and Alternative Locations to Consider for CXM Outsourcing | Blog

March 23, 2022

With Eastern Europe serving as a major hub for Customer Experience Management (CXM), the Russia-Ukraine crisis poses a serious threat to service delivery. Now is the time for enterprises with large presences in this region to diversify delivery locations and mitigate risks.

Read on for our expert analysis on the state of CXM outsourcing here, the potential disruptions, and alternative countries to consider for multilingual customer service and tech support to ensure continued CXM services.

Just as the world was looking to emerge from the global pandemic that caused a seismic shift in work and collaboration models, another highly disruptive crisis looms on the horizon. The recent geopolitical developments in Ukraine and Russia have caused the whole world to take notice, and with new sanctions kicking in every day, many are already preparing for adverse scenarios.

Given that this rift involves nuclear heavyweights in Russia and the NATO countries, the consequences could be far-reaching for the entire world. Consequently, these tense developments have created a lot of uncertainty and consternation for companies having a presence in the affected region.

Eastern Europe, which forms the immediate vicinity of Ukraine, is a major hub for delivering a plethora of customer experience management services for end-users both within and outside this region. Let’s take a look at the potential impacts to CXM outsourcing and alternative locations for CXM services.

Eastern European region CXM snapshot

As a strategic location for CXM services, eastern Europe offers strong multilingual capabilities, relatively inexpensive skilled talent, and cultural similarities and a minor time difference to western Europe. Leading global enterprises and Europe-focused players have a significant footprint in this region, putting them at risk in the current situation. The heatmap below illustrates the country-wise vulnerability index based on the number of delivery centers and corresponding CX agents present in each of them.

Potential CXM services disruptions and alternate solutions

Due to its skilled and relatively inexpensive IT talent pool, Eastern Europe is highly leveraged for its multilingual support for not only the regional languages such as Russian, Czech, Serbian, etc. but also for many of the major west European languages such as German, French, English, Spanish, and Italian. Poland and Romania also are sizeable talent sources for technical support.

Major cities in Ukraine such as Kyiv and Dnipro have been the most severely impacted by the armed conflict with Russia, and enterprises must accelerate Business Continuity Planning (BCP) measures to relocate affected CXM agents to safer parts of the country or outside of Ukraine to provide immediate relief.

If the conflict escalates beyond the borders of Ukraine in the coming weeks, major cities in Romania, Poland, and Bulgaria – which have the highest concentration of CXM delivery centers – could also be directly impacted.

We also envision a potential threat of cybersecurity breaches in Ukraine, inevitably causing collateral damage to its neighboring countries as well. While no one can foresee how the situation will unfold or its duration, enterprise clients must stay well informed and start devising backup scenarios and activate disaster recovery plans if needed. Although we believe the disruption will be temporary, a long-protracted war can’t be ruled out.

Alternative locations for CXM support services

Considering the uncertainty and volatility, let’s look at some viable alternate locations to help enterprises mitigate their emerging risks:

Multilingual customer support – Enterprises should consider new offshore and onshore locations to support major European languages for CXM outsourcing, as illustrated below:

Tech support – The best strategy for enterprises is keeping their complex tech-related support in-house through onshore locations. However, for simpler queries, alternative nearshore locations such as South Africa and Egypt offer similar advantages that Eastern European locations can provide at lower price points without any dip in the talent pool. Even offshore locations such as India and the Philippines are suitable alternatives to consider as long-term tech support outsourcing locations

Mitigate risks

The last two years have taught enterprises the glaring importance of risk mitigation as a strategic priority to ensure service continuity, and this year seems to be behaving no differently. Customer experience has established itself as a true differentiator for enterprises of all sizes and shapes in every industry. As such, ensuring that customer support services run unhindered is vital for enterprises to achieve their business outcomes.

Now, more than ever, diversification of service delivery locations will become increasingly relevant to counteract the rising instability that the current geopolitical tensions between Russia and Ukraine as well as similar such events could bring in the future.

While we hope that this devastating humanitarian crisis comes to an end as soon as possible, enterprises that closely re-examine their service delivery footprints and proactively mitigate their risks will be better positioned to absorb any shockwaves that could potentially arise in the coming months.

With the continuing escalating events, it is important to stay informed on the latest developments in this region. Contact us at [email protected] or [email protected] to discuss your situation and solutions.

Discover more about the impacts to the service delivery ecosystem in our LinkedIn Live event, How to Manage the Ukraine-Russia Impact on Service Delivery.

You can also keep up on the impact of service delivery from Ukraine and the CEE region in our resource center where you’ll find our consolidated coverage.

How are European Organisations Riding the Global Services Headwinds? | Webinar

March 22, 2022

ON-DEMAND WEBINAR

How are European Organisations Riding the Global Services Headwinds?

Access the on-demand webinar, which was delivered live on March 22, 2022.

Steeply climbing salaries and outsourcing rates, dwindling talent pools, and increasing customer expectations of service are causing organisations across Europe to feel the heat and break budgets when it comes to global services. Because these challenges will likely persist throughout the year, European organisations need to adjust and refresh their strategies.

Watch this on-demand webinar to discover how leading European organisations are solving global services challenges by creating solutions and adopting best practices, including:

Using impact sourcing to reach untapped and affordable talent pools in other geographies
Adjusting operating models for a higher emphasis on automation and technology to increase the productivity of existing employees
Price Benchmarking to obtain real-time and reliable data on pricing and performance metrics
Exploring alternate locations for agility

Our experts address:

The key global services challenges and best practices to solve these challenges for European organisations as they come out of the pandemic
The areas enterprises should be looking for talent

Who should attend?

CIOs
CTOs
CDOs
IT and BPO leaders
Sourcing leaders
Strategy leaders
GBS leaders

Parul Jain

Practice Director

David Rickard

Vice President

Ricky Sundrani

Vice President

Real Diversity, Equity, Inclusion, and Belonging (DEIB) in Your Supply Chain: Advancing Gender DEIB with Impact Sourcing for the Workforce of Tomorrow | Blog

March 21, 2022

Organizations that have a diversified workforce and prioritize providing opportunities to all will ultimately contribute to building a stable global economy. While gender equity and inclusion have improved over the last decades, many challenges remain, including discrimination/bias, underrepresentation in leadership levels, and lack of access to education and employment opportunities. Impact sourcing is a business imperative that will not only help companies reach new talent pools but also offer opportunities to marginalized communities and populations, especially women.

Empowering women through impact sourcing

Impact sourcing is a business practice in which companies intentionally prioritize service providers that hire and provide career development opportunities to people who otherwise have limited prospects for employment.

Companies are implementing impact sourcing models to elevate excluded groups and improve gender equality through opportunities such as training and employment in various regions, especially where educational and career opportunities are not readily available to all. By including impact sourcing initiatives, organizations can begin to embed gender-responsive and ethical procurement practices into their business models, and, ultimately, affect social-economic improvements, such as decreased poverty and increased employment rates.

A response by the approximately US$215 billion¹ global services industry to address social exclusion, impact sourcing is not a new concept but can make a significant impact. Considering that third-party services is one of the largest corporate sourcing/procurement spend categories, with companies often spending 5% of revenue on services partners, the practice has the potential to not just open up new talent pools, but also provide equal opportunities.

The gender gap in global services

According to S&P Global data, the percentage of women in the total workforce in developed and emerging markets has averaged around 35% over the past five years and has been exacerbated by the global pandemic. The proportion of women decreases progressively up the corporate ladder. However, in developed markets, the percentage of women in senior management is even lower than the number of women within boards of directors.

By investing in impact sourcing, companies can combat unequal treatment of women in the workforce with specific impact sourcing strategy goals. For instance, they can focus on closing the gender gap at the base of the issue rather than reporting on diversity indicators at the top, such as the number of women on boards or the percentage of women’s ownership. This is part of a growing movement to broaden supplier diversity to gender-responsive procurement, spearheaded by UN Women[1].

How impact sourcing aligns with the United Nations (UN) Sustainable Development Goals (SDGs)

Impact sourcing is one of the most credible and powerful ways to accomplish some of the 17 UN SDGs. As a result, it bolsters gender-responsive procurement, which is defined as the selection of services, goods, and civil works that consider their impact on gender equality and women’s empowerment.

Impact sourcing naturally aligns with UN SDGs in the following ways:

	Goal 1 – No Poverty: Impact sourcing helps provide employment opportunities to marginalized groups, contributing to reduced income distribution gaps and eradicating poverty
	Goal 4 – Quality Education: The innovation in impact sourcing includes training, accommodation, recognition of unique talents, and career counseling for youth who may not have access to higher education
	Goal 5 – Gender Equality: Putting women at the center of economies will fundamentally drive more sustainable outcomes since individuals who identify as women are increasingly becoming part of the core workforce. Organizations can become more inclusive towards women by having a rigorous impact sourcing strategy
	Goal 8 – Decent Work and Economic Growth: Employment is at the core of impact sourcing, helping organizations offer good jobs to marginalized individuals
	Goal 10 – Reduced Inequalities: Growing inequality is one of the biggest roadblocks in achieving social progress and global stability. Impact sourcing can contribute towards inclusion and equal opportunities within and among countries

With lower attrition rates and higher corresponding levels of employee engagement, which results in lower costs and higher productivity over time, impact sourcing also provides a diversified talent pool to companies.

Impact sourcing encourages companies to help underserved populations, like women, move out of poverty and transform their lives and provide for their families. Corporations can engage in inclusive hiring practices that promote equal opportunity, diversity, skill development, and equal treatment for women. A responsible hiring mechanism by organizations can effectively contribute towards increasing employment opportunities and career development for this socially impacted and vulnerable segment of society, creating meaningful change in the world and taking an impactful step in the fulfillment of the UN SDGs.

Additionally, as the LGBTQ+ community enters the workforce, organizations may expand the definition of “gender” to become more inclusive in their impact sourcing decisions.

Impact sourcing use cases with gender-specific goals

Televerde

Established as a US-based for-profit sales and marketing organization in 1994, Televerde provides on-the-job training to more than 200,000 current and formerly incarcerated women in the US. As a purpose-driven company, Televerde helps these women reintegrate back into their communities.

Televerde has a global workforce of more than 600 employees, 70 percent of whom sit behind prison walls, and about 60 percent of its staff is comprised of incarcerated women. In addition to being paid fair market hourly wages, they receive training for the required skills and can also achieve certifications in sales and marketing, while earning college credits for completing company-sponsored training programs.

Not only does the Televerde business model help these women, but it has enabled the company to generate more than US$8 billion in revenue for its clients.

In 2020, Televerde formed its non-profit unit Televerde Foundation to further empower incarcerated women and serve as a driving force to fulfill Televerde’s mission to change the lives of 10,000 disempowered people by 2030.

iMerit

A global impact sourcing specialist, iMerit was founded in 2012 in rural India to bring a diverse talent pool from underserved backgrounds into the digital workforce. Today, 52 percent of its workforce is female, and, interestingly, the company was founded by Radha Basu, a technology pioneer who rose through the ranks when very few women did. By embedding purpose objectives into its business model, the for-profit impact sourcing firm has raised US$23.5 million in funding since July 2021.

Today, iMerit employs more than 4,000 data enrichment and annotation experts in Bhutan, India, and the US. It launched one of its first all-women centers in Metiabruz, West Bengal, a region where women have traditionally lacked professional career opportunities.

Sama

A for-profit training-data company, Sama focuses on annotating data for artificial intelligence algorithms. As one of the pioneers in the impact sourcing space, it aims to reduce poverty, empower women, and mitigate climate change. The company combines its technology platform and worker training programs to increase economic opportunity for those in underserved communities.

Sama, a certified B Corporation, operates global delivery centers in Kenya and Uganda and was named one of the “Best for the World” for workers in 2021.

By 2019, Sama had helped over 50,000 people move out of poverty. Its impact was particularly strong for women during the COVID-19 pandemic, when Sama was able to create a remote working model, allowing them to continue working despite lockdown orders.

FiveS Digital

An India-based certified woman-owned business and impact sourcing company, FiveS Digital has a workforce of over 1,500 employees at seven delivery centers in India, with a presence in Europe and North America. It started as a pure-play BPO company in 2009 and has entered the digital technology services domain over the years.

FiveS Digital collaborates with several non-profit organizations and supports young professionals’ upskilling needs, especially women from Tier-2 or Tier-3 cities and rural areas. With diversity and inclusivity as one of its key focus areas, it invests in opportunities and leadership roles for women. As a result of its continued commitment and focus, it was recently certified as a Women’s Business Enterprise (WBE) by the Women’s Business Enterprise National Council (WBENC), the largest third-party certifier of women-owned and operated businesses.

Organizations are choosing suppliers that aim to help disadvantaged groups

An increasingly used type of gender-responsive procurement, impact sourcing helps organizations discover initiatives to improve gender inclusion at all levels by partnering with leading impact sourcing specialists like FiveS, Sama, iMerit, and Televerde, as well as mainstream providers.

Enterprises can make a difference by partnering with service providers that employ groups experiencing exclusion, whether as an HR practice or by subcontracting to impact sourcing specialists. As businesses increasingly reach into untapped geographies for hidden talent, they will help build a stable global economy and promote inclusivity – a true win-win scenario.

Discover more about the benefits of inclusivity in the LinkedIn Live event, Why Inclusivity is Essential in Building Your Tech Talent Workforce.

[1] https://www.unwomen.org/en/about-us/procurement/gender-responsive-procurement

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