Take a FORCEful Approach to Drive Digital Pervasiveness | Market Insights™
January 29, 2018
Take a FORCEful approach to drive digital pervasiveness
Take a FORCEful approach to drive digital pervasiveness
Leveraging digital to survive an evolving market
You might recall, back in December we identified digital agility as a key 2018 initiative. In that blog, we discussed how you can create business value by making things easy, reliable, and fast for your customers. The question I would ask GIC organizations for 2018: In realizing that goal, are you part of the problem? Or are you part of the solution?
Our research, Digital Maturity in GICs | Pinnacle Model™ Assessment 2018, seeks to answer those questions.
Most GICs started small and expanded over time as they proved their value. Now that most GICs have realized the fundamental benefits of labor savings, quality and process improvement, and – in some cases – business outcome improvement, it’s time for them to look to their next act.
Our central thesis is that a GIC can be a critical driver in building and running new digital competencies. But we want to hear from you about the functions and processes that are getting the most attention and investment. Which digital technologies are you focusing their efforts on? And what capabilities did you deploy to build out these capabilities?
There are plenty of digital surveys that you can participate in, so – why Everest Group’s? Because we take a different approach that results in more meaningful, useful outputs. Our Pinnacle Model™ approach asks questions about what the very best GICs are doing in terms of real impact and then correlate the capabilities required to achieve those results. And we go beyond the online survey, talking with some respondents to understand their journeys – what worked and what didn’t.
With that information in hand, we identify a set of Pinnacle Practices™ that you can consider deploying in your GIC.
Yes, there is a ton of hype around digital; let’s get beyond the headlines and talk outcomes and practices in your GIC.
The shift towards a “digital-first model,” in the wake of technology-led disruption, has given GICs an opportunity to become strategic entities that can drive innovation across the enterprise, instead of an arbitrage-first-oriented low-cost set-up delivering back- / middle- office services at scale. A very positive move for GICs and the enterprises they support.
Robotic Process Automation (RPA), among other digital technologies, is gaining popularity across enterprises and GICs thanks to its many business benefits. And enterprises are increasingly leveraging their GICs to drive RPA usage. This is largely driven by factors such as GICs’ tighter integration with the core business, increased endorsement from the enterprise, shift toward insourcing, higher visibility to enterprise leadership, lower costs, and availability of talent.
So what factors enable best-in-class GICs to drive RPA programs successfully? We’ve identified eight:
Successful GICs, through dedicated RPA CoEs, have gone beyond exploring RPA technology for in-house consumption. From educating various stakeholders across the enterprise on capabilities and benefits of the technology, to executing RPA solutions across functions and locations, these CoEs are playing a key role in transforming processes across the enterprise. CoEs in best-in-class GICs have gone a notch higher, and are focusing on creating an ecosystem that enables businesses to independently explore RPA opportunities.
While GICs are well positioned to drive RPA across the enterprise, successful implementation requires dedicated focus on factors including governance and business continuity. They must also be on the lookout for advanced technologies, such as AI and cognitive, that can augment existing RPA technology and enhance overall automation business benefits.
To learn more about the best practices employed by best-in-class GIC adopters of RPA, please read our recently published report, “RPA Implementation in GICs – Learnings and Best Practices.” We developed it based on interactions with 100+ global enterprises’ GICs and a range of automation technology vendors.
If you are driving RPA from your GIC, I’d love to hear your story. Feel free to share your opinions and stories on how your GIC is evolving in its RPA journey directly with me at [email protected].
And/or, join in on our research on how enterprises design their GIC journeys to drive their enterprises’ digital agendas. Click here to take the survey; responses will, of course, remain anonymous.
Service delivery automation (SDA) continues to gain favor, as it promises not only cost savings, but also reduced errors, faster operations, and 24X7 coverage.
But, while SDA offers significant benefits to Global In-house Centers (GICs) and services providers, it also brings a whole new set of challenges.
The GIC model has evolved significantly over the last decade, and is gearing up for the third wave of evolution – GIC 3.0, as some are calling it – driven by GICs’ strong desire to move away from the “arbitrage-first” delivery model towards a “digital-first” model.
Everest Group describes the journey to mature GICs as progressing through four different stages.
Our research shows that best-in-class – or Stage 4 – GICs deliver up to six to eight times incremental value beyond arbitrage. Yet, while many of our engagements over the last few years have made it clear that most Global 1,000 GICs deliver value beyond arbitrage, very few track and measure their impact. When they do, it’s typically in a piecemeal, selective manner. Thus, their parent perceives that they are delivering limited business value, beyond arbitrage, to the enterprise.
By educating their parent on their impact, GICs can improve their credibility, and build a case to secure support for expanding their role.
We believe that putting a dollar number to the business impact is the most objective and effective way for GICs to showcase their true worth. The framework we use maps value drivers linked to savings, risk, and revenue, quantifying all forms of impact created by the GIC.
Here’s an example: a U.S. company’s GIC was able to prove to its parent that it delivered US$20 to 22 million in overall business impact, compared to incremental cost arbitrage of US$4 to 6 million, through increased effectiveness, greater efficiency, and revenue growth. This helped the GIC secure the parent’s buy-in on increasing the scope of functions currently delivered out of their GIC.
A comprehensive quantification facilitates measuring the overall business impact across businesses/LOBs supported by the GIC. A GIC can use these results to:
Contact us about Everest Group’s business impact quantification framework, and learn more about our research on in-house delivery models.
Best-in-class GICs deliver 6-8X incremental business impact through arbitrage, cost improvement, risk reduction, and revenue increase.
Key characteristics in 2016: increasing share of technology services and adoption to verticals beyond BFSI and technology; more setups in Nearshore Europe
While GIC activity declined marginally in 2016, a couple of key factors are presenting ongoing opportunity: demand for digital transformation and benefits beyond cost savings
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