Tag: Service Ecosystem

Is Your Incumbent Service Ecosystem the Source for Lacking Performance Breakthroughs? | Sherpas In Blue Shirts

In three of my recent blogs, I’ve discussed the possible reasons as to why companies are only getting modest, incremental benefits from vetted, powerful new technologies such as cloud, analytics, cognitive computing and robotic process automation (RPA). These technologies should be making big differences – performance breakthroughs. As I’ve mentioned, we at Everest Group are studying this phenomenon – an important issue these days as these technologies continue to disrupt business. We’ve looked at whether the maturity of the technologies is the reason for their not delivering performance breakthroughs and whether it might be due to lack of talent. In this blog I’ll discuss the role of incumbent ecosystems as a possible culprit.

Take the situation of RPA in finance and accounting (F&A) processes as an example. It’s reasonable that, with our current state of technology and current adoption, 40 percent of the FTEs in the F&A function can and should be turned into a digital workforce. So the question is, would the current service provider resist the RPA technology because it would lose revenue (or in the case of internal services, the company would lose people and prestige)?

Let’s examine that in the most difficult situation, which is the third-party providers. If they charge on an FTE basis, as much F&A is done, why would they be reluctant to bring in the technology?

We find that today almost all new F&A bids for work have an RPA (robotic automation) component. And if you go to an Accenture or a Genpact delivery center, it’s very clear that they have an aggressive program to implement automation. So, yes, they could resist it in existing contracts (and the same could be said for internal services).

But this alone doesn’t seem to be a sufficient answer to the question of why companies are not getting performance breakthroughs. Why aren’t they getting the step change in delivery that they could be getting?

Is it a conflict of interest? No. That seems a hard argument to make because service providers are actively implementing the RPA technology.

In my next blog, the final one in this series, I’ll reveal the answer to what’s causing the phenomenon of powerful new technologies not delivering on their promise of performance breakthroughs.

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