Tag: service providers-COVID-19

How the COVID-19 Pandemic is Impacting Pharma Sales Interactions with Healthcare Providers | Blog

With the world facing an unprecedented health crisis, one group shouldering the brunt of the challenge is our healthcare workers, who are battling the threat from the front lines. Under the circumstances, their interactions with pharma sales representatives have naturally taken a back seat, with many healthcare providers closing down access. This reality is accelerating pharma firms’ shift toward a virtual sales organization, and not only for the short term.

The amount of time, access, and influence hospitals have been willing to grant pharma sales reps has been dropping for quite some time now, and face-to-face engagements have declined significantly over the years. According to a survey from DRG’s 2019 annual ePharma Physician Report, 54 percent of physician respondents said they saw pharma reps in person in 2019, down from 67 percent in 2018.

DRG ePharma Physician Report 2019 – % of physician respondents on pharma rep interactions11 1

Source: ePharmaPhysician® US 2019

Today, given the COVID-19 pandemic, healthcare providers, including hospitals and clinics, are increasingly refusing in-person visits from pharma sales reps, and pharma companies such as Biogen and Global Blood Therapeutics have themselves suspended face-to-face meetings. In turn, virtual interactions between reps and healthcare providers are increasing, with BMS, GSK, Pfizer, and Sanofi – to name a few – scaling up the use of remote technology to ensure continued engagement with healthcare professionals. We expect this progress to continue even after the pandemic’s threat has abated.

However, not all pharma firms are well equipped for this shift; there’s a wide degree of variance when it comes to the maturity of their virtual healthcare provider engagement capabilities. Not surprisingly, the many digital solutions that exist in the current market can help them. Several software vendors and IT services providers have developed innovative CRM solutions, such as around personalized engagement, interactive detailing, and live video through intuitive mobile apps and web portals, in order to effectively engage healthcare providers virtually.

In response to the crisis, many vendors have recently begun to enhance product functionality. For instance, Veeva recently introduced new capabilities for remote drug sampling in Veeva CRM Engage Meeting. The company also announced several alliances for digital field engagement.

Yet, going forward, getting virtual sales right could be a major deciding factor for whether or not pharma firms are able to convert extensive R&D efforts and patent wins into commercially successful therapies.

Here are our suggestions on how pharma firms can successfully pivot to a virtual sales :

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  • Realign budgets Drive C-suite endorsement of initiatives whose goal is improving virtual engagement with healthcare practitioners. Money saved on aspects such as travel and organizing marketing conferences/gatherings should be diverted to investments in IT and content creation.
  • Engage technology partners to have the right solutions in place Assess the landscape of solutions from Independent Software Vendors (ISVs) and IT services providers. Look for verticalized CRM solutions meant particularly for healthcare provider engagement. Prioritize quickly implementable and scalable solutions that give the assurance of little downtime and offer omni-channel (email, web, mobile, etc.) and personalized engagement.
  • Create compelling content Rethink marketing strategies. Content delivered virtually needs to be all the more engaging, detailed, and easy to consume. Such content could include live videos, webinars, intuitive brochures, and web/mobile portals. Generating personalized content can improve conversion rates. Finally, content needs to be such that healthcare providers can consume it in their own time and follow up on as needed, minimizing the need for live interactions.
  • Train representatives to effectively engage and deliver information in virtual settings Facilitate a cultural shift in sales operations from being in-person to virtual through dedicated training programs. Representatives need to utilize the time saved on travel to draft strategies for more engaging interactions. They also need to be trained on using specific technology tools for provider engagement.

While healthcare workers are bound to be overburdened and under tremendous stress in these times, this is also a tough time for pharma sales representatives. Assertive sales behavior might come across as being insensitive, but at the same time, healthcare practitioners need to be kept aware of new therapies for ailments apart from COVID-19. Shifting to a virtual model represents a huge change. Engaging with empathy and showing flexibility in working around physician schedules will be paramount in the near term, as pharma enterprises come to grips with what could potentially be a new, or next, normal.

 

How COVID-19 Will Impact IT Services in the Banking and Financial Services (BFS) Industry | Blog

The BFS industry started 2020 in a cautiously optimistic mood, hoping for a rebound in global economic growth. But then the COVID-19 outbreak swept the world into a state of emergency. The current challenge is far greater for BFS firms than was the Great Recession, as they need to crack the code of how to deal swiftly with both demand- and supply-side shocks. In this scenario, banks face a dual mandate of:

  1. Playing a central role in stabilizing the economy
  2. Ensuring business continuity to maintain normal operations

Breaking down the impact of COVID-19 on the BFS IT services market

To illustrate the variation in pandemic impact across different BFS lines of business (LoBs), we analyzed the severity of impact and speed of recovery for each line. Our assessment of severity of impact involved modeling factors such as the COVID-19 revenue and profitability impact from both a near-term (3-6 months) and a medium-term (6-12 months) perspective. We gave more weight to the medium-term impact as the near-term uncertainty makes the modeling of impact very difficult.

And we mapped impact severity against the speed of recovery by gauging the time it will take for these LoBs to bounce back to the pre-crisis state; this is a function of the health of these business segments before the crisis, as well as expected changes in customer sentiment and buying behavior once the crisis is over.

Our analysis found that BFS LoBs cluster in four zones, each of which exhibits unique characteristics and will face a distinct set of technology and IT services implications. Taking it counterclockwise from the bottom right quadrant:

  1. Aggressive cost take out – Lying on the bottom right, the LoBs in this zone will face the highest degree of impact; we also expect their pace of recovery to be painfully slow. To aid in their recovery, these LoBs should rethink their operating models and get back to basic principles: focus on the core business of provisioning financial services, think of delivering more value to customers, and move away from non-core elements like engineering or IT services innovation.We expect to see heightened asset-heavy deal activity in this segment, as these LoBs will need cash to invest and rejuvenate growth in select focus segments. And they’ll be looking for financial engineering support through activities such as takeover of legacy assets, shared services carve-outs, and even signing of long-term integrated technology plus operations support engagements that are centered around specific business outcomes.
  2. Modernization –This zone at the top right comprises LoBs that we expect to rebound faster to pre-crisis growth levels. From an IT services standpoint, we expect these LoBs to focus on cost savings in the near-term by seeking price cuts on rate cards and pausing some change initiatives. However, soon enough, these segments will get back to modernization initiatives. Hybrid cloud will play a critical role, as these LoBs will place significant emphasis on digital enablement to fuel their long-term growth.
  3. Growth – Odd as this may sound, we expect these business segments to benefit from the crisis in the near term. For example, as governments across multiple geographies have announced relief packages for small businesses that are facing unprecedented economic disruption, banks are needed to facilitate these SBA loans. Financial services firms that have proactively invested in creating a scalable infrastructure and stronger business continuity plans are better positioned to take advantage of this opportunity by generating significant fee income. Enterprises with large LoBs in this zone will also be on the lookout for inorganic expansion and take advantage of the reduced evaluations. Enhancing customer experience, driving product innovation, and improving agility to quickly respond to market demands will be the key investment themes.
  4. Transformation – This zone comprises LoBs that will recover most slowly from this crisis. Hence, these business segments need to rethink their business models and diversify their revenue mix to sustain themselves in the long term. For instance, retail/consumer transaction banking will face profitability challenges due to reliance on interest-based income, and some of the fee-based commoditized businesses, like retail wealth management, have been under stress due to downward fee pressures. As a result, enterprises with large LoBs in this zone will look to transform themselves and invest from a long-term growth perspective.

 

COVID 19 impact vs. response matrix across BFS lines of businesses

Implications for BFS enterprises

At an industry level, we expect BFS firms to completely focus on running the business initiatives in the near term. Our research suggests that banks have put nearly 60 percent of change projects on hold. Most of these suspensions are temporary and will restart once the crisis abates; however, we believe that the prioritization and nature of these change projects will mutate due to a shift in business priorities and budgets.

As an immediate response to the current situation, designing and executing customer assistance programs should be the top priority for BFS firms. In the medium term, the firms’ focus should gradually shift to modernization of legacy systems that slowed down banks’ agility and ability to respond to this crisis. Post COVID-19, BFS firms will need to reimagine their products, pricing, and channel strategies to fulfill evolved customers’ expectations.

Our recommendation for BFS enterprises is to cautiously evaluate their exposure across each of their LoBs and carve out a holistic IT strategy that takes into account not only the near-term implications, but also their long-term business philosophy.

Please share your views on the impact of COVID-19 on the BFS industry segments with us at [email protected] and [email protected].

Redefining the Status Quo: The IT-BPM Industry Post-COVID | Webinar

This webinar is hosted by IBPAP (IT and Business Process Association of the Philippines). Attendance is by invitation only. 

The spread of COVID-19 has wreaked major havoc across nations, people, and businesses, and disrupted the global IT-BPM industry. In this webinar, industry experts from Everest Group will discuss the impact of COVID-19 and the economic recession on the global IT-BPM industry, the outlook going forward, opportunity areas, and action steps that can help IT-BPM players better prepare for the future, followed by an open discussion in which IT-BPM leaders from the Philippines can ask questions and share perspectives.

When

April 29, 12:30-1:30 PM IST

Presenters

H. Karthik
Partner
Everest Group

Prashray Kala
Vice President
Everest Group

Are IT Buyers Pushing for Discounts Due to the Pandemic?

Not surprisingly, we’ve been flooded with questions about the implications of COVID-19 on the IT services industry over the past two months.

Let’s take a look at the two most prevalent questions.

How are IT contracts being impacted?

Financial distress – such as a dip in revenue generation and restricted cash flow – is forcing enterprise IT to review their IT contracts. Clients are exploring three options:

  • Putting non-critical projects on hold
  • Deferring payments to keep critical projects running
  • Seeking discounts

Their preferred option is putting non-critical projects on hold. Clients are triaging to keep their business-critical functions – like transactions systems, call centers, datacenters, and supply chain systems – running. However, they’re putting non-critical engagements, such as new application development and feature upgrades, on the back burner.

Second in order of priority is deferring payments. We’re seeing deferral requests increase in frequency, especially in distressed industries such as travel, transportation, hospitality, and medical devices. And we’ve seen payment terms going up to 180 days in a few situations. However, an early trend that will soon establish itself as the IT industry norm is balance sheet (or cash pile) financing; vendor balance sheets have started to play a role in enabling billing deferrals and “deploy now pay later” models. For example, Cisco has set up a US $2.5 billion war chest leveraging its balance sheet to help some of its clients defer payments until 2021.

Our analysis shows that vendor balance sheets, both tech products and IT, are healthy. For example:

  • IT vendors’ (HCL, Infosys, TCS, Wipro, etc.) balance sheet assets over liabilities ratio ranges from 1.3x to 3.5x
  • Tech vendors’ (Adobe, Amazon, Microsoft, Oracle, etc.) balance sheet assets over liabilities ratio ranges from 1.1x to 3.4x.

And there is evidence that they may dip into them to help their clients out.

The third in priority is seeking discounts. We’re seeing anecdotal evidence of clients seeking discounts on contract value and in a few cases extending up to 50 percent of the annual contract value. But to clarify and qualify this:

  • The discount discussions are largely focused on time and materials (T&M) projects. Few are around fixed price and managed service engagements, which form a larger share of revenue profile for large IT vendors
  • And this means that smaller IT and staffing vendors – for which T&M constitutes larger share of the revenue profile – are going to be impacted more than the large IT vendors

Most importantly, we’ve seen enterprises being very flexible and collaborative with their vendors – working closely with them to keep initiatives running.

How will enterprises prioritize and fund IT initiatives during this crisis?

Enterprises are currently preparing their playbooks to navigate the ongoing recession. It’s important to note that recession does not mean that IT initiatives will be broadly deprioritized. Depending on the impact they see on their overall business and their anticipation of recovery, enterprise executives will triage their resources (cash, talent, vendors) to keep critical initiatives running.

Here’s a look at the framework we’re using to help buy-side clients prioritize their decisions:

  • Rescue business critical initiatives most severely impacted by the recession through financial engineering and aggressive cost takeout
  • Revitalize revenue-generating business functions that can gain from automation usage and cloud-driven agility
  • Reinforce the lowest impact portions of the revenue profile through M&A and product launches
  • Restructure those portions of the portfolio – such as vendors, locations, and talent – that already had redundancy and concentration risk issues

Portfolio approach by enterprises

In the coming weeks, enterprises will be using this framework to:

  • Triage between critical and non-critical IT spends
  • Build their blueprints for how they will reallocate budgets and engage with vendors
  • Identify new scope and financial models on which they’ll engage their vendors

Watch this space to see how this playbook evolves. If you have any questions or ideas on other approaches, please write to me at [email protected].

Will COVID-19 Ease the Relentless War for Talent? | Blog

While some people in the global services industry think that large scale unemployment and the slowdown in growth due to the COVID-19 pandemic may reduce the talent demand-supply gap, we wholeheartedly disagree. Indeed, we believe that strategic workforce planning has become even more critical for the global services industry.

Here are four reasons why organizations need to accelerate their workforce initiatives right now.

Talent shortages will become acute

A survey we conducted in early 2020 found that, even before the COVID-19 crisis, 86 percent of enterprises considered the talent shortage a key barrier to achieving business outcomes. This situation will further exacerbate. It’s true that the impending economic downturn could lead to even more unemployment and oversupply in the talent market. However, the available skills profiles may not necessarily match organizations’ current and future requirements, especially because highly skilled talent is expected to be retained even during downsizing. Increasing focus on automation and digital transformation will further widen the demand-supply gap for skills, making it difficult for organizations to source suitable skills internally or in the open market. The prevailing circumstances (e.g., the lockdown, financial distress, and health issues) may impact overall talent employability in the open market, further compounding the talent availability issue.

Rapid digital transformation is inevitable, and it will intensify the demand-supply gap

COVID-19 has accelerated digital transformation across organizations. It has not only reinforced the utility of tech-enabled platforms and advanced automation for seamless service delivery during mandatory Work-From-Home (WFH) protocols, but also enabled organizations to react to the evolving business environment and customer needs faster. The impending budget cliff and business model changes will further push organizations to prioritize digital transformation, which will have implications on the talent needed both to drive this change and to deliver services after transformation. Demand for emerging skills will spike even faster, again creating the need for reskilling, alternative talent models, and productivity enhancement. We are already seeing a spike in hiring by companies like Amazon and Google. Some firms are seeing this as an opportune time to acqui-hire – or acquire startups primarily for their talent. Leading global banks, healthcare firms, and manufacturing firms are rethinking their talent strategies.

Supposedly foolproof location and BCP strategies did not work in the face of this pandemic

COVID-19 has exposed key issues with enterprises’ and service providers’ existing locations strategy and Business Continuity Planning (BCP) approaches. Nearly three-quarters of enterprises that have offshore/nearshore GBS centers operate in only one location. Even enterprises with multiple GBS centers have a high concentration of talent in their largest center. Others have developed centers of excellence with large portions of their workforce for a specific function consolidated in a few locations. Less than 10 percent of GBS centers were truly prepared for a seamless WFH model. Companies will need to re-evaluate their redundancy matrices and location/portfolio mixes to achieve a more robust BCP. Some seemingly obvious responses to locations portfolio questions may not apply anymore.

WFH is here-to-stay

A 2017-18 survey by the Bureau of Labor Statistics revealed that nearly 30 percent of the American workforce could work remotely. The extended lockdown in the near term and a high utilization, once the COVID-19 crisis has abated, will likely make WFH an integral component of the overall service delivery model. This change will have significant talent implications – motivation, employee engagement, performance metrics, reporting metrics, communication protocols, and collaboration – which organizations will need to proactively address to optimize productivity and enhance output.

COVID-19 has precipitated a fundamental shift in the way we work. There are underlying opportunities for enterprises and service providers that proactively adapt to the new normal. We believe there are four immediate steps that enterprises must take:

  • Review your enterprise global workforce strategy
  • Develop a roadmap for skills development initiatives
  • Review your locations portfolios and BCP strategy
  • Build a playbook for integrating WFH and crowdsourcing into your services delivery models

We’d love to hear your thoughts on how the COVID-19 pandemic is impacting talent strategies. Please share with us at: [email protected], [email protected], or [email protected].

Cognizant Withdraws FY20 Guidance, Draws on Credit Line to Boost Financial Flexibility | In the News

Bengaluru/Mumbai: Cognizant will miss the top end of its first-quarter revenue outlook and the IT services firm withdrew its full-year guidance, as the Covid-19 pandemic takes a toll on its business. The company also drew down on $1.74 billion in debt to boost its financial flexibility and has stopped share buyback.

“The major concern is the longer lasting impact or the tail, we can be certain that there will be a tail however, so much depends on how quickly the global economy recovers,” said Peter Bendor-Samuel, the chief executive of US-based IT advisory and research firm Everest Group.

Read more in Economic Times

IT/BPM Services Biz to Slow to 4-6%: Everest Group | In the News

US IT research and advisory Everest Group said the global services revenue (excluding the domestic market) is expected to touch $221-$226 billion in 2020, growing at 4%-6%, the slowest in the last five years exacerbated by slowdown due to the coronavirus outbreak and the likelihood of many economies slipping into recession. The growth was 5-7% in 2019, and 6-8% in 2018.

Read more in TOI

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