Tag: shared services-COVID-19

The Silver Lining in the Current Crisis: Retail and CPG Global Business Services Centers Seizing Opportunity | Blog

The recent months have been challenging for retail and Consumer Product Goods (CPG) firms due to the COVID-19 outbreak, with the industry suffering from both demand and supply shocks. However, this situation is actually a blessing in disguise for many shared service centers or Global Business Services (GBS) centers, which have seized the opportunity to showcase their capabilities to adapt to newer and more agile operating models.

As we discussed in detail in an earlier blog, retail and CPG GBS centers have evolved over the years to provide support across the value chain, delivering core processes such as sales and marketing and supply chain management. And digital services increasingly core to service delivery. In fact, about 40% of all new retail and CPG GBS set-ups in the past two to three years have been centered around digital capabilities, analytics and automation technologies in particular.

Many GBS centers have gained confidence and visibility across their enterprises during these turbulent times. In one example, a CPG firm’s GBS center swiftly moved to a work-from-home delivery model, while simultaneously helping its service provider get back on its feet by supplying spare laptops and other assistance. The center also took on additional activities from other parts of the enterprise, completing complex tasks such as quarter-close and year-close using a work-from-home construct – a first for the entire enterprise.

The disruptive environment provided many retail and CPG GBS centers the opportunity to elevate the support they provide to their enterprises. We believe these GBS centers can have an impact in a variety of ways, three of which we describe below.

Retail CPG future

Strengthen support across the value chain

With the re-orientation of consumer behavior and supply chain disruptions, retail and CPG enterprises are likely to adjust several elements across the value chain – from supply chain and logistics to e-commerce architecture. GBS organizations are well placed to lead initiatives related to the revised value chain such as managing e-commerce webpage design, AI-driven customer sentiment analysis, and pricing optimization. The sharp increase in online purchasing also increases the scope of delivery opportunity in areas such as fraud detection, identification of counterfeit products, integrated cashless payment systems, and promotion management, all of which have been in nascent stages of adoption to date.

Expand digital support

In the short run, GBS centers are likely to continue to concentrate on established technologies such as analytics and automation to provide robust solutions in areas such as demand forecasting and customer retention. Supply chain analytics, for example, will become imperative for the organizations. In another example, a leading CPG company’s India-based GBS center is using advanced analytics to help its company reduce customer churn and adopt more targeted marketing practices.

Some mature retail and CPG GBS centers, as part of their longer-term strategy, are looking into technologies such as computer vision, IoT, and Augmented Reality (AR) or Virtual Reality (VR). A few large chain retailers have started to implement smart IoT-based solutions for better warehouse management, which has helped to increase staff efficiency, reduce error rates, and reduce turnaround time.

Ride the disruption wave and adopt newer operating or business models

Many GBS organizations are modifying their current workforce and governance strategies – testing virtual/remote working models as alternatives to locations/BCP strategies, deploying a wider array of metrics to measure value beyond the cost benefits, taking end-to-end responsibility for specific services or technologies/platforms (cultivating an intrapreneurial mindset), and identifying opportunities to better collaborate with external ecosystem, to name a few. We are likely to see structural and governance changes in the next 12 to 18 months as GBS organizations look to integrate better with the enterprises as strategic partners.

The virus has impacted some enterprises more than others. Based on our recent research of retail and CPG enterprises with GBS centers in offshore/nearshore locations, about 60% of retail/CPG enterprises (those that are considered “non-essential,” or are in a single retail brand) are likely to face increased cost pressures, primarily driven by industry headwinds. In the immediate term, these enterprises are likely to be more selective in terms of strategic investments, and their GBS organizations will need to be proactive in adjusting their operating models, adjusting workforce strategies, and accelerating delivery to provide higher value add.

The next 12-18 months is sure to be a turbulent – but transformational – time for GBS centers; their roles are likely to change. Keep an eye out for our upcoming report on the next wave of evolution for retail and CPG GBS for more details. And reach out to Bharath M or Samartha Agrawal if you have questions or comments.

Preparing for the Future – COVID-19 Implications for the HR function | Blog

Over the past couple of years, the HR function has experienced drastic changes, particularly in the way employees work, learn, and communicate. The pace of change has been exponential, with enterprises pushing for digitalization. However, no one would have imagined that a single global event, the COVID-19 outbreak, would accelerate one of the greatest workplace transformations of our times.

Digitalization is crucial, as it will help companies enable their internal functions with collaboration and productivity tools for employees and improve operational efficiency with agile business continuity plans.

The acceleration can be credited to the urgency to support employees working remotely so the business can run as smoothly as possible and provide a superior employee experience amidst the panic and uncertainty. With businesses struggling to survive in the face of, what is likely, one of the harshest recessions to date, it’s vital to understand the changes that will be brought about by this global pandemic. These changes will be facilitated by newer technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and automation, and force companies to rethink their existing structures and guidelines

Here’s a look at how HR needs to change to ensure a great work environment in the next normal:

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Incorporate policy changes for the next normal: With the strain of the coronavirus confining everyone to their homes, companies across the globe have mandated or are encouraging employees to work from home. And this model is expected to stay. Even after the pandemic ends and employees return to their workplaces, remote work will continue to hold significant relevance as enterprises realize its cost-benefit and commit to finding other methods to support business continuity. To ensure its success, companies will have to develop processes and inculcate policies that enable flexible working – establishing guidelines for working remotely, managing employee productivity in physical and digital workspaces, and formulating guidance for managers handling a distributed workforce. Further, the use of digital workers and bots will increase, which will, in turn, result in an urgent need to develop policies regarding cybersecurity, auditing, and redefining instances of human intervention.

Ensure undisrupted workflow: With the new and restructured workforce, companies are also looking to digitize the workplace and automating various processes and workflows to increase efficiency. Thus, HR solutions for automated employee onboarding, automated helpdesk, and productivity tools, along with communication and collaboration tools, are gaining traction in the market. For instance, the adoption of Microsoft Teams and Zoom have dramatically increased, and the uptake will continue.

Utilize the power of virtual learning: Businesses that have typically relied on face-to-face/classroom learning will have to develop a proof of concept for learning using the latest online technologies. The remote working model and increased leverage of digital technologies will also increase the need to upskill and reskill the workforce. In light of COVID-19, enterprises have become extremely cautious with their spending and are seeking cost-effective solutions for their workforces, which adds to the appeal of remote learning. To derive maximum benefit, organizations will have to look not only for relevant skills and talent but also for tools to enable smart learning, as well as enter into partnerships with traditional and non-traditional learning organizations.

Focus on health and well-being: COVID-19 has brought the importance of employee well-being, which encompasses physical, mental, and emotional health, to the forefront. The HR wellness agenda for the future will have two facets: One, the employee side, which includes tools and policies that help employees plan their day-to-day activities, particularly when working remotely and have to deal with increased stress and added concerns of changing benefits ranging from health and hazard to leave policies; and, two, the operations side, which includes tools that track employee sentiment and help improve employee support, thereby ensuring better employee engagement.

Develop new talent acquisition and workforce management practices: Every process in the acquisition value chain will be overhauled to make it more efficient – from the use of AI and Machine Learning (ML) algorithms to source and screen candidates to the use of video interviewing tools to enable remote presence, and chatbots to ensure a superior candidate experience and engagement. Following the COVID-19 crisis, the job market is also set to undergo massive changes; while the demand for some jobs will increase, the overall job market will slow. Enterprises will need to conduct powerful workforce planning to ensure their access to the right talent, and strategically structure existing talent to ensure maximum engagement and productivity.

Use analytics to track workforce- and engagement-related data: As the workforce becomes increasingly (and literally) spread out, and as new ways of working emerge, HR leaders will have to keep track of their organizations’ pulses. Efficient data collection and mining tools will be key to understanding the nature of changes. Organizations will increasingly adopt tools that track how employees work, perform, collaborate, and feel to derive insights to improve operations and engagement. These tools, along with advanced AI capabilities, will also deliver actionable insights for more informed decision-making in a shorter time.

Keep employees motivated: With increasing instances of pay cuts and the uncertainty of the current situation, enterprises are looking for effective strategies to keep their employees engaged and motivated. Deploying a robust R&R solution that quickly recognizes and rewards valuable employees for their effort and commitment to work can help organizations mitigate some of the impacts of the ongoing pandemic and the slowdown, and as a result, boost employee morale.

Emphasize on financial wellness: With the increasing number of layoffs, instances of pay cuts, and market fluctuations, financial security is a significant concern for many employees. To curb these types of fears within the workforce, companies can provide employees with financial wellness options. Features such as budget management tools, financial coaching, and financial stress management tools, as well as the offer of paid leave, on-demand paychecks, and pre-paid cards, can help during these unprecedented and trying times.

Automate tasks, humanize processes: While HR must redesign processes to make them more efficient, it is far more important to keep the employee at the center of these processes rather than the function. This crisis is an opportunity to redesign around the central stakeholder – the employee.

These strategies will help enterprises survive in the new normal while keeping their employees engaged and satisfied, whether they develop them in-house or partner with service providers to deliver them.

Is your workplace future-ready? How do you see the HR strategies transforming? Share your inputs with Priyanka Mitra.

What Next? Adjusting Your Workforce Strategies to Address Tomorrow’s Global Economy | Webinar

60-minute webinar delivered live on Tuesday, May 19, 2020 | 9 a.m. CDT, 10 a.m. EDT, 3 p.m. BST, 7:30 p.m. IST

Download and view the presentation

To say that 2020 has been a turbulent year is an understatement. While the COVID-19 pandemic continues to affect services delivery today, the resulting economic downturn will have longer-term impact. As a result, organizations like yours are rapidly refocusing, reprioritizing, and redesigning their workforce strategies.

What are the ideal approaches to reduce risks and tap into the most suited talent at the right location in the most optimal construct?

Join this webinar to hear our experts share their insights based on our research – including conversations with executives who are right in the trenches, addressing these challenges.

The webinar will help answer questions such as:

  • How has COVID-19 impacted enterprise workforce strategies to date?
  • What is the next normal for locations and delivery strategies in this unfolding economic environment? Will the balance between offshore, nearshore, and onshore change?
  • How can organizations make their Business Continuity Planning (BCP) strategies simultaneously resilient and responsive?

Who should attend and why?
This session will help leaders across organizations evaluate impact and uncover opportunities:

  • Executives of Strategic Outsourcing and Vendor Management organizations; leaders of Category Management organizations
  • Heads of the Global Business Services (GBS) / Shared Services Centers (SSCs), Senior Strategy Executives, Global Sourcing Managers

Can’t join us live? Register anyway!
All registrants will receive an email (typically within 1-2 business days of the live presentation) containing the link to the slides and on-demand playback.

Presenters
Eric Simonson
Managing Partner
Everest Group

Anurag Srivastava
Vice President
Everest Group

Parul Jain
Practice Director
Everest Group

Leveraging Tier-2 and -3 Locations to Strengthen Business Continuity Planning | Blog

It’s time for a fundamental rethink in the way companies approach their Business Continuity Planning (BCP), in general, and their locations strategy in particular. More than 70 percent of enterprises leverage only a single – usually tier-1 – location in one country for global business services delivery, according to our analysis. And even for companies that leverage tier-2/3 locations, deployment is the highest at their tier-1 location. This deployment model not only limits the full value they can achieve from location diversification, but also significantly increases their BCP risk. Let’s take a deeper look at this.

As our recent blog on unlocking value from tier-2/3 locations pointed out, with tier-1 locations fast maturing and saturating, enterprises may soon have to factor in tier-2/3 locations to minimize risk, capitalize on the cities’ advantages, and ensure business continuity. Leading co-working players are also expecting a rise in real estate demand in tier-2/3 cities, and planning to expand to these locations.

In India, in particular, a leading global services delivery location, companies that deliver Global Business Services (GBS) and have leveraged tier-2/3 locations as part of their location strategies (such as IBM and Tata Consultancy Services) have benefited significantly from a BCP standpoint by successfully diversifying their:

  • Concentration risk: Multi-city location strategies, coupled with workload flexibility across delivery centers, have helped minimize prolonged disruption during the pandemic.
  • Delivery locations risk: Tier-2/3 cities help diversify the location risk and also face lower macro-economic and political risk than tier-1 locations, which adds to their viability.
  • Functional risk: Many firms, such as Capgemini, leverage tier-2/3 locations as spoke or support centers in a hub-and-spoke delivery model network. In fact, they don’t shy away from distributing highly critical services and processes across tier-1 and -2/3 locations to reduce the functional risk.

And it’s not just the risk diversification advantage – our client interactions have revealed that leveraging tier-2/3 locations across India can help facilitate business continuity during the pandemic in the following ways:

  • The spread and impact of the virus is concentrated in major tier-1 locations, which account for ~40 percent of the total cases in India. In contrast, most tier-2/3 locations are largely unaffected, and only about 15 percent of them are classified as red zones, or areas with high active cases of COVID-19 and a high doubling rate. Thiruvananthapuram and Kochi in Kerala, Visakhapatnam in Andhra Pradesh, Bhubaneshwar in Odisha, and Trichy and Coimbatore in Tamil Nadu are some of the tier-2/3 locations designated as orange/green zones. Thus, restrictions are likely to be relaxed or lifted earlier in those areas, with a faster return to business as usual.
  • The resilience and back-to-work rate for tier-2/3 locations are higher, as they’re easier to traverse, and employees typically live near offices, unlike in most tier-1 cities, where employees typically rely on public transport to go to work
  • Most firms that operate in tier-1 locations have a considerably large pool of migrant employees who have returned to their native towns/cities in the light of the lockdown and might not be willing to return to work immediately, given the risks.

At the same time, to unlock the full scale of BCP benefits from tier-2/3 cities, firms need to ensure certain baseline factors to facilitate business delivery:

  1. They need to make sure they have ready, skilled, and trained staff for all critical processes in secondary locations, as it’s difficult to transfer employees from one city to another in the event of an emergency.
  2. They need to establish leadership representation in these locations to better govern and manage the increasing workload.
  3. They need a seamless communication system to facilitate data accessibility and transfer.
  4. They should simplify and redesign their processes to reduce handoffs, decision points of contact, and people dependence.

 

We’d love to hear about your BCP experience with tier-2/3 locations and thoughts on the viability of these locations in the coming years. You can also read our blog on “The Coming of Age of India’s Tier-2 and -3 Service Delivery Locations” to understand the key drivers and challenges inherent to tier-2/3 locations to develop your own locations strategy. Please share your inputs with us at [email protected], [email protected], or [email protected].

Will COVID-19 Amplify Acqui-hiring and Help Companies Win the War on Talent? | Blog

COVID-19 is truly turning out to be the black swan event of our lifetimes – it will have profound near- and long-term consequences on talent markets around the world. The International Monetary Fund (IMF) recently noted that COVID-19 could contract the global GDP by 3 percent in 2020, causing the GDPs of 170 countries to shrink and making it the steepest downturn since the Great Depression of the 1930s. As discussed in our recent blog, Will COVID-19 Ease the Relentless War for Talent?, talent shortages will become even more acute and the supply-demand gap for emerging skills will further widen as companies undertake rapid digital transformation and adapt to the “next normal.”

Against this backdrop, some firms are seeing this time as an opportune time to acqui-hire – or acquire startups primarily for their talent.

We have been here before. Acqui-hiring tends to spike during and after economic crises. The early 2010s saw a flurry of acquisitions by Silicon Valley giants including Facebook, Google, and Microsoft, aimed at acquiring hot skills. We believe there will be a similar acqui-hiring surge in 2020, with multiples firms announcing plans to acquire emerging skills and accelerate their efforts to build niche capabilities.

Why do companies acqui-hire?

Mark Zuckerberg once said, “Facebook has not once bought a company for the company itself. We buy companies to get excellent people.” This sentiment highlights the premium companies place on good talent. Companies acqui-hire to leverage multiple advantages such as access to highly-skilled talent, reduced time-to-hire and training efforts, developing niche capabilities, and launching a business model.

Facebook has plans to hire 10,000 additional FTEs in its product and engineering teams to tackle high utilization after the pandemic abates and to combat misinformation in advance of the U.S. presidential election in November. Amazon and Google are aggressively hiring product, design, and engineering talent. Apple CEO Tim Cook recently stated that the company plans to hire aggressively, just as it did after the 2008 financial crisis.

With multiple startups facing reduced valuations due to the economic downturn, it is highly likely that a significant chunk of this demand for talent will be addressed through focused acqui-hiring. Additionally, we expect leading Indian service provider players supporting global services delivery, like Infosys, TCS, and Wipro, to accelerate their acquisition efforts to gain strategic capabilities and grow business inorganically. And Walmart Labs has announced plans to hire over 3,000 FTEs for its India centers, aiming to strengthen its India COE by hiring new talent and acquiring relevant startups.

We are already seeing many acqui-hiring deals in 2020, a few of which we describe below. While not all were triggered by the COVID-19 aftermath, we expect the business and economic repercussions of the pandemic to accelerate this trend.

  • Google recently acqui-hired Superpod, an app that allows users to post questions and quickly receive answers from experts, to boost Google Assistant’s capabilities.
  • Tata Group-owned Titan Company, a traditional watchmaking firm, recently acqui-hired HUG Innovations to strengthen its smartwatches and wearables division, and plans to set up a development center in Hyderabad to cater to hardware, firmware, software, and cloud technology.
  • KPMG India acqui-hired Shivansh Solutions, an SAP consulting and implementation services provider, to augment its technology implementation practice, retaining Shivansh’s directors and the core team of SAP consultants.
  • Leading tech-enabled logistics marketplace, LetsTransport, recently acqui-hired and onboarded the team of a web and mobile app development startup, Pixlcoders, to strengthen its supply chain, technology, and applications divisions.
  • Alphonic Network Solutions, a leading mobile application development company, recently completed the strategic acqui-hire of Roaring Studios, a digital startup to augment its web and mobile app development.

As these deals indicate, acqui-hiring presents a great value proposition for companies to access highly motivated ready talent, augment existing offerings, and develop new capabilities. It also proves lucrative for startups, especially those that might be struggling with funding during an economic downturn. We are already seeing early signs of funding scarcity, with industry analysts reporting that total startup funding in New York City is down 48 percent from year-ago levels since the lockdown started in mid-March.

Acqui-hiring can be a win-win for everyone. However, to ensure acqui-hiring success, companies must address critical factors beyond the usual legal and contractual due diligence.

What makes acqui-hiring work?

To make acqui-hiring work, companies must:

  • Explore cost-benefit trade-offs – While multiple acqui-hire opportunities may exist in the market, assess their strategic near- and long-term priorities, and shortlist startups that align with their firms’ objectives and address crucial talent-supply demand gaps.
  • Assess culture fit –Ensure that the acqui-hired talent, who usually possess an entrepreneurial mindset with a constant need to create, has the capacity to adapt to a systemized, rules-based corporate environment.
  • Evaluate employee attitude –Make sure that the relevant skills are accompanied by the right attitude to avoid potential attitude issues.
  • Ensure smooth integration – Properly manage the integration process to eliminate in-house talent’s apprehensions about, and potential resentment toward, acqui-hired team members.

The way forward

The economic aftereffects of COVID-19 will surely create some paradoxes. While on one hand startups may be challenged and job markets ravaged, on the other hand this time could present an opportunity to re-strategize priorities, revitalize operating models, build capabilities, and acquire the right talent. We believe companies that proactively realign their workforce strategies and tactically utilize acqui-hiring will emerge stronger and more resilient.

Companies looking to acqui-hire as way to address emerging talent challenges must undertake the following steps to ensure effective outcomes:

  • Review the global workforce strategy and identify relevant talent supply-demand gaps
  • Identify and evaluate potential acqui-hire options
  • Undertake comprehensive legal and contractual due diligence
  • Develop a comprehensive roadmap for integration with the existing operating model.

We’d love to hear your thoughts on acqui-hiring as an effective talent acquisition strategy. Please share with us at: [email protected] or [email protected].

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