According to Chris Smith, Zoom’s strategy lead, “We needed a partner which enjoys huge value from its deep client interactions, and we’re delighted HFS is willing to trial this and write about its experiences with its huge community of business leaders.”
While this seems like a good idea in principle, there is some concern that some executives will feel like their civil liberties are being taken away, however, HFS CEO Phil Fersht is confident the joint venture will be a success. “Taking away your mute button isn’t like being forced to wear a mask. It’s about being able to express yourself without the temptation to hide behind that little button. Am pretty confident most people will see it that way and join us on our mission to end the mute frustration.”
HFS chose to work with Zoom over Microsoft Teams, as the analyst firm leadership felt people would be more confident to lose the mute button having the benefit of Zoom’s “touch up my appearance” feature. “When my face is free from blemishes and the effects of last night’s vodka martinis, I am much happier for people to enjoy the sound of my emancipated voice with my gorgeous face”, said an HFS analyst who preferred to remain anonymous.
HFS principal analyst for employee experience, Will Rock, is not quite as bullish about the joint venture, “Sometimes my boss just gets a bit too carried away with himself. Taking away one’s mute button is like taking away their freedom. But we might as well go along with it as Zoom sent us all these really cool Yeti mugs”.
With SAP squarely in its rearview mirror, Celonis’s PAFNow acquisition sets it up to tap an even bigger enterprise technology ecosystem, Microsoft
One-time HFS One Office Hot Vendor Celonis has acquiredProcess Analytics Factory in a $100m cash and stock deal in a move that takes Celonis deep into serving Microsoft Power users. The software unicorn is already moving very quickly to integrate PAFnow’s technology with Celonis EMS, so this isn’t a case of buying and killing off competition or leaving it to run independently. Moreover Celonis and PAF come from German process engineering and analytics roots, so their respective DNA will likely blend well to form a process analytics powerhouse.
Didn’t Celonis already do all this process mining stuff? Why acquire a much smaller competitor?
PAFnow was founded in 2014 and is based in Darmstadt, Germany. It claims to be a disruptor in the process mining market with unique recognition for innovation through both state and federal grants over the years. PAFnow has a process mining product that is embedded in Microsoft Power BI, and it automatically learns how your business processes work, detecting any hidden deviations. In March 2019, PAFnow became available free of charge for all Microsoft Power BI users worldwide.
In our Process Intelligence Products Top 10 (see rankings below), we found that PAFnow customers clearly loved its ability to natively hook into PowerBI and the Power platform, and be up and running in weeks. A PAFnow client that is a German multinational automotive corporation shared with us their experience working with the company, “The combination of BI and process mining is the key driver. if we do projects, 80% of clients are interested in simple KPIs and numbers. if they figure out something wrong, they want deep dives, diagnostics, and figure out root causes. We can use process mining fantastically there. With other process mining tools that are also used in our company, we don’t have options to create BI dashboards. For us, that combination is the key driver.”
Natively hooking into a business intelligence platform like Power BI is a strong enough motivation to get started with PAFnow, as most process mining users need strong data visualization to understand the insights coming out of system log data analysis. However, the fact that Power BI is part of the Microsoft ecosystem is where the magic happens, for clients, and certainly for Celonis. The automotive client, for example, shared “The ecosystem they [Microsoft] built around PowerBI, like Powerapps and UIflows, most of which comes for free, makes it very interesting. We initially thought RPA would be a very big use case, but there is so much potential for [data and process] transparency, RPA is something smaller in efficiency potential. If you work with SAP processes, you could introduce simple RPA for automating order purchases, sure. But not that much for us… However, I know with UI flows, options of automating processes with Power BI and process mining as the backbone is possible within Microsoft.”
What can clients expect? A faster way to get going on process intelligence – and beyond
Many organizations in our research have shared that their process mining projects have stalled due to challenges with getting access to system data and data integration across multiple ERPs and tech platforms. Data security, risk and compliance, and cloud concerns have held back potential process mining projects for many clients. PAFnow shone in those scenarios, not least also sidestepping tedious procurement processes by being available for free directly through PowerBI. Now the ability to use Celonis’ underlying process mining engine, and eventually EMS’ process orchestration capability through Microsoft opens up the possibilities for enterprises that are already invested in the MS ecosystem and want a rapid solution.
The “Celonis Experience”, coming soon to a platform near you
The plan for Celonis is to integrate Celonis Execution Management Suite with Microsoft Power BI reporting, collaborate with Microsoft Teams, and trigger flows in Microsoft Power Automate. Yet, the proof here will be in the pudding. There is still a big chasm to progress from all those disparate insights to actionable insights to ultimately automation. At the same time, these insights need to be transferable between different domains and functions. Only this way will organizations progress toward the OneOffice.
It is within this context that we see automation and process intelligence capabilities moving into ISV ecosystems. But make no mistake, ISVs are not entering those markets, rather they expand their platform capabilities. Thus, from SAP to ServiceNow and now Microsoft, Celonis is getting closer to where work gets done, rather than just providing static data and insights – this was also our initial hypothesis when EMS first came out. All while steering clear of RPA. The ‘Celonis Experience’ as the vendor calls it is envisioning being the intelligence layer or ‘brain’ underneath major enterprise tech platforms… Salesforce is likely in the works, for example. SI partnerships are starting to follow this dynamic too, such as IBM’s Intelligent Workflows technology-enabled solution featuring Celonis EMS under the hood for process insights.
Yet, there is another take on this expansion of capabilities. Celonis is positioning itself more and more as an automation company rather than a process intelligence. The likely focus of this positioning are possible investors who see more value in end-to-end solutions. Tellingly after Celonis announced its partnership with ServiceNow, the latter CEO Bill McDermott started to talk up automation as the next addressable market in earning calls. His vision is leveraging Celonis as an X-ray to capture process variants and challenges as well as to stream operational telemetry data. So that the ServiceNow platform can capture those inputs to design workflows in the cloud and ultimately offer actions and automation. The Holy Grail is to progress to actionable insights not just vast repositories of data.
The Bottomline: Celonis has opened itself up as the leading multi-environment process intelligence platform
Celonis’ next round of growth is going to look very different from its past, and it’s all about close integration with major enterprise tech darlings. The next frontier is about demonstrating actionable insights and automation on those inputs. Celonis just added another ecosystem where it can do exactly that.
Rewind exactly two years… we were shutting down the civilized world so quickly we could barely process what was happening to our lives, our families, our children, our jobs – even our pets. There was this eerie week where many of us just carried on as normal as the realization sank in that our world was changing dramatically, and nothing would be quite the same again.
This is the calm before the storm
Just as we’re peering out of our caves and rubbing our bleary eyes at a world recovering from a two-year pandemic… a world with the most vibrant investment climate ever, people gleefully hopping employers for salaries they had never dared even dream about, companies making stacks of money which they barely know what do to with… and all we were worried about was a bit of wage inflation and our pathetic attempts to combat carbon emissions. Suddenly everything has changed again… and changed very differently.
The reality
Firstly, we’re not going to predict how this ends. Noone can. But we can draw up scenarios of what will happen to the world and our industry as the reality of what is happening sets in:
The global economy will hurt, and IT and business services are caught right in the mix. There is no way around this. The question is to what extent, but the prospect of a looming energy crisis, a humanitarian crisis, great uncertainty, rising inflation, and a crashing Russian economy will significantly reverse the rampant growth that emerged from the pandemic recovery.
Wage inflation + attrition + economic tightening is already putting huge pressure on services firms. Some will struggle to survive this. Demand for immediate support for all types of IT and business support services is higher than ever, with the hurry to the cloud the desperation to modernize systems to remain effective in the virtual economy. As if this wasn’t challenging enough, throw in the uncertainty of military conflict in Ukraine and neighboring states, which fuel the continuity of European enterprises. The cost and capability to execute basic services are being challenged like never before.
Enterprise clients of services will struggle to meet rising prices. The services industry has done a fantastic job keeping services pricing steady over the last couple of decades. Whatever hardships arose – such as the 2008 crash, wage inflation in critical service delivery locations such as India, Philippines, and Central/Eastern Europe – these have always been offset by increases in delivery efficiencies, automation of IT and business services, and advancements in technologies such as conversation AI and smart tools that convert analog activities, processes, documents, etc. into digital formats. However, the rising cost of services is driving service providers to increase prices to stay profitable, and many enterprise clients will struggle to meet these increases. The services industry has reached a dangerous tipping point between cost-effective delivery and simply becoming an unattractive proposition for clients.
Many industries are highly vulnerable to high energy prices. Industry sectors such as industrials, infrastructure, automotive manufacturing, telecommunications, real estate development, and public sector financial services will experience margin pressures like never before due to the looming energy prices. Combine this with the painful impacts from the Chinese slowdown, the fallout from the Ukraine crisis, unpredictable supply chain disruption, and rising stagflation in the US and Europe, their ability to meet the rising prices of IT and business services critical to keep them functioning in the virtual economy will be severely tested. Companies like BP, Shell, Equinor ASA, Nestle, Bunge, Imperial Tobacco, Volvo, Daimler Truck, Renault, and VW are just examples of enterprises strongly impacted by their ties and investments in Russia and Ukraine. Sectors that are less vulnerable are private banks, consumer staples, pharma, healthcare, utilities, upstream oil and gas, and IT.
Many new services engagements will be delayed as many enterprises absorb this new reality. We are already seeing hesitancy from enterprise leaders in signing new services deals until they have a clearer picture of the landscape, their own financial position, and the selection of locations and partners to deliver the work. While we came into this year expecting a further 10% increase in IT and business services spending, we think this will shrink to something closer to 5% amidst the uncertainty.
The Bottom-line: This completely unnecessary and bloody mess that Russia has created by invading Ukraine will likely have a crippling effect on Ukraine’s emergence as a technology hub and a rippling effect on global technology and business services.
Debilitating Ukraine’s software engineering talent. Ukraine’s IT services exports accounted for nearly US$5B, higher than its income from wheat exports, Ukraine’s #1 export category before Russia decided to invade. Now the entire country and its thousands of software engineers face an uncertain future, literally not knowing whether they’ll live to see another day. Global software engineering firms like EPAM and Luxoft (now part of DXC) have thousands of talented Ukrainian engineers…but at this time, we can just wish and pray for their safety. We have been talking daily with many Ukrainian tech professionals who have stable satellite internet access and are determined to keep doing their work.
Perception of Eastern Europe as a delivery hub is fragile. Depending on how long and widespread this war gets, western multinationals are likely to get nervous about their Eastern European delivery centers that border Russia and Ukraine, i.e., Romania, Hungary, Slovakia, Poland, and Belarus. The threat of war might stall new decisions to outsource to these countries and/or expand captive centers. This could be of significant benefit to India and the Philippines, the two global offshore regions with the strongest “talent at scale” reputations.
Be prepared for some tense conversations with your service providers. The concerns in Europe might shift more work towards offshore locations such as India, but that will likely result in exacerbation of the talent supply issues amid increasing wage inflation and never seen before attrition levels. Service providers are already struggling to keep their operating margins in line with shareholder expectations. This will mean price increases that they will need to pass to unwilling customers dealing with an inflationary economy.
Dealing with the situation might force a pause on long-term enterprise innovation. Enterprises saw light at the end of the Covid tunnel, but this war complicates things even more. Rising oil prices from Russian sanctions will further drive inflationary pressures across the western hemisphere. Will this push enterprises to focus on operational cost reduction to save CAPEX? This might mean a slowdown in large-scale innovative initiatives (perceived to be risky), but a pick-up in short-term tried and tested (read commoditized) services. For instance, we were finally seeing a positive movement towards real investments around sustainability, but will this war force us to forget climate change for some time?
Another test for battered supply chains. The covid-impacted supply chains will also be tested once more. Russia is not only an oil country but also exports iron, steel, aluminum, copper – raw materials for many goods-producing industries. Investments in making supply chains resilient will likely continue might even see an even higher uptick given the unrelenting pressure on supply chains.
A major test for the virtual economy as we deal with uncertainty. The last two years have seen the true birth of the global virtual economy, where location becomes irrelevant for so many situations, including service delivery. The hurry to the cloud is fuelled by this new virtualization of business, and most companies are barely two-thirds of the way there. What we didn’t account for was a military conflict in a location such as Europe, and how this could destabilize everything. Stock markets held up during Covid as we were able to factor in the impact of the pandemic and eventual return to normality. However, military and geopolitical issues, where the very energy that keeps industries running is in question, which creates nothing but uncertainty
Let’s begin with the last question in our discussion with Kenneth Barry, Partner in Infosys’ Global Consulting Practice and Co-Executive Sponsor of the iBelieve Black Employee Resource Group. We asked: “In a few years, where do you want to see the state of diversity and inclusion in the tech and business services industry?”
His very clear answer sits firmly at the intersection of business and technology, traces its roots back to the start of his collegiate years, and is a common thread through his career, in which he’s helped establish diversity councils and black employee resource groups: “What I want is this not to be a conversation. I want it just to be the way we operate.”
So, let’s see how change is happening and what we can do to be a part of it in this industry. Here are seven takeaways from the discussion. You can watch the full Videocast available above.
1. Embrace the continuous evolution of culture.
There is a constant evolution of culture. All you have to do is play a favorite movie from your teenage years to realize the cultural norms of yesteryear have indeed progressed, or in tech terms – we have hopefully moved beyond the legacy. The goals and objectives of a diversity and inclusion initiative that may have started a decade ago are very different than what you would need right now. We must embrace being open to continuous cultural change.
2. Drive culture, not just statistics.
When an inclusive mindset is embedded in the culture, the makeup of the organization naturally becomes more diverse. Ken says it’s important to think less about ticking boxes across diversity metrics and more about an underlying cultural shift “that allows for a balanced, diverse workforce to make contributions at all levels of the organization.”
Ken continues, “Many times we don’t have employees that feel they can truly give 100%. They keep a portion of themselves back because they don’t feel they’re being truly embraced, and what I’m trying to do is create a playing field where everybody can be 100%.” The cultural imperative has to come first.
3. Look at the power centers.
According to the 2021 Bersin Diversity, Equity, and Inclusion study, it is not the diversity and inclusion programs that enable the most change, it’s the commitment in the business strategy itself. The power centers drive that sea change, so in looking beyond statistics again, what do you see across the spectrum of diversity represented in the board and the real decision-makers? Defining the strategy is both an immense responsibility and opportunity, according to Ken, “that makes a material impact to the products and services that we offer and the communities that we exist in to be the best corporate citizens we can be.” Look at the power centers.
4. Take personal accountability.
When you see gaps, where people may not feel included, valued, welcomed, or represented, taking accountability, starts with the willingness to have uncomfortable conversations. Change isn’t typically the partner of comfort. “You’re doing it for the right reasons, in the right way, and promoting win-win outcomes, but certain things can’t fall on deaf ears anymore.” As an organization, accountability is being willing to ask, listen, and act on feedback.
5. Make purposeful decisions to attract diverse talent.
If you are not finding diversity among your candidate pool, then you must intentionally find it. Ken thinks you should look at your approach to talent acquisition and ask yourself, “What are you doing right now to attract the current and future talent pool? … Focus on the profiles you want, the outcomes you want to achieve, and give everybody a fair shot to at least be able to have a 30-minute conversation.”
The digital environment has only opened access and speed to a diversity of talent. Put it to good use and get going.
6. Use diversity as a tool to combat algorithmic bias.
Every company has a technology core (if you don’t, you need it), and ultimately, it’s people that determine ethical deployments of technology across objectives, for example, populating social content, determining creditworthiness, analyzing resumes, etc. Ken says that,“If you don’t have the right balance of diversity in your company, you could be codifying bias, you could be codifying tendencies that could lead towards racism, in ways that we never envisioned.” The influence of the global technology product and services companies will only continue to grow, and the commitment to diversity is imperative. What HFS can do? Ken thinks we should work toward a ranking on diversity, equity, and inclusion for the business and technology services providers, “because this is going to have a material influence in the impacts on society as we go forward.”
7. Make more money.
Similar to Larry Fink’s recent stance on sustainability, if you boil the organizational ethos down to shareholder value, as Ken says, “it pays to be diverse.” Time and time again, studies show that the more diverse an organization is, the greater the financial performance. According to McKinsey’s 2020 report, Diversity wins: How inclusion matters, “Our latest analysis reaffirms the strong business case for both gender diversity and ethnic and cultural diversity in corporate leadership—and shows that this business case continues to strengthen. The most diverse companies are now more likely than ever to outperform less diverse peers on profitability.”
As services firms secure a new digital future, leading the journey to cloud-native for many firms is the need to modernize the vast number of applications across their technology and business silos.
While application modernization is commonplace as systems constantly need to be upgraded or migrated to newer solutions, data from our HFS’s Pulse survey of Global 2000 firms’ investment in microservices is increasing by over 40%.
As part of our application modernization services research, we interviewed 17 services providers and 50 enterprises about their efforts to rehost, re-factor, re-architect, replace, and retire legacy applications. Key learnings included:
Funding is coming from the business As a result, the business is driving (and funding!) the vast majority of modernization efforts;
Access to talent is the most significant limiting factor There is a battle for talent as enterprise and services providers struggle to recruit, develop, and retain the cloud-centric development skills needed for microservices, Kubernetes, Docker, and serverless software architectures;
All in on the cloud Hybrid cloud is the preferred platform for developing these solutions; this has triggered additional needs across infrastructure planning, technology architecture strategies, data management, and security.
Services providers are seeing traditional outsourcing revenues stagnate as digital revenues increase dramatically. Global stalwarts are reporting a rise in digital revenues in their financial filings, attributing to 20-40% of revenues now attributed to digital and new business opportunities in their pipelines of 60-80% of projects being digital. Meanwhile, formidable challengers like Hexaware, Mphasis, and Virtusa are reporting digital making up 70% or more of their revenues.
These are all being driven by digital.
The journey to cloud-native is here. Services providers boost their Agile practices, acquire firms with deep experience with hyperscalers and cloud-first development, and modernize their DevSecOps teams to deliver microservices, edge, and serverless computing technologies.
The modernization of applications also means significant investments in modernizing enterprise data strategies. As applications are connecting with new data solutions from Amazon’s AWS (RDS) or Google’s Cloud Big Data, we also see growth in NoSQL solutions and cloud-native SQL’esque solutions from Couchbase MongoDB and others.
You can (but you shouldn’t!!!) modernize your applications without modernizing your data.
I sat down with Joel Martin, our Research Leader for Cloud, SaaS, and applications at HFS, to learn about the experiences and insights from this new research.
To download a copy of the report, please click here.
Phil Fersht, CEO and Chief Analyst, HFS Research: The 2022 HFS Application Modernization Services Top 10 provides a comprehensive look at the practices leading services companies are bringing to market. Joel, what changes or shifts did the pandemic put in motion?
Joel Martin, Research Leader, HFS Research: Thanks, Phil. With the switch to virtual, there is a bigger than ever expected for technology to deliver value for the business. In 2021, we saw a surge in applications modernization efforts funded by the business unit and directly tied to measurable outcomes. The positive result is that technology departments are thinking more like the business regarding how products (or services) lead to top-line growth or bottom-line efficiencies. Thus, the way they have engaged with their partners, the services provider we profile in this report, is also changing. This was reflected in our engagements with both parties in the way they set goals brought in “squads of teams from the business, partner, and technology groups” to co-innovate and co-develop solutions. I also saw how pricing models are changing to reflect the client’s desire for their technology or applications development partner to commit to the outcome or output-based pricing. More often than not, the client said, “if you want to win my business, you need to put some damn skin in the game as well!”.
The second big topic is the war for talent. The best talent is becoming very mercenary. Suppose you need Kubernetes experts good luck finding them or keeping them. Enterprises are investing in full-stack development teams and guarding them against other firms, software vendors, hyperscalers, and services firms that are all looking for skilled individuals. Services firms have excited their certification programs and training by partnering with universities and actively acquiring smaller firms with skills in cloud, apps, and data. A case in point is how aggressive Accenture’s efforts have been in 2021 towards acquiring over 20 firms in this area!
Phil: What should enterprise leaders take away from this research, Joel?
Joel: Business leaders should take away the simple fact that modernization will improve their team’s ability to deliver results. They don’t need to go out to get their software because their technology teams are too busy fixing legacy solutions. Instead, the efforts of technology teams and partners to enable a largely virtualized workforce have sharpened their perspective on what teams need to deliver the services people need to provide what a customer is ready to pay for. I heard multiple stories about how technology and business became a lot closer in the past two years than in the previous decade.
On the other hand, technology leaders can look to the research to guide their opinions on the skills, domain expertise, and partnerships that these services firms bring to the market. We have collected some great insights into how these firms can execute, innovate, and help break down business processes and technology workloads based on customer case studies and interviews we conducted as part of this research.
Phil: So, Joel, who are the service providers are at the top of the list, and why are they there?
Joel: We had a very competitive market where skills and innovation are in high demand. However, after reviewing RFIs, talking to enterprise customers, and multiple vendor briefings, Cognizant, Infosys, Accenture, IBM, and EY came out as our Top 5.
#1 Cognizant has doubled down on its efforts to deliver application modernization projects tied to clear business outcomes. For example, the firm’s case studies showed how squads of developers mixed technical, project, development, business, and programming experience. How these were aligned to the client’s desired outcomes and delivered on these will assist in the training and developing client-side technical skills. In addition, Cognizant was willing to put its money where its mouth was and has embraced output and outcome-based pricing models.
#2 Infosys showed a deep appreciation for their customers’ challenges in applications modernization, from finding the budget to IT and business alignment. In addition, Infosys shows how visionary they are becoming in their view of how important it is for customers to understand how applications modernization services must incorporate data & decisions, connected & responsive value chains, and employee and customer experiences.
#3 Accenture continues to build on its Cloud First program by aggressively adding talent through acquisition and internal programs. Not only is it deepening its skillset, but it has heavily invested in domain expertise that brings deep industry knowledge for both business and technology leaders to leverage in their applications modernization practice.
#4 IBM went through a fair bit of change in 2021, the biggest was splitting from Kyndryl, but the firm continues to make key moves that underpin its focus on hybrid cloud and AI. These both factor into the firm’s applications modernization services, where they bring AMS teams, Garage, and Red Hat tools to bear to deliver compelling success stories.
#5 EY surprised us with how well its customer spoke of the firm’s commitment to their journey. EY consistently was given stellar feedback on how their teams brought innovative approaches to the challenges preventing their clients from reaching the desired outcomes. In addition, EY championed the need for measurable business outcomes, brought in partners and tools to delivery, and wasn’t afraid to pivot if a new technology was introduced to make the final solution more sustainable over the long term.
Phil: Joel, was there anything that surprised you in this study?
Joel: How much the service providers and transforming their own business in 2021. The firms are getting a lot crisper in how they lead with their solutions, automation for assessment, discovery, and code conversion being the key ones. Each of the services providers has developed, partnered, acquired, or a mix of all three, some compelling solutions that aid their clients in expediting the software development lifecycle as it applies to applications modernization efforts. Several firms, like LTI, have a clear view of how they lead across partners to drive domain-centric solutions with customer success teams. At the same time, companies like TCS have one of the most diverse partner ecosystems allowing them to bring talent to nearly any re-hosting or re-factoring opportunity.
Phil: Are there any interesting technology trends you spotted in your conversations with customers?
Joel: The key trend ties back to something we identified in the Top 10 Hyperscaler Services research we did last year. That is the importance of deploying, delivering, and managing applications and workloads across multiple clouds. IBM’s Red Hat Open Shift is not only part of their solution but popular with other services providers and enterprise users to manage hybrid and multi-cloud based on Kubernetes. While Google’s Anthos, AWS’s EKS, and Microsoft’s Kubernetes Service (AKS) are valid competitors, none of these currently match RHOS when it comes to enterprise-grade, multi-cloud applications management.
Phil: How do you think the application modernization opportunities will evolve over the next 12 to 18 months?
Joel: As more front and back-office systems are moved to the cloud, we will see significant changes in how data is managed and delivered. As we see more cloud-first applications developed in Node.js, PHP, Perl, Python, Ruby, and JavaEE and deployed as microservices or serverless how these are integrated with core systems and databases (PostgreSQL, MongoDB) or data warehouses (Snowflake, Cloudera) is going to drive significant changes in computing and storage architectures.
In addition, we are seeing a lot of interest in the role low-code and no-code will play. This is very important when addressing the talent gaps faced by many firms. The growing use of low-code and cloud-centric development tools can be a boon for enabling teams both on the client or partner-side to use a common set of tools (Unqork, Outsystems, Pega, Appian, etc.) to develop and support many of these exciting new projects.
Phil: Who are the disruptive players in this market?
Joel: While the big guys have tremendous global reach, they better watch their backs. We spoke with a handful of formidable challengers, including Hexaware, Virtusa, Hitachi Vanatara, and UST. These firms are very dynamic, have developed automation and AI tools for the application modernization value chain that rival larger firms’ solutions, and are even more willing to go all-in with pricing that reflects success from the customer’s point of view. These firms aren’t burdened by legacy lines of business and outsourcing contracts, so we saw them willing to go after sub-$250 million contracts and wedge themselves into both mid-tier and Fortune 1000 firms. They also bring some outstanding specializations. For example, Hitachi Vantara is a strong manufacturing and supply chain player, Mphasis kills in banking, and Hexaware’s Amaze portfolio continues to be one of the most clearly thought out solutions for automating the discovery assessment and conversion of legacy software to modern systems.
Phil: What do you expect to see as the biggest challenges for CTOs in 2022?
Joel: Phil, I must go back to talent and skills. Partners and the enterprise will have to continue to lean on one another to access a finite talent pool. Many architectures, microservices, Kubernetes, and serverless solutions are still evolving. Microsoft, Amazon’s AWS business, and Google Cloud Platform teams.
Wipro cited one exciting example of developing talent with their Topcoder initiative. Recognizing the battle for talent and that many talented individuals would be happy being freelance, they’ve created a crowdsourcing marketplace for their customers. In the market in general, to find key talent. Wipro has combined Open Source with Open Talent models. This program is definitely worth watching.
Phil: Thanks for your time and insights, Joel.
HFS premium subscribers can click here to download our new Top 10 Report: Application Modernization Services, 2022
The number 5 ranked vendor in the HFS RPA products Top 10, Kryon, is the latest automation ISV to be scooped up via acquisition. This is a continuation of the typical M&A activity we’ve been seeing with the pure-play automation software firms getting bought up by large enterprise ISV platforms, since we introduced the technology to the industry in 2012.
These enterprise ISV RPA acquisitions started with Pega in 2016 when it acquired desktop automation firm OpenSpan, before SAP, Microsoft, SAP, Mulesoft/Salesforce, Appian, Hyland, Nintex, ServiceNow, Uniphore, and SS&C made their moves into the space. With Kryon off the block, only Automation Anywhere, Laiye and WorkFusion are the last remaining scaled RPAs that are yet to IPO / get sold to one of the enterprise ISVs.
The world does not need more RPA tools… enterprise customers are focusing more on Process Intelligence (Mining and Discovery)
Our latest Pulse study covering 600 decision-makers across Global 2000 organizations shows that process intelligence (mining and discovery) is the third most prioritized emerging technology:
Now the red hot process intelligence market is the latest in-demand tech getting acquired – ABBYY (who started the trend with Timeline PI), UiPath, IBM, SAP, Appian, Automation Anywhere and now Nintex have all hopped on the PI party train. Even process mining market leader Celonis hasn’t been immune, seeing minority investments from ServiceNow.
The purpose is different though. RPA has a clear leader – UiPath and a clear #2 in Automation Anywhere, while the service providers and consultants are also feverishly cuddling up to Microsoft because it’s easier to sell to CIOs. Diehards will state Blue Prism is the best but we may as well just start calling them Chorus, which is the platform they’ll be rolled into at their new parent SS&C. The world does not need more RPA tools. But RPA is a useful widget to have as part of a tool kit when grappling with legacy integration needs. Thus the burgeoning purpose of an RPA acquisition these days is to add RPA functionality to a broader platform. Most of the aforementioned vendors who have acquired RPA ISVs do not license the tech outright. It is tucked into their broader stacks.
For process intelligence, the domain also has a clear leader in decacorn Celonis, but the whole log versus desktop discovery and how PI supports automation versus broader transformation leaves a ton of room for viable competitors like Soroco, Minit, and Skan. The PI market is still decently nascent and full of hype and hope like the early days of RPA. Thus the primary purpose for PI acquisitions at the moment is shiny new toy syndrome – tapping into the latest trendy tech to help drive up valuations and enrich automation value propositions. Don’t get us wrong – there is value in the mash-up. But limiting PI to automation enablement is like using a Ferarri to drive to the grocery store once a week (see more on our commentary about FortressIQ’s similar fate with AAI ).
So what does this new Kryon / Nintex cocktail look like?
Kryon is a desktop discovery pioneer which bundled the coolest part of its tech with RPA. So customers paid for attended RPA but also got desktop discovery. As the blush came off the RPA rose, Kryon perhaps realized its proposition was the wrong way round. Thus in 2021 we started seeing a much greater emphasis on process discovery-centric themes such as “data-led transformation” and “continuous process optimization”. They were still “full cycle automation” inclusive of process discovery, but they realized and pivoted towards the value of process intelligence. The automation vendor’s product roadmap and updates in the last year skewed towards speeding up, enhancing, and expanding the use of process discovery insights, albeit all under the context of automation.
How will Nintex change with Kryon under its wing?
As for Nintex, founded in Australia in 2006, it has grown by acquisition and created a Swiss Army knife of a platform that includes process mapping, digital forms, mobile apps, workflow, RPA, document generation and signing, process analytics, and connectors to extend and orchestrate workflows, tasks, documents, and forms across most systems and services. When we last caught up with company leadership in late 2021, they indicated their interest in adding process intelligence into the mix, supported by investment from their new majority shareholder TPG Capital.
Will Kryon be the acquisition that helps Nintex’s alphabet soup of functionality line up? Unlikely. Nintex needs to decide what it is and stop trying to surf the increasingly ill-defined automation wave. What is not automation these days? Its greatest asset is its fabulous customer base. Its best bet is to stop emphasizing generic automation and get more specific about the rich process management and digital document workflow capabilities it offers. In this context, Kyron makes sense.
The Bottom-line: Beyond this automation bubble, will we see any of the pureplay automation or PI vendors trying to consolidate and move into adjacent markets, or will we continue to see the large ISVs expanding the capabilities of their core platforms?
UiPath is likely to engage in strategic M&A at some point to justify their still lofty market cap. Conversely, Celonis might tie the knot with ServiceNow and move in the opposite direction. Yet, the biggest consolidation move thus far comes from the IT Operations space. Cisco just bid $20bn for Splunk. If successful, this could create a new AIOps/Observability behemoth. Cisco’s AppDynamics would become the clear leader in the AIOps/Observability space whilst expanding into security. Conceptually, AIOps/Observability is the pendant of PI on the IT Operations side. The diverging valuations between Kryon and Splunk are striking. And Cisco’s move provides more pointers for the next frontier for automation and PI. It will be around providing actions and ultimately automation on all the insights gleaned. Against this background, Nintex acquisition of Kryon appears a bit like a sideshow.
Kryon CEO Harel Tayeb (pictured right) before he got rich
It’s taken a pandemic to spark a revolution in how CEOs are prioritizing customer experience. The virtual economy we now live in demands real bridges between physical and digital worlds, so customers can engage in the way they want, and businesses can quickly to meet (and anticipate) their needs.
One company that is banking on the benefits of super-effective Conversational AI and how it bridges these physical/digital gaps is Uniphore, which is building a SaaS platform that enables businesses to scale their CX with real intelligence and automation, in tandem with the physical CX customers demand. And to add some spice to the conversation, Uniphore has just announced a $400 Million Series E Funding Round, which really emphasizes the growing importance of Conversational AI.
So I managed to get time with industry legend John Chambers, one of Uniphore Technology’s backers via his firm JC2 Ventures, in addition to Uniphore’s recent market-maker hire Ritesh Idnani and Co-Founder/CEO Umesh Sachdev.
John T. Chambers, Founder and CEO, JC2 Ventures
Phil Fersht, CEO and Chief Analyst, HFS Research: You have made a career out of calling market transitions and seeing around corners, John… first as head of Cisco and now your own successful VC firm, JC2 Ventures. What are the areas you are seeing that are ripe for disruption?
John T. Chambers, Founder and CEO, JC2 Ventures: Every company and country in the world is going digital. Innovation is happening at an unprecedented rate and companies that do not constantly disrupt themselves will get left behind. At JC2 Ventures, we invest in startups that are leading market transitions by combining a business model shift with new technologies. We have found that those new market leaders are born from thinking bigger than others and, ultimately, securing more of the total addressable market (TAM) than those limiting themselves to solving only one piece of the puzzle.
There are a few areas we are watching particularly closely that are ripe for disruption. One area I am betting especially big on this year is AI and other emerging technology like edge cloud going mainstream. Conversational AI in particular is exciting because customer experience has never been more important to CEOs – even when companies were cutting expenses and freezing certain parts of their operations at the height of the COVID-19 pandemic, they doubled down on CX. Companies are finally recognizing that if they don’t meet the expectations of their customers, they will simply leave and find another brand that will give them more personalized experiences that are faster and more enjoyable. I think we’re just seeing the tip of the iceberg when it comes to the application of Conversational AI and I’m betting on companies like Uniphore who have a larger vision for the space.
Phil: During times of massive upheaval, John, you’ve anticipated the need for and created many new categories in your career. What is the recipe for success? What lessons have your learned over your career that you won’t make again?
John: My only regret in my career is not taking more risks and dreaming even bigger. Next-generation companies can’t be afraid to take risks – they should only be afraid of doing the right thing for too long because that is when you get disrupted. I know this firsthand from when the dot-com bubble burst – business had never been better and the data was telling me we should have been fine but I underestimated the impact and relied too much on doing the right thing. After that, people who had praised me as the best CEO in the world were questioning whether I could even do my job. However, in hindsight, I know we learn more from our mistakes than our successes – and that’s why I coach my startups to have the courage to dream big.
It is key for companies today to identify their unique differentiators and how they can innovate in ways that no one else can. This means it is part of the CEO’s job to not only communicate their vision for the company – but also get everyone else on board, so the entire team is working towards a common goal. Companies must move with speed; they must be good at acquisitions; and they have to embrace empowered partnerships, especially with startups, to deliver value from that vision even faster for customers.
Platforms and visionary companies build the future, not silos of solutions. When establishing new categories, some companies take a narrower view, but visionary companies have a broader view. The CX industry is changing quickly and customers are demanding more from the brands they interact with. Uniphore is bridging the gap, allowing companies to automate certain tasks so customer service can spend more time on interactions that really require human intervention.
Phil: The business world has changed dramatically over the past two years, creating tremendous opportunities, specifically for Conversational AI. What are some companies doing right to maximize the value of Conversational AI for huge successes and what are others NOT doing that will lead to failure?
John: Customer-centric companies are the ones that will succeed in the long run. I have long thought that the best way to learn what you should or should not do as a CEO is to pickup the phone and call your key customers. CEOs often spend too much time, especially during times of crisis, looking at the data and relying on the numbers to tell them what to do next. In reality, it’s the existing customers that have been with you a long time that will be able to give you insight into what will really move the needle.
Customer-driven insights are only possible when you nurture the customer experience and create a value exchange. At the beginning of the pandemic, many companies had their entire business models upended. Those that did well were the ones who pulled back from growth and insulated – and learned from – their existing customers. Conversational AI has benefited from this because platforms like Uniphore’s are always learning and getting smarter based on how the customer interacts with the technology. There is truly no limit and the companies that will win are focusing on that larger vision and taking a platform approach across multiple areas.
Ritesh Idnani, Chief Revenue Officer, Uniphore
Phil Fersht, CEO and Chief Analyst, HFS Research: CX has been heating up across the enterprise for quite some time and doesn’t appear to be slowing down. How can a redefined Conversational AI solve these challenges?
Ritesh Idnani, Chief Revenue Officer, Uniphore: Historically contact centers faced massive challenges managing call volumes, agent turnover, long hold times, untrained agents, and high agent turnover. One of the earlier solutions that surfaced were basic voice bots that were used to do some initial screening and solve routine or standard customer inquiries. Since then, chatbots have also been brought online to work with people over text or instant message platforms. Early versions of self-service chatbots were primarily rules-based and what many enterprises and outsources found was they were challenging to implement and even harder to prove an ROI.
However, with the growth of AI, and advanced applications that use NLP and RPA, Conversational AI has enabled contact centers to now view self-service as a strategic channel to drive NPS, CSAT scores by predicting the intent, sentiment and emotion of the customer, thus eliminating friction in their journey and driving a better CX. Broader Conversational AI accomplishes this by taking a holistic view of the customer experience across the board and applying AI with Natural Language Processing technologies across both voice and digital channels. While this is still the predominant usage of conversational AI in contact centers today, we think there is an opportunity to leverage the same technologies on the agent side and drive automation of repetitive agent tasks such as after-call work, call notes, promise management etc. That would be the next natural evolution of conversational AI in contact centers.
Phil: What happens when enterprises take a limited view and see Conversational AI only as an offloader of call center traffic. What was the impact on their business?
Ritesh: Customer satisfaction and NPS is often viewed as a strategic imperative of contact centers. Thinking about conversational AI primarily as an offloader or call deflector defeats the purpose as it brings in friction in customer journeys which drives down CSAT and NPS scores.
Customer satisfaction and NPS is often viewed as a strategic imperative of contact centers. Thinking about conversational AI primarily as an offloader or call deflector defeats the purpose as it brings in friction in customer journeys which drives down CSAT and NPS scores. The businesses of the future will have self-service along with high-touch contact center agents. The pandemic has shown that with volumes to the call center actually has gone up significantly. Conversational AI, therefore, has to not just help contain calls but also help amplify the contact center agent experience by keeping the human in the loop to deliver superior business outcomes.
Phil: Why did you leave a large, successful company like Tech Mahindra for a wild Silicon Valley startup? How will your background in business process services impact Uniphore? Don’t these tech startups prefer to hire dyed-in-the-wool techpreneurs?
Ritesh: I had a fantastic time during my 5 years at Tech Mahindra growing a flat business by more than 2.5 times. As a business practitioner, I had a ringside view of the power of  technology to disrupt the way traditional services were delivered and impact CX. CX was a boardroom priority for each of our enterprise customers and I felt we were still at the first innings of a large addressable market with significant headroom for growth. Uniphore as a partner had a broad platform across the entire lifecycle of a conversation, a growing list of enterprise customers, visionary founders and a great board and set of investors. My experiences had helped businesses to scale to the next level and I felt there was a tremendous opportunity to leverage those experiences and bring them to Uniphore.
Umesh Sachdev, Co-Founder and CEO, Uniphore
Phil Fersht, CEO and Chief Analyst, HFS Research: Umesh – do share how you got into this space – was this your dream when you were growing up?
Umesh Sachdev, Co-Founder and CEO, Uniphore Software Systems: I wanted to be an astronaut, truthfully. I was always enamored by SciFi, and I loved watching all those typical movies and shows. I’ll admit it; I was a Trekkie. But more seriously, that entire area of AI and getting machines to understand us as they did in those fantasy books and movies really intrigued me as a kid; and I always wanted to explore that. Uniphore gets me closer to that dream.
Phil: It seems like you pretty much founded Uniphore straight out of college! Were you always focused on conversational AI, or has this evolved over the years?
Umesh: We founded Uniphore to bridge the digital divide between humans and machines. In 2008, my friend and co-founder, Ravi Saraogi, and I recognized – while we sat in a lab in college – that millions of people would be left behind in the digital age because they could not use traditional text-based interfaces.
We began our pioneering work together on the use of voice technology which allowed people to have better conversations with the help of machines. The demand generated by the next billion internet users motivated us along the way and led us to create our technology.
From our early innovations, we’ve built a robust system that continues to evolve, and today we offer a complete SaaS platform that extends beyond customer service and focuses on the intersections between conversations, AI, and automation across the entire enterprise. We are growing quickly, with operations in 12 countries, and our platform serves some of the biggest enterprises in the world with more than 100 language offerings.
Phil: You would think that with so much attention on conversational AI, there would be agreement as to what is necessary to help the business move forward. Why is that NOT the case and how would you define Conversational AI?
Umesh: Yes, this ties back to previous notions and definitions of conversational AI, which we believe are very limiting. From its origins, the idea of Conversational AI has stuck in the minds of many as mere chatbots. We all know chatbots are very serviceable, but they also have limitations and can’t fully deliver on promises. With this in mind, Uniphore’s taken a platform approach, which has expanded the definition as we’ve advanced and delivered Conversational AI’s capabilities across both the physical and virtual enterprise. Our software-based platform is meant to augment human capabilities – using the best of machines – but prevents, through automation and AI, the cycle of customer (and agent) frustration often caused by chatbots.
Our conversational AI today has emerged as a byproduct of natural language processing (NLP) software to analyze natural human language and speech; AI’s prediction of communication patterns based on the data inputs; and machine learning (ML) that enables AI-based systems to “learn” without being explicitly programmed. Newer low-code/no-code tools additionally help business developers to implement these technologies without expensive IT infrastructure. The combination of technology we’ve refined along with that we’ve acquired has opened up entirely new possibilities combining AI, automation, computer vision and tonal emotion.
This broad and solutions-based approach supports customers in achieving their business priorities: improvements in customer satisfaction and loyalty, the productivity of call center agents, reduction in operational costs and improving overall operations through streamlined CX. As a result, the use cases for Conversational AI are not limited to the contact center but are increasingly benefiting a variety of industries and powering a range of applications across every conversation in the enterprise.
Phil: Uniphore is one of the fastest-growing emerging tech companies, recently being recognized by Deloitte as a Fast500 winner posting over 500% growth. What makes this company unique in your view?
Umesh: Uniphore is different because we are the first and only to do what we do. We’ve combined conversational AI, workflow automation, robotic process automation (RPA), low-code/no-code capabilities and a business developer user experience to create a best-in-class platform that transforms and democratizes the customer experience.
Moreover, we’re experienced and focused. We’ve been investing in deep tech and AI for many years and have used our patents as the genesis for our technology. We’ve spent twelve years building and refining our AI models, which has created faster deployment and a deeper understanding of the complexities within each industry we serve. And we are the only player to combine conversational AI, RPA, and workflow automation to capture and fulfill promises.
In simpler terms, we go beyond customer service and service the entire front office of the enterprise by providing value in every interaction and through optimization of each conversation through AI and automation.
All of this comes together in the only platform that combines computer vision, voice AI and tonal emotion to ensure that every voice is truly heard, tying back to our original vision that we can bridge the gap between people and machines using voice.
Phil: What’s next for Conversational AI? What are other areas it will impact that others are not taking into account?
Umesh: We’ve taken the approach of first focusing on the contact center, where we’ve built out a strong portfolio of solutions for agent assist/analytics, self serve, voice authentication, security and robotic process automation (RPA). We firmly believe that the platform is the best approach over point solutions, which are only focused on meeting one singular business need. So, what we offer now is very comprehensive and has tremendous legs. For instance, agent assist isn’t just limited to the contact center; we can assist others in other industries. Agent assist is analogous to sales assisting, and agent coaching is analogous to sales coaching. The solutions are broad-based and applicable to nearly every industry: from marketing and sales to human resources, telco, healthcare insurers/payers, education, insurance, financial and legal institutions, and more.
The conversational AI space is much bigger than it’s currently being scoped. We are capturing much of this depth already with our platform and have invested strategically in building a broad and comprehensive architecture. There are a lot of use cases to capture, and the broadest platforms will win out.
Phil: Thank you guys for your time, looking forward to sharing these insights with the industry!
Who was it who said about “making the same mistakes over and over and expecting different results”? When it comes to pandemics, we seem not only to make the same mistakes but add in even more for good measure… so what can we learn from all this? Our healthcare research lead, Rohan Kulkarni offers up the 5 specific lessons our politicians, business leaders, educators, scientists – and ourselves – can try and learn from, to make sure we don’t find ourselves in another COVID-19-sized black hole ever again…
The Situation
Since 1900, the world has experienced 6 pandemics including COVID-19. Through these pandemics, approximately 100 million people died, and untold numbers suffered economic, social, and mental challenges of material proportions.
One could argue that after so much suffering, the planet would be well-equipped with enormous experience to manage the next pandemic effectively, to reduce the period of virulence and hence limit deaths. However, COVID-19 has proven that humans, over eight generations, across so many regions and different forms of government, have regressed in their abilities to combat and defeat a pandemic.
1. Work together to create a consistent framework and demonstrate some leadership
There has been a lack of a comprehensive framework to combat global pandemics, one that is consistent and accepted globally. Multi-lateral organizations such as the World Health Organization (WHO) have a structure to monitor, evaluate and react that tends to be a guide for some nations while more advanced economies like the US have frameworks to lead the globe in recovery.
However, these frameworks compete with each other, are backed by different levels of resources and legal ramifications. The situation is further exacerbated by a lack of cohesion across local, provincial, and national approaches. In the US, while the federal government has mandated the wearing of face coverings in all its facilities, certain state governments have taken contrary steps in their facilities in the name of personal freedom and liberty.
There has been an overwhelmingly poor leadership across the globe with a few bright spots like South Korea, Norway, and Denmark. The decisions most national leaders took have been across a spectrum from the draconian like China (zero covid policy) and India that chose to completely shut down their nations or laissez-faire like Sweden relied on voluntary actions of its populations or even the US that initially refused to recognize the potential of COVID-19 to generally abdicating its federal responsibility to its states until the Biden administration took office. The politicization of the pandemic has diluted the credibility of leaders in many parts of the world including the US, France, UK, Philippines, and Brazil to name a few. Consequently, these choices have led to inconsistent responses allowing the virus to continue to spread, mutate and kill in the millions.
2. Focus on the science, not political agendas
The lack of science in decision-making has been the hallmark of the global response to COVID-19. Decisions to slow the spread of the virus, treatment options, quarantine periods, and other related measures have been taken often without the use of corroborating scientific evidence. This has been exacerbated by the virus mutating in real-time, requiring constant adjustments to our understanding of it and consequently modifying mitigations.
Instead of following the science, which has been imperfect given the virus has been shape-shifting and challenging our understanding of it, authorities have chosen to make use of data that suits its contemporary agenda. The best examples are in the US with certain state’s choosing to use hydroxychloroquine (anti-malarial) or ivermectin (horse tranquilizer) to treat Covid despite the US Food and Drug Administration (FDA) directive against it or the former incumbent of the white house Donald Trump suggesting the use of bleach and light.
While the contemporary examples may be preposterous, they mirror the past and highlight a fight against known science and the adoption of solutions that have no scientific merit.
3. Get ahead of misinformation and stamp it out
COVID-19 occurred at the current zenith of human communications technologies as compared to the Spanish Flu of 1918. With the speed of the word came unleashed the battalion of village idiots all over, giving them giant megaphones. This transition from one-on-one communications to one-to-many has been both a blessing and a curse. While it allowed the speedy dissemination of scientific information of the pandemic, it also gave the village idiots the license to pander to the uninformed.
Consequently, a material percentage of populations subscribed to misinformation to drive their decisions. In the US approximately 70% received their COVID-19 information from non-healthcare experts (see Exhibit 1).
Exhibit 1: 20-30% of US consumers relied on clinicians to stay informed about COVID-19
Sample: 2411 US healthcare consumers Source: HFS Research, 2021
The subscription of misinformation has translated into fights about masking in schools, retail outlets, public transport, and other locations where the public tend to congregate. Anti-vaccine advocates have come out in droves to protest the use of COVID-19 vaccines even though there is overwhelming evidence of their efficacy in preventing infection, severe illness, and deaths. In some parts of the world, there is even skepticism of the virus, suggesting that the pandemic is false and is essentially a conspiracy of the elites to continue to subjugate the oppressed.
4. Try and treat humans across the world as equals
Discrimination is an animal instinct; it is part of our DNA. It is the prime reason why birds of the same feather flock together, why a pride of lions doesn’t hang out with a troop of monkeys, or why humans tend to be parochial. Unlike other species, we have organized our discrimination such as that rendered by color being racism or by income, age, sex, etc. So, it has been a laudable endeavor to reduce and eliminate discrimination of all types by legislating and enforcing laws, educating children early, and more.
Yet one of the major failings is that in our efforts to drive equality, we have ignored equity. Inequities prevent access to care including COVID-19 vaccines. Some 50% of the world has been fully vaccinated (not boosted) as of the end of January 2022. According to Bloomberg, the least wealthy countries have received just 6% of the vaccines while they represent 21% of the population. This is emblematic of inequities built into every aspect of how care is delivered globally.
5. Learn from our past mistakes to change our behaviors
Woodrow Wilson, America’s 28th President would not acknowledge the Spanish Flu of 1918 and did not take visible federal actions to deal with it. Fast forward to January 2019, Donald Trump, America’s 45th President would not acknowledge Covid-19 and resisted federal actions until early spring of 2019. And yes, both contracted the illness.
Masking and social distancing were some of the tools used in 1918 as have we in against COVID-19. In late September 1918, Philadelphia would not cancel its Liberty Loan parade to pay for the war effort while an anti-mask league was formed in San Francisco in January 2019 to protest mask mandates as it was seen as unconstitutional limits to individual liberty. Similar behaviors have been exhibited during this current pandemic.
There are many more such examples of our unwillingness to change behaviors to mitigate the current and next pandemic. Despite troves of data showing the correlation between social distancing, masking, and vaccinations to the prevention of infection, severe illness, and deaths, a material percentage of people choose to not learn from the past yet expect to thrive.
The Bottom Line: Those that don’t learn from history are doomed to repeat it.
Pandemics can be an existential threat, but they don’t have to be. We have over 100 years of data and experience to learn from. We have options to choose from yet, time and again we have made the same choices of not believing in the science, abdicating responsibilities, and being selfish. Pandemics have brought the worst amongst the best of us.
Yet, there are examples of heroes amongst us, be it the nurse who put in 48 hours straight in a resource-constrained hospital to save tens’ if not more; teachers going and above to make virtual learning as engaging as in-person, employers making it is easier for employees to work from home. Pharma’s developing effective vaccines and medications in less than 12 months. We must learn from the litany of mistakes, evangelize good practices, emulate everyday heroes, and consciously drive change with better choices starting at home today.
The needs of enterprises are not rocket science these days – they are based on what they need right now, and the direction of travel for everyone is pretty much the same across the OneEcosystem:
Get your sh*t into the cloud as fast as you can so you can operate and compete
Make sure you know exactly what your customers what and have the tools and know-how to engage with them and impact them
Make sure you have a handle on your security challenges
Make sure you have collaborative partners who can support you (and you them)
Make sure your key people aren’t going to leave
Have a handle on the data you need to be effective, and organize your business functions to get rid of the silos
Create a leadership function to pull this all together for you
We would argue that you’ll mess up 1 through 6 if you haven’t figured out 7.Â
These are the roles – and leadership traits – that will make post-pandemic companies much more in tune with their strategic needs and align them to their business operations
The Chief Executive Officer: The CEO should be the leader who drives the infinite mindset across the organization. He/she must continuously define the purpose of the organization and relentlessly drive a fearless collaborative culture that values stakeholder value beyond shareholder value. As a leader, it’s so easy to obsess with operational functions of the business during times of disruption or distress – in this case, a global pandemic – that it can create knee-jerk, often short-term decisions that could inherently damage your long-term vision, your business’ culture and your raison d’ĂŞtre. With no defined time horizon, no clearly-defined rules, and with players that may enter and exit at any time, the primary objective of an infinite game is quite simply to keep playing. The goal for businesses is to have the will and resources to stay in the game, through thick and thin.
Having lived and worked through four recessions, I personally understand the rapid change in leadership mindset that can occur when a firm goes from peacetime and growth to one of survival and all-out war. According to author Simon Sinek, people look to leadership to serve and protect, to “set up their organizations to succeed beyond their lifetimes.” But in the modern landscape, most organizations place an unbalanced focus on near-term results that may ultimately prove to be self-defeating, like casting aside your umbrella in a storm because you haven’t been getting wet. In short, business is no finite endeavor. This pandemic lays plain for all to see the game we are really playing.
The CEO is the ultimate collaborator, forcing the change that is needed and balancing the desires of the various stakeholders (the board, key clients, key partners, the employees). His/her team to make this happen must be responsible for the full gamut of their customers, employees, and partners, working with a transformational wizard to bring together the process and technology with the real innovation ingredient: the people.
Chief Transformation Officer: This leader must link front to back office and ensure processes run smoothly across functions to deliver the data/outcomes the organization needs. This should ideally be someone who understands the challenges of enterprise operations, and how to align them with the market-facing/client impact areas of the firm. Forget the old GBS head / shared services head role, as this just has repeatedly failed to get out of the transactional back-office world and the “finance factory”. This person must oversee both technology and operations, understand the value of automation and AI, be able to design and implement change programs and work closely with the employee experience leader to eliminate the back office mindset from antiquated business functions into one that is aligned with the direction of the business.
Chief Customer Experience Officer: This is the leader who lives and breathes the world of the customers and obsesses with how to engage them as effectively as possible – right across the entire customer life-cycle. This ideally is someone who understands how to design customer interfaces, how to service customer needs leveraging both digital tools and physical support, and ensuring the entire employee base is unified around (and incentivized on) driving customer impact. In addition, the CCXO must ensure the marketing mindset is to communicate with the customer, educate the customer, and develop specific programs that have a real impact on driving customer engagement and business growth.
Chief Employee Experience Officer: Forget transactional HR, the employee experience leader is the person responsible for making the company a great, energizing place to work, where staff of all backgrounds, ages, experience levels cultures are energized by the values and desired outcomes of the firm. This individual must be the person who can manage the expectations of the board, the CEO, and the shareholders to create a company culture and values that everyone believes in. Moreover, the CEXO must be intimately involved in the creation and execution of training programs across the firm to attract talent who want to work for a company that will develop them, as well as establishing a culture and values they can identify with. This should ideally be a strong leader with broad experience in the business and staff development, who knows what it takes to be successful, and who understands how to motivate people beyond pure compensation. The best leaders today are also great people managers – and the CEXO role must be at the core of the business leadership, not some ancillary executive painting lip service and not having any real impact.
Chief Partner Experience Officer: As the OneEcosystem environment evolves, the need to collaborate with entities with common objectives, across the entire customer value chain, has never been so prominent. Partners are no longer just your suppliers. Suppliers are essential partners to deliver your goods/services. Still, the OneEcosystem looks at partners more holistically – partners in the ecosystem involved in providing the customer experience across the entire customer lifecycle.
As such, we believe these five partner ecosystems will evolve
Supply chain partners, such as suppliers, distributors, or financers;
Industry partners, such as multiple banks collaborating to improve trading, or mobile phone brands collaborating to share components, logistics, and manufacturing processes to improve time-to-market;
Cross-industry partners across industries with regulators. For example, regulatory approval in the airline industry between the airline, original equipment manufacturer [OEM], and authorities. Or stakeholders across the healthcare / pharma / retail / regulatory ecosystems to improve the efficacy of vaccines in the Pandemic.
Technology and business services partners. These must fall under the CPXO to plug critical skills and technology gaps that are increasingly needed (with immediacy) in today’s talent-constrained environment. This is where we envisage a huge cross-over with the transformation leader’s role, where services partners are increasingly critical to driving change at speed. The CPXO must ensure his/her services partners truly understand (and are embedded) in their core business and understand what their clients – and other key partners – need to collaborate effectively.
Hyperscaler partners. The increasing influence of Microsoft, Amazon, Google – and others – is becoming significant across all partner ecosystems. For example, if you are in the consumer goods or retail businesses, you cannot survive without strong engagement with the Amazon channel. The same is happening where all these hyperscalers control your scalability with the cloud, your security, your data, and so on. They have become huge influencers and enablers of the virtual business, and there is nowhere to hide from them.
The Bottom-line:Â The old way of running businesses is fast eroding as we rethink what constitutes success and ambition
Did you ever think your enterprise could move to a 100% work-from-home environment with less than three weeks’ notice? This crisis era of constant change has forced businesses to flex – vastly accelerating the OneEcosystem environment, dramatically cutting redundancies and improving processes at scale. There is a massive amount of change happening, and out of change comes real transformation. After years and years of complacency due to the relentless growth (and papering over the cracks of 2008), all of today’s organizations now finally have a burning platform to change how they operate globally. In fact, the platform is positively on fire!
