Welcome back to the F&A business, which we’ve been tracking religiously on HfS since our very first blog post more than a decade ago, famously titled “Beyond Labor Arbitrage: The New F&A BPO Frontier”. And how much has changed since then (ahem). However, what has changed is the rampant excitement about the new arbitrage: RPA, where many clients hope they can still avoid that true process transformation by mimicking those same obsolete processes in a piece of robotic process recording software. At some point, they will need to stop dodging the transformation bullets and actually make real investments in their underlying process and data workflows, but until that time, let’s see how the market continues to shake out in our 2017 F&A As-a-Service Blueprint, so let’s hear from the blueprint lead author, Barbra McGann…
The HfS Blueprint is a guide for the service buyer to learn more about what to expect by engaging with a service provider. What does this service provider bring to the table above blocking and tackling? Where does the buyer need to challenge his or her own assumptions or organizational culture to see impact beyond tactical conversion of tasks from human to robotic automation or labor arbitrage? How does the service provider need to engage to provide long-term value – beyond green light SLAs for turnaround time and data accuracy?
This year’s HfS Blueprint: F&A As-a-Service reflects a time of transition as service buyers and service providers move to “finance of the future” – more strategic use of talent, technology, partnerships, and operating models to achieve high-quality, more agile, and insight-driven finance operations. Any company not thinking of how to bring together these elements to impact business outcomes is behind the curve at this point, although it’s not too late to get going. And service providers in this mature services market can play a valuable role in helping broker within and across organizations to develop and/or deliver against a roadmap for “virtual finance.”
The question is not whether or not to use RPA or cognitive computing but how, when, and where
Many service buyers, from our research, are mostly interested in low-cost standard delivery. What will get that next level of efficiency and cost savings – and how does robotic process automation (RPA) play a role in it? What is the balance of RPA versus lower cost delivery centers – movement from 1st to 2nd to 3rd tier cities, to use industry terminology? In too many cases, labor arbitrage conversations are being replaced by robotic labor arbitrage – a combination of lower cost delivery locations and RPA. The industry is at an inflection point — do service buyers and service providers have a choice to make – (a) move up the value chain with strategic collaboration – defining and addressing business problems, outcomes, and designing appropriate solutions that use digital technology or (b) promise 40-50% further improvement through digitization or automation, a tactical approach. Or is there a combination in play? The industry sits on this knife’s edge today.
Last year many of the finance and operations leads we spoke to for this study when asked about RPA, were, with few exceptions, in one of two camps: had heard of RPA or hadn’t. This year, every client is familiar with RPA and has some kind of status to share, ranging from “discussion” of how and where to use it, working on a business case, or already using it either in-house or with service provider partners. It’s driving change in how the industry thinks about operating models, contracts, governance, partnerships, talent development, and change management. Earlier adopters in the business are realizing that automation for the sake of using the technology or in trial/pilot is not as impactful as when there is a business case for change in partnership with IT to achieve a targeted outcome for a process, e.g., touchless invoicing. There is a disparity in the market as to whether clients want/will develop and keep intelligent automation capability in-house or partner with service providers. We heard examples of both decisions.
Collaborative engagement is an increasing factor in whether or not service providers have “stickiness” with clients
There is a current trend in “considering options” as contracts come up for renewal. A number of service buyers shared their stories of re-bidding parts or all of their finance BPO contracts to (a) create balance in a service portfolio to have strategic partners where there is stronger alignment on strategy and culture as well as thought leadership for finance and tactical partners to address the transaction and increased use of RPA; (b) shake up service providers that clients believe are complacent, e.g., not consistently raising the bar or challenging the status quo.
Clients are (a) kicking it up a notch in partnering for the long –term with strategic roadmaps, (b) getting impatient with service providers that seem to be “resting on their laurels,” complacent, or just not aligned or insightful about the client culture or work/objectives, and (c) more willing to look beyond the traditional market leaders to “up and comers” who can prove trustworthiness, credibility and cultural alignment. This was reflected in scores for “value of engagement over time.” With the increasing mix of technology – platforms for procure-to-pay, record-to-report, and order-to-cash, as well as robotic and cognitive computing – in the business process services market, clients need to be looking at where and how service providers are investing in their own and third-party software, technical and business/consulting talent, and change management.
F&A As-a-Service Winners are service providers with clear vision and momentum towards transformational finance… but face the challenge of making an appropriate match with clients culturally and having the talent to deliver on these promises consistently
Our study included over 60 client interviews as well as surveys, service provider briefings, and additional research and analysis covering the vision and operationalization of F&A As-a-Service. All of the participating service providers are making investments and progress in some way towards a more insight-driven, digital-enabled finance function. The ones that have the clearest and compelling vision and scale as well as roadmap and evidence of investment and progress toward landed in the Winner’s Circle. However, there are also some unique value propositions by players on the whole map.
As always, we recommend that when you as a service buyer – finance, procurement, or operations executive – are evaluating a service provider for a new or existing business process services engagement, that you consider that best fit for your organization. Criteria, as reflected in our methodology for the blueprint, should cover culture, strategic, technical, and corporate alignment.
Accenture: One of the few service providers that consistently through the years touts talent development as a differentiator and is working to create a more flexible workforce management approach (Accenture Agile Workforce). It’s also invested in building out and rationalizing a set of proprietary and third-party tools to address all areas of finance and integrated systems support, e.g., Accenture Intelligent Automation Platform and Accenture Cognitive Engine, with apps like Intelligent Collections, Payables Optmizer, and Period-End Analyzer. Accenture is looking to partner with clients to define and deliver real-time enterprises and is doing a better job at defining joint roadmaps with clients to achieve this kind of vision. It also has industry-specific IP, such as in hospitality and utilities. Accenture faces the challenge of meeting high client expectations for understanding their business and delivering highly relevant and meaningful innovation consistently – for each client across its portfolio.
Capgemini: Through acquisitions and partnerships, Capgemni has built up and then defined a portfolio of offerings that are platform-based and designed to match the culture and approach of its clients to help them achieve “virtual F&A.” The portfolio of “as-a-stack” now includes support for centralizing and supporting FP&A and controllership. In the last year, Capgemini has made progress in defining a more clear and collaborative approach to incorporating robotic and cognitive automation into finance with its clients. It’s also had success in co-defining new models and approaches through design thinking with F&A clients. Capgemini needs to make all of this capability more transparent and relevant to more of the clients in its portfolio, as well as with new clients.
EXL: While operating on a smaller scale then the other players in the Winner’s Circle, EXL serves as an example of being small enough to feel approachable and collaborative but large enough with resources and focused investments. The EXLerator 2.0TM Palette includes custom-developed IP, best practices, and co-development partnerships. EXL has also adopted a more stakeholder and experience-centric approach to transformation and is rotating operations employees through consulting services, EXLerator, and RPA workstreams to develop more talent with future-oriented business, tool, and technology capability. EXL’s industry-specific IP is in insurance, healthcare, banking, and capital markets. EXL’s biggest challenge is the perceived lack of middle management talent pool to lead transformational change at an account level at scale.
Genpact: A steadily increasing percentage of Genpact’s F&A business is led by transformation, and it has built incentives for its teams to measure business impact beyond contracted productivity that must be acknowledged by the client. The latest acquisitions, Rage Frameworks and TandemSeven address two forward-thinking areas – platform-based microservices with conversational artificial intelligence and customer experience focused service design, respectively. Genpact is also building up its FP&A capability. It has particular coverage of consumer goods, manufacturing, pharma/healthcare, and financial services from an industry perspective for F&A. While Genpact’s thought leadership receives recognition consistently, on the ground, there is the inconsistency that gives clients the feeling that there is a gap between the capability of leading and delivering. Genpact needs to invest in raising the whole; and its recent investments are a smart approach.
IBM: Steadily consistent in its messaging, investment, and delivery through IBM Cognitive Process Services to help finance organizations incorporate digital technologies to drive better outcomes in finance. While the momentum is a bit slower across its clients than its peers in this category, IBM clients appreciate that the company has strong technology, design, finance, and industry capability. IBM is focused on how to best use data, and its core to the work it does to help “future-proof” finance. IBM has the highest percentage of its contracts incorporating FP&A and receivables analytics per our analysis. And it has a handful of useful applications for reconciliation, close, and translation that can be incorporated into finance today. The service provider, however, still has a tendency to be too “trigger happy” when it comes to embracing the next shiny toy – and it’s not just IBM Watson anymore, now it’s blockchain. It needs to define a clearer roadmap with clients on how to address the problems of today with the funding and contracts of today to bridge to the future.
TCS: “Touchless and intelligence” sums up the TCS vision for finance of the future. It is a technology first organization, with the “Digital Five Forces” of Analytics, Cloud Computing, Mobility, Robotics, and Cognitive Intelligence and Social Engineering. TCS is getting smarter about how it approaches the positioning of technology within business need and outcomes using its ValueBPS™ approach; it’s also in the top four of service providers reporting contracted analytics work embedded into BPS. Its F&A business by revenue is growing twice as fast as headcount by using this combination of talent and technology and not having a past portfolio of headcount-based deals. The challenge that TCS faces is that its story tends to be complex and in the weeds of technical detail, rather than looking at problem to solve, targeted outcome, and relevant solution.
WNS: In the year since launching its “Outperform CFO Framework,” WNS has invested to build out the capabilities such as thought leadership, domain expertise, maturity models, and context for the appropriate use of digital technology. It provides an outline and guide for building out future finance operations. From a technology perspective, WNS’ new CFO TRAC is the package it puts around cloud-based, mobile-enabled partnerships, such as for invoice-to-pay. It’s also one of the few service providers we cover in this report that has an ad-hoc research and analysis capability that supports FP&A beyond reporting. It’s depth is in industry-specific F&A, such as for travel, logistics, healthcare, and airlines.
High Performers – Cognizant, Conduent, DXC, HCL, Infosys, Sutherland, Wipro – are strong challengers to the F&A As-a-Service Winners, each with some unique capability to bring to the table. Arvato in retail, commerce, and fraud analytics, and NTT Data in industry-specific F&A such as healthcare, execute effectively in these chosen focus areas although lack a clear and compelling vision for future finance. OneSource Virtual is newer to the F&A business process services world with its launch just last year of accounts payable services wrapped around Workday. Hexaware and Intelenet have platform-based business process services in F&A that need consistency in delivery and clarity in vision – although both are advancing in these areas.
Bottom line: It’s time to share the risk to get to the next level in F&A
A focus on customer engagement and relationship is increasingly having an impact on the longevity of service buyer and service provider engagements in F&A. Where RPA and collaboration are both part of the equation, the value of the engagement is rated higher over time. It’s the watermelon effect that we often refer to – even when SLAs show that performance is on target with green, if there is not a feeling of partnership and a visible effort to continually raise the bar (e.g., with journey maps, relevant use of RPA), then the engagement red – not of value to the service buyer and/ or the service provider.
What is making a difference now, per the collective feedback from references in this study, the service providers via briefings, as well as discussions with technology partners of the service providers and other leaders in the industry, is capability, context, communication and transparency, calculated impact, and collaboration. We hear from clients an increased willingness to “look around” and be open-minded if their engagements don’t match their own business, e.g., not customer-centric, or lacking a roadmap, or culturally misaligned. You – as service buyers and providers – need to be engaged, open-minded, and willing to take and share risk in order to drive increased value from services engagements.
Premium HfS Subscribers can download their copy of the Blueprint Report: Finance & Accounting As-a-Service 2017 by clicking here.
Amigos – I’ll be waxing on about my favorite new topic “The Future of Operation in the Robotic Age” this Thursday morning at the Nasscom Summit in Bangalore – reserve your spot here! I hope to see you at my favorite hotel in the world… the lovely Leela in Bangalore…
The worlds of software, business operations and services have always been chasms apart – different mindsets, vernaculars, conversations, ideas of what constitutes value – and vastly different cultures. Software people never understood the operations folks and vice versa – each thought they were top of the corporate food chain.
However, the past couple of years have seen the coming together of these diverse groups of people to rethink completely how we run global operations in this robotically digital era (or whatever we want to call this curious period of time in which we exist).
One thing is abundantly clear: the outsourcing phenomenon which has gripped the Global 2000 over the past decade is making way for a genuine industry in which we all play a part – an industry where we have no choice but to develop learning programs, sustainable business strategies and make real, actual investments in order to survive. And what’s most fascinating are the new conversations that have rapidly emerged to bridge this divide between the technologists and the business operators.
Suddenly, we’re talking about business logic, about datasets, about redesigning processes with genuine business outcomes in mind. We’re talking about deep learning AI systems that store what has been learned in the past, take notes of how variables and results have changed under different scenarios and then make decisions based on that.
The narrative has radically changed and the focus is now firmly on bringing together all the components that can escort us to this promised land of Digital Operations. So let’s take a look at what has transpired to get us to this point, where we can actually claim to be part of this emerging industry….
“Outsourcing” never materialized as an “industry”
Having spent the best part of the last two decades trying to make some sort of sense out of “outsourcing” I have come to the simple conclusion: “outsourcing” was never an industry – it was simply the practice of moving work around the world to save money. It consisted of people selling outsourcing deals and the poor suckers who’d been lumbered with trying to manage them – and the deal brokers and lawyers who took money from both sides making it all happen. It was never an industry, it was greedy corporates slashing their wage bills, and those lovely folks who were just so keen to comply with their wishes to turn a profit. Outsourcing has always been an activity searching for a higher purpose than cost take-out. While service providers and advisors undoubtedly feel part of an outsourcing industry, the buyers do not – they are operations people doing their job deploying whatever techniques are at their disposal to improve efficiencies and operating costs. They would not class themselves as “outsourcing professionals”. It’s like selling gym equipment to gyms. The seller is in the “gym equipment business”, the gym itself is in the “gym business”, and the customer at the gym is looking after their fitness. The “industry” is ultimately the higher purpose of which all the entities are all constituents – in this instance, it is the fitness industry – which could also encompass sportswear manufacturers, specialist outlets stores and so on.
How traditional outsourcing has left us in a right pickle
Outsourcing was like a one-time thing C-suite execs arranged on the golf-course to take 30-40% off the operations budget for a set of low-level processes – and enjoy the bulk of those savings upfront for a nice impact. Many folks became heroes overnight for making these deals happen, and they were lauded and courted at conferences as those radical executives who possessed some secret talent ingredient to make this all possible. Yes, a mystique around outsourcing was created, advisors did an amazing job making a science out of the “art of the deal”, and the façade of a new profession and (possibly) a whole new industry was borne.
Sadly, there was never (really) a long-term plan to sustain those productivity impacts, beyond moving as much work offshore, without overly impacting business performance and finding even lower cost cities to take on the low-hanging fruit to eek out a little bit more cost off the bottom line. Eventually, that well runs dry if you don’t make fundamental improvements to the quality of your processes and the convergence of the data sets they support.
Yes, we had a lot of fun creating useless qualifications and meaningless SLAs, but the end results were always the same: clients figured out how they only got what they had paid for, and the fancy innovations they were fed on those lovely pitch decks were always subject to change orders (or never really existed). The only real leverage came at rebid time, when the incumbent would usually make some new promises to get their house in order, if they felt there was actually a chance they could lose the business. Otherwise, it was business as usual.
The Global 2000 is littered with stale outsourcing deals that need radical transformation
However which way you paper over the cracks of short-termism, costs are like hedges – if you don’t look after them properly, eventually they grow back. As a result of all these fun and games, we are left with thousands of ropy outsourcing engagements littering the corporate world, where the clients are still paying for the same number of FTEs to deliver the same tired old obsolete processes, while their providers has no incentive to cannibalise their revenue streams, and the actual concept of moving these deals to other service providers is pretty desperate – all the smart ones have no interest buying up a legacy mess, while some desperate lower tiers ones may take on the work if they can shunt it to even cheaper, lower quality delivery resources.
But there is a way forward, and outsourcing has served a purpose
Believe it or not, there is a method to all this madness – companies managed to externalize work they didn’t want to run themselves, they got a lot of cost off their books, and they opened up the opportunity to pull more levers in the future to find new thresholds of productivity. Rarely will you ever find an enterprise which regretted outsourcing – they’ll never want that work back. The big issue, now, is ensuring that work is in a state to be optimized further by improving the quality and logic of process flows, digitizing them and applying smart automation techniques, where it makes sense. However, that can prove quite a challenge when the work has been distributed across third and fourth tier cities, and it actually requires some investment to transform those processes to consider meaningful automation and other delights that digitized processes can enjoy, such as Machine Learning and AI.
In fact, in too many cases, outsourcing resulted in enterprises sweeping their real process issues under the carpet and choosing to ignore the real need for genuine transformation until that day of reckoning occurred. And that day is now upon us, as CFOs are smoking the automation crackpipe and demanding that next 50% of cost to be ripped from the bottom-line in a 3 year timescale. Outsourcing provided them with a band-aid to enjoy cost savings through labor arbitrage, but robots can only provide further band-aids if the outsourced work has high-intensity, high-throughput processes that can easily be programmed into the software. If that work is distributed across too many locations, with service providers unwilling to make renewed investments to co-invest with those clients, we have an emerging issue facing many enterprises: their day of reckoning has been reached and they actually need to make some investments in their processes and underlying systems.
Welcome to an actual industry in which we can co-exist: Digital Operations. This is why we are now emerging as an industry – we are facing the reality that most enterprises need to make long-term investments in their digital underbelly, their process flows and their people to run them, in order to find sustainable value over the next decade.
For the first time, we are witnessing deep conversations happening across the operations spectrum: RPA, Machine Learning and AI software vendors and now talking with service providers about how to embed their offering into long-term service contracts to support sustainable productivity and incremental data value over time (our data already shows close to a third of the Global 2000 are already integrating automation into their service delivery):
Ambitious enterprise customers of outsourcing, shared services heads and other operations leaders are all feverishly learning how to understand the value of software tools and how to prepare their process flows for the benefits of digitization and automation. Consultants worth their salt are rapidly training their people to develop automation roadmaps for their clients and prepare them for a longer term strategy of creating a truly effective digital underbelly. Yes, we are still are suffering from a few cowboy consultants claiming their clients can slash 50% overnight through RPA, the our observations are quickly showing that people are learning fast and know they need to address many of their underlying processes and talent issues, if they are truly going to take the next step forward.
Bottom-line: The Industry is Digital Operations, and there are six levers to pull to find sustainable value
The conversation among operations executives has changed dramatically just over the past year. As the excruciating hype around robots taking our jobs and these outlandish predictions from drama-loving analysts and academics, a sense of reality is finally setting in – roles are not changing overnight, we just need to get out of our comfort zones and learn new stuff. We need to understand the pivotal role data plays in our professional lives and become smarter about how we manage it. We need to understand where RPA adds value, where to start with Machine Learning and AI, how we can truly leverage globally distributed talent to support out operations affordably and smartly, we need to be observant about the creeping impact of blockchain and how we can truly take advantage of digital technologies to nurture new revenue streams and enhance customer, partner and employee engagement up and down our supply chains. It’s taken a full decade just to take advantage of the cloud, and we need another one before that really fulfils its potential. It’s going to be even more complex to ingest the benefits of automation, AI and blockchain into our business operations – but now we have six genuine value levers to pull to tend the hedgerows of digital operations.
In case anyone thought we were going soft, we’re proud to announce another feisty outspoken analyst to the HfS family to help drive our coverage of industries – most notably the hi-tech and banking sectors – Elena Christopher.
Elena – it’s just terrific to be working with you at HfS! Can you share a little about your background and why you have chosen research and strategy as your career path?
It’s wonderful to join the HfS family. Research and IT and business process services have been the prevailing themes of my professional life. I realized while in university studying social science that research and its various methods provide valuable insights into whatever topics you apply it to. In my second job out of school, I was fortunate to be hired by Dataquest (Gartner), which afforded me the opportunity to learn the IT and business process services industries from the ground up. I never looked back. Since 1994, I have served as either an advisor or supplier partner to clients in most commercial industries, working to make sense of the various waves of seminal change in how businesses operate.
So why did you choose to join HfS… and why now? And didn’t you want to go back to one of the traditional analyst houses?
I started my career as an analyst with Dataquest/Gartner. After nine years, I went into industry to build practical experience to complement my theoretical knowledge. I’ve been in the supplier world for the past ~15 years building and running services businesses. I was resolute in wanting to come full circle and connect my practical experience with my analyst skills. However, I only wanted to go with a firm that was doing things differently and one with which I personally had derived value. I was very attracted to HfS’ approach of tackling and breaking down the major trends and issues in an incredibly timely fashion with much of the research accessible open source. I also appreciated the independent perspective and use of enterprise data rather than substantial reliance on supplier research. And as a services research company it is perfectly aligned with my experience base.
So where is the services industry right now, Elena? Do you see us in a transition state, or is something else bubbling to wake us all up?
We are most certainly in a transition state – with most industries in the process of being remade as disruption and enabling technologies change the fundamental concepts of business as usual. The services industry is enabling much of this transformation but it is also in throes of change with increased impetus placed on platform-based models and business outcomes.
So what can we expect to see from you at HfS… can you give us a little snippet of what you’re going to be working on?
l’ll be driving the industry-specific research agenda for HfS – digging into the major trends impacting each in-scope industry and the implications for business process and IT services. I’ll collaborate with my fellow analysts to cultivate the industry angle on major trends such as automation, artificial intelligence, blockchain, digital business models and smart analytics. My primary coverage areas are High-Tech and Banking. In addition, I’ll drive the industry point of view across HfS research.
And finally, is the analyst industry going as exciting as it was 10 years’ ago?
Probably more so – there is so much change and transition afoot that creates a great need to research near-term and future horizons
Welcome back to the analyst community, Elena – am sure you’ll find HfS a fascinating laboratory for observing the next phase of this industry!
After the unprecedented success of our inaugural Future of Operations in the Robotic Age (FORA) Council in Chicago last week, we’re thrilled to announce esteemed strategist, product entrepreneur and analyst Azeem Azhar will keynote our next FORA council session in London 7th December at the Andaz Hotel.
Azeem has spoken for TV and radio on BBC, CNN, Sky, among others, lectured at Harvard and London Business School, and writes a column for the Financial Times. Azeem has taken the stage at major tech conferences, including TechCrunch, The Europas, DLD Conference, WHU Founders Conference, Nordic.ai. At the HfS FORA Council, he’ll deliver his Exponential View on the impact of artificial intelligence on global business and how our near future is shaping up as we ride this disruptive wave. He’ll also stick around to engage with the council members and co-lead our AI breakout session,
I cannot wait to unveil the full FORA agenda that spans the leading minds and stakeholders across the worlds of RPA, AI, operations services very soon… stay tuned folks, but this will be our most explosive summit yet.
Don’t forget to apply for your seat, as this will fill up very fast… be there or be eliminated!
We interviewed 300 digital technology decision makers across the Global 2000 to get up close and realistic about their experiences working with all the main IT consultants and services providers, when it comes to their consulting and strategy abilities (report can be accessed here).
What’s unique about the HfS approach is we don’t allow any of these firms to opt-out of our report, and we also do not need to rely on the wined-and-dined reference clients for their rose-tinted views. So how did this all shake out?
For us, the standout performers are TCS, KPMG and Wipro, after the obvious “big two”. And this is so much more about pragmatism and focus, than big marketing and glitz.
Let’s take a closer look out the digital tech services firms which make up the 2017 HfS Winner’s Circle:
IBM: IBM is all about technical skills and the ability to bring a wealth of enterprise IT experience to fix a problem – the company has thrived on huge transformations, which has proven both a bane and a boon for the firm, as the whole IT industry shifts to smaller-scale deals, more one-off projects and the demise of the multi-year billion dollar managed services contract. Big Blue has invested in strong business consulting skills across offerings including customer experience/design thinking to help clients understand digital and drive value out of tech projects. In addition, the arrival of former Accenture consulting head Mark Foster is having a significant impact on IBM’s approach to services as the firm seeks to embrace the value of Watson and break out of legacy FTE engagements which are weighing down so many service providers. While it’s been a tough couple of years dealing with these winds of change in the traditional global services sector, the firm’s focus on designing and operating complex solutions is starting to bear fruit and it’s recent top spot in the Digital OneOffice Premier League emphasizes its broad capabilities across the front, middle and back offices. It’s big challenge now is to become the ultimate “whole is greater than the sum of the parts” partner for clients.
Accenture: Accenture scored highest in the ability to execute criteria, supported by a plethora of recent acquisitions that shore up its digital business. With digital talent and resources in abundance – the challenge now is to integrate of the likes of Karmarama, Chaotic Moon and Kuntsmaan and align these front office design areas with the firm’s digital technology execution. The landmark acquisition of Fjord has paved the way for the firm to allow its digital assets to maintain their own creative cultures and leverage the Accenture execution and consulting machine. However, the massive new abundance of digital acquisitions (19 so far this year) could prove challenging, simply because of the sheer size and scale of the new investments. Whichever way we look at it, Accenture is now firmly competing with advertising agencies for digital accounts, and is redefining the whole digital market place with its aggressive approach. Accenture’s challenge now is to capitalize on its terrific momentum in the digital space and really bridge its newly-acquired design capabilities with its execution machine. With projects increasing in business focus and the need for data-driven consulting, this should be Accenture’s market for the taking, but ultimately the firm will need to venture beyond its comfort zone inside the Global 2000.
KPMG: KPMG’s capabilities in the traditional consulting space haven’t held it back from pushing a compelling digital narrative. The firm’s digital clients are benefiting from the cross-pollination of design talent and operational prowess to address business challenges. The firm’s operational prowess to integrate the back office with the customer experience has been noticeable with several major clients, and its ability to partner effectively with the likes of Microsoft and IBM are putting the firm in a surprisingly strong position as one of the most nimble of the “Big 4” to work on spot projects and larger more complex transformations – a critical component of making these digital initiatives successful. KMPG does need to work on its brand positioning in the digital market as it continues its impressive trajectory – both in terms of thought leadership and perception from CIOs.
Wipro: Investments in Designit and Appirio have created a defining set of digital capabilities for the firm – giving the firm the necessary structure and focal point to repackage the firm’s strong operational IT skills to match a client’s digital transformation agenda. While its current digital footprint is still emerging, its ability to partner with digital native pureplays and fintechs is impressive, and its digital design labs in the US and UK great hubs for driving new client work. We view Wipro as a well-resourced, disciplined outfit which could emerge as a genuine contender in the digital race, as clients needs become more demanding and providers have to be more flexible and aggressive to take advantage. Its challenges moving forward are scaling its consultative talent and finding smart ways to bring its Holmes AI platform into meaningful client conversation. Wipro is frequently viewed as a “safe pair of hands” for IT projects and it need to work hard to evolve this perception.
TCS: TCS has the scale and capacity to handle heavy IT and digital engagements, which makes the firm perfect for organisations with a lot on their digital to-do list. They’ve also got a great reputation for packaging their deep domain experience into usable solutions for clients. TCS simply has that ability to win any deal in the world if it really wants – its industrial and relentless approach to execution always stands the firm in good stead, and its aggressive more to analytics and automation will be crucial for digital exercises with clients mired in obsolete processes and creaking infrastructures. Its challenges are managing its next phase of growth, with the firm famous for avoiding acquisitions in favor of organic development. With this convergence of digital business design capabilities with IT execution, organic growth may no longer be an option as the market consolidates at unprecendeted speed and the emergence of digital pureplays threaten the traditional IT service model.
Deloitte: Deloitte has solidified its position in the digital space, driving innovative thought leadership and research into the market and using it to develop offerings. Similarly to KPMG, the firm can also bring that same “outside-in” broader market perspective to help firms contextualize new technologies and solutions within the broader market and industry trends. It’s no surprise Accenture has recruited Deloitte’s head brand honcho, Amy Fuller, to take on the Accenture CMO role next year (see link) – clearly the brilliance of Deloitte’s branding and thinking has impacted the industry at the highest levels. However, while Deloitte is clearly an early leader in the space, we are seeing several key competitors closing the gap, both from the traditional consulting space, as well as the outsourcing industry. We need to see the “what’s next” from the firm as competition intensifies.
Atos: Atos’ broad digital offerings include structured transformation projects – such as the Atos Digital Transformation Factory – which offers clients an accelerated journey to embracing digital. The firm offers significant experience in some industries (mainly public sector, manufacturing and retail) and especially in Europe with a long list of successful engagements. On the IT enablement side of digital, Atos is clearly doing well, however, adding capabilities at the design front-end would add significant capabilities if the firms wants to compete more aggressively with the market leaders. However, outperforming the likes of Capgemini and DXC is a significant achievement for the French-led firm. Atos really need a flagship digital acquisition to take its strategy to the next level and keep it ahead of its traditional competitors.
Premium HfS Subscribers can download their copy of the Blueprint Report, “Digital Technology Strategy and Consultancy Services 2017” authored by Phil Fersht, OIlie O’Donohue and Jamie Snowdon, by clicking here.
