Anyone with a real history in the services industry will be familiar with the insights of one Christine Ferrusi Ross, who spent many years leading the services and sourcing practice for Forrester Research, during the firm’s heighday. And in pre-HfS days, I used to enjoy meeting Christine for lunches when we would bemoan the state of the research analyst industry and what needed to be done to revitalize how analysts do research. Little did we realize back then we would be able to shake up the analyst industry together in an analyst firm not beholden to the whims of their paying suppliers and analysts confined to covering tiny slices of software markets. So when we got the opportunity to bring Christine, or “CFR” as her colleagues like to call her, to help shape our events and research strategies, it wasn’t a difficult decision… especially when you hear her views about moving to outcome-based contracts.
Welcome Christine! Can you share a little about your background and why you have chosen research and strategy as your career path?
Making a career of research and strategy, and then product development, came serendipitously. What I explicitly chose was being an analyst — because it seemed like an easy job at the time! When I graduated college I was working in a public relations firm for high tech companies. A big part of my job was convincing analysts to take briefings with my clients and then hopefully convince them to say something good about those clients to reporters. And I thought, wow, an analyst’s whole job is based on people being nice to them! PR people, tech execs, and reporters chasing analysts around like they were rock stars, who wouldn’t want that kind of a job? So I called some reporter friends who got me connected to some analysts and the rest is history. From the content side, I had done PR work for ERP companies and I understood how databases worked. So the application development and systems integration space was where I landed in my first analyst job.
Can I mention a competitor here? Because I started at Dataquest (now owned by Gartner) and was lucky enough to work with Allie Young, who taught me that the whole “rock star” thing was really not what the job was. She was the one who showed me that being an analyst meant doing good research and making sure you are as accurate as possible. Once I was at Dataquest, I realized I found my path — I love research, strategy, and I love the services space. From that first job, I’ve expanded into strategy and product development because I wanted to get deeper into helping clients solve problems in a tangible way and not just through research.
And why did you choose to join HfS… and why now?
Phil, I was joking with someone the other day that the real question is who thought it was a good idea for you to bring me on? It’s like taking the two kids causing trouble at the back of the classroom and letting them teach the class! That’s exactly what it’s like! You and I have had many conversations about where the IT services market is going, and where the research business is going. I’m not particularly bullish on either in their current forms. And HfS has a braver outlook than most when it comes to pointing out the flaws, but more importantly what hard changes have to happen if the businesses in these areas want to stay viable.
So with that context, why strategy and product development instead of fulltime analyst? I have spent a lot of time over the years with buyers who are frustrated. They have trouble negotiating with suppliers because deals are complex. But they’re also not getting the kind of help they need from consultants, advisors, and analysts. I’m excited to be working on some new products that will make buyers’ lives easier and hopefully make the industry as a whole more productive.
What are the areas and topics that you will focus on in your role?
On the “corporate” side, I spend most of my time on events and building new products. But I always say that analysts are born and not made, so I can’t really stop myself from looking at a few topics, at least. Right now, those topics include supplier risk and security, sourcing governance, contract negotiations, and improving the quality of life of people affected by our supply chains. There are a lot of good things we can do for the world — reducing human trafficking, for example — just by being responsible buyers and vetting suppliers properly. I talk about this more in my first blog post about being a superhero.
And what hot trends and developments are capturing your attention today?
Within the areas I mentioned, I’m particularly interested in compliance with supply chain and supplier risk requirements, as well as how contract negotiations are affected by emerging technologies. For example, it’s one thing to sign a contract with an automation software vendor. It’s another to think about how automation is applied to your services contract and the impact that has on the different cost levers. Related to that, I’m spending time on defining and contracting for outcomes. We’ve been on this ride before, but we really have to get it right. And once we get the definitions and the contracts right, what will be the impact on our industry?
So what do you do with your spare time (if you have any…)?
Hmm, a lot of things blend together in terms of work and personal for me. I’m very interested in fashion, and they have supply chain and sourcing problems too, in fact probably much worse than the tech industry. Especially problems like poor worker conditions and sweat shops, which I already mentioned is a hot button for me. I like music. You’ll hear a lot of my music taste at HfS Events actually, since I pick the playlists. I also go to a lot of concerts. My next concert is Steve Vai, and I’m really excited to see him since I’ve loved his music since college. In the past couple of years I’ve seen a lot of global musicians like Ed Sheeran, Stromae (from Belgium), One Ok Rock (Japan), Hozier (Ireland), Exo (S. Korea), BTS (S. Korea) and Block B (S. Korea.) The whole kpop industry is pretty fascinating. As someone who does product development and management, I was surprised how many product and marketing best practices we talk about in the technology that the kpop industry puts into practice. I love to discover singers from other countries, so if anyone has suggestions I’d love to hear them!
Welcome to HfS, Christine. Delighted to have you choose us as your analytical home!
Last week we wrote a blog about the leading BPO/IT services players in EMEA, this week we’ll look at North America. Conveniently the headline is more or less the same: the Global majors: IBM, Accenture, and HP, still dominate the top of the list. Although the question here is… for how long?
Frankly, much of the same comment applies to the Top three in North America as it does to EMEA:
IBM is struggling to know what to do with its services business. The cash cow days of traditional large scale infrastructure and BPO deals are gone – with the remaining “traditional” large scale engagements much slimmer pickings and being very aggressively targeted by Indian-heritage competitive usually offering lower price points. Its pivot, like many of the technology players (but with more justification), is toward a more intelligent adaptive operations play driven by more advanced cognitive computing and analytics where clients pay for achieving business outcomes, not bill-by-the-hour labor rate cards. However, the industry is caught in a time lag between the old world scale deals and the coming intelligent deals, which could take several years to flesh out. How IBM (and its ambitious rivals) can bridge both old and new worlds of service delivery is a significant challenge.
The “New HP” – is pretty much an unknown quantity in services with the announcement of the CSC merger. Obviously, the new entity will be larger, and likely to be in the number 2 spot next year. However, while, HPE is making announcements about its future, we have heard little about the new services firm. We apologize slightly for still calling them HP, but we just keep thinking there is no point changing it until we know what the name will be, and people understand whom we are talking about even if it should technically be HPE right now. What concerns us about New HP is it appears it could be planning to compete head-on for bread-and-butter IT infrastructure business against the likes of Wipro, TSC, HCL, and Infosys. Brand India is popular among enterprise clients these days, especially for operational delivery at scale. Hence, New HP has its work cut out attempting to preserve its slide of the North American IT services pie.
Accenture has managed to balance the worlds of operational delivery and consulting to become the industry bellwether. The one service provider which has firmly established itself with its 144 diamond clients is Accenture, which expertly manages them through the forces of change at a pace which suits them. Accenture’s path is on the face of it a little smoother, partly down to its market performance, its deep C-Suite consulting relationships and its reputation to bring sanity to complex IT and business process worlds – its services seem as in demand as ever, with many clients boating their “we use Accenture” badge with pride.
The differences appear just after these three service providers. With the offshore-centric firms making a much stronger showing with Cognizant and TCS in number four and five positions, not forgetting Infosys at 12. Ignoring the shenanigans at HP, you could argue that Accenture, Cognizant, and TCS are the top three performing IT/BPO services firms in North America in recent times.
Over the next two years, there isn’t likely to be much change in the top three. Accenture is unlikely to be caught by Cognizant and TCS in that time. This is unless IBM makes a similar move to HP, hiving off another part or parts of its services business. Although there is a question mark, at least in our mind, on the exact final number attached to the new HP entity – and this will depend exactly on what is included and not included in the final deal. However, it is still likely to be significantly bigger than Accenture. So – even with big declines and fair winds behind the offshore players, it’s unlikely they will overtake in this time frame.
Not to spend too much time dwelling on the comparison with EMEA, the lack of the European giants Atos and Capgemini in the Top 15 is worth mentioning. Largely given their recent focus and acquisitions, this demonstrates the level of investment and determination required to make a dent in the North American market.
The US government contractors would have also dominated a similar list to this in the past – with Lockheed Martin, Northrup and General Dynamics all having significant revenues in this space. However, thanks to restructuring and slowdown in US government spend, Lockheed Martin has slipped off the bottom of the chart. General Dynamics and Northrup still have a place in the list, but revenues have slipped significantly for both firms over the last five years.
Amazon Web Services (AWS) remains just off the list, but is likely to overtake CGI next year if it continues its current market momentum, we could also see other cloud players like Microsoft and Google in the years to come.
Bottom Line: Agility to keep ahead of the market headwinds is still the critical X-factor
Although the global majors are likely to dominate the top of the list for at least the next couple of years. The direction of the market is largely being forged elsewhere, and unless they can tap into the zeitgeist more directly, most will end up as another CSC or EDS.
We have observed, in other blogs, that the competitive landscape was increasingly two-tier, with the main differentiator between the two categories being inertia, however, it is those companies that are reacting quickly to the changing market conditions that are growing, and not necessarily the low-cost offshore-centric providers. We are sticking by this fact that the x-factor for an enterprise service provider is agility – both regarding the provider’s ability to adapt to the market conditions and capacity to deliver adaptive intelligent solutions to clients.
A year ago, we took our first look at population health and care management business process outsourcing trends and service providers. This year’s update considers the increased focus and impact on health, medical, and administrative outcomes through BPO and BPaaS engagements. We cover the availability of skilled resources, increasingly intelligent automation, analytics, and improvements to and bundling with componentized, cloud-based platforms. It’s quite a list, and there are pockets of momentum that hold promise for delivering more effective healthcare operations for these changing times.
At the Heart of Healthcare
The healthcare industry is looking to put the people, their lifetime and lifestyle, at the heart of the business in order to drive better health and care experience at a lower cost. And healthcare organizations—payers, providers, and others in the ecosystem—are challenged to deliver on this set of outcomes, and bridge the old legacy world to the new As-a-Service Economy. As people take on more responsibility for their own health and care, they want quality, accessibility, and affordability. And every part of a healthcare operation—front, middle, and back office—has a role to play to make it a more “intelligent operation,” one that is consumer focused and results oriented.
A number of service providers are stepping in to help change the game, and partner to make healthcare business operations more effective, with an eye toward impacting these health, medical, and financial outcomes. We hear from service buyers that they are partnering increasingly for resources—to allow local clinicians more time and energy for interactions with healthcare consumers by rethinking what activity can be done remotely, through partners, or even automated.
In this blueprint, we take a look at the role of service providers in bringing together talent and technology to broker solutions through BPO and BPaaS engagements. The scope is:
Population Data Management and Analytics: identifying whom to target with what intervention
Consumer Engagement and Interaction: reaching out, engaging healthcare consumers
Utilization Management: processing authorizations, reviews, appeals and grievances
Care Coordination: coordinating care activity
Performance Management and Operational Analytics: program evaluation and assessment, quality and compliance reporting
Service Provider Landscape and Blueprint Grid Performance
As-a-Service Winners are service providers that are in collaborative engagements with clients, and making recognizable investments in future capabilities in talent and technology. These providers are also leading in incorporating analytics and BPaaS to deliver insight driven services:
Accenture: Sophisticated and innovative thought leader with a wealth of knowledge and experience looking to “change the game” in healthcare operations
Cognizant: Partnering and driving results with an increasing portfolio of BPaaS for population health and care management support
EXL: An operations management and analytics company that partners with the option of platform based and BPaaS services
Xerox: Coming out strong with refreshed focus on research-based population health that taps into healthcare heritage and recent acquisitions
The High Performers all execute well, are investing in future capabilities, but need to gain more consistency and traction among clients in defining and delivering against business outcomes, and using analytics in on-going services:
HGS: Building out a nicely comprehensive capability for enabling “healthy behaviors” and interactions between consumers, payers, and healthcare providers
Sutherland Global Services: Willing to align and invest in resources to partner with clients, creating a strong data-based starting point
Wipro: Using customer experience journey maps as a basis for helping healthcare address industry disruptions and drive outcomes
A new addition to the Blueprint this year, HCCA Health Connections (although not new to the industry) is a solid Execution Powerhouse with energetic, high quality clinical process outsourcing.
Dell has High Potential for increasing momentum for BPO/BPaaS for analytics and unique IP around imaging, social, and telehealth, and a strong ecosystem.
HCL shows innovation in enabling healthcare management through digital channels—mobility and telehealth—for the life sciences that could be used more in healthcare as well.
Picking up the Pace—What’s On the Horizon for Population Health and Care Management Operations?
In the year since the inaugural HfS Population Health and Care Management Blueprint, we have seen an increase in the use of automation, analytics, and software platforms, attention to talent development, expansion in the location of resources, and blending of talent and technology.
But the pace is slower than it could or should be, due to continued concerns about data privacy and security, locked legacy contracts, and “old habits that die hard” in procurement. Compliance both hinders and helps progress, with constant updates and requirements from the government, but also promotions and clarifications that are meant to increase interoperability, transparency, data access, and quality health care. We have to choose and commit to doing something in a different way to get a different result.
In Healthcare, more so than in other industries, service buyers are increasingly ready to switch out service providers that fail to help them evolve to a more flexible, automated, and insight driven operation. In our recent research, 66% of healthcare executive buyers—higher than any other industry—said they would likely look around when their contracts come up renewal. There is just so much at stake in the Healthcare industry now, between the driving forces of consumerism and compliance.
This side of the Healthcare Business Process Services Market—BPO and BPaaS addressing health and care management—is “poised to pop.” We have seen acquisitions and investments to get a handle on structured and unstructured data, change the mix in the workforce towards more use of automation and greater healthcare and analytics expertise, and momentum with one-to-many models and applications. We look forward to seeing how healthcare executives can partner with service providers to reinvent not just healthcare, but healthcare operations, and truly impact the health and care of consumers, driving toward higher quality, accessibility, and affordability.
The HfS 2016 Population Health and Care Management Blueprint covers market trends and direction as well as the analysis of 10 service providers: Accenture, Cognizant, Dell, EXL, HCCA Health Connections, HCL, Hinduja Global Services (HGS), Sutherland Global Services, Wipro, and Xerox. For more detail—including visuals of the market and contract activity and analyses of the service providers—click here to access and download the Blueprint.
You’re a hiring manager and you’ve just had an offer accepted from the ideal candidate. Now what? Well now the nail biting wait starts as to whether the candidate will turn up on his/her first day or indeed, last the first month.
This is a key concern for organizations today, as a candidate that drops out at this stage can cost between $3,000 to $18,000 to replace, and they haven’t even stepped in the front door yet! Therefore, the onboarding process (in this context “onboarding” will refer to both the pre-boarding and onboarding process of a candidate) is a key concern in today’s competitive job market. The reality is though that a bad onboarding experience might not just result in a candidate not arriving on their first day, but could have detrimental effects in the near and long term:
Dropout rate in the first 45 dayscan reach as high as 20%. Although this issue doesn’t end here as up to 86% of candidates make a decision to leave an organization within the first six months of their employment.
Underperforming employees who have not aligned with a company’s culture or processes are often a hidden cost. Studies have shown that keeping on underperforming employees costs the U.S. Economy around $37 billion a year.
Tools emerging on the scene will help “escort” the candidate to the starting line to increase the odds of a smooth transition on day one.
Since many companies provide various forms of booklets and induction courses, it’s not necessarily an issue of education or training about the company being joined. What is needed, is to establish a candidate within the culture of an organization from offer acceptance. Being able interact with line management and future colleagues, as well as easily access training materials on company “ways,” policy and procedure, will imbed a candidate within the organization prior to physically joining. For example, ADP has a tool for on-boarding new hires that uploads pictures and personal messages from new colleagues and managers, as well as providing online access to information.
These interactions do not have to be overly formal or heavily focused on training, as the candidate could be serving notice at a previous employer. Rather they can be regular “pulse checks” to make sure a candidate is up to date with pre boarding documentation and also that he/she is interacting with future colleagues. During this time mundane tasks such as laptop preference and tax filing should also be completed. The end goal is that the candidate can hit the ground running on the first day, already having an idea of the company’s policies and procedures as well as having already become acquainted with colleagues. Hexaware’s new ONe mobile application for example, enables interaction between management and a candidate from the time of offer acceptance through to first day, and also provides analysis on candidate’s state of mind to preempt potential drop out through a continuous mood assessment undertaken with the candidate.
A key take away here is for hiring and HR managers to move past the notion of employees only becoming part of the company on their first day, and then having to quickly assimilate or feel isolated or left behind. From offer acceptance a candidate should begin their induction, both through social interaction with management and colleagues through to light-touch training and administration. Think of a candidate as an employee even before they start their first day.
Most British people around my age will be familiar with Not The Nine a Clock News – a satirical sketch show on the BBC in the early eighties, which was one of the first vehicles for Rowan Atkinson. I remember a sketch where a customer was visiting an electrical retailer and asked a series of questions to one of the staff members about a Stereo’s features, like “does it have Dolby?” With the member of staff just parroting back affirmatives to every question, “yes it has Dolby.” The customer, with increasing disbelief asks if it could microwave chickens – with the “expert” answering with disinterest “yes it microwaves chickens.”
This is the type of response you get when you ask an “expert” about blockchain. What does blockchain do? Everything. Or so it seems.
I have the fortune (or misfortune depending on your perspective) to hang out a lot with IT and sourcing industry analysts – working in the industry they make up my colleagues and many of my friends. This means that, over the last couple of months, I have had to endure a whole spate of blockchain theses testing the boundaries of sanity. The issue with a topic like blockchain is it’s hard to understand what is real and what is not. Because blockchain is a difficult concept to understand, many of the people I have encountered talking about the benefits do not seem to understand what it actually is. Except that it will revolutionize lots of things – by making electronic voting a reality, electronic financial transactions perfectly secure, IoT actually happen and work, helping to enforce digital rights and combatting physical counterfeits. Which are all laudable aims, but I tend to lose confidence in people’s predictions about a subject, when they do not understand how it works. Just saying “well you know, it’s blockchain, of course it can (microwave chickens),” just doesn’t inspire.
What is more, this overblown confidence in blockchain’s ability to change the world is not shared by business leaders at the moment. Our recent research on achieving Intelligent Operations, which canvassed 371 major buy-side enterprises, showed interest in blockchain at a similar level to using drones.
When you look around and see the many options for pet services such as pet insurance, grooming and exclusive doggy spas, it’s pretty easy to see how our pets are considered part of our families (just ask my own pampered hound dog!). To stay competitive in the pet supplies business, Petco’s customer experience team is laying a foundation to cater to customers and the way they want to shop, often with their pets, which is also impacting the way the retailer engages with service providers.
Bentley the hound putting in a hard day at the office
Writing Off Legacy
Challenges on the surface are not just about meeting new customer expectations and bridging online and offline worlds, but about writing off legacy and building the back and middle office processes to support the front, essentially creating what we call an Intelligent One Office. Part of this includes moving away from old tools and connecting underlying systems to bring customer data together on an omnichannel platform. Despite the challenges in doing so, Petco is working with service providers to take these essential steps to future proof its competitive strategy.
Petco is also writing off legacy thinking, pivoting expectations of their service provider partners to be more aligned to the NPS and customer issue resolution that matters to their business results. Sutherland Global Services, one of Petco’s Integrated Business Process Outsourcing partners, has aided in the customer experience changes with certain areas of expertise, including handling phone, email, chat and social interactions as well as helping with some of the thinking about how to improve CX. Petco’s social customer care, for example, is run by trained and dedicated social-savvy pet enthusiasts. Using a “social media platform” that monitors and prioritizes comments, agents can respond to inquiries within an average of 30 minutes.
Applying Design Thinking
Sutherland is also doing some aspirational work to help Petco along its transformation journey. To get into the pet groove, Sutherland sent its own workforce along with Petco into the stores and neighborhoods to better understand what people want for their pets and fed it into the solution design. Using design thinking concepts, Sutherland consultants aim to improve the customer experience from the inside out—talking with groomers and understanding what can make their lives easier, using it to suggest what would improve the experience for customers.
One of the key focus areas of building out a digital customer experience strategy is evaluating whether the tools employees use are aiding or hindering good customer experience. It is all too frequent that contact center agents are toggling through many different screens to find the appropriate information. Petco is addressing this by investing in tools that will bring together the relevant information agents need, which also impacts the training and approach of key services providers to adapt to new systems quickly. Sutherland was one service provider which worked on a prototype platform connecting various pieces of customer information to create a more holistic “omnichannel” view of the customer. This creates a unified customer view using data sources such as web, loyalty info, chat, shipping info, social monitoring feeds—to generate customer intelligence that is actionable in real-time across channels. The unified view and analytically-driven intelligence helps optimize the customer experience by improving business and customer outcomes (e.g., reduced average handle times, increased first contact resolution, incremental sales, decreased attrition, improved NPS, increase customer satisfaction).
Petco’s efforts are taking a wise approach to move the needle on improving customer satisfaction, as well as the retention of loyal customers and their furry friends.
Enterprises adopting SaaS applications to run their business processes are often entering the unknown. They don’t know what moving to the cloud actually entails, both technically and organizationally. They don’t understand the migration and integration needs relating to existing systems and data. And they certainly underestimate the support requirements to ensure effective management of the solution that continues to align to dynamic business needs.
What’s more worrying is that, after decades of experience with IT services and outsourcing of legacy, on premises applications, there are lots of generally accepted approaches, issues and outcomes that some buyers assume will translate to the SaaS world. This means that buyers are just not asking the right questions upfront to ensure successful SaaS deployments. Moreover, as service providers and buyers alike are actually learning about the SaaS services market as it evolves, enterprises are still working out what the ‘right’ questions should be!
So, what should enterprises be doing about this? Generally, it’s about talking. Talking to peer enterprises and pushing the service provider to demonstrate their knowledge of the market. A few key approaches for buyers include:
Contract consulting services that provide business and process focused advice, preferably prior to any software platform selection. Select service providers who provide some sort of Cloud Readiness Assessment services that include technical and organizational elements. Ensure that you know exactly what is involved, and which resources you need to make it work. Deloitte has simulator tools, for example, that explain the go-live process to consultants and clients. Some service providers also offer important support readiness services that advise on how to support the SaaS application in-house for enterprises that do not want to outsource this. Aon Hewitt’s approach to helping clients to not just ‘go live’ but ‘Go Thrive’ is a fantastic example of assisting clients to be self-sufficient post-deployment.
Talk to other buyers to share best practice and experience. There is no substitute for talking to other enterprises that are implementing, or even better, have already implemented the same product. Also, identify which particular area is causing a problem and talk to enterprises that are facing that exact same problem. Remember, this could be an enterprise in a different industry or country, so broaden your horizons in terms of defining ‘peer enterprise’. Service providers are often good at bringing best practices learned to every deployment. They are typically less great at physically connecting enterprises to have the conversation. So, buyers need to demand these connections.
Talk to the software vendor. Often the software vendor connects clients too. Workday is excellent at doing this, and enterprises have opportunities to make some great contacts for the duration of the deployments.
Go to conferences, especially the big software vendor events to meet other enterprises and service providers. Buyers increasingly find this incredibly useful for service provider selection as well as important connections and best practice lessons. Buyers can also stay abreast of all new developments in the market to make more informed decisions. For example, did you know that Aon Hewitt acquired UK-based Kloud and now has European feet-on-the street?
Push the service provider to be proactive. At the end of the day, they are the ones with experience and if they don’t know how best to do something, no-one does!
Both service providers and buyer enterprises have to be proactive on keeping up the communication to ensure a successful SaaS deployment that meets desired business outcomes. So, pick up that phone, get out to those conferences and have those conversations in the hallways. It’s where you will likely get the most useful advice to help you on your SaaS journey.
In a recent podcast about omnichannel (see below), an interesting spin on the well-trodden omnichannel topic came up, posed by my colleague Fred McClimans: “Omnichannel applies to the internal business/partner operations just as much as the consumer side of the market – so why isn’t this given enough attention? Or is it?”
Is the Omnichannel truly Everywhere?
It’s a great question, and one that every company should think about. All organizations are dealing with BYOD and an increasingly mobile workforce that has various preferences depending on what we want to accomplish. We are omnichannel in our personal lives—just yesterday, I texted a friend about making plans to meet, later sent her a link to a funny video on Facebook messenger, and then called to tell her I was running late for said plans. It’s the same at work where sometimes we Skype, text, call or use social platforms depending on what we do. Of course, these are interpersonal relationships where we know one another and the context for seamless interactions is often inherent and certain technology implications aren’t quite as severe (think automated analyst briefings!) – but the concept is the same.
Where the internal omnichannel concept seems increasingly applicable, is within the contact center environment. Static FAQ style knowledge management systems are being replaced by dynamic social platforms where contact center employees can get the information they need and learn from each other to support the end customer experience. Gone are the days of contact center supervisors poring over reports in dark corner cubicles, they are roaming the floors with tablets giving them real-time performance updates while listening to and coaching employees.
It’s Tools and Talent!
All too often employees don’t have the tools at their disposal to effectively do their jobs – as we move toward OneOffice, it’s not just front line workers like contact center that need effective communications tools, it’s the back office and everything in between, as well as partner communications. It’s about how we work with each other, how that permeates through our company culture, and ultimately how that supports the end customer.
From a larger business, and cultural, perspective, supporting any type of omnichannel engagement costs money and takes time to implement, not to mention a new level of training. Already stressed by budget costs associated with digital transformation and omnichannel expansion, both talent costs and technology costs are watched very closely. Every dollar spent (or invested) is increasingly tied to customer-centric outcomes, while internal development (which may not immediately impact sales revenue) is often a second or third priority.
There is also a mindset shift that needs to occur within most enterprises – viewing employees as less “workers” and more “consumers and partners”. The truth is, employees are customers (users) of an enterprise’s internal systems and their satisfaction and consumption follows the general pattern of the larger consumer market. Employees are also partners, who must engage with various departments as part of an internal supply chain process). Failure to embrace omnichannel within an enterprise, while employees are living it at home, is like asking employees to leave their mobile devices at the door and not embrace BYOD.
The Bottom-line: Employees are Customers too!
So, to answer the question, why isn’t this being given enough attention (or is it)? It’s not, and the reason is a matter of maturity, and recognizing the influence that internal culture and organizational structure can have on business performance. Most of the marketing hype for omnichannel is being driven by tech vendors that are selling customer facing platforms, and thus the discussion leans in that direction. But employees are customers too. Time for us to change that dialogue, and start pushing enterprises and service providers alike to embrace the omnichannel in internal operations.
Here’s the podcast mentioned above, where we dive into the issues of omnichannel CX support within the global market, including the challenges faced by omnichannel within the enterprise:
Elon Musk released his master plan last week, which outlines his plans for solar roofs, trucks, buses, autonomy and business models for the ride-hailing economy. As a former business planner in a leading manufacturing firm, this gives me goosebumps. All companies can learn from the master plan. In fact, I would like to turn the clock back and have these kinds of discussions in our product planning meetings. But, apart from the effect it will have on Tesla’s competitors, I think the most important implications are for engineering service providers that aspire to disrupt and plan to have a long-term future in the industry.
These are the lessons from the master plan:
Start planning about engineering disruption in your customers’ industries: Do you want to wait for customers to come to you and ask for support in engineering projects or do you want to anticipate what support customers will require in future and plan it now? Do you follow end customer trends which will impact your customers (OEMs, Tier-1s, ISVs) in future and start building your capabilities in advance? It’s not about where the puck is now but where will it be next. (BTW, have you started thinking about Augmented Reality Engineering CoE post Pokemon Go?)
Fund your future ideas from the profit of current ideas: Money shouldn’t be the excuse not to build capabilities especially when some of the service providers are sitting on piles of cash. Tesla is able to disrupt the whole automotive industry with relatively small amount of money and used money generated to reinvest in further capabilities. Don’t expect customers to fund your innovation capabilities. Engineering services buy-side customers often complain that engineering service providers want to bill all PoCs, training, tools, etc., back to them. Service providers should at least show interest in funding innovation projects for their own good.
Challenge product and industry boundaries: Engineers are trained to think within boundaries. All engineering equations and theories have boundary conditions that need to be adhered to in order validate theories and formulas. The flip side is that engineers often don’t challenge existing boundaries—whether product or industry. Innovation happens when we question boundaries and long-held assumptions—as Tesla’s plan shows about challenging assumptions of different bus designs, point-to-point passenger drop of buses, etc. Also, industry or vertical boundaries are blurring and innovation is happening at the intersection of different industries. Is Tesla’s battery capability an automotive or energy capability? Similarly, in which industry is solar power combined with an electric car? Engineering service providers have experience in multiple industries and should be in a good position to help their customers in redefining industry boundaries.
Anticipate and support new business models: We all are tired of using Uber as a new disruptive business model example. But now Tesla is showing its vision of new business models, including a future in which an automated car can earn money for you when you are not using it. Another new business model will be easily generating, using, storing and selling excess solar power. Cars and solar power systems can transform from costly depreciating assets to revenue-generating productive assets for the average Joe. These models will require a good amount of engineering support at the backend to work well. Are you ready to support them?
Develop real value engineering capabilities: Though this is not listed in Tesla’s master plan, the real success of Tesla has been developing a game changing and cost effective car battery. How did Tesla do it? Tesla challenged existing constraints as discussed in earlier point but also value engineered it from first principles. Elon Musk, in this interview, said, “Somebody could say, battery packs are really expensive and that’s just the way they will always be. Historically, it has cost $600 per kilowatt hour. It’s not going to be much better than that in the future. With first principles, we say, what are the material constituents of the batteries? What is the stock market value of the material constituents? It’s got cobalt, nickel, aluminum, carbon, some polymers for separation and a seal can. Break that down on a material basis if we bought that on the London Metal Exchange what would each of those things cost? It’s like $80 per kilowatt hour. So clearly you just need to think of clever ways to take those materials and combine them into the shape of a battery cell and you can have batteries that are much, much cheaper than anyone realizes.” This is the essence of value engineering capabilities; your customer might expect from you in future.
Keep an eye on future leaders in your target industry: Engineering service providers that want to stay relevant for the long term should keep an eye on the future leaders/unicorns that are disrupting the industries. Don’t make the mistakes of the telecom industry, where yesterday’s leaders (Motorola, Nokia, Blackberry, Lucent, Nortel, etc.) were displaced by likes of Apple, Samsung, Huawei, etc. The bad news for engineering services providers is that new disruptors are not heavy outsourcers of engineering services. They needed to engage early. The same disruption in leadership might repeat in automotive, aerospace, medical devices, industrial equipment, energy, and ISV industries.
The Bottom-line: engineering services providers that aspire to be disruptive and innovative should avoid the following –
Digitization as digital
Developing a mobile app as a new disruptive business model
Building a version 1.1 product similar to other products as disruptive product development
Using same design library as rethinking existing industry boundaries
Substituting a cheap material or cost effective supplier as value engineering
All of those points are not bad strategies, but they push you into a downstream or mature phase, which is where you build scale and fund upstream activities.
But disruptors are the ones that get into upstream phase and shape the industry. This is similar to what Phil Fersht has said about two kinds of service providers group emerging in the IT services industry – OneOffice Enablers and BackOffice Outsourcers. The same will happen in engineering services. The difference in engineering is that the Teslas of the world are setting the bar a little higher!
If you run any type of business operation or P&L, you’re quickly realizing your number one challenge is getting your people to help you achieve the results your business needs to be successful. Your strategy has to be about promoting a mindset where people focus on what they are contributing to the business, not the amount of hours they spend “at work”.
Whether you are a workaholic slogging an 80-hour a week, or a 20-hour a week work-at-home mom/dad, you are going to be measured on what you are contributing to the business – so it’s really all about setting the right outcome expectations with your employer. Simply sending through a weekly timesheet with a bunch of vague activities is a waste of everyone’s time. Agree in advance with your boss what outcomes are expected of you and focus your time on meeting them… and if you can achieve them working 10 hours a week sitting by a pool in the sun, or slaving away for 100 hours in your basement really doesn’t matter anymore – it’s whether you delivered those outcomes expected of you. You just need to decide whether that job suits you and your own goals in life. Today’s successful working relationships are being defined by employers and workers sharing outcomes that both are motivated to meet. If those outcomes do not gel, then that working situation will not survive.
And this isn’t some fancy new vision for talent only a few businesses are adopting – this is the only way firms can really function today, if they want to be successful. Everyone on the payroll needs to add tangible, easy-to-explain value… otherwise why are they on the payroll? It’s easy to turn your PC on in the morning and forward emails around the place, but what is your real value?
The only six questions that matter when it comes to outcome-based employee performance
Which customers have you delighted recently?
What new relationships have you made that add value to our business?
What work have you done that excited people inside and outside of the business?
How are you helping energize your colleagues and exciting them with new ideas?
How have you helped add value to new business wins?
How have you contributed to new initiatives that improve productivity and effectiveness?
Cutting to the chase, if you think all you have to do is turn on your PC on at 9.00am and shut down at 5.00pm, mindlessly immersing yourself in forwarding and adding to chains of emails between your hourly Facebook visits, bi-hourly LinkedIn visits and your twice-daily moronic retweeting of some crap you never really bothered to read (but the title sounded impressive), then you’re pretty much done. Go check on your pension plan, because you may be hitting those funds long before you had anticipated.
As an employer myself, I gave up caring what staff do during the day – trust me, you’ll drive yourself insane if you go old-school with the old micro-management. New school management is simply asking staff those 6 questions – and requiring answers to them.
So what activities should outcome-centric employees do during the day?
Limit email activity to one email a time. Scan your messages and quickly decide which ones require a response. The pick them off one at a time. Do not click out and re-check them all again. Just answer then quickly one at a time until all the important ones are done. The minute you start trying to multi-task your email your lose focus and you’ll spend all day faffing around your inbox like packing up your hotel room with a hangover…
Call people who matter. Remember when you actually spoke to people? You got things done, you created friendships and new ideas. Something nearly always happens when you speak to someone. List the 5 people you need to talk to and focus on them for a couple of days.
Read something that makes you smarter. We all get loads of interesting stuff shoved at us and let’s face it, we probably ready 5% of it at best. Stop. Pick out the one article you know will make you super damn smart at your key work task at hand and read the damn thing. Make a decent cup of tea, go sit somewhere quiet and read it.
Turn off Facebook. Seriously – there is nothing in there to help you do your job better. Do it with a glass of wine in the evening if you have nothing better to do. If HfS did a productivity analysis impact on the global economy due to Facebook-faffers, it’s probably in the billions…
Write something. We’re all analysts now, so focus on writing something that your think you are expert in. It’s a great way to build credibility and if forces you to be a better communicator. We all went to school, we can all type, we can all read, we can all talk, so why can’t we put out thoughts to print? Just write like you talk, like you’re explaining your views on something to someone down the pub… or explaining to your Mom what you actually do. Everyone is an expert insomething… hell, if you’re not, you might as well give up now.
Exercise. Not much is worse for you that staring into a 12 inch laptop screen 18 hours a day while guzzling caffeine and noshing last night’s pizza… so pick out the best time of the day to get your heart pounding. It’s the best thing ever, but organize when you do it, otherwise you’ll hit 5.00pm and you know full well it’s just not going to happen…
The Bottom-line: we must change our work habits if we are to survive in this work-outcome environment
Personally, I never thought the work environment would reach some of the current depths it has today for so many people, but the impact of “digital” has not been very good, when it comes to the productivity and effectiveness of so many workers. So many people are just burned out from picking up terrible digital work habits (and many at quite a young age). So change how you work. Just do it, and you’ll start to experience a very old feeling you’ve probably long forgotten: job satisfaction.
Most British people around my age will be familiar with Not The Nine a Clock News – a satirical sketch show on the BBC in the early eighties, which was one of the first vehicles for Rowan Atkinson. I remember a sketch where a customer was visiting an electrical retailer and asked a series of questions to one of the staff members about a Stereo’s features, like “does it have Dolby?” With the member of staff just parroting back affirmatives to every question, “yes it has Dolby.” The customer, with increasing disbelief asks if it could microwave chickens – with the “expert” answering with disinterest “yes it microwaves chickens.”
