While we were all getting carried away with the As-a-Service Economy, where life and work will be completely digitized, robotized, on-demand, one-to-many, outcome-based – and all available on your mobile device – our Chicago Blueprint Sessions helped us dial back a bit to reality, where one core element is needed for enterprises to get through the next 12 months, let along the next 12 years: Trust.
When we asked the service buyers to describe their service provider relationship, it immediately became clear that half of them are still “master/slave” in nature:
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So Barbra McGann decided to put pen to paper after the vigorous Chicago debates to encapsulate the key tenets both service buyers and providers need to think harder about, if they are all going to end up joining the elite 27% in the promised land of jointly-strategized and executed service behavior:
Here are three phrases that are today’s big no-nos:
1) Labor Costs. These things are just the worst thing ever and have to be eliminated. Who wants people anymore, when systems can talk to other systems, processes mimicked in drag-and-drop software apps and cognitive analytics can replicate those antiquated human brains. People cost money and need to be gone.
2) Transactional. Oh my – all you do are transactional activities? Can you please replace yourself right away with someone either lot cheaper or, even better, a piece of software? How can you dare exist when you add no “value”?
3) Legacy. Probably the worst insult anyone can use on any person, process or technology. You’re done. Dated. Over. Yesterday’s news. Time to crawl away and cower somewhere on government handouts.
There is good news – and challenging news – for outsourcing buyers, service providers and advisors: most enterprises are pleased they moved into an outsourcing model, but have recognized they need to make significant changes to the way they manage their service provider relationships, if they are to realize real value in the future.
Some service providers are going to become legacy, some will step up to meet the demands of the As-a-Service Economy, and there will be new arrivals in the future to disrupt the market, which may not even have been formed yet.
What is clear, is that two things are going to happen with most outsourcing relationships in the short-medium term: many existing service providers will be switched out, and contractual terms will need to change to reflect the evolving needs of the maturing enterprise buyer.
During the recent Chicago HfS Blueprint sessions, we asked the enterprise buyers to express how they viewed outsourcing service providers and the nature of their relationships. As we revealed last week, a good number of buyers (43%) admit they should give up more high value work and responsibility to their providers, but are struggling to let go because of the change and trust issues at play. However, when probed further, over four-fifths of service buyers would choose not to reverse their outsourcing decisions, and, instead, would make changes to their current contractual terms (44%) or simply look to change provider (33%):
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What this signifies, is that outsourcing is the start of a new way of working for enterprises, but does not provide all the answers in the early days – it sets the agenda for how they intend to operate in the future, where third-parties provide lower operational costs, increased scale and – hopefully – added capability. However, what is clear, in the initial phases of outsourcing, is that achieving lower cost and added scalability of resources are the real outcomes three quarters of service buyers actually expect:
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The Bottom-Line: It’s time to dial-back the rhetoric as most services buyers are still getting to grips with cost
We can bemoan for days the struggles so many outsourcing clients are going through trying to achieve value beyond cost, however, the happy reality of today’s outsourcing business, is that most services buyers are only expecting their service providers to be agents of cost-reduction and efficiency.
These expectations change as processes become more efficient and governance skills develop, which is when service providers will be held to task to bring new capabilities to the table, namely automation, analytical prowess and process reinvention, which we will reveal shortly. However, for now the industry is – by and large – a reasonably happy place to be. It’s the next phase of business transformation with will separate the wheat from the chaff… a phase we have already entered, even though many have not yet realized it.
Gianni Giacomelli is SVP, Product Innovation and CMO for Genpact (Click for Bio)
Did you hear the one about the Italian process wonk who gave up his E-Class Benz, his job-for-life at SAP and his Frankfurt home to uproot his family to spend a year in Delhi devising strategy for an India-heritage BPO provider which, at the time, was barely out of its start-up phase? Yes, that actually happened.
I have known Gianni Giacomelli well for 10 years now, and have always described him as a misplaced analyst foraging a career on the sell-side – always one of the smartest guys to talk strategy, and great fun to bring to our HfS summits to face the fury of the buyers. Gianni today has found himself as product innovation and marketing lead for the largest business process services pureplay of all, Genpact, and moved his family from Delhi to the confines of Westchester County, New York.
So without further ado, let’s find out what’s going to happen in the world of business process operations..
Phil Fersht, CEO, HfS Research: Good afternoon, Gianni – it’s great to get some time with you today. I think we last featured you on HFS (see post) about maybe seven or eight years ago right at the beginning of the blog. So it’s nice to circle back after all this time and hear from you again. You have had a pretty colorful career in the services and software industries, so maybe you could just take us through some of the highlights.. and how you ended up doing what you’re doing today.
Gianni Giacomelli, SVP & Chief Marketing Officer, Genpact: Yeah, thanks Phil, and it’s especially good to see how you guys have evolved as well. I mean seven years ago, certainly a bunch of talented people – you never have thought that you would end up disrupting the analyst model so it’s good to have seen you growing like that.
I would actually like to make a parallel. I mean, you guys have grown and I think it takes perseverance and a lot of work but then it also takes innovation and agility – this stuff takes you, careers take you to an unexpected place. Frankly, I never would have expected starting 25 years ago working in consumer products marketing and analytics then in consulting for BCG and so forth and ending up in SAP, product innovation in a business services companies. I guess it’s a little bit of a hallmark of our times, right? You don’t quite know where you are going to end up being. I think all that matters is the diversity and what you call colorfully diverse. Because when you have diversity, you actually see things from different perspectives and you end up in places that you wouldn’t know but there is a logic, there is portability and I do think that is the crux of what I’ve tried to do. Technology that can be applied to services and services that can be applied to technology.
I do think that is the way many industries are converging these days, frankly, services and technology and consulting are colliding. There is a space that is called software as a service. Ten years ago it was software and then services. And there is another space that is called consulting and then there is advisory that is very close to ongoing relationships with clients that are very similar in some cases to operations support that we do. I think having the ability to look at those things from a different perspective and obviously I have worked as a consultant and advisor. I have worked in technology and worked in services, I came to see why it is that this stuff is converging because the root isn’t all that different.
Phil: Gianni, I think the biggest contrast in your career was spending several years working for enterprise software giant SAP and then moving to a high-growth Indian-centric (at the time) BPO firm (Genpact). How did you find that transition. What was the big difference between a big software firm and a big services firm… just from your experience?
Gianni: Yeah, so it’s interesting because, you know, first of all, Genpact, yes a very big India root but a company that was growing out of India really fast, it was exhilarating. I mean, the Board was, if you look at the composition of the company, a lot more diverse and a lot more global and especially now, many top people including CEO and CFO and a number of P&L leaders in New York, and certainly very strong roots, operations, and strength of that in offshore locations. So the company already promoted the idea at the time, Pramod Bhasin who was my boss back then did so vehemently, we needed to be absolutely global and already the India based folks where very global in that respect.
So that wasn’t actually too much of a shock to be honest. I also moved to India. I moved there for a year. The reality is that obviously I was in Germany before and moving to India isn’t quite the same thing but the type of work that you do is global. I mean, you can do it from the moon and at the end of the day, it’s very similar. You end up talking to Germans and Indians and instead of sitting in German you’re sitting in India, and conference calls, groups’ compositions are roughly the same, you just have to sit somewhere else. So that wasn’t really all that much of a shock, daily life and whatnot is different but that’s life anyway. I think the big difference though, and it’s interesting, is software versus services. I think it’s a difference that will fade away to some extent over time. Think about SAP, and how it has changed. SAP has always been long-term planning, you know, do three to five years planning, organic, don’t buy too many companies because you’ll corrupt your DNA. That was back then.
Obviously, they’ve now been buying companies left and right especially in software as a service and it is funny because in those days when I was there in 2004, we actually tried to start a software as a service business in many respects by trying to embed technology into the outsourcing service providers as well as obviously using similar software into shared services. It just met with a lot of internal resistance. That strategy turned into a defensive play instead of an offensive play and low and behold ten years later, the pendulum is swinging a lot. They have abandoned a lot of reticence against inorganic growth and creating all this HANA based stuff that is a lot more malleable and adopting software as a service pervasively. So the company was already changing quite a lot back then in 2010. That is also the reason why the jump wasn’t all that big.
But yes in terms of software you have long cycles of building an assets whereas in services you typically try to get into a client situation and build stuff out from there and I think that was the biggest difference. It creates differences in terms of which people you staff solution design and delivery functions with, how you give investments, tollgates and all that kind of stuff. But even software companies are increasingly doing co-innovation with clients, doing agile development, and software as a service means that you don’t allow product management in Germany to tell you what products and operational functionality because it is needed for those clients in North Carolina – you do a lot more of a try, test, does it work, remove and then move on. I think services companies are coming in from the other side. I for example think of co-innovation with clients but also creating assets, creating the foundation, creating, in our case, system of engagement technology that allows you to build IT underpinnings more quickly. And yes, it is agile development with a lot of testing with our operations people.
Phil: There is so much talk right now about disruption, Gianni, with the emergence and availability of new technologies, automation and analytical tools and capabilities – and there is a lot of out-of-the box thinking going on. Are things really that different when you look at your clients and what they’re buying from Genpact today? Do you think there is a genuine shift happening in the industry, in terms of the types of services clients are buying and the way they are going to be priced?
Gianni: This is interesting because five years ago I would have said, Phil, in many respects I can go into hibernation for five years and I come back and we’re still talking about the same stuff when it comes to innovation. In 2005, we talked about outcome based pricing and we used to talk about governance. In 2010, we’re still talking about the same stuff. The reality is that I do think the last four years have changed things substantially. A couple of things that I think have happened. First of all, let me just clarify one thing that hasn’t happened. Here you are dealing with operations so follow me and forget about shared services, outsourcing and whatever those are just incarnations of operations. You’re dealing with operations and the ability to do controlled experiments in operations is always relatively limited. That is the reason why you can’t often do abrupt innovation changes. This industry is not like I buy an iPhone, I like it, I don’t, tomorrow I buy a Samsung.
In operations, there is legacy and refresh cycles are longer that is the reason why many of these things get delayed. Obviously, service oriented would have helped already back in 2007 but they didn’t until a couple of things happened. But a few things happened. First of all, APIs are a lot more pervasive right now. You have a lot of systems of records out there that you don’t need to use the inner architectures of. Very often people just take stuff out through API. The master data is still a mess but the solutions are more intelligible than it used to be in the past – from both a technology and process standpoint. So when you have those two, you can actually start pulling process stuff out and do change bit by bit which is actually what enables innovation and most people don’t think about that, but the reality is that if you try to change things wholesale, the COOs of any operation they won’t do it unless you allow them to do it bit by bit.
The other thing that has happened is obviously all the practices related to shared services and outsourcing has matured. I mean, they used to be an exuberance period in 2005 and 2007 in which everybody was running offshore for all sorts of things and I think there were a bunch of deals especially in the HR space but also in others where some providers took too much stuff to be honest and they actually ended up tarnishing a little bit of the reputation of an industry because of few but disproportionally publicized. So a lot of that has matured and that also gives everybody a bit of a level-set, and people are less reluctant to try new stuff now. And the third aspect is within the last two or three years, we have had a bunch of stuff that has become really mature in terms of technology. You should look at Mobility, you can look at Cloud, you can look at analytical tools, all that kind of stuff. It has been about three years, all of them have come together and they are mature now.
Three years ago the performance of those things was crappy and it was unpredictable if you would finish something in time or not but now the mobile applications work, much big data technology is not bleeding edge anymore and it allows you to do a proper job with distributed analytical powers. The Cloud stuff isn’t – a lot more people understand a lot more how you can use Cloud. Think of our systems of engagement, they couldn’t have been there at this scale and cost three years ago. So I do think that those three things all together are a big shift and they come together and now is the perfect storm on top of obviously the fact that in 2008 the world changed and it has created a burning platform for a bunch of people. So I do think that things have changed.
Phil: The platform is definitely burning! There is a desire to change… so when you look at Genpact, you have built a great business through managed operations, BPM, so where does it go from here? Does you become more of a consulting type business? Do you just broaden your operational services business? How does Genpact get to that next phase of growth in your evolution? What does that kind of game plan look like?
Gianni: Yeah, I think the way we look at it and certainly the way I look at it is twofold. First of all, let’s straight on understand what your clients want from you, which is getting them to run more effectively and efficiently. And secondly, let’s try to understand what you can do because of the genome of what you have. If you wanted me to be a singer, that would be great but I wouldn’t have the genome to do that so you wouldn’t want me the do that. So the same applies here. I mean, many of our clients for which we have been running operations believe we have been a really good operator and really good transformer of day-in and day-outs processes and so forth for almost 20 years for some of them. They ask “can you help us design and transform the next wave?” I think that is legitimate. Yes we’re not a management consulting firm per se. I mean, we’re not and will never be a traditional management consulting firm. But what does that mean?
We certainly have a sense of what we call the “operations feedback loops” which basically means whenever you change things, you know, small things, big things, we run that stuff and we actually figure out if those things actually materially impact from a business outcome standpoint what you’re doing. That clearly gives us an advantage over folks who just design or implement the stuff – because we design it, then we test it, we have thousands of people working on that stuff hands on keyboards and eyes on screen and a bunch of clients we can observe and you end up understanding what works and doesn’t, both on our side and on our clients’ side. So that’s our angle. Our angle is we typically tends to be fairly accurate in terms of understanding what works and what doesn’t, what will work and what will not work. Now, are we going to be your strategy consultants for every company function? Are we going to do the complete blue sky and candles kind of stuff? Should we be that? I mean, what we do is about how you run companies better, it is operations. At the end of the day, you want to invent the future but you want to invent a future that our clients can run on within the next two years. There is no appetite anymore for long jumps, because of the volatility and uncertain market conditions. I mean, you can do a little longer but it isn’t like in the old times when you implemented ERPs with a 5 years ROI in mind and it ended up being 10 and you survived it.
So I think we are becoming a little bit of that. Managed services company who can design, transform, and help you run and continuously innovate on your operations and frankly, the crux of the operation is how do we them make it intelligent, how do you re-imagine them so they predict, sense, react and learn from the impact to get better next time. Part of it that we run, part of it you run. How do we use tools? How do you use metrics? How do you use the process acumen to optimize both of them? Certainly, yes, we have come a long way from just operating one part of the business. I do think that in this respect, the GE heritage has helped a lot because we have always been kind of an extension of a client company. We have been a service provider but the next door was the rest of the company so you can actually understand how you can work across boundaries and whatnot. Does that clarify a bit?
Phil: Well thought out, Gianni. So that brings me to my final question… You are crowned the emperor of BPO for one week and you are allowed to do one thing to change the industry, what would that be?
Gianni: Our is an industry that needs some vision as well as execution. Maybe I will go way back to your initial point which I think you bumped into it and maybe accidentally but I think it is a very profound one. This isn’t about BPO or shared services or system integration or consulting or big data. This is trying to solve enterprises way of running at scale, every day, operations, a bunch of different processes. I think I would do one thing which is take everybody who is involved on the BPO side and the shared services side, on the consulting side, the analytics folks, in banking, in health care, in consumer products, and a bunch of other places, across processes. Put them into a blender, mixed them up and kind of pull them out and put them into different positions from where they were.
So in other words, just push diversity. People get siloed and incremental because they have always looked at their little patch of land and they think oh, you know, domain expertise is all there is, and obviously you need to have that, but that’s not all. We ran an interesting piece of analysis recently. We took a sample of 500 operations leaders, and most of those folks have only worked in one industry. I think that is dangerous. And by the way, you are in the one industry where you have more a mixed genome is the software industry, where people from all kind of places. Spot the correlation with innovation.
But the reason why that is, if you look at, take health care, they want to get straight processing through processing of a bunch of stuff that they do but, you know what? Banks have been doing straight through processing for probably 20 years. Well, I want you to get people from banking into health care to look at some of that stuff. And you look at the contact centers in pharma companies and their model of needing to listen more to clients directly and perhaps even provide services, and again, there is CPG contact centers have been doing social media analytics for that and have been doing a lot of combing and listening to clients in very portable ways.
It’s just that the moment that you start siloing people and siloing careers. and, by the way, the same can be said for services and technology, people think of them as categorically different but there is more overlap than you would think. You get to stifle stuff a bit, right? So what I would do is just get people to, for a week or a month or a year, do – what was that movie, Sliding Doors, I mean, you have got to swap people up for a period of time, right, and then see if you still can do things and if you can innovate. I think that probably would be a good thing for the industry.
Phil: Well said! It’s been a great interview Gianni – really some strong stuff in here. I look forward to sharing with the HfS network.
Gianni Giacomelli is SVP, Product Innovation and CMO for Genpact. He can be reached on twitter at @ggiacomelli
Suddenly, everyone is a bloody analyst. I must get at least five posts a day from a completely random selection of individuals attempting to educate me on how robotic automation, digital technology, IoT, big data and outcome-based pricing are going to be the biggest game changers to disrupt the business world since the invention of the desk.
Suddenly, there’s going to be minimal need for human labor anymore, so we’ll just sit at home all day running our lives from our mobiles devices sequencing our own genomes using some cool analytics app that we only need to pay for once we’ve added 10 years’ to our life expectancy. Somebody please shoot me now… let’s dial this dialog back to reality for a few minutes.
During our Blueprint Sessions in a very, very chilly Chicago this week, we started with the vintage discussion, “How can we re-set these stale services relationships to drive more value beyond labor arbitrage and standard operational delivery”. Yes, the old chestnut conversation has to take place, just incase there has been a dramatic, unexpected shift in these relationships in the last six months. But, alas, as per usual, most service buyers in the room were still pacing the treadmill of operational ordinariness with little clue how to move the needle.
So we asked them one very simple question:
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Oh my god. After all the whining about things like, “All they do is sell to us”, and “All that cool stuff they promised us during the sales process and never delivered”… the real reason behind this stagnation is the simple fact that most buyers are just struggling to let go!
So there we have it, folks. Rather than spend another minute reading the latest riveting diatribe about how “big data is about mining meaningful insights”, let’s focus on the real issue at hand here: TRUST. Why do 43% of buyers today admit they need to give up more high value work to their service providers to drive value into their relationships? Quite simply, this is an admission from buyers that they are scared of change – they worry that giving up control to a third party will minimize their own value, and their provider simply does not make them feel comfortable enough to take more of a risk.
The Bottom-line: The biggest disruptive trend on the horizon is TRUST
The solution, then, is simple: service providers need to earn that trust – and prove they can enhance the value of their clients’ governance teams by taking on higher value work from them. This means many need to change behaviour… the overselling needs to stop and the demonstration of real value needs to start. Service providers need to take a long, hard look at the personalties of their account managers to make sure they are providing consultative value to their clients. Service buyers do not “let go” until they know they have a safe pair of hands to trust with their beloved processes… so let’s refocus on the one real business value item that matters: TRUST.
For the last decade, and longer, we’ve been debating and bemoaning how we can encourage services relationship to drive better collaboration, better automation, better talent development, throw off better data… and shift us away from a labor-based model that will not survive the test of time. Next week, in Chicago, we will stare at that wall we’ve hit, and collectively figure out how to jump over it. So without further ado, pop in your headphones, turn up the volume and enjoy!
Is it possible to make it through a single day with the word “robotic” being uttered somewhere?
Indeed it is not, ever since HfS Research first began covering the emergence of the new technologies in Robotic Process Automation (RPA) back in 2012. Since then, we have seen RPA take off and become one of the dominant topics in the BPO and IT services market (read more here). RPA is now on the strategic agenda of every service provider, third party advisor and increasingly on the minds of enterprise buyers as well.
But, until now, there wasn’t a way to contrast how different service providers in particular were both thinking about and acting on the opportunity created by the emergence of these new RPA tools. Instead, every activity by a service provider seemed unique and it was hard to get a picture in anyone place as to how mature this capability was and how central it might be to the future operating model of the BPO service providers.
So, after dozens of interviews with service providers over the last several months, we have created the HfS RPA Maturity Model based around 10 Elements and 3 Levels that define what it means to have a mature strategy and delivery capability for RPA in today’s marketplace. The HfS RPA Maturity Model is a useful way for enterprise buyers, third party advisors and service providers to guide conversations within the BPO and IT services ecosystem about RPA and to assess where an individual service provider sits with regards to the maturity of its RPA strategy and program.
The 10 Elements of the HfS RPA Maturity Model include:
Primary Goal of RPA.What does the service provider want to achieve through their RPA program, is it skills augmentation or labor cost reduction for example?
RPA Program Owner. Who owns the RPA program within the service provider’s organization?
Vision of Deployed RPA. How sophisticated a vision does a service provider have for how the “robots” in RPA can be deployed and the utilization model that comes with that?
RPA Tech Vision. Is the service provider looking to deploy RPA in a relatively simplistic technology vision going forward with remote access to a client’s applications or are they building RPA into the heart of a more ambitious business platform program?
RPA Expertise Owned By. Where is RPA knowledge being captured and maintained within the service provider’s organization?
RPA Program Funding. Is there substantive funding behind the RPA strategy or is this being done of the back of individual client contract P&Ls?
Vision for Processes Addressed by RPA. Does a service provider see a way to use RPA to transform existing business processes or is it a vehicle to look things in place as they are now for a few more years?
Approach to Client-Service Provider RPA Partnership.Has the service provider learned through experience about the interdependence of RPA and a client’s business applications and if so have they built a strategy to manage that interdependence?
Vision of RPA Data for Analytics.Has the still under-appreciated benefit from RPA of the increased availability of data on the performance of the software robot agents been identified and how has that been used in the broader analytics approach of the service provider?
Current Long Term Vision for RPA. How does the service provider think about RPA technology itself and where it is likely to go over the next several years?
What we realized is that there were currently three different answers that came out from our interviews with regard to each of these Elements, which we then clustered into 3 Levels:
Overall, most of the service providers are consistently operating at either Level 1 – Initialization or Level 2 – Industrialization. Perhaps that shouldn’t be surprising given how relatively young RPA is in the overall scheme of BPO.
However we have seen that a few service providers are actively shaping their strategy around Level 3 – Institutionalization. Which is a broad strategic commitment by a BPO service provider to the transformational potential of RPA on their business and operations. A service provider characterized by this Level is making a sizeable, executive led investment in RPA with a view to creating a fundamental change in the commercial and delivery operations of the business.
Charles Sutherland, author of the HfS RPA Maturity Model (Click for bio)
We believe RPA will be integral to BPO delivery over the next few years as we shift away from an excessive dependence on labor arbitrage and towards the emerging “as-a-service economy” where technology will be at the core of value creation. It isn’t necessary for a service provider to be at Level 3 to create value today for an enterprise client but we do need some service providers there to set the broadest possible vision for how RPA can change the delivery of business processes.
It so happens that there may also come to be a Level 4 to this RPA Maturity Model, a Level that might come to be called “Innateness”. In this additional Level 4, it may be that the lines between RPA as deployed by BPO service providers on behalf of their enterprise clients and the RPA capabilities that may be adopted inside the client’s internal operations will come together and a new hybrid model of coordination and delivery will emerge.
We will be looking for signs that Level 4 maturity is appearing as we continue our daily discussions with service providers, software developers, advisors and enterprise buyers on the value and evolving maturity of Robotic Process Automation.
Please find the full HfS RPA Maturity Model for download on the Automation Anywhere website.
Yes, we’ve bemoaned the stubbornness of some service providers, which are protecting the profitability and predictability of their labor arbitrage businesses, and laid out the key tenets of the emerging As-a-Service Economy. So what steps can we now take to figure out who’s on the As-a-Service train, and who’s just pretending to be?
Click here to access the new POV "Does Your Service Provider Have A Winning Investment Strategy for the As-A-Service Economy?" by analysts Charles Sutherland, Barbra Sheridan McGann and Phil Fersht
In the As-a-Service Economy, the service provider will not be a stand-alone entity; the cost of doing business this way is simply too high. The partnership ecosystem of how technology vendors and service providers forge workable alliances over the long term, with effective investment practices and product management, will be a key factor in having a portfolio of As-a-Service options that are flexible, scalable, and in tune with these evolving times.
But how can buyers really see past the pretty PowerPoint and claims of future value?
Simple: Here are nine key questions that can quickly clarity what’s really going on behind the scenes, when it comes to service providers making the financial commitments needed to be effective in the emerging As-a-Service Economy. Find answers to these and you’ll have a much more realistic picture of where a service provider’s future direction is heading:
1) Is this As-a-Service platform, or new capability, funded year-to-year, or with a multi-year commitment, including CAPEX?
2) How is the first (or first few) client(s) of your As-a-Service platform being charged – and do they bear an excessive level of initial investment?
3) Are you defining and measuring the success of this new As-a-Service capability against clear quantitative metrics, or is this more of a “fast and loose” gut-feel?
4) Are you really making big bets for investment, or just parceling out small bits here are there for Proof of Concepts?
5) Are you getting input from younger talent in your organization, and not just with the submission of ideas, but also with the evaluation of the decisions?
6) Has the level and focus of investment kept pace with the number of emerging areas that need further investment and attention?
7) Is there an investment ‘bank’ of some kind for quick response to industry changes and challenges?
8′) How effectively do you partner with technology vendors to weave their services, namely wrapping the product management, support and innovation over time?
9) Do you have a focused talent development plan to provide analytical, consultative and value-add skills to customers beyond transactional support functions? And how will this talent plan be funded without passing on major incremental fees into the clients?
The Bottom Line: Service providers must find their balance between growing their legacy revenues and investing in next-generation of As-a-Service solutions
In the subscription-based, plug and play, collaborative As-a-Service Economy, service providers are touting their toolsets, their industry and functional expertise, and their alliances – and all of this requires investment over the long-term to maintain progress and drive ongoing innovation. To achieve a true one-to-many approach, it also means increased internal collaboration and transparency, with some give-and-take on priorities near – which is a major challenge for a service provider seeking to protect and grow its legacy cash-cow business, while growing its next-generation capabilities.
In addition, there needs to be flexibility with funds to address the unexpected and provide fast and furious value to address the issues of the day. Xerox for example, responded quickly to the need for tracking and reporting on people exposed to and having contracted the Ebola virus, by releasing an update of their disease surveillance and outbreak management software, Maven®. With greater investment comes greater value. Transparency into the investment decision 3Ps of processes, priorities, and partners can help services providers and buyers take full advantage of the As-a-Service Economy.
While we were all getting carried away with the As-a-Service Economy, where life and work will be completely digitized, robotized, on-demand, one-to-many, outcome-based – and all available on your mobile device – our Chicago Blueprint Sessions helped us dial back a bit to reality, where one core element is needed for enterprises to get through the next 12 months, let along the next 12 years: Trust.
There is good news – and challenging news – for outsourcing buyers, service providers and advisors: most enterprises are pleased they moved into an outsourcing model, but have recognized they need to make significant changes to the way they manage their service provider relationships, if they are to realize real value in the future.
