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Thriving in the As-a-Service Economy | Research Strategy Community Phil Fersht Founder and CEO, HfS Research #pfersht NASSCOM BPM STRATEGY SUMMIT SEPTEMBER 24 TH 2015 BENGALURU The Emerging Digital BPM Economy: Strengthening the Foundations to Get ahead of the Disruption Curve Web www.hfsresearch.com Blog www.horsesforsources.com Email [email protected]

The Emerging Digital BPM Economy: Strengthening the Foundations to Get ahead of the Disruption Curve

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Page 1: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

Thriving in the As-a-Service Economy | Research Strategy Community

Phil FershtFounder and CEO, HfS Research #pfersht

NASSCOM BPM STRATEGY SUMMITSEPTEMBER 24TH 2015BENGALURU

The Emerging Digital BPM Economy: Strengthening the Foundations to Get

ahead of the Disruption Curve

Web www.hfsresearch.comBlog www.horsesforsources.com Email [email protected]

Page 2: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

#NASSCOMBPM

Get Tweeting!

Page 3: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Overview Industry analyst, author, speaker, strategist and blogger 20 years’ business experience in the global IT and business process

outsourcing and shared services industry Advised on 100’s of global IT services, BPO and shared services

engagements Facilitates the largest global network of enterprise services ad

operations professionals

Career Experience Practice Lead, IT Services & BPO Research, Gartner, Inc Global BPO Marketplace Leader, Deloitte Consulting Consulting Practice Lead, IDC Asia/Pacific IT Markets Practice Lead, IDC Europe

Education BS with Honors in European Business & Technology, Coventry

University, United Kingdom Diplôme Universitaire de Technologie in Business & Technology from

the University of Grenoble, France

[email protected]

Phil Fersht, Founder and CEO, HfS Research

Page 4: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Unbridled Opinion… Simply Calling It How It Is

www.horsesforsources.com

Page 5: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd. Proprietary │Page 5

…With a More Serious Side Too!www.hfsresearch.com

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© 2015 HfS Research Ltd. Proprietary │Page 6

V

V

V

VV

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© 2015 HfS Research Ltd. Proprietary │Page 7

Charles Sutherland,Chief Research OfficerTech-Enablement of Services, Procurement, Supply Chain, Automation, Cognitive Computing

Barbra McGann,EVP Business Operations Research Operations,Healthcare, Life Sciences andPublic Services

Jamie Snowdon, EVPMarket Analysis and Forecasting

Reetika JoshiResearch DirectorConsumer-Centric Operations Services and Analytics

Meet the HfS Research Practice Leaders

Thomas ReunerMD, ITOSaaS, Automation, Cognitive Computing, Cloud

Hema SantoshPrincipal AnalystFinance Strategies, BPO, IT Services

Khalda de SouzaPrincipal AnalystEuropean Services SaaS Services

Fred McClimansEVPDigital Trust & Security, The Digital Consulter

John HaworthChairman,HfS SourcingExecutive Council

Pareekh JainResearch DirectorEngineering Services, Telecom Operations, Pricing Strategies and Supply Chain

Phil Fersht,CEOThe As-a-Service Economy,Operations Strategies,Global Business Services

Page 8: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd. Proprietary │Page 8

LEGACY “BPO” AS-A-SERVICE ECONOMY

Resolve problems by lookingfirst at the process 1. Design Thinking Generate creative solutions by

understanding the business context

Complex, often painful technology and process transitions to reach steady state 2. Business Cloud “Plug and Play” business services

Fragmented processes requiring manual interventions, multiple technologies 3. Intelligent Automation Blending of automation, analytics, and

talent

Operations staff doing mostlytransactional tasks 4. Proactive Intelligence Operations focused on interpreting data,

seeding new ideas

Ad-hoc analysis on unstructured data with little business context 5. Intelligent Data Real-time applied analytics models,

techniques, and insights from big data

Legacy technology investments drain budgets to remain functional 6. Write Off Legacy Use of platform-based services makes

many tech investments redundant

Governance staff manage contracts and service levels 7. Brokers of Capability Governance staff manage towards

business-driven outcomes

Pricing and relationships based on cost, effort, and labor 8. Intelligent Engagement Pricing and relationships based on

expertise, outcomes, and subscriptions

Successful BPM needs to achieve Eight Ideals

Page 9: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

SVP & Up

VP & Below

16%

8%

37%

21%

47%

62% 10%

Absolutely critical Critical Significant Insignificant

How significant do you see the “As-a-Service Economy” for your organization?

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Leadership has the desire to drive the change, not the operational layer

Page 10: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Business Cloud

Intelligent Data

Write Off Legacy

Design Thinking

Proactive Intelligence

Brokers of Capability

Intelligent Automation

Intelligent Engagement

53%

42%

42%

37%

32%

32%

26%

21%

21%

21%

12%

15%

14%

16%

19%

14%

% Significant Progress

VP & Below

SVP & Up

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Total = 716; Enterprise Buyers = 178; Advisors/Consultants = 176; Service Providers = 372

Something’s Gotta Give: Leadership expects to get to As-a-Service… their staff do not Based on your CURRENT investments and services relationships, how much progress do you expect to make achieving these “As-a-Service” ideals in the next 2 years?

Page 11: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Invest in effective analytics tools & skills

Replace your existing (legacy) service provider(s) with "As-a-Service" driven providers

Identify/hire a transformational leader/change agent

Accomplish creative problem solving/"Design Thinking"

Write-off legacy IT investments and move straight into cloud delivery of processes supported by As-a-Service

partner(s)

Retrain existing internal operations talent to redesign processes

Hire new operations talent to redesign processes

61%

61%

56%

44%

44%

41%

39%

44%

25%

36%

41%

36%

21%

28%

% Significant Impact

VP & Below

SVP & Up

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Decision-makers willing to dump their legacy service provider relationshipsHow much impact would taking the following actions help you reach your desired “As-a-Service” end-state, if you were to make them today?

Page 12: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

INN

OVA

TIO

N

EXECUTION

High Performers

HP

Hexaware Technologies

MercerAon Hewitt

NGA Human Resources

OneSource Virtual

MeteorixCollaborative Solutions

CPSG Partners

IBMSierra-Cedar

KPMG

Deloitte

Appirio

AccentureTowers Watson

AtaraxiseverBe

Winner’s Circle

The As-a-Service providers are emerging:HfS Blueprint 2015: Workday Services

Page 13: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

The HfS Intelligent Automation Continuum

Fully

auto

mat

ed

Data CenterAutomation:

RunbookScriptingSchedulingJob controlWorkloadautomationProcessorchestration

SOAVirtualization

Cloud services

RPAAutonomicPlatforms

TrueArtificialIntelligence

BPMBusiness process automation

Workflow

trigger based

Characteristic of process

rules baseddynamic language

rules basedstandardized language

Structured

Characteristic of data/information

Unstructured without patternsUnstructured patterned

CognitiveComputing

Page 14: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research

-20%-10%

0%10%20%30%40%

-13%-5% -5% -4% -3% -3% -5%

31% 29% 28% 26% 21% 18% 17%

-20%

-10%

0%

10%

20%

30%

-9% -7% -6%-2% -3% -3% -4%

18%26% 19% 17% 20% 20% 16%

Decrease Increase

Source: 2014 State of Industry Study, 2014. HfS Research in Conjunction with KPMG (Sample 312 Enterprises)

Man plus machine: Offshoring continues to accelerate across business functions in 2015How will your Offshore Investments Change in 2015? (Outsourcing)

How will your Offshore Investments Change in 2015? (Shared Services)

Page 15: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research

Source: HfS Research in Conjunction with KPMGNote: n=343

Sales

Analytics

Marketing

Payroll

Legal

Procurement

Supply Chain and Logistics

Industry-specific Processes

Human Resources

Customer Service

Finance and Accounting

Facilities Management

Print & Mail Operations

IT application maintenance & development

IT and Network infrastructure support

38%

36%

35%

27%

40%

47%

42%

42%

48%

45%

52%

38%

37%

46%

46%

9%

12%

13%

33%

21%

14%

21%

23%

18%

22%

21%

35%

42%

37%

39%

53%

52%

51%

40%

39%

39%

37%

35%

34%

33%

27%

27%

21%

17%

15%

Shared Services Outsourced In-house (de centralized)

But outsourcing still augments in-house delivery, as opposed to replacing it…

Page 16: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Drive down operating costs

Cost effective, flexible services

Better address risk and regulation

Real-time data-driven insights

Improve the quality of operations talent

Restrict the recruitment of labor where possible

Invest in process automation and robotics to reduce reliance on labor

62%

49%

29%

24%

18%

13%

11%

33%

45%

40%

43%

30%

23%

25%

3%

4%

19%

24%

37%

29%

26%

2%

2%

12%

9%

16%

35%

38%

Mission Critical Increasingly Important Emerging Not a Directive

Source: HfS Research and KPMG LLP, 2015Sample: 168 Enterprise Buyer Executives from “Achieving Value Beyond Cost” Study

C-Suite Internal Priorities: Less Cost, Better Data, Less PeopleHow critical are the following C-Suite priorities/directives with your operating model?

Page 17: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.Source: HfS Research State of Industry Study 2014, conducted in conjunction with KPMG

(Sample 312 Enterprises)

Two-Thirds of Enterprises Lack “Digital” Skills…How satisfied are you with your internal talent’s ability to achieve the following business outcomes with your current outsourcing engagement(s)?

Accomplish new innovations/creative ideas with service delivery

Improved analytical capabilities

Better automated processes

Better transformed/reconfigured processes

Aligning stakeholders across the org. to achieve better results

Adding strategic value to the business beyond standard operations

Work collaboratively with the provider(s) to deliver higher value

Better standardized processes

Achieving significantly lower operating costs

Keeping the standard operations ticking over efficiently

Meet compliance/regulatory requirements

0% 25% 50% 75% 100%

4%

5%

8%

5%

6%

6%

11%

6%

12%

17%

20%

27%

28%

29%

38%

41%

40%

41%

47%

43%

51%

50%

40%

48%

36%

35%

30%

29%

27%

29%

22%

20%

22%

24%

17%

23%

18%

19%

20%

18%

16%

20%

11%

7%

5%

2%

4%

4%

5%

5%

3%

2%

3%

1%

1%

Very satisfied Satisfied Neither satisfied or unsatisfiedUnsatisfied Very unsatisfied

Value Beyond Cost

Page 18: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

BPO is a force for innovationand_x000d_change within business

My BPO role is fundamental_x000d_to business performance

I am excited about the future_x000d_of BPO as an industry

BPO today is an exciting career choice

There has been a big recent shift in_x000d_the recognition of a career in BPO

BPO has a defined career_x000d_track and a certain future

86%

63%

50%

13%

13%

13%

88%

69%

88%

69%

50%

69%

84%

83%

74%

53%

47%

34%

88%

91%

86%

76%

67%

49%

< 2 Years 2 to 5 Years 5 to 10 Years > 10 Years

Excitement about BPO as a force for change

Not translating

into sustainability

as a career for those new to it

Source: ”Talent in BPO" Study, HfS Research 2015Sample: Enterprise Service Buyers = 192

Experience:

Only one-in-eight professionals new to BPM view it as a long-term careerTo what extent do you agree / disagree with the following? (By years’ experience)

Page 19: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Source: “The Growing importance of Social Skills in the Labor Market”David J. Deming, NBER Working Paper 21473, 2015

The Rise of Jobs requiring Social Skills in the US

Change in tasks performed by US workers, 1980 to present

Page 20: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Source: Based on Bureau of Labor Statistics, U.S. Census Bureau, Business Dynamics Statistics (BDS)

19771979

19811983

19851987

19891991

19931995

19971999

20012003

20052007

20092011

0

20

40

60

80

100

120

140

Net Job Creation by Company Size (US)

Small Medium Large

Empl

oym

ent M

illio

nSmall and medium firms drive job creation in the US

From mid-2009 to 2011, small firms (20-499 employees), accounted for 67 percent of the net new jobs. Based on Bureau of Labor Statistics.

Page 21: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.Source: Bureau of Labor Statistics, HfS Research Analysis (data to 2014)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

20

40

60

80

100

120

Motion Picture Projectionists

Executive Secretaries and Assistants

Desktop PublishersEmbalmersPhoto processorsCompensation & Benefit Managers

Telephone Operators

Law Clerks

Data Entry Clerks

The bad news. Some individual Occupation Areas are Declining – Replaced by Technology Decline in jobs from 2004 to 2014 (Index 100 = 2004)

Page 22: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.Source: Bureau of Labor Statistics, HfS Research Analysis (data to 2014)

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

50

100

150

200

250

300

350

400

Models

Massage TherapistsMarket Researchers

Sales reps

Food scientistsSocial science teachersManicuristsOperations Research Analysts (analytics)Application Software DevelopersEconomists

The good news. Individual Occupation Areas That are Growing

Growing jobs from 2004 to 2014 (Index 100 = 2004)

Page 23: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

So Here’s the Future!

Page 24: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Computers are still really bad at simulating social interaction

Your ability to interact with people, applying intelligence and creativity to your craft, is where you add value

Your reputation is everything

Repetitive jobs are fading, “Born in the Cloud” jobs are growing

It’s all about creating a collaborative, stimulating – and enjoyable work culture

Thriving in the era of Digital BPM: Being Social Intelligent

Page 25: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Positively – Technology has raised the value and of Outsourcing as long-term sustainable careerNeutral – It hasn't really changed my decision-makingNegatively – I am concerned that outsourcing jobs will be automated in the future and will go away

Buyers

Providers

41%

73%

55%

21%

3%

6%

Source: ”Talent in BPO" Study, HfS Research 2015Sample: Enterprise Service Buyers = 192; Service Providers = 252

Technology having a highly positive impact on outsourcing careers…How is technology impacting your decision to pursue a long-term career in outsourcing?

Page 26: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Invest in effective analytics tools & skills

Accomplish creative problem solving/"Design Think-ing"

Identify/hire a transformational leader/change agent

Replace your existing (legacy) service provider(s) with "As-a-Service" driven providers

Hire new operations talent to redesign processes

Invest in external IT services to help us migrate away from legacy systems

Invest in robotic process automation

47%

42%

38%

32%

30%

24%

21%

52%

50%

38%

58%

47%

56%

37%

1%

8%

23%

10%

24%

21%

41%

Significant Impact Some Impact Minimal/No Impact

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Design Thinking will increase in significance, as the need for socially-intelligent workplace interaction takes hold How much impact would taking the following actions help you reach your desired “As-a-Service” end-state, if you were to make them today?

Page 27: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

1ENVISIONING SUCCESS

Discovering our challenges to re-imagine new solution opportunities.

2DEFINING DESIREDOUTCOMES

Determining the right questions to ask of ourselves

3PRIORITIZINGOUTCOMES

Exploring meaningful ways to implement outcomes-based solutions

4IMPLEMENTING OUTCOMES

Piloting initial outcome-based initiatives

5REALIZING OUTCOMES

Analyze continuous feedback on the solutions provided to measure impact

The more robust our process standards, the more we can work smarter, not cheaper

Design Thinking… we must change our focus to finding business problems

Page 28: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Easy WorkComplainingPretendingBlamingTakingResenting

Hard WorkInspiringTeachingLearning

GivingEmpowering

Wrap: Successful socially-intelligent workers are those who can self-reflect and improve. Digital transformation is about human ability to enable digital technology

Page 29: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Fix the disconnect between leadership ambition and operation lethargy

Go for more “big bang change”. Incremental fixes clearly do not work – for all stakeholders

This is about humans creating more intelligent value, finding more problems through collaborating and using the tools available to them

It not about jobs going away, it’s about the nature of work changing. A third of today’s workforce is made up of Millenniums seeking different work experiences

So mentor the new services generation out of its career malaise

Embrace technology and put it to work…

Actions to drag ourselves into the Digital Economy

Page 30: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

Thriving in the As-a-Service Economy | Research Strategy Community

PANEL DISCUSSION

NASSCOM BPM STRATEGY SUMMITSEPTEMBER 24TH 2015BENGALURU

The Emerging Digital BPM Economy: Strengthening the Foundations to Get

ahead of the Disruption Curve

Web www.hfsresearch.comBlog www.horsesforsources.com Email [email protected]

Page 31: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

#NASSCOMBPM

Keep Tweeting!

Page 32: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Pavan Bagai, COO EXL

And today’s contestants are…

Chris Caldwell, President Concentrix Mohit Thukral, SVP, Genpact

Page 33: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

1. Digital technologies are changing how enterprises run, with arguably greater and deeper impact than any of the previous IT waves. The surge of digital transformation will however also result in a lot of failed projects. And while some failure is appropriate in a deliberate controlled-experiment strategy, the amount of waste – estimated up to almost US$400 billion per year, globally - that enterprises witness is simply unacceptable to most CEOs.

2. Many established companies aren’t fully prepared to embrace digital technologies that deliver measurable impact, and address the value chain beyond the front-office “veneer”. In those firms, the complexity of legacy technology and processes (and sometime people) seems insurmountable. What do you do when you have a front office moving at warp speed without the aligned operational infrastructure to keep pace?

3. What are the practical solutions which exist to circumvent the above issues?

4. How do we develop the talent to make this all possible?

PANEL DISCUSSION PREMISE

Page 34: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

The HfS Enterprise Digital Framework

Page 35: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

I. The Optimum Operating Model

Outsourcing Shared Services GBS BPaaS/SaaS/IaaS

Crowdsourcing

II. Empowering Talent to Make it

PossibleCapabilities over Skills Defining

Outcomes Creativity Data Science

IV. Technology to Augment Knowledge Labor Digitization & Robotic Automation Analytics Mobility Social Media Cognitive Computing

III. A Burning Platform for ChangeGlobalization of Labor High-growth Emerging Markets Disruptive Business Models Consumerization

The Four Foundations of the Emerging Services Economy

Tools/Infrastructure GovernanceAgility Collaboration

One-to-Many Outcome Focus Plug-and-Play Services

Page 36: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.Source: HfS Research in Conjunction with KPMG, Value Beyond Cost Study, 2015

Sample: n=168 Enterprise Service Buyers

Service Providers must prove to decision-makers they can do more than the basics

So what do you really think of service providers today?

STRA

TEGI

C VA

LUE

A vital partner that plugs critical gaps in terms of skills, global scale, domain knowledge and technology

A lever to drive down costs and improve efficiencies

Provision of access to cheap labour, but little value beyond that

54%

34%

12%

34%

49%

17%

Buyers Advisors

Page 37: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Clients looking to move on from the FTE commercial model

Training existing account managers with the technology and business skills to support increasingly complex client needs

Hiring new account managers with the technology and business skills to support increasingly complex client needs

New services firms entering the services market with disruptive offerings

BPaaS / IaaS models driving down our profit margins

Clients investing in captives and doing more themselves

73%

67%

62%

53%

40%

38%

70%

89%

78%

44%

41%

56%

Indian-Heritage Providers Western-Heritage Providers

Service Providers can Win by Up-skilling their Staff

Source: HfS Research and KPMG LLP, 2015Sample: 112 Service Provider Executives from “Achieving Value Beyond Cost” Study, November-December 2014

How significantly are the following challenges impacting your business?(% Increasing Significantly / Somewhat)

Page 38: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Senior leaders have negative view of providers’ willingness to change the legacy model

Few available "plug and play" services

Lack of willingness from our service provider(s) to cannibalize their existing

revenue models

Lack of support from our service provider(s) to share risks/gains with us

General inertia in our organization to change from the status quo

Lack of trust in service providers

We don't have the talent inhouse to evolve the current model

56%

47%

44%

26%

22%

17%

28%

21%

19%

29%

22%

21%

% Highly Significant

VP & Below

SVP & Up

How significant are the following obstacles holding back your enterprise’s move to the “As-a-Service Economy”?

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Page 39: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

<$1B

$1B - $10B

>$10B

4%

3%

2%

36%

26%

27%

43%

32%

54%

11%

19%

15%

7%

19%

2%

We are already there Within 2 years Within 5 years Within 10 years Never

While 7 out of 10 major enterprises are kicking the can down the road…How quickly will your core enterprise processes be delivered “As-a-Service”?

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

Page 40: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

BPO is a force for innovationand_x000d_change within business

My BPO role is fundamental_x000d_to business performance

I am excited about the future_x000d_of BPO as an industry

BPO today is an exciting career choice

There has been a big recent shift in_x000d_the recognition of a career in BPO

BPO has a defined career_x000d_track and a certain future

86%

63%

50%

13%

13%

13%

88%

69%

88%

69%

50%

69%

84%

83%

74%

53%

47%

34%

88%

91%

86%

76%

67%

49%

To what extent do you agree / disagree with the following? (By years’ experience)

However, only one-in-eight professionals new to BPM view it as a long-term career

< 2 Years 2 to 5 Years 5 to 10 Years > 10 Years

Excitement about BPO as a force for change

Not translating into

sustainability as a career for those new to it

Source: ”Talent in BPO" Study, HfS Research 2015Sample: Enterprise Service Buyers = 192

Experience:

Page 41: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

How is technology impacting your decision to pursue a long-term career in outsourcing?

Technology having a highly positive impact on outsourcing careers…

Positively – Technology has raised the value and of Outsourcing as long-term sustainable careerNeutral – It hasn't really changed my decision-makingNegatively – I am concerned that outsourcing jobs will be automated in the future and will go away

Buyers

Providers

41%

73%

55%

21%

3%

6%

Source: ”Talent in BPO" Study, HfS Research 2015Sample: Enterprise Service Buyers = 192; Service Providers = 252

Page 42: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

The HfS Intelligent Automation Continuum

Fully

auto

mat

ed

Data CenterAutomation:

RunbookScriptingSchedulingJob controlWorkloadautomationProcessorchestration

SOAVirtualization

Cloud services

RPAAutonomicPlatforms

TrueArtificialIntelligence

BPMBusiness process automation

Workflow

trigger based

Characteristic of process

rules baseddynamic language

rules basedstandardized language

Structured

Characteristic of data/information

Unstructured without patternsUnstructured patterned

CognitiveComputing

Page 43: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Major lack of understanding of RPA and Cognitive

Software-as-a-Service applications

Cloud infrastructure

Analytics engines

Mobile Apps

Social Media platforms

Robotic Process Automation tools

Cognitive Computing platforms

83%

82%

77%

76%

64%

50%

33%

17%

18%

23%

24%

36%

50%

67%

Yes No

Do you fully understand the value propositions for the following enabling technologies for your enterprise?

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Enterprise Service Buyers = 178

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© 2015 HfS Research Ltd.

IT is leading candidate for RPA

IT including service desk

Procurement

Finance & Accounting

Master Data Management

HR

Supply Chain

Customer Service

Marketing

Claims Processing

82%

65%

62%

53%

53%

50%

44%

32%

32%

Where do you believe robotic process automation to be applicable? (Choose as many as applicable)Base=34 (those with some RPA experience who agreed to share their views)

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Total = 716; Enterprise Buyers = 178; Advisors/Consultants = 176; Service Providers = 372

Page 45: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

RPA cost-saving expectations are not aggressiveWhat percent of your total process cost today do you expect to remove with RPA, all else holding constant?

Buyers Providers Advisors6% 1% 2%

34%

29%

43%

20% 36%21%

3%

14%6%

37%

19%28% Good question, don't

have an answer

40%+

20-40%

0-20%

None

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Total = 716; Enterprise Buyers = 178; Advisors/Consultants = 176; Service Providers = 372

Page 46: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

Cognitive all about augmenting existing knowledge laborWhat do you believe to be the greatest potential benefit of Cognitive Computing?

Buyers Providers Advisors

21% 18% 23%

21%

10%10%

49%

50% 44%

9%21% 23%

Creating entirely new processes and services for new revenues

To augment the capabilities of knowledge labor and create new revenues

To replace knowledge labor and reduce overall costs

To replace transactional labor and reduce overall costs

Source: "Ideals of As-a-Services" Study, HfS Research 2015Sample: Total = 716; Enterprise Buyers = 178; Advisors/Consultants = 176; Service Providers = 372

Page 47: The Emerging Digital BPM Economy:  Strengthening the Foundations to Get ahead of the Disruption Curve

© 2015 HfS Research Ltd.

The Capabilities to get us to the As-a-Service Economy will take time to develop…

As-a-Service Economy

< 3 yearsInfluencing senior executivesUse of automation as first building blocks to decouple labor from routine service delivery

3 – 6 yearsReal-time Analytics ModelingAutomationDefining & impacting value beyond costDesign Thinking

> 6 YearsAugmenting Labor with Artificial IntelligenceIdentifying new ways to drive cost reduction & value

Legacy Simplification