View the webinar replay here: http://www.hfsresearch.com/webinars/state-of-business-operations-2017
The webinar will share the key findings of the State of Business Operations survey by HfS Research in conjunction with KPMG with 829 enterprise buyers, service providers, and advisor/consultants.
The outsourcing and shared services market has been in a seemingly endless state of flux for as long as HfS Research has existed – with the current market more confused than ever before, organizations struggling to cope with competing priorities, and confusion on the requisite timing and methods to best exploit new(ish) technologies such as process automation and evolving service delivery models.
We have seen the latest wave of change agents combine into the “digital” phenomenon, manifesting in a jumble of technology change and business drivers. Enterprises are being forced - more so than ever -to become increasingly customer-centric as they must respond to progressively complex online demands. This is driving investment in new technologies such as IoT, and analytics, and new ways of consuming, technology, and business process services – with software platforms encroaching on classic operational services.
Attend and learn:
- Changes to organizational operating and service delivery models
- The investments and directives driving operational change
- The use of shared services, outsourcing, global business services, and the impact of automation and offshoring on these service delivery models
- The maturity of business operating models linked to the use of alternative service delivery models and emerging technologies
- Adoption levels, challenges, and opportunities related to process and cognitive automation
- The effectiveness of outsourcing, above and beyond delivering cost savings, and impact on service provider selection
- Stakeholders’ current view on service providers and future expectations
- Organizational and operational talent challenges, shortages, and solutions, including automation
Presenters:
Phil Fersht – CEO & Chief Analyst, HfS Research
Jamie Snowdon – Executive Vice President, Research Operations, HfS Research
Dave Brown – Global Lead, Shared Services & Outsourcing Advisory, KPMG
Stan Lepeak – Director & Head, Research & Thought Leadership, Global Management Consulting, KPMG
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HfS Webinar Slides: The State of Outsourcing and Business Operations 2017
1. The Services Research Company
Webinar:
The State of Operations and Outsourcing 2017
January 12th, 2017
Host: Phil Fersht
Chief Analyst and CEO
HfS Research
phil.fersht@hfsresearch.com
@pfersht
Jamie Snowdon
EVP Market Forecasting
HfS Research
jamie.snowdon@hfsresearch.com
Dave Brown
Global Lead, Shared Services & Outsourcing Advisory
KPMG
djbrown@kpmg.com
Stan Lepeak
Director & Head, Research & Thought Leadership,
Global Management Consulting
KPMG
slepeak@kpmg.com
2. Overview:
• 20 years’ business experience in the global IT and business process
outsourcing and shared services industry
• Coined the “As-a-Service Economy” in 2014
• Industry analyst, author, speaker, strategist and blogger
• Advised and cogitated on 100’s of global IT services, BPO and shared
services engagements
• Meddles with the largest global network of enterprise services and
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
phil.fersht@hfsresearch.com
Phil Fersht, Chief Analyst and CEO, HfS Research
15. The Service Providers will
bifurcate into two groupings
Back Office Outsourcers
Efficiency, Automation, Labor Arbitrage
and Scalability
OneOffice Enablers
Data Orchestration and Human
Collaboration
20. Total Impact of Automation on IT/BPO Services Workers by
Major Country (likely scenario, low-skilled workers)
0.73 0.74
2.28
2.34
0.67
0.54
1.64
1.57
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%0.0
0.5
1.0
1.5
2.0
2.5
Philippines UK India US
% Decrease in Workforce
Services Workers (Millions)
2015 2021 % Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM,
US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment
21. Total Impact of Automation on IT/BPO Services Workers by
Major Country (likely scenario, mid-high skilled workers)
0.28
0.80
1.11
2.56
0.41
0.94
1.27
2.73
0%
10%
20%
30%
40%
50%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Philippines UK India US
% Increase in Workforce
Services Workers (Millions)
2015 2021 % Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM,
US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment
25. 25
Document Classification: KPMG Confidential
The world around us is transforming faster than we think
“Our view is ‘transform or wither,’ ‘transform or lose
pace.’ We take the perspective that the concept and
the execution of transformation are never complete,
because the marketplace changes, and so do the
needs of our clients and customers—and the digital
era just accelerates all of that.”
Catherine Bessant, Global Technology & Operations Executive,
Bank of America
“At Tupperware Brands, our belief is
that transformation is a continuing
process. We benefit from the
mindset that there is no such thing
as competitive advantage and that
you constantly have to be ready to
transform.”
Rick Goings, CEO, Tupperware Brands
Percent of U.S.-
based companies
undergoing
business model
transformation*
98
%
*KPMG CEO Survey
Trends in employment
transformation
The rise of robots will lead to a
net loss of over 5 million jobs in
15 major developed and
emerging economies
by 2020
Trends in technology
transformation
As a service economy, i.e.,
Platform as service
65% of today’s grade school
children will be employed in
jobs that haven’t yet been
invented
One in 3 jobs will be converted
to software, robots, and smart
machines
by 2025
Natural language processing
Quarter of the world’s energy
needs are set to be met by
renewables in 2020
Virtual assistants
Cognitive computing and
machine learning
“If you aren’t
innovating, you’re
managing your exit.”
Paul Perreault, CEO , CSL
Behring
26. 26
Document Classification: KPMG Confidential
And these changes are causing GBS leaders to rethink their
strategy
With robotics we can give center
mangers both operational and
regional responsibility. This is a
general trend to having people
wear two or three hats. – Money
Center Bank
All of our new people are mainly
focused on process and risk. We
think of information processing not
RTR. Away from product to
process.
– European Bank
Our transformation journey included
linking IT within GBS to support processes
whether in or outside of GBS. It is critical to
have a cultural link to the organizing the
different parts of the delivery organizations
wish to serve. – European Pharma
Some of our service locations will not survive the automation process, a major AP location being
one. We need to move to locations to provide high value added services as low cost transactional mission
diminishes in value. – Money Center Bank
We try to perfect process but don’t know
outcomes in most cases – movement away
from process optimization to automation .–
Global Pharma
GBS optimization is
not just about
improving SS
operations but also
changing nature of
retained organization
and possibly reducing
staff there too. – Global
Retailer
27. 27
Document Classification: KPMG Confidential
GBS is on the cusp of another major leap…
— Internal delivery of
core services;
predominantly
regional models
— Outsourcing/multire
gional outsourcing
with select global
providers
— Focus on
transactional
activities
— Emergence of right
shoring; near-shore
becoming key
element of delivery
models
— Vendors delivering
niche services
— Introduction of multi-
vendor deals
— Emergence of COE
solutions
— Integrated service
delivery models
— Lower value
activities typically
outsourced;
increasing focus on
analytical, judgment,
and expert services
1990s – Shared services 2000s – Multi-sourcing Since 2010 – Integrated GBS 2020
?
28. 28
Document Classification: KPMG Confidential
…with key change drivers looming large on the horizon
Change is accelerating and solutions are converging
—Human-centric process is morphing to human-centric
design
—Robotics has disrupted the traditional levers of an
optimal service delivery model
—Cloud has hit mainstream and is driving the “as-a-
service” revolution
—Big Data riding the “as-a-service” wave available to all
corners of the organization
—New value generation and ROI models based on shift
from labor to capital
—Social and Mobile have disrupted the buy-sell
relationship
—Shifting focus to external customer facing services
36. § Work as a team: Heal the disconnect and unrealism between
leadership ambition and middle management operational challenges...
Internal and external
§ Think big! with an attitude to write-off legacy. Incremental fixes clearly
do not work – for all stakeholders. Stop retro-fitting!
§ Become a student again: This is about humans creating more creative
value, finding more problems through collaborating and learning how
embrace the Digital and Intelligent Automation tools available
§ This is 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
§ To create a new experience in the industry and for results… we must
be brave to begin writing-off or legacy or we’ll never evolve…
Actions to drag ourselves into the Digital World