© 2020, HFS Research Ltd Page 3
Only 37% will return to the office based work-style
21%
16%
29%
22%
11%
We’re planning to return to office-based structures once the
situation is over
We will relax working from homerules, but will still be largely office
based
We’re committed to remote working now, and will evolve our
operations to support a hybrid workforce model in the future
We’re monitoring productivity and well-being at the moment and will
consider retaining a primarily remote structure if the results are
positive
Others
As an organization, which of the following best describes your approach to post-covid working arrangements?% respondents
37% prefer return to office-
based environment
51% considering
remote/hybrid workforce
Sample: 400 executives across global 2000 enterprisesSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 4
Different industries have felt the impact differently
Banking and Financial services
Consumer products and Retail
Energy and utilities
Healthcare
High-tech and Telecom
Industrial manufacturing and logistics
Insurance
Life Sciences
Travel and hospitality
Revenues
How is your organization doing today as compared to before COVID-19?Weighted average by industry
Significantly worse
Worse Similar Better Significantly better
Better
Significantly better
Similar
Worse
Pro
fits
/ M
argi
ns
+ve valuation -ve valuation
Size the bubble represents perceived impact on valuation
Sample: 150 C-level executives across the global 2000 enterprisesSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 6
The outlook for IT and business process services in healthcare post the pandemic shock remains “bullish” as enterprises want to “do more with less”
Increasing business process outsourcing in the next 12 months % respondents
Already done, 25%
Planning in the near
term, 32%
Considering options,
28%
No plans, 15%
Increasing IT outsourcing in the next 12 months % respondents
Already done, 28%
Planning in the near
term, 35%
Considering options,
25%
No plans, 13%
Sample: 400 executives across global 2000 enterprisesSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 7
•
•
•
© 2020, HFS Research
OffshoringGlobalization
Shared Services /Nearshoring
Centralization
The Internet
Client/ Server
ERP
Six Sigma
LEAN
Basel II
Private Cloud
Open Source
Digital Business Models
IOT
Public Cloud
eBusiness
Digital Marketplaces
ASPs
Sox
Y2K
Euro Currency Conversion
VOIP
3G
RPA
Enterprise IT dressed up as
Digital
Intelligent Automation
Machine Learning
AI
Blockchain
5G
The Guerrilla Sharing
Economy
Digital Workers
OutsourcingAnalog
Basic DigitalResponsive
GBSAnticipatory
2020+Autonomous,
Hyperconnected Supply Chains
Data-driven Virtual
organizations
Final phase of widespread
Cloudification
Digital OneOffice
Interactive
Evolution to the Connected OneOffice MindsetReal change drives
rapid pivot to OneOffice
© 2020, HFS Research Ltd Page 10
Creating the “OneOffice” experience for clients
Accenture is able bring its innovation capabilities together
across Accenture’s series of organizational units
TCS brings together business process services and IT
infrastructure services under single business unit – Cognitive
Business Operations (CBO)
“TCS’ Cognitive Business Operations (CBO) caters to various CXO
stakeholder’s transformational needs by taking responsibility of the
entire slices of enterprise operations, including process delivery,
application services, and the underlying IT infrastructure, and delivers
superior business outcomes and experience to all stakeholders through
holistic Machine-First™ transformation leveraging Cloud, Analytics, IoT,
Machine Learning, AI, and RPA throughout the operational stack.”
© 2020, HFS Research Ltd Page 11
Partnership and start-up ecosystems. No one can be everything to anyone
● Wipro Ventures bridges the gap between emerging startups and enterprise customers. Established in 2015 as the strategic investment arm of Wipro Limited, we invest in early to mid-stage companies building innovative enterprise software solutions.
● TCS COIN™ brings together a network of experts from the start-up, research, academics, and corporate worlds to work on collaborative innovations for TCS’ customers. The 2,500 start-ups on the TCS COIN™ roster are supported by nearly 50 university partners.
© 2020, HFS Research Ltd Page 12
360 degrees engagement model. Become partners with skin-in-the-game
● Vanguard-Infosys. Partnership will advance digital transformation of Vanguard’s defined contribution recordkeeping business. While role transitions are typical, Vanguard is putting real skin in the game with notable senior execs going to Infosys.
● Volt Partners with TCS to Expand Payment Offerings. Set to launch in 2021, Volt 2.0 will leverage TCS BaNCS™, a global payments solution, to expand the bank's offerings to include NPP, BPAY and DE, enabling full-service banking capabilities for all its customers.
● Wipro-Alight partnership enables Alight to accelerate investment in consumer-facing technologies and services across its health, wealth and cloud businesses by leveraging Wipro’s industry-leading strengths in automation, machine learning and data analytics. Additionally, Wipro will acquire and take on responsibility for the services delivered from Alight’s India locations. Alight has developed a rich set of technology and delivery capabilities across its India centers located in Gurgaon, Noida, Mumbai and Chennai.
● HCL and Xerox expand strategic partnership building on a decade-long Product Engineering relationship, this Managed Services arrangement positions HCL to transform Xerox’s shared services globally, resulting in greater operational efficiency, automation and enhanced service levels
© 2020, HFS Research Ltd Page 13
The ability to understand and solve business problems are the key attributes that clients seek from third-party services
What are the attributes of a business/technology service provider that gives you confidence to deliver the value you seek?
Rank
Demonstrating the “awareness of the problem” #1
Leveraging creativity, knowledge and experience to solve problems #2
Ability to keep an eye on the future, e.g., emerging technologies #3
Agility and flexibility to react to business changes #4
Continuous modernization, i.e., continuously improve solutions #5
Proven ability to deliver flawlessly #6
Co-innovating with the client #7
Ability to challenge constructively and offer a clear point of view #8
Sample: 150 C-level executives across the global 2000 enterprisesSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 20
Overall spending on IT expected to increase driven by investments in cybersecurity, cloud, and core IT to re-platform the enterprise
How do you think your overall spending on IT will change over the next 12 months?% respondents
5%6%
19%
20%
22%
18%
12%
Overall spending on IT
Decrease by 5-20%
Increase by 0-5%
Increase by 10-20%
Decrease by 0-5%
No change
Increase by 5-10%
Increase by 20%+
Over 70%
respondents
expect overall
spending on IT to
increase
6.7%
5.4%
5.2%
4.4%
4.1%
4.1%
4.0%
3.8%
3.8%
3.6%
3.6%
3.4%
3.4%
2.9%
2.5%
1.7%
Cybersecurity
Cloud
Core IT modernization
Customer experience
5G
Process Automation
Learning Platforms
DevOps/Agile
Software as a Service
Low-code/No-code
Artificial Intelligence (AI) incl. Machine…
Data management and Analytics
Internet of Things (IoT)
ERP
BPM/Smarter workflow
Blockchain
How do you anticipate investment changing in the following areas over the next 12 months (Weighted average % increase/decrease)
Sample: 400 executives across global 2000 enterprisesSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 22
Automation• Superpower: Increases
efficiency and productivity
• Tech examples: RPA, RDA,
BPM, scripts, macros, rules
engines, low code/no code
development platforms
AI• Superpower: Solves
business problems
• Tech examples:
Machine learning,
computer vision, natural
language processing,
digital associates, deep
learning
Analytics• Superpower: Improves
decision making
• Tech examples: Data
ingestion, reporting and
visualization, predictive
and prescriptive modeling,
decision support, process
intelligence
Exponential
value
potential
© 2020, HFS Research Ltd Page 23
Strongly agree, 24%
Agree, 40%
Neutral, 28%
Disagree, 6%
Strongly disagree, 2%
Strongly agree, 23%
Agree, 45%
Neutral, 24%
Disagree, 6%
Strongly disagree, 2%
64% 68%
Sample: 600 executives across Global 2000 enterprises (Phase I sample)
Source: HFS Research in conjunction with KPMG
Nearly 65% respondents believe that the combined use of emerging technologies is beneficial – and a similar number say Triple-A, Cloud, and Low Code are converging.
The combined use of emerging technologies is much more
beneficial than using any of these technologies in isolation
Automation, AI, analytics, cloud, and low-code
platforms are converging
© 2020, HFS Research Ltd Page 24
38%42%
59%
35%
44%41%
34%
19%21%
16%
6%
15% 16%13%
Smart analytics Hybrid or multi-cloud Process automation Blockchain Artificial intelligence Edge computing 5G
Respondents who strongly agree to the power of AND Respondents who disagree to the power of AND
Sample: 600 executives across Global 2000 enterprises (Phase I sample)
Source: HFS Research in conjunction with KPMG
Organizations that “strongly agree” to the power of AND have a higher realized value compared to organizations that “disagree”
Already realized value from investments in emerging
technologies
© 2020, HFS Research Ltd Page 25
Focus on enhanced support across the spectrum of hire-to-retire with an increased emphasis on employee experience:● Streamlined onboarding and provision, enhanced self-service moving from search-based
experience to conversation-driven experience, creation of intelligent workflows, recruitment effectiveness, query resolution, benefit administration
Triple-A usage in sales and marketing focuses heavily on campaign optimization and revenue enhancement:● Marketing campaign management and lead conversion, improved return on campaigns through
optimal website ad placements, quote management, order management and upselling, price and portfolio management, behavioral correlations across sales funnel, dynamic pricing
Customer service use cases are dominated by contact center optimization and the quest to make agents as productive as possible across all channels:● Customer loyalty program management, agent optimization in contact centers, next best action,
customer email management, classification and response, contact analytics, digital associates for self-service and off-hours coverage, repeat call optimization
A broad range of use cases across accounts payable, order to cash, record to report, controllership activities, and finance transformation:● Reconciliations, identity management, digitization of the controllership function, revenue
forecasting, invoice management, journey entry exceptions management, audit, reporting, fraud
Leading use cases for Triple-A Trifecta services
Industry-specific (representative)
● BFS: Payment investigation, commercial cards, accounts services, settlements, fund accounting, fraud detection, collateral monitoring, portfolio administration
● Insurance: Claims processing, new business, underwriting, billing and collections, subrogation● Retail and CPG: Digital shopping experience, smart home, smart store, trade promotions, order
management and experience, customer journey optimization
Finance and accounting
Customer service
Sales and marketing
Human resources
The Triple-A Trifecta goes deep with industry-specific use cases and value beyond cost and efficiency. ● The 21 service providers covered in
this report shared 180+ case studies showcasing how they bring the enhanced value of the Triple-A Trifecta to their clients.
● Across the providers, the leadingcategory of Triple-A use cases is for industry-specific processes and functions. This points to better alignment of emerging technologies use with core business needs and objectives and outcomes focused on revenue growth, CX, and EX.
● F&A and other back office and operations-centric domains persist as strong poster children for Triple-A Trifecta services engagements in alignment with the perpetual need to drive efficiency and cost optimization.
Source: HFS Research, 2020
N= 182 Triple-A Trifecta services case studies
© 2020, HFS Research Ltd Page 26
Get ready to go native
Piecemeal automation Intelligent automation Native automation
Automation
Artificial IntelligenceAnalytics
• The HFS Triple-A Trifecta• End-to-end automation
BPM
RPA
AI
Analytics
• Silos• Task automation• Incremental results
• Digital transformation
We are somewhere here
People
Process
Triple-A stack
Data
Change
management
OneOffice
The death of GBS and the emergence of OneOffice as the operating mindset for the work-anywhere enterprise
© 2020, HFS Research Ltd Page 28
New sentiments are driving fundamental operating model decisions
43
25
13
8
3
3
3
2
17
7
15
17
13
9
7
15
8
7
11
10
17
17
19
10
We need to accelerate digital initiatives as COVID-19 becomes the
burning platform to change
We need to drive profits with a purpose that impacts broaderstakeholders beyond shareholders
We require a new wave of “cost reduction” as we enter a
recessionary economy
We now have a real opportunity to manage the enterprisetechnical debt
We need to focus on virtual consumer experiences for the new
digital world
We need to de-risk our supply chain to ensure that it is far moreresilient
We need to adapt and change our business model to have abetter chance to come out stronger at the other end
We need to focus on process debt (wasteful activities)
Rank 1 Rank 2 Rank 3
Which of the following statements most accurately captures the current sentiment for your organization?Percentage respondents
Sample: 150 C-level executives across the global 2000 enterprisesSource: HFS Research, 2020
• Tension and tradeoffs between experience and efficiency initiatives
• Sacred cows in terms of how people work getting thrown out especially when it comes to service delivery model and outsourcing decisions
© 2020, HFS Research Ltd Page 29
The March to the OneOffice Mindset and why rigid organization and operating models will fall to wayside
• GBS grew from 5% to 11% between 2016 and 2019 – with little movement since then
• Movement away from models focusing on process efficiency to one focusing on business outcomes and experience optimization
© 2020, HFS Research Ltd Page 30
Coming up in 2021!HFS OneOffice Enterprise Maturity Assessment Model – A new way to accelerate value
Level 1
Starting gate
Level 2
Piecemeal
Level 3
On the fence
Level 4
Optimized
Level 5
Transformational
Digital enablement is in the very early stages and does not feature in strategy discussions either around employee and customer engagement and experience.
Digital enablement is in the pilot stages. It is part of strategy discussions at a functional level but there is not a clear corporate position or understanding of impacts to employees or customers.
There are instances for end-to-end digital enablement on a process level but not consistently deployed for most service delivery initiatives touching both the customer and employee.
Digital enablement for linking back, middle and front office processes is wide -spread but it is mainly used to increase efficiency and not as a transformation initiative.
Digital enablement is a mission critical enterprise-level goal and transparently supports achieving the most important corporate objectives around customer experience, financial performance, etc. It has produced a shift in mindset from considering technology as a tool for enablement to considering technology as a tool to a differentiator for business outcomes.
The HFS OneOffice Enterprise Maturity Assessment driven by a balanced scorecard approach across the HFS Vision 2025 Fundamentals for OneOffice Organization: • The principle: Connect the front, middle, and back offices to deliver the “OneOffice Organization”• The talent: Align employees to customers with experience and skills• The Architecture: Slay your legacy dragons to go “straight-to-digital” with an integrated enterprise technology platform• The Competencies: Expand the traditional “people, process, and technology” paradigm to include data and change management• The Strategy: Collaborate not just internally but also externally
© 2020, HFS Research Ltd Page 32
9% 13% 12% 18% 19% 24% 28%22%
23% 28%30% 30%
29% 26%
65% 63% 56%50% 49% 46% 44%
Developing new skillsinhouse through
training
Expecting our staff tolearn on the job andengage with learning
and developmentresources
Leverage our partners to bring skills and
capability we don’t have
Crowdsourcing labour Actively recruitpermanent staff for
specific skills
Recruit people whoare a good fit andthen train them
Recruit temporarystaff for specific skillswhere we need them
The urgency to develop new skills inhouse through training has increased significantly
Post-COVID, how will the urgency of the following talent development activities change?% respondents
Decrease
No change
Increase
Sample: 400 executives across global 2000 enterprisesSource: HFS Research in partnership with Infosys, 2020
© 2020, HFS Research Ltd Page 33
Talent: Repositioning the organization
Sample: 400 executives across global 2000 enterprisesSource: HFS Research, 2020
How are you repositioning your organization to unleash people in the post-COVID world? % respondents
50%
48%
43%
39%
32%
31%
27%
We are boosting HR transformation and Talentdevelopment budgets
We are retraining managers and leaders
We are training technology staff to have a betterunderstanding of business
We are training business staff to understand anddeploy technology
We are scaling collaboration capabilities throughanytime, anywhere, any-device platforms
We are building a new organizational playbook toreimagine change methodologies
We are harnessing data to empower insights anddecision-making
The interplay between business and IT
is critical, and both functions must be
able to navigate the environment with
digital fluency.
Digital fluency provides business with
a better understanding of how
technology and digital tools can drive
value. Likewise, digital fluency
provides IT with the ability to
understand the business application of
technology and use it as an accelerant
to growth.
© 2020, HFS Research Ltd Page 34
Today’s organizations needs to look
at a core sets of skills – and new
applications of existing skills –in the
context of an integrated organization,
a new digital reality, and the speed
and pace of change.
HFS has defined six core skills
categories for the future of work.
HFS has defined six core skills categories for the future or work
© 2020, HFS Research Ltd Page 35
Selling in the “have-to-have” economy requires expanding the view of the traditional “people, process, and technology” paradigm to include data and change management
• People and jobs will be top of mind as this new reality materializes.
• The biggest challenge the industry will face in this transition is leadership.
• How long can we keep running after cheaper and faster?
• There is a need for extreme ideas to eliminate the wasteful activities that have accumulated across G2000 enterprises.
• AI-powered and cloud- enabled processes should become the foundation of most technology initiatives so we can move beyond piecemeal automation toward more autonomous solutions such as touchless invoicing or claims processing.
• We also need a technology backbone that delivers trust, transparency, and governance; this is where emerging technologies such as blockchain hold promise for the BPO industry.
• We need new approaches, different sources of data, open data marketplaces, and the ability to discover new datasets that lie beyond organizational silos.
• Actionable data must become a core part of what we deliver as an industry—not some value-add just for the select few.
• Build-in change management; it’s not just an invoice line item.
• Success will not be determined by the rate of digital adoption but by digital change management’s effectiveness.
© 2020, HFS Research Ltd Page 36
Localize talent. Not offshore everything
Wipro is also aggressively localizing its workforce
(from Wipro’s 2019-20 annual report)
The massive healthcare revolution and how the tech and services industry can provide intelligence, scale and agility
© 2020, HFS Research Ltd Page 38
A trifecta of challenges—demand explosion, supply shortage, and the pandemic shock—has created a burning platform for the healthcare industry to embrace change
Increasing demand
Rising costs Pandemic shock
Do you expect COVID-19 to have a bigger or smaller impact on markets than the 2008 downturn?% healthcare and life sciences respondents
53%
14%
28%
5%
Much bigger Bigger
About the same Smaller
Sample: 36 healthcare and life sciences executives across global 2000 enterprises
Source: HFS Research, 2020
Source: StatistaSource: United Nations Department of Economic and social affairs
© 2020, HFS Research Ltd Page 39
Major innovations in the healthcare industry
Reduce cost of care
(Increase supply)
Shift from illness to wellness
(Reduce demand)
Drive resiliency and compliance
(Manage risks)
• Alignment of stakeholder incentives
• Vertical integration and emergence of
payviders
• Administrative cost optimization
(touchless claims, intelligent
automation, BPaaS)
• Optimizing broken processes,
digitizing paper-based manual
activities
• Virtualizing care (digital care and
telehealth, remote care, home care,
population-health management,
wearables and IoT devices)
• Encourage health and wellness (smart
analytics, AI)
• Patient experience (unified, seamless,
personalized, omni-channel, digital front
door)
• Access to health data (cloud,
blockchain)
• Modernize legacy health systems
(cybersecurity, data privacy, resiliency,
IT modernization)
• Supply chain resiliency
• Regulatory compliance (interoperability,
value-based care)
© 2020, HFS Research Ltd Page 40
Improving the customer and patient experience is at the heart of healthcare transformation
Rank the following statements about your organization's objectives for business operations transformation over the next three years
Average rank across respondents
Improve customer experience
Create new business models
Grow top-line revenue
Increase bottom-line profit
Optimize regulatory compliance
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
1.8
3.1
3.2
3.3
3.7
Sample: 41 healthcare clientsSource: HFS Research, 2020
© 2020, HFS Research Ltd Page 43
● HFS Market Vision Paper● HFS Digital Roundtable● HFS Webinar● HFS Unfiltered Podcast● HFS Enterprise Success Story
● HFS OneOffice Pulse● HFS Market Vision Paper● HFS Global 2000 Enterprise
Research
● HFS ThinkTank● Voice of the Customer
(VOC) Dashboard● Market Feasibility
Assessment● M&A Advisory
● HFS Top 10 reports● HFS Industry Primers● HFS Hot Vendors● HFS Market Analysis ● Emerging Tech Case Study
Compendium● Competitive Intelligence● HFS POVs and Blogs
HFS
HFS Research Agenda 2021 – Engagement Model
© 2020, HFS Research Ltd Page 44
16
5 2
344. Industry Snapshot Reports will focus on industry-specific drivers, challenges, IT and business services and adoption of emerging technologies by industry value chains. We plan to publish these reports for each of the 10 industries1 covered by HFS.
5. OneOffice Maturity Diagnostic will allow our enterprise clients to compare their OneOffice journey with 1000 other enterprises across the 5 pillars of HFS Vision 2025 and engage with HFS analysts to understand emerging best practices.
6. Tailored Advisory Sessions. HFS clients will also be able to understand differences by industry, geography, and size of the clients through customized advisory sessions with HFS analysts.
The ultimate guide to technology and business services:
1. Institutionalized proactive versus reactive research
2. Upcoming trends (versus look-back reflection) to anticipate upcoming client and user demand
3. 1000 global 2000 enterprise executives across our research coverage areas
4. 10 Industry Sectors
5. Semi-annual
6. Assessments of where to invest based on current maturity
OneOffice Pulse
1. The journey to the OneOffice. The semi-annual report will focus on the current enterprise maturity across the pillars of HFS Vision 2025: OneOffice operating model competencies, talent, business/IT architecture, and strategy.
2. Outlook for technology and business services. The semi-annual report will focus on the adoption and investment priorities across emerging technologies, relative growth across IT and business services, and anticipated changes to consumption and delivery models.
3. Deep dive on the current hottest area. Every six months, we will focus on one of the hottest segments across our research coverage based on client demand. The first coverage area will be the 2021 state of “Cloudification.”
© 2020, HFS Research Ltd Page 45
HFS Top 10 Research in 2021 | New “OneOffice” Dimension in addition to Execution, Innovation, and Voice of the Customer
Ability to Execute
Focuses on size, growth, experience, expertise,
geographic footprint, and delivery excellence
NEW: Alignment with OneOffice fundamentals
HFS Top 10 Research ranks service providers across execution, innovation, and voice of the customer criteria. Starting 2021, we are adding
a new dimension to our Top 10 evaluations: Alignment with OneOffice fundamentals
Innovation capability
Focuses on vision, go-to-market strategy, investments, emerging technologies, and creative client
engagement
Voice of the Customer
Focuses on direct feedback from both reference and non-
reference clients
© 2020, HFS Research Ltd Page 46
Q&A
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