NASSCOM BPM Summit 2016 session III : Business Process Services : The Next Big Evolution

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TJ SinghVice President, ResearchBusiness Process ServicesBusiness Process Services The Next Big Evolution

2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."

2015 Gartner, Inc. and/or its affiliates. All rights reserved.

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Digital Business Is Changing Business Models and Disrupting Every Industry

# 2015 Gartner, Inc. and/or its affiliates. All rights reserved.

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Digital business is changing business models and disrupting every industry. It is creating new business designs in which people, business and things communicate as equal entities.An autonomous vehicle that pays bitcoins to the cars in front of it to move out of the lane is a new business design. Today, we have already seen how a technology platform has enabled personal car owners and homeowners to disrupt the travel and hospitality marketplace. And how digital business is improving the airport experience (for example, beacons or location-based sensors communicate to the phone to notify the passenger of connecting gate time and location). Digital business is impacting industries, and this impact is happening now. According to a Gartner study completed in 2014, 83% of respondents expect to complete their digital transformation in the next two to five years, meaning that the window of greatest opportunity for providers will close in 18 months. Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


At Greater Speed Than Any Other Single Influencing Factor New data-driven services = faster time to market and lower barriers to entry

Core MarketsNew adjacentmarkets = industry convergenceNew ancillaryservices= new offerings

DifferentiationCompetitive AdvantageNew consumption patterns = new partners and lower barriers to entryBanking and Securities

Communications




Making Industry Boundaries More Fluid

Insurance

Banking and Securities

Education

Healthcare

Retail

Government

Media

TravelUtilities

Manufacturing

Communications

3D Printing

AugmentedHumansAdvancedAnalyticsLearningMachinesNexus TechnologiesSensors/IoT

Technology ForcesVertical StrategyMarketsProductsCompetitionTechnologiesOperations

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Digital business is creating new business designs and enabling industries to become more fluid. Gartner has been talking about the Nexus of Forces cloud, social, mobile and information and how it impacts an industry. Now newer technologies augmented humans, learning machines, advanced analytics, 3D printing, the Internet of Things (IoT) are empowering industries to compete or serve in a new dimension. The barriers to entry are now radically reduced with technology, and therefore, the time to market is much faster. 3D printing is enabling in-house manufacturing, and it is creating retail and service opportunities for new players. As an industry business unit leader, digital business and industry fluidity impact markets, products, competitive landscape, technology adoption and business operations. New relationships and partnership are being forged and dismantled in a fluid manner to create cross-industry value experiences, such as the travel experience that blurs transportation, retail and airport authorities. The health and fitness value proposition crosses multiple industries, such as healthcare, education, retail and life sciences. Industries are becoming more fluid, so this report addresses how to succeed in this new realm of industry fluidity.



Mobility and Digital Engagement Is a Top Priority for CEOs to Achieve Growth

"The future economy is an experiential economy""I do think we are becoming even more of a technology company"

"The digital revolution is realigning how we all live"

"Wherein the user is no longer just a passive buyer, but an active participant throughout the entire process, and companies around the world need to adapt to this."

Zhang Ruimin Board Chairman and CEO, December 2013 "Half of orders received digitally this Christmas were on mobile devices and then they want to come through the drive-through at Asda (U.K.) to pick up their groceries and other items."

C. Douglas McMillon President and CEO, January 2014"At least part of a facelift might be downloadable while the customer is in their garage." "Cars will become mobile computers. That will be revolutionary for how we operate in future."

Martin WinterkornChairman of the Board of Mgmt., March 2014Images: www.haier.net/en/about_haier/ceo/introduction, http://media.vw.com/release/632, news.walmart.com/photos/doug-mcmillon-addresses-analysts-101514




AutomationDesign Thinking

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Digital Business is an unstoppable and irresistible catalyst for change. Change that will affect the fundamental foundations and baseline assumptions of every business. The very essence of what you do, who you serve, how you behave, the value you deliver and how you get paid will change forever. The Digital Business revolution is underpinned and enabled by the macro technology forces of Cloud, Social, Analytics, Mobility and the Internet of Things. Not every business fundamental will need to change to the same degree, nor will every technology driver have a role to play in every business scenario. Businesses that decide to wait and see are likely to become an irrelevance. Change on this scale has never been seen within the modern industrialized world. Agility is no longer an optional differentiator. It is now a mandatory business requirement. Major established brands will fall. New brands will emerge. Industry segmentations and product classifications will become moot. Yesterdays consumer product company will become tomorrows corporate content provider. That is, before it re-invents itself and re-evolves into a pre-emptive collective servicing organization the week after that. There is no steady-state operation. Standing still means falling behind. Those that fall behind may never catch up.Customer experience is everything. As the number of inter-connected touch points across the physical and virtual worlds increases, the potential to disappoint or delight increases exponentially. Cross-interaction consistency and real-time value perceptions will drive pseudo-loyalty and transient affection. Customer satisfaction metrics are unhelpful and misleading relics of the past.Technology and Service Providers need to determine and demonstrate how their offerings can underpin, support, enable and accelerate the Digital Business revolution to remain relevant to their customers. Digital Business requires providers to totally change the way they do things while helping their customers to do the same thing at the same time. This presents significant challenges with equally significant opportunities and risks. Traditional buyers will have a role to play. But a new breed of buyers is emerging and providers must address their wants and desires if they are to earn the right to help in the transitionPage #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


We Asked 400 CEOs: Which Five Technology-Enabled Capabilities Will Be the Most Important Areas of Investment to Improve Your Business Over the Next Five Years?

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Gartner CEO Survey, 2015http://www.gartner.com/document/code/274031Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


The role of BPS providers will change over the next five years 7Be The BusinessBe The ProcessSupport The Process Ad HocMortgage ServicesReverse Logistics ServicesCustomer Experience ManagementHuman Capital ManagementMarketing ManagementFinance ManagementPay SlipsFinancial Data EntryEDICustomer Data VerificationCampaign ManagementAccounts PayablePayroll ManagementBenefits AdministrationLogistics ManagementPatient Data EntryLoyalty ManagementRevGen Management

2015 Gartner, Inc. and/or its affiliates. All rights reserved.A01. Based upon current spending, what percentage is spent on internal delivery versus external business process outsourcing (BPO)? Internal delivery vs. Outsourced spending Percentage for all functionsNote: Statistics are approximations calculated from range mid pointsBase: Have knowledge about the "Business process services delivery by internal and/or external resources" technology area (SS07)/ Have knowledge about spending changes with ESPs in 12-24months (SS08A) / is a decision maker for ESP use and BPO vendor selection (SS08B) and were shown this section. Excluding DK.


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Business Process Services: Opportunities await for those who demonstrate valueBusiness Consulting Services

ClientDigitalBusinessInternet of ThingsRisk &SecurityAutomationSocialMobileInformationCloudStrategyBuildDesignRun

Business Process Outsourcing

IT Outsourcing, App ServicesKey External Issues and Forces Organizational Behavior and StructureEconomic Uncertainties Geo-Political RisksSocial and Demographic ChangesSourcing Maturity

2015 Gartner, Inc. and/or its affiliates. All rights reserved.The Business Process Services (BPS) agenda covers both the business consulting services and business process outsourcing (BPO) service segments, which include BPaaS. Today, buyers have many choices in areas such as cloud, mobile, big data or information and social. They also have to deal with new market forces or evolution, such as digital business and IoT, and renewed business opportunities through transformation and transaction optimization, including automation, risk and security. BPS providers are looking to build a successful go-to-market strategy and value proposition to captivate prospects and retain clients, while sustaining and in some cases in BPO, improving healthy margins via optimized delivery. The evolution of the business process services industry is accelerating rapidly. Service providers are competing by building next-generation offerings and industrialized capabilities to deliver them. Providers that cannot demonstrate value to customers will be replaced by those that can.

Business process and consulting services executives and managers must be aware that in 2015:Many service leaders will feel personally threatened because of their failure to aggressively drive change and growth in a rapidly evolving market.Up to 20% of the top 100 services providers are being displaced by market consolidation mergers, acquisitions and divestment. Low margin and limited growth will no longer be tolerated, and a focus on new, fast growing and innovative service offerings in areas such as digital business, the Internet of Things (IoT) and automation is a must. The competitive landscape is also evolving at a rapid rate with the entry of new, nontraditional competitors driving value-oriented and standardized digital solutions like business process as a service (BPaaS) and demand-driven value network solutions.Service delivery industrialization alone will no longer guarantee survival, as price erosion will intensify and digital pass-through processes and autonomics/automation will change process performances.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


In Digital Services, Context Maximizes Value

Home

Traveling

Commuting

Lunch

BusinessMeetings

With the Customer

BetweenSales Calls

Walking tothe Car

With Partners

Sporting Events

At theGym

Shopping

Tradeshows

EntertainmentVenues

Office

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Mobile devices are used from the time we wake up to the time we go to bed at night. In many cases, they are now the portal to the digital world. The impact on customer engagement processes will continue to be more pronounce as companies seek to market, sell and service customers when and where they need it most.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


The Emergence of the Digital-Customer-Facing EmployeeVoice-Driven AppsAutomotive InfotainmentMobile Digital Content Virtual Customer AssistantsWearablesMobile Social Apps Mobile Sales ProductivityMobile Digital Analytics Apps




HealthcareTransportationUtilitiesManufacturingBankingRetailInsuranceMedia CommunicationsGovernmentChief Digital Officer Role511555510101Seeking New Business Models/Digital Platforms15105551010105Formulating Partnerships/Startup Engagement515515510101Sharing Data for Business Benefit555515551010Policies and Regulatory Forces51010551101055Internet-Enabling Objects/Smart Machines1010101015101051Seeking New Technology Adoption Now/Point of Inflection55105110510105Renovating Core IT Toward Digital Future (Speed, Scale, Agility)51010515510105Impact From Constituents (Citizen, User, Customer, Millennial) Driving Technology Change51051101010101010Talent Acquisition/Skill Set (Data Scientists, Digital Anthropology)51555551055Highly Collaborative Environment151101511011Operational Processes Are Digitized and Automated1510105551055Overall Priority Score536882714166761159154 High Priority Somewhat of a Priority Low Priority

Digital Business Readiness Framework for Industry Business Unit Leaders

2015 Gartner, Inc. and/or its affiliates. All rights reserved.One way to evaluate the viability of your go-to-market strategy is to map it to the industry demand drivers.When we look at digital business, the opportunity is immense, so how do we break this down? Our team has identified 12 qualification points to gauge an industry's digital business journey (for more information, see "Market Insight: Defining the Digital Business Opportunity Across Vertical Industries," G00270882). For example, is there a policy or regulatory force driving the industry to move toward digitalization? We definitely see this in media, where governments mandated the switch to digital broadcast. Is the customer pushing for technology change? Yes, we see this in mobile banking and mobile commerce. We mentioned innovation occurring outside of the industry, and that is why companies are formulating new partnerships and working with startups. Formulating new partnerships/engaging with startups is a more of a pressing issue in some industries (such as media and telecom), which is why that category on the slide is listed as a high priority. The bottom line is that industry business unit leaders can use this framework to assess market opportunity. You can look at each qualification point to determine where your strengths are and use it as a guide in your go-to-market strategy and planning.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


Drivers and Pace of Adoption of New Digital Business Models Differ by IndustryFinancial ServicesPublic SectorManufacturingDriversIndustry competition Nonbank entrantsConsumer behaviorCost-effectivenessTransparencyFairnessOpen government policiesBudgetsEstablish relationship with customerEnabling characteristicsService-based industryTechnology maturityHighly structured processesSensors waiting for connectionSupply chain automationEarly adopter segmentsPaymentsAll consumer-facing segmentsInformation service agenciesCitizen-facing operationsConsumer packaged goods

2015 Gartner, Inc. and/or its affiliates. All rights reserved.While on the whole, the window of opportunity is short, the pace varies by industry, as do the drivers and inhibitors. A well-understood example is government, in which regulation is an inhibitor to fast-paced change. However, even within government, there are conditions or requirements in some agencies that will foster new models or will even act as enablers to other industries.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


Innovation: Smart Machine CategoriesAutonomous VehiclesSmart Robots Machine-Focused HelpersPhysicalVirtual Customer AssistantsSmart AdvisorsNatural Language AidesVirtual




Virtual Customer Assistant GenerationsGen 1Primitive cartoon image with poor search resultsOnly text-based Q&A

Gen 2Moving animated GIF with better search resultsOnly text-based interaction with some speech emerging

Gen 3Moving image that resembles humanText-text, text-speech, speech-text

Gen 6Mobile enabled 3D moving high-quality human imageMost speech-based interaction with location awareness

Gen 53D moving image of human with great search resultsText-text, text-speech, speech-text, speech- speech

Gen 4Photo rendering of human image with good search resultsText-text, text-speech, speech-text, speech- speech

Gen 7Emotion detection,Mimicking tasksTransactional enabledPersonalized engagementContext awareness

2000201020132016

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Tactical Guideline: Virtual assistants have come a long way. Link your virtual assistant to your corporate culture and image for differentiationKey Issue: What Is a Virtual Assistant, and How Does It Work?The first-generation VAs were nonmoving graphical images that delivered poor search results and a less than acceptable customer experience. Generation-two VAs typically have moving and animated images and the search results have become a bit more refined. Generation-three VAs are starting to take on the shape of real human beings and often represent the corporate culture and image in its appearance. These generation-three VAs are also introducing speech as a technology to accompany the information delivery. Generation-four VAs are very refined human images, often made up from a combination of video clips and interacts via voice. The underlying search engine provides excellent results and provide a high level of relevance in their responses. Generation-five VAs have emotional responses and can conduct a social dialogue with Generation-six VAs delivering services via mobile devices.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


Interactive Conversation

Explicit InformationTransactionalInformationalGeneral Questions/AnswersCustomer DialogueGuided Task CompletionPersonalized EngagementsVirtual Customer Assistants Use CasesTask ComplexityLevel of Engagement




Show personality in engagementsDifferentiate themselves by the kinds of engagements providedCapture novel, but relevant contextsShow industry knowledgeAbility to precisely target needs and wantsCapture all the data collected through interactionsHave the ability to "market" to smart machinesAutomate knowledge management through machine learningHow Will the Winners Differentiate?




Customers can receive service 24/7. 800 customer inquires per month no longer require AASC's agent intervention.(ABN AMRO Bank)Why We Will See the Rise of the Virtual Customer AssistantWorkforceSource: Gartner, Survey, 2010

An 18% reduction in inbound telephone calls and a 133% increase in volume of customer queries dealt with and 65% migration of customer service queries to online channels. (European airlines)The call center volumes were reduced by 700,000 on an annual basis after the launch of Ask Emma. (BT)Reducing contacts through email and application form by 70% with 85% correct answer ratio and conducting up to 500 conversations a day. (LOT Airlines)Approximately 62% reduction in volume and saves times and staff able to focus on core issue. (FujiFilm)

2015 Gartner, Inc. and/or its affiliates. All rights reserved.Key Issue: What Are the Business Benefits of Using a Virtual Assistant for Customer Service?Virtual assistants will become the pervasive customer service technology as generation 1 and 2 of the technology is already making huge strides in not only reducing operational costs but also because it is increasing the levels of service to the customer. Here are five case studies of organizations that have already taken the step to a workforce without humans.Page #Presenter Name, Presenter Name, Presenter Name, and Presenter Nameconf_sessionID, date


This discerning behavior exists at several levels:C-Level executives are more involved.Increasing process complexity, depth and Be the Business approach to outsourcing driving change in buyer expectations.Technology buying has become a team sport.Multiple enterprise personality profiles exist within industries.Different buying styles exist within organizations.Cross-industry ecosystems of entities involved in delivering a customer experience. Buying Behaviors and Purchasing Decisions Have Become More Complex




TJ SinghVice President, ResearchBusiness Process ServicesBusiness Process Services The Next Big Evolution

2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This publication may not be reproduced or distributed in any form without Gartner's prior written permission. If you are authorized to access this publication, your use of it is subject to the Usage Guidelines for Gartner Services posted on gartner.com. The information contained in this publication has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information and shall have no liability for errors, omissions or inadequacies in such information. This publication consists of the opinions of Gartner's research organization and should not be construed as statements of fact. The opinions expressed herein are subject to change without notice. Although Gartner research may include a discussion of related legal issues, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner is a public company, and its shareholders may include firms and funds that have financial interests in entities covered in Gartner research. Gartner's Board of Directors may include senior managers of these firms or funds. Gartner research is produced independently by its research organization without input or influence from these firms, funds or their managers. For further information on the independence and integrity of Gartner research, see "Guiding Principles on Independence and Objectivity."


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