The Finance & Accounting (F&A) outsourcing space continues to evolve rapidly; there are two major drivers for this - one on the client side and the other on the vendors’ side.
On the client side, there are fundamental shifts in the expectations from outsourcing initiatives: CFOs want to focus more on the strategic value of the finance function, expecting outsourcing programs to arm them with insights and not just information and deliver on business metrics. They want a modern, future-ready finance function that can execute with speed, agility and stability. On the vendors’ side, there are many tools and innovations available at the vendors’ disposal: point solutions for a track or specific utility, cloud ERP, automation platforms, big data analytics and even AI-driven platforms.
Here’s a look at 5 key areas that are changing the F&A outsourcing landscape:
The Automation Cliffhanger:
While Robotics Process Automation has been around for some time now, the focus is shifting from process automation to intelligent and cognitive-based automation. Today’s end-to-end automation uses software bots that are knowledge driven and come with the ability to self-learn – this makes it possible for bots to be trained to understand, learn and execute complex business processes: enhancing agent productivity by as much as 20-30 % and ensuring 100% accuracy.
Digital Convergence in F&A:
While every transaction is processed on the system, the CFO still has to pore over multiple spreadsheets at the end of the month to review performance: which is all in rear-view mirror perspective. The CFO needs a single real-time version of truth - at her fingertips, accessible anytime and anywhere. Vendors are now arming the CFO and controllers with an interconnected, interactive, cloud and mobile-enabled Digital Command Console that provides live data and diagnostics, transparent monitoring, exception highlighting, divisional-level drill down and real-time performance status.
Bolder Domain = Unlocking Business Value
Expanded and in-depth functional expertise is being mined to unlock value for customers by ‘looking beyond the scope of process’ and ‘executing more optimally’ through innovative ideas and solutions. These range from identifying opportunities to optimize working capital, inventory reductions or risk avoidance– all of which may not explicitly feature in the contractual Statement of Work.
Smarter Knowledge-based Artificial Intelligence (AI) Platforms:
Platforms that can ingest data from the sources of truth systems (both internal and external), apply machine learning and big data analytics on that data will help derive predictive insights enabling the CFO in decision support. Today AI-based solutions are being used to analyze the financial and operations data to identify patterns and trends which have a significant impact on various aspects such as: optimizing working capital, developing self-evolving collections strategy based on customer behavioral patterns, external market risk-factors to proactively address data inconsistencies that could hinder timely book closure, zero-touch claims processing and intelligent fraud detection.
Service providers are moving away from taking responsibility for only the outsourced portions of work to assuming shared responsibility for the success of the overall transformation program. Endless lists of process metrics are being replaced by fewer end-to-end business metrics which ensure that functional ownership is not split. There are newer business models such as BPaaS and innovative component-based pricing models being introduced to bring flexibility and meet evolving needs. As a rub-off of this ‘program-as-a-whole’ view, customers are now much more proactive in acknowledging and addressing implementation and change-constraints on their side and are seeking expert help to collaboratively address those constraints together.
We bring you interesting snippets on what is trending in the Sourcing & Procurement space!
FROM DESCRIPTIVE + DIAGNOSTIC TO PREDICTIVE + PRESCRIPTIVE
The traditional decision-support analytics in procurement with the descriptive and diagnostic aspects of ‘what happened and why’ is now passé. We are now in the world of prescriptive and predictive procurement of ‘what should we do next in a given scenario’ and ‘what is likely to happen’. There will now be an even stronger inter-connectedness between the supplier mix, facilities management, carbon footprint and sustainability index of the organisation, minimising risk of supply disruption and spend forecasting; which will all be used to arrive at business insights and recommendations.
Volatility, uncertainty, complexity, ambiguity (VUCA) have become the buzzwords for procurement - causing disruptions in the supply markets. Procurement needs to insulate itself as best as possible with agility to combat these. Today, these disruptions due to various aspects - IT that has moved to cloud from on premise, big data, ‘uberization’ of services and evolution of marketplaces, disruptions from global geopolitical developments such as Brexit, US trade uncertainties, economic slowdown in China and other countries, volatility in commodities due to demand supply shocks, crash in the oil and steel, copper prices and other commodities, among others. All this requires us to leverage real time dynamic supply market-intelligence combined with prescriptive and predictive analytics. The procurement function will need to constantly tap into continuous innovation, deploying technology to reinvent and transform itself: through automation, AI, advanced contract management, digital tail spend management and cognitive procurement.
CONTINUED FOCUS ON CORE PROCUREMENT
The core procurement responsibilities of the function, of course, continue to be in-focus. These include being the primary custodian of cost / spend management for the organization, compliance and supplier relationship management, and value-delivery beyond cost savings.
We bring you the top 5 trends to watch out for, in the Supply-chain-of-everything world!
Digital Supply chains
The rapidly proliferating, adoption and maturing of technologies (the Internet of Things, digitization of data, big-data, blockchain and 3D printing) have accelerated the pace and accuracy with which the supply chain can execute to a client demand. So whether it is about improving planning and replenishment, creating a lean and balanced supply-chain, product traceability or reducing cost to serve and transact, the supply chain is better enabled through such technologies.
As the global economy shifts eastward, many manufacturers are restructuring their supply chains by ‘re-shoring’ operations closer to where the markets are, and are likely to be. Near-shoring offers several advantages which include less distant time zones, greater security over intellectual property, increased customer responsiveness and decreased turnaround times. Some of the key reasons for this trend includes: rising labor costs in China, technology that has reduced the relative cost of labor, political instability and environmental disasters and major time zone differences that make communication between the U.S. and Asia more difficult, issues around maintaining quality standards and guarding intellectual property, among others.
The global population is projected to touch 8.3 billion by 2030. With the demand for food and energy increasing by 50% and water demand increasing by 30%, we will soon witness an era where demand for natural resources begins to easily outstrip available supplies. Production costs will also likely go up. This trend will revolve around sustainability, regulations on carbon footprint and opportunities in the space for green-technology opportunities.
The growth of e-commerce has forced established retailers to adopt omni-channel fulfillment practices. Inventory optimization will take on greater importance as product availability and timely fulfillment becomes essential across all channels.
Movement towards a subscription/lease economy
We are already seeing a big trend of customers looking to buy a service rather than a product, even in more traditional product categories. Supply chains will need to evolve to support these needs more efficiently, effectively and with added emphasis on customer experience.
Brace yourself for some top trends in the world of Digital Marketing Services, that are right round the corner!
Convergence for better ROMI
With digital marketing constituting 25% of marketing spends and growing at 25% per annum, companies are asking for convergence in the digital marketing supplier landscape, bringing together creative agencies, IT vendors and service providers to provide an integrated service. Clients are now aware of the exponential benefits to be derived from integrating the digital marketing value chain to amplify the Return On Media Spend (ROMI).
People + Software = delivery of superior services
A convergence in the digital landscape will facilitate a new competitive edge in delivering value through a people + software model rather than on costs alone. The ability to deliver global services using expertise in technologies, automation and people skills will drive value in digital services and increase ROI. ‘Digital factories’ combining these skills will replace older models of digital engagement.
Digital Marketing Service providers are partnering with next-gen tech partners to develop custom solutions
With marketing spend constituting almost 2.5% of revenues, technologies are being developed to drastically improve the returns on this spend. Advertising spends, for instance, is increasingly moving to programmatic platforms and personalisation is driven by analytic engines which not only automate but drive ROI of the Ad spends. Digital marketing service providers are partnering with these platform vendors to provide an integrated offering.
Redesigning marketing functions to drive innovation
Companies are building a marketing value chain by investing in ‘design-thinking’ workshops to strategize and plan the right marketing services model. This ground-up strategy is helping companies come up with long lasting solutions to their marketing needs such as improving time to market, increasing conversion rates and driving continuous improvement.
Machine Learning (ML) and Artificial Intelligence (AI) = superior digital marketing results
The digitisation of services are breaking down the silos between functions, businesses and legacy systems. Digital data and information now moves seamlessly throughout the organisation enabling AI and ML platforms to develop customer insights. Hyper-personalisation, omni-channel digital interactions across devices and creation of customer genomes are some of the outcomes enabled by such analytics platforms.
Data privacy and compliance of services will be key to successful operations
With customers using multiple channels to provide confidential and private data, both compliance and transparency of data becomes critical to customers. Organisations will invest in creating fool-proof systems to ensure data privacy and transparency of operations. This will include ensuring that digital data continues to be owned by firms; and compliance procedures are in place to avoid issues of loss or PII or even conflicts of interest between the different partners of the digital value chain.
Most organizations today are competing in a boundary-less global world where digitization and technology is transforming every facet of the business. Business transformation in BPM plays a crucial role in this journey to deliver on the aspects of effectiveness and experience, while continuing to drive efficiency maintaining a leverage of 10X.
Here we bring you some key trends in the Business Transformation space in BPM to watch out for:
The integrated, end-to-end view
Increasingly shared services work with clients in not only looking at driving transformation within, but also to ensure that change percolates end-to-end. SLAs are moving towards being business outcome-driven, in addition to looking at operational aspects.
The Stacked Approach to Transformation
Data, business processes, applications and infrastructure make up the core of how businesses operate. However today, these elements and their strategies are isolated and uncoordinated. In the next generation of Business Process Transformation, organizations would have to rethink their vision and revise their strategy, by bundling these four elements together and defining seamless structures and mechanisms that allow a holistic view to business needs.
Deeper Insights through Analytics
The future lies in how well the abundant amount of data available is leveraged; and one of the key levers to achieve transformation today is analytics. Using structured and unstructured data, organizations need to leverage the power of analytics in defining the problem statement and also prescribing the possible solution options for the problems. This can be achieved through prescriptive, predictive, diagnostic and reporting analytics.
Today’s technology is enabling us to drive high levels of automation. How can we ensure Straight-Through-Processing with only minimal exceptions to the process? This is the challenge for us as transformation professionals. Driving automation at the application layer should be the objective, however given the challenges and investments, introducing point-solutions and driving automation of the front end - mimicking human movement; could be the possible first step. This could be data extraction and entry, single view to data and auto query resolution using Chatbots, to name a few.
Here we bring you the most relevant, game-changing trends of today in the Human Resources Outsourcing function.
From Human Resources to Human Relations
The Fourth Industrial Revolution is already here, driven by an increase in automation – enabled by rapid innovations in robotics, artificial intelligence and smart technologies. This revolution is complemented by the rapidly changing workforce demographics, which also means the workplace will no longer hold on to traditional job definitions, progressions or roles. Transactions that have been facilitated or managed by HR would be either self-served, automated or simplified. The Human Resource organisation of the near future, will play a central role in this metamorphosis - playing different roles of enabler, catalyst, change agent, counsellor – and establishing a personal connect with each and every employee in the organisation.
With an extremely diverse demographic mix, interests, and varied degrees of performances across the employee base, there would be an increased need for HR to tailor messaging and services. It would mean micro-segmentation of employees and creating an ‘n=1’ experience. This would include articulating the employer value proposition, job descriptions, feedback and trainings. This would also mean HR would have to build on tactics to leverage social media, not just as a broadcasting tool but as a listening tool, thereby creating established channels of greater employee engagement.
Scaling the Maturity Ladder of People Analytics
All HR organisations analyse and interpret data. The true power of this data will be unleashed only if it provides a comprehensive, 360 degree actionable view of the individual, teams and talent for both the new recruits and the organization as a whole. With powerful data analysing platforms and AI based learning mechanisms, it would be possible to achieve that and much more. Some examples include creating a 3-dimensional employee persona- link instead of a 2-dimensional data records view, and then leverage this understanding to create contextualised and personalised experiences for employees; using insights to attract talent instead of chasing talent; develop talent-pipeline for the future instead of training them and pre-empting employee queries before they manifest.
Embracing Speed and Simplification
With the rapidly changing landscape, be it around technology options such as ERP based HRMS, to point solutions, cloud based solutions or the changing socio-economic-political scenarios, time for devising long strategic roadmaps and implementing them is continuously shrinking. Hence HR needs to adopt newer approaches to simplify work-life integration, prioritising urgent business needs, experimenting, and prototyping and implementing quickly.
We bring you our top 6 trends in Customer Service to watch out for!
Automation and Chat-bots
Automation is going to be one of the forces of disruption in the contact center operations market with an upfront commitment of 40-50% reduction in the total contact volume – and repetitive work will either be eliminated or automated. Today, since customers prefer self-service, it is critical that the self-service tools are supported by strong and effective Knowledge Management (KM) systems, enabling easy interactions. The new-age virtual agents and Chatbots enable accurate probing with the ability to quickly scrounge through the knowledge base to provide near accurate responses as that of a live agent.
The change in customer demographics has driven the need for companies to become more agile and available for their customers not only in real time but also anytime/anywhere. Mobile Apps are becoming popular and customers seek to resolve and access their information in real time - increasingly defining how customers communicate, shop and engage with a company.
There is a trend among customers, who seek to balance their spread of delivery locations and bring balance to their representation of the user base. This enables convergence of languages, cultural fit, scalability and proximity to the market, which is critical for enhanced customer satisfaction. While this would drive up cost of operations, it is agreed that the cost of customer churn from a dissatisfied customer would cost even more – this easily makes right-shoring a key trend to look out for.
Work from Home (WAHA)
Flexibility of the workforce is another critical dimension to meet market and customer needs. Work At Home Agents or WAHA, are of great significance and contribution, as it allows organizations to plan and staff, based on customer needs and also gives flexibility to the work force to plan their time effectively.
Analytically Driven Operations
Applying analytical models/techniques, and insights from big data in real-time to bring value to business operations is one of the key trends in Customer Service today. It helps to sync online and previous customer behaviors with agent schedules and forecasts enabling us to align the most capable agent to handle a specific type of query satisfactorily. All organisations must aim to facilitate a healthy mix of automation, virtual assistant and also a team of empowered and trained agents to provide consistent and positive customer experience.
From Multi to Omni channel
Contact centers will need to support the shift from Multi to Omni channel where customers do not stick to one medium of communication. Also the general expectation from customers is that the organization they interact with knows them, their likes, and their dislikes and keep a context to the conversation irrespective of channel of contact. With digital media being so active, the speed of addressing customer feedback/complaints will be as critical as the eventual resolution provided.
From industry verticals, to enabling functions like finance, HR, procurement, manufacturing and production - Analytics will be an all-invasive and omni-present variable across the organization.
We bring you our Top 5 trends in Analytics that will keep you ahead in the race!
Analytics will expand across the enterprise, across functions:
Currently the usage of analytics is quite lopsided across industry verticals and across functions in an enterprise - with retail, financial services, insurance and telecom that have traditionally been in the forefront of analytics usage. Similarly front-office functions like sales, marketing and customer –acquisition have also seen more advanced usage of analytics. This will now widen across industry verticals and back-office functions like finance, HR, procurement, manufacturing and production. Better visualization will also be a driver to widen the analytics foot print and improve its usage. It will expand into middle and lower management and won’t just be utilized by the top management.
Bringing business context to life
The focus will be on driving key business and operational metrics and not just productivity. The focus will be on driving measurable business outcomes like topline, margins, cash flow and other clearly defined levers that improve customer satisfaction and regulatory compliance.
Rear view to futuristic view
As the ability to bring data together and the cost of managing larger chunks of data improves, the focus will be on moving from the past to the present; to forecasting the future and improving its accuracy. The focus will be on what will happen rather than what already happened. This will further push the frontiers of creating new data inputs using the Internet of Things (IOT)
Time to derive insights will continuously shrink
This is also driven by the declining cost of managing data, increasing pool of people to manage the data and the increasing power of machines to manage larger data pieces.
Heavy automation using Artificial Intelligence (AI) and Machine Learning (ML)
As automation creeps into repetitive rule-based work, usage of AI and ML will make automated decision-making the norm, resulting in huge productivity and lower process exceptions. Standardization and harmonization of global processes will accelerate, to enable easier adoption of AI and ML.
Intelligent RPA will change the way outsourcing is done today
There will soon be a domination of automation, analytics and cognitive- which will shift the outsourcing agenda from cost arbitrage and productivity to business value driven innovation, cost optimisation and transformation. Within next two years, more than 80% of the outsourcing deals will have these capabilities included as a key ask to drive process transformation. First time outsources will also be evaluating automation as a potential alternative to outsourcing.
Collaboration, Convergence and Consolidation
Technologies and technology providers will collaborate to provide automation, analytics, mobility and cognitive solutions. For example, automation and AI could be embedded into ERP’s and other point solutions. Partnerships will be forged between technology providers to bring in big-data and analytics or automation on cloud based SaaS solutions. Intelligent chatbots within applications would be a common scenario in the near future. RPA & AI technology providers will also enter into aggressive partnerships with existing BPO & ITES providers to improve client foot print.
Re-definition of Data Security policies and Governance
With automation, AI and robotics being a part of both insourced and outsourced operations, data security, ownership and ethics could redefine data security policies. Legal teams of organisations will have to factor in regulations for AI as part of contracts and ethical governance and the aspect of taking away human work would also be questioned and regulations will be in place in future.
Alternate Innovative Pricing models in the ‘As a Service’ economy will emerge
Outsourcing may not be only about transferring people to offshore or near-shore locations. BPO deals will be more about transformation and business value delivered. Anything/Everything ‘As-a-service’ and over cloud, will change the way we consume services.
There will be an evolution of self-assisted chat bots, self-help portals and voice enabled responses.
Domain-specific RPA Solutions:
Industry and domain specific RPA solutions will emerge. More and more automation use-cases will evolve based on domain and industry specific nuances taking automation to the next level. Vendors will also need a much deeper understanding of processes to have this competitive edge.