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26 May 2016
BPO and TechnologyNew Model to Offer Solutions
Proprietary & Confidential. © 2016, Everest Global, Inc. 2
Speaker
Michael Hedegard
Associate Partner,
Consulting
Focus areas
� Global services
� Service provider
strategy
� Services automation
� Digital
� Outsourcing
Proprietary & Confidential. © 2016, Everest Global, Inc. 3
Range of servicesOverview
� More than 25 years of experience
advising Global 1000
� Recognized for positioning clients for
the next generation of global
services − combination of deep
insights, strategic decision-making
approaches, and implementation
expertise
� Distinctive combination of consulting
and research capabilities
� Over 1,000 engagements, covering IT
and business processes (e.g., HR,
finance and accounting, procurement)
� Rich data sets and subscription
research based on over 75 business
processes, 150 service delivery
locations, 500 captives, 100 service
providers, and 18,000 outsourcing
contracts
Implementation
Consulting services to capture
value from decisions
Implementation
Consulting services to capture
value from decisions
Strategy
Consulting and research
services to turn insights into
decisions
Strategy
Consulting and research
services to turn insights into
decisions
Resources
Webinars, research, and blogs
Resources
Webinars, research, and blogs
Subscriptions
Research reports, data sets,
customized tracking services
Subscriptions
Research reports, data sets,
customized tracking services
We serve enterprises, service providers, and service enablers
Services
Industry
Service
Enablers
Service
ProvidersEnterprises
Everest Group is a leading global services advisory firm
Proprietary & Confidential. © 2016, Everest Global, Inc. 4
Agenda
� Digital adoption
� BPO trends with a focus on Latin America
� Q & A
Proprietary & Confidential. © 2016, Everest Global, Inc. 5
Sources for today’s Digital context
Focus of this section
� Digital adoption – putting facts to the hype
� Dispelling Digital myths and peeling the adoption onion
� What to watch out for and best practices
Focus of this section
� Digital adoption – putting facts to the hype
� Dispelling Digital myths and peeling the adoption onion
� What to watch out for and best practices
Everest Group
Digital Research
Comprehensive survey with over 200 enterprise (USD
1bn+ in annual revenues) Digital leaders across major
industry verticals
• North America adoption report
• Europe adoption report
Digital context setting
Proprietary & Confidential. © 2016, Everest Global, Inc. 6
Digital topics
Efficiency or
Growth
Efficiency or
GrowthThe Digital DipThe Digital Dip
Digital
Adoption
Digital
Adoption
� Overall Digital
market
� Technology focus
� Spend
Proprietary & Confidential. © 2016, Everest Global, Inc. 7
Easy
Complete
Accessible
Flexible
Digital dramatically enhances the
experiences of users
Source: Everest Group
What is Digital?
Customers, Employees and Partners
Proprietary & Confidential. © 2016, Everest Global, Inc. 8
Cognitive/Artificial
Intelligence
Cloud
infrastructure3-D printing
Social Touch screens
Mobility
Visualization
Voice recognition
Software-as-a-
Service
Sensors
Big Data
Analytics
Chat
Multi-channel
Internet-of-Things
(IoT)
Next-generation
UI/UX
Enabling layer
Integration
challenge� Standards
� Systems
Integration
� Agile/DevOps
� Automation
Interaction
layer
Virtual Reality
Digital
Cybersecurity
Source: Everest Group
The definition of “Digital” needs to embrace a rapidly evolving
span of functionalities and enabling technologies
Proprietary & Confidential. © 2016, Everest Global, Inc. 9
47%of Digital spend
Core mid-office
(e.g., such as Operations &
Production)
Market-facing front-office
(e.g., Sales and Marketing)
Back-office
(e.g., Procurement, F&A, HR)
� Reduce costs
� Improve productivity
� Transform supply chains
� Engage the customer
� Spawn new businesses
� Scale existing business
Digital for Growth (DfG)Digital for Efficiency (DfE)
24%of Digital spend
� Make Digital secure
� Make IT Agile
Digital Enablement
29%of Digital spend
Source: Everest Group
Contrary to hype, Digital is much more than customer
interfaces and online commerce
Proprietary & Confidential. © 2016, Everest Global, Inc. 10
Ad
op
tio
n
Time
Digital
Cybersecurity
Cloud IaaS
Big Data
Mobility
Social Media
engagement
Digital marketing
Online commerce/
Omnichannel
SaaS
IoT
• Using data for insights
• Flex infrastructure for
data handling requirements
• Securing data
• RoI coming under scrutiny
• Need to integrate Digital CMO suite with core
operations
• Nearing take-off
Digital Adoption Results: Technology themes driving Digital
Source: Everest Group
Data is the new Digital Currency
Proprietary & Confidential. © 2016, Everest Global, Inc. 11
Enterprises are going to spend as much as 20% of their total
IT spend on Digital
Source: Everest Group
Proprietary & Confidential. © 2016, Everest Global, Inc. 12
The Digital DipThe Digital DipDigital
Adoption
Digital
Adoption
Efficiency or
Growth
Efficiency or
Growth
� Dispelling the myths
� Industry orientation
� Digital sentiment
Digital topics
Proprietary & Confidential. © 2016, Everest Global, Inc. 13
Source: Everest Group (2015)
Dispelling the Digital myths
Proprietary & Confidential. © 2016, Everest Global, Inc. 14
Source: Everest Group (2015)
Several industry verticals display a strong Digital for
Efficiency orientation
Proprietary & Confidential. © 2016, Everest Global, Inc. 15
Based on their DfE and DfG orientations, enterprises can be
divided into four primary segments
Source: Everest Group (2015)
Proprietary & Confidential. © 2016, Everest Global, Inc. 16
Scaling enterprise Digital adoption: The Big Issues
Source: Everest Group (2015)
Proprietary & Confidential. © 2016, Everest Global, Inc. 17
Source: Everest Group
And the Digital Marketing promise is beginning to show signs
of tiredness, in the absence of clear RoI
Proprietary & Confidential. © 2016, Everest Global, Inc. 18
Digital topics
Efficiency or
Growth
Efficiency or
Growth
Digital
Adoption
Digital
AdoptionThe Digital DipThe Digital Dip
� Explaining the Dip
� Dealing with it
Proprietary & Confidential. © 2016, Everest Global, Inc. 19
In spite of the hype and investments, Digital success is not an
assured outcome
Proprietary & Confidential. © 2016, Everest Global, Inc. 20
Organize cross-functional teams to drive progress; Digital is not just the
CIO/CMO/CDO’s job����
Evaluate end-to-end processes; not piecemeal implementation����
Drive strategic clarity and obsessive focus on a limited set of objectives����
Unlearn sequential transformation; Agile is the key����
Dealing with the Digital Dip: Best practices
Proprietary & Confidential. © 2016, Everest Global, Inc. 21
Agenda
� Digital adoption
� BPO trends with a focus on Latin America
� Q & A
Proprietary & Confidential. © 2016, Everest Global, Inc. 22
Share of delivery regions by headcount in global services
delivery
2013-2014; Number of FTEs (in ‘000s)
1 Others include Africa and Middle East region
2 Analysis based on headcount for global services exports in 2014
Note 1: Includes global services exports for 31 leading locations. Excludes domestic market
Note 2: APAC: Asia Pacific; LATAM: Latin America
Source: Everest Group Global Locations Annual Report (2015): Everest Group (2016)
LATAM - Market heatmap2
2014
Brazil
Argentina
Chile
Costa Rica
Mexico
Guatemala
Panama Colombia
Nicaragua
Uruguay
Peru
Honduras
El Salvador
Belize
Emerging locations
Mature locations
Nascent locations
Latin America grew to 9% of the global services delivery
market, with Argentina and Mexico leading maturity
Proprietary & Confidential. © 2016, Everest Global, Inc. 23
1 Includes data for Q1 2015 (January-March 2015) and Q2 2015 (April-June 2015)
2 Others include Africa and Middle East region
Note 1: APAC: Asia Pacific; LATAM: Latin America
Source: Everest Group Global Locations Annual Report (2015): Everest Group (2016)
Breakup of new center set-ups by region
2012-H11 2015; Number
Latin America’s share in new center set-ups has stayed
between 15-26% over the past few years
Proprietary & Confidential. © 2016, Everest Global, Inc. 24
Breakup of new centers in LATAM by functions supported
2011-H1 20151; Number
1 Includes data for Q1 2015 (January-March 2015) and Q2 2015 (April-June 2015)
Note 1: Includes GICs and (third-party) service provider delivery centers; centers may be supporting multiple functions
Note 2: Excludes centers where function is not specified
Source: Everest Group (2016)
Proportion of centers catering to voice BPS, IT, R&D, and
engineering services has increased in the new setups
Proprietary & Confidential. © 2016, Everest Global, Inc. 25
Voice BPS
Non-Voice
BPS
Knowledge
processes
IT services
R&D and
engineering
� Significant evidence of delivery from multiple
locations in Latin America
� Key regions served from Latin America locations
include Latin America, North America, and
Europe
� Select list of locations support these functions
from Latin America
� Evidence of support for Latin America only, with
limited offshore service delivery
Functions
Source: Everest Group (2016)
Medium LowHigh
Comments
� Only some locations within Latin America support
offshore IT services delivery due to requirement
of specific skill sets
� Evidence of support largely for Latin America and
North America region
Maturity of service delivery
Locations support delivery for functions other than voice and
non-voice BPS services is limited
Proprietary & Confidential. © 2016, Everest Global, Inc. 26
� Latin America economic
performance have
contracted in 2015,
currencies have depreciated
and inflation has raised
� Currency depreciation
improves location
attractiveness for global
services delivery from
locations like Chile,
Argentina, Mexico,
Colombia and Brazil
� Significant depreciation of
the currencies has helped
countries and companies in
relation to the export of
services, which still
manifests itself as a bright
spot
US Dollar appreciation is creating opportunities in Latin
America
Proprietary & Confidential. © 2016, Everest Global, Inc. 27
Global services view Regional demand view
Source: Everest Group (2016)
Look for changing functional proposition of
locations, e.g., Costa Rica emerging as a
new location for IT services1
Watch for legislative changes (e.g., labor,
tax related laws) in the region, which can
impact services industry2
Be mindful of trade-offs between
opportunities and risks (in particular
security and political), especially as risks
continue to evolve
3
Seek opportunities for penetration into
domestic/regional demand markets4
Multi-tower deals, covering multiple BPO
segments is likely to pick up1
Demand from local-headquartered
companies are likely to rise2
With growth in voice channels stagnating,
non-voice channels such as email, chat
and social media will drive growth in
customer care
3
HR (especially Recruitment Process
Outsourcing), industry-specific BPO, and
analytics services will continue to drive
LATAM BPO growth
4
Future trends to watch
Proprietary & Confidential. © 2016, Everest Global, Inc. 28
Agenda
� Digital adoption
� BPO trends with a focus on Latin America
� Q & A
Proprietary & Confidential. © 2016, Everest Global, Inc. 29
� For advice, consulting or research on Digital, Automation or Global Services, please contact
– Michael Hedegard, [email protected]
Q&A
Proprietary & Confidential. © 2016, Everest Global, Inc. 30
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