SMAC: educating the advisory community
- Outsource Magazine
- On November 17, 2014
Disruptive SMAC (social, mobile, analytics and cloud) technologies are leading the digitisation of business and significantly affecting customer buying patterns as the emerging model is moving from process to business outcomes.
These disruptive technologies are driving change and creating opportunities for the BPO providers and many new deals have significant components of digital and SMAC – US-based HfS Research, for example, described nearly half of the large global IT deals signed in July 2014 deals as having a core that is either digital or SMAC.
Add artificial intelligence, cyber security and robotic process automation into this mix and suddenly SMAC has become an absolute game-changer. Given this new world and the new opportunities for the BPO providers, it seemed apposite to understand how this impacts upon the relationships with the advisor community.
It is important for the suppliers to have an excellent relationship with the advisor community – primarily to generate opportunities of course but also to position the company in terms of brand awareness and market intelligence. The advisory channel is also seen as a sounding board.
So how easy is it to keep the advisory community abreast of the new SMAC propositions? There are differing views on this. The advisory community (mostly) acknowledges that it doesn’t know everything and are open to learning as much as they can from all quarters. On that basis, proof points, and a tangible approach to creating value for clients are what they want to see and what gets their attention. Having a solutioning and delivery model which differentiates helps otherwise it is a battle of mindshare versus the competition. And sometimes, perhaps, it is difficult to accentuate the positives over rivals.
Incidentally, the advisory community would appear to have its own geographic strengths and weaknesses too and so articulating the SMAC message on a global basis can occasionally be difficult.
Although there are various channels for demand generation, advisory is an important part of the eco-system – and although it is changing rapidly, it helps to build outsourcing pipeline. And being part of the network has to be an advantage as it’s a bona fide route to market and the revenue pipeline is tangible. BPO providers are thought leaders and developers of process improvements and industry leading tools; sharing this information not only builds credibility and confidence but also helps generate the necessary new business opportunities.
It is apparent that providers recognise the value in developing strong relationships within the advisor community, but how effective is this in reality? Most I’m sure would see it producing deals more or less as expected but obviously the new capabilities offer increasing opportunities in new geographies. No doubt providers would like to see more deals from the community and so the importance of taking new digital propositions to market via this channel is clear to see. Given advisory is closer to sales than the analyst community, continuous and direct engagement has to be the way forward.
Advisors are all very different. On the one hand, you have the large, global consulting firms; on the other, the pure-play sourcing specialists and the niche independent advisors. Is there a fundamental difference between them? In some respects no but in terms of real-world differences, well, yes, of course: price, structure, approach, methodologies, degree of au fait with the art of the possible, time they have for learning, time they give for non-billed activities and so on. All advisors work in a different way irrespective of where they sit within the advisory hierarchy. Differences exist between how each of the big four work and it is exactly the same with the pure plays and the one-man bands. In essence, then, providers need to have strategies to work with all and the trick is working out how to optimise each relationship. Add to this other factors – industry or service line focus, geographies – and it’s really a balance of working out the optimum target list in the different geographies depending on local players and strengths of propositions.
Having said that, disruptive technologies are driving change and creating opportunities, how different is the BPO provider proposition? Not significantly perhaps in some ways but clearly different in others. What is evidently changing is what clients are buying: the focus is switching from buying people who perform a service to buying business outcomes or transactions. So it’s more a question of technology first and then people. Providers need to offer solutions that are technology-driven and, thanks to SMAC, customers actually do want to be inspired by the smarts under the hood. Automation and analytics are being embedded into value propositions and the blend of innovative tools and technologies together will create new and sustainable revenue streams and raise customer satisfaction. Low-cost offshore outsourcing is now being challenged by higher value onshore and increasingly sophisticated cloud computing solutions.
Assuming, then, that organisations are now looking at (and expecting perhaps) increasingly innovative technology – think mobile, analytics, big data, cloud, automation, artificial intelligence et al – then how is the new digital landscape changing the way providers work? Outsourcing deals increasingly have core digital or SMAC components and this will undoubtedly continue. At the same time, initial engagements in many markets are becoming smaller where pilot projects in mobile and analytics, data and automation, for example, are leading into bigger and broader engagements. Internal knowledge management is also a key factor in enabling better collaboration with customers. The changing digital proposition not only creates new customer offerings but, with increased service lines and an ability to quickly upscale, augments and potentially simplifies customer engagements.
It is also pertinent to consider that the relative embryonic nature of this digital landscape is reflected, too, by the individuals who work within it. Most of us are very aware that the younger generation tend to be far more technology-savvy than their predecessors. And if you look at TCS, for example, an interesting statistic is that with over 300,000 globally employed, the average age is 28.
BPO providers are rapidly developing their digital strategies as enabling technologies continue to develop. The BPO space is changing although finance and accounting tends to lead most engagements. Incorporating, therefore, new digital propositions into existing business lines will lead to substantial revenue opportunities. Exactly how much this new market is worth is open to question but numbers in excess of $225 billion by 2020 have been suggested.
So given the potential expectation of a digital market worth hundreds of billions of dollars in little over five years, how quickly can the providers produce revenues in line with expectations? It’s an interesting question and some aren’t going to answer it. Achieving a successful balance between the old and the new will be integral to future success and market share. There is a school of thought that says the providers have been offering SMAC services for some time and that analytics, big data, cloud and other digital services are already part of their client solutions. In essence, clients expect them to be filtered into the services they buy in any case. That may well be true but obviously there is likely to be a continual evolution of the services provided. Whichever way you look at it, the market is changing and there is massive opportunity for those that win.
For those in the front line of advisor relations, engaging with the community is as essential as ever and getting out there spreading the message is a prerequisite. The ecosystem is expansive and there are both internal and external stakeholders to manage. The social element is vital for articulating the message to market and is critical in articulating your capabilities to people who don’t know what your company can do. Of course the business development angle is always there but it’s not just about that. Meeting all kinds of people in the industry, understanding what they want to see and hear and bringing in your own thought leaders and senior executives enables you to shape the business strategy and the tactical activities you need to execute to achieve.
SMAC is not changing the way providers engage with the advisory community but it does present bigger challenges as clients have considerably more choice in whether to outsource or not. It’s not the automatic default it perhaps was as solutions can be more complex and may now involve a combination of consulting, technology and or platforms. The traditional way of delivering services through an outsourced engagement is changing. What isn’t, though, is personal engagement and articulating the message – which is why those that do this job enjoy it so much.
Thanks to Martin Atherton at EXL, Yash Khanna at TCS and Rob de Souza at Capgemini who assisted with the creation of this article.
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