Day 1 of the HFS OneOffice™ Digital Symposium included several interesting discussions related to AI, intelligent automation, business management, and other timely topics. Day 2 started with an exciting keynote from Francesca Gino (Professor, Harvard Business School) followed by the Shaping the 2025 Vision for our Industry panel discussion to discuss some of the key future aspects of the outsourcing industry related to global business services, future innovation, hybrid workforce, data management location strategy, and change management. HFS’ CEO and founder Phil Fersht and Chief Client Officer Nigel Edwards hosted the panel. Our high-profile panelists included 17 advisory, business, and technology leaders:
Source: HFS Research, 2021
Here’s what we covered.
The discussion started with the future of global business services (GBS). As part of the coverage of our recent survey, we highlighted Exhibit 2, which depicts that enterprises will move away from traditional GBS operations and toward functional shared services and centralized operations in the next two years.
Sample: 800 Global 2000 enterprises
Source: HFS OneOffice Pulse Study, H1 2021
Panelists think technology services should align with how they expect extended enterprise operations to evolve over the next five years. Global business services should extend beyond transactional outsourcing toward high-end processes and technologies such as analytics, change management, and transition management. Further, GBS should be more competency-based and follow an integrated model for core processes. Digitization and automation-centric journeys are additional critical themes of the future of GBS.
The panel generally agreed with Bob Cecil’s (Timberstone Partners) comment on the age-old question of GBS versus outsourcing, “Sourcing strategies should be driven by who has the best talent and capabilities.”
In our recent HFS survey, we asked enterprise leaders to provide an overall estimate of how much their employees would be working from home in the coming months. Exhibit 3 shows that though the responses varied across regions, industries, company sizes, and business functions, the prominent theme is that the hybrid workforce is the future.
Sample: 800 Global 2000 enterprises
Source: HFS OneOffice Pulse Study, H1 2021
Leaders also mentioned that remote collaboration is the future, and enterprises need to figure out how to manage talent better, including security and governance-related aspects. But they were concerned about employees’ emotional wellness, too. The physical environment is well-suited for collaboration, so enterprises need to highlight the human-centric aspects of virtual collaboration to fuel professionals’ excitement and imagination. We also asked leaders for their opinions on whether working from home will be a limitation for innovation. The panel agreed that virtual collaboration does not impede future innovation. Nitin Rakesh (Mphasis) provided an example from Mphasis; the company successfully set up a quantum lab and collaborated for client use-cases through a virtual environment.
Since working from home has become the new normal, enterprises can recruit professionals worldwide to work in remote environments. The HFS OneOffice Pulse Survey reflected this trend; Exhibit 4 highlights our observation that 62% of the respondents prefer location-agnostic talent sourcing.
Sample: 800 Global 2000 enterprises
Source: HFS OneOffice Pulse Study, H1 2021
Sudhir Singh (Coforge) mentioned that talent recruitment will be more global now, and enterprises can target tier-three and tier-four cities for the same. Furthermore, they can focus on recruiting specialized talent from relevant geographies. For example, Coforge established an operation center in the US city of Las Vegas, Nevada, to recruit gaming talent.
Traditionally, enterprises established onshore delivery centers for client proximity and cultural or regulatory skillsets. As the remote working environment continues its popularity, enterprises can focus on nearshore center growth. So, delivery centers are becoming more strategically important to service providers.
The discussion also highlighted the importance of enterprise data strategy and change management in recent times. Data management has become of paramount importance, and data strategy has become a critical focus area for enterprises. Previously, enterprises often stored data in silos, where insights were available to limited business functions and with no integration across enterprises. Now, data strategy is an integral part of the customer journey, and enterprises need an integrated data strategy for better visibility and insights. In the same vein, change management has gained importance from strategic aspects (business readiness, transformation, etc.) and cultural reasons (reason for change, people management). Consequently, alignment with customer and employee goals, trust, value creation, and effective communication are critical aspects of successful change management.
Service providers need to evaluate the long-term implications of COVID-19 on sourcing strategies, whether in-house or outsourced. You’ll find the balance at the intersection of working practices, location, talent, and capabilities. Automation is a critical enabler. The secret sauce, however, is in having a comprehensive data strategy while doubling down on change management.
You can read other POVs and a comprehensive ebook about the Symposium, plus watch video highlights of the two-day event, here.
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