Genpact adapts service delivery model to help customers succeed with digital transformations

Internal shift positions Genpact to capture digital demand

Genpact continually invests in its business and delivery model to align with changing client demand for emerging technologies, such as IoT, digital and cloud, and is initiating a companywide evolution — its fourth in two decades — to embrace digital. Building out AI- and automation-enabled services strengthens Genpact’s core capabilities around business process services. Taking an outcomes-oriented approach provides clients with the tools and technology necessary to streamline and automate lower-value tasks. Genpact’s approach to digital transforms clients’ traditional workflows to address their business challenges. Genpact views digital transformation as a set of opportunities that enable clients to change their business models to address human need and unlock business value. Three key aspects guide Genpact’s digital transformation method — scale process to power transformation, connectivity and data at scale — helping clients create the “human experience.”

During the event, Genpact noted that less than 50% of its approximately 98,000 employees are based in India. Building talent throughout the U.S., Australia, LATAM and Europe increases Genpact’s client touchpoints and enables it to work more closely with clients around transformation and drive business value and insights for clients. Also, the expanded global client base improves Genpact’s position as a global professional services vendor and helps the company move beyond the perception of being a low-cost BPO provider.

Genpact Analyst and Advisor Day: Genpact (NYSE: G) hosted approximately 50 analysts in Boston’s Seaport District to provide an update on its business and transition to the digital age. Additionally, the company highlighted its service design capabilities and how it is differentiating from peers.

Peak PwC or just getting started? PwC’s NYC EC

No bigger stage: Have to get it right in New York City

Opening the New York City Experience Center (EC) long after the first one in Hallandale, Fla., launched allowed PwC to learn lessons about design, operations, talent and culture that will help ensure the high-profile NYC location excels in every way that PwC measures the success of these centers. According to PwC’s Seb Wocial, a design architect and member of The Difference team at the NYC EC, every design element of the new center built on ideas hatched and tested in its ECs, of which TBR has visited five others: Hallandale, Fla.; Frankfurt, Germany; Shanghai, Tokyo, and Toronto. Having seen the advantages of a stand-alone center in Miami and the challenges inherent with keeping the EC colocated with other PwC offices (such as in Frankfurt, Germany), TBR expected a more limited change to the physical space and was surprised by the PwC professionals’ intense attention to small details (such as where a carpet ends and hard flooring begins) and how enamored they appeared to be with their space. TBR has long maintained that digital transformation and coinnovation centers must be more than funky chairs and cool spaces, but very few of TBR’s visits to consultancies’ centers have included as much discussion of the purposeful architectural choices. One additional note: TBR has met with leaders and professionals working at the ECs and competitors’ similar centers and has seen the infectious enthusiasm they have for the environment and the work, which came through again clearly during this NYC visit. Finding the right people, like Wocial, a three-year veteran of PwC with a background in process optimization, and placing them in the collaborative and creative environments, accelerates change within the larger organization and continues to attract the best talent. 

Operations now, internal change later

Two elements of the new EC came as no surprise to TBR: an early preponderance of financial services clients and a steady stream of in-house sessions, designed to bring more of the BXT approach to NYC-based PwC professionals. While the more mature ECs have diversified their client bases (at least by industry), serving a heavy dose of financial services clients without explicitly making the NYC EC a banking hub echoes PwC’s approach overall. Other consultancies and IT services vendors have designated their innovation and digital transformation centers as single-industry-focused, a decision typically reflecting the vendor’s culture with respect to organization and industry alignment. The second element, internal sessions to promote BXT (Business, eXperience, Technology) and explain the EC’s capabilities, carries forward PwC’s best practices from established ECs and reflects a common thread through these kinds of centers: facilitating internal change in addition to serving clients. In TBR’s view, PwC’s ECs, like Accenture’s acquisition of Fjord, created a substantial ripple effect through the firm, changing culture and allowing long-tenured professionals opportunities to see what the firm could become. At every digital transformation center TBR has visited, this internal change has been discussed, but with varying degrees of commitment, with the most dominant variable the vendor’s expectations around return on investment (and corresponding metrics around number of client engagements — internal change gets shunted if the number of client engagements per month is the priority). Catalyzing internal change, of course, does not mean neglecting clients but does include careful selection of which clients use the centers and preparation prior to on-site engagements.

TBR had the opportunity to take an informal tour of PwC’s latest Experience Center (EC), hearing directly from one of the professionals running day-to-day client engagements about what makes the center work. The tour included discussions around operations, talent, and culture and what will be next for PwC, BXT and the ECs.

Reading the tea leaves again: TBR’s Professional Services and IT Services Team looks ahead to 2Q19

Talent remains the catalyst to success, with leadership

Every vendor raises the issue of talent when discussing disruptions and strategic priorities, reflecting the continued struggle to recruit, retain, retrain and reward skilled resources in a crowded, competitive market. To track how vendors have been handling these challenges, TBR will continue analyzing every step of the journey, including recruiting at universities, where TBR has seen an uptick in apprenticeships and training so new employees arrive ready to work on day one. TBR has also seen an increase in training and reskilling budgets, with a common emphasis on digital skills considered essential for every digital transformation engagement. (And what engagement now isn’t digital transformation?) Notably, Accenture (NYSE: ACN) has pledged to spend $1 billion on training per year for the next few years and is increasingly using AI-enabled platforms to support that effort. In a recent post, Accenture’s head of human resources, Ellyn Shook, said that Accenture can be a case study for reskilling talent. Over the past four years, the Dublin-based consulting firm has, Shook said, “reskilled” nearly 300,000 of its total body of 469,000 employees. Beyond bettering their employees, many IT services vendors and consultancies have revamped efforts to spread their HR successes such as Cognizant’s (Nasdaq: CTSH) “Future of Work” campaign. Accenture has a Future Talent Platform, and PwC has described a diverse, multichannel and multimode digital training program to TBR.

TBR recognizes this trend around talent isn’t new, but as vendors develop offerings and fund training programs, IT services vendors and consultancies begin to ask a new question: How much will firm culture need to change to accommodate new digitally focused talent? The new concerns around talent are bigger than the decade-old question of how to handle Millennials. Vendors have seen traditional strategy firms alter their hiring practices and adjust their professional development tracks. And more IT services-centric vendors have begun re-hiring experienced professionals to both fill talent gaps and provide leadership, especially as engagement teams shrink and clients demand more agility and flexibility from the IT services vendor. With the advent of automation, we expect the challenges associated with attaining, retaining and upskilling to get worse before they get better, as the fear of losing jobs to machines still persists in the market. It may take a generation to record a full pivot to and recognize the benefits of a right-skilled bench and the associated KPIs. The services firms that can rotate their workforces to establish these new skills from both the bottom up and the top down, in terms of organization hierarchy, are positioned to win. The C-Suite of the future needs to be ready to operate in the boardroom of the future, and vendors that recognize and act on that shift — not just through marketing materials but also execution — are positioned to earn share from rivals.

TBR’s Professional Services and IT Services Team will take a closer look over the second quarter and the rest of 2019 at three trends sparking extra attention among vendors, their technology partners, and clients: cloud, talent and vertical approach. None of these trends are remarkably new, but subtle shifts TBR has seen in recent months, combined with questions from clients about the direction of the IT services and consulting market, provide new frameworks for analysis. 

5G-related investment fuels vendor growth; greenfield 5G and Industry 4.0 opportunities emerge

U.S. cable operators and Dish Network are exploring building out their own 5G networks

Rakuten’s mobile broadband network deployment demonstrates that vendors must be aware of new opportunities to deploy 5G networks for customers that do not currently own mobile broadband networks. In November Dish Network selected Ericsson to supply a radio access and core network for Dish’s Narrowband IoT (NB-IoT) network, which is expected to be completed in March 2020. Dish, which has been closely watching Rakuten’s build-out, is also contemplating a nationwide 5G network, on which it could spend up to $10 billion. Cable operators Comcast, Charter and Altice, which are currently mobile virtual network operators (MVNOs) of Tier 1 mobile operators, are contemplating greenfield 5G network builds as well.

Industry 4.0 will drive demand for cellular connectivity within the enterprise, but not for a few years

TBR’s research suggests that Industry 4.0, which includes mass 5G adoption globally, will not ramp up until between 2022 and 2025, at which point business cases will be proven, justifying an increase in market spend on ICT infrastructure. Cellular technologies, namely LTE and 5G, have better uplink and security capabilities, and lower latency than Wi-Fi, all of which are necessary as enterprises begin to use network technology for mission-critical workloads rather than “best effort” communications. Certain vendors, namely Nokia, Huawei and Cisco, are better positioned than others to capitalize on this trend as they sell both directly and indirectly into enterprises, as well as through communication service providers (CSPs). Ericsson, in contrast, plans to go to market almost exclusively through CSPs, which will place it at a disadvantage as many large enterprises will want private networks.

TBR’s Telecom Vendor Benchmark details and compares the initiatives and tracks the revenue and performance of the largest telecom vendors in segments including infrastructure, services and applications as well as in geographies including the Americas, EMEA and APAC. The report includes information on market leaders, vendor positioning, vendor market share, key deals, acquisitions, alliances, go-to-market strategies and personnel developments.

CX customers are buying into Oracle’s Modern Customer Experience vision as competitors innovate similarly

Data unification, enhancement and intelligence are key

Out from under the ERP and autonomous database narratives of Oracle’s (NYSE: ORCL) top executives, Oracle’s CX leadership was able to curate an inspiring event around its CX portfolio with themes of empowerment and valuing people’s time — both employees’ and customers’. The bulk of Oracle’s Modern CX event built on announcements made five months prior at Oracle OpenWorld 2018, most notably the capabilities that will be enabled through the launch of Oracle CX Unity and the acquisition of DataFox. These advancements will enable CX clients to engage with their customers in a more informed, timely and intelligent manner.

Through CX Unity, Oracle’s customer data platform, clients will be able to create and act on a unified customer profile that is retained and enriched within the persistent data store, for use across all other CX products, whether from Oracle or a third party. Ultimately, the goal is to leverage hyperpersonalized profiles that are updated from all CX systems in real time to best engage and delight customers. Integration across all front-office systems enables sales personnel to be aware of factors that may impact a sales opportunity, like a service ticket that implies sales personnel should hold off on a pursuit until a customer’s issue has been remedied.

The data curation assets that Oracle has acquired further enrich these customer profiles and contextual points. Augmenting the largely business-to-consumer (B2C)-oriented data that many of its previous acquisitions enabled, Oracle touted the ability of the acquired DataFox platform to utilize current, relevant market data to inform business-to-business (B2B) interactions, such as identifying when a prospective customer appoints a new executive or closes a new round of funding that may make the prospect more likely to purchase. These data assets, paired with the company’s first-party data, bolster Oracle’s Adaptive Intelligence Applications (AI Apps) portfolio, which is set to expand rapidly from eight to 17 AI Apps. Among those being added to the CX suite are Lead Optimization, Smart Talking Points, TAM Expansion and Churn Prediction.

Held in conjunction with Oracle’s Modern Business Experience, Oracle’s Modern Customer Experience brought together more than 4,000 customer engagement professionals to inspire a deeper understanding of the functionality Oracle is adding to its customer experience (CX) applications and prompt adoption against competitors’ offerings.

Public cloud segment leaders projected to secure another 10% of market share by 2023

TBR estimates total public cloud market size was $165 billion in 2018. Microsoft (Nasdaq: MSFT) led the overall public cloud market, while Amazon Web Services (AWS) (Nasdaq: AMZN) maintained a strong lead on the IaaS segment and Salesforce (NYSE: CRM) delivered enough growth to sustain a top-three position in both SaaS and PaaS market share. Microsoft and AWS are expected to jointly compose nearly 40% of the public cloud market over the next five years, while Adobe (Nasdaq: ADBE) and IBM (NYSE: IBM) — fourth and fifth, respectively, in total public cloud revenue in 2018 — will fall out of the top five by 2023 due to adoption headwinds and an inability to convert established enterprise relationships into revenue growth while Alibaba (NYSE: BABA) and Google (Nasdaq: GOOG) take share.

Trend to watch

An increase in multicloud environments will position some vendors to take segment leaders’ market share.

“In the SaaS market, Microsoft Adobe and SAP have joined forces under the Open Data Initiative to challenge Salesforce’s single vendor suite,” TBR Senior Analyst Meaghan McGrath said. “Meanwhile, Alibaba and Google will embrace their role, providing additional PaaS and IaaS services to enterprises that made early investments in AWS or Microsoft.”

Public cloud remains the largest, fastest-growing segment of the cloud market. TBR’s Public Cloud Market Forecast analyzes the SaaS, PaaS and IaaS performances of leading vendors and details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

CSPs focus on supporting advanced use cases and network technologies to maximize IoT revenue

Industry 4.0 will spark the adoption of advanced IoT use cases as well as the integration of network slicing and private 5G networks

TBR projects global CSP IoT revenue will increase at a CAGR of 24.9% through 2023 as the launch of mobile 5G services contributes to revenue growth acceleration starting in 2020, and operators, particularly in China, begin capitalizing on advanced use cases. As the 5G and digital ecosystems develop, advanced IoT use cases will emerge that can leverage the unique performance characteristics 5G offers, specifically high bandwidth and low latency. Connected transportation, AR/VR, and mission-critical IoT are all likely to be preliminary use cases for 5G technology, but the commercialization of these use cases will take a couple of years to unfold.

Though advanced IoT use cases that require the precision promised by 5G, such as remote surgery, are being explored, many of these services will not become commercially available until the mid-2020s at the earliest. Additionally, solutions such as remote surgery and V2X (vehicle-to-everything) automotive services will be burdened by significant regulatory and societal challenges.

TBR anticipates Industry 4.0, which includes mass 5G adoption globally, will ramp up around the 2022 to 2025 timeframe and result in heightened spend on ICT infrastructure as demand for new use cases, including advanced IoT solutions, increases. As Industry 4.0 progresses, leading enterprises in certain verticals such as manufacturing, logistics and warehousing will likely opt for private 5G networks that they buy, own and control. Private 5G networks will provide enterprises enhanced data security and the precision needed to support advanced IoT solutions. Private 5G networks will provide new revenue opportunities as customers will in many cases be purchasing these networks directly from telecom vendors rather than CSPs.

Though some larger enterprises will opt for private 5G networks, TBR expects most smaller companies will need to support advanced IoT solutions via a slice from a CSP. Though network slicing solutions will provide revenue opportunities for telecom vendors, adoption will be limited initially as most global operators will delay migrating to 5G core networks, which is essential to support network slicing, for another several years. Though many operators outside of China and South Korea will delay upgrading the 5G core because the system will be costly to install, early adopters will gain a time-to-market advantage capitalizing on advanced IoT use cases requiring the accelerated data speeds and ultra-low latency enabled by network slicing.

Cloud marketplaces are small in revenue impact but mighty in market impact

Cloud marketplaces are more of a slow burn compared to pronounced market impacts in books, retail and music

To predict the impact of cloud marketplaces, it is worth evaluating how similar changes in go-to-market strategies have impacted other markets. Sears (Nasdaq: SHLDQ), Amazon (Nasdaq: AMZN) and Apple (Nasdaq: AAPL) are three very different companies that illustrate just how profound an impact sales motions can have. Sears rode the impact of its mail-order catalog for nearly 100 years in a wave of success that only recently petered out. Amazon and Apple have much broader business strategies, but both owe a considerable amount of their success — which has them jockeying for the title of the world’s largest company in terms of market capitalization — to their selling methods. Both Amazon and Apple entered well-established markets and disrupted them, not by competing on the merits of their offerings but by challenging the existing sales motion with a marketplace approach. Amazon’s online approach to the book market is a very pronounced example of marketplace disruption, as Figure 1 illustrates. Amazon began selling books online in mid-1995, overtook traditional market leader Barnes & Noble less than eight years later, and subsequently expanded and dominated the market. Today, Amazon controls over 50% of the total book market in the U.S., including both physical and digital titles.

Market overview: Online marketplaces, where customers can browse, search and then buy or subscribe to software titles, have been around for quite some time. Salesforce (NYSE: CRM) rolled out the first cloud app store in 2005, and a wide variety of new options have been introduced since. Despite their longevity, the impact of these marketplaces is still uncertain. Salesforce AppExchange is a standout success, but the impact is more nuanced for most other marketplaces and the industry overall. Marketplaces have not yet become a prominent distribution model for software and cloud services, but they play a niche role in overall go-to-market strategies that include traditional direct sales, partner-driven sales and customer self-service sales. Although marketplaces currently hold a small portion of overall cloud and software revenue share, trends could bolster their role in the market moving forward.

India-centric professional services firms jockey for position in the digital world

Position as trusted advisers for enterprise customers’ modernization efforts

Technology specialists such as Salesforce and ServiceNow recognized the need of enterprises to have a trusted adviser for their modernization efforts and re-geared their service teams to capitalize on this opportunity. For instance, by verticalizing its service teams, Salesforce now provides industry-specific services to customers modernizing their infrastructure, architecting its portfolio against customers’ needs. While addressing customer needs around deploying Tier 1 provider solutions is critical to professional service firms, partnering with smaller technology specialists such as Tableau, Intuit and Epicor that lack the resources to become trusted advisers to prospective customers creates an avenue for growth in the digital realm. Within the applications space in particular, this represents a significant partner opportunity for professional service firms aiming to root themselves in the enterprise C-Suite undergoing digital transformation.

Where will tomorrow’s Greenfield opportunities exist?

The software-driven world has rapidly accelerated the presence of next-generation technologies in customer IT environments. Having software-defined architectures — from AI to blockchain — accelerates time-to-market for next-generation solutions. TBR believes this is especially true with containerized applications that technology vendors are increasingly targeting, evidenced by IBM’s acquisition of Red Hat for $34 billion, and VMware’s recent acquisition of Heptio.

However, rising adoption of hybrid architectures creates additional challenges for customers seeking to deploy containerized applications, as they must ensure the compatibility of on- and off-premises IT infrastructure with containers. This challenge has given rise to managed services around solutions like Kubernetes, with Platform9 announcing the first fully managed service for Kubernetes on VMware infrastructure in February 2019. TBR believes professional service firms that can foster relationships with various open-source container groups, or leading vendors like Red Hat, will be well positioned to work with enterprise customers seeking to deploy the solutions.

To date, India-centric services firms such as Cognizant, HCLT and Infosys have reference architectures, DevOps and advisory services related to leading containerized application frameworks, such as Kubernetes. While these services help educate prospective customers on the benefits of containers, TBR believes that without skilled headcount, such as senior DevOps application engineers, India-centric services firms risk missing out on the opportunity to partner with technology specialists with robust service teams like Microsoft and Google that are better positioned to guide prospective customers through deployments of emerging technology on their infrastructure. 

TBR reports quarterly on five India-centric IT services giants and includes analysis of their strategies and performances in the quarterly IT Services Vendor Benchmark. This special scenario has been drawn from and complements the most recent reports on these vendors. For further questions, see the TBR team.

WWT’s innovation center shines a spotlight on the company’s evolution from product reseller to outcome enabler

The rise of the innovation center as a platform for digital storytelling

Enabling customers’ digital transformations has become the holy grail opportunity for companies across the technology ecosystem. In a world in which everyone from server and storage vendors to technical services providers professes to be a “technology solutions provider,” marketing alone is insufficient to convince customers to entrust their digital futures to just a run-of-the-mill technology company. TBR’s research on the private and public sector consulting and IT services providers that typically deliver the expertise necessary to enable transformation shows that to do digital effectively for customers, providers must be digital internally.

Being digital means engaging in self-disruption by integrating internally the same innovative technologies that customers demand externally. It means adopting cloud operating models, developing IP and embracing new monetization cycles. These are difficult tasks, and not all technology companies are up to the challenge. Those that let fear paralyze action face the prospect of becoming irrelevant as more adventurous competitors build credibility around customer zero use cases leveraging partner-developed technology and come to clients armed with their own digital transformation success stories. Customers do not always care about a provider’s platinum-level certification from vendor X, Y or Z, but they will likely find something compelling in a provider’s story about navigating their own self-disruptions.

If customer zero is the story that successful services providers tell clients, then innovation centers are the stage on which the story is told. Innovation centers, digital studios, design studios, centers of excellence: There are almost as many names for these centers as there are examples of companies integrating them into their sales and marketing efforts. While it began with the leading consultancies, the innovation center trend has proliferated across all corners of the IT sector. A key component of providers’ overall innovation programs, the innovation center is where technology providers make digital transformation tangible for their customers. Innovation centers offer a neutral space to discuss business outside typical office settings, bring stakeholders to the table to identify and find solutions to problems, and develop blueprints for a successful transformation, enabled by collaboration between provider and customer. Innovation centers, when run correctly, evolve the conversation from one between buyer and seller to one between equal partners co-invested in enabling a successful digital initiative.

TBR recently spoke with World Wide Technology’s senior vice president of public sector sales, Bryan Thomas, to discuss the technology solutions provider’s new innovation center in Washington, D.C., and its connection to the company’s Advanced Technology Center in St. Louis. The conversation focused on how these centers improve client engagement and enhance go-to-market performance, as well as the importance of expert talent and the shift toward a consulting-led model to meet the specific mission objectives of federal clients.