From January 1st 2017, Xerox will separate its business process services (BPS) business into a public company called Conduent (trading under the ticker CNDT on NYSE). Conduent will have approximately ~$7bn revenue and over 96k employees. I recently spoke with Chuck Koskovich, Executive Vice President Customer Care Services at Xerox Services, about the implications of the split on their customer management services (CMS) business, and the strategy to develop it.

Offshore expansion & new automated operating model to drive growth

Conduent is looking to grow its CMS business with a focus on offshore markets and delivery centers, expanding its contact centers (currently over 160 in 26 countries, supporting over 30 languages). It recently launched new sites in Johannesburg for the European markets, also a new customer care center in Indore, in west-central India. The drivers for this geographic expansion are not only costs and access to labor, but also clients’ need for multi-country support.

The company is also looking to revamp its operating model, leveraging its capabilities in advanced analytics, machine learning, and automation to move upstream in the clients’ business. Conduent comes with a significant breadth of CMS clients, and the task at hand is to evolve their support beyond basic account management or billing interactions, aiming at broader and more complex services. The push for increased efficiency is twofold: towards cost optimization via automation and robotics, and improved customer satisfaction through empowering front office agents via analytics.

Enhanced leadership team preparing for a future workforce

In July, Xerox appointed Ashok Vemuri, the former president of iGATE, as CEO of the new company. In the last quarter, the company has also expanded its customer service leadership team by appointing leaders who not only have direct contact center outsourcing expertise but, very importantly, understand the changing nature of the industry, where new hires, particularly millennials, look for shorter working hours and a more flexible career path. An example is an expansion of the Work-At-Home (WAHA) program for a U.S. client, an upgrade of the WFM platform, and an increase in agents working less than 40 hours per week. Conduent recognizes that this shift towards a part-time or freelance workforce may well be the future industry standard. 

Another part of this change is the adoption of methods such as gamification in contact centers, and new training processes with the support of digital technologies and new learning techniques. For Conduent, this approach enables the hiring of operational management staff with background in education and psychology.

Greater focus and more demanding client base

The overarching objective of the senior management team is not just to run efficient operations, but to assist clients in identifying opportunities for transforming their sales and support, something that clients are demanding. To support this, Conduent is looking to recruit a Chief Innovation Officer.

The scale of its CMS client base (over 400 clients) allows Conduent to be more selective when approaching new opportunities, targeting companies that will more readily allow them to move higher up the value chain. Conduent’s core verticals remain technology (two new clients in 2016), telecoms (a new mobile telephone client this year), media, and healthcare (two new clients) in the U.S.

Healthcare represents a third of the portfolio, and is the sector in which Conduent has had the most success with adoption of automation, despite the regulations in the industry. However, this sector poses its challenges; for example, when a North American healthcare client lost business, this forced discounting of the contract.

Strong message for contact center services from a big new brand

A number of official announcements have yet to be made, e.g. the location of the new headquarters. However, as the close of the year approaches, Conduent is launching its branding and marketing initiatives, with plans for the executive staff to be present in the contact center sites.

For certain, CMS is at the forefront of Conduent’s new brand messaging.

NelsonHall has published three profiles on various aspects of Xerox Services’ CMS business this year: an overall CMS profile, plus profiles of their CMS analytics capabilities and their CMS business in the Retail & CPG sector.

Xerox Services is also covered in the NelsonHall Vendor Intelligence Program, in both Key Vendor Assessments and Quarterly Vendor Updates. For details, contact [email protected].