NelsonHall: COVID-19 Impact Assessments blog feed https://research.nelson-hall.com//sourcing-expertise/covid-19-impact-assessments/?avpage-views=blog While we all know that COVID-19 is having an immense impact on digital business operations worldwide, it is not yet clear to what extent and how at any level of detail.This NelsonHall program will provide an ongoing stream of research to assist organizations in both identifying and quantifying the impact of COVID-19. <![CDATA[Infosys Helps Utilities Navigate the Impact of COVID-19]]>

 

As with all industries, utility companies are responding to the ever-changing requirements related to COVID-19. In this short blog, we take a look at the macro and value chain impacts of COVID-19 on the utilities industry, how utilities are adjusting their business and IT priorities, and how Infosys is supporting utilities in their ongoing response.

Macro-level and value chain observations & impacts on utilities

Utilities are seeing noticeable demand reduction, led by the commercial & industrial sector, which has mostly gone into lockdown, resulting in load reductions of ~3-11% across most of the U.S. (half of which is due to COVID-19) and ~2-20% in Europe. This is impacting grid operations, as the usual seasonal load shapes of dips and surges in demand (i.e. in the residential sector due to increased homeworking) are changing, all of which are impacting revenues and marginal costs.

There are also further impacts in the rate case and regulatory space with a number of hearings and energy legislation being delayed or postponed, in particular across the U.S., resulting in capital spends tied to these being delayed. It is further impacting the smart meter installation 2020 target set by OFGEM in the U.K. and contingency planning around RIIO-2 price controls. However, major capital programs already approved across the U.S. and Europe are moving ahead.

Across renewables (solar, wind, and storage), sectors are facing supply chain disruption on goods for new installations and maintenance, and parts availability for grid components is further impacting networks. Global electric vehicle sales are expected to drop by ~40% in 2020, further limiting growth in power demand.

These supply chain and logistics issues are impacting transmission and distribution across field services, outage restoration, and preventive maintenance. Discretionary non-critical construction projects are being delayed, although RFPs across IT services are continuing. A major area of concern for utilities is workforce availability, where ~40-50% of employees are field workers supporting critical infrastructure. EEI has advised utilities to plan for up to ~40% absenteeism due to the COVID-19 pandemic.

Utilities are adjusting their priorities in response to COVID-19

To ensure business continuity, utilities are ramping technologies, infrastructure, and processes to enable work from home, and according to Infosys, utilities have enabled ~50% of employees to work from home (the remainder are field resources and employees in critical roles across their facilities). They are mobilizing and fine-tuning BCP actions and ensuring rapid logistics support in the supply of PPE for field force and looking to enable the field force with automated processes and technologies, including AR/VR. In addition, they are enhancing monitoring and alerting capabilities in response to cybersecurity threats. Utilities need to provide support for customers, including suspending disconnections, providing self-serve facilities, bots and web chat capabilities, and deploying analytics to track contact center and employee performance while WFH.

Utilities are further deferring discretionary non-critical projects and enabling rapid changes to systems to support COVID-19 response and assessment, with routine inspections and non-critical work assigned a lower priority.

Utilities will accelerate investment in digital technologies to be more resilient

Infosys sees utilities increasing investments in a number of key priority areas, including Digital Workplace, Cloud Computing, Cyber Security, Digital Workforce, Hyper Automation, and Smart Asset Management.

Focus will increase in particular across digital workplace to support WFH, across multiple types of devices, and enabling productivity and collaboration tools (i.e. Microsoft Teams, Zoom, Cisco WebEx, Skype for Business), and supporting virtual call centres. They are using gamification methods to drive employee engagement and enhancing virtual training platforms (e-learning/virtual assistants).

This is further driving cloud requirements to support VDI, IT infrastructure, and training platforms. Other key focus areas include secure connectivity of all devices and assets through unified endpoint management (UEM), and increased focus on data masking and data management.

Focus will increase in enabling the field force digitally, with additional advanced technology like AR/VR, and remote operations, including drones. Companies will also invest in cross-skilling staff across job functions, to be able to do more with less staff.

Utilities need to further streamline operations, including automation of non-decision-making operations, enabling more self-service, and industrial automation for daily operations support. In addition, they need to expedite the transition to next-generation asset performance management with IoT integration, remote sensing, and AI/ML-based predictive maintenance.

Infosys is working collaboratively with utilities to support COVID-19 initiatives

Infosys helps utilities Navigate the Future of Energy by transforming customer experience, modernizing infrastructure (grid infra and IT assets), and enabling future-ready business models. This is particularly key in its current initiatives to support utilities in their response to COVID-19.

Immediate priorities for utilities

While Infosys has done a very detailed analysis of challenges and opportunity impact of COVID-19 across the utility value chain, it is providing utility clients a prioritized view on what they should focus on now and what can be planned for the future. In terms of immediate priorities, these include six key areas:

  • Making employee safety and technology a top priority (i.e. IoT sensors to monitor health and geo-locations of field workers), and return to work protocols and mitigating workforce shortages
  • Enabling collaboration tools and best practices and remote working infrastructure for all employees and vendors
  • Ramping cybersecurity management for all IT systems accessed remotely
  • Personalized communication to all impacted utility end customers through smart video, digital billing, etc.
  • Enhancing mobile workforce management through GIS-based zoning and tracking (overlaying COVID data) for field services for essential and priority services
  • Deploying RPA and virtual assistants for repetitive tasks across call center and back office.

Infosys offerings & client examples

Infosys is supporting a number of global utility clients in their response to COVID-19 across a number of areas:

  • Digital Workplace: enabling utility workforces to work from home and remotely through Infosys’ Workplace Suite (collaboration), Modern Workspaces (VDI), Workplace Operations (automation, self-heal, analytics, virtual agents). In addition, enabling traders to access trading applications via VPN for day-to-day trading
  • Mobility & Field Force: created COVID geofencing solution and zones for field crew safety and protection, and COVID-19 impact GIS dashboard and real-time crew tracking, and work allocation and prioritization based on zoning
  • Customer Service: implementing COVID-19 energy support program and promoting digital billing, canceling service disconnects and waiving late payment charges.

It also sees further traction for its Wingspan open-source cloud-based IT skills training platform, where utilities are currently looking at creating digital CoEs in collaboration with Infosys. The platform now has multiple training courses, including technology, domain, and utility products developed by Infosys, that utility client accounts can use for digital capability build-out and cross-skilling. In support of hyper-automation, it is deploying its LEAP (Live Enterprise Application Management Platform).

Utilities smart bot and AI/ML use cases relevant to the grid, energy supply, and plant operations include:

  • Vegetation management and safety, with the ability to quickly do visual analytics through the use of drones for asset and field inspections, and using AI/ML to do predictive analysis, in partnership with third parties to identify where vegetation management needs to be done (i.e. where trees are close to transmission lines and need to be trimmed). The data is processed through the NIA IP layer
  • Infosys NIA-based chatbot for anomaly root cause and resolution
  • Grid analytics, using Grid 360 from Nexant, taking insights into the NIA common platform, and bringing out insights both at the planning end and operations end of the grid; DERM and urban grid offerings
  • AI-based RAMS leveraging KRTI 4.0. Infosys is integrating the Reliability, Availability, Maintainability, and Safety (RAMS) lifecycle services models from Pöyry with NIA predictive modeling and insights capability and tying this back to the asset management and work management systems to identify whether a specific process should be automated or kick-off a maintenance process.

Outlook

Infosys sees continued traction in cloud adoption across utility enterprises, and a key IP includes its Polycloud (hybrid cloud orchestration) platform which is part of Infosys Live Enterprise Suite, to enable a utility to develop a new digital services platform and quickly launch new products and services. It effectively enables users to build vendor-agnostic solutions across cloud providers. It includes a vendor selection support framework, smart brokerage; self-service tools for server provisioning and deployment; and a governance framework.

Infosys expects further traction for remote surveillance (drone and robotics) for power infrastructure monitoring to reduce field visits, and AR/VR and smart glasses to enable remote field support backed by a central command team to mitigate potential staff shortages in the field.

Further traction in support of COVID-19 (and post-COVID-19) includes remote sensing technologies enabling touchless substations for device management and load control, and IoT, AI/ML-based analytics for planning and asset management. Infosys expects to see further traction for its Wingspan training platform as utilities seek to adapt to the ‘new normal.’

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<![CDATA[everis: Digital Transformation Pivots from Discretionary to Fundamental]]>

 

Digital experience consulting has been a critical focus area for IT services clients over the last several years. NelsonHall estimates that digital experience consulting services revenues grew by 15.8% globally in 2019, and projects a CAGR of around 12% from 2021 through 2024, after the COVID-19 pandemic eases.

However, with COVID-19 still spreading, digital transformation projects with lengthy delivery timescales and indeterminate business value are currently vulnerable to deferment or cancellation. In a NelsonHall survey of over 1,000 CFOs globally, conducted in the early stages of the COVID-19 outbreak, they projected an average decline of ~2% in their companies’ spending on digital transformation initiatives in 2021.

Nevertheless, in an environment where their customers, employees and partners are forced to remain socially distant, connected to the outside world via digital channels, it is imperative for companies to continue to make investments in digital.

We recently spoke with everis, an NTT DATA consultancy focused on Europe and Latin America, to discuss its structured offerings for addressing customer relationships and internal service operations both during the lock-down and in the new world as we come out of it.

Customer Interactions Become Digital-First

everis highlights four offerings leveraging digital technologies where it can help clients quickly adapt their customer-facing operations in the current changed environment:

  • Customer support: B2C organizations in many sectors are challenged with increasing inbound calls in their customer service operations; to help clients expand their use of virtual assistants in these operations, everis is offering a conversational platform called eVA that can boost the adoption of this channel and simplify its management
  • Collections process:  with the economic disruption being caused by COVID-19, there are going to be customers unable to pay monies owed. For a company, the cost and effort of chasing after collections that will never be paid is sunk cost. The everis offering here is based on applying analytics and AI to collections data to help clients prioritize their collections effort
  • New business sales platform: offerings that use COTS products include Sales Commercial Cycle Optimizer solutions based on Salesforce and Microsoft, leveraging pre-built tools, including CPQ configurations and templates
  • E-commerce: everis has a number of offerings, including ones leveraging products from the likes of Adobe and Salesforce to support the expansion and modernization of clients’ e-commerce offerings, including ones to optimize the conversion rate.

Adapting Service Delivery for a Fluid Workplace

COVID-19 is also having a major impact on organizations’ internal operations; in the great shift to work-from-home, employee experience is evolving even faster than customer experience. everis has two tools to support employees operating in a work-from-home environment:

  • everis Knowler, which can be implemented with Office 365 and Azure, helps employees access the institutional knowledge required for them to do their job
  • TOGO, digital workplace offering to boost Microsoft Office365 and Teams adoption and improve collaboration and communication.

everis is also looking to help clients transform their service delivery in response to COVID-19 disruptions by:

  • Reducing the workload of remote workers through the expanded use of automation in business processes, leveraging its Clonika RPA PaaS offering and commercial RPA solutions such as Automation Anywhere that can be implemented based on the highest value use cases defined as part of a consulting and assessment phase
  • Working with clients to re-assess their digital properties and identify opportunities to transform these properties through standardization and integration on to a common digital platform. Developing a broader, cohesive approach across digital properties improves the ability to rapidly roll out new products in response to changing customer requirements. everis has developed a proprietary analysis tool, everis winder, that evaluates a digital platform to identify opportunities for transformation.

Digital Transformation as Response to a Crisis, Not a Victim of It

COVID-19 has caused global disruption. One of the ancillary impacts on enterprises has been a widespread re-assessment of investments to determine what is mission-critical in a time of economic uncertainty and what can be delayed until later. Digital transformation initiatives are often viewed as a discretionary budget item, to be undertaken only as time and money allow. However, with lock-downs temporarily pausing nearly all in-person and physical transactions, digital transformation initiatives should be viewed as a response to these challenges rather than budgetary line items that are victims of those challenges.  

everis appreciates that to help its clients weather this disruption, it needs to focus on offerings that address their most pressing needs, and that by tailoring digital transformation initiatives, it can enable clients to improve how they meet customer needs and how they perform their internal operations.

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<![CDATA[Allegis Global Solutions: Leveraging Technology for Recruitment in a COVID-19 World]]>

 

My initial research into Impact of COVID-19 on Recruitment Services: Vendor Perspective (March 2020) highlighted several stand-out dilemmas that client organizations face. Notably, some organizations need to continue hiring and the only way to do so is by embracing technology (sometimes reluctantly), enabling them to carry out recruitment steps remotely. Also, some sectors were ramping up hiring (in an already-tight labor market), while other industries had ceased all hiring activity for the immediate term. Without the appropriate technology in place, how would organizations needing to furlough workers, and end contingent worker contracts in the short-term, be able to rehire them later?

I recently spoke to Cory Hansen, VP of MSP Operations at Allegis Global Solutions, to establish how they have been helping organizations navigate the COVID-19 pandemic. I was keen to focus on their expanded (via acquisition) healthcare vertical (representing 20% of their MSP clients), the cyclical nature of demand for hiring support of contingent workers in the sector, and their use of technology to track those workers.     

Allegis Global Solutions’ initial approach

Following initial focus on preserving employee health and safety, enabling its employees to work from home, then supporting its clients to do so too (by setting up its MSP COVID-19 taskforce), there was a wave of MSP clients that needed to either ramp-up or reduce their workers with immediate effect.

Within 12 hours, Allegis Global Solutions had set up a COVID-19 Operational Demand Center (with a Leader, a Recruitment Manager, a Supplier Manager, and three specialist recruiters) to control all the different client demands centrally. Being able to holistically see all recruiters and manage their movement, from program teams seeing declining recruitment to program teams seeing recruitment surges, was essential. More importantly, Allegis Global Solutions needed a grip on the movement of all contingent workers (whether those of their existing clients or new organizations reaching out for the first time for COVID-19 support).

Healthcare sector focus

The Healthcare vertical, with three clusters of clients with hiring needs at different times throughout the pandemic, would add another layer of complexity. Life Sciences (including Medical Devices, Pharmaceuticals, etc.) were ramping up hiring from the get-go. One client, manufacturing items to combat COVID-19, required an additional 250 resources, which Allegis Global Solutions delivered within three weeks, leveraging their existing supply chain. Another client needed to reach a target of delivering 100,000 medical devices to hospitals, requiring 100s of extra staff to manufacture those devices.  Also, clinical clients were ramping up, but with the complexity of worker reassignment. Allegis Global Solutions uses its proprietary platform to keep track of the workers. Information stored comprises key details of the worker; the supplier representing them; the manager they report/reported to; the client they are/were deployed with; and the original requisition number. This enables Allegis Global Solutions to successfully reassign workers to new jobs and track their location so they can be hired for a new assignment or rehired in their original position, should circumstances allow.

One client, providing occupational health services, was adapting its services to support the COVID-19 pandemic (temperature screening, nurse provision, etc.), requiring tracking of their redeployments.  Similarly, hospital network workers were being redeployed from areas (such as elective surgery, where demand has slumped) to ICU, which was desperate for additional resources.

Allegis Global Solutions’ proprietary technology proved its worth when it was asked by a State Governor’s office to stand up a hiring solution within 24 hours. The solution required 1000s of clinicians to be on the front line to save lives at existing and temporary hospital sites, as well as to skill nursing facilities throughout the State. Twelve hours later there was a verbal agreement in place to deliver MSP-type services for them (normally a 12-month engagement cycle) and deploy technology (a four-to-six-week process, usually). The project was to supply talent and create an outreach web portal for talent (possessing medical skillsets). The program could potentially have needed 12-15K extra hires as a worst-case scenario. Further complexity has come from the need to interface with and source talent from several existing hospital networks, which would normally be competing with each other. To date, there have been over 1000 clinicians hired and dozens of individuals reassigned from other jobs.

Allegis Global Solutions has been leveraging its ACUMEN Business Intelligence technology, too, where at the presentation layer, it can get access to as much data as it needs to see what is happening in real-time. It keeps track of all clients, what jobs are open, and what jobs have been cancelled. Also, it identifies where there is a surplus of workers who can be redeployed to another client with a spike in demand. It has been a useful repository of pay data, too. The already severe clinical staffing shortage has been exacerbated with COVID-19, as clinical workers have demanded a 30%-100% pandemic/ quarantine premium in addition to their basic pay to consider a temporary role. This data set from the pandemic will be invaluable for the future if similar events happen again.

Looking ahead

As per the NelsonHall March 2020 research, Allegis Global Solutions is one vendor advising its healthcare clients (especially frontline clinical workers) on the quickest way to leverage technology to aid remote hiring, especially for virtual interviewing (where face-to-face interviewing has been the norm), timely background screening/credentialing (including drug testing), and the virtual onboarding of workers. Allegis Global Solutions has helped clients to prioritize the components, from the most important to the least important, making concessions allowing contingent workers to start work, with checks following on later than would otherwise be permitted.

Into Q3 and beyond, essentially a lag of several months, the healthcare payer providers will see an uptick in work, resulting in a surge in demand for extra staff from Allegis Global Solutions, as end customers will make claims, require preventative testing, and the window for open enrollment looms (with expectations of enrollments being higher than ever before). This activity may be post-clinical ramp-up or sit alongside (depending on how long the COVID-19 pandemic remains at a “requiring social distancing” level). It will, however, add further data/tracking insights into the impact of the COVID-19 pandemic via its proprietary platform and ACUMEN. When the pandemic is over, it will be interesting to see the patterns of reassignment and rehire of workers throughout the period. 

Conclusion

For me, what the COVID-19 pandemic has highlighted is that organizations have left themselves exposed through their slow uptake of digital transformation (especially in the recruitment space). On a positive note, it has made everyone aware of the importance of technology in their daily lives (and how it has enabled organizations to have some level of business continuity). It has forced organizations to embrace digital transformation at an initial break-neck speed, such that there is now no turning back. The Allegis Global Solutions case study highlights that organizations cannot embrace digital transformation/ recruitment transformation single-handedly. Organizations must seek out a suitable partner who can guide them on their transformation journey.

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<![CDATA[Update: How COVID-19 is Impacting the Financial Services Industry]]>

 

This is an update on my last blog on the impact of COVID-19 on the financial services industry. Since then, I have interviewed many more industry executives both at banks and at operations services vendors. Industry responses are still muted, but clear signs are emerging that banks will be focused on prioritizing those activities which maintain continuity and support adaptation in an operating environment with larger volume swings.

Key transformation initiatives where banks are accelerating investments include:

  • Remote delivery focused on workforce engagement and a relatively reduced effort in remote customer engagement 
  • Migration to cloud delivery, with its ability to manage large volume swings
  • Data management initiatives, with a focus now on default management applications
  • Consolidation of operation solutions and methodologies. These are longer-term initiatives, but much higher ranking for global institutions than before COVID. At the same time, banks are increasing their search for multiple supply sources.

Banks have reduced their activities focused on support for: 

  • Marketing and sales campaigns: business growth which requires capital has been sidelined 
  • Expansion of suppliers: banks are now focused on vendors with the strongest financial positions. 

Impact on banks to date

To date, the impact on retail banks and capital markets firms has been to move workforces to a work-from-home (WFH) environment. This has not been a hard initial transition for banks in markets with mature internet infrastructure; however, banks in markets with weak public internet infrastructures, such as some Asian markets and most of Africa, have faced significant challenges moving employees to a home environment.

Even within markets, the success of moving to WFH has varied as government policies have changed. In India, the nation went into lockdown on March 24 for 21 days. This was extended to May 3 on April 14. Initially, many delivery centers struggled to move workers to a WFH environment, given a limited number of laptops per worker and poor connectivity in some regions. Over time, bank operations have been able to obtain permission for critical processes to be delivered from centers, with dormitory and hotel housing provided for workers. Non-essential processes have continued to be delivered from home. This has led to worker utilization rates at the largest delivery centers moving from an initial capacity utilization rate of 20% in late March to 60% utilization in early April, to 90% utilization rate with essential work done in centers and large numbers of WFH workers.     

While operations delivery has rebounded,  bank executives we have interviewed expect their businesses to aggressively deteriorate in Q2 2020. Specifically, they expect sales to decline ~25%, costs to increase ~7%, and profits to decline ~45% in Q2 2020. Fortunately, their operations supplier contracts are adequate to support a 20% decline in volumes (and a 25% increase in volumes). No one is sure how long the impact on business will continue. Based on announcements by governments and universities in the past few days, this analyst expects the COVID-19 lockdowns to continue, at some level, for at least six months. The saving grace may be that the continuing shutdowns will be at progressively lower levels of restriction.

Banks have been asked by regulators to provide BCDR plans for themselves and their suppliers. These have been supplied. Of note is that private conversations indicate banks and suppliers are setting triage plans for who and what to focus resources on if the impact of COVID-19 worsens. If that happens, expect to see suppliers retaining service to their most important clients and banks cutting back on product lines (i.e. low margin and risk products) and reducing suppliers to financially stronger vendors.

Transformation projects in production have continued as planned. However, new projects have been stopped in anticipation of restarting the process when lockdowns are lifted. However, as profit levels fall, the focus on cost-cutting will increase. Banks will have to prioritize which projects to restart as they face reduced capital to invest in transformation. Currently, many banks are looking to restart RPA projects when they resume projects. Successful RPA projects can scale processing volumes with a smaller workforce. Because scalability has become so important, banks are looking to restart initiatives that enable scaling, such as RPA and cloud migration.     

Finally, bank product lines have been aggressively impacted. Lending, except for government support loan programs, has all but stopped in all countries. Payment volumes, especially cross-border payments, have plummeted by over 20%. Physical branches have been shut down for business. The fall in activities has reduced operational requirements, but at the cost of profits for banks and revenues for their services providers. While bank executives have not projected volumes beyond Q2 2020, the outlook is very weak for a turnaround during the remainder of this year. ITS and BPO vendors will have stable revenues from long-term contracts. However, these vendors will find that new contracts are few and far between. Some BPO vendors are expecting to grow their business at +20% (annual rate) by buying bank or service vendor captive operations. As bank and vendor liquidity becomes a concern to regulators and investors, there are now captive operations actively for sale. For the next year, successful BPO vendors will have an active M&A strategy in place.        

Conclusions

To summarize, banks have not yet changed their operational delivery activities with third-party vendors. They have reassessed their BCDR plans. Financial institutions have begun to see very substantial drop-offs in transactional activity, and they expect this to impact their revenues and profits starting in Q2 2020. The largely anticipated drop-off in revenues and profits will drive a reassessment of their services contracts to drive lower pricing and sale of operations. There will be a consolidation of vendors and pressure on pricing. The scale and scope of the transformation in sourcing arrangements will be driven by the length of the COVID lockdown. When the lockdown abates, banks will redouble their efforts in digital transformation to prepare for any future pandemics.

My next blog post will address the impact to date of COVID-19 on services vendors to the banking industry.  

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<![CDATA[Infosys Shifts its QA Portfolio in a Post COVID-19 World]]>

 

We recently talked to Shishank Gupta, the practice head of Infosys Validation Services (IVS), about how the practice is adapting to the COVID-19 pandemic and ensuing economic crisis. Of course, the initial focus has been on employee health, helping clients, and enabling its employees to work from home, getting access to tools, applications, and connectivity.

The QA practice is gradually moving on from this phase: Mr. Gupta highlights that clients are starting now to reconsider the contracts they have in place, discussing the scope and prioritizing activities across run-the-business and change-the-business. Unsurprisingly, new deals are on hold as clients lack visibility of the short-term future.

COVID-19 Accelerates the Shift to Digital

Infosys Validation Services is also busy preparing for the post-COVID-19 world and what that will mean in terms of clients shifting their QA needs. On the delivery side, the practice is expecting that client acceptance for home working and distributed agile will increase. This will drive usage of cloud computing, collaboration tools, and virtual desktops, along with increased telecom connectivity.

The pandemic will accelerate the shift in IT budgets to digital, particularly in retail, government services, and healthcare, the latter with renewed spending in health systems, telemedicine, collecting health data, and clinical trials (resulting from increased drug discovery activity). Shishank Gupta also expects that demand for UX testing will grow alongside the growth in digital projects. He also anticipates a continued acceleration of digital learning adoption that will create further testing opportunities across applications and IT infrastructures.

Infosys is Changing its Go-To-Market Priorities

Infosys’ IVS practice is realigning its go-to-market priorities and emphasizing existing offerings that had previously generated only moderate client appetite but have potential for growth in a post COVID-19 world. One example of such an offering is in the area of data masking that IVS had created several years ago for financial services clients for anonymizing their production data for usage as test data. IVS expects new delivery models to drive demand around capabilities such as data security and privacy, risk, and compliance audits.

IVS also expects accelerated adoption of cloud computing both in terms of testing applications to the cloud and SaaS adoption.

Finally, Infosys IVS is increasing its go-to-market effort around crowdtesting. The practice highlights that security concerns were a barrier to crowdtesting’s commercial development. Mr. Gupta now expects clients will adopt crowdtesting as a service and require fewer background checks on the crowdtesters.

And, of course, Infosys knows the world post-COVID-19 will also require leaner operations and lower costs: IVS is expanding its commercial focus on testing open-source software, test process re-engineering combined with RPA. Mr. Gupta highlights an ongoing project with an APAC investment firm where it is deploying RPA tools to automate the monitoring of applications in production and feedback to QA and business users.

QA Becomes Less Internally Focused and More Digital

NelsonHall expects that the role of testing will become less focused on internal transformation (e.g. test process standardization and TCoE setup) and become more integrated within digital transformation programs, where testing is part of the required services.

Currently, clients are continuing to focus on the immediate imperative of business continuity. NelsonHall expects that, in a post-COVID-19 world, clients will make strategic decisions, including accelerating their cost savings programs, driving offshore adoption and distributed agile, and also renegotiating their existing multi-year managed testing services contracts. In parallel, they will redirect some of their savings to the digital-led QA activities that Shishank Gupta has described.

In this new world, enterprises will need a QA partner that offers both onshore advisory capabilities to shift their QA spending to change-the-business, and further offshoring and automation to reduce their run-the-business spending.

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<![CDATA[Concentrix Messaging & Bots: Innovation During the COVID-19 Crisis]]>

 

One of the memes during the COVID-19 crisis asks ‘who led the digital transformation of your company?’ with the options of ‘the CEO’, ‘the CTO’, or ‘the virus’. The global emergency has severely impacted CX, forcing many organizations to shut down or limit their contact center operations when they are most needed. A side effect is that, where available, self-service, customer-facing bots, and asynchronous messaging prove their efficiency in handling large volumes, 24/7. As a result, for many CX services clients, the pandemic will trigger a call to action and jumpstart CX innovation programs.

Concentrix messaging

Private messaging use has exploded in recent years, and for younger generations it surpasses traditional social media. Its benefits are numerous – it runs voice and text; it is mobile, asynchronous, private, timesaving, low effort, and retains the conversation thread. It is also a richer channel, allowing hyperlinks, documents, pictures, videos, stickers and emojis, and interactive widgets such as carousels. All three of Apple, Facebook, and Google (with RBM) are pursuing opportunities in the space, opening the API for development and business use.

Concentrix has been working on its messaging offerings since 2016, when it started with WeChat in China. In early 2020, it launched a comprehensive offering called Concentrix XP Messaging. Concentrix XP Messaging includes support resources along with the messaging and automation platform. The company identifies the CX opportunity for messaging deployment and designs, implements, manages, and optimizes the bots coupled with live agent support. It offers the pre-built APIs and integration accelerators for the messaging apps and also provides and maintains the third-party software. Finally, it establishes and delivers the reports and insights on metrics, interactions, volumes, and utilization levels.

The ideal path is when customers initiate the message, a bot responds with selected answers, and if live agent support is required, it automatically transfers with contextual information. Agents can invite bots back to the conversation; for example, to handle payments. Bots can also proactively initiate conversations. The messaging platform handles the queuing, routing, delivery of messages, and live transfers. For the customer service agents, the messaging platform integrates directly with the CRM and it is presented as a unified queue regardless of the customer channel – web or in-app chat, messenger, SMS, or social media DM. Contact center managers have a real-time and historical view of performance and traffic.

On average, Concentrix sees at least a 26% productivity gain from increased concurrency and efficiency compared to chat, and up to 50% compared to voice. The deflection rate from voice, email, and chat to messaging can reach ~30%. In addition, ~85% of customers return to the channel with typically higher CSAT scores of between 7% and 11% compared to traditional channels.

Before the global impact of the pandemic, Concentrix had several thousand messaging agents supporting clients in financial services, technology, telecom, and retail. It provides B2B and B2B status checks, appointment setting, customer care, L1 technical support, upfront marketing and sales over WhatsApp, Messenger, Apple Business Chat, and SMS.

Interactions suitable for messengers & bots

Increasingly, Concentrix is identifying new use cases for messaging with its clients. The discussions often evolve from a substitute for traditional chat or email to customer journeys suitable for self-service and automation with bots and messaging. For example, for a U.K. retail brand, it added a messaging option on the IVR to prompt SMS use with ~90% adoption rate. Usually clients are surprised by the potential scope of up to 50% of voice interactions suitable for messaging and up to 100% from text channels. Concentrix models show potential cost savings of 20%, 30%, 70%, depending on the level of automaton, the original channel, and delivery location. For example, for a retail provider in the U.S., it provided a messaging application allowing customers to engage over web, SMS, Apple Business Chat, in-app messaging, FB Messenger, Twitter, and WeChat. It also deployed proactive outbound messaging via SMS from agents or systems based on business rules. Concentrix integrated an APIs to client systems to present offers and achieve in-channel purchase completion.

The company developed a digital operating model to recruit, train, and performance manage messenger agents and set up different quality standards and KPIs. The agent profile is a digital native with advanced typing speed and understanding of the conversation styles and tone using emojis, shorter phrases, and more direct language. The agents have to be confident in multitasking as the environment is fast-paced with higher concurrency than chat (as high as five to seven sessions) and smaller after-call work. Across its messenger population, Concentrix sees an 8% greater training graduation rate and a 16% higher retention rate.

Messaging bots in time of crisis 

While phone hotlines have been the go-to response during the pandemic emergency, private companies and government bodies have also taken up Q&A bots on messengers to help the public. For example, WHO launched a COVID-19 bot on Viber and the Pakistani government started a virus hotline over WhatsApp.

Concentrix developed several use cases to address the pandemic, with Q&A bots offering general COVID-19 information for a company, brand, or product-specific statements, safety recommendations, and retailer updates about openings and closures. These types of bots require no client IT involvement and have rapid 24 to 48 hour deployment cycles. With massive volume demand on the contact center in certain verticals in the current situation, it proactively offers self-service bots to existing chat clients. These bots apply effectively in basic triage scenarios such as status updates, warranty and replacement, and new product order and pricing info.

For example, for a multinational printer company, Concentrix provides technical support outside the product warranty and sells support subscriptions over the phone, email, and chat. Due to the COVID-19 emergency and higher than normal volumes, the client needed an alternative channel. Within two days, Concentrix developed, tested, and configured an SMS bot, created the content and bot flows and set up an IVR prompt to drive customers. The bot answers the most common call types such as wireless connectivity and Windows updates. It also links customers to ‘how to’ instructions and troubleshooting videos for printer and PC issues. The messaging bot deflected 10% of all traffic to self-service and the client plans to expand to other programs.

Future interface

Messaging is one of the most promising future customer interfaces, with a far greater pool of transactions applicable to its use. Its current and potential benefits are expanding, such as the integration of Apple Business Chat, eliminating the need for user authentication and the deployment of messaging in Google search. The pressure on brands to patch their CX brought about by COVID-19 creates the need to add a more productive and user-friendly channel. Over time, it can also fire up the opportunity for conversational commerce.

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<![CDATA[How COVID-19 is Impacting the Financial Services Industry]]>

 

COVID-19 is impacting banking operations and, as a consequence, related business process services (BPS). Banks are already restructuring operations to address the emerging challenges from COVID-19 (see below for those challenges). The changes are just beginning and will continue to evolve over at least the next four months. While the global adaptation to COVID-19 will take much longer, perhaps several years, each country’s banking industry will need to make sizable adaptations to their operations in a four-month timeframe in order to survive without permanent impairment to their business. The four-month timeframe for adaptation within each country assumes two months for COVID-19 to stabilize in each market and two additional months to implement measures to mitigate any future pandemic risks. Across all markets, operational adaptation will take one to two years to fully implement. 

Operational impacts to date

So far, the operational impacts have manifested across customer access  and employee access.

Access for both customers and employees has been impaired due to:

  • The inability of customers to enter brick-and-mortar locations, often due to the imposition of lock-downs by governments
  • Volume spikes in transactions creating online access and processing delays, often due to market reactions (e.g. stock market declines and liquidity demands)
  • Alternative demands on time (e.g. from children at home)
  • Inability to conduct standard sales and customer in-person interaction.    

Actions being taken to mitigate these impacts have included:

  • Increasing remote access options by:
    • Increasing capacity for online access, typically via increasing cloud access to core systems
    • Sending omnichannel access apps to customers for their use
    • Outbound messaging on what options are available for remote access 
  • Scaling processing capacity by increasing:
    • Access to remote temporary labor
    • Use of RPA
    • Cloud capacity of core systems (especially transaction systems)
    • Processing capacity to match diurnal demand spikes
  • Operational hygiene reviews, including:
    • BC/DR plan updates
    • Liquidity planning (including drawdowns of credit by BFS clients)
    • Reviews of in-branch operations changes, including increased availability of cash in branches and customer interaction SOPs 

Bank product line impacts

The impact of COVID-19 within the banking industry has varied by product line, as follows: 

  • Commercial loans: increased drawdowns of committed loan lines by customers to assure liquidity. Also, certain consumer-focused industries such as restaurants have shut down operations, cutting off revenue-generating capabilities. These activities have increased risk exposure, tracking efforts, and funding requirements. Operational impacts include increased data gathering and reporting requirements
  • Payments: retail customers withdrawing physical cash from branches to assure liquidity if banks are shut for a period. This temporarily increases operational loads on the branch system. Operational impacts include increased staffing and a shifting product mix for daily operations at branches     
  • Mortgages: anticipated loss of income will reduce loan origination demand while increasing the need for default management. Operational impacts include changing skill sets required for bank workforces and increased loan loss reserves. Increased loan loss reserves directly require reductions in the balance sheet. Shrinking the balance sheet requires significant senior executive effort.   
  • Student loans: temporary closure of colleges seems likely to reduce demand for new student loans but is likely to lengthen the repayment period for existing loans. Reduced job prospects increase default management requirements. Operational impacts include changing skillsets from loan origination to default management.  

Additional impacts by product line will emerge over time. Trade finance will likely be very heavily impacted by the pandemic.

Conclusions

To summarize, operational impacts to date have been focused on reduced in-person access to financial services purchase and delivery. Business impacts to date have been focused on increased credit risk and the shift in resources from revenue generation to risk mitigation.

We expect that over time the impacts will cause banks to shift product mix, employee skillsets, and channel delivery. The costs of changing products, workforces, and delivery will be very large.

We will be monitoring this space to develop a much more granular understanding of how these impacts will reshape financial services operations. We are conducting multiple banking executive interviews (>100) across all geographies to ascertain:

  • Emerging priorities
  • Lessons learned
  • Best practices
  • Impact on business
  • Decisions made.

We are also conducting interviews with leading BPS suppliers to ascertain the impacts on their business and how they are responding to the impact of the COVID-19 pandemic. We will be reporting on this rapidly evolving dynamic over the next several weeks.

In the meantime, we would like to hear your feedback.

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