David Cushman — Executive Research Leader, HFS Research[00:21]
Today we’re talking about HFS Horizons, particularly the Agentic Services Horizons report that’s just come out. It’s our first report on agentic services and it acknowledges the point we’ve already reached, which is that AI-led agentic services are already augmenting human capabilities through smart AI agents optimizing processes and decision-making. The study has evaluated how effectively service providers are helping enterprise clients embrace innovation and realize value across three horizons. iOPEX ranks among those in Horizon 2. The Horizon 2 providers are enabling enterprise transformation through end-to-end organizational alignment across the front, middle, and back offices by leveraging agentic AI to improve decision-making and drive unmatched stakeholder experiences across processes. This research has evaluated the capabilities of 36 service providers across the agentic services value chain. And based on a range of dimensions, we’ve tried to understand the why, what, how, and so what of their service offerings. And to that end, I’m joined by Dharmesh Mistry, the Chief Revenue Officer at iOPEX. Dharmesh, I want to congratulate iOPEX for the Horizon 2 ranking as an enterprise innovator for a start. But can you tell us a little more about how iOPEX’s deep domain and process expertise and its gain-share commercial approach is hitting home with enterprises?
Dharmesh Mistry — Chief Revenue Officer, iOPEX[01:52]
Yeah. No, thank you. Thank you, David. I’m really excited to have worked with HFS and the ranking that you gave us. I look forward to working in this partnership and growing this. Yeah, we’re seeing a lot of demand from our clients. I think, as you know, and Phil has written about this a lot, there’s a shift in how clients are implementing the systems. You know, previously it was about implementing systems; a service provider would come in and provide expertise and usually the engagement model would be an FTE model or a certain scope of work for a price, and if it’s multi-year then the price would increase year over year, and that kind of, in the traditional approach of systems implementation. But we are seeing now that clients are not asking for systems implementation, but they’re asking for agentifying the business process. And that’s kind of where we step in and say, we’re coming in and providing an operating model on an outcome basis with our tools and technology to be a partner for them to run and operate the systems using AI. So I see a huge shift in that. And I think HFS has mentioned about 70 to 75 percent of IT contracts are probably going to get renegotiated. And 80 percent of those are potentially requiring the use of humans plus AI.
We’re seeing a lot of demand coming through that model where we don’t have the legacy baggage of, you know, if you have a 20 million dollar contract with a client, it’s hard to come back and say, we’ll do this for five million. Right. And but we don’t have the legacy. So we’re coming in as a disruptor and saying, well, we will identify your business process. And it’s not technology for the sake of technology, but it’s technology for the sake of automating your business process. And we can be that operating partner and price it based on a certain outcome of that business process.
David Cushman — Executive Research Leader, HFS Research[03:52]
So Dharmesh, I get that there’s obviously a shift in the market and you come at it with a good freshness. It’s a challenge for some of the incumbents. Can you share an example of the kind of impact you’ve been able to make in any particular client?
Dharmesh Mistry — Chief Revenue Officer, iOPEX[04:12]
Yeah, I mean, one of the recent launches we had, and we actually talked about this publicly as well, there’s a client called Toshiba. Toshiba has a division called Toshiba Global Commerce Solutions. They provide wall-to-wall services to retail customers. For example, their clients are Costco, Walmart, Kroger. And they provide the point-of-sale solutions, the network, the printers, the self-checkout machine that you go through when you’re buying groceries. And so, it’s a fairly complex implementation with many parts. They have a field services workforce of about 600 engineers across 36,000 installations across the U.S. And in terms of kind of just numbers of truck rolls, right?
The challenge of maintaining this equipment is a lot of failures. The operational challenge of fixing problems at clients like Costco, it’s about 36,000 truck rolls per month. They wanted to kind of come up with a solution that reduces the repeat visits. You know, a field service engineer might go to a location, might not have the right part, or the part has been backordered. Visibility on kind of across the U.S. what the company needs to order, you know, what are some of the challenges and trends and repeat failures. And so I think a traditional legacy solution from a service provider would be, well, maybe we’ll give you a call center or a BPO operation in Manila and support your field services with that. But, and again, that would be a people-based solution, right?
What we came out with, more from being trying to be an operating partner for them, was AI-based solutions. We created a field pilot, which was a conversational AI solution. We ingested about 5,000 parts manuals into this solution. We built the solution in our environment into an AWS OpenAI environment. And we created an interface for the field services engineer so they can actually talk to the pilot. So, some of the expertise and domain expertise that we have in this industry. You know, Toshiba was saying, well, maybe we can have a text-based solution or we can have a, you know, user login. And we said, no, that doesn’t make sense. It wouldn’t be applicable or usable. But, you know, we created a kind of a solution where they have facial recognition and then kind of just quickly get into the AI and just ask questions. And then this just took us 12 weeks, right? So it wasn’t a large-scale project; typically in 12 weeks from idea to implementation.
We are able to reduce parts, we reduce parts accuracy to, you know, it was about 30 minutes of time that a field service engineer would take to look up a part number because of just the manuals that they had. So that was reduced to seconds. The number of calls that they would make to expert services, right, so they would know how to fix something, they would make a call to their equivalent or level three. We had about a 30% drop in the usage of expert services across the US. And then we created a solution where it automatically ingested the data as new parts and new manuals came about. And so this is a working solution.
And for Toshiba, there’s no capex cost, right? So we build the solution and we now priced it based on a certain outcome, an operating model. So they just subscribe to that solution. And then it’s customizable so that in the future, you know, if you want to switch from OpenAI to another AI, we can do that in the background. Toshiba just doesn’t have to worry about, you know, the nitty-gritty of the technology, but they’re just looking at the outcome of what the solution does. And that, I think, you know, is transformational for kind of the way we approach the market is, you know, where we want to do more of these kinds of solutions.
David Cushman — Executive Research Leader, HFS Research[08:07]
That’s great. I think it’s a really good example of the journey that we’re on – the rise of the agentic capabilities, but also the outcome model that you’ve focused on in terms of the commercials for this. Very hard. Everyone’s trying to get there, but where you can actually get the contracts in place and deliver on it, that’s a real breakthrough. So congratulations on that. If anyone’s interested in reading more about the agentic services horizons report, it’s available to download at HFS. And we welcome your comments on this and everything else we put out there. Thanks very much for your time today, Dharmesh. Thanks everyone for listening.
Dharmesh Mistry — Chief Revenue Officer, iOPEX[08:48]
Yeah. Thank you, David.
