Point of View

Technology alone will not bridge the Digital Divide

November 7, 2020

“There is an extraordinary change in the momentum of importance on digital capabilities—and those who haven’t moved aggressively on this are falling behind every day.”

Traci Gusher, National Leader AI and Enterprise Innovation KPMG

Businesses require essential technologies that are functional, efficient, secure, and in the cloud to make critical decisions and rapid pivots. Services leaders have concluded that the tech shift is not enough to leapfrog to where they need to be in a fully digital environment. In our recent HFS Live webcast, five industry luminaries joined HFS CEO Phil Fersht to discuss the requirements for bridging the growing digital divide. Malcolm Frank, President of Digital Business, Cognizant; Traci Gusher, Leader AI and Enterprise Innovation, KPMG; Jesus Mantas, Senior Managing Partner, IBM Services; Chirag Mehta, Product Leader, Google Cloud; and Mike Small, CEO Americas, Sitel, each gave insights on the opportunities and challenges for leading the charge in a fully digital environment

The essential technology set: pre-COVID-19 vs. the present

HFS and KPMG published a recent study identifying emerging technologies that are now considered essential for survival. The study captured the technology considerations from both an emerging pandemic environment (March–April 2020) and a more developed one (May–June 2020) (Exhibit 1). You’ll see that the technologies that enterprises considered mainly sub-critical, cost-reduction areas—process automation, AI, analytics, and cloud—are suddenly considered essential for future survival. Even 5G, which struggled a bit pre-COVID-19 in terms of understanding ROI and impact, is now also included in the “essential” category.

Exhibit 1: ExAI, analytics, and cloud technologies have moved from cost-reduction to critical investments

“Essential for future survival” is the #1 ranking objective for investments, followed by “Improve competitive positioning.”

Source: HFS Research in partnership with KPMG, 2020

Competing in our new digital reality requires a greater focus on finding the right balance of people and tech

No matter where a company is on the maturity spectrum, the top challenges to emerging technology adoption are not necessarily about technology. Restructuring for a new digital reality transcends many organizational boundaries. It also requires an interplay between business and IT at levels many have never seen before.

“The companies that get it right will accelerate and will outperform those that just focus on the technology only. I think the intersection of the people and the technology element is the critical element.”

Jesus Mantas, Senior Managing Partner, IBM Services

Getting the balance right requires an investment in talent and skills to take your workforce from where they are today to where you need them to go. “Those that jumped ahead to upskilling and hiring resources that could perform modern delivery types of capabilities and programs—those are the ones set up to move quickly now,” noted Traci Gusher. The rest are playing catch-up. The urgency to develop new skills in-house through training has increased significantly in the pandemic present versus approaches like crowdsourcing, recruiting new hires, and recruiting temporary staff. Approximately 65% of leaders now expect their staff to learn on-the-job and engage with learning and development resources (Exhibit 2).

Exhibit 2: The urgency to develop new skills inhouse and learn on the job

HFS 2020, Sample: 400 executives across global 2000 enterprises

Leadership takes on a whole new role in our virtual “Now Normal”

And the upskilling doesn’t stop with staff—businesses are rewriting the leadership capability as well. From Jesus Mantas’ perspective: “We are facing what I believe is the leadership challenge and also the leadership opportunity of a generation. What it takes to actually lead people, what it takes to lead companies, what it takes to lead teams—the book is being reinvented. There is a massive leadership gap that cannot be filled by traditional leadership, traditional command and control, traditional structures that are targeted to manager scarcity. It requires a new book of leadership.”

Businesses approach internal leadership from both individual and organizational levels. Mike Small gives us a glimpse into one of Sitel’s organizational approaches: they are encouraging everyone from the coach level and above to embrace a “listen to lead” approach, with leaders across varying roles taking the time to connect and listen to what employees are saying. “We took a hard look at every critical point in the employee experience, starting early in the process in how we attract the right candidate. At each critical stage, we sought input from our employees to gain a deep understanding of what they need and what they want from us in order to be successful.”

A dedicated focus on employee experience drives deeper engagement across personal, social, and organizational domains and acts as a catalyst for competitive advantage. Ultimately, employee success feeds the customer and the organization. Employee and customer experience have never been so closely tied together and experiences so blended.

According to MIT Center for Information Systems Research, companies that score in the top 25% of employee experience achieve double the customer satisfaction and 2x the innovation in terms of percent of revenues from new products and services, ultimately providing 25% greater profitability. Participants in a recent HFS roundtable provided feedback that supports the employee/customer satisfaction link, noting a lift in employee satisfaction and NPS scores in tandem.

Empathy, data, and shared outcomes underpin customer and employee alignment

For the first time, people across the organization are bonded with the customer through a shared, 100% digital environment–with a common purpose and common outcomes. Chirag Mehta shared the struggle of some software companies to respond to their customers. “There is usually a huge empathy gap, where companies struggle to understand the needs of their customers.” He continues, “That is now changing… If you are supporting your customers, you are [now] experiencing directly what your customers are experiencing in some shape or form. In my opinion, that’s the biggest opportunity, where it’s [been] very hard to teach people how to be empathetic, how to really be customer-centric.”

From a digital perspective, customer-centricity lies in the data. “We have 100% of what customers are telling you about your brands and products. How do you mine that? How do you ensure that you are re-imagining and reinventing the end-to-end customer experience through the front office, middle office, and your back-office processes, and that really does take a holistic approach.” Mike Small continues, “The [HFS] OneOffice concept is absolutely critical—and if you do not have opportunity to truly take that step back and measure each element of how your customer is interfacing with you through the process, whether it’s front office, middle, or back, you’re frankly behind. This is really where technology and data will help you make better decisions.”

The Bottom Line: Technology is not a strategy–instead, compete on experience and building enduring relationships in a virtual world.

It’s clear that today’s services leaders for the new digital economy are rearranging priorities; technology is essential, but it is useless without leadership that understands the complex dynamics surrounding emerging and essential tech and its relationship with employees.

According to Malcolm Frank, companies that will survive and thrive in the post-pandemic environment will compete on experience and build enduring relationships through virtual channels. “Firms that have their acts together are moving quickly on that. They are very clear-headed; they are spending hand over fist. They recognize the ROI is so large they just need to ‘go.’ You see others, candidly, that can’t get out of their own way.”

The playing field has leveled, and today’s leaders must focus on people and relationships at the core of their business to thrive in the “now normal” environment.

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