As strategic advisors and dealmakers overseeing large client-service provider relationships, we have observed a multitude of post-COVID transformation initiatives that intend to leverage innovative technologies to create business efficiencies.
These initiatives often feature software-as-a-service (SaaS) implementations which help clients evolve to modern tool-based operating models. We have been happy to see how quickly service providers have learned to implement and operate new custom and market solutions, helping clients cut costs and improve performance simultaneously. We refer to this delivery model as “tech-enabled services,” and we are optimistic about its transformative potential. That said, we fear that many service providers are now leaning too heavily on technology and neglecting the other core aspects of solutioning. In doing so, they put the account, the delivery of services, and ultimately their clients’ businesses, in jeopardy.
Allow us to elaborate by way of example. We recently observed a relevant case, a BPO engagement involving a top-tier provider, which looked perfect on paper. It had a comprehensive and integrated solution architecture, direct answers to client pain points, excellent application of modern tools, clear and appealing graphics, and a strong business case. However, a couple of years into the engagement, the client is still very concerned. Performance has barely improved from what it was under the previous provider, and financial savings have yet to materialize. What happened?
In short, the provider bet big on technology, and its gamble backfired. The provider failed to efficiently implement the tools that the solution revolved around. The client organization was not prepared for a new way of working, leading to limited adoption. The provider had not anticipated a failed implementation and lacked strong backup plans for this scenario. And finally, the provider had not put in the hard work of building a strong foundation of trust with the client.
This article is intended as a reminder to service providers that while tech-enabled services may be the future, application of this model is not as simple as throwing an advanced tool at a client and expecting it to stick. This new model requires careful preparation, devoted execution, and significant people-driven engagement throughout. The following are five key principles for you to keep in mind when constructing a tech-enabled services solution.
- Build a Balanced Solution
We often view successful delivery as the balance of three core elements: strong people, mature processes, and innovative technology. Although technology is more powerful than it used to be, all three pillars are essential. Without skilled personnel and well-thought-out processes, you provide yourself very little buffer room. An overly tool-dependent solution is like a poorly diversified equity portfolio and is at risk of collapsing like a house of cards.
- Passionately Drive Implementation
Tech-enabled services depend heavily upon tool implementation. Thus, you need to be especially proactive in pushing implementation forward, even when the client is at fault for potential delays. Strong project management, risk identification and planning, and realistic timelines are a few key elements. If tool implementation fails, your whole solution goes down with it.
- Prioritize Change Management
Implementation is not the only prerequisite to executing a tech-enabled services deal; adoption is essential as well. Many client organizations are entrenched in old ways of working and are not prepared for transformation, and you need to bring them along with you for your tools to have their intended impact. Patient and empathetic teaching can easily be the difference between success and failure.
- Create Contingency Plans
Because successful implementation and effective adoption are not guaranteed, you should plan for a situation where you have to deliver the services without the planned technologies. Prepare technology-free process maps. Identify the key risks associated with technology-free delivery. Communicate these plans with your client. This will show them you are prepared for any situation and encourage them to get their act together and implement the tools because they will have a much harder time if you have to deliver the services manually.
- Focus on Building Trust
Even though you have a tool that will eliminate a significant portion of the labor required to deliver services, don’t forget the human element of delivery. Connecting with clients on a human level, going above and beyond to win their trust, and demonstrating a commitment to their success is still essential. Trust-building both increases the chance of implementation success by improving collaboration and reduces the chance that you will lose the account in the case of implementation failure. Your tools cannot build client relationships and deliver services on their own.
In summary, we at Avasant are thrilled by the proliferation of new digital applications created to solve common client challenges and are excited by service providers’ speed to learn and offer these tools to our clients. However, we do not believe these tools are enough independently to solve the complex client problems that lead them to outsource. Our experiences and observations are our evidence. These new tools may, in some cases, be enough independently to win new deals. But to succeed in the long term — to successfully execute business transformations, to retain deals, and to build more business with the client — providers must remember that transformation needs more than technology intervention. It still depends upon the quality of your people and your processes as well.
By Ben Silvian, Senior Consultant