|Providers and Advisors Tackle Big Questions to Open OWS21|
Providers and Advisors Tackle Big Questions to Open OWS21
By: Sandy Frinton, PULSE Editor-in-Chief
Since OWS21 was being held for the first time in a virtual environment amid a global pandemic, it was no surprise that the impact of COVID-19 dominated the opening discussions for this year’s event.
Advisors and providers set the stage for the three days of riveting discussions by tackling the challenging top-of-mind questions at a workshop on the first day of the Summit.
While their experiences varied, a big takeaway was that outsourcing demonstrated its true value during this time. Partnerships were key. Suppliers were already well-positioned and willing to go above and beyond to meet customers’ needs.
Industries that were previously reluctant to outsource critical functions or allow certain work to be done remotely or from home environments quickly reversed their decisions out of necessity. And in the end, the results in improved productivity and cost savings proved the longer-term viability of this solution beyond the pandemic.
Relationships between customers and suppliers took on even greater importance. The buy-side was flexible and lessened service level agreements, at least in the short term, to ensure critical functions continued. Providers took extra steps during the health crisis with some living in hotels or “bubbles” to ensure business continuity. Some suppliers also gave price reductions to customers for the savings they had due to work from home.
None of the session attendees enacted force majeure - a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties legally described as “acts of God.” But they did rely on their governments for financial assistance and technology upgrades. Data security and protection also proved to be a critical work consideration.
Session moderators shared their views of the timely conversations below.
Top Four Topics on Everyone’s Minds
- The Importance of Relationships
Relationships proved crucial to surviving the pandemic, particularly in the early days. Suppliers partnered closely to do whatever was needed to get the job done and deliver critical services, attendees said.
Customers relaxed contract requirements in the short term and relaxed risk management practices to make this happen. For example, extremely sensitive security practices were eased and costs to rent hotel rooms to bubble staff so they could safely work together were shouldered.
“Customers relaxed contract requirements to allow massive work-from-home to be enabled on the fly in very short order,” said Andy Sealock, Senior Director, WestMonroe. “They did not wait for a contract change order to accomplish this as it would have been too slow and caused service disruption. Customers just made the decisions and operated on good faith that contract and cost issues would be worked out in the future in an equitable manner.”
This same cooperative approach also extended to supplier-supplier relationships where multiple providers are involved in delivering end-to-end processes and value. Suppliers interacted directly with each other – without forcing the customer to constantly act as the systems integrator – to keep the customer’s processes working effectively.
“The pandemic quickly demonstrated who wanted to actually be a business partner as opposed to just a supplier,” Sealock said.
Instead of traveling for in-person meetings with clients, suppliers and advisors were able to meet with customers more frequently via video technology versus waiting for formal scheduled meetings. This enhanced relationships and supported quicker decision-making, he said.
Soft relationships played a large role in strengthening the long-term bonds between customers and suppliers, according to Paul Sheridan, Principal, Eclaro.
Customers who previously dismissed work-from-home as an option quickly saw its value and are now more open to this arrangement going forward since it has proven its effectiveness with productivity at or above pre-COVID levels.
“The question remains what is the best way to continue to maintain relationships and develop new ones in a virtual environment,” Sheridan said.
- Challenges with New Models
According to Sealock, the movement of software or hardware functionality to the cloud helped service providers provide better and more flexible solutions to their customers as cloud services include an inherent degree of modernization. The larger investments also can be shared across an entire customer base that would be too expensive for a single customer.
In the discussions in her group, Susanne Richter-Wills, Head of Enterprise Sales DACH, ABBYY Europe GmbH, found there hasn’t been a significant increased pull from the market for cloud-based solutions due to COVID-19. Data protection concerns are still an obstacle for moving to the cloud and governance is a topic of conversation.
On the vendor side, however, there is a clear trend for cloud-only solutions, which has increased with advances in Artificial Intelligence (AI) that benefit from shared environments, she noted.
- Preparation for the Pandemic
Most of the attendees reported a smooth and quick transition to work from home for the majority of companies. The change was significant with many organizations going from having 5 percent of their organizations working remotely to 90 percent within weeks.
Data security was a major concern, at least initially, to work from home. Companies had to invest in technology like digital cameras, Internet connectivity, credit card processing machines, headsets, AI-enabled technology and additional security devices in this new environment.
One customer shared that they had already made an enterprise-wide transition to Microsoft Teams as its chosen standard supported collaboration platform fortuitously just a month before the outbreak. Everyone was already trained and the infrastructure had already been upgraded to support the capacity, making the mass work from home (WFH) transition relatively seamless.
On the other hand, a buyer reported a supplier had a difficult time getting up and running because India’s government stopped them and destroyed all the computers they were transporting because they did not obtain the required permits.
Some healthcare clients with stringent regulations would not allow work at home so the suppliers arranged for the staff to live on-site and many offshore locations also set up operations like this to ensure business continuity.
In some cultures, workers haven’t minded putting in more hours at home because they are not spending that time commuting or in traffic, one participant observed.
Based on the session discussions, the sell-side reported that trust was a key element in clients allowing WFH and many leveraged established relationships to maintain critical operations, noted Audrey Cushing, Business Services & Quality Director, Vee Technologies.
Buyers have greater comfort with working from home so they did not have many concerns around productivity. Meanwhile, both sides reported less attrition with WFH and teams meeting service levels. All also feel the common ground shared during the pandemic has made outsourcing relationships stronger, according to Cushing.
Some companies hired ergonomics specialists as an internal consulting group to help people set up their home offices, assisting with design decisions and ordering specific products to implement those designs. Sealock said this was extremely popular and has helped with productivity.
The differentiating factor in the success of making the transition to WFH was having a solid business continuity plan. Most organizations prepared for a single site being down but not having such a wide-reaching impact as the pandemic while others had not regularly tested their plans, noted Richter-Wills.
“Those organizations who have a wide-reaching and tested business continuity plan in place were able to swiftly adapt their operations,” she said.
ABBYY’s latest study was discussed that found the older generations were better equipped for the new way of working and the pandemic challenges. The surprising survey results showing the use of technology and workforce productivity revealed that executives aged 55-plus have fared better than their digital-native counterparts aged under 35 during the global pandemic.
The younger attendees of the session confirmed the findings and stated that remote working does not suit them as well because it takes away the ability to collaborate and learn from senior members. On the other hand, these workers expect a hybrid working model that allows some days in the home office post-pandemic.
Sealock expects organizations will adopt a hybrid working model as the standard going forward post-pandemic. Hoteling only requires limited floorspace assuming each person will only be physically in the office up to three days per week instead of five. Similarly, business travel will more likely be monthly as opposed to weekly going forward.
After the pandemic most except that the trend for remote working will reverse, said Richter-Wills. But in some countries, governments will mandate that organizations dedicate a percentage of their workforce to work from home or provide staff with the right to work from home unless it is not feasible, which will provide an ongoing challenge for organizations.
- What Assistance was Sought
The OWS attendees said they did not need to take advantage of their insurance coverage and were not aware of any cases in their network. Instead, businesses have taken full use of far-reaching government programs which included short-term working arrangements in some countries like Germany and broader assistance in other areas such as Singapore that helped organizations and individuals.
The force majeure clause and willingness to relax SLAs has been enough for most BPOs to be able to keep business going and they quickly adjusted, Richter-Wills observed.
While most providers didn’t use force majeure, future contracts will have more clarity on what to do in situations like COVID which are not unprecedented since we have experienced the Spanish flu and other pandemics, said Andrew Alleyne, partner of Fasken Martineau DuMoulin LLP.
“Maybe organizations didn’t need to access insurance because the transition was very smooth and both vendors and customers have been very flexible,” said John Beardwood, also a partner with the firm.
Silas Goldman, Senior Director of Operations of Vee Technologies, said that the company had agility and built-in solutions that were established a decade before the pandemic so they didn’t need to use insurance.
However, he noted, “Luckily, we didn’t need it. But there is a long list of companies that didn’t play their cards right. The companies that are sitting here today did something right.”