Being customer-obsessed means getting past industrial-world process flows that are slow and unwieldy. Forward-thinking businesses are embracing a dynamic technology strategy, reconfiguring their business models based on insight and intelligence gathered by a plethora of smart devices, dongles, voice assistants and more, and layering these insights with machine learning to inform analytic output.
For example, UK insurers are moving beyond analyzing past behavioral patterns for pricing and underwriting, and shifting toward making predictions using current behavioral data. They’re resetting business models around algorithmic-driven, flexible, on-demand insurance offerings that target customer behaviors and trends — as they happen, in-the-moment.
How effectively insurers instantaneously price and transparently underwrite risk, with minimal intervention and a high degree of precision, will determine their commercial success. Workflows will creatively fuse emotion, trust and ethics into the algorithms that drive future customer engagement.
Delivering value against rapidly evolving customer expectations won’t happen by simply tweaking a customer touchpoint here or fiddling with an underlying process there. Instead, businesses must engineer connected practices that support the delivery of services and support for business capabilities across front-end experiences, community-driven product development and innovation, as well as back-office operations that continuously adapt.
And organizations cannot do this the alone. The trick is to architect corporate information systems and capabilities to interface with external systems and extend the customer journey across multiple service providers that bring unique and compelling technologies, insights and customer experiences.
- Key learning point: Technology mastery enables organizations to tap into richer seams of data through hyper-connectivity and machine learning that power decisions and analytic outputs. New ecosystems are emerging across industries that layer decisions with meaning, accessed through application programming interfaces (API) and modular system components and capabilities.
Future workforce strategies hinge on strategic partnerships
Sourcing has returned to the enterprise shopping list, with almost half (46%) of UK respondents forecasting third-party services strategies to powerfully impact their future work strategies by 2023 — more than double the finding in our previous study.
With the impact of the pandemic and Brexit, accompanied by the rise of customer obsession, UK businesses are prioritizing short-term benefits rather than long-term goals. As one of the early adopters and biggest proponents of offshoring, UK businesses will turn to partners as an important lever for operational efficiency and cost control. The pandemic’s aftermath has unleashed greater scrutiny on spending, tighter cost controls and a laser focus on generating value from contracts negotiated with short-term targets and more precise ROI terms and conditions.
Driving this renewed interest in sourcing is the need for agility and fresh skills in emerging technology areas, such as hyper-connectivity, automation and AI. While these technologies are rapidly moving mainstream, finding partners with demonstrated expertise is a challenge.
Our read is that UK businesses want easily understood service arrangements, with fast, demonstratable results. Technology is only the first step; leaders need the talent in place, both internal and through partners, to ensure the technology works. The supply for skilled technology workers continues to outpace demand as the new division of labor between humans and intelligent machine algorithms accelerates.
For example, the UK's digital tech sector was growing almost six times faster than the rest of the economy prior to the pandemic, and that will only increase as organizations shift to digital-first operations. The rekindling of interest in third-party sourcing masks a serious talent gap.
- Key learning point: Reinvent services partnerships for a cloud-centric, digitally defined world rather than relying on a short-term cost-containment workaround. The bigger issue is to undertake strategic workforce planning and identify longer-term skill requirements — and then figure out how to fulfill them. Conversely, policy makers need to invest in and increase the supply of STEM and technical skills into the country.
Executives struggle with leadership changes imposed by digital
Executive concerns about leadership have shifted considerably since our last Work Ahead study. Senior leaders express uncertainty about how well they’re adapting to the new styles of leadership driven by digital tools and ways of working (see below).
Digital tools and technologies hinder executive performance
Please indicate whether you agree or disagree with the following statements about the impact of digital on the future of your own job in the next three years. (Percentage point change in the number of respondents who said they agreed between 2016 and our current study)