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The HR Software Market Reinvents Itself

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The multi $billion market for HR software is reinventing itself. This presentation highlights the major disruptive changes, based on presentations Josh Bersin makes in 2017 and beyond.

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The HR Software Market Reinvents Itself

  1. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 0 Josh Bersin Principal and Founder, Bersin by Deloitte, Deloitte Consulting LLP August 2017 HR Technology Disruptions The HR Tech Market Reinvents Itself
  2. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 1 Demographic upheavals: Millennials make up more than half the workforce, and Boomers are working into their 70s and 80s. Digital technology everywhere: Technology is disrupting business models and radically changing the workplace and how work is done. Artificial Intelligence and Robotics Jobs becoming automated at an increasingly rapid rate, causing continuous change in roles and skills needed. New social contract: Younger and older workers demand rapid career growth, compelling and flexible workplace, and a sense of purpose at work. Forces Disrupting Organizations Today
  3. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 2 Productivity is Suffering – Is Technology Helping? US Productivity Last Ten Years 1 billion smartphones i-Phone launched 100 million Twitter users
  4. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 3 Sources: Deloitte Human Capital Trends 2014 and 2015 Employees are Overwhelmed The “average” US worker now spends 25% of their day reading or answering emails Fewer than 16% of companies have a program to “simplify work” or help employees deal with stress. More than 80% of all companies rate their business “highly complex” or “complex” for employees. The average mobile phone user checks their device 150 times a day. The “average” US worker works 47 hours and 49% work 50 hours or more per week, with 20% at 60+ hours per week 40% of the US population believes it is impossible to succeed at work and have a balanced family life.
  5. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 4 • Since 2000, US workers have lost an entire week of vacation, dropping average vacation days from 20.3 to 16.2 • Americans left 658 million unused vacation days and lost 220 million of them in 2015 • 39% of Americans “want to be seen as a work martyr” yet 86% say it’s bad for their family life. We Are Working More Hours: A Vacation Crisis 48% of Millennials want to be seen as a “work martyr” Millennials 50% more likely to forfeit vacation days Source: Project :Time Off, https://www.projecttimeoff.com/research/state-american-vacation-2016
  6. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 5 Average 3.2 What are these companies doing? Engagement Remains a Challenge Summer, 2016 Glassdoor Bersin Research, Glassdoor ratings of employer recommendations — 200,000+ respondents. http://www.4-traders.com/AON-PLC-11994390/news/Aon-Employee-Engagement-Declining-Across-the-Globe-24083101/ AON research (March 2017) shows global engagement dropped by 4%
  7. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 6 The Modern Organization: A Network of Teams B A DCF A C D E B G How things were How things “are” How things work Shared values and culture Transparent goals and projects Free flow of information and feedback People rewarded for their skills and abilities, not positionE The Way We Work Has Changed
  8. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 7 We Build Tools, then The Tools Change Us How Technology Changes Us Steam Engine - 1874 Telegraph and Electricity - 1882 TRS-80 1977 IBM PC 1981
  9. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 8 We Build Tools, then The Tools Change Us How Technology Changes Us & What’s Next Smart Phone 2007 Wearables 2011 Smart Badge 2013 Virtual News 2015 IBM Watson 2013 Amazon Echo 2015 Snap (Chat) 2017
  10. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 9 • 38% of companies believe they will be “fully automated” within five years. • In 77% of companies automation results in “better jobs” and retraining of workers (only 20% see job reductions). • 33% expect to retrain people to do more “essentially human” tasks around robotics and AI • 50% of companies expect to retrain workers to side by side with robotics and AI • In 65% of companies HR is not involved at all. Automation Has Arrived: Jobs are Changing
  11. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 10 Major Disruption in Core HR Technology Markets 1
  12. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 11 Shift in Investment toward New HR and Workplace Tools HR Technology Now A Hot Marketplace $5.5 Billion in VC Investment in HR Startups since 2014
  13. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 12 Automate Integrate Engage Empower 1990s-2000s 2004-2012 2012-2015 2017+ Automated Talent Management Integrated Talent Management Engagement, Fit, Culture, Analytics Empowerment, Performance, Leadership Talent Management: Integrated processes and systems, Talent as core to HR and business agenda People Management: Focus on culture, engagement, environment, leadership, empowerment, and fit Systems of Automation Practice-driven solutions Systems of Engagement, Productivity-driven solutions From Talent Management to People Management Engage
  14. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 13 The Reinvention of HR Technology Shift in Focus To The Employee, not HR • Appification of everything • Reinventing performance management • Embedded Analytics • Feedback and pulse surveys • Wellness, fitness apps • AI-based recruitment platforms • Next generation learning platforms • Diversity and inclusion products • Team management tools • Emergence of Teams, Slack, Workplace, and Gsuite ERP Vendors Under Pressure
  15. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 14 Benefits & Compensation Hiring Recruiting E-Learning Performance Talent Network Based Applications New Systems of Engagement HR Technology Shift in FocusMARKETGROWTH-ADOPTION 2 0 0 0 2 0 1 7P R O G R E S S I O N O V E R T I M E Compensation HRIS Benefits Administration Applicant Tracking Recruiting Sourcing Learning Management Workforce Management Succession Management Performance Management Integrated Talent Mgmt Analytics Tools Social Recognition Network Recruiting HRMS + Talent + Workforce Management Self-Service Apps Personality and Pre- Hire Culture Assessment Predictive Analytics Real Time Engagement Mobile Apps for HR Process Automation Integration & New Talent Apps Analytics Driven “Systems of Engagement” Apps that “Make Work Life Better”
  16. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 15 Shift to Cloud is Losing its Luster Core HR Technology spending is slowing (41% say it’s flat) Clients not fully satisfied: only 21% of customers say talent systems “always meet their needs.” Two biggest growth areas are Learning and Analytics (37% yty) Career, succession, onboarding, analytics hottest functional needs User satisfaction is 2/3 lower than vendor satisfaction Rip and Replace Pace is Slowing How Will You Upgrade Your HR Technology? Sources: 2015 Cedar Crestone survey and 2015 Bersin by Deloitte, Deloitte Consulting LLP, HR Systems Research Ris k Speed
  17. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 16 Next Generation of People Management Software 2
  18. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 17 Historic Perspective on Performance and Management The Evolution of Management Thinking We are Here The Industrial Corporation Hierarchical Leadership Collaborative Management Networks of Teams <1950s 1960s-80s Today1990s Andrew Carnegie Henry Ford Netflix, Google, Facebook, Amazon Jack Welch Peter Drucker Howard Schulz Steve Jobs Profit, Growth, Financial Engineering Customer Service, Employees as Leaders Mission, Purpose, Sustainability Operational Efficiency 2020 Purpose,Meaning, andEmpowerment? Industrial Age People as Workers Management by Objective Servant Leadership Work Together Empower the Team The Corporation is King The Executives are King The Teams and Team Leaders are Kings The People are King(s)
  19. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 18 Feedback and Engagement Reinventing Performance Video Based Learning & Career Social Recognition Well-Being Work – Team Management 2016 and Beyond: A New Set of Disruptive ApplicationsMARKETGROWTH-ADOPTION 2 0 1 6 Pulse Survey Text Analytics Mobile Feedback 2 0 2 0 Culture Assessment Coaching Tools Checkins with Feedback Agile, open goal management Org Network Analysis Recognition Everywhere Custom Rewards Programs Customer Recognition P R O G R E S S I O N O V E R T I M E Video Learning Content Curation Intelligent Learning Career Planning Gamification Accreditation Well Being Fitness Tracking Competitions Social Sharing Points Gamification Fitness Merges w/Engagement Virtual Work Management Document Management Goal Sharing Goal Tracking Communications Messaging
  20. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 19 Convergence of HR Systems Ahead Diet Wellness Fitness Challenges Goal Management Feedback Pulse Survey Surveys Engagement Tools Mobile Feedback Customer Feedback Check Ins Personality Assessment Performance Review Fitness Monitoring Health Behavior Change Social Recognition Customer based Recognition Community Circles Affinity Groups Anniversaries Work Events Engagement Analytics Travel Time Management Video Learning Video Sharing Gamified Onboarding Career Planning Training and Certification Engagement Feedback Performance Recognition RewardsLearning Well-being & Work Management
  21. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 20 From Application Tracking to Recruitment Success Reinvention of the Talent Acquisition Market Applicant Tracking Candidate Marketing Sourcing Chatbots, and AI-Based Intelligent Recruitment Intelligent sourcing, AI-based assessment, gender bias, facial recognition Onboarding Manager Tools Integrated Sourcing ?
  22. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 21
  23. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 22 New Industrialized Tools for Performance Management 3
  24. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 23 New Generation Performance Tools Are Here The New World of Performance Management Check-ins Transparent Goals Peer Feedback Feedback to Manager Engagement Survey Individual Assessment Team Assessment Continuous Micro- Learning Regular Evaluation Integrated into Workflow Mobile App Annual Process Continuous Manager-Centric Team-Centric Hierarchical Multi-Directional Competitive Developmental Subjective Data-Driven Secret Transparent Single Rating Richer Rating Vendor A Vendor C Vendor D Vendor E Vendor G Vendor FVendor B Fundamental Changes Are Enormous
  25. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 24 27 companies that redesigned their process, found overwhelmingly positive outcomes: • 100% said conversation quality improved • 83% said conversation frequency increased • 90% said employee engagement increased • 91% say data for evaluation is better • 96% say tools are easier and simpler • 77% expect continuous feedback • 45% are using check-ins to assess managers • 50% say training process is easier and shorter • 67% doing feedback quarterly • 80% expect employees to drive check-ins Yes, New Models for PM are Effective • Bersin by Deloitte Proprietary Research, 2017 Ratings Are Not Going Away, Just Changing
  26. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 25 Feedback = Performance Deloitte Feedback Process Helps Drive Performance 1. I am really enthusiastic about the mission of the firm 2. At work, I clearly know what is expected of me 3. In my team, I am surrounded by people who share my values 4. At work, I have the chance to use my strengths every day 5. My teammates have my back 6. I know I will be recognized for excellent work 7. I have great confidence in the firm’s future 8. In my work, I am always challenged to grow BASELINE BOTTOM QUARTILE TOP QUARTILE 1 2 3 4 5 6 7 8 4.4 3.2 4.2 4.0 3.8 3.6 3.4 Pulse Survey items Questions that Predict High Performance at Deloitte Source: Deloitte pilots FYs14-15 Questions © Marcus Buckingham Company.
  27. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 26 EmployeeVitality Business Performance Cost Reduction Labor Productivity Retention Productivity Collaboration Team Performance Leadership Health Monitoring Employee Assistance Medical Benefits Fitness Challenges Nutrition Exercise Sleep Stress Sustainable Performance Recognition Skills and Training Work Environment Rewards Leadership Management Clear Goals Growth Opportunities Drive Well-being Self Discovery Career Purpose Mindfulness Abundance Mentality Positive Thinking Culture Fit Family From Wellness to Well-being to Performance
  28. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 27 Culture and Engagement: “Always-On” Feedback 4
  29. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 28 The Feedback System How Does Feedback Work Today? Engagement Survey Senior Management Team Employees Line Managers | HR Performance Review Filtering and Cleaning Time Per Year Feedback is the Killer App Feedback Apps are Everywhere
  30. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 29 Create an Enterprise Feedback Architecture Integrated Reporting & Analytics Sentiment Analysis Network Analysis Social Media Monitoring Job Boards & Ads Employment Brand Customer Satisfaction Anonymous Feedback Tools Pulse Surveys Annual Survey Performance Check-ins Exit Interviews Performance Appraisals
  31. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 30 New Generation of Learning Employees in Charge 5
  32. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 31 Video is now >55% of all internet traffic and mobile is now over 60% (KP Internet Trends 12/2015) 35 Million people have enrolled in MOOCs in the last four years, with 2015 enrollments doubling 2014 (Class Central) Over 50% of learners use mobile for more than 1/3 of their learning (Degreed) India is estimated to be a $3-4 billion market for corporate learning and MOOCs Expert and user-authored video is taking over The Net- Promoter Score for L&D is now -8 And lower for non L&D professionals Video and Mobile is Taking Over Learning
  33. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 32 We are here E-Learning & Blended Evolution of L&D Has Been Blindingly Fast 1998-2002 2005 20172010 Self-Study Online Learning Course Catalog Online University 2020 Intelligent Learning Intelligent,Personalized, MachineDriven Instructional Design Kirkpatrick LMS as E-Learning Platform Talent Management Career Focused Lots of Topics Learning Path Career Track Blended Learning Social Learning LMS as Talent Platform Digital Learning Everyone, All the Time, Everywhere Micro-Learning Real-time Video Courses Everywhere Design Thinking Learning Experience LMS invisible Data Driven, Mobile Continuous Learning Learning On Demand Embedded Learning Video, Self-Authored Mobile, YouTube 70-20-10 Taxonomies LMS as Experience Platform Formats Philosophy Users Systems © Bersin by Deloitte From E-Learning to Digital Learning In One Generation
  34. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 33 Career Models In Disruption 58% of companies are redesigning or planning to redesign their career model 83% of companies expect to have an “open” or “highly flexible” career model within the next 3-5 years While 33% of companies promote vertical career moves, 67% now promote horizontal or project based career progression 31% of companies expect careers to be 3-5 years long 60% expect them to be 10 years or less Learning and career management software is the #1 fastest growing segment in HR technology (CedarCrestone 2017) Cedar Crestone, 2017
  35. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 34 Result: Explosive Growth In MicroLearning Content is everywhere, But How to Manage It All Micro-Learning Macro-Learning I need help now. I want to learn something new. • 2 minutes or less • Topic or problem based • Search by asking a question • Video or text • Indexed and searchable • Content rated for quality and utility • Several hours or days • Definitions, concepts, principles, and practice • Exercises graded by others • People to talk with, learn from • Coaching and support needed Is the content useful and accurate? Is the author authoritative and educational? Videos, articles, code samples, tools Courses, classes, MOOCs, programs
  36. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 35 How Can We Redesign Learning For Work? New on the Job Seasoned Expert PaceofLearning Normal Great Bad Macro MacroMicro Micro Micro Micro Micro Credential Coach
  37. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 36 The Learning Tech Market Starting to Shake Out Learning Experience Platforms Program Experience (Delivery) Platforms Micro Learning Platforms LMS Platforms Assessment, Development, Delivery Tools Content Libraries Learning Record Store © Bersin by Deloitte
  38. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 37 Major New Learning Announcements No, the LMS is Not Dead After All!
  39. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 38 LEARNER or TEAM • Employee Generated • Validated • Experiences • Books • Videos • Podcasts • Articles Credentials • Partner MOOCs • MOOCs • Classrooms Moments • Collections with exercises, activities, points for reflection • Simulations Collections Integration & Practices • Mentors • Reverse-Mentors • Coaches • Faculty • Experts • Critical Topics • Critical Paths • Academies and Colleges • Campus Experiences User Generated Places People • Roles • Competencies • Evolving skills The New World of Corporate Learning
  40. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 39 People Analytics Now Mandatory but New 6
  41. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 40 2017: Where People Analytics Is Going Interesting Experiments, Models, and Studies Practical, Useful Dashboard and Tools Projects Based on Problems and Strategies
  42. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 41 Progress Steady and Accelerating % Change Plan Performing multi-year workforce planning + 23% Correlate Correlating people data to business performance + 56% Predict Using people data to predict business performance + 50% Deloitte Global Human Capital Trends, 2016 and 2015 Percent Change in Companies Excellent or Good, 2015-2017 % of Companies “Good or Excellent” Increasing (Deloitte Human Capital Trends 2017)
  43. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 42 But… new types of data, and new issues arise Markets Converge: Text Analysis | Sentiment Analysis | Organizational Network Analysis | Feedback Systems 8% of companies are now doing some form of Organizational Network Analysis (ONA)
  44. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 43 Emergence of “Relationship Analytics” Organizational Network Analysis (ONA) Teams Organizations The Enterprise
  45. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 44 AI Applied to Recruitment and Selection Video Intelligence Becomes Real Source: https://www.fastcompany.com/3064863/election-2016/watch- this-ai-platform-assess-trumps-and-clintons-emotional-intelligence • Video interviewing now nearly mainstream, as many as 40% of interviews are done digitally • AI software (such as HireVue) can now detect race, emotion, gender, and tendency to exaggerate or lie through video • While use of this data is not legally defensible yet, companies are actively using this data to select candidates
  46. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 45 AI, Analytics, Sentiment, and Organizational Network Analysis likely to Converge AI Based Diversity, Coaching, Recruitment Systems
  47. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 46 Design Thinking and Conversational HR 7
  48. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 47 believe internal processes for collaboration are working well believe their employees are fully aligned with the corporate purpose 23% 14% are excellent at building a differentiated employee experience 22% are using design thinking as part of crafting the employee experience 10% Source: Deloitte and Facebook, “Transitioning to the future of work and the workplace,” November 2016 38% Say problem is urgent Culture, Engagement, and Beyond Focus on the Employee Experience
  49. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 48 The Simply Irresistible Organization® What we have learned: an integrated approach is key Meaningful Work Supportive Management A positive work Environment Growth Opportunity Trust in Leadership Autonomy Clear and transparent goals Flexible work environment Training and support on the job Mission and purpose Select-to-fit Coaching Humanistic workplace Facilitated talent mobility Continuous investment in people Small, empowered teams Investment in development of managers Culture of recognition Self-directed, dynamic learning Transparency and honest Time for slack Agile performance management Fair, inclusive, diverse work environment High-impact learning culture Inspiration
  50. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 49 Example: Design Thinking Comes to HR
  51. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 50 Employee Experience: A Journey
  52. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 51 Major New Learning Announcements Conversational HR Arrives Learning Goals Self- Service
  53. Bersin by Deloitte / The indispensable digital HR destinationCopyright © 2017 Deloitte Development LLC. All rights reserved. 52 Bottom Line: The HR Technology Market is Reinventing Itself
  54. About Deloitte As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. Copyright © 2017 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited

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