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Top trends and predictions for 2018

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Intelligent automation goes from hype to business transformation.

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Top trends and predictions for 2018

  1. 1. Toptrendsand predictions for20184Q 2017 KPMG Global Insights Pulse January 30, 2018
  2. 2. 2© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. • Global Insights Pulse launched in 2004 by EquaTerra* • Key component of global KPMG market research program • Top Trends and predictions for 2018 – Negative trends – Positive trends – Hype vs. reality 2018 – Organizational initiatives – Challenges to & enablers for Initiatives – Market sentiment • Call center/customer care • Finance and accounting • Human resources • Information technology • Procurement • Real estate and facilities management • Vertical industry BPO • Emerging BPO/KPO functions KPMG Global Insights Pulse The surveys are a quarterly review of global business services (GBS) and intelligent automation (IA), related service delivery market trends and individual observations from the ‘front lines.’ The annual 4th quarter survey examines top trends for the coming 1-2 years. • KPMG’s global network of advisors focused on: – Sourcing Advisory – Financial Management – Technology – People and Change – Business Operations – Tax, Deal Advisory, and Audit • KPMG market research Focus on performance, trends, and future state * KPMG LLP (U.S.), KPMG Holdings Limited (UK) and KPMG International acquired the business and subsidiaries of advisory firm EquaTerra, Inc. in February 2011. Input sources: Topics evaluated: Primary functional focus:
  3. 3. 3© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Key findings Artificial intelligence, machine learning and cognitive computing will gain greater exposure across a wider number of firms. Deployment in scale, however, will still remain a rarity in mainstream and legacy organizations but will increasingly benefit leading edge and Internet-native firms. 2018 is certain to be the year of intelligent automation though a large gap will remain between expectations and readiness and capabilities. The use of bots and robotics process automation will accelerate and become mainstream in scale across a growing number of organizations. (Nearly) all organizations are recognizing the potential huge impact and benefit that the collective IA technologies and their capabilities will serve as a remedy for many ailments, including talent and skills shortages and the need to improve process efficiencies while further driving out costs. Organizations focused on creative disruption via IA to drive true innovation, especially in new initiatives and in customer facing operations, will likely become the clear long term winners and those fixated on just cost-reduction the likely losers. But all organizations must gain IA tools and techniques expertise and understand where each IA component is most applicable.
  4. 4. 4© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Top negative and positive trends for 2018 Negative Trends Talent shortages/talent management challenges; perennial top trend Trade protectionism; de-globalization; economic populism Restrictive environment for M&A efforts Positive Trends Positive impact of intelligent automation/digital labor Maturation of/greater access to innovative technologies; closely related to top trend Improving consumer/customer demand Top 2 the same over the past three years, political/government gridlock comes in fourth Regional Differences Talent shortages/talent management challenges most acute with advisors supporting global efforts Trade protectionism and political gridlock concerns strongest in North America Restrictive M&A environment concerns most prevalent in North America and Europe Top 2 the same over the past three years Innovative technologies clearly top trend with close clustering on next set of trends North America and Asia Pac most bullish on the positive impact of IA/digital labor Process automation becoming key enabler to address talent shortages and further reduce costs but most importantly increase process effectiveness
  5. 5. 5© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Top 2018 organizational initiatives Initiatives Continue to drive down operating costs Invest in new/improved information technology Invest more in robotics process automation Top 2 the same over the past three years Regional Differences North America and Asia Pac most bullish on investing more in RPA and AI Europe and North America most focused on investing in innovative technologies overall
  6. 6. 6© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Market hype vs. market reality Most Hyped, 1-3 years Deployed and functional blockchain initiatives - beyond financial services AI as a service Use of AI/cognitive computing to radically change core activities Most Real, 1-3 years Consistent and wide spread deployment of D&A to deliver meaningful business value Realistic plans and adequate resources to address e-commerce opportunities and threats Solid cybersecurity strategies and operational plans and adequate resources to support Regional Differences Perception of hyped or over-hyped trends, technologies and capabilities generally consistent across geographies Regional differences Global organizations believe D&A most “real” while Asia Pac the least Europe and North America most comfortable with cybersecurity strategies and operational plans to overall perception of “real” still relatively low No change in rankings for top three most hyped and top three most real at the 1-3 and 3-5 year levels, but perceptions of over-hype decline significantly
  7. 7. 7© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Top challenges to successfully undertaking 2018 initiatives Challenges Dysfunctional/fragmented organizational/ operating models, designs & processes Inadequate change management and governance capabilities Lack of adequate and skilled talent; inability to attract and retain talent No change in top three challenges year over year Regional Differences Lack of adequate and skilled talent; inability to attract and retain talent Inadequate/antiquated IT infrastructure and systems a common problem globally Advanced and emerging technologies taking center stage to address broad range of challenges Talent and talent management shortages and weaknesses common challenge globally and a key driver for great use of automation
  8. 8. 8© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Top capabilities required to successfully undertake 2018 initiatives Required Factors and Capabilities Smart/innovative management and management practices IT systems and capabilities Process automation – basic and enhanced RPA Regional Differences Process automation – basic and enhanced RPA cited most highly in Asia Pac Global access to talent most important in Europe and for Global Smart and innovative management cited most often in Asia Pac and Global Some shifting of top perceived required capabilities; once you have smart management it’s also about IT enablement IT systems & capabilities jumps and process automation continues to strengthen D&A drops in ranking – its pervasiveness lessens its discrete ranking
  9. 9. 9© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Additional results growth areas for investment Process automation - basic and enhanced RPA Cybersecurity products, services and resources Cloud computing worsening market trends Cybersecurity threats Cost of healthcare Political gridlock, partisan politics Some differences in investments by geography and major differences on market trends by geography Process automation, especially RPA, top growing investment area Political gridlock and more regulatory burdens growing as business concerns
  10. 10. 10© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. More from KPMG on top 2018 trends To complement and extend findings and analysis from the 4Q17 Global Insights Pulse survey, KPMG professionals conducted a series of podcast interviews discussing top trends for 2018 and beyond. Executives interviewed include the following: • Automation will drive “workforce shaping” in 2018: Robert Bolton, Partner – KPMG in the U.K. and Head, Global HR Center of Excellence, KPMG International • Top trends for 2018: Winning with customers: Julio Hernandez, Principal, U.S. Customer Advisory Practice Lead – KPMG in the U.S. and Head, Global Customer Center of Excellence, KPMG International • Intelligent automation and the 21st century enterprise: Steven Hill, Principal – KPMG in the U.S. and Global Head of Innovation & Investments, KPMG International • AI to go mainstream in 2018: Cliff Justice, Principal, Innovation & Enterprise Solutions – KPMG in the U.S. • Intelligent automation isn’t at least on your radar screen? You’re late to the game: Ron Walker, Principal, Shared Services & Outsourcing Advisory – KPMG in the U.S. Visit Advice Worth Keeping for additional podcasts covering a range of topics, including: global business services, shared services, outsourcing, information technology, finance, human resources, and customer experience management.
  11. 11. 11© 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Learn more: Shared Services & Outsourcing Advisory KPMG Shared Services and Outsourcing Institute: https://institutes.kpmg.us/institutes/shared-services-outsourcing-institute.html Global Insights Pulse Surveys: https://institutes.kpmg.us/institutes/shared-services-outsourcing-institute/articles/campaigns/ssoa-pulse-surveys.html GBS Maturity Research Program: https://institutes.kpmg.us/institutes/shared-services-outsourcing-institute/articles/campaigns/global-business-services-maturity.html KPMG Anticipate: https://home.kpmg.com/xx/en/home/insights/2016/05/kpmg-anticipate.html KPMG Institutes Home: http://www.kpmginstitutes.com/ Blog: Reality Check: https://advisory.kpmg.us/blog.html Podcasts: Advice Worth Keeping: https://institutes.kpmg.us/institutes/shared-services-outsourcing-institute/events/podcast-series/advice-worth-keeping-podcast-series.html
  12. 12. David J. Brown Principal and Global Lead, Shared Services & Outsourcing Advisory KPMG in the U.S. E: djbrown@kpmg.com Click here for additional insights on “Top trends and predictions for 2018” Learn more:
  13. 13. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. © 2018 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. kpmg.com/socialmedia

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