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Gazing Toward a Digital Shore



The name of the seminar was “Paradigm Shifts.”


It was one of my first required college classes. In retrospect, it’s easy to see that our professor intended to shake us free of the breezy certitude that tended to characterize our ideas of the world. Our professor was going to make us imagine moments in history when peoples' understanding of reality shifted in fundamental ways.


We read Dante’s Divine Comedy to understand the worldview of the medieval church, laboring over a heavy dose of Thomistic philosophy and Aristotelian and Ptolemaic cosmology. There was order in Dante’s universe, from a precise hierarchy of heavenly angels to all those human beings groping through life on earth. By the time the first edition of the “Comedia” was printed, it already had a reputation for reassuring readers there was meaning in the universe despite the disasters that had struck Europe, such as the Black Plague of the mid fourteenth century.


Shakespeare’s Richard III, written around 1593, helped us see how the later Middle Ages undermined the beliefs of an earlier time. We analyzed the Medieval conception of God’s award of temporal power to political rulers – the divine right of kings – but also witnessed the symbolic end of the Middle Ages itself. Things didn’t seem quite so clear as Dante’s intricate worldview had suggested, with scheming royal courts portending a coming chaos of meaning.


By the time we debated Dostoevsky’s Notes from Underground, published in 1864, one of the first pieces of existential literature, the question facing humanity was whether there was any meaning in the world at all. The strand of idealized rationality that had somehow persisted throughout the Medieval period and into the Renaissance and beyond could no longer account for the dark, often absurd irrationalities of human history.


It was a disorienting and eye-opening learning experience.


Global Sourcing’s Shifting Landscape


I’ve been thinking about that class a lot these past few weeks, wondering in particular how Covid-19 might affect the model of global service delivery we've grown so accustomed to.


Will outsourcing continue to offer enterprises the same arrangement it has for the past three decades? Might a paradigm shift of sorts be shaking the world of offshore outsourcing in particular? How will the business process outsourcing (BPO) industry be impacted specifically, from the front-office to the back-office?


Writer Matt Stoller might offer some clues. In an April 2 article in Wired magazine discussing the United States government’s massive economic relief package, he points out that:


While it’s tempting to see this bailout package as being similar to that of 2008, the analogy is flawed. During the Great Recession, the bailouts of Wall Street were an attempt to keep private credit flowing. The coronavirus relief bill, however, is an explicit takeover of Main Street-level activity by the state. It’s hard to wrap your mind around the ideological change that has taken place…. Think about what it means in a capitalist society for the government to take over the means of production.


Stoller sees profound change on the horizon. “The 30-year period of globalization, in which we consolidated and offshored production to lower costs, is over,” he says. “Trade, procurement, antitrust, and financial laws and regulations need to be modified to reflect this new reality. We must make things we need here. There is no way of going back to the old normal.”


Although Stoller is not focused on the BPO industry, one wonders how the scenario he sketches would nonetheless affect it. After all, he is convinced that, “… we must restructure how we approach risk…. It also means ending financial practices such as stock buybacks, stock compensation and high compensation packages for executives, and mergers in concentrated industries. All of these are mechanisms that enable financiers and Wall Street to control the flow of resources.”


And then there’s this from the editorial board of The Financial Times at the end of another surreal week:


Radical reforms – reversing the prevailing policy direction of the last four decades – will need to be put on the table. Governments will have to accept a more active role in the economy…. and look for ways to make labour markets less insecure…. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix….


The leaders who won the (Second World) war did not wait for victory to plan for what would follow. Franklin D. Roosevelt and Winston Churchill issued the Atlantic Charter, setting the course for the United Nations, in 1941. The UK published the Beveridge Report, its commitment to a universal welfare state, in 1942. In 1944, the Bretton Woods conference forged the postwar financial architecture. That same kind of foresight is needed today. Beyond the public health war, true leaders will mobilize now to win the peace.


It’s eyebrow-raising stuff. And in response, a member of the Bernie Sanders’ U.S. presidential campaign tweeted that, “The newspaper of the global financial establishment suddenly sounds like Bernie Sanders.”


Indeed.


It’s a lot to process. While on the surface of things the physical nature of production and supply chains might seem to have little to do with the realm of BPO, one must ask how the emergence of new antitrust laws, banking laws, and regulatory power could affect the industry.


In other words, what if the changes Stoller and the FT’s editorial board envision are in fact forced on the system of "Anglo-Saxon capitalism" currently animating the societies and economies of both the United States and the United Kingdom? How might a new kind of social contract ripple through the outsourcing space and its vast pool of workers if there is an effective push to transform us from a society of empowered consumers back to something more akin to empowered citizens? How might a reinvigorated “craft of solidarity” among reformers (in the words of Professor of Sociology Richard Sennett of the London School of Economics) play out over time?


As the home-based agent model shakes up the global delivery equation (industry leader Teleperformance aims to have an eye-popping 110,000 home-based agents deployed across its global footprint by mid-April, accessing cloud-based business process platforms) we might start considering the possibility that such a shift is but a prelude to not insignificant portions of offshored services work being brought back to the United States and the United Kingdom under some combination of business, social, and political pressure.


In fact, that may already be happening. Pressure seems to be mounting by some businesses to take some work out of places like India. As an article this week in The Wall Street Journal puts it, "Meanwhile, some clients of outsourcers are trying to 're-shore' work back to their home markets." And an April 5 piece in The Telegraph echoes that sentiment in the United Kingdom, noting that India’s shutdown “is forcing the corporate world to rethink the thousands of jobs sent abroad in recent years.”


Automation Storms the Field: Digital Takes the Throne


But let’s assume, for the sake of argument, that outside of the dramatic rise in at-home agents across the globe, there is little material impact on BPO’s geographic sourcing model (ie, offshoring) in the wake of the Covid-19 crisis. Even if this were to be the case, we still need to consider how Covid-19 will almost certainly accelerate our move to a digital world, shaking the foundations of the BPO and contact center industries in the process.


As Booth School of Business Professor Robert Wolcott argues, “COVID19 makes resistance to digital transformation appear short-sighted, even naive. Digital savvy companies are more effectively shifting to remote work, re-organizing stressed supply chains, supporting customers and partners in crisis mode.


According to Wolcott, one executive at a large global retail chain recently reported that the crisis has caused an acceleration of digital customer-facing products and services; and in his words, “They are now all in.”


Meanwhile, it certainly seems consumers are adapting to our current crisis by assuming more power through the click of a button. As Wolcott notes, “Digital technologies push the production and provision of products and services ever closer to the moment of demand.” The innovation of real-time and even anticipatory services will mean a host of issues are resolved before they manifest, and in many cases companies will avoid customer complaints about issues that never materialized in the first place.


“We call this Proximity,” Wolcott points out. “Digital and digitally enabled technologies— from IoT and data analytics to additive manufacturing and distributed energy generation— allow us to sense, analyze, respond, produce and service virtual and physical products with unprecedented speed, specificity, and flexibility.”


In the world of customer experience (CX), that ability to predict customer intent has been gaining momentum for years. Now, the Covid-19 crisis is causing sudden spikes in inquiries across industries from needy, confused, or frustrated customers at the same time as the almost frenzied shift to home-based customer care agents proceeds apace. And in many cases, quality of service and customer satisfaction suffers.


This is a bit like what Richard III might have felt like at the Battle of Bosworth Field. Richard’s defeat and death signaled the end of the Middle Ages in England and augured a new age. Today, automation in the form of Intelligent Assistants (IA) is storming the well-worn field of enterprise operations, seizing the high ground in real-time from the butts-in-seats medievalists struggling in the mire of legacy systems. And technologies ranging from RPA and AI to NLP and smart analytics fight side by side in this war of re-engineering, dragging us all into a new era.


Meantime, there is no incrementalism amidst the fog of such a war. Small changes to traditional processes will be too sclerotic, gradual innovation will be impossible. Every entity will be forced to transform, from start-ups to incumbents. It won’t happen overnight, it won’t be perfect or even orderly, because there will be some contracts that make a quick transition to the appropriate digital channels almost impossible. But it is happening on an opportunistic basis nonetheless, because mindsets are changing.


According to an article in The Guardian last weekend:


Some 41% of respondents in a survey by the auditing firm EY said they were investing in accelerating automation as businesses prepared for a post-crisis world….


A majority of companies said they were already planning major transformation before the pandemic hit. Once normality returns, they would focus on new investment in digital and technology, the survey found.


‘Business leaders are seeing their transformation plans paused or slowed currently. With these plans set to restart, possibly with added energy, once the situation stabilises, executives will have to make faster moves to reimagine, reshape and reinvent their business and create long-term value’….


And as Professor Robert Wolcott says, “When a few companies offer such agility, customers expect the same of everyone.” Expectations are liquid across all industries. Companies that don’t keep up will suffer or even die.


New Perspectives


By the time Dante and Virgil emerge from Hell in The Divine Comedy, they gaze into the distance at the shores of Purgatory, which offers at least some sense of relief. Finally, there is sunlight along with night, hints of beauty in the colored landscape. Although the island they look upon features a steep mountain that suggests more struggles to come, there also is hope in their new perspective.


When we emerge from the Covid-19 crisis, so many industries will have been humbled, and there will be considerable work ahead during what will almost certainly be the purgatory of our economic recovery. But some business leaders will possess a fresh view of reality and be poised to meet the challenge.


The final section of that college class “Paradigm Shifts” featured two texts for us to dig through and learn from, in close succession – the heroic Old English poem, Beowulf, and John Gardner’s 1971 novel Grendel.


The former saga encourages the reader to cheer for the warrior of the title in his battle against a terrible and threatening beast by the name of Grendel. But the latter novel asks the reader to stop and think, to consider circumstances from Grendel’s point of view. In Gardner’s telling, Grendel is the victim of grave misunderstanding and prejudice, becomes a sympathetic creature we come to see as having been too long subjected to the terrors of Dostoevsky’s bleak existentialism.


Gardner compels us to ask – what if Grendel was not the aggressor in this classic tale after all?


What if Beowulf was the real lunatic, the one to be feared all along?


Before the current crisis is over, it may be time to change our perspectives on a range of CX-related industries – from the outsourcing of different business processes to the contact center itself. Everything from the offshoring of business services to automation may look quite different to us compared to business as it was conducted before 2020.


And yet, it's also easy to see now that the past held hints for us all along.


Just two years ago, in 2018, I did a series of speaking engagements in multiple cities with contact center systems company Genesys, entitled, “The Dangers of Standing Still in the Contact Center.” I spoke about how quickly the world is changing, about the impact of exponential technologies, and that modernizing the contact center is an essential exercise in future-proofing and accommodating the unknown. To remain competitive, I told audiences, organizations would need to be poised for rapid and almost constant change.


Covid-19 has hit us all like a storm few had imagined. What companies can do now is resolve to take new perspectives and move aggressively to accommodate themselves to a changed world.


Ultimately, the best leaders will make no excuses and take full responsibility for pushing necessary change throughout their organizations.


Dante says it best in The Divine Comedy:


If the present world go astray, the cause is in you, in you it is to be sought.



Image: Domenico di Michelino’s fresco painting of Dante holding a copy of the Divine Comedy next to the entrance to Hell and the seven terraces of Mount Purgatory and city of Florence, with the spheres of Heaven above (from Wikipedia).

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