Key trends that define the business landscape

The recent global crisis has forced many companies to accelerate their plans for digital transformation. A study by technology firm IFS showed that 70% of companies in 2020 were planning to increase digital investment. The more disruption a company faced, the more they were likely to spend.³ Much of this was caused by the unique nature of the situation, which at one point saw 60% of the world under lockdown conditions.⁴ There is also an understanding that in the post-pandemic economy there will be a need for greater efficiency and competitiveness, as the world works itself out of a prolonged slump.

However, despite these advances, talk of a digital-only future remains premature. The reality is that the vast majority of companies still have a lot of paper in their processes and use both print and digital channels. This will be the case for many years. Research by EY showed that only 32% of retail banking customers were paperless, and for general insurance customers it was just 18%.⁵

As a result, while many companies are investing and building teams to enhance their digital capabilities, it is important that they continue to prioritize their print operations as well. Otherwise, they risk alienating large sections of their customer base who still prefer print communications. For many people, print is still the most convenient way for them to receive information or communicate with customers. It is vital that companies find a way to make their print operations more efficient and cost-effective, whilst also using them as a way to maximize customer experience, drive upselling and create loyalty.

Although paper and physical communication channels are still important, recent investments in digital capabilities represent a remarkable opportunity. By 2025, millennials will account for three-quarters of the global workforce and are set to receive $68tn in inheritable wealth by 2030.⁶ This demographic, which grew up with the internet, expects effective digital solutions across a range of products, from money management to mortgage applications. Being able to offer a smooth, integrated experience across different channels will put companies in a strong position to win these consumers and keep them over the long term. If they can achieve this while still servicing and maximizing their traditional customer base, then they will be well set up for success. After all, baby boomers, those born just after the Second World War, still outspend millennials and account for over 50% of all consumer expenditure.⁷ They will continue to be the dominant economic force over the next decade. However, the crisis has accelerated the digital shift. According to research from KPMG, those aged 45+ have increased their number of digital interactions.⁸

Recent events have emphasized the importance of companies building an operational infrastructure that is resilient and able to withstand major shocks. If offices are forced to close, or one country suffers from a crisis, then it is vital that an organization is able to continue its core operations with minimal disruption. But this will take more than just digital transformation, it will take fundamental operational transformation. One way of doing this is by outsourcing high volume transactional work to partners with an interconnected global infrastructure. Shared service factories leverage a combination of technology and process expertise. By standardizing and digitalizing processes, they can rapidly shift workflows between different centers in the event of a local disruption, sometimes within hours.

 

This enables companies to de-localize their operations. They are no longer reliant on a single HQ or operational center, which may be vulnerable in the event of a disruption. Due to their built-in redundancy and work-load balancing, shared service factories can continue to operate without any drop in efficiency or service level agreements. As the regulatory environment continues to evolve, this model also allows companies to remain compliant across multiple countries and geographies, and future-proof themselves against new compliance requirements.