Innovation through the digital disruption of customer service

| Article

It’s often said that necessity is the mother of invention. Customer-service organizations are continuing to prove this is the case as they respond to a customer-driven charge towards digital interactions with service providers across industries and geographies. They’re reinventing business models that improve productivity and customer experience, and by doing so are positioning themselves for success in the next normal.

What lies behind this reinvention is a set of factors common to many functions’ digital progress in the past 18 months—indeed, recent data show that we have vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks. At the same time, incumbent companies are experiencing pressures on their systems and processes from remote working, lockdowns, and the “great attrition” as workers increasingly leave the labor force, often leading to blowouts in service times, poor customer experience, and subsequent customer churn.

Additional pressure comes from digital natives that are setting new standards in seamless online service. While these companies scale and run ahead, existing companies are struggling to speed and scale their own digitization efforts.

To better understand companies’ experiences with the digitization of customer services, we conducted a global survey of the challenges faced by service-led organizations across industries and geographies, speaking to hundreds of business leaders in the process. In addition to these conversations, regional forums provided a snapshot of organizations’ most recent experiences. These far-reaching discussions revealed a set of four shifts that are increasingly critical for any individual organization seeking to navigate the challenges and seize opportunities for renewed growth.

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Four shifts from the Fourth Industrial Revolution

Each of the shifts illustrates how rapidly the technologies of the Fourth Industrial Revolution (4IR)—such as analytics, artificial intelligence, and robotics—have penetrated the delivery of services.

Rapid and extreme digitization

A boom in disruptive technologies that leverage greater volumes of data and analytics than ever before is making it possible to truly digitize end-to-end processes. Digital solutions, such as voice-to-text technology, are being adopted up to 25 times faster than before the COVID-19 pandemic, with executives refocusing strategy and investment towards technology. Early signs suggest that more than 80 percent of customer interactions could move to digital in the future as we reset our ways of working.

Nowhere is this more apparent than in the medical sector. Postpandemic, companies are three times more likely to conduct more than 80 percent of their customer interactions digitally—such as through telehealth visits. Michael Fisher, Cincinnati Children’s Hospital CEO, said that his teams went from 2,000 telehealth visits in all of 2019 to more than 5,000 a week in 2020.

In another example, a telco in Asia-Pacific applied cutting-edge technology and automation to augment the capabilities of their large field-based workforce. The changes enhanced the agent experience while also leading to happier customers—and productivity metrics (such as job duration and right-first-time rate) have continually improved. Underpinning this development is the new wave of automation and analytics technologies to address pain points across the back office and in the field. Combined with conventional digital-collaboration and agile-workflow tools, these tactics are minimizing repetitive, tedious tasks, so that workers can focus on the highest-value activities in a supported, collaborative way, wherever they are.

The ascent of contactless operations

More organizations are combining human, AI-enabled, and digital customer support across all of their channels, a change that 67 percent of surveyed executives expect to stick postpandemic. With vastly enhanced access to data and real-time analytics, companies can achieve personalization at a scale that was never possible before. The changes have major implications on both the offer and the servicing sides of the business.

For example, a leading wireless network operator rapidly implemented a new tool that combines video chat, augmented reality, and self-service capabilities to help resolve customer issues remotely. With results including resolution rates increasing to 90 percent, improved customer satisfaction, and reduced cost of servicing, the benefits of these moves to both service levels and cost are quickly apparent. In similar fashion, an international bank was able to keep its relationship managers operating in a new remote-only model without disruption to client service or employee capability, thanks to better remote working and collaboration tools.

The virtualization of workplaces

Organizations are rapidly adapting their operating models to enhance flexibility in where and when their employees work, with individuals and teams now tailoring their working week (and re-tailoring as conditions change) to suit their individual needs and preferences. While this response was initially triggered by the need for remote working to ensure business continuity during lockdowns and quarantine periods, the use of online collaboration tools has now become the norm. There are still challenges to overcome (including technology resilience and connectivity, employee wellbeing and burnout prevention, compliance, and quality management in remote settings), but leaders are increasingly experimenting with bold moves to embed these operating models in their next normal.

Global companies across sectors are regularly making headlines with their approach to remote working, but there is a risk of a growing disconnect between employers and employees about the return to the workplace. Hybrid approaches are growing in popularity, but for some, remote working is here to stay and enabling significant reductions in real estate. For example, an insurance company has decided to make the move to remote a permanent one, saving significant costs as it closes more than 75 percent of its offices and moves 98 percent of its staff to working from home. It is doing this without experiencing any falls in productivity, while also gaining a new competitive advantage for talent sourcing, as discussed in the next shift.

Rise in alternate sources for talent

Dislocations in the labor market are becoming rapidly apparent in multiple industries as companies struggle to fill vacancies at all levels, driven by increased demand for digital and specialized skills and the shifting preferences of a wide range of workers towards independent work.

As the battle to recruit continues, organizations are becoming more innovative in how they source skilled talent pools, including the gig economy and crowdsourcing. The moves have implications both at the front line, thanks to improved cybersecurity and digital marketplaces, as well as in specialist positions, as global experts become available on demand instead of as part of a dedicated workforce. We’re already seeing reports that specialist marketplaces are being developed to allow companies to blend traditional and as-needed labor to increase capacity and leverage niche skills on demand.

An on-demand revolution in customer-experience operations?

An on-demand revolution in customer-experience operations?

A look to the future

Together, these shifts are creating an industrial revolution in services. They could reshape the operating models of the future and enable decades-old companies to reinvent themselves: from rigid organizations with manual processes and systems to digitally enabled, agile, flexible workplaces that leverage the power of data and analytics to enhance customer experience and create more business value.

The theory is matching closely with the reality experienced in companies’ boardrooms and on the front line. More than 75 percent of digital operations leaders we spoke to at a recent Asia-Pacific forum expected customer services to be fulfilled via online channels in the future, and around two-thirds thought most of their operations would be conducted virtually. Moreover, the productivity benefits are expected to be large—more than 25 percent above today’s levels.

For companies that act fast, there is a one-time opportunity to harness disruption and ride the digital wave, setting up their customer and back-of-house operations to deliver enhanced experience and productivity benefits to lead the competition in the next normal.

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