More eggs, bigger basket

Digital and customer transformation programs have taken a sharp turn to delivering hard, short-term cost-out or revenue-up for investment to proceed in the biggest shift around customer management in a decade of digital “transformation”. That’s the upshot of the top brass at the $1.3bn Publicis Sapient tech and digital business advisory firm, owned by French marketing services holding company, Publicis.

On the tech stack front, most enterprise-scale firms have “bought everything on the menu and none of it’s connected, none of it’s doing what it needs to,” Robinson told Mi3 in a joint interview with Vaz. “We're seeing projects being delayed or a real laser focus on the business case and what can be pushed back and what absolutely needs to be done. It's not different to what's happening globally, but it is particularly pronounced in Australia right now. Not everybody is accepting that the economic normal that we're living in right now may very well be our economic normal for some time, and that the business cycles that we've enjoyed over the last 20 or 30 years will not be the kind of business cycles we're going to be enjoying into the future. It is going to be more tumultuous, more challenging.”

At a global level, Vaz concurs with his Australian lead – for the past year or more, he notes a collective swing in sentiment among company leaders to drive harder, faster, shorter value from a decade of tech and resource investment in “customer transformation”. 

“Historically, you could fund customer experience work, even if it didn't tie specifically to exactly how you were going to drive growth or how you were going to take cost out of the business because it was ‘the right thing to do,’ Vaz says.

“What we're seeing now is there's got to be a steel thread from ‘yes, this is actually going to make things better for the customer’ to does that mean their basket size is going to increase? Does that mean they're going to book more flights? Does that mean they're going to spend less time with my call centre agent trying to resolve an issue? And unless it's doing those sorts of things that go all the way through and connect to actual business outcomes, there’s not much interest. Because there were a lot of things that got labelled under the context of 'a better customer experience' and may or may not have actually driven specific value to the customer or to the organisation”.

Vaz says for the past five years or more the idea of transforming a business to a customer focus was “primarily driven in the context of envisaging a different future,” he says. “What we've seen over the last couple years has been real pressure in the context of how are these businesses actually going to deliver value in the short to medium term?" For customer programs to proceed today, that “steel thread” running through the business case demonstrating short-term cost-out or revenues up is no longer optional, Vaz says.

AI wedges outsourcing rivals 

Moreover, the arrival of AI is bringing “new meaning to what transforming a business really means” – particularly for Publicis Sapient’s own competitive set in business consulting. Vaz and Robinson say their larger rivals are, for now, trapped.

Vaz cites the frustration expressed by a large healthcare CEO in which Sapient deployed a bespoke AI build for a specific global legal and marketing business function which saved the company $250m annually. Vaz said the CEO was confounded on how Sapient could deliver a bespoke AI solution that delivered an immediate $250m cost-out benefit when he had several other “major” consulting firms “all with 3,000-5,000 people in my organisation … why aren’t I hearing this from my IT partners who have been building a lot of these tools?” Vaz recounted.

His and Robinson’s response is the same – the business model of consulting firms offering technology and business process outsourcing is based on human headcount. AI, say the pair, renders the outsourced efficiency pitch – and model – redundant.

“I made the choice to come across to Sapient – that was a very deliberate move on my behalf,” Robinson says. “And the thing that really appealed to me is what Nigel was saying a bit earlier on – those large head counts delivering business process outsourcing, technology outsourcing as an anchor that whether you mean to or not, is going to disincentivise you from doing the right thing by the client.”

Transform thyself

The practice that for so long has proven lucrative for some consulting firms is now a transformation challenge for the transformation advisors.

“We’re not set up that way. It’s not our business model,” says Vaz, who prefers and alignment with the Navy SEALS – a faster, smarter firm with less legacy baggage than his bigger rivals. But Vaz won’t be drawn on whether the competitive advantage he sees for Publicis Sapient has had a direct benefit to his business. 

“I don't think we can quantify that. What I will say is it's certainly an opportunity as we look forward because it's not just the legacy [consulting firm] issues. It's also about the business model and what client organisations are looking for. We're trying to build something that's more future-facing, given where we’ve come from. We’re not a business that has built itself on hundreds of thousands of people…”

Both are quick to caveat the collective smarts inside their larger consulting rivals are more than sufficient to re-engineer a lucrative part of their business – but pain is still coming.

“I'm not betting against those organisations,” says Robinson, “but I think we have the ability to really create something very innovative and very-client focused – and that's what we're going to do.”