Artificial intelligence has come a long way since the early days when it first appeared as a storytelling device in works of fiction. This gave rise to the popularity of thought-capable artificial beings, inspiring innovators to make this unique concept possible. Now, it seems that a synthetic intelligent machine network bent to end the world isn’t far-fetched thanks to the wonders of technology.
Having antagonistic cybernetic organisms running amok is a future we’re not too keen on having, so thankfully AI is being used in more constructive ways such as its applications in business. It can be used for the automation of frontline processes, boost operational efficiency, and handle tough data management issues.
Overall, AI helps eliminate human error and automates processes to make them quicker and more efficient to execute continuously without breaks. The potential benefits are astounding, but it seems that we still have a long way to go in terms of having AI take on more complex tasks. Despite the long road ahead, we’re making headway through advancements in AI technology.
With all the wonderful benefits AI could potentially bring to the table, it raises a couple of questions: Is it overhyped? Is it also possible to have automation working seamlessly with humans in business processes, particularly customer service? That’s what we aim to find out.
AI: Is it all hype?
AI may be massively beneficial to businesses across many industries, if not all, but it certainly poses a threat to the human workforce. As a business owner, saving on costly operational expenses is always favorable to an organization. With AI-powered robotics process automation (RPA) paving the way for cost-efficient customer service, you would want to make the big switch. However, this would mean that you may have to get rid of a percentage of your workers in the process.
In a survey done by Deloitte, 53% of respondents have already started automating tasks formerly done by humans. This is expected to increase by 72% by next year, proving that businesses are all for RPA. According to another study done by investment bank UBS, the AI industry is set to be worth a whopping US$180 billion in 2020. Even former Google exec and ‘AI Superpowers’ author Kai-Fu Lee predicts AI will replace 40% of jobs in 15 years.
These numbers seem to prove that AI is on its way to take over profit-driven companies who want to keep abreast of the competition. Still, many believe that it will create more jobs than it terminates. And if there are indeed job losses, perhaps it won’t be as disastrous as expected. The consensus is, some automation would help workers by increasing productivity and opening them to focus on more creative tasks instead of routine ones.
There is a great dichotomy presented by automation: on one hand, business owners are all for RPA for the purpose of saving money and boosting profit. On the other, they’re likely going to be facing a backlash from workers. Perhaps this may be the reason why some keep their automation plans on the down-low. However, some companies like Foxconn and JD.com make no attempts to hide it.
To have the best of both worlds, a common strategy involves the ‘reskilling’ of workers whose jobs have been eliminated by automation. For example, in an effort to keep its personnel, Accenture claimed that the company trained 17,000 employees to work in a different department when it automated back-office processing jobs. Amazon CEO Jeff Bezos sent a letter to shareholders saying the company trained 16,000 warehouse workers in high-demand fields. Perhaps the key is striking the right balance.
The Importance of Human-Centered Customer Service
Automation in customer service may have cut processing time, but with the absence of a real human providing the service, it lacks the emotions needed to connect to customers. They can resent having to deal with an AI-driven machine since empathy is an essential part of exemplary customer service. In fact, a Harvard Business Review study found that emotionally connecting with customers reduced attrition and improved advocacy.
A poorly designed workflow can also hurt your automation system, particularly if it makes them go around in circles instead of addressing the concern immediately. This happens when your chatbots aren’t able to understand a customer’s issue. So, if call routing leads to repetitive conversations, an automated system is more trouble than it’s worth.
Ultimately, this will have a negative effect when your customers identify your customer service with your brand. A poorly configured automated system or a lack of human presence—or both—will leave them frustrated and taken advantage of, eventually causing them to disengage with your brand altogether.
Keep in mind that dissatisfied customers are louder than contented ones, making them more visible to your potential customers. This will result in bad publicity that’s eventually going to sink your brand’s reputation.
Wrapping Up: Can Your Business Get the Best of Both Worlds?
Yes, AI-powered automation and human-centered customer service can and should co-exist.
There’s no question that AI-powered automation in customer service is ideal in providing a level of responsiveness that isn’t humanly possible. Indeed, AI is a game-changer in enhancing customer experience through its ability to deliver relevancy and individualism while it increases marketing accuracy. With the right analytics, it can even understand your customer’s needs before they even realize them.
A correctly configured AI can run an RPA show with customers not realizing they’re communicating with a machine. While this kind of set up can deliver quick and precise service, it still has its limits. This is where the human touch comes in.
Businesses can make RPA and humans work seamlessly by having a pre-programmed robot complete a designated task. If it reaches a point where it can no longer address a customer’s concern due to its limited capacity, a human worker can step in to provide more complex resolutions.
Basically, RPA will be left to handle the most basic queries before handing the task over to human agents to complete the request. It’s a win-win situation for both the business and its human workers.
If you’re looking to achieve your bottom line quickly and inexpensively, outsourcing is the way to go; but this method will only work in your favour if you do it correctly. To be more exact, you must be able to find the best talents and utilise the most advanced technologies. Of course, it would also be favourable to get the help you need in the most cost-effective manner.
However, in this data-driven era, not doing appropriate research before making a critical business decision is a huge mistake. Gut-feel is still relevant, but data will be the one to back up your choice through logic and facts as established by studies and surveys—and that includes decisions regarding your outsourcing efforts.
Outsourcing refers to contracting third party entities to do specific business functions for your organisation. One of the most common reasons why companies outsource is to avoid certain costs or cut expenses, but there are also those who choose to do it to meet their strategic objectives.
In this post, we compiled all the latest data and statistics about outsourcing to help you make informed decisions for your business. If you’re still undecided on whether to implement it for your organisation, or if you want to update your current strategies based on what the trends are, the latest figures and facts about the global outsourcing industry presented here will hopefully give you an idea on which path to go.
Use this table of contents to quickly jump to a specific category.
In terms of value, approximately 84.2% of outsourcing deals originated from the United States, followed by the United Kingdom at 5.2%. Spain and Australia were two other key outsourcing markets. (KPMG, 2017)
Ukraine has the most number of IT professionals in Central and Eastern Europe, with a workforce that is expected to rise to over 200,000 by 2020 (Ukraine Digital News)
Top Outsourced Countries Based on Financial Attractiveness, People Skills, and Availability, and Business Environment Scores (AT Kearney, 2017)
Outsourcing in India
In 2017, the IT-BPO industry in India had an aggregated revenue of $154 billion. (NASSCOM)
40% of India’s workforce would need to upgrade their skills over the next five years to accommodate emerging tech like robotics, big data, AI, etc. (NASSCOM)
Outsourcing in Malaysia
Outsourcing in Malaysia accounts for 1.7% of the total Asia-Pacific market. (Time Doctor)
Malaysia’s BPO market is expected to grow at a compound annual rate of 7.9% by 2021. (Time Doctor)
Outsourcing in the Philippines
The outsourcing industry in the Philippines contributes to 10% of the country’s economy. (Time Doctor)
The BPO sector in the Philippines had a 17% growth and created 1.3 million jobs in 2016. (Time Doctor)
34% of the outsourcing industry in the Philippines is comprised of knowledge process outsourcing -– making the country a top choice for higher-value services like animation, content production, and legal and financial services. (EnterPH, 2017)
III. Service Type
Here are specific numbers for the global IT outsourcing (ITO) and business process outsourcing (BPO) industries, two of the most common forms of outsourcing today.
Information Technology Outsourcing
Revenue of the global ITO industry in 2018 is at $62 billion. (Statista)
Total budget rose from 10.6% in 2016 to 11.9% in 2017 (Logicfy)
Large organisations increased the percentage of budget from 6.3% to 8.7%.
Midsize increased spending average from 4.7% to 6.5%.
Small companies spent 7.8% of their IT budget in 2017, from 6.7% in 2016.
Business Process Outsourcing
The revenue of the global BPO industry in 2018 is at $23.6 billion. (Statista)
The global market for BPO will reach $262.2 billion in 2022, which may be due to the cost benefits of back-office administration, and the development and availability of new technologies. (Global Industry Analysts, Inc.)
US could capture a dominant 41.9% share.
Asia-Pacific could lead with a compound annual growth rate of 8.5%.
IV. Outsourced Functions
These numbers are based on specific types of jobs or functions within a company that are outsourced.
The estimated market size for global outsourced customer experience in 2018 is at $75.1 billion, which is expected to rise to $82.6 billion by 2020. (Statista)
In terms of global deal value, the defense sector tops the list with a total deal value of $100 billion in 2017. It is followed by the government and insurance sectors, with a total deal value of $75 billion and $52 billion, respectively. (KPMG, 2017)
The healthcare sector saw the most significant outsourcing growth in 2017 by up to 36%, followed by the human resource sector (32%) and finance sector (30%). (Outsourcing Insight)
In 2018, only 9.4% of the average IT budget was allocated to outsourcing, which is lower to the 2017 figure of 11.9%. This is due to IT organisations relying on their in-house talents to meet service goals, with these reasons also factoring in. (Computer Economics, 2018)
Advances in technology have helped firms enhance their productivity and maintain high quality at a lower cost. The rise of automation paved the way for developments like robotic processes automation (RPA) and AI, which all provided corporations with a way to complete repetitive tasks faster and more efficiently.
It may also lead to a bigger supplier margin, cost efficiency for buyers, and enhanced revenue with reduced liability towards staff. In effect, automation may be well on its way to replace human talents and will likely diminish the need to outsource skills.
More than 1 million outsourced jobs in the US, Poland, India, and the Philippines are at risk (A.T. Kearney, 2017)
1 new automation management position is created with every 4 jobs lost (A.T. Kearney, 2017)
Higher-level jobs that involve creative tasks are on the rise since these cannot be automated yet. (AT Kearney)
Another trend that can improve efficiency along with cost-effectiveness is the Cloud. It also allows corporations to deliver innovative products and services to customers depending on the latest market trends.
95% of SMEs have adopted cloud technologies for outsourcing purposes. (RightScale)
VIII. Privacy and Security
In light of recent hacking scandals and other problems with data breach and misuse, there’s a predicted focus on privacy and security. Even more so in outsourcing, where firms often relay confidential business information to a third-party staff. The smallest problems with data could mean massive loss and damages.
Companies worldwide are expected to spend an estimated $75.2 billion on protection and security. Other significant key investments include identity and access management ($4.7 billion) and network security ($11.7 billion). (Gartner)
Most organisations use third-party vendors for about 20% of their security in 2017. (CSO Online)
People share almost everything on social media, sometimes, a little too much. Admittedly, it’s the stories about a company’s wins and gaffes on customer service that catch the attention—and rightfully so. After all, everyone is a customer one way or another.
You may be judging the company by its hashtags nowadays, but there are legitimate organizations that measure customer satisfaction with proper metrics, such as the US American Customer Satisfaction Index (ACSI), which ranks companies based on customer evaluations of their goods and services. Aside from US-based firms, they also rank international organizations with substantial US market shares.
Outside of the ASCI rankings though, the following companies have made waves for raising the bar for customer service:
Over the last few years, Chick-fil-A saw many ups and downs. But, there are still those who keep coming back for their legendary chicken sandwiches. It may also be because the chain values customer experience in the simplest way possible. According to QSR magazine, Chick-fil-A is statistically the most polite restaurant business chain.
Survey reveals that their employees are the most likely to say “please” and “thank you,” and smile at drive-thru customers when compared to other fast-food chains and that they’re the second best in “pleasant demeanor.”
2. Amazon (Prime)
ACSI said that retail giant Amazon “has mastered the combination of value, satisfaction, and delivery efficiency that consumers love.”
One of their breakthroughs is Amazon Prime, a premium membership that comes with perks like free shipping (for same-day, 2-day, and 2-hour deliveries) for eligible purchases and shipping addresses, free streaming of movies on Prime Video, exclusive shopping deals, and more.
Amazon’s drive is to serve the needs of their customers. CEO Jeff Bezos has said, “Even when they don’t yet know it, customers want something better, and your desire to delight will drive you to invent.” Bezos has been known for being meticulous with customer service that he reportedly sat through a 5-minute wait during a customer service call to understand what their buyers are experiencing.
Learn more about Amazon’s efforts toward a better customer experience by reading our recent feature on the Four Comma Club.
Another retail store, Zappos, goes above and beyond in offering excellent customer service. They’ve been known to surprise customers as ways to connect and engage. There has been an instance when a Zappos employee sent baby blankets to a customer when, during a call, they heard a crying baby in the background. They also make sure to reach out to the audience by hosting events and concerts.
4. Trader Joe’s
Aside from being one of the US’ top employers, Trader Joe’s is also a favorite among buyers. Joe-Joe’s Cookies may be one of the reasons, but ACSI commented that their private label items and organic produce also helped the brand propel its growth.
Their loyal customers love that Trader Joe’s employees are focused on them, creating a personalized experience for each buyer at every local branch. This focus has allowed them to innovate their fast checkout lanes and product recommendations.
5. The Ritz-Carlton
Legendary hotel chain Ritz-Carlton’s service policies are as sophisticated as the hotel itself. Group President and COO Herve Humler believes that employee engagement is the key. Their mission, “We are ladies and gentlemen serving ladies and gentlemen,” proves that the value they give to their employees is also the value that their customers will experience.
Many great customer service stories have come out of the Ritz-Carlton—in fact, books have been written about it. One story came from author John DiJulius, who left his laptop charger in his guest room at The Ritz-Carlton Sarasota. He was surprised to find that the hotel had already air-packaged the charger the next day, even before he got the chance to call them about it.
6. Harley Davidson
The motorcycle manufacturer treats every customer like family—specifically the Harley Owners Group (HOG). Anyone who has bought a Harley motorcycle is encouraged to join this group of 300,000-plus members. HOG is more than just a fan club, though, as it connects riders with other riders and the brand itself to help with their bikes’ maintenance.
A big part of good customer service is knowing and offering what your customers want, until such time that your product or service becomes an integral part of their lives. Spotify CEO Daniel Ek found that people want a better way of listening to music without resorting to piracy, and so, the music streaming service was born.
As an added service, Spotify curates customized playlists and radio stations for each listener based on their listening preferences. In addition, their customer service makes interaction more fun. For instance, they reply to Twitter queries with customized playlists. This makes them more in-tune with the current, internet-savvy generation.
Make Your Own Customer Success Story
Today’s customers are more informed than ever thanks to the information readily available to them, making it a lot easier find the brand they would rally behind. However, this also gives them the power to warn everyone of any company who may have been failing in customer support.
Now more than ever, it’s crucial for businesses to fine-tune their customer service efforts and address the needs of this new generation. There will be more customer service success stories—as well as horrors—for years to come; don’t let yours be a bad one. Make sure to level-up your customer service efforts this year.
Podcasts are a unique way of listening to information on the go. It gives lecturers a platform to broadcast engaging audio content and make it available to their subscribers 24/7. For many business professionals, this added convenience is what makes podcasts a great way to stay updated with the latest IT and outsourcing trends.
Let’s take a look at why podcasts are an essential tool in your business arsenal and a list of five business podcasts you should start listening to right now.
Why Should You Listen to Podcasts?
As of 2018, there are over 630,000 podcasts available. The numbers are continuously climbing, and for good reason. Podcasts are easy to create and consume—a win-win for both educators and learners everywhere. Anyone with decent recording equipment can start sharing their knowledge to the world, and anyone interested can listen to podcasts from practically anywhere, on any device—whether it’s on a laptop at work or on an Apple Watch while going for a run.
Here are just some of the benefits of this medium:
The content is easily accessible and always available. Your listeners can look through your library of topics, pick one episode, and listen to it wherever and whenever. Stats show that 49% of podcast listening is done at home, while 22% is done in the car.
It allows subscribers tomultitask. Listening to a podcast demands way less from its audience than if they were made to read an article or watch a video. Much like listening to music, you can tune in to a podcast even if you’re walking down the street or tidying up your desk.
Podcasts can keep your audience’s attention for longer. Eighty per cent of podcast listeners listen to all or most of the podcast episode. If you think about it, it’s easier to listen to a 30-minute podcast vs. an article with the same reading time.
That being said, there are many valuable podcasts today that leaders in business can learn a great deal from. Without further ado, here are some of the best podcasts you can listen to covering various topics in business, IT industries, and outsourcing trends.
What it’s about: Exponent is hosted by Ben Thompson and James Allworth, two guys who have in-depth discussions about the current developments in tech and its impact on society. They’re both very knowledgeable in their fields and sometimes have different views on subject matters, but they respect each other’s opinions. The healthy debate is refreshing to hear and adds an educational value for listeners.
This show touches on many industries and is easily digestible and relatable even to those who don’t have a business in tech—as the show philosophizes, everyone is affected by the digital world in some way.
This episode dives deep into the massive data breach Facebook had in 2018 and its impact on their users. Data privacy is a huge concern in tech and all business industries today. Many companies encounter security attacks regularly, and the successful ones hurt those targeted companies badly. Listen to their thoughts on data privacy, how apps handle people’s information and the dissection of Facebook as a platform.
What it’s about: The International Business Advice podcast has been airing since 2012, but it doesn’t release episodes as frequently as some of the others on this list. However, the content you get is always relevant, timely, and meaty—the show doesn’t miss a beat.
It dives into topics like outsourcing, international markets and market entries, and other pressing global business topics. The podcast also gives a lot of actionable tips to listeners that can help them strategize in their business. The approach is light, fun, and informative.
Recruitment is one of the biggest struggles of most companies today. The job market is changing, and so are the skills that people need to excel in their positions.
In this podcast, the discussion centers on the importance of investing in great people for your business, as well as the impending challenges global companies, whether seasoned or new, may face in adding more people to their team. Whatever your industry, this is a very relevant topic and an important one to ponder at that.
What it’s about: If you want a show that picks the minds of brilliant people in different fields, then this show is for you. Each episode of IT Visionaries brings focus to an accomplished personality in a specific industry, where they share their stories, learnings, and struggles amidst all the technological innovation. It’s an interview-style platform with inspirational themes, but they also don’t hold back on the realities of business. This makes it a great learning opportunity for new business owners who want to get insight into the strategies of successful entrepreneurs.
The show is a series, meaning it’s better to listen all the way from the first episode and follow along until you reach the most current one. Nonetheless, there is a recommended episode for you to listen to.
Have you ever wondered what it’s like to be at the center of everything in the IT industry? IT Visionaries conducted an exclusive interview with Alvina Antar, the Chief Information Officer of Zuora. Antar shares her struggles in becoming a CIO and the obstacles she encountered as the world slowly transitioned into a “subscription economy.” She also discusses the evolving role of IT today and how information officers need to become visionary to thrive.
What it’s about: This podcast tackles everything and anything under the sun about the BPO industry in the Philippines! The Philippines is known to be one of the most significant contributors in the offshoring market to date, with countries like the US, UK, Canada, Australia, and New Zealand being the top countries who outsource Filipino staff.
Each episode invites CEOs or reps from various international companies who share their outsourcing strategies to their audience. If you’re looking to get the pulse of the Philippine BPO industry, this is an excellent podcast to tune into for more information.
Dive right into the latest episode of the podcast! John Jonas, the US-based creator of OnlineJobs.ph, discusses the history and journey of his virtual job search platform for Filipinos. Jonas didn’t intend to start an outsourcing website, but he’s proud of where his project has reached today. He fondly recalls how it started, who the target audience of the website is, as well as what services they provide. To date, OnlineJobs.ph has more than 500,000 Filipino resumes and over 100,000 global employers posting job ads in it.
What it’s about: Hosted by Andreessen Horowitz, aka a16z, this podcast discusses everything from industry trends, budding tech, new players in the business, and the continued evolution of digital culture. With their tagline “software is eating the world,” the podcast also revolves on machines and robots taking over humanity and the world. Horowitz frequently invites industry experts and business leaders who bounce ideas with him on topics that are relevant, whether you have a small business or a large enterprise.
If you’ve frequently asked yourself if robots will take over your work in the future, then you may want to start with this thought-provoking episode. Several big names in the industry gather and talk about the introduction of AI in their business ops in the form of chatbots and robots, the new skills needed in the future, and what unique needs companies will be looking for in humans and machines alike. The future is here, and the need to adapt is big.
There you have it: five diverse and informative podcasts you can tune into to get a broader sense of outsourcing, IT, and business trends globally.
It can’t be stressed enough how continuous learning is one of the most critical factors in making successful business decisions. Listening to the podcasts above can give you time to digest the fast-paced changes in the tech scene and how your business will feel its impact. It’s a healthy practice to stay updated with news and trends in IT as your company will likely grow with the tech advancements to follow.
Which of the podcasts above are you going to start listening to regularly? Are there podcasts that you already tune into but wasn’t mentioned in the list? Let us know in the comments.
The benefits of outsourcing are aplenty – reduced costs, streamlined operations, increased flexibility for your business, and more. With fast-paced innovations in tech, the outsourcing industry is poised to evolve, too. Nowadays, the extent of what you can outsource is constantly increasing as it’s no longer limited to IT functions or customer service. From accounting to healthcare and retail businesses, more and more companies are utilizing outsourcing services now.
This makes it important for companies to recognize which trends can help them meet the business goals of their organization and their clients, with focus on technology, value, and methodologies. Here’s our top 4 list of outsourcing trends that may impact your business in 2019:
(Scroll further below for a more in-depth discussion on each trend.)
1. Growth of robotic process automation (RPA)
As the name implies, robotic process automation (RPA) is a technology that deploys bots with artificial intelligence and machine learning capabilities to perform recurring tasks through automation. This is possible thanks to technologies becoming more sophisticated, freeing human workers from menial jobs to attend to more complex tasks.
RPA can speed up your response times significantly. As such, outsourcing companies and third-party service providers leverage RPA and human customer service agents to make sure that queries, complaints, and feedback from users of your product or service are immediately directed to a channel or recipient. The initial contact with customers may be automated, but it’s comforting enough from a customer’s point of view to know that their message doesn’t fall on deaf ears.
The functions of RPA are more far-reaching than handling messages from customers. RPA is also ideal for high-volume tasks, such as data entry involving financial transactions. This is due to its ability to analyze the data being received from software-based processes based on a set of rules, and then create triggers for appropriate actions, responses, or communication with other systems. Of course, human intervention will not be lost, as people will still be handling cognitive-based tasks and make the appropriate judgment calls.
Another factor that makes RPA a popular outsourcing solution is that it integrates seamlessly with multiple applications that you’re already using in your day-to-day operations. Thus, there’s no need to build new infrastructures as this activity could disrupt your workflow or affect the timeliness of your deliverables.
2. Doubling down on data privacy and cybersecurity
Data breaches and other cybersecurity threats are major risks that you need to prepare for. When your IT networks are compromised, your business stands to lose significant amounts of money to production downtime, system restoration work, and loss of customer trust, to mention a few.
A recent study by Computer Economics found that as more and more companies outsource their tech and data projects, service providers are working on the double to ensure the robustness and integrity of their IT infrastructure, including data repositories. In fact, 48% of respondents from the same study claimed that they’re increasing IT security outsourcing to boost their defenses. They’re making their IT environment less susceptible to vulnerabilities through 2-factor authentication, one-time PIN, and other security protocols.
Globally, there’s a drive to protect and preserve customer data. A case in point is the General Data Protection Regulation or GDPR. The GDPR is a law that was established by the European Union (EU) to guide businesses and industries around the ethics and legalities of handling customer data.
With the GDPR in effect, doubts or uncertainties about handing over proprietary and customer data to third-party companies are waning among outsourcing clients. This is due to the fact that companies found to be violating the EU GDPR may face heavy fines from industry regulators, not to mention the possibility of dealing with negative sentiments from users of social media and other online platforms.
In light of historical cases of data leak and the GDPR, cybersecurity will likely move up the priority list of many businesses.
3. As-a-service will increase for larger businesses
As-a-service refers to making something available to customers in the form of a service. This involves cloud computing or the practice of using a network of remote servers hosted on the internet to store, manage, and process data, rather than a local server or a personal computer.
As a business tool, cloud computing enhances office productivity by streamlining your processes through cloud computing service models. They are customizable according to the needs of your business, too.
As-a-service comes in many forms, but here are the most common:
Software as a Service (SaaS) is the most common as-a-service cloud solution for businesses. Most SaaS applications do not require you to download or install the app on your end. However, the vendor manages your data, servers, networking, and a host of other technical issues. Google Apps is an example of SaaS.
Platform as a Service (PaaS) refers to when you use a platform hosted by the provider, so your developers can build a software specific to your business requirements. The platform has built-in software components to help you in designing your software, and the provider takes care of your operating systems, software updates, and infrastructure. The Google App Engine is an example of PaaS.
Infrastructure as a Service (IaaS) is when you outsource the management of your servers, hard drives, virtualization, and network without physically maintaining them. Due to the scalability of this service, you can purchase hardware resources on-demand. The Google Compute Engine is an example of IaaS.
If 2015 to 2018 figures (shown above) will be used as basis, as-a-service models will continue to be in demand among businesses. While they are mostly associated with enterprise businesses that need flexibility and scalability in terms of controlling their systems and infrastructures, they can also benefit startups that don’t have the resources to invest in their own software or hardware.
4. Higher demand for well-rounded IT workers
On its own, the IT discipline is complex. IT staff have to specialize in several skill areas, such as system troubleshooting, software development, and loads more. And yet, the IT industry faces newer and bigger challenges nowadays with the speed that emerging technologies are being introduced. Thus, businesses in the IT services will need people who can manage IT-related projects or offer tech support to customers by having the right mix of hard skills and soft skills.
Let’s take the case of the blockchain technology. Banks, tech startups, and financial consulting firms are slowly but surely putting their investments in blockhain development initiatives. Their goal is to incorporate Bitcoin cryptocurrency capabilities into their business model.
To make this happen, they’ll need the help of outsourcing companies whose pool of talent has undergone intensive training to achieve expert-level proficiency in software development, engineering, security, and other blockchain-related skills.
At the same time, blockchain developers will have to work on their soft skills, such as communication and collaboration, to enable them to educate their clients about how the technology works and how they can apply it to their business organization.
Moreover, the most sought-after talent in IT outsourcing will have high adaptability characteristics as they’re able to transfer their skills into new environments confidently and competently. They also cull their previous knowledge and experiences when making judgment calls regarding how much new technology or time-tested techniques to use when working on IT projects.
Outsourcing is an important industry that continues to grow, as a response to ever-evolving technologies and demands in the business world. Further, outsourcing companies are always on the lookout for trends in the industry, so they can invest in the necessary resources, tweak their formula, and ultimately deliver up-to-date and high-quality services.
Contact us to find out which of these outsourcing solutions could give the best value for your business.
The customer service industry has seen a dramatic shift over the years. With new innovations and trends, companies now leverage advanced tools, such as automation, in delivering the best customer support.
A survey shows 89% of businesses compete through the level of customer service experience they provide. Meanwhile, 70% of unsatisfied customers whose problems are resolved are eager to do business with the brand again. This proves that consumers place a higher premium on excellent customer service than competitive pricing.
Today’s customer service has evolved from face-to-face and on the phone interactions to email, live chat, and social media. These channels have become critical outlets for building customer relationships, prospecting potential clients, and protecting brand image.
But no matter how high-tech your customer support tools are, if your employees and agents don’t have the soft skills necessary to placate, satisfy, and delight your customers, then it’s all for naught.
Here are six essential soft skills you need to prosper in the customer service industry, as well as course recommendations to kick start your learning.
Not only should you take note of what customers say but you should also consider their emotional, mental, and physical state. This is a valuable soft skill that not all people have, but if you do develop it, then that will make you an asset to your team and the company.
Put yourself in a customer’s position. How would you feel if a customer service representative claims they understand you but doesn’t treat you like they do? Before you speak, filter and choose the right words so as not to dismay them. Getting into their headspace can help you better understand and identify what your customers need.
Recommended course: Learn Social Psychology from Udemy. This course will help you develop a better understanding of the ins and outs of how people think, feel, and behave.
If you’ve been in the industry long enough, then you know how outlandish the requests, inquiries, and questions might get. Customer service in 2019 means you have to get creative in attending to unusual problems. Loosen up a little and don’t be afraid to go off-script.
Great customer support agents look at problems from different angles, which exercises their out-of-the-box thinking. There are cases where you’ll need to think of solutions that is tailored to a particular customer.
One of the basic principles of marketing is satisfying customers to have them pick your brand over your competitors. Excellent customer service is the best marketing tactic, so it only makes sense to study and understand how the two disciplines meet to deliver the best customer service.
Excellent marketing strategies combined with fantastic customer service efforts shape the customer’s brand experience. The more you understand why they use your products and services, the easier and more effectively you can attend to their needs. Your goal is to keep your customers happy and satisfied—this starts from the moment they make contact with your brand’s marketing collaterals and continues throughout the customer service experience.
If you’ve been played with “the customer is always right” card before, then it’s essential that you learn how to deal with it for future situations. Negotiation is a powerful soft skill which helps one come to a more compromising resolution and avoid further dispute, while maintaining a stable relationship with the customers. This is most useful for managers dealing with customers who abuse terms of purchase and will insist that they’re “always right.”
Excellent customer support needs to know how to direct any disagreement to a favorable resolution. Seeking mutual benefit and retaining the relationship are the keys to a win/win outcome.
Being in the customer service industry means you’ll deal with all kinds of customers who are looking for assistance to solve their problem. Do your best to understand the issue at hand, so you can advise effective, possible solutions.
You’ll exercise your active listening skills and emotional intelligence in cases like this. Customers will have high regard towards you when they see your interest in them and your eagerness to help them in any way possible.
Recommended course:Conflict Resolution Skills from Coursera. This course will teach you how to resolve conflicts in a positive light and how to deploy proper communication tactics in cases of negative resolutions.
6. Stress Management
Being in the customer service industry requires great stress management skills since dealing with irate and unhappy customers can wear down frontline representatives. Too much stress, if left undealt with, can often lead to absenteeism, conflict, decrease in productivity, poor work performance, and health-related issues.
Excellent customer support reps practice coping strategies to help them deal with and recognize their personal triggers, ultimately managing their stress levels. In effect, they don’t radiate any negativity when they’re dealing with customers. Customer service department heads should train employees how to cope with and prevent stress to promote a healthier work environment.
The customer service industry may have adopted new technologies, such as automation and chatbots, to improve and fast-track their work. But it’s still the human interaction and connection that woo the customers and keep them loyal to brands.
At the end of the day, it’s these skills that will make an impact on customer satisfaction and brand excellence. Expanding your skillset and adapting these soft skills can help you thrive in the business and gain more customers.
Technology has been transforming the workplace landscape over the years with a piece of innovation being added to make the process better. The industrial revolution had business owners build factories with a production line to speed up the manufacturing process. The telephone became an indispensable business tool for faster communication and the computer changed the way we store and process data. The most recent game-changer is the Internet, which opened the doors for countless possibilities.
As much as the internet has helped with workplace progress by leaps and bounds, there’s a new player in town to disrupt the current status quo. We have now reached a time when it was once perceived as the future—a future where robots are doing certain jobs humans once held. This may be regarded as a threat, but it’s the next logical step up the ladder of technological progress.
This time, we have a computer program or ‘machine’ that’s tasked to take on repetitive jobs, leaving humans to handle more complex problems to maximize their potential. Enter robotic process automation.
The Rise of Robotics Process Automation
They say ‘necessity is the mother of all invention,’ so when a need like automating repetitive, menial, and tedious tasks presented itself, this leads to the creation of robotic process automation. Robotic process automation, or RPA, is an emerging form of business process automation technology that uses software robots or artificial intelligence to perform what could be defined as labour-intensive tasks.
RPA was the brainchild of two process automation experts, Alastair Bathgate and David Moss, when they set out to develop technology that aims to improve efficiency and effectiveness of organizations. They created a digital workforce that follows rule-based business processes and interacts with the organization’s systems in the same way existing users do.
Essentially, RPA is left to handle high-volume and repeatable tasks such as handling customer queries, calculations, maintenance of records, and transactions. It mimics a human worker by logging into applications, entering data, completing tasks, and logging out.
Large companies have realized the more attractive benefits of RPA, so they’re starting to pivot from traditional methods to software-run labour so they can gain high volume output and through the automation of highly transactional manual processes. This is particularly helpful in highly regulated industries, where the speed, accuracy, and analytics of RPA will decrease compliance costs and mitigate risks. In addition, RPA makes it easier to comply with industry and audit regulations.
RPA vs. Outsourcing
Outsourcing has opened the floodgates of opportunity as it grew to global proportions. When businesses saw that locally sourced labour was a lot more expensive than what they could find elsewhere, outsourcing eventually progressed to offshoring. It became about hiring the more cost-effective people to streamline business processes with the help of technology. However, with robotic process automation slowly entering the picture, this has become a more attractive option.
Outsourcing has come a long way to becoming one of the most popular options for organizations that want to have a competitive edge. It has gone through many changes over time, eventually leading to finding the right talent that can accomplish more complex tasks, which completely changed the way businesses operate.
Organizations have benefited greatly from outsourcing, with productivity getting a nice overall boost. Your business will have more control over operational costs while giving you access to state-of-the-art technologies. It also helps improve both internal and external business operations, and at the same time allowing your staffing to be more flexible. But now, outsourcing has gone beyond your standard manpower.
Robotics process automation also seeks to improve business productivity but in a different manner. Instead of outsourcing all tasks to a third-party service provider, what it does is it picks tasks that can be automated—those that are repetitive, rule-based, and incorporate structure digital data—and assign those to a bot that performs them according to the program.
It’s clear robotic process automation has many advantages, setting it apart from traditional outsourcing in the sense that it makes people more of an option instead of a priority in providing services through the execution of a business process. Sooner or later, companies will realize how the integration of RPA could prove to be invaluable in running the whole show.
This makes perfect sense if it would cut costs, making it a more inexpensive option than outsourcing people. Not only could it affect the finances of a company, but also the amount of work it’s set to accomplish.
To give you a better idea of how it works, here’s an infographic of RPA applications in three industries: customer, IT infrastructure support, and business and finance.
Customer Service and Support Desk
RPA is a useful tool that can be used to automate many of the common tasks in the customer service industry such as incident management, billing queries, user administration, and updating of records. Leaving all these tasks to automation delivers many benefits, speeding up the process while addressing these concerns more accurately.
What typically happens is a service agent handles a call and at the same time navigates through various applications to address a concern. This interaction increases the likelihood to commit errors. But through RPA, the tasks can be run flawlessly and consistently 24/7 and have automation resolve problems on its own within its set parameters. It can link different systems and apps into one single console, build a unified knowledge base that’s able to deliver relevant data in real time, and automatically set up and run processes to free up human agents of manual and repetitive tasks, allowing them to focus on customer-centric skills.
Companies will be able to maximize their IT resources through a virtual workforce. They can do this either by human assisted-automation or by full automation to take over existing user actions and have them free themselves of labour-intensive tasks for more intellectually demanding activities.
By focusing on jobs that can’t be automated such as subjective decision-making, innovation, and customer-facing activities, your IT team will be far more efficiently employed while leaving them feeling more professionally engaged.
Business and Finance
There are a host of jobs in the business and finance industry that are deemed automatable. According to a 2017 McKinsey report on automation, 43% of these jobs can be automated since data entry and processing are both important parts of these businesses:
RPA can process claims payments forpre-approved amounts
It can assign to claims handlers
It can input First Notice of Loss (FNOL)submissions
It can notify loss adjusters
RPA can automate daily bank reconciliations
It can process low-risk payments
RPA is still relatively young, but experts believe it will be a more reliable business tool in the future. In fact, a mere 3% of organizations have managed to scale RPA to a level of 50 or more robots. But with the benefits you can get from the technology, it’s hard to argue that RPA can propel your business into the future.
If you have a hint of hesitation in exploring this option since it’s new tech, it’s prudent to consult with industry experts. Transcosmos can provide your RPA needs through its robotic process outsourcing services. Grow your business with those who specialize in this new tech field.
The progress we’re making with technology has been nothing short of impressive. While many technological advancements are helping mankind in various fields, there’s a growing concern that these upgrades may eliminate the need for human involvement.
We’ve made so much headway in the field of artificial intelligence and automation that many think they pose a threat to the human workforce. With pop culture portraying AI as an antagonising entity in the form of murderous robots and scheming self-aware computer programs, it just fans the flames of fear. As far-fetched as this may seem, the fear is warranted, but let’s not get ahead of ourselves.
Fortunately, modern applications of AI like chatbots and automation are way less sinister than Skynet’s Terminator robots.
Chatbots: Where did they come from?
Current commercial applications of artificial intelligence are in the form of chatbots. They may not be life-threatening, but pessimists think they do pose a threat to the human labour force. These chatbots are commonly the AI-driven automated responses we get when we engage them on chat conversations online.
Perhaps they all blame it to Alan Turing when he came up with the Turing Test back in 1950. This was actually when the concept of artificial intelligence and robots came into being.
With the Turing Test paving the way, the first chatbot was created in the form of Eliza in an MIT laboratory back in 1966. It simulated human conversations by matching user prompts to scripted responses. Soon after, many other known chatbots followed such as Jabbarwacky in the late 80s, ALICE in the mid-90s, and virtual assistants like Siri and Alexa are now being used. But perhaps, the most widely used chatbot is the one featured on Facebook Messenger.
Will chatbots replace humans in the workplace?
Chatbots have proven to be useful in many aspects across different industries. They’re widely used in customer service and IT outsourcing support, where they engage customers and provide immediate solutions to their concerns. This fast-tracks the process and will only need human intervention when tackling more complex issues.
Virtual assistants help with basic tasks such as asking information from the internet, which could be done by Google Assistant and Siri. For more complex jobs like switching the lights on and off, and controlling the temperature of a smart home, Alexa can do all these for you.
These examples show that chatbots are not about to replace humans, but instead help us make our jobs a whole lot easier by filling in the gaps where we may have deficiencies. To put it simply, they are here to augment our capabilities.
Here are some scenarios where chatbots augment instead of replace humans in the workplace:
1. When humans are asleep, chatbots can fill in for therapists in case someone needs immediate mental health care.
Humans, as biological beings, need rest. And with mental illness a constant threat to anyone suffering from it, therapists should be available 24/7. However, this is not usually the case. And with the absence of quality healthcare to many countries across the globe, this created a need for a chatbot to help those suffering from depression.
Through cognitive behavioural therapy or C.B.T., former computer programmer Alison Darcy worked with a team of psychologists and an AI expert to create Woebot, a text-chatbot therapist that helps people suffering from depression by coaxing them to describe their moods more clearly. This may help save lives when therapists could not be reached.
Chatbots are also used in preventing suicides. Australian non-profit organisation Lifeline launched a Twitter chatbot to help the friends and family of those at risk to easily begin a conversation about suicide. And since more young people are in danger, the integration of a chatbot on social media may prove to be a lifesaver.
2. Triage chatbots as a more accurate way for patients to diagnose their symptoms vs Google search
It seems that chatbots are perceived to be useful in the healthcare industry as they play a crucial role in helping people diagnose their symptoms better than Google search.
Triage chatbots are presented as better alternatives to search engines so patients would know the appropriate steps to take once they’ve answered a set of questions based on their symptoms. This would help them know whether to rush to the ER, have themselves checked up at the nearest clinic or go to the urgent care centre.
3. Banking chatbots help customers with transactions and finance management
Handling your finances are now more accurate thanks to Kasisto’s KAI, a banking chatbot and virtual assistant that functions as a bank’s messaging, mobile and web platforms. The tool is built using industry-specific knowledge, which aims to help customers not only with their payments and transactions but also with account insights and personal finance management.
KAI uses natural language processing, AI reasoning, and speech recognition technology to deliver intelligent, human-like conversations through text and voice. It can also extract meaning and intent through its engagement with customers to provide the service they need.
By the looks of it, chatbots are here to stay. It’s an invaluable tool in helping streamline any process by automating responses, therefore, speeding operations to reach a definitive solution. However, this doesn’t mean they are going to replace humans; they merely function to augment our skills since they work on a limited capacity.
Pretty soon, chatbots will be integrated into the workplace to elevate both employee and customer experience by providing seamless service through more precise solutions, and boosting employee skills by helping them focus on more complex tasks.
When even a tech giant can’t promise the security and integrity of its data, how can small players hope to defend themselves against malicious hackers?
In September 2018, Facebook discovered that 50 million of their users had their accounts compromised. Hackers reportedly took advantage of a software bug that was introduced in a 2017 video uploading feature to gain ‘access tokens’ and take over some of the accounts.
The social media platform logged out 90 million users—including 40 million potentially at risk—and patched up the bugs to solve the problem. This controversy follows the heels of their Cambridge Analytica scandal earlier this year.
Understandably, this news has left both consumers and businesses upset. Facebook is one of the biggest digital companies to date, and they thrive on the information users give them. Mishandling that trust is one of the biggest errors a business can make, as we’re sure to see a lot of consequences from this issue.
The State of Cybersecurity in 2018
Facebook is just one of the millions of companies that are victims of hacking. Statistics show there are over 130 large-scale breaches in the States every year, and that number is increasing by 27% annually.
Yahoo!, Uber, Google, and Under Armor’s My Fitness Pal are just some of the biggest companies attacked by a data breach within the last two years alone.
Cyber threats can take on many forms, and your business is at risk whether you are hiring IT outsourcing services or have an in-house team. The most common of these are malware, ransomware, corporate account takeovers (CATO), distributed denial of service (DDoS) attacks, spam, and phishing.
The year 2017 specifically saw a rise in ransomware attacks, where hackers can threaten a business to expose their confidential information unless a ransom is paid. These threats are expected to continue increasing at an alarming rate of 350% annually.
What Can We Learn from Facebook’s Latest Security Breach?
Lesson #1: The more data you have, the more likely you are to be a target.
Facebook has over 2.2 billion users. The amount of data that can be mined from that platform alone will give hackers a lot of leverage to ask for ransom, steal your identity, or plot other malicious crimes. According to Symantec, phone numbers (63%) and device location (37%) are the two most often leaked information from apps.
The solution: Don’t collect data you don’t need. While data is necessary for marketing, personalization, and other business goals, it won’t do your consumers any good if you can’t build a safe space for their valuable information.
Lesson #2: As cybersecurity advances, so do cyberthreats.
The saying “set it and forget it” doesn’t work for cybersecurity. While you’re working on securing your system, hackers are also working hard to bring you down. As cybersecurity firm Crowdstrike’s advertisement says: “Yesterday’s antivirus can’t stop today’s cyber attacks.”
Getting hacked will cost a company more than continuously investing in the tech needed to keep security tight. The figures are overwhelming: The average cost of a malware attack on accompany is $2.4 million. Cybersecurity Ventures pegged global ransomware costs at $5 billion in 2017. The bigger the size of your company, the higher the price it would take to recuperate from your losses.
The solution: Always update your security protocols. Be aware that there are hackers who want to steal your data every day, especially if you’re high-profile. Facebook is a top target because of their massive standing in the industry. However, this doesn’t excuse smaller companies to slack off on security.
Lesson #3: Padding features can be your weak link.
Facebook promised other digital companies that users are likely to sign up for their platform if they have a unified login—and this is how Facebook Connect was born. While there is truth to their statement, the added convenience did come with a risk.
Besides the stolen login info, Facebook later admitted that they are unsure if the hackers were able to access other accounts linked to their profile. The Facebook security breach affected all their partner websites and caused alarm for the platforms to take extra security measures.
The solution: Be wary when adding new features that center on convenience. Software updates and added features may expose weak spots in your security system. Gartner notes that misconfigurations account for 75-99% of all breaches, depending on the platform. It’s inevitable to add new features, but you should exercise caution while doing so.
Lesson #4: Having risk management in place can help you recover.
Your company’s next steps after getting attacked matters. Every plan of action is unique to each company, but it’s worth discussing before any hack even takes place.
Facebook was quick to admit the data breach to their users, followed with a statement that the problem has already been fixed. They had the right tools to detect how their system got compromised and logged out all the accounts affected.
Other companies don’t have it so lucky. A famous example is the data breach from Yahoo a few years ago. This severely hurt their image and revenue because the company kept the issue a secret for around two years. People lost trust in them, and the rest is history.
The solution: Prepare for the worst. Know the different types of cybersecurity threats, like compromised credentials, system vulnerabilities, and loss of data, to name a few. Have a contingency plan intact, so your business stays afloat amidst the attack.
Is cybersecurity just a joke?
The short answer is no—but it’s not perfect.
Cybersecurity isn’t foolproof, and unfortunately, it will never be. If anything, the whole Facebook issue is a reminder that it’s incredibly difficult to safeguard so much data—tech giants are vulnerable to attacks too. Hackers are smart and should never be underestimated. However, having multiple lines of defense is much better than having none at all.
Investing in network security is a no-brainer. Don’t question whether or not you need cybersecurity. Instead, assess the degree of protection you need to dodge threats and attacks successfully. Keeping your company and consumer data safe should be one of your top priorities at all times.
In August 2018, Apple became the first American public company to reach $1 trillion market value. The company enjoyed their solo stay at the top until a month later in September, when Amazon joined in. And while Amazon’s stock did quickly roll back to below a trillion in total, it has become evident that businesses can reach this feat, and that the race to the trillion continues.
However remarkable this may be for the American-owned corporations, it’s not an impossible achievement to accomplish, as companies founded in other countries have done it before. But it’s important to note that the US tech sector has been enjoying growth in the global stock market over the last few years, and this might have contributed to the trillion-dollar feat.
Financial commentators and investors have expected this to happen, seeing that technology share prices ended strong in 2017 and are continually booming this 2018. The massive increase in valuations also came as a result of the global stock markets reaching record highs in 2017, the US tax cuts that share prices benefitted from, and the continued quantitative easing from central banks.
But perhaps, there’s one factor that is more important and has contributed most to the success of Apple and Amazon—both understand and take into consideration the needs of their customers first.
It was Steve Jobs who pioneered the idea that technology isn’t boring or complicated, but fun and simple, and Apple products are evidence of this philosophy. Their computers, mobile gadgets, wearables, and internet devices have gained a following worldwide not just because it’s easy to use, but also because of how it takes into consideration the customers’ experience.
For instance, the first iMac design included a carrying handle not mainly for convenience but because Apple believed that being able to carry it everywhere would better connect its user to the device.
Not just in terms of design, but also in feasibility and packaging, Apple obsesses over the smallest of details and studies the customer journey exhaustively, making sure that it will provide the best possible experience. It’s safe to say that aside from innovation, a bulk of their trillion-dollar stocks is all thanks to buyers who want the Apple Experience.
Luxury hotel Ritz-Carlton can be considered as the gold standard of customer service, and Apple adopts their ways in their recruitment and training. The techniques that Apple assumed include the following.
Greet guests with a warm welcome and always be ready to assist them. A warm greeting, as well as addressing them by their name, make them feel valued and happy.
Own the relationship. Every staff in the Apple Store, much like in Ritz-Carlton, need to make sure that all guests have an excellent experience by helping them. It’s as simple as directing them to another staff who can help with their need if the initial attending staff cannot do so. They should also check back and see if the customer’s concerns were addressed.
Reset internal clocks. This refers to the waiting time and how employees can reset it by simply greeting the customer, reminding them of the waiting time, other short interactions with them, and by allowing them to use the distractions laid out on them, such as Apple products available to access.
Anticipate their unexpressed needs. Apple employees are trained to listen for and fulfil the guests’ unresolved issues, concerns, or wishes, also known as anticipatory customer service model. This can be done as early as scheduling the visit at the physical store through the App Store to having the checkout come to you when you’re ready to pay for the services.
Much like in the beginning, Apple staff must end the customer’s journey with a fond farewell, with an invitation to return to the store. Make the guests feel special before they leave and give them something to anticipate for when they return.
Lesson #2: Feel, Felt, Found
Image Source: Gizmodo
Apple reportedly has a Genius Training Student Workbook as a manual for their new hires. Supposedly, the word “empathy” was used a lot on the manual, outlined by the 3 F’s.
Empathise with how the customer feels in that moment, and let them know that you understand them.
Explain that you once felt that way before, too.
Tell them how you found that your concern was actually incorrect.
These steps can make a guest feel confident enough to make their own decision, but with Apple still trying to control what the decision will be. This technique may feel like Apple trying to find backdoors into the customer’s mind, but Jobs firmly believed that it is a great service and a memorable customer experience that resulted in lasting customer relationships.
Lesson #3: Empower employees
Apple believes that inspiring their customers entails encouraging their employees first. The company seriously values their employees and believes that they can make a difference.
The former head of retail Ron Johnson said that “The most important component to the Apple experience is that the staff isn’t focused on selling stuff, but on building relationships and trying to make people’s lives better.” They cultivate trust and autonomy internally, so they can offer the same to the customers.
Amazon: Anything can be Exciting
It seems that everything can be bought off of Amazon, so it’s no surprise that the company captures 49 cents of every ecommerce dollar in the US. Like Apple, Amazon takes something and introduces an exciting way to do it.
As the New York Times pointed out, the company started as a new, exciting way to buy books when the internet was still less developed. Then, they offered new, exciting ways to read books via the Kindle, and to publish with CreateSpace.
Today, we have new, exciting ways to power the internet through Amazon Web Services, to get deliveries via the Amazon Prime, and to power up your home with Alexa.
At the heart of these exciting innovations is the company’s desire to serve the needs of their customers. Founder Jeff Bezos built Amazon based on that philosophy, and it helped make the company one of the best when it comes to overall customer satisfaction.
Bezos is known for being very particular when it comes to customer service that he reportedly sat through an almost 5-minute wait to get through a customer support phone call, as he wanted to find out and understand what their customers were going through, especially during the holiday rush.
Lesson #4: The Day One Philosophy
Day 1 is the name of a building in the Amazon compound, named as such to remind the CEO of his work philosophy, that every day is Day 1—the first day of operation of the company.
In Day 1, everything is still new; the company still has a positive outlook in terms of reaching its goals. Bezos wants to preserve that state that’s why he treats every day at Amazon as if it’s still Day 1. He dreads seeing Day 2, as it can bring “stasis, irrelevance, excruciating and painful decline, and even death”.
Jeff Bezos on why it's always Day 1 at Amazon - YouTube
So how does Amazon maintain their Day 1 outlook?
Focus on results and not process. Don’t let following the process rather than running after results and growth become the desired outcome.
Leverage high-velocity decision making. Have the start-up attitude of making decisions quickly. At Amazon, the management does a “disagree and commit” system, wherein everyone will try to agree on a choice. When one or more employees disagree, they will still commit to working toward the same goal.
Embrace external trends. Bezos believes that “the world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly.” This has allowed him to take advantage of the tech innovations in the industry, including delivery drones and the Amazon Go convenience store, which uses machine vision instead of human cashiers at checkout lines.
Resist proxies. According to Bezos, “Customers are always beautifully, wonderfully dissatisfied… even when they don’t yet know it, customers want something better, and your desire to delight will drive you to invent.” It’s important to hear out actual customers and not rely on market research and surveys, especially when you’re inventing and designing products.
Lesson #5: Obsessive customer focus
As already mentioned, Amazon is very customer-centric, which is also reflective of the Day 1 attitude. This is evident throughout their process and policies, such as their return policy which states that a package will be replaced if it gets lost in the mail, or in their dedicated help page where they offer different ways to get in touch with customer support in case of an issue.
Amazon thinks ahead by offering several options on how users can get in touch with their customer support staff.
Amazon thinks ahead by offering several options on how users can get in touch with their customer support staff.
Much like Apple’s anticipatory customer service model, innovation for Amazon is making sure that your products and services are providing people what they want even before they ask for it. This means that the company truly understands them and their needs.
Being customer-focused also means having a data-driven approach on making company-wide decisions based upon the success and failures of their customer experience. Bezos believes that what’s best for the customer is also what’s best for the company.
Here are other ways Amazon take their customers’ considerations:
The Empty Chair: Reportedly, in many Amazon meetings, Bezos will put an empty chair to signify their customers, or what he calls “The Most Important Person in the Room”. The decisions that will come out of the meeting must satisfy the occupant of that chair.
Respect today’s customer: Bezos firmly understands today’s customer, being a pioneer in ecommerce. Amazon knows that today’s customers are listening to fellow customers, doing their research, and praising or critiquing on social media. That is why the company knows how to handle and respond to complaints and negative stories about them.
Lesson #6: Acknowledge your mistakes and apologise sincerely
Amazon has had their share of both positive and negative press. For instance, in 2009, the company was criticised by Kindle users after digital copies of the books 1984 and Animal Farm were remotely deleted from their devices, alleging that the company is monitoring and forbidding users from reading these titles.
When Amazon’s initial boilerplate apology fell on deaf ears, and they started losing customers, Bezos stepped up and made an informal and heartfelt apology, owning up to the mistake and saying, “We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.”
No one likes admitting to their mistake, but if you don’t want to lose loyal customers, it’s something that you must do. Embarrassing and frustrating as it may be, saying sorry shows that you genuinely care about the needs of the customer.
The Customer is at the Core of Apple and Amazon’s Driving Force
Both Apple and Amazon’s products can be described as groundbreaking—Apple paved the way for the smartphone era, while Amazon pushed the boundaries of what a humble ecommerce corporation can create. As a result, people—especially consumers—saw and experienced how their products and services improved their lives. Needs were addressed even before they were expressed.
And while there may be small differences in the way the two companies handle customer service—Apple going the luxury route while utilising psychological measures and Amazon appealing to the emotional side of the market by acknowledging the company’s human tendency to err, the core and end goal remain the same: understanding the customers and putting their needs first.