Travel and Hospitality Customer Engagement Services Excerpt for Cognizant September 2017

The Services Research Company

HfS Blueprint Report

Melissa O’Brien Director, Digital Front Office and Customer Engagement [email protected] Table of Contents

TOPIC PAGE

Executive Summary 3

Market Overview 12

Research Methodology 20

Service Provider Grid 24

Service Provider Profile 27

Market Direction and Recommendations 30

About the Author 37

HfS Research is launching our first Travel and Hospitality Services Blueprint, presenting a comparative analysis of the innovation and execution capabilities of service providers in this market. This research will take a look at the evolution of the travel and hospitality services market to a more agile, consumer-centric As-a-Service Economy that includes increasingly diverse talent, analytics, and platform-based services.

In this Blueprint we will also use the Eight Ideals of the As-a-Service Economy as a significant element of our service provider assessment methodology.

The scope of the Blueprint will be services that support customer experience with clients in the travel and hospitality industry: airlines, hotels, tour operators, travel intermediaries, car rental companies, global distribution systems, casinos, and cruise lines.

This report is about business process and outsourcing services that support customer experience, and how they fit into the OneOffice framework. Digital technology is an increasingly integral part of these services and considered in this analysis. Standalone IT services and outsourcing are not covered in this report.

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 4 Travel and Hospitality Value Chain This report focuses on customer experience related front-office services and other business operations support services specific to the industries outlined below. Technologies, operating models, methodologies, and platforms are enabling elements of service delivery.

Customer Experience Front-Office Services Other Travel and Support Services

• Customer experience design • Revenue accounting (passenger and cargo) • Reservations and sales bookings • Revenue integrity • Rate quoting • Revenue management • Customer experience management (customer service, • Airline operations (engineering support, flight operations sales, and marketing, including inbound and outbound support, etc.) interactions) • Irregular operations management (flight, crew, customer • Customer analytics recovery, mishandled baggage) • Loyalty program management • Finance and accounting • Guest relations • Fraud prevention • Frequent flier helpdesk • Refunds • Other travel-specific processes

Travel and Hospitality Clients >> Travel intermediaries (online booking companies, corporate travel providers) >> Airlines Hotels >> Tour operators >> Car rental companies >> Casinos >> Cruise lines >> Global distribution systems >> Tour operators >> Airports >> Surface transportation

Enabling Technologies >> Digitization and robotic automation >> Analytics >> Mobility >> Social media >> Cognitive computing >> Artificial Intelligence

Operating Models, Methodologies, and Platforms >> Outsourcing >> Shared services >> GBS >> COEs >> BPaaS/SaaS/IaaS >> Design Thinking

Several disruptive forces are taking hold in the travel and hospitality industries, forcing enterprises and service providers alike to re-think the way they approach customer experience.

n Competitive bar rising: The travel and hospitality industries are rife with competition, much of which rests completely on using customer experience as a differentiator. n Business model disruption: New business models in the “sharing economy” are forcing traditional travel and hospitality businesses to rethink their value proposition. End customers wanting the “Amazon experience” are challenging enterprises to become more customer-centric.

n Partnership ecosystem: The partner ecosystem is becoming more and more important as travel and hospitality companies see opportunities to leverage loyal customer bases (e.g., Qantas and Airbnb)

n Mobility is “driving” a different paradigm: Online activity in the travel space, such as booking flights or hotels, is increasingly mobile, forcing a re-design of the customer journey from start to finish.

n Acquisition activity: Heavy acquisition activity, in particular in the hospitality space, generates challenges and opportunities with issues like tech platform consolidation, and updating policies and procedures. n Consumer empowerment: The role of social media for sharing poor customer experiences and doing research for travel choices is a dynamic force impacting brand perception and influencing buying decisions. Consumer-to-consumer interaction is more direct and impactful on a travel and hospitality business than ever before.

As a result of this disruption, travel and hospitality companies are laser focused on differentiating through experience and making the most of their customer loyalty programs and opportunities to engage. The focus of this report is on how service providers roll up their services to customer experience and deliver on various elements of CX including: n Supporting loyalty programs that foster meaningful customer relationships

n Using analytics to identify and understand customer behaviors and preferences

n Maintaining service levels and customer support during unpredicted and unavoidable events (e.g., weather related events)

n Creating seamless experiences for travel-specific occurrences such as rebooking flights, lost luggage, etc.

n Curating and controlling rich multimedia content across platforms; making digital assets more accessible n Identifying ways to improve customer satisfaction (CSAT) and improve personalization (see next slide)

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 7 Improving CSAT is Driving CX Strategy for Travel And travel companies have a greater focus on personalization than enterprises overall

What are the most important goals when it comes to your organization’s customer experience strategy today?

80%

70%

60%

50%

40%

30%

20%

10%

0% Implementing Improving Lowering costs Reducing churn Sourcing Making service Improving Personalization Improving digital customer internal talent effortless and customer customer customer satisfaction to deliver on convenient spending acquisition engagement (CSAT and NPS) customer experience

Travel Respondents, n=32 All Respondents, n=154

Source: OneOffice Customer Experiences Survey, HfS Research, August 2017

Trends in business process services and outsourcing for the travel and hospitality industry:

n The most mature and readily outsourced functions are traditionally horizontal services like customer service, but with a travel focus on reservation booking or loyalty program information and guest relations. Finance and accounting back office is also very mature in this space, in particular for consolidation of processes as a result of M&A activity in the hotel space.

n Some interesting, emerging areas of services include customer journey design, in particular for airport experiences and the re-design of loyalty programs. Many loyalty programs are now focused on identifying and addressing the customers who have a greater propensity to purchase more in the future. Greater value-added, vertical-specific services include aviation interaction platform services that integrate passenger data for crew operations, marketing, sales, and customer services, as well as services that automate re-booking and customer notifications for flight disruptions.

n The use of automation is rapidly maturing in this space. Travel and hospitality companies are using automation to increase efficiency and provide seamless customer experience. Dedicated innovation centers are popping up globally in part to address the automation trend.

n Industry expertise is an important requirement for service providers. Not only are travel clients requiring service providers to have expertise in their particular industry niche, but also seeking thought leadership from across verticals and understanding what other industries are doing to become more competitive.

n As-a-Service Winners in this Blueprint are As-a-Service Economy distinguished by innovation and execution capabilities: Providers included in the As-a-Service Winner’s • Accenture is using innovative design and Circle utilize operating models, enabling consulting to help transform CX in the technologies and talent to drive business travel and hospitality industry outcomes through outsourcing. The focus of • Cognizant is leading with customer these providers is on what matters to the end consumer. experience design and a talent-focused strategy for CX outcomes in the travel and HfS uses the word “economy” to describe the hospitality space next phase of outsourcing as a new way of • Concentrix is using front-office services engaging and managing resources to deliver services. delivery execution excellence to transform into a strategic partner for travel and The Eight Ideals of the As-a-Service Economy: hospitality clients 1. Write Off Legacy • TCS’ strong technology and talent strategy 2. Design Thinking is driving customer experiences for travel 3. Collaborative Engagement and hospitality clients 4. Brokers of Capability • WNS’ deep industry heritage and expertise 5. Intelligent Automation 6. Accessible and Actionable Data enables execution excellence, along with 7. Holistic Security proprietary technology for innovation 8. Plug-and-Play Digital Services

Source: Beware of the Smoke: Your Platform Is Burning by HfS Research, 2015

n The High Performers have innovative approaches to travel and hospitality services:

• Hexaware is taking an automation-first approach to its growing travel and hospitality practice • HCL is using strong talent and Design Thinking capabilities to improve customer engagement in travel and hospitality • Intelenet is an up-and-coming provider with a laser focus on the travel industry, supported by a travel- specific proprietary technology suite • Luxoft is using digital user experience design to re-imagine customer journeys for travel clients • Sutherland Global Services is leading travel and hospitality clients with design thinking and sophisticated customer interactions • Tech Mahindra is leveraging great customer relationships, smart partnerships, and proprietary technology to tackle travel clients’ challenges • Teleperformance is a contact center powerhouse bringing delivery excellence and CX thought leadership to travel clients

n The Execution Powerhouses stand out for their strong execution capabilities, in particular:

• Acticall Sitel Group is a customer experience expert developing a portfolio to address all aspects of customer engagement in travel and hospitality • EXL is developing a travel and hospitality portfolio with solid customer relationships and analytics • Genpact exhibits execution excellence, providing solid delivery for travel and hospitality clients • Wipro demonstrates operational excellence and is moving up the value chain in the travel space

Customer Channels and • Ever-increasing channels for engagement Touch Points • Mobile is the biggest challenge and opportunity for travel

• Enormous opportunity to use data in travel for more Personalization personalized experiences

Market Disruption: The Experience • Business models in travel are fundamentally changing, with new entrants posing competition for traditional travel Economy companies

What are the most challenging aspects of executing digital customer engagement?

Having the right data and developing analytics

Implementing self-service and automated customer engagement

Managing customer engagement on social media and public forums

Understanding customer expectations and preferences

Finding and retaining talent to deliver on new customer experience expectations

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Travel Respondents, n=32 All Respondents, n=154

Source: OneOffice Customer Experiences Survey, HfS Research, August 2017

Data on the previous slide shows that travel respondents are less challenged by understanding customer needs and preferences, perhaps because they are limited now by the challenge of getting the right analytics and data and using it to their best advantage.

Travel and hospitality clients need help from their service provider partnerships in areas such as:

n Analytics capabilities to understand customer data, segment it, and apply it to loyalty programs, marketing, and customer service.

n Consolidating and managing processes across disparate systems, in particular as a result of M&A activity. This includes a need for key partnerships in the travel and hospitality technology space, for example, systems such as Amadeus, Indra, Sabre, Galileo, and Worldspan

n Automation for greater efficiency, particularly in back-office processes, previously labor intensive areas such as fare audits, and self-service for customer interaction.

n Manage interaction volume fluctuations during seasonal highs and lows or weather events and natural disasters.

n Thought leadership to mitigate intense media scrutiny: need to integrate back office with the front to create more insightful, predictive, and seamless lifecycle interaction with customers – the “OneOffice” omnichannel experience (see next slides).

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 15 The Future of Operations: The Digital OneOffice™ Effective future operations will be oriented around the customer and stakeholder experience and use analytics and digital technology to have predictive insight for proactive action and better outcomes – e.g., higher quality, speed, profitability. In the travel and hospitality space, this means connecting the underlying systems to allow passenger and guest data to flow more freely and re-thinking the design of that customer experience on the front end.

Under Intense Scrutiny: The Role of the Media

In particular for airlines, poor customer service incidents get tons of

media attention. Both social and traditional media are lying in wait to Analytics and take down the next airline that can’t deliver a flawless customer Segmentation experience.

The travel industry needs to find a way to give their front line staff the autonomy and support to make appropriate decisions that will help protect the business results (e.g. customer loyalty and positive brand image) that impact short- and long-term revenues. It also requires a talent strategy and culture to support it.

Using the Digital OneOffice concepts can help T&H companies avoid these disasters, and respond appropriately when problems arise.

Travel and hospitality executives have a number of levers – operating model design, talent in the workforce, digital I.#THE#OPTIMUM# II.#EMPOWERING#TALENT# technologies, and a burning OPERATING#MODEL# TO#MAKE#IT#POSSIBLE# platform for change – to pull to Outsourcing+|+Shared+Services++ Capabili=es+over+Skills+|+ help them become more strategic GBS+|+BPaaS/SaaS/IaaS+|+ Deﬁning+Outcomes+|+ partners in the business. Crowdsourcing+ Crea=vity+|+Data+Science+ HfS uses the word “economy” to AS7A7SERVICE7 emphasize that the emerging next ECONOMY# TOOLS/INFRASTRUCTURE# GOVERNANCE# phase of outsourcing service Agility+|+Collabora=on++ engagement is a more flexible, OneGtoGMany+|+Outcome+Focus++ outcome-focused way of engaging PlugGandGPlay+Services+ and managing resources to impact IV.#TECHNOLOGY## outcomes. III.#A#BURNING# TO#AUGMENT# PLATFORM#FOR#CHANGE# KNOWLEDGE#LABOR# Operating in the As-a-Service Globaliza=on+of+Labor+|++ Digi=za=on+&+Robo=c+Automa=on+ HighGgrowth+Emerging+Markets+ Economy means architecting use |+Analy=cs+|+Mobility+|+Social+ |+Disrup=ve+Business+Models+|+ of increasingly mature operating Media+|+Cogni=ve+Compu=ng+ Consumeriza=on+ models and enabling technologies and talent to drive targeted business outcomes. The focus is on value to the consumer.

§ Realizing the OneOffice vision means changing the nature and focus of engagement among enterprise buyers, service providers, and advisors to be more agile and collaborative, focused on shared outcomes § “As-a-Service” unleashes people talent to drive new value through smarter combinations of talent and technology focused on business results beyond cost reduction

Fixed Assets Leveraged Assets

7 Holistic AS-A-SERVICE CHANGE MGMT Security ECONOMY Ideals 5 8 Intelligent Plug-and- Automation Play Digital 3 6 Services Brokers of Accessible & Capability Actionable 1 4 Data Write Off Collaborative Legacy Engagement LEGACY 2 SOLUTION Design ECONOMY Thinking Ideals

Data Summary This Report Is Based on: n Data was collected in Q2 2017 from buyers and service providers in the travel and hospitality § Tales from the Trenches: Interviews industry with buyers who have evaluated service providers and experienced Participating Service Providers their services. Some contacts were provided by service providers, and others were interviews conducted with HfS Executive Council members and participants in our extensive market research. § Sell-Side Executive Briefings: Structured discussions with service providers regarding their vision, strategy, capability, and examples of innovation and execution. § Publicly Available Information: Thought leadership, investor analyst materials, website information, presentations given by senior executives, industry events, etc.

Execution 100% Quality of customer relationships 30% • Account management, incorporating customer feedback Service delivery execution 30% • Completeness of offerings, execution of process, geographic footprint Ability to attract and retain talent 25% Progress on embedding automation 15%

Innovation 100% Talent strategy 25% Vision for OneOffice evolution in travel and hospitality 30% Approach to helping clients Write Off Legacy 15% Roadmap for use of technology to support business processes 15% Roadmap for accessible and actionable data and analytics 15%

Execution How well does the provider execute on its contractual agreement and how well does the provider manage the client/provider relationship? How do clients rate account management? How well does the service Quality of customer relationships provider incorporate client feedback into operations? How well does the service provider perform its services (e.g., delivery consistency, stability, meeting targeted SLAs, and impacting business Service delivery execution outcomes that matter to you)? How complete is the service providers breadth of offerings, execution of process, and geographic footprint? How well does the service provider attract and retain the best talent to Ability to attract and retain talent enable ongoing service delivery of digital travel and hospitality operations? Does the service provider use automation to improve the efficiency and Progress on embedding automation effectiveness of services for travel and hospitality clients? Is the service provider looking at ways to increase the intelligence of automation?

Innovation Innovation is the combination of improving both services and business outcomes. Does the service provider’s talent strategy take into account the changing talent needs as a result of digital technology? Does the service provider Talent strategy think about ways it can prepare its workforce for its travel and hospitality clients’ future needs? Does the service provider have ideas to invest in change on its clients’ Vision for OneOffice evolution in behalf? How complete is the service provider’s vision for the future of the travel and hospitality travel and hospitality industry, and does it complement the overall company strategy for digital transformation?

Is the service provider helping clients pivot their traditional operations to Approach to helping clients Write Off the customer-focused, digital OneOffice by using agile methodology, legacy Design Thinking, and developing a strong partner ecosystem?

How is the service provider using platforms, whether proprietary or Roadmap for use of technology to partnership focused, to support its travel and hospitality clients? Is the support business processes service provider looking at ways to increase the intelligence of automation?

Roadmap for accessible and Is the service provider offering or providing analytics? What are the use actionable data and analytics cases and examples and plans for the future?

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 23 Service Provider Grid Guide to the Blueprint Grid To distinguish service providers that show competitive differentiation in a particular line of delivery with progress in realizing the As-a-Service Economy of business outcome-oriented, on-demand talent and technology services, HfS awards these providers the “As-a-Service Winner’s Circle” designation.

Execution Innovation

As-a-Service Winner’s Circle Collaborative relationships with clients, Articulate vision and a “new way of show excellence recognized by clients services executed with a combination of thinking,” have recognizable investments in in the Eight Ideals in execution and talent and technology as appropriate, and future capabilities, strong client feedback, innovation flexible arrangements. and are driving new insights and models.

High Performers Execute some of the following areas with Typically, describe a vision and plans to demonstrate strong capabilities but excellence: worthwhile relationships with invest in future capabilities and lack an innovative vision or clients, services executed with “green partnerships for As-a-Service, and illustrate momentum in execution of the vision lights,” and flexibility when meeting clients’ an ability to leverage digital technologies needs. and/or develop new insights with clients.

High Potentials Early results and proof points from Well-plotted strategy and thought demonstrate vision and strategy but examples in new service areas or leadership, showcased use of newer have yet to gain momentum in innovative service models, but lack scale, technologies and/or roadmap, and talent execution of it broad impact, and momentum in the development plans. capability under review.

Execution Powerhouses Evidence of operational excellence; Lack of evident vision and investment in demonstrate solid, reliable execution however, still more of a directive future-oriented capability, such as skills but have yet to show significant engagement between a service provider development, “intelligent operations,” or innovation or vision and its clients. digital technologies.

Investing in Innovation to Change Excellent at Innovation and Execution

HIGH HIGH HfS POTENTIALS PERFORMERS WINNER’S CIRCLE

Intelenet Accenture Cognizant Sutherland TCS WNS Concentrix HCL Teleperformance Hexaware Wipro Genpact Luxoft EXECUTION POWERHOUSES

INNOVATION Tech Mahindra EXL Acticall Sitel Group

Excerpt for Cognizant

Building All Capabilities EXECUTION Execution Is Ahead of Innovation

Execution Innovation

• Quality of customer relationships (account management, • Talent strategy: Cognizant and TCS both had strong talent strategy incorporating customer feedback): Wipro, Accenture, TCS, and stories, with investments in human science and travel-specific Hexaware stood out for the excellent client feedback on being a training programs. solid partner with strong relationships with their clients. • Vision for OneOffice evolution in travel and hospitality: Accenture worked with a major South American airport through • Service delivery execution (completeness of offerings, execution the development of an airport app under its Connected Travel of process, geographic footprint): WNS, Teleperformance, Wipro Platform. The new app provides travelers with information on and Concentrix all scored high for service delivery excellence. flight status, travel alerts, navigation throughout the airport, retail and other services, as well as access to food and beverage promotions, and also facilitates travelers to pay for airport parking • Ability to attract and retain talent: Teleperformance and Acticall directly through their mobile device. Sitel Group, the two customer engagement experts, have great expertise around attracting and retaining the right talent. • Approach to helping clients Write Off legacy: Cognizant partnered with a major Middle Eastern airline to help them define their end- • Progress on embedding automation: Most of the stories weren’t to-end digital strategy, from booking from returning home, and yet in the realm of Intelligent Automation, but it is definitely an every step in between. Many of the features ideated and tested aspiration for many of the service providers. Hexaware takes a are now present in digital, airport, and flight experiences. bold stance around “automation first,” and WNS, TCS, Concentrix and Accenture all provided solid case studies for improving • Roadmap for use of technology to support business processes: business outcomes through automation. WNS and Intelenet both have an impressive suite of proprietary technologies focused very specifically on the travel vertical and solving travel clients’ unique issues.

• Roadmap for accessible and actionable data and analytics: WNS has a strong analytics offering which travel clients depend on for customer insight and operational efficiency. Sutherland's acquisition of Nuerova has added strength to its analytics capability.

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 28 Cognizant Leading with customer experience design and a talent-focused strategy Winner’s Circle for CX outcomes in the travel and hospitality space

Blueprint Leading Highlights Strengths Challenges

• Talent strategy • Digital customer experience design and journey mapping: Cognizant demonstrates expertise in the design of • Acquisition integration and • Vision for OneOffice evolution in customer journeys for travel and hospitality companies. Cognizant uses a “Travel Ribbon” framework to depict cultural shift: Acquisitions such travel and hospitality the customer journey to analyze use cases across the travel consumer’s lifecycle. This typically goes through the as Idea Couture and ReD • Ability to attract and retain talent phases of inspiration and awareness, search, book, journey, stay, and feedback; by customizing this framework to Associates are likely to have various client scenarios, Cognizant maps current business processes and envision how the industry can adapt to differing cultures and values various various disruptive forces. Cognizant’s acquisition history has also reinforced its commitment to CX design. from a services organization, The 2016 acquisition of Mirabeau, a digital agency with experts in the fields of customer experience design, which can certainly be an asset; marketing, development and cloud services and brought various travel and hospitality clients to Cognizant’s however, a potential challenge travel and hospitality portfolio, including KLM-Air France, Transavia, and China Southern. will be to enable those cultures Value Chain Services Coverage: • Focus on CX outcomes: Cognizant’s case studies presented were largely aligned to outcomes that impact to sync and thrive within a customer experience such as loyalty, minimizing customer effort and increasing meaningful engagement with service provider organization, Front Office Customer travel and hospitality brands. Cognizant is flexible with outcome-based contracting and focuses on engaging with in order to optimize and use Experience Services clients using new pricing models. Cognizant also displays a strong use of design thinking on the front end and those talent assets to their full thought leadership for digital business. advantage as well as protect Other Travel and Support • Talent strategy: Cognizant’s commitment to evolving talent for the future of work is demonstrated in some from morale issues and Services recent investments, such as its partnership with ReD Associates for example; ReD specializes in using human turnover. science to understand consumer behavior and employs behavioral economists, anthropologists, sociologists, and ethnographers.

Relevant Acquisitions and Partnerships Key Clients Global Operations Centers Proprietary Technologies Recent Acquisitions: Total number of travel and hospitality clients: 110 Headcount: Cognizant does not disclose • OrderServ Online Food Ordering Platform: Omnichannel • 2016: Mirabeau, Idea Couture, ordering solution designed provides flexibility of a custom exclusive strategic partnership and Partial list of travel and hospitality clients: Locations: online ordering application and agility of market ready the acquisition of an ownership • American Airlines • North America: 21% (7 major products. interest of 49% in ReD Associates • Wyndham Hotels Group locations at Atlanta, Denver, • BigDecisions Business Solutions Platform: A “system of • MGM Casinos and Resorts Chicago, Dallas, Seattle, Tri-State intelligence” platform that enables organizations to turn data Partnerships (relevant to T&H): • TUI Group, UK area, and Florida) into actionable insights. BigDecisions’ advanced data • Adobe • Etihad Airlines • EMEA: 11% (Abu Dhabi, Dubai, ingestion capabilities and ready to use SmartConnectors • Oracle Hospitality (Micros) • Large US East Coast Airline Amsterdam, Berlin, Frankfurt, make it possible to rapidly integrate variety of data from new • Indra (work in progress) • Global online travel brand Geneva, Rome, Grenoble, Hamburg, and existing sources. • AboveProperty (in progress) • Large global distribution system Madrid, Munich, Oslo, Paris, • RetailMate: A customer experience platform built to bring • Farelogix (in progress) • UK-based airline group London, Gatwick, Luton) IoT concepts to scale by optimizing digital in-store operations • UK-based global hotel chain • India: 60% (Bangalore, Chennai, and customer experience needs of retailers (can also be used • International airport in London Coimbatore, Delhi, Gurgaon, in airport retail and in restaurant chains for customer • Global privately owned car rental company Hyderabad, Kochi, Kolkata, Mumbai, identification, inventory management, and customer service • World's largest commercial real estate services firm Noida, Pune) through digital and Internet of Things) • World's largest hamburger chain • Others: 8% (Philippines, Thailand, • APEX: A platform providing a single integrated view of Australia, Hong Kong, Argentina) enterprise information management, including predictive analytics.

As-a-Service All Ideal Non-Existent Initial Expansive Extensive Ideal Definition Pervasive

Using platform based solutions, DevOps, and Write Off Legacy API ecosystems for more agile, less exception- oriented systems and processes 2017 2021

Understanding the business context to Design Thinking reimagine processes aligned with meeting client needs 2017 2021

Orienting governance to source expertise from Brokers of all available sources, both internally and Capability externally, to address capability gaps 2017 2021

Collaborative Ensuring relationships are contracted to drive Engagement sustained expertise and defined outcomes 2017 2021

Intelligent Using of automation and cognitive computing to Automation blend analytics, talent, and technology 2017 2021

Accessible and Applying analytics models, techniques and Actionable Data insights from big data, real-time 2017 2021

Proactively managing digital data across service Holistic Security chain of people, systems, and processes 2017 2021

Plug-and-Play Plugging into “ready to go” business-outcome Digital Business focused, people, process, technology solutions 2017 2021 Services with security measures

We’ll continue to see bots creep in… but not at a feverish pace. Most travel and hospitality companies we spoke to are in the midst of evaluating and adopting more intelligent automation both for support functions and customer interaction. The greatest uptick in customer-facing automation thus far has been with chatbots on messaging apps for booking functions. Automation investments moving forward for customer interactions will be focused on more intelligent solutions like cognitive and virtual agents. See KLM Uses Facebook Messenger Whatever happened to that velociraptor robot staffed hotel in Japan in 2015? to Stimulate Customer Interactions

What best describes your investment or interest in chatbots and virtual and cognitive agents for customer interaction? (T&H respondents)

80% 60% 40% 20% 0% Currently using Evaluating No interest

Chatbots Cognitive and virtual agents

Source: OneOffice Customer Experiences Survey, HfS Research, August 2017

§ Integrating wearable technologies and sensors: The travel industry is starting to embrace connected devices, in particular wearables, for delivering customer experience. Using a wristband or pendant as a way to order food and drinks or as a room key at a hotel, for example, are becoming more commonplace. This trend will provide more opportunities for designing frictionless customer journeys, and generate much more data which will be a challenge – and an opportunity – to use in creating personalized experiences.

§ More augmented reality: Augmented reality is also becoming more mainstream in the travel industry. The big opportunity here is for marketing, where savvy marketers can use augmented reality images either before a travel experience to make or improve the sale, or during travel to enhance the experience and increase ancillary sales. This will provide opportunities for experience design as well.

§ Writing Off Legacy becomes less about technology and more about mindset: There is no doubt that the travel and hospitality industries are mired in legacy technology, but as these companies find workarounds and ways to make these platforms more adaptable and connected to more nimble systems, the real challenge becomes a rethink of the legacy mindset. This means looking at human focused design – starting with the employee and ultimately focusing on the customer. Travel and hospitality companies will need to do this in the future in order to stay competitive.

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 33 2017 Recommendations: Travel and Hospitality Enterprise Buyers Considering these trends, it’s going to be a challenge to ensure that travel and hospitality companies can keep up with customer expectations amid the waves of change.

§ Find the right blend of automated and human touchpoints to meet customer expectations. Most travel companies have been early experimenters with bots and automated tools for booking tickets and the like. Many of the service providers in this market have expertise around designing the right blend of human and self-service or automated interaction – for example, how to know when to escalate the interaction and pivot a bot to a human. This will be increasingly critical as automated messaging matures with chatbots and virtual agents.

§ Use accessible and actionable data to empower the front line (and potentially avoid CX disasters): Give the “front line” the autonomy to make decisions by having accessible and actionable data at their fingertips with some built-in rules for guidance and standards.

§ Embrace Design Thinking as an ongoing method to promote customer-centricity and design frictionless customer experience. In addition to reaching across organizational siloes, services buyers also need to get out of their comfort zones when it comes to a human-centric design thinking approach internally and with service providers.

§ Align the entire organization to customer centricity (OneOffice): Break out of the legacy mindsets and siloes to align the whole organization to the customer – and look for service providers that also take this approach.

What capabilities are most important in your future evaluation of customer experience management service providers:

Customer analytics Strategy Technical expertise Innovation Competitive analysis and benchmarking Operations Customer journey mapping Automation capabilities Design expertise Thought leadership Vertical expertise

0% 10% 20% 30% 40% 50% 60% 70%

Travel Respondents, n=32 Total Respondents, n=154

Source: OneOffice Customer Experiences Survey, HfS Research, August 2017

In order to be competitive, service providers need to: “I’m always looking for • Look across industries to bring innovation to clients. new tech and ways to Buyers aren’t just looking for expertise in the travel streamline and automate.” vertical, they’re looking outside their industry to – SVP, BPO Governance, understand what’s working well and differentiating in other industries. They will look to service providers who Global Hotel Chain have strong expertise in other industry verticals as well as their own.

• Play a more strategic role through consulting and • Invest in a solid people and employee approach. Buyers customer journey mapping, and invest in analytics in the travel space we spoke to were really focused on capabilities. As the data on the previous slide shows, ensuring that their service providers had a strong approach travel and hospitality clients want to lean on their to attracting talent, and making sure that they are treated service providers to have more strategic and analytics well and empowered to help the customer. focused capabilities.

• Foster the technology partner ecosystems for technology innovation. The nature of the travel industry’s technology ecosystem necessitates a strong partnership ecosystem “I love their customer with the key software and platform providers for travel and focus and how they treat hospitality-specific functions. people.” – VP, Rental Car Company

• Research Director, Contact Center and OneOffice Customer Experiences, HfS Research – Boston, MA

Overview § Melissa O'Brien is Research Director, Contact Center and OneOffice Customer Experiences at HfS Research. Her research coverage includes customer experience management services, exploring ties with marketing operations and developing thought leadership around intelligent automation for Digital Marketing Operations and vertical specific customer engagement business processes. Previous Experience § Prior to HfS, Melissa spent four and a half years at IDC as Research Analyst managing the Worldwide Customer Experience Management Services program. Her role at IDC included analysis of evolving contact center business process and consumer communication trends and delivering reports, [email protected] presentations and custom consulting projects including market forecasts and in depth competitive assessments. § Melissa previously worked within the BPO industry as Client Services Manager at PSG Global Solutions, an outsourced recruiting services business. Melissa held various roles at PSG Global, including new client implementation, program design, and training, including development and delivery of the original training program in their Manila and Cebu, Philippines offices.

Education § Melissa graduated with honors from the University of New Hampshire with a BA in English and Communication, and is a member of the Phi Beta Kappa honor society.

© 2017 HfS Research Ltd. Excerpt for Cognizant Confidential and Proprietary │Page 38 HfS: Revolutionizing the Industry HfS’ mission is to provide visionary insight into the major innovations impacting business operations: automation, artificial intelligence, blockchain, digital business models and smart analytics. We focus on the future of operations across key industries. We influence the strategies of enterprise customers to develop operational backbones to stay competitive and partner with capable services providers, technology suppliers, and third party advisors.

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The "As-a-Service Economy" and "OneOffice™" are revolutionizing the industry.

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