Tom Quigley

HFS research on Avnet’s digital journey

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• Avnet, a Fortune 500 provider of global technology solutions, is on a mission to reinvent the role of the electronics distributor

• This Voice of the Customer report showcases a key element of Avnet’s digital transformation strategy, Ask Avnet, a cognitive assistant platform, developed in collaboration with its technology services partner Infosys

• https://www.hfsresearch.com/pointsofview/how-ask-avnet-cognitive-assistant-became-critical-part-customer-life-cycle

© 2019, HFS Research Ltd

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© 2019, HFS Research Ltd 3

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What we’ll cover today

● The importance of WHY. The value of a unifying business driver

● Where do you start? Prioritizing a starting point on your journey to the Digital OneOffice

● Improving B2B customer experience. Chatbots versus cognitive assistants

● Benefit and alignment. Achieving results and aligning initiatives to broader transformation programs

● Q&A

© HFS Research 2019

DEFINING FUTURE BUSINESS OPERATIONS

Smart Analytics

Robotic Process

Automation

Artificial Intelligence

Digital Business Models

Blockchain

Global Sourcing

The HFS mission is to provide visionary insight into the major innovations impacting business operations, including: automation, artificial intelligence, blockchain, Internet of things, digital business models, and smart analytics.

HFS defines and visualizes the future of business operations across key industries with its DigitalOneOffice™ Framework.

HFS influences the strategies of enterprise customers, to help them develop OneOffice backbones to be competitive and to partner with capable services providers, technology suppliers, and third-party advisors. The "As-a-Service Economy" and "OneOffice" are revolutionizing the industry.

© HFS Research 2019

HFS celebrates its 10th birthday in 2020!

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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HFS introduces RPA to the Industry

HFS Roundtables launchedHFS Top 10 Reports launched

HFS Academy launched HFS Hot Vendors launched

HFS Research founded

HFS unveils the “As-a-Service

Economy”

HFS India opens

HFS launches the “Digital OneOffice”

Cambridge UK HQ opensHFS launches the “Triple-A

Trifecta”

Employees Site Visitors

© HFS Research 2019

HFS research coverage areas1. DIGITAL ONEOFFICETM AND HYPERCONNECTED ENTERPRISE

Triple-A Trifecta:

Robotic Process Automation (RPA)

Artificial Intelligence (AI)

Smart Analytics

Internet of Things (IoT)

Blockchain

Quantum Computing

5. HFS DATA PRODUCTS: Interactive tools and market analyses

2. CHANGE AGENTS 3. FUNCTIONS 4. INDUSTRIES

Business services: Customer Engagement, Finance & Accounting (F&A), Sourcing &

Procurement, Supply chain

Cyber-security and regulatory compliance

IT Services: Cloud and IT Infra, Digital Consulting, ADM, and SaaS Services

Industry 4.0 Services

Banking & Financial ServicesInsurance

Telecom, Media, & TechnologyRetail and CPG

Travel, Hospitality, & LogisticsEnergy & Utilities

ManufacturingHealthcare

Life Sciences

How does your enterprise leadership view “Digital”?

Q. Which of the following statements most closely resembles your

organizational leadership’s view on the 'Digital Transformation' strategy?

a) “It’s about INVESTING IN "NEW IT" (e.g., get

technologies deployed like mobile platform, a

cloud platform, infrastructure, etc.)

b) “It’s about CREATING NEW CUSTOMER

EXPERIENCES” (e.g., having the coolest use of

innovative new technologies like social, mobile,

interactive, etc.)

c) “It’s about CREATING NEW REVENUE

STREAMS” (e.g., commercial leverage of digital

channels, such as mobile, interactive tech,

social media, etc.)

d) “It’s about ALIGNING / HARMONIZING

BUSINESS OPERATIONS to customer

needs” (i.e., all organizational touchpoints,

processes, systems and technologies are driven

by the customer experience strategy, from front

office to back office)

e) “We don’t have a digital vision”Source: HFS Research, “Journey to the Digital OneOffice 2019” Sample: n=395 Enterprise Digital Leaders

Digital disruption is rampant: 29% have already seen their top 2 competitors change in just three years

Do you believe that your top 2 competitors will be the same in 2021?

Source: HFS Research, “Journey to the Digital OneOffice 2019” Sample: n=395 Enterprise Digital Leaders

Are your top 2 competitors the same now as in 2016?

Customer data strategies become Critical as Enterprises shift from Physical to DigitalWhen you look at today’s immediate business pressures, what are the major burning business challenges facedby your company?

Hyper personalization/customization of products to customers

Combatting the presence of disruptive digital competitors

The shift toward digital/online virtual experiences away from physical/face-face

Finding the right talent to be effective in our business environment

Cyber security threats

Emergence of new business models

Reskilling staff to keep our business moving forward

Changing our culture to be competitive in a changing business environment

10%

12%

11% 12%

14%

10%

10%

10%

18%

14%

10%

12%

16%

12%

24%

10%

6%

8%

6%

8%

2%

8%

8%

6%

6%

42%

38%

37%

33%

32%

28%

27%

24%

Source: HFS Research supported by KPMG, "State of Operations and Outsourcing” 2019Sample: Global 2000 Enterprise Leaders = 355

© 2019, HFS Research Ltd

This is the new Avnet

15,000+Employees worldwide

2,500+Engineers around

the world

2.1MCustomers in

140+ countries

1,400+Technology

suppliers WW

1M+Engineering

community members

122BUnits shipped

annually 125 Locations across the world

We guide today’s ideas into tomorrow’s technology

We design, make, supply & deliver technology solutions

We work with customers of every size, in every corner of the world

“Changing the culture of an almost 100-year-old company is a daunting task. Creating a ‘why’ mission focused on cultivating happier customers and more

productive employees was clear and intuitive for internal sponsors to accept.”

—Nishant Nishant , Vice President of Digital, Avnet

14© 2019, HFS Research Ltd

Key customer service challenges:

• Customers could not easily navigate across the various brands under the broad Avnet corporate umbrella

• Customer service employees, many of whom have strong technical and engineering expertise, spent too much time on mundane tasks

• Customer service was not available 24x7x365

Objectives for Ask Avnet:

• Create a concierge-like experience that helps customers navigate across Avnet’s ecosystem of online brands including Avnet.com, element14.com, Hackster.io, and MakerSource.io, thus enabling access to Avnet’s full breadth of capabilities.

• Improve employee experience

• Expand customer service availability to 24x7x365 without hiring additional headcount.

Leveraging AI to improve B2B customer experience

Avnet’s B2B customers include engineers, procurement specialists, and professional makers who often have complex queries.

Cognitive assistants are at the high-end of evolving digital workers

15 © 2019, HFS Research Ltd

Integration of heterogenousdata and information

Screen scraping Data extractionProcess studio

Conversational services

Self-learningSelf-remediation

Execution

Enhancement of data

OpenSpanJacadaCiceroNICE

Staples “Easy ButtonAmazon “Dash Button

RBS LuvoKik

Slack

SiriCortana

AlexaGoogle Assistant

IBM WatsonIPsoft Amelia

Blue PrismUiPath

AutomationAnyw.Jidoka

Voice focusedservices

Front office Back office Internet Mobile phone OneOffice

Conversationalinteraction

Processexecution

Augmentationof human worker

Substitutionof human worker

Cognitive assistants combine conversational AND learning capabilities for business outcomes

“Implementing a low-level chat bot for an easy or standard process is straightforward. Developing an industry-specific cognitive capability requires

a lot of work to train the AI engine for the necessary intent.”

—Komal Jain, Industry Head – High-Tech, Infosys

Train the bot to understand the

Industry & ‘Avnet’

Organize info into query-able data

Build a vocabulary for Electronic Components

Brand it for Avnet, make UI & features

richer

Ask Avnet solution considerations

About the Ask Avnet solution

Leverages LUIS and QnA Maker for NLP

eCommerce integration for Bot to handle

product & order related features

Azure platform services for spell check and data

analytics

Taps into other properties within ecosystem for electronic

component blogs, articles

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Automated assistant Instant answers to

everyday questions, 24/7 (based on AI)

Avnet expertise on demand The right expertise from a real

person, at a time that suits you

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Ask Avnet features and benefits

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• Fast and easy access: reach everything from one obvious starting point

• Enabling conversations: interactive discussions in natural language

• Proactive: pre-empting needs and anticipating their next move

• Best answer: not a list of all possible answers

• Transparent & unbiased: solutions customers need, not just ones we have

• Products and solutions: from quick transactions to detailed design support

Ask Avnet Results

1. Adoption and utilization: Getting customers to change their behavior is always challenging. However, Avnet’s client base has embraced Ask Avnet; each week it logs 1000s of users and the number is growing.

2. Increased sales conversions: While the vast majority of Avnet’s sales are still conducted offline, Ask Avnet’s ability to provide contextual information about products, projects, and related components has supported an increase in online sales. Customers are buying more online versus a comparison to offline purchasing behavior. For online channels, there is a threefold conversion rate on Ask Avnet compared to its website.

3. Reputational lift: Avnet was the first distributor to launch a cognitive assistant, helping to further its reputation as a leading technology company and helping to bring to light the full breadth of its portfolio. A reputation as an innovator helps cater to current and future engineers and makes Avnet more relevant in the digital economy, where consumer brands dictate a certain standard of online access and ease of experience.

4. Enhanced customer satisfaction: Ask Avnet baked in a simple satisfaction scoring mechanism at the end of each interaction—a one-to-five rating scale for satisfaction. Its score has been gaining steadily and is well above historical averages. As intended, Avnet accomplished the score increase without adding headcount.

5. Cross-pollination of brands: Avnet, its customers, and its employees have all been delighted with the ability to provide a view of complementary products and services across the Avnet ecosystem of brands and companies. Customers appreciate the ease of navigation, which is now via a single source rather than different websites. It showcases the breadth and depth of Avnet’s portfolio.

6. Employee benefits: Ask Avnet has begun to successfully manage a portion of mundane requests that were formerly sent to live agents. Offloading these easily resolvable requests helps improve the quality of agents’ work because they can focus on more complex customer challenges. Employees also appreciate the cognitive agent’s ability to recommend context-based information from the Avnet ecosystem.

20© 2019, HFS Research Ltd

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Q&A and related HFS research

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• It's Bots-in-Seats as IBM, Cognizant, Accenture, TCS, Infosys and Tech Mahindra lead the HFS TOP 10 Cognitive Assistants

• Accenture, IBM, Cognizant, Infosys, Wipro and TCS lead the first Digital OneOffice Blueprint

• The why, the what and the how of the HfS Digital OneOffice

© 2019, HFS Research Ltd

• ENTERPRISE AI LEADERS MUST TAKE A CONSULTING DRIVEN APPROACH: BEST PRACTICES FROM INFOSYS

• HOW THE ASK AVNET COGNITIVE ASSISTANT BECAME A CRITICAL PART OF THE CUSTOMER LIFE CYCLE

• INFOSYS BPM ACQUIRES EISHTEC TO BOLSTER ITS ONEOFFICEOFFERING

• HFS ENTERPRISE AI SERVICES TOP 10 REPORT

• TRAILBLAZE A PATH TO YOUR CUSTOMER-CENTRIC ONEOFFICEEXPERIENCE WITH THESE FIVE STRATEGIC IMPERATIVES

• HFS TOP 10 MICROSOFT AI SERVICES 2019

• DON’T FALL FOR THESE SIX COGNITIVE ASSISTANT MYTHS

• ENTERPRISE LEADERS MUST LOOK TO COGNITIVE ASSISTANT SERVICES AS A CRITICAL BUILDING BLOCK FOR THE DIGITAL ENTERPRISE

Thank you

22 © 2019, HFS Research Ltd