Finance talent: automation skills now trumping analytics skills

Our current in-the-field study looking at Re-architecting the Finance Function for the Digital Age (click here if you are yet to complete it) is confirming some major changes in the capabilities organizations need from their finance staff:


What’s eye-opening, here, is the softening focus on analytics skills and the huge increase in the need to understand automation and better define business outcomes.  I’ve long preached that you can’t really get the data your organization needs real-time, if you don’t have well automated processes to generate it in the first place.

It’s becoming clear that staff have to be less focused on creating data, overseeing operational processes and performing routine tasks, and much more adept at figuring out how to make better sense out of what they are doing to achieve more measurable, value-add results (outcomes) for their organizations.

Stay tuned as we drip this study out to market in the next few weeks.  The world changed at lot in 2015, and we need to get back to basics in 2016 to understand actions customers are taking to change with it…

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Rohit’s rhetoric

While we can all obsess about a future where any work requiring any sort of basic logic will be automated, where we won’t even need to think anymore, because machines will do that for us (in fact, we won’t need to do anything anymore except exist, or maybe play golf or twister or something…), the market for good old-fashioned BPO is quietly picking up very nicely as several smart providers, quite simply, are getting better at developing offerings that are much more effective, profitable and scalable.

Rohit Kapoor is Vice Chairman and CEO EXL (Click for bio)

Rohit Kapoor is Vice Chairman and CEO EXL (Click for bio)

One such service provider, which has been quietly going about its business very effectively of late is EXL, which has been enjoying a record stock price this month and very healthy improvements in profitability and revenue growth this year.

I first met a fledgling EXL before the firm went public, back in 2006, and was immediately impressed by the hands-on steely determination of its CEO, Rohit Kapoor, and his close-knit team of process-obsessive young managers. Fast-forwarding a decade, and that same firm has passed the half-billion dollar revenue threshold, developing deep process niches in verticals like insurance, banking and healthcare, while building out real global depth and competency in analytics and finance and accounting.  And it’s this breed of provider which is really beginning to thrive in today’s As-a-Service Economy – small enough to be nimble to cater for needy clients, large enough to take on complexity and scale, and resourceful enough to lay the groundwork for multi-tenant As-a-Service offerings for the future.

So without further ado, let’s drag Rohit away from the golf course (where he’s probably upsetting yet another of his clients by not letting them win…) and hear his views of how the industry has evolved and how he intends his firm to evolve with it:

Phil Fersht, CEO and Industry Analyst, HfS Research: Rohit, it’s great to have you with us today. I think I’ve known you nearly 10 years – and it’s the first time we’ve had you on HfS to talk to our audience. So maybe you could give us a little bit about your own career background, what you started out doing and how you ended up running a major BPO firm like EXL?

Rohit Kapoor, Vice Chairman and CEO, EXL:  Hi Phil, thanks for having me on – great to be here! I started my professional career with the Bank of America in India, ,and came to New York 25 years ago to establish a new business unit for the bank dealing with High Net Worth Individuals, helping them manage their money. As part of this, I started to make a lot of private equity investments into the Indian IT services companies, which were just growing up at that stage. These were highly under invested companies, not very well known in the public market, and there were a lot of myths Read More »

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The HfS 2016 Blueprint Research Agenda …at your service

2016 will mark our seventh year as an analyst firm and will be our most expansive as we tackle many emerging areas and industries.  Yes, we have come an awfully long way since the days people thought we “only covered BPO”:

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Click to Enlarge

The analyst industry’s most ambitious 2016 research agenda tackles the continuum from legacy operations to the As-a-Service Enterprise across talent, technology and process

Earlier in 2014, we introduced to the world the concept of the As-a-Service Economy and how it is fundamentally impacting how business and IT services have to be fashioned, solutioned and delivered. Enterprise service buyers and providers have little choice but to evolve how they manage their services, or face extinction.

This means both parties need to make genuine investments in their underlying process architectures, reorient their talent capabilities and make some short-to-medium term sacrifices in their financial models to remain viable in the As-a-Service Economy. The same issues apply to sourcing advisors and analysts that face increasing irrelevance if they fail to adjust to the shifting demands of what it means to be an “As-a-Service Enterprise” in this new economy.

The legacy model of IT and business services sales and delivery that has dominated the industry for decades has rapidly become obsolete in our increasingly digital world, where speed, agility, flexibility and re-invention are no longer optional, but core characteristics for the success of any As-a-Service Enterprise.

For HfS, As-a-Service is about continuous progression, where enterprises do not pause at a status quo state. Instead they are continually exploring better ways to automate processes, access rapid meaningful data, and advance self-learning capabilities in a secure, trusted environment.

Our thinking about the Ideals of the As-a-Service Enterprise also has progressed this year. We now segment the ideals into Change Management Ideals and Solution Ideals that intermingle and build upon each other on the journey to the As-a-Service Enterprise. This journey will require significant change management, and through the course of 2015, we have seen encouraging examples of that throughout the industry, especially with efforts to simplify and automate increasingly unwieldy legacy operations and technology.

We could write and talk for hours about the unwillingness of enterprises to change the status quo to achieve better results. But ultimately it all boils down to the leadership of the enterprise having the appetite to go out and find a trusted partner that is motivated to share the risks of this transition within a financial model that works for all parties. Middle management will always resist anything that doesn’t pay them more, make them happier and more excited, or more motivated to perform. The only way forward to achieve genuine plug-and-play digital business solutions is for service providers and enterprises buyers to embrace real design thinking concepts and work together continuously in a much more collaborative and transparent fashion. This means they need to invest in talent, in training, in change fundamentals—and ultimately in solution fundamentals.

The Ideals of the As-a-Service Enterprise explained

In sharing our thinking on the Ideals of the As-a-Service Enterprise through countless client strategy sessions, industry-wide webinars and briefings this year, we have had the chance to test these Ideals with industry stakeholders to understand their relevance and practical applications.

What came out from these sessions was that the Ideals fell into two key themes: Change Management Ideals and Solution Ideals. In many cases enterprises approach these ideals sequentially.

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Click to Enlarge

To move toward the As-a-Service Enterprise, it is beneficial to begin with a willingness to write off the legacy technology and operations and with that adopt Design Thinking as a way to look at business challenges and opportunities with a fresh perspective. Then an enterprise can orient governance and relationships toward building service solutions with the optimum capabilities, Read More »

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HfS brings O’Brien’s brains on board

Melissa O'Brien is Research Director, Contact Center and Omni-Channel Operations, HfS (Click for Bio)

Melissa O’Brien is Research Director, Contact Center and Omni-Channel Operations, HfS (Click for Bio)

Pretty much everything we cover at HfS has a contact center at the heart of the process, whether it’s an insurance claim, a supplier inventory call, a sales inquiry, an analytics request, and so on….

So we realized it high time we actually brought on an analyst who has set up contact center operations around the world, lived and breathed the offshore experience, has intimate knowledge of the service providers, the technologies and the skills needed to make these things function effectively.  We also realized we needed that analyst to be expert at kick-boxing to keep us all in order.  So join me in welcoming a great talent to educate us all on the future of the contact center and omni-channel operations, Melissa O’Brien…

Welcome Melissa!  Can you share a little about your background and why you have chosen research as your career path? 

Thank you for the welcome, I am very excited to join the HfS team! I have been following contact center operations and customer experience as an analyst for the last four and a half years, and I previously worked within the BPO industry in various roles. I’ve been an implementation manager, designing and transitioning processes from onshore to offshore- managed client relationships, and have also developed and administered training to groups of new contact center employees and to the trainers themselves. When I got the opportunity to work in market research, I had found the perfect combination of continuing to work with clients on solving problems, but also getting the chance to do a lot of strategic thinking and writing about my domain. I really enjoy research because you’re always learning as the market is constantly changing and evolving – I love the challenge of always having to be that step ahead!

Why did you choose to join HfS… and why now?

I have been working in the contact center operations market for the past 10 years and my passion is understanding what makes great customer experiences. HfS’ focus on the As-a-Service Economy is at the heart of how the contact center is evolving today, and the way that companies are now looking at customer experience, which is a much more holistic and outside-in approach. Ambitious contact Read More »

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Life beyond automation? Consider the H Factor

Technology is useless without the H Factor to drive it...

Technology is useless without the H Factor to drive it and apply it to business scenarios

I woke up to an interesting piece by Everest’s Peter Bendor Samuel yesterday, where he describes how IT service providers have developed their delivery staff into, essentially, “human robots”. He goes onto say that, while providers have delivered real value serving up these “human robots” to their clients, their staff no longer wish to work in such a robotic fashion.

“With automation, we no longer need human robots. But then what do we do with these people?”… which is where Peter leaves the question hanging.  And that was the biggest takeaway for me – not that operational jobs are gradually being automated away, but what are people going to do next, who didn’t actually want to be human robots in the first place? So let’s cut to the chase… technology is useless without smart humans (the “H Factor”) to apply its potential to real business scenarios

Tackling the H Factor: Today’s human workforce’s challenges in the face of automation

Today, we essentially fall into three categories of worker, with each one roughly a third of today’s workforce:

  1. Millennials.  Yes, that strange, fascinating species we all need to be extremely careful not to upset. Remember, we weren’t born with Snapchat and Instagram embedded into our DNA, and we have to be very cognizant of the fact they need Youtube playing on their machine at all times, while they try to reimagine our procure-to-pay processes. Remember, these kids weren’t introduced into the workplace needing to work for their money. They need to be wrapped in cotton wool and nurtured in an environment with plenty of open spaces, coffee bars, collaboration rooms, movable white boards, a 24×7 gym and a tattoo parlour.  The challenge here, is that while Millennials are, on average, more loyal to their employers than their previous generation, how can they all be aligned with adding real business value in the real world? Do we really need as many Design Thinkers as we used to need coders and process managers?
  2. Baby Boomers. Yes, that motley crew of crusty old farts just hanging on until they get pensioned off. Most want to call it a day, but have expensive lifestyle tastes and can’t afford to – I mean, have you gone to Whole Foods recently? For the Boomers, there is no point changing anything now, as retirement is only a few short years away and they’ve convinced their bosses of the imminent security meltdown, should they tinker with their career defining masterpieces getting their firm’s operations to this fine state of operational performance. I mean, who else can boast a gold watch, simply for showing up to work everyday for the last 30 years?  The challenge here is how to retire this lot, so we can create career progression for the younger generations…
  3. Moomers.  The weird bunch stuck between Millennials and Boomers.  They’re half-terrified they need to be effective using social media, and half-terrified they are going to get automated out of existence, as they aren’t “Digital” enough to break out of their humanesque-robotic existence. They’re trying hard to get to 100 Twitter followers and have got quite adept at posting little essays on LinkedIn, which they think hundreds of people read, when, in fact, noone really got past the headline, with a few sympathetic souls clicking the “like” icon.  They really want to be seen as “Digital Transformers” and made sure they added “Digital” into their job titles (as if “being Digital” was what they aspired to be when they graduated from college).  Little do we suspect they were also previously experts in eBusiness, Web Services, SOA, Cloud, Big Data, and so on… The challenge here, is most these lovely people don’t really have a lot of skills beyond marketing themselves as valuable people, as most the stuff they really do is tactical and highly automatable.

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Did HfS really just uberize the analyst business?

Yes, I know I promised to savage anyone who used the term “uberize” to describe a disruptive business model, but having spent a fascinating day at the ARForum in London last week, it really struck me that uberization is pretty much what HfS has done to the traditional IT analyst industry, when you look at the results of what ~1000 consumers of IT research are saying:

Click to read the full article over at Influencer Relations

Click to read the full article over at Influencer Relations

While you can’t really do a direct apples-t0-apples comparison between the Uber and HfS business models, what we have in common is the fact we’ve both leveraged digital platforms to disrupt traditional, slow-moving industries – and with limited infrastructure and resources.

So why is HfS the “Uber” of the analyst industry?

1. We use digital technology, the web and social as our customer platform. At HfS, we do not need to hire armies of expensive, aggressive sales people to grow our customer base. We use our webplatform, a host of digital content and marketing apps, our blog and our social communities to bring the customers to us – at a fraction of the cost.

2. We don’t view “customers” as entities that have to give us money. Do Facebook, Twitter and LI fail to influence people because they are free? It’s the same with research – why does everyone have to pay money to be considered “influenced”.  We get over a million visits to our stuff every year, well over 100,000 subscribers to our blogs and research and 15-20k pieces of research being downloaded each month.  These are our customers.  We just don’t believe in making everyone pay-to-play – we are of a size where we are proud to share what we do without slapping a huge paywall in front of the world. That’s why we are already the #3 firm in the industry in terms of reach and influence, after only 6 years in existence.

3. Freemium research, that is compelling and easy to access, is what gets read today.  Most people tend to read only research when it’s slapped in front of them, that is digestible and compelling.  Trying to navigate your way behind an expensively assembled firewall and search engine pretty much loses most people before they even think about trying to reset their password.  I recall when I was last working for a “legacy” analyst firm that we were lucky to get more than 15 people downloading a report.  Today we have in excess of 20,000 reading them. The difference is, simply, off the scale.

4. The revenue model is different from the incumbents. We don’t believe most people really want to pay for libraries of reports any more.  They will, however, pay for benchmark and pricing data, competitive analyses and access to awesome analysts, who are fun to talk with and easy to get hold of.  We also mix access to our massive global community (both physical and electronic) with the research access.  Our buyer clients can come to our industry-leading quarterly summits, while vendor clients can have sponsorship privileges.  We believe peer networking and sharing the dynamics of thousands of the global community as a critical part of the Research 2.0 process.


Talking about analyst disruption last week, at the 2015 ARForum

5. The customer experience is just so much better.  I love the fact that, with Uber, both the drivers and customers get to rate each other.  It’s a bit like that with HfS – we love our clients and we want them to love us. We do not put in 1-800 numbers to set up faceless analyst discussions, and we certainly do not stick analysts on competing postage-stamp P&Ls where they cover extremely narrow areas. In fact, talk to HfS and you’ll likely get a meeting with 4-5 of our analysts within a few days as so many areas are overlapping, if you really need to talk to us urgently. We also make time to hang out with our clients, at our office or theirs. We do this because we enjoy it, not because we just want to get through the ol’ 9-5 treadmill.  It’s like getting into an Uber, where the driver is genuinely grateful to be of service, as opposed to some self-entitled miserable worker who’s just going through the motions.

6. The incumbents can’t/won’t cannibalize their revenues.  No-one likes having to drop their prices, while improving  their services and customer experience at the same time. It costs money and upsets investors with short-term mindsets. There is also an arrogance when your firm has been printing money for years, and suddenly you have to work for it again. Entitled people just do not want to work harder/smarter and with a better attitude. It’s the same for many of these overpriced creaking old taxis that smell like a dog died in the trunk – they simply have lost the ability and appetite to up their game.

The Bottom-line: It’s all about being non-traditional, using digital tech and creating a workable revenue model

Hopefully, after reading this, people will start to use the term “HfS-ize” instead of uberize =)

But, seriously, surviving in a market that refuses to change, such as the traditional IT analyst industry, is all about leveraging digital tech and the web to have a much, much more competitive model in terms of cost, reach and customer accessibility.  However, you can use all the cool tech in the world, but it’s useless without the human factor to drive it and make the magic work.  That’s where having a team of motivated, passionate – and genuinely nice people, makes this business successful.

While technology and a great business model is what makes the thing function, it’s really the people, the socially intelligent attitude and culture which make up our secret sauce.


Meet the Fresh Prince of Capgemini… Mike Small

Mike Small is the Global Sales Officer, BPO at Capgemini

Mike Small is the Global Sales Officer, BPO at Capgemini

People in the BPO world have noticed that Capgemini has really started to win business in the US over the last couple of years – no longer is the firm seen as largely a European/International player, but a global player with a strong US footprint.

One of the key reasons for this has been the introduction of Mike Small, initially to lead US BPO development efforts, before his elevation to global BPO sales leader after his success helping bring in major new clients such as NBC, Office Depot, UBM and Ferro.

Despite being very tall, very charming and very articulate (come see Mike at our Harvard event this December), Mike is also a complex-deal addict – he loves grinding out the really large, intricate engagements, when he’s not out playing golf or running off his business dinners. So it’s high time we made a major introduction to the HfS community to Mike Small…

Phil Fersht, CEO, HfS Research: Good morning Mike, it’s great to have you join us today… please give us some of your background and how you got to the role you’re in today.

Mike Small, Global Sales Officer, BPO at Capgemini: Great Phil, and good morning to you. I’ve been with Capgemini now for over a year and a half. As far as my current role and responsibilities, I head up global sales and marketing including go to market operations for Capgemini’s Business Process Outsourcing business. The best part of my job is working with clients in multiple industries and helping them address their business challenges mostly around finance and accounting as well as supply chain. Capgemini BPO is a leader in both of these disciplines from a marketplace standpoint. So that is my current job. Prior to that I was working at a major technology firm, again focused on business process outsourcing mainly in the North American market. Specifically with a domain focus in both healthcare and financial services, and again running sales and marketing.

When I first started in the industry about 18 plus years ago; I was focused on finance from a controllership and audit perspective and then quickly moved into another multi-national outsourcing firm. Since then, I’ve pretty much been with outsourcing firms, both ITO and BPO as well as applications with experience in solutions and service delivery. Over the past five years I’ve taken what was an IT/ application outsourcing background and really focus on end-to-end business processes. So that’s my passion. Helping clients with shared services strategies, global business services adoption, integration of hybrid models, and full outsourcing of business processes

Phil: What attracted you to join Capgemini? Surely the world was your oyster =)

Mike: Capgemini is a leader in the BPO space and well recognized by analysts like yourself as well as others globally. So that was one initial draw. As I started to explore the corporation, I looked at the cultural fit. Like any career decision a lot of it comes down to feel. So did I feel that I could bring my talent to this organization? Did I feel that this is the right fit? Both of these dimensions for me, Read More »

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Outsourcing is on life support, with many providers failing to invest in As-a-Service

Legacy Cat

Why aren’t you prepared to share more risks with your clients, Mr Provider?

If I have to hear another advisor, lawyer or provider sales executive whining about their lack of business, I am just going to tell them straight – “You’re a dinosaur, you are selling a capability from a bygone era. The reason clients don’t call you anymore is because you are not offering them what they really need – or at least educating them on what they need to haul their legacy back ends out of the dark ages.”

The narrative simply has to change. Today’s enterprise world is littered with literally hundreds of legacy outsourcing relationships where the service providers are unwilling (and many just plain incapable) of making any genuine productivity improvements.

What’s more, the leadership in their clients is quickly wisening up to what’s going on and simply does not trust them to invest in their delivery capability, or share risks with them to find new thresholds of value.  Close to half (47%) the enterprise leadership we spoke to in our recent As-a-Service study view their service provider’s unwillingness to cannibalize their existing revenue model as a highly significant obstacle to make the As-a-Service shift, and a similar number (44%) view their provider’s lack of support to share any risk as a key issue:

Providers unwilling to change the model

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The outsourcing industry is stuck in a legacy holding pattern and is in real danger of decline

The problem we have, today, is that the leadership within many enterprise “buyer” clients is under huge pressure to take their operations to the next level, but most of their middle and lower management clearly only care about keeping the current status quo. In a nutshell, our industry is suffering from hundreds of stagnating outsourcing relationships, where the service provider has zero incentive to do anything much beyond keeping the margins consistent, while the middle management on the buy side has a similarly lethargic ambition not to do anything much… bar keeping the lights on. Read More »


Accenture, Deloitte, Capgemini and Bluewolf lead the industry’s first Salesforce Services Blueprint

Salesforce dot com.  Remember that upstart little CRM online platform that created affordable, intelligent customer management capabilities that defied the evil on-premise model?

Well, it’s now a multi-billion dollar service market that commands ERP-level rates, demands expertise that are in very scarce supply… and has driven a whole ecosystem of services upstarts and established providers all seeking to master the art of delivering salesforce-as-a-service.  So without further ado, let’s hear from Blueprint report authors Khalda de Souza and Charles Sutherland on this escalating As-a-Service market:

Click to enlarge.

Khalda.. why have we undertaken an HfS Blueprint on the Salesforce Services market at this juncture?

Well, we saw the Salesforce services market as being analogous to a “petri dish” where many of the innovations of the “As-a-Service Economy” are visible. As a result, we wanted to use our Blueprint methodology to assess how service providers were responding to all of these innovations up close and in a structured manner. Every enterprise and service provider is making the commitment to Write Off Legacy in some way by moving to Salesforce to begin with and with that they are looking Read More »


And finally… The Agenda for the Harvard Working Summit for Service Buyers

Who else can put on an event and oversubscribe it before even releasing the bloody agenda?  Didn’t people realize the central theme this year is invoice processing transformation in Kazakhstan?

Well, the long wait is over and we’re proud to  present a slightly eccentric and highly knowledgeable line up of industry luminaries for our upcoming HfS Working Summit for Service Buyers, in Harvard Square, Cambridge, MA, December 1 – 2:

Here’s a mere sprinkling of the luminaries joining us for the December summit:

A mere sprinkling of the luminaries joining us for the December summit.

Read More »

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Provider, provider on the wall, who’s delivering Trust for Digital?

Anyone who knows me well has seen how hard we’ve been pressing the importance of security and trust in a global services delivery environment, since we founded HfS.

In short, we’re moving into a world where reactive fixes to security breaches is a sure-fire recipe for disaster.  Savvy enterprises simply have to deploy proactive, holistic management practices of their data flows across systems, people and processes.  What’s more, with all these new investments going into digital technology, SaaS platforms, global outsourcing initiatives and automation bots, the risks out there with our data flying all around the place – and the trust in people needed to manage these risks – is second to none.

So who better than an analyst legend of the networking and computing boom era, the founder of analyst firm Current Analysis himself, and now a year-long member of the HfS team, Fred McClimans, to have a serious deep dive into what we are calling… Trust-as-a-Service:

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Click to Enlarge

So Fred, why a Blueprint on security, or perhaps the better question, why trust as a Blueprint topic?

The transformation from an analog to a digital economy has been profound, giving rise to a whole new wave of business and economic models that place the consumer first and corporate assets online. This is a huge shift from the legacy models where brands controlled the message, consumers ate what was available, and managing risk meant not much more than a solid business plan, a line of credit, and Master locks on the front and back doors. That game ended a long time ago.

With most, if not all, corporate data now available online, and a massive consumer-driven omnichannel engagement model, we’ve literally given competitors and “evil-doers” a map of where Read More »


Meet General Gary

Gary Novak, KPMG China

Gary Nowak (pictured right) is Partner for KPMG’s Shared Services and Outsourcing Practice in China

How many consultants do you know who just give up their life of first class travel, champagne lunches, and arrival by helicopter to luxury golf courses to slum it in the back streets of Shanghai?

Yes folks, KPMG’s Gary Nowak had it all . . . but his love of Yoga, meditation, and people-watching just got the better of him and off he went. So, without further ado, let’s learn more about KPMG’s Gary Nowak and what he’s learned having lived in China the last few years . . .

Phil Fersht, CEO, HfS Research: So good evening, Gary Nowak. Thank you for spending some time today with HfS. I know we’ve met in the past, but I’d like for you to give a little introduction to our audience. Tell us a bit about yourself, your history in the industry, and how you’ve ended up leading a practice for KPMG in China.

Gary Nowak, Partner, KPMG China:

Sure. Thanks, Phil. I appreciate the invitation. I’ve been in China since January 2013. In the summer of 2012, I took a trip to China in connection with a client I had taken globally—to Eastern Europe, India, and eventually China. I was very impressed with China, specifically Dalian China, a city with a high concentration of outsourcing, located in Northern China. After that visit, I requested, through KPMG, to be sent to China, specifically Shanghai, because Read More »


Join us in NYC next week to give BPO a much-needed face lift

Let’s get together in New York next week to reminisce about that wonderful  phenomenon that was BPO, which – of course – is now a thing of the past, with everyone digitizing and automating their business operations, while adding layers of artificial intelligence to help make groundbreaking business decisions. Who needs BPO anymore, right?

In fact, us humans are probably not even needed at this conference, so why don’t we just meet at the bar instead and leave the discourse to our future employees:

BPOi NYC Conference

Come to NYC next week and get your future BPO employees motivated…

But wait!  It’s not over for us humans yet – honest!

The problem with all this much-hyped digital tech and automation is that it’s completely useless without the right talent to operate it. Don’t tell the software firms, but better technology underpinnings actually empower humans to do their jobs better – and spend more time on higher value activities.

“BPO” is now going through its biggest-ever facelift, with the advent of intelligent automation, analytics and digital, and I am personally excited to get some quality time in the Apple next week, at the 2015 BPO Innovations Conference, where we can cut through the hype and get to the real conversation, starting with my opening keynote address:  Welcome to the As-a-Service Economy.
Come along and I will be hanging around all day to spend time with you all, with some of the HfS team, including Bram Weerts and Tom Reuner.  We would love to spend time locking heads on where our industry is heading.


  • Don’t miss Keynote sessions from HfS Research, Xerox’s Chief Innovation & Chief Process Officers, and HBO executives
  • Join leading buyer execs from Astra Zeneca, Bloomberg, HBO, McKesson, Pricewaterhouse Coopers, SunTrust Bank, Thomson Reuters
  • Hear from industry expert thought leaders at Avasant, Capgemini, Tata Consultancy Services, Xerox, Loeb & Loeb & Neo Group

Register today to build your rolodex during 5 designated networking sessions, including complimentary breakfast, lunch, and evening cocktail reception, where you will have the opportunity to win a test drive with a Tesla.

Registration is complimentary to buyers and practitioners. Influencers and Suppliers can use code HFS15 when registering to receive a 15% discount.

Conference Details
October 22, 2015
8:00 am – 6:30 pm
Bohemian National Hall
321 East 73rd Street, NY, NY 10021

The full conference agenda can be found at

Register today and hope to see you there!

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Cannibalize or face extinction (if you want to survive in the As-a-Service Economy)

hannibal the cannibal“Ten years ago, my CEO asked me to drive efficiencies through offshore outsourcing, now he’s asking me to make them through automation”, declared the CFO of a major corporation at the recent NASSCOM event in India.

This pretty much sums up where we are as a global services industry. We’re embarking on the next phase of productivity, and that means we have to incorporate it into our contracts and prepare to invest in the future model, not merely perpetuate the old one.

Service Providers invested in the old FTE model and it worked, now they need to make new investments in As-a-Service delivery

It’s not completely dissimilar to the old “lift and shift” FTE-centric deals of 5+ years ago, where providers would invest in the short term costs of client transitions, and spread the investments out over a 5-7 year contract to make the deal offer immediate attractive cost-saving gains for clients.  Yes, they were making their first steps to becoming insurance firms for their clients, which is even more the case today, where the risks are higher and the savings more challenging to generate.  However, if today’s service providers fail to develop scalable As-a-Service delivery platforms they can replicate across clients for the future, they will likely get replaced by other service providers in the future, which have made the investments necessary to provide more automated delivery, better data – and consequently more intelligent operating talent.

OK – the legacy FTE deals were less risky, so long as you could deliver up the lower cost people and shift the work to them without any major blow-ups.  The modern deals require providers to find additional margin by automating processes effectively, converting freed-up effort into lower operating costs and also redeploying available talent on higher value collaborative activities.  In other words, the old model was all about hard savings from direct labor swapping, the As-a-Service model is about a combination of smarter labor provision and genuine process transformation through better technology (i.e. soft savings).

It’s higher risk to avoid making the necessary investments – extinction could beckon for many

As the following graphic clearly illustrates, from our recent As-a-Service study covering 178 major buyers of services, if the major decision makers (SVPs and above) fail to see real As-a-Service progress made by their existing service providers, six-out-of-ten believe replacing their services providers would have a significant impact smoothing their progress towards their desired As-a-Service end-state.

While their more junior subordinates clearly do not view replacing their service providers as having such a drastic impact (25%), the frustration at the senior levels from providers’ failed promises and lack of progress to invest beyond the legacy model is abundantly clear:

Legacy SPs getting Dumped

This isn’t about like-for-like body-swapping, this is about removing menial transactional work and redeploying people resources into areas of higher value-add to clients.  This is what real “transformation” (sorry, I said it) is about – spreading workloads across talent pools effectively, by leveraging smarter automation, SaaS-based process standards and training talent to work more collaboratively and intelligently.

The Bottom-line:  Most service providers are not structured for success…. and the problem lies at the top

There are a lot of client RFIs on the market that are increasingly complex, but aren’t as attractive to providers as the juicy scale deals of the past, requiring a determined effort from the provider to cobble together the right resources and expertise to take them on effectively. Sadly, many of today’s service providers are simply not structured in the right way to take on more integrated / As-a-Service-type deals.  At HfS, we are seeing some of the legacy service providers turn up their noses at these deals because they simply cannot break down the barriers internally to bid effectively for them.  They are geared up for the dwindling legacy deals, not the new ones that are emerging from the next layer of buyers ready to move into outsourced As-a-Service business models.

In most cases, service providers are too vertically set up, for example, most still have an infrastructure service line, an application service line and a BPO service line – and most have product service lines too (not to mention some legacy vertical industry groups that do not even talk to each other). Each service line still tends to use its own unique contracting, pricing and risk tolerances.  In short, client expectations are increasingly becoming much more mature around integrated services, taking the form of As-a-Service models, comprising elements of infrastructure, storage, comms, apps functionality and BPO, optimized around that integration as opposed to discrete components.

The legacy service providers (and those service providers who may not realize they are – actually – legacy) simply don’t know how to price, solution, assess the risk and pull it all together – they can’t, because they simply aren’t set up that way.  These problems stem from the leaderships in these providers, where they simply have failed to structure their organizations in a way that can truly deliver As-a-Service.  They are slaves to their little fiefdoms of siloed P&Ls, which have dictated strategy over the years.

Without a game-plan to take on integrated deals at lower margins to grow the future platform, many service providers can kiss goodbye to growth.  The only route is to invest in smaller deals to build a service delivery platform for future client utility – today’s providers need to develop a 2-3 year plan where they will take on strategic deals at low margin/cost in order to build out the As-a-Service model of the future. Those ignoring this strategy better have a few billion in the bank to make acquisitions down the road, as that will be their only route out of this legacy black-hole into which they currently find themselves sinking.


The 2015 HfS Global IT Services Top Ten. Here it is.

Yes, we threatened to update our annual look at who’s climbing and falling in the IT services world, after the storm we created last year when Jamie Snowdon put out the 2014 Top 10.  So here it is:

Click to Enlarge

Click to Enlarge

While the Indian-heritage providers continue to surge, here cometh Amazon

Last year, we observed the entrance of the first of the large India-heritage service providers into the Top 10 IT Services providers, with TCS entering the fray. Throughout the past decade, the five major India-heritage offshore-centric IT services providers have dominated growth in the marketplace, and had created a new market segment – a tier of fast growing services providers.

Over the last 5 years, we have seen another unique growth phenomenon emerge, representing another tier of the IT services market, a tier of even faster growth the cloud pure play providers. In this year’s 2015 list, we have included the Top 10 providers, the major 5 India-heritage offshore-centric providers and Amazon Web Services (AWS), as the largest as-a-service IT services provider (see above).

AWS has dominated the infrastructure cloud market with revenues as much as ten times larger than its nearest pure play public cloud providers, at over $4.6 billion. In response to this threat, the traditional providers are also staking a major claim to be in the As-a-Service business with IBM, for example, stating it now has achieved cloud revenues of $7 billion in 2014, with $3 billion of which is As-a-Service, with the rest presumably comprising more traditional consulting and integration services.

Accenture poised to overtake HP, Fujitsu wobbles

HfS' Jamie Snowdon, Author of the HfS Global IT Services Top 10

HfS’ Jamie Snowdon, Author of the HfS Global IT Services Top 10

IBM remains the lead provider thanks to its broad portfolio of technology products and services, plus its genuine global reach. IBM is one of the few providers with significant revenues in professional services, outsourcing/managed infrastructure services, application services and traditional support services. Although HP remains in the number 2 spot, consistently poor growth performances in its Enterprise Services group, over the past 3 years, creates the possibility of being overtaken by Accenture in the near-to-medium term. Fujitsu has slipped down the list, in part due to exchange rate, with ~60% of its services revenues coming from Japan and over-exposure to the recent weakness of the Yen.

Of the traditional onshore-centric service providers, Accenture has created a tier in its own right for the last 2-3 years, with a couple of exceptions, posting consistently strong growth quarter by quarter. A large part of this success has been its dual role as a strategic thought leader for its clients, in addition to its focus on delivering global services across an expanding array of global delivery centers, most notably in India and the Philippines. Accenture’s focus on balancing consulting with managed services has helped support the firm’s differentiation and revenue growth in the industry. In addition, its early wins in the digital space that brought about new investments in technology could lead to significant new business value and wealth being created for the firm.

SAP and Oracle both have large professional services teams, accounting for ~$3.7 billion in revenue, for both providers. However, HfS includes their product support revenues in its IT services definition that pushes both providers’ IT services revenues to the level above.

Capgemini and TCS move on up

The last 12 months have been good for Capgemini, has managing to remain robust with solid organic growth across its regions, particularly in North America, Asia, and the UK. Its continued focus on portfolio management, taking the best ideas from its large teams of local consultants and building Read More »

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Harman, Tech Mahindra, IBM, Accenture and Atos leading the Internet of Things phenomenon

The silicon valley giants are not satisfied with embedding themselves into your phones and laptops – now they are looking to connect up our cars, bank accounts, air conditioning systems, washing machines, even our hair dryers (OK, maybe not hairdryers just yet)… They want to manage data tied to your whole life, not just your computing activities.  Live with it, it’s happening.

Suddenly, IT services are morphing into “Things services”.  So we decided to get ahead of this and conduct exhaustive research into how the leading service providers are shaping up their capabilities and investing in this emerging space. HfS’ Charles Sutherland is a walking, talking, breathing example of the Internet of Things. He’s plugged in 24×7 into a global network of devices and companies operating said devices. Yep, he never stops, and his research into autonomics has naturally pulled him into this market.

Charles and his team have been conducting exhaustive research interviews over the past few months with many enterprises to learn more about their experiences with IoT, in addition to the performances of their service providers to provide the bread and butter service delivery and assess their innovative capabilities, vision and investments.

As a result, we are proud to unveil the industry’s first assessment of the IoT services market: HfS Blueprint Report: IoT Services 2015, which is available for our premium research subscribers on


Click to Enlarge

So Charles, why have we undertaken an HfS Blueprint on the IoT services market today?

Because we wanted to sort through the daily avalanche of IoT related press releases, presentations and conferences to understand how 18 different service providers were really designing and delivering IoT services for enterprises clients. HfS is focused on the emergence of the As-a-Service Economy and the impact that digital services are having on IT and business processes and the IoT is part of how those are coming together for clients today. It is still very early in this market but we Read More »


Thriving in a market that refuses to change? Then join us next month for the Analyst Relations Forum


So what are you doing on Guy Fawkes’ night?  Well, rather than blowing up Parliament, why don’t we start with the legacy analyst business?

With the swirl of social media, free information and business model disruption in the technology world, everyone assumed the traditional analyst world would follow suit. We thought there would be a plethora of new generation analyst boutiques cropping up to challenge the old model. Some tried, and most have failed. A few linger on in their death throes, but the revolution we thought would happen – let’s face it – never really did. Except in one corner—right here at HfS.

I’ll be presenting on Research-as-a-Service and how HfS is changing the face of the analyst industry

As we look around the industry, we see the same old legacy analyst houses producing their useless charts and dull, turgid research just as they did a decade ago. Few subscribers actually read the stuff, but technology vendors still fund these firms because they have few other outlets to justify their existence.

Here at HfS, we’ve been fortunately enough not to be beset by legacy contracts and the dirty vendor dollar to give to industry a very different analyst model – one where we are unafraid to make our research widely accessible to the world with our freemium model and call out the real trends that are happening to our industry (as opposed to regurgitating the same old marketing fluff that turns off the smart buyers).  In short, we’ve thrived because of our huge global community, our continuous demand data from our readers and a team of  great people and analysts who love the freedom of Research-as-a-Service.

This is where the real fireworks will be on the 5th November…

I’m pleased that I’ll be in London on November 5th to share our story as I keynote the Analyst Relations Forum. My keynote, Thriving in a Market that Refuses to Change: Research-as-a-Service, will look at how HfS has fought to transform a conservative industry that has been slow to change.

I’ll also be having a fireside chat with Wipro’s dynamic new CMO, Naveen Rajdev, and we’ll also hear from Accenture’s popular Managing Director for Global Analyst Relations, Allen Valahu, about what it’s been like to work with a multitude of analysts over the last two decades and what they would like to see in the future (see full agenda for the menu of analytical delights).

We are providing 10 free tickets for those who hurry to register! Sorry—all gone!

We have made special arrangements for ten free tickets to the event (with promotional code JoinPhilFersht) – first come, first served!  Sorry—all gone! But we also have arranged for a $124 discount (with promotional code ARForumKeynoteHfS) for those who did not manage to register in time.

Please register here with the promo code.

Hope to see you there,


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IBM makes a meteoric rise into the HR-as-a-Service big three

IBM_MeteorixJust when you thought IBM’s Global Business Services was cratering into an As-a-Sleep state, having sold-off its call center business exactly two years’ ago, Big Blue’s next-gen services star is once again shining, with the acquisition of one of the finest up-and-coming specialist Workday services firms in the market:  Meteorix.

Every HR head wants a Workday rollout… and every SI wants a SaaS services acquisition

There is a clear scramble for talent which can implement and support popular SaaS platforms, such as Workday, not completely unlike what happened with specialist consulting firms supporting the ERPs in the ’90s and 2000s, such as SAP, Oracle, Peoplesoft et al.  Specialist SaaS services providers supporting SaaS products, such as Workday, Salesforce, SAP SuccessFactors, NetSuite, ServiceNow and Google apps, are now in hot demand as ambitious global service providers seek to avoid the commodity trap of legacy software maintenance, which can still generate revenues, but not at the growth rates of past years.

As HfS, we estimate this has set IBM back something between $80-$100m and adds 180 certified Workday consultants to IBM’s stable. This creates the third biggest Workday services player in the market, with a total of 380 certified Workday consultants and elevates IBM into the coveted Read More »


Nasscom Wrap: Grasping for digital identity, but needing a dosa reality

The BMP Masala Dosa Reality: Great product, Weak Message

My recent experience of dosas, one of Southern India’s favorite food snacks, typifies the potential and shortcomings of India’s BPM (Business Process Management/Outsourcing) industry. The product is fantastic once you experience it, but, as a Westerner, you probably haven’t got a bloody clue what you are actually buying.

“It’s a bit spicy, sir” was the response, when I asked what the Mysore Masala dosa actually was. At that stage, I just took the plunge, but a little more description of why this food product is very tasty and will meet my desired hunger-fulfillment outcome, would have really helped close that deal.

This scenario isn’t a million miles from the typical experiences of dealing with an Indian-heritage business process service provider….

Coming back from the excellently well-attended and content rich 2015 NASSCOM BPM strategy summit in Bangalore this past week, I find myself feeling conflicted between excitement and frustration for the future of Indian-centric business process management / operations services.

My excitement

Execution is better than ever. India-based process delivery is getting really good. The tiresome client whining about poor execution and failed promises is become fainter than ever, with the vast majority now proudly talking about how smoothly their offshore operations are running. At HfS, we Read More »


Ready to strut your stuff at #NasscomBPM this week?

We’ve been a having a great time helping the Nasscom team pull together this year’s BPM Summit agenda and speaker lineup.  And how could you fail with the theme “The Emerging Digital Economy:  Thrive, Survive or Die”?

So get over to Bangalore this Thursday and Friday where you can mingle with the HfS team, a whole plethora of  service provider leaders, advisors and buyer executives, where we will attempt to unravel the mystery, hype, excitement and confusion surrounding the BPM industry. And you can find out just why this picture fits in with the HfS vision for the future of the workplace…

Find out what's making Chandra, Vishal, Tiger and TK strut their stuff in Bangalore this week

Find out what’s making Chandra, Vishal, Tiger and TK strut their stuff in Bangalore this week…

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