How Robotic Process Automation has become a right dog’s breakfast

Dogs Breakfast RPAOver the course of this year, practically every conversation we’ve been having about IT and BPO has culminated in the impact robotic automation will have on service providers, third-party advisors, RPA software vendors and the poor unsuspecting enterprise clients, all seemingly unprepared for the tsunami of impending disruption caused by this suddenly-discovered ability to mimic human behaviour in software scripts.

Sadly, most of these conversations are fraught with misconceptions about what RPA can – and should – deliver to the enterprise and real misunderstandings about the speed to benefit realization.  Yes indeed, the whole services industry has gone careening up hype creek, powered by advisor and provider-infused methane.  So let’s enter the kitchen of HfS’ Charles Sutherland, who will unravel the not-so-secret recipe of today’s RPA dogs’ breakfast…

RPA – why 9 out of 10 enterprises haven’t really got a bloody clue

In a recent survey of 178 enterprise buyers, only 11% of respondents said that they have extensive or even some real-life hands-on experience with RPA to-date.   That means that 89% of respondents have not really experienced RPA hands-on but were instead getting their insights on its capabilities via indirect messaging.  Much of this messaging on RPA has sensationalized the benefits (scope and speed) of this technology and, in the view of HfS, created a misrepresentation of the art of the possible today. So how did we as a market get to this point of serving up this Dog’s Breakfast of RPA?

Recipe For Making A Dog’s Breakfast Out of Robotic Process Automation (RPA)

  1. We began with one initial but tasty ingredient of a technology suite that uses software “bots” to replicate rules based human facilitated transactions.
  2. We introduced a portion of confusion as to whether the real application of RPA is for roles that are 100% replacement (e.g. all day data entry) or whether RPA is more likely to be applied in roles that are only partial substitutable with technology and when doing this make sure that the attributed benefits from application to the former are broadly applied to the later even when that can never be.
  3. Then a few cooks forgot to mix in the required portion of change management and internal communications as to how RPA will impact talent in the enterprise (and any service provider) and what their futures will look like post RPA.
  4. They then used less than the required amount of skilled talent who actually understand both the technologies and the processes against which they should best be applied.
  5. We also allowed any software vendor with even a passing association to automation to join the cooking team and add their own specific flavoring to the recipe.
  6. Then the market stirred up the resulting mixture with unclear messaging as to whether RPA is an end-state of technology or whether it is the means to an end of finding the cost savings to fund a future (and pending) transformation of the business process and its supporting technology into a natively digital end-to-end environment.
  7. Now as the recipe begins to become less recognizable than what you started with, just for good measure we have seasoned in hints of cognitive computing and artificial intelligence as further ingredients.
  8. Then we baked this mixture at a high heat with much hype into commercial discussions between enterprise clients, their third party advisors, consultants and BPO service providers until it takes a hot bubbling form.
  9. Finally, when ready to prove and serve to the enterprise service buyer, the market forgets to turn on a helpful light of real case studies from other enterprises that have sampled this before and instead pour the resulting breakfast dish into pilot or proof of concept sized bowls that don’t show it all in its tastiest form.
Charles Sutherland, HfS Chief Dog's Breakfast Officer

Charles Sutherland, HfS Chief Dog’s Breakfast Officer

The Bottom-line: Automation is too important to get served up in this fashion

As a market, we haven’t done ourselves any favors by letting this Dog’s Breakfast develop. Automation needs to be too important a technological development for both business process and information technology processes for the current situation to be left as it is.   It is our goal as HfS to take our knowledge of what is hype and fantasy in this Dog’s Breakfast versus what is real and make it clear for the market as to what we really should be eating to start each day in this new era of automation.


Social intelligence and reputation are the keys to survival in this automating world

RealityAutomation hype and anxiety is everywhere today.  In fact, haven’t you been amazed by the emergence of all these “automation experts” that have suddenly appeared on your LinkedIn recently? It’s as if these people went to school 20 years ago with the sole purpose of becoming an automation expert…

However, I have good news for the paranoid – computers are still really bad at simulating social interaction. What’s more, team work is becoming more critical than ever, as we need to keep adapting to a changing work environment. Your personality and ability to excite, befriend, intellectually stimulate, or just have a laugh with the people around you, is now more critical than ever.

Welcome to the socially-intelligent workforce, where your reputation is everything

What’s more, there is nowhere to hide anymore – if you repeatedly behave badly, back-stab, lie, or are just an asshole to work with, your reputation will spread across the digital and social networks, like it never did in the past.  When smart future employers check you out, it’s so easy to find former colleagues to conduct informal background checks.  There is no hiding anymore, so prepare yourself for the socially intelligent workforce, or scramble for one of those fast-disappearing legacy jobs, where you can hide away for years, unnoticed by the world.

Your ability to interact with people, applying intelligence and creativity to your craft, is where you add value

People, increasingly, want to work with people they like and people who spark positive energy, first and foremost, as technology continually makes jobs more sophisticated and intelligent. I don’t need an accountant who can tell me my revenues this month, as I have software that can do this for me easily… I need an accountant who can talk me through the nuances of sunsetting a legacy product and its impact on my profit line.  I don’t need a lawyer who can create employment contracts – I can pull these off Legal Zoom… I need one who can talk through the nuances of creating incentive Read More »


TCS, EXL, Concentrix and Infosys set the As-a-Service pace for Insurance

Insurance is priming the pump for industry-centric As-a-Service solutions.  The insurance space is one of those industries where it’s all in the sales, marketing and customer experience, so the more the delivery engine can he standardized and run efficiently, the more cost savings can be passed onto the customer and intelligent data to the service provider to set their policies, pricing and future strategies.

Insurance majors were among the first Western enterprises to open offshore captive centers in India and Philippines to process and adjudicate clients, support customer service etc.  However, the main issue that has long-plagued the carriers has been finding value beyond the initial offshore cost-savings.  I personally recall hosting a roundtable of eleven major insurance BPO clients five years’ ago, and the common consensus was “The only way to find incremental value is by tech-enabling our processes”.

So has this industry been making genuine progress as we evolve to the As-a-Service model?  So who better to ask than the one analyst who has been tracking this space intensely ever since she joined HfS four years ago, Reetika Joshi:

HfS-Blueprint Report-Insurance As-a Service

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What is “Insurance As-a-Service” and how is it different from insurance BPO?

Phil, insurance is a mature market for BPO – core insurance processes like claims processing have been outsourced for over a decade now. Our discussions with property & casualty (P&C) and life & Read More »

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Hello As-a-Service Economy, goodbye Outsourcing, Part 2

State of DenialDuring Part I, we discussed the gradual simplification of cumbersome people-centric outsourcing towards technology-centric “As-a-Service” solutions, driven by the need for enterprises to remove their excessive operations costs and anti-competitiveness burdens inflicted by legacy processes and obsolete technology.

Simply put, what worked last decade no longer works for ambitious enterprises striving to stay competitive, plus the emerging “Born in the Cloud” enterprises, many of which will comprise tomorrow’s FORTUNE 500, where As-a-Service is native to their operations, not retro-fitted in painful increments. Their mantra is to invest in outcome-centric services first, then hire talent to broker these capabilities and align them to the revenue-generating activities of the business.

Gone are the days when the only solutions were to reduce labor costs and hope for the best. Arriving are the days where investments in outcome-driven solutions, fueled by common standards and automation, ubiquitous cloud delivery, digital tools and apps, are being seen to have genuine long-term ROI. Enterprise leaders, in our discussions, are much more willing to make investments in permanent solutions, where the outcomes are tangible, as opposed to temporary solutions, where there is some short-term benefit, but the long term outcomes are still murky and unclear.

We know the future is moving towards a state of creative, motivated operators accessing available tools and intelligent platforms to help their enterprises achieve their desired outcomes.  We know most viable enterprises, today, cannot afford to drag around these archaic, obsolete infrastructures and operations – and remain competitive in the long-term.

So what, pray tell, is really driving our enterprises to make decisions today, what will our world really look like in five years’ time as a result, and what are the implications for society and business?  Oh the questions that need answering…

Two-thirds of enterprises are actively pursuing strategies to reduce reliance on human capital

“How much of this room will be replaced by bots in the next three years?”  I asked, polling some peers and colleagues deep in client-side automation research attending a recent service provider conference.

“As many as 60%” was the collective response – 30% directly through improved automation capability and another 30% simply through better apps and efficient processes”.  Just think about that for a minute… we’re really on an path away from people to technology.  So why are so many services and operations professionals so blissfully unconcerned of what’s coming?  Are we living in permanent state of denial that the business world around us is simply never going to change?  It’s not as if the majority of senior operations leaders do not see As-a-Service as critical, according to our new Ideals of As-a-Service study:

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So, while the leadership layer is clearly bought in and ready to go, why aren’t the operational middle and junior layers following suit? Why aren’t these leadership ambitions being translated down through the ranks? Why does this desire to challenge ourselves and improve our capabilities dissipate when we reach the rank and file? Read More »


Finally – somewhere to find your next As-a-Service job…


Who doesn’t love jobs?

Ignore this at your peril… but we really are at the early stages of a “Digital Revolution”, which will ultimately have an impact as seismic as the Industrial Revolution of the 19th century, which left us with entire workforces untrained and unskilled for what was needed next. The same is happening today – and we need to get ahead of this by being unafraid to reorient our capabilities and career trajectories.

The last 30-40 years has merely been pre-amble as enterprises  leveraged globalization and technology to lower costs, automate and standardize processes (ERP, apps, offshore-nearshore outsourcing) and consumers to improve their lives (PCs, mobile, social).  However, these are only the baby steps, where we experimented on what we ultimately needed from technology.  Today’s emerging generation has digital at the core of both their home and work lives, while the more mature generations are trying to retrofit digital into our (becoming) obsolete business processes and social lives.   The big shifts are starting Read More »

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Good heavens, it’s Liz Evans…

If I had a dollar for every scuba-diving triathlete mom who specializes in the art of service buyer/provider relationship management and governance strategy for a big 4 management consultancy… I really wouldn’t be very rich.

Liz Evans

Liz Evans is KPMG Managing Director for Governance (Shared Services & Outsourcing Advisory)

Liz Evans has been at this for several years now, from the early days of Equaterra, where she was marriage counseling for most of the broken outsourcing deals in the industry, through to KPMG where she has molded her craft into the GBS governance functions of many of the largest enterprises in the world.

Not bad for a nice lass from a town called Middlesbrough, somewhere up in the north of England, who’s firmly implanted herself as a governance therapist in many North American boardrooms (when she’s managed to yank herself away from her Lego-addicted kids).

So, after all these years since we last spoke, we thought high time to get reacquainted with Liz to find out just how much things have changed in the industry…

Phil Fersht, CEO, HfS Research: Liz, it’s great to talk with you again. I think it’s been five years since we last spoke to you on the blog. You’ve built quite the reputation at KPMG these days for leading a lot of the governance strategy and how clients are maturing post-transaction. I think our readers would like to hear a bit from you about your background and some of the early days in your career, and how you ended up becoming such a respected governance and relationship management practitioner in the industry.

Liz Evans, Managing Director Governance, KPMG:  Thanks Phil – it’s great to speak to you. You know, I did a conference—a Governance roundtable last October—and one of the sessions was on talent management. The first question I asked the audience was, “Put your hands up if, when you left university, you wanted to be a governance professional.” Shockingly, no-one raised their hands. And I have to say I am in the same boat. So I think the route into governance and this industry is often an interesting one.

I started off doing outsourcing deals way back in the mid-‘90s. And I actually focused much more on service levels. And then was asked to look at the structure of how you manage those on an ongoing basis. It kind of led me down the road as well. Service levels and service credit really are not all there is to a relationship—it’s much broader. I think the rest, as they say, is history from there. When I joined EquaTerra in 2005, I had the opportunity to really spend my time focusing on Read More »

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Hello As-a-Service Economy, goodbye Outsourcing, Part I

As-a-ServiceWhen we coined the term “The As-a-Service Economy” a year ago (remember our famous Ten Tenets post), we never quite anticipated we were helping define the future model the services industry would adopt for business, technology and operational service delivery.

As-a-Service replaces Outsourcing

We’ve perennially debated the (toxic) term “outsourcing”, long vilified as the substitution of onshore jobs with cheaper offshore people. The outsourcing community has continually struggled to find new defining terminology, as NASSCOM replaced “BPO” with “BPM” and the IAOP has refused to shift from the past, staying true to the O word as its core identity.

The reason why we struggled with our identity was because outsourcing, by and large, has really always been about people.  It’s hard to change processes, drive common standards across clients, build a utility model that can be scaled and made cost-efficient, when you’re really just moving work around the world with the goal of getting it done cheaper. And that’s really been the story of outsourcing to-date – service providers battling it out, at varying levels of effectiveness, to deliver people-based services more productively, promising delights of delivery beyond merely doing the existing stuff significantly cheaper and (hopefully) a bit better.

But outsourcing hasn’t failed. Only 13% of service buyers in our new Ideals of As-a-Service study believe there is no more value to be found in the current outsourcing model.  Outsourcing is the starting point towards driving out bloated labor costs, centralizing the delivery staff within a service provider, and creating some basic common standards across processes.  However, it’s not the end-solution for ambitious firms, it’s merely the start of the journey towards this future vision of “As-a-Service”.

We also hear a lot of hype about Robotic Process Automation, which is another accelerator towards As-a-Service, but like outsourcing, RPA isn’t necessarily the end-solution either  – many applications have a lifecycle and are replaced over time, and many of today’s processes become obsolete as businesses evolve. RPA merely acts as a further conduit, coupled with outsourcing, to smooth the ultimate journey towards destination As-a-Service.

Defining the evolution to the As-a-Service Economy with Eight Ideals

The game-changer is centered on today’s services work gradually becoming a genuine blending of people-plus-technology that helps us inch towards an ultimate destination of services value, accessible on-tap, empowering service buyers to focus on proactive value-identification with help from their service partners through meaningful and secure data, enabled by intelligent automation and digital tools… all made possible by smart people working together.

So let’s examine the Eight Ideals of As-a-Service, into which we delve in-depth in our new defining report, “Beware of the Smoke: Your Platform is Burning“, that canvasses the views, dynamics, aspirations and intended actions of 716 service industry stakeholders:

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The journey to As-a-Service is all about simplification

Business services, today, are one of speed to business impact. They are about simplification.  They are about removing the blockages and obstacles diluting this business impact.  Anything less is not taking advantage of the experience and capability that has been developed in the global services market, over the past three decades. In this time, enabling technologies, talent, sourcing operating models, and macro-economic trends, such as globalization of labor, high growth emerging markets, new business models and consumerization, enable service buyers, advisors, and service providers to engage increasingly in a more flexible and collaborative manner. The ambition is to achieve renewed business results with speed, quality, and effectiveness. When we get there, we will be in the As-a-Service Economy.

The transition to As-a-Service is all about simplification — removing unnecessary complexity, poor processes, and manual intervention to make way for a more nimble way of running a business. It is also about prioritizing where to focus investments to achieve maximum benefit and impact for the business from its operations.

The emerging As-a-Service Economy will be more agile and dynamic, featuring on-demand plug-and-play services in a one-to-many fashion targeted to impact what matters to consumers as well as businesses. The two are increasingly intertwined as consumer insights, decisions, and loyalty carry increasing weight on the success or failure of an enterprise in any industry.

The Bottom-line:  The As-a-Service Economy is a vision for the future, building on today’s achievements

It’s easy to deplore how poorly our business are run,  how dysfunctional are our processes, how badly integrated are our technologies, how reactively and transactionally our staff perform. But this is the evolution of business, this is how we got here today. When you talk to service buyers, they are unlikely to tell you their businesses are running worse every year. In fact, most have improved immensely over the last five years with improvements in global scale delivery, cloud computing etc.

Survival in today’s global business environment, for most, is a marathon, not a sprint. Not every industry has been Uberized over-night – most are being disrupted with technology-driven business models that we can learn from, adapt, adjust and try to get ahead of. Most enterprises suffer from the same woes and face similar challenges to clear their path towards their desired As-a-Service Ideals.

The new challenge is to prioritize which Ideals really matter and how to work with the smart people and partners around us to get there. In subsequent posts to this theme, we will analyze our study findings further to understand the priorities, obstacles, expectations and anticipated dynamics to unravel how we will eventually arrive at the As-a-Service Economy, and what we can do as an industry to get there and prosper.

Please download a copy of our new Industry Report “Beware of the Smoke: Your Platform is Burning”, authored by analysts Phil Fersht and Barbra McGann, that analyzes findings from 716 service industry stakeholders in our new Industry study that defines the future of services and the emergence of As-a-Service Economy. 


HfS unveils the first application testing blueprint report

The lifeblood of the IT outsourcing industry has always been application testing – it’s not sexy, but it’s a huge portion of ITO spending – and massively important to the revenues of the major ITOs.

And while much of the traditional app testing market is commoditizing, with advances in remote management and automation, the proliferation of digital apps (social, mobile, analytics) and related technologies are creating renewed growth and market demand for testing.  Here at HfS, we have watched this development closely. And, with Tom Reuner on board as Managing Director for IT Outsourcing Research, we thought it high time to take our Blueprint microscope and have a close look at application testing services. Tom worked feverishly over the past couple of months to prepare the Blueprint, along with HfS Executive Vice President, Research Charles Sutherland. The result is a groundbreaking Blueprint report:

HfS-Blueprint Report-Application Testing Services_Axis

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So let’s get an up-close view of the report from the man himself, Tom Reuner:

So what’s new in App testing these days, Tom?

Thanks Phil, in order to answer your question, I have to start by going one step back and outline where the industry is, as there is little reference material from analysts and third-party advisors. The notion of independent testing is evolving where services are not just bundled as part of an IT outsourcing contract but are delivered as a stand-alone offering. But, broadly speaking, testing services lag most IT service lines in terms of mindshare and broader visibility. A lack of investment, Read More »


How the gig economy has turned bad analysts into vendor advocates


What’s happening to the world?

Yes, I have been trying hard – and failing miserably – to avoid using the term “Uberization”, but it’s everywhere! Even in the analyst business, where the sharing platform is the Internet and any old whackjob can get in on the act. All you need is a computer and an ability to write remedial English.

The technology and services industry today is awash with individuals whose only professional activity is flitting from vendor conference to vendor conference, with the sole purpose of writing completely non-objective puff pieces praising their vendor hosts in exchange for money (or in the hope said vendors will pony up some dough in gratitude). Vendors are only too willing to pay these Read More »


Sangita on song

Sangita Singh is Chief Executive, Healthcare & Life Sciences, Wipro (Click for Bio)

Sangita Singh is Chief Executive, Healthcare & Life Sciences, Wipro (Click for Bio)

I recall when I founded HfS Research nearly six years’ ago, one of the first people to visit our offices was the calm, but tenacious Sangita Singh – one of the most recognizable and popular faces of Wipro over the last decade.

Since then, Sangita has made a regular habit of visiting us at HfS during her analyst rounds in the Massachusetts area –  a location right at the heart of many of her life sciences and healthcare clients. And what amazes me about Sangita is the fact she manages to (somehow) live simultaneously in both Manhattan and Bangalore at the same time, in the midst of all this merger-mania in healthcare.

While Wipro has built a reputation for helping to drive cost savings and provide IT and business process support and capability, Sangita is on a mission to take her firm’s healthcare solutions to the next level, by working with clients and partners to build connections between the many silos in today’s US healthcare system. At the heart of it is how to better serve the patients with the right combination of services and technologies in a more simplified and accessible way. It requires a different way of working both within Wipro, and with clients. It’s a big, bold dream, but that’s what gets her excited.

So when we convinced Barbra McGann to join us to lead our analyst coverage of healthcare and life sciences, I couldn’t resist introducing her to Sangita… and lo and behold the two of them cooked up a little interview for our reading pleasure…

Barbra McGann (Managing Director, Research at HfS): Sangita, your career has lately been a smorgasbord of specialized leadership roles, from an education in engineering, to most recently at Wipro as Chief Marketing Officer, then Head of Enterprise Application Services (EAS), and now, Chief Executive of Healthcare and Life Sciences. What is your approach to tackling each of these very different areas of expertise as a leader?

Sangita Singh (Chief Executive, Healthcare Life Sciences & Services at Wipro): Hi Barbra – it is to be open to listening and learning—from the team, from peers, from management, from the external environment, and to be inclusive. One thing that defines me is my curiosity—my willingness to not take myself too seriously and be willing to learn from anybody and everybody. That provides the input. Then I do three things: First, I carve out a really audacious big bold dream that can be called strategic vision, that I remain consumed by. Then I try to spend hours and hours getting my entire team inspired and on the same page with respect to that dream. Therefore, the second aspect is Read More »

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Forget Uberization, we must avoid Subwayfication

The Used-to-be-a-Service Economy

The Used-to-be-a-Service Economy

The As-a-Service Economy is all about achieving the outcomes we most want with a great service experience.  So let’s look at how to avoid that not happening and becoming legacy businesses that failed to stay ahead of the demand curve.

The perfect anti-example is Subway. Back in 2001, the release of Fast Food nation shocked much of the Western world into realizing we were slowly killing ourselves on pink-slime infused fast food. It was great for Subway as it sold sandwiches that – for all intents and purposed at the time – we thought were a far healthier option than Burger King.  And it seemed to taste OK too…

Fast forward to today – people are increasingly  aware that chemically-preserved fake colored bread, cheap antibiotic-induced meats and pesticide-flavored vegetables aren’t much worse for you than a greasy concoction of pink slime, protein and french fries.

Coupled with this is the service experience – I accidentally ventured into a Subway the other day (one of those once-in-every-five yearly visits, where you are just so damn hungry and want to avoid the golden arches).  The only desired outcome Read More »

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The lack of ethics in enterprise AI and intelligent automation

A raft of luminaries ranging from Stephen Hawking and Steve Wozniak to the figureheads of Artificial Intelligence (AI) at Facebook and Google, Yann LeCun and Demis Hassabis, have signed a petition warning of a “military artificial intelligence arms race” and calling for a ban on “offensive autonomous weapons.”

Meanwhile, among the developer community, the discussion on the ethics and ramifications of AI has been as intense as it has been far reaching. Yet in the discussions around the notions of RPA and process automation, the issue of ethics and the impact on the future of work are (still) largely absent.

A dichotomy of ethics is in play:  Outsourcing is viewed as somewhat evil, while labor elimination via technology is barely an afterthought

One main observation we, at HfS, are beginning to notice is that many enterprise clients are showing an increasing willingness to invest in technology-based (rather than people-based) solutions. You only have to revisit our Value Beyond Cost study, which we ran with KPMG earlier this year, where we asked 168 senior executives about the priorities of their C-Suites with their operations:

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What is startlingly apparent here, beyond the fact that well over 90% of C-Suite directives are obsessed with cost and flexible services as operational priorities, is that less than half (48%) view improving their operational talent as important, 65% are exploring efforts to restrict the recruitment of labor where possible, and 62% are looking, with varying levels of interest, at automation and robotics with the specific purpose of reducing their reliance on labor. The bottom Read More »

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Making hay after the sun has set on legacy outsourcing… meet John Haworth

John Haworth, HfS

John Haworth is Chairman of the HfS Sourcing Executive Council (Click for bio)

So what do you do after a rollercoaster career working in ERP software, HR services, sourcing advisory and finally the BPO lead for one of the largest healthcare insurers?

Where do you next take a career, which was centered on traditional services and outsourcing, when all you want to do is challenge the old model and bludgeon a path towards the new?

Of course, you already knew the answer… come to HfS and make some serious trouble.

John has been intimately involved with the HfS community for several year as a service buyer and has long talked to me about his desire to “saw off the legacy”.  So when we reached the size and need to have a dedicated leader of the buyer rebels, armed and ready to hive off the turgid, valueless detritus of yesteryear’s transaction-dom, there was noone better to ask to fill the spot.  And he loves it so much he’s already written more research pieces than the analyst team in his first month on the job.

So let’s find out a bit more about John’s plans for the HfS buyers council and a little about himself too…

Phil Fersht (CEO, HfS):  Good afternoon John! You took the decision recently to join us at HfS Research and we’ll talk about that in a minute, but first could you could give us a bit of your own background?

John Haworth,Chairman of the HfS Sourcing Executive Council: Like a lot of people I think I’m in this industry somewhat by accident. The reason it wasn’t by design is because to some degree the industry as we know it didn’t exist, so there wasn’t anything for anyone to aspire to become part of. I think if you go back twenty years you’ll find strong BPO examples starting to show up. But the seeds had been planted in this industry before that, largely by ITO players and “service bureaus” Read More »

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Visualizing Vishal’s first year at Infy

Infosys CEO Vishal Sikka talks to HfS on his first year in charge

Infosys CEO Vishal Sikka talks to HfS on his first year in charge

So… one year into the new job and Infosys’ Vishal Sikka has managed to perform a task noone thought possible. He’s dragged a once-famous Indian-heritage IT services firm – kicking and screaming – out of a maddening tailspin into that dark sinkhole of legacy-ness that is scaring the life out of today’s services industry.

The reason for this is quite simple – he never brought with him a baggage of legacy services culture, where the common practice is to:

1) Copy what all your competitors are saying and try to out-bullsh*t them;

2) Hire cheaper, younger staff and gut the middle layer;

3) Sugar-coat every ADM, Infra and BPO renewal with terms like “digital”, “transformation”, “automation” and “outcomes” etc., when none of these things were really included in the actual contract, but made nice additions to the press release.

Vishal just gets to the point with a refreshing and honest perspective about what his firm needs to do – and is already making shrewd investments in critical areas, such as Panaya (automation) and Skava (digital). He’s also been growing the traditional business, with Infosys just reporting its best quarterly revenue growth for 15 months (4.5% year-on-year), and overseeing several new $2Bn+ sized engagement wins in the last 12 months, with the likes of Allied Irish Bank, Deutsche Bank, NSW State Government and ICA Gruppen in the last 12 months).

The business is stable, growing well again in an industry where many competitors are scrambling all Read More »


Forget the sharing economy, we’re in the uncaring economy

The Sharing EconomyIf I have to read another article about Uber’s disruptive business model, I think I am going to defect to a Trappist monastery and brew very strong beer for the rest of my life…

However, iet’s be honest here – who really cares about these taxi drivers being forced to improve their services, clean their cabs,  clean themselves, start using credit card machines and even (on occasion) help you with your bags? The fact is, unless you are a legacy taxi driver, or related to one, you’re most likely delighted they are being forced to get competitive and improve their services.

It’s the same with Spotify / Google music – unless you are in the business of selling music, most people are ecstatic they can now get all the music they desire for $10 a month or less, without having to spend a fortune on CDs, with the hope that there’s the odd good tune.  And there’s Amazon versus Best Buy, there’s Airbnb versus Marriott, there’s Netflix versus Comcast, and so on. Moving to our industry, there’s Onesource Virtual versus NGA, there’s ZenPayroll versus ADP, Workday versus SAP, there’s software versus people, there’s offshore people versus onshore people, there are robotically automated solutions versus people, there are self-learning machines versus people, in fact, every advancement in services we look at today is all centered on less people… and delivered As-a-Service.

And like the happy world of taxi customers now getting a better and cheaper service for their money, there are many business leaders who are only too happy to get cheaper and better business operations, because they can reduce their reliance on people. If you’re not an employee who is being replaced by a piece of software (although it’s widely assumed we will be someday), the chances are you’re happy your firm is becoming more profitable and doesn’t need to rely on so many bodies to keep the lights on. Just revisit our Value Beyond Cost study we ran with KPMG earlier this year, where we asked 168 senior executives about the priorities of their C-Suites with their operations:

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What is startlingly apparent here, beyond the fact that well over 90% of C-Suite directives are obsessed with cost and flexible services as operational priorities, is that less than half (48%) view improving their operational talent as important, 65% are exploring efforts to restrict the recruitment of labor where possible, and 62% are looking, with varying levels of interest, at automation and robotics with the specific purpose of reducing their reliance on labor. The bottom line here is very clear – C-Suites are caring less and less about their people, and more and more about their services.

The big question many are facing now isn’t whether to invest heavily in their people – it’s whether to invest in technology to replace staff, or use outsourcing partners to reduce the burden of inhouse staffing cost, while improving their access to flexible services.  Or use a combination of the two… or use an outsourcer which is using robotics on itself and is willing to pass on the benefits to its clients desperate to move from a legacy labor-centric operational infrastructure.

The Bottom-line:  In the The As-a-Service Economy, we only care about achieving our desired outcomes 

Here’s the nub of the argument, while people like Hillary Clinton want to turn back the clock and protect the legacy job-for-life, the vast majority of people really do not care that labor forces are being disrupted, along with legacy business models and obsolete practices.  Today’s world is all about faster, cheaper, more accessible services – and to hell with any obsolete process, system or person which gets in the way of convenient and affordable As-a-Service models.

People care most about enjoying the outcomes of what they pay for, not the efforts made to achieve those outcomes.  Expenditure on services is increasingly related directly to outcomes, not a fixed tax we have to pay for a standard service. Personally, I always pay a limo driver $10 over the norm to drive me to the airport. He picks me up in a Cadillac, hangs up my suit, gives me a bottle of water and a newspaper – and only makes conversation if I want to. My desired outcome is a relaxing journey and the extra cost is worth it – and he wins my business everytime and I refer him to all my friends and colleagues. Now that’s one way to win over the Ubers of this world – people will pay when the outcome is what they want. Welcome to the uncaring economy where is all about the outcome…


KPMG makes a bold HR-as-a-Service move buying out Towers Watson’s Workday practice

KPMG As-a-ServiceRight on cue, after we made the call is was high time for the leading consulting firms to buy into BPO, KPMG makes its first major As-a-Service move, picking up Towers Watson’s HR Service Delivery practice, which includes both technology implementation and HR process delivery capabilities.

And this isn’t some traditional HRO play, it’s KPMG making a serious investment in Workday delivery across both HR and Finance & Accounting. KPMG already claims to be the transformative partner for 45% of the world’s Workday financials rollouts… now it is playing with the leaders in Workday based HR delivery, namely OneSource Virtual, Deloitte, Accenture, Collaborative Solutions and Meteorix.

Does this mean KPMG is now an HR-as-a-Service Provider?

Yes it does. The firm has realized it has to be in the managed services business to support the emerging SaaS offerings across technology implementation, post go-live support, transaction business processing and higher value services, such as organizational change management, workforce analytics and ad hoc strategy needs… in an on-demand model. It also knows it needs to be in the position to provide these on-demand capabilities around several core HR SaaS product Read More »


Why Hillary could be the biggest friend of offshore and nearshore outsourcing

The Uber HaterLike many of you out there, I was floored last night to see Presidential candidate Hillary Clinton openly attack the Sharing Economy in a speech outlining her economic theory.

Clearly taking a swipe at the likes of Uber and Airbnb Mrs Clinton states, “This on-demand or so-called gig economy is creating exciting opportunities and unleashing innovation. But it’s also raising hard questions about workplace protections and what a good job will look like in the future”. Clinton “Vows to crack down on employers who misclassify workers as independent contractors”, which she says is “wage theft”.  Along with globalization and automation, Clinton describes the “Sharing Economy” as “conspiring against sustainable wage growth”. The report says “she will argue that policy choices have contributed to the problem, and that she can fix it.”

So why does added protectionism of US workers help offshore and nearshore outsourcing?

While the open attack on innovative business models is in itself mind-boggling, the less obvious impact of her focus here is to discourage service providers and enterprises from hiring US talent to provide business support services. As service delivery becomes increasingly focused on higher value needs, such as organizational design, analytics modeling and supporting complex apps development across multiple environments, the opportunity for local US talent to be leveraged is huge.

In addition, the way in which new generation As-a-Service providers want to engage with talent needs to be more “As-a-Service” to be competitive. Virtual support models are becoming critical for BPaaS support functions where clients need quick, on-tap support, and – in many cases – the new generation of service provider isn’t simply looking to stock up hoards of full time employees in a call center somewhere in the Midwest  – they are also seeking to engage talent which prefer a flexi- Read More »


#Crazymergerideas – Infopact or Genosys?

Two CEOs clearly up to no good... Genpact's Tiger Tyagarajan (left) and Infosys' Vishal Sikka (right)

Two CEOs clearly up to no good… Genpact’s Tiger Tyagarajan (left) and Infosys’ Vishal Sikka (right)

One of the great things about HfS is the fact we never partake in gossip or idle speculation. So let’s change “never” to “rarely”…

I was happening to be Uber-ing myself aimlessly around the streets of San Francisco last week when I happened to drop in on Infosys’ sexy new Design Thinking center (I think that’s what they call it) in Palo Alto, where I caught two of the industry’s finest minds having a sneaky cup of coffee.

Now, before you all jump to conclusions that Vishal Sikka and Tiger Tyagarajan are about to join forces, they are actually old friends and neighbors, and this was purely a social call…  but it did get me thinking about what if Infosys and Genpact got a little more intimate with each other…


Challenging the old way of thinking. Infosys’ fresh Design Thinking approach and Genpact’s re-imagination of business processes are very well aligned.  Both firms have jumped on the importance of challenging current thinking and instilling that across their organizations (and not a CoE approach).

IT services meet BPO… on steroids. A great IT services firm meets a great BPO/operations process management firm.  This would be a real powerhouse.  What’s more, Genpact is the largest “process Read More »


Our Dallas working summit really rocked… next up Harvard Square!

The HfS show hits the road in 2015… last stop was Dallas, Texas:

See you in Harvard Square this December!

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Infosys, HCL, TCS, and Tech Mahindra make the first Engineering Services Winners Circle

If there’s one market people have been raving about for the past decade – and still are – but has never quite taken off as quickly as many have predicted, it’s the world of engineering services outsourcing.

This market is all about using third parties in the design, analysis, manufacture and augmentation of products.  And in today’s world of global labor, the global marketplace, emerging technologies, smarter global sourcing models and the Internet of Things, the potential to embrace outsourcing expertise to bring products to market smarter, faster and cheaper has never been so exciting.

Engineering services has a huge market potential, but – somehow – engineering service providers have had limited success in transforming this potential into the actual outsourcing engagements. Now things are changing, and we believe that engineering services is evolving from a niche offering to the mainstream.  So without further ado, let’s hear from HfS Research Director, Pareekh Jain, on the excellent research he’s completed that delved deep this this market:

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Pareekh, how do you see this market evolving and what are the key drivers for engineering services?

Engineering services outsourcing, over the last decade, has evolved from simple drawing and drafting to complex end-to-end product design. Now an enterprise which wants to enter a new market segment can partner with some leading engineering service providers, that can not only deliver complete new product design but that can even collaborate with manufacturing partners for additional benefits. Some engineering service providers are also collaborating on high-end R&D Read More »

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