HfS Network

Monthly Archives: May 2008

Musings from abroad... dispatch #2... meet me at Nasscom

May 30, 2008 | Phil Fersht

BPO-Strategy-Summit-Nasscom

I'm leaving for a tour of the sub-continent next week, stopping in Delhi, Mumbai, Hyderabad and Bangalore, where I will be speaking at the Nasscom BPO strategy summit chairing a CEO Panel looking at BPO competitiveness.  Key discussion points will focus on:

  • The survival prospects of pure-play BPO providers to compete effectively with the IT and business process The importance of knowledge process outsourcing to the future of successful BPO solutions
  • Whether BPO vendors should take more responsibility for helping their clients establish stronger and more effective governance capabilities
  • Measures BPO providers should take to add more value-added servicesinto the engagements to ensure their clients receive ongoing quality
  • India's major strengths and challenges with BPO in the medium-to-long term and whether Latin America, China, and other regions could threaten India's current dominance in BPO

Drop me an email if you want to meet up while I'm at the show.

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesOutsourcing Events

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Join the BPO and Offshoring Best Practices Forum

May 30, 2008 | Phil Fersht

Sign up now!

BPO-ForumI am extending an invitation to HFS readers apply to join our new networking group on LinkedIn entitled the "BPO and Offshoring Best Practices Forum" - we already have 850 members signed up.  This is intended to be a forum for leading outsourcing executives to share their experiences, views, opinions, best practices and lessons learned in the world of business process outsourcing and offshoring.  You will also get a chance to participate in a "State of the BPO Industry" online survey next month.  And it's FREE.

 

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesFinance & Accounting BPO

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Musings from abroad... dispatch #1

May 29, 2008 | Phil Fersht

Les-fontaines  

I'm currently on a three-week outsourcing excursion across France, UK, Belgium and then India... so I thought I'd entertain you all with some pictures and musings along the way.  Am currently enjoying the hospitality of a outsourcing provider which owns this rather charming estate... can you guess which provider it is?

Posted in: Absolutely Meaningless Comedy

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Upcoming Event: The FAO Summit, New York

May 29, 2008 | Phil Fersht

FAO_Summit My friends over at FAOToday magazine (Crossing media) are staging an "FAO Summit" at New York's Union League Club on 2nd and 3rd June, entitled "The Art of the Deal".  They have kindly offered free passes to the first 5 "Horses for Sources" readers to register:  Register here, or email Adam Bleifeld for more information.

Unfortunately I will be in India at the time, otherwise would definitely have been there, but thanks for the award nomination chaps.

Posted in: Outsourcing Events

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BPO partnerships are opportunistic, rarely strategic

May 24, 2008 | Phil Fersht

Icgc-gpact Having worked closely with both ICG Commerce and Genpact for the last few years, it was a positive step forward for the firms to announce a partnership, but I believe the companies should go a step further and merge.  Partnerships like this are normally opportunistic; they help the firms team up for broader finance/procurement customer bids, as they can be vulnerable when competing with Accenture and IBM, which have broadscale finance & accounting (F&A) and Procurement BPO solutions. 

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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHR Outsourcing

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Happy birthday Horses for Sources

May 22, 2008 | Phil Fersht

Horses1 124 posts, 548 comments and ONE YEAR later, this blog continues to (somehow) prolong the dialog on the "O" topic.  I have learned so much from some of the excellent views, opinions and insights from so many of you - I hope some of you have too.

Here are some of my favorite highlights:


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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHR Outsourcing

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Can this Marriage Be Saved?

May 21, 2008 | Phil Fersht

Ban-marriage You may recall the excellent guest post "Upward, Onward, Onsource!" by my good friend Deborah Kops, back in November last year.  Deborah is widely recognized as one of the outsourcing industry's foremost thoought-leaders, having led global transformation efforts at Deutsche Bank and Bank of America before helping to establish PwC's outsoucing division.  Today, Deborah is Chief Marketing Officer for WNS Global Services, a leading offshore BPO and KPO provider.  BPO today is all about governing your service provider relationship, and whether or not you view your vendor as your partner, the whole experience is certainly like a marital relationship (better hope my missus doesn't come here...).  Thanks Deborah for sharing this great article with us... over to you:


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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesFinance & Accounting BPO

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Will the EDS acquisition spark a BPO feeding frenzy?

May 18, 2008 | Phil Fersht

So HP acquired EDS.  Wow.  Biggest services news since HP acquired Compaq a week before 9/11?  In my opinion it is, anyway.Feeding_frenzy

We discussed here in January the issue of consolidation among large outsourcing suppliers, and the general view was one that we would be unlikely to see acquisition among services firms that were similar in nature:

Outsourcers like to acquire firms that bring something new to the table to enhance their outsourcing offerings - for example new technologies, or a niche expertise that gives them competitive advantage.  Too many large outsourcers are too similar... they overlap too much and a merger would often end up as an unprofitable exercise and result in a mass exodus of key talent.

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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHR Outsourcing

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Knowledge Process Outsourcing (KPO)

May 18, 2008 | Phil Fersht

FaceoffI am in the throes of writing a series of research articles in this area and welcome any contributions from people in the Knowledge Process Outsourcing (KPO) industry.  If you are a user of KPO services, or an outsourcing vendor providing them, I would like to hear from you.

As companies tackle how to leverage third-party services for activities that require a certain level of customization, we are seeing new and established outsourcing service providers branching into KPO services in areas such as financial, legal, marketing, sales and accounting services.  While BPO typifies services that are relatively standardized, KPO represents those that require tailoring to the needs of the customer.  The benefits go beyond simple cost-savings and provide resources and skills that many firms simply do not have, or do not wish to employ inhouse full-time.  For example, most enterprises today cannot afford a full-time inhouse attorney, so use third-party legal services as and when they need them.  But why go to a top-end law firm when you can now get many legal services provided from offshore outsourcers, such as Infosys?

Posted in: Business Process Outsourcing (BPO)Knowledge Process Outsourcing & Analytics

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Bored? Look no further

May 15, 2008 | Phil Fersht

Solitaire Clearly you have far too much time on your hands if you're spending time here, so here are more places to go to fill those vacant hours.  This is especially for all you sourcing consultants who went out of your way to vote for yourselves as the "top place to go to get balanced advice on outsourcing" - c'mon chaps get real -:)

IBM vs. Tata: Who's More American? - Businessweek's Steve Hamm raises some incisive points, namely, TCS, India's largest tech-services company, collected 51% of its revenues in North America last quarter, while 65% of IBM's were overseas.   Builds upon some of the issues we discussed here last year;

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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HP/EDS redux

May 13, 2008 | Phil Fersht

Odd_couple I know several of you are hounding me for my views here... we've put out a couple of pieces on this today at AMR - check out Bruce Richardson's blog where he raises the discussion. 

I have to confess this one came completely out of left-field while I was traveling, but does tally well with HP's focus on bundled BPO.  All-in-all, these are my key takeaways from this eventful day:

No-one saw this one coming, most of us were expecting one of the Indian providers merging with EDS.  This now raises the possibility of further mergers in services, even though this was looking unlikely until recently.  The incumbent Western providers need scale and depth to compete effectively with the lower-cost Indian firms, and we could see a response from one of the other top tier firms to swallow up one of the vulnerable services firms.

On the BPO side, this is a great move, with the merger filling both companies’ BPO portfolio gaps, most notably in finance and accounting (F&A) and HR processes.  As we discussed a few weeks' ago, BPO market leaders Accenture and IBM have already been aggressively pushing their combined portfolios of finance and accounting and HR BPO services, with increasing emphasis on bundling these services with their application outsourcing services.   HP is looking to follow suit, with the likes of Cap Gemini, Infosys, Wipro and TCS avidly observing how they can broaden their global BPO and IT services depth, scale and industry specialization.  Now HP has deep HR delivery expertise to draw on, which elevates its bundling capability, in addition to EDS's $1 billion call center outsourcing and global IT services business.

Culturally, this is definitely an odd one to fathom, but Mark Hurd has the track record and financial discipline to make this merger a success.  He also got a good valuation for the firm, so now was probably a good time to strike.

Interesting times... maybe we'll have some more days like this in the coming months?

Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHR Outsourcing

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Ensure you have a solid platform before you seal the deal

May 11, 2008 | Phil Fersht

Anyone from the UK will appreciate this...

Posted in: Absolutely Meaningless Comedy

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Whom do you trust for balanced outsourcing advice?

May 09, 2008 | Phil Fersht

Balance I wrote a piece entitled "Blog-culture is ripping up the rule book for the outsourcing services and technology media industry" a few weeks' ago which raised a few eyebrows.  OK, it's a litttle biased and I was on my high-horse, but it did raise several questions on where people go to get balanced, insightful information on the outsourcing industry that they can rely on.  So, please choose your preferred three information outlets on the poll to the left side-bar.  And please be honest :)

For the results of this poll, please click on the continuation sheet.

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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Is it time to dump the term "outsourcing"?

May 08, 2008 | Phil Fersht

Sunset_2Having worked on a large number of "O" initiatives with enterprises over the last few years, the term outsourcing has given me nothing but problems. The minute the "O" word is uttered, staff get defensive, passions get stirred, resistance occurs.  Often staff quickly brush up their CVs for a hasty exit before the axe falls.  Staff and management tend to associate outsourcing with job losses, and their firms using low-cost labor from service providers. 

But what else can you use when you are looking to move into a multi-year engagement with  third-party service provider, where you will use their staff, technology and processes and likely reduce your own inhouse overhead?  I have experienced companies trying to disguise the fact they are outsourcing by labeling their service initiative as "out-tasking", "co-sourcing", "right-sizing", or even "resource-optimizing" (oh, there is more...).   Peter Allen also chips in with his preferred term "services contracting".  However you want to spin it, your staff will view it as outsourcing, and the more you try and disguise the taboo term, the more suspicious your staff will be that you are simply trying to ship them out for lower-cost labor.   

Personally, I prefer the term "managed services", as staff are not always transitioned out of the organization, and management responsibility for running the contracted services is transitioned over to the third-party provider.  However, outsourcing has become ingrained in modern business vernacular, not dissimilar to information technology.  It describes the activity a company goes through when it engages a third-party to take on the management of specific IT or business services on a long-term basis.  However, I would stress that outsourcing these days describes the activity of evaluating and transitioning the processes and not normally the long-term management of them.  For example, if a company decides to engage ADP to take on its payroll services, it will say "we're outsourcing our payroll to ADP".  However, ask the same company how they run their payroll a couple of years later, and it will say "we use ADP for payroll".  It won't say "we outsource our payroll to ADP".

So all-in-all, if you are looking to outsource processes, be upfront with your staff and tell them you are looking at outsourcing opportunities.  Explain they are a key part of making this outsourcing initiative successful and you need them onboard to support the initiative.  It will be good for their career, and they will have the chance to take on new tasks that are more core the the business - for example vendor and service-level management and higher-level business activities that directly impact senior management decision-making.   The more upfront you are with what you are doing, the more your key staff will appreciate the honest communication, and the more likely they will be supportive and proactive in making it work.  If they still resist and try to derail the process, at least you know who the dissenters are and who may not be onboard the train once it has left the station.

If you have any preferred terms for outsourcing, I'd love to hear from you...

Posted in: Business Process Outsourcing (BPO)

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Retail therapy....replaid

May 07, 2008 | Phil Fersht

For those of you who missed today's webcast on outsourcing and offshoring for the retail sector, you can access a replay here.

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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Why are you calling it outsourcing in the first place?

May 07, 2008 | Phil Fersht

I've been enjoying some great comments from people these past months and thought it time to highlight the occasional contribution that got me thinking "good point!".  The recent post entitled "Is it time to dump the term outsourcing?" has - and still is - produced some superb discussion, in particular one comment from Robert Jakobson, a program manager and 15-year veteran with IBM, Microsoft and Sun Microsystems, who puts forward a great argument on why some enterprises use the "O" term in the first place.  Enjoy.

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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Are we reaching an inflection point of business globalization?

May 03, 2008 | Phil Fersht

I can't help feeling we are entering into a critical phase of business globalization, due to a convergence of factors.   We have seen these global dynamics in play for the last 30 years, but we are now in an economy where today's CEOs are aware they need the tools at their disposal to become truly integrated global enterprises.

Global_3

I was privileged to have a preview of IBM's new study of 1100 CEOs this week at its analyst event in New York, and, while the findings are under embargo until next Tuesday's public release, I can say they reinforced one thing for me:  the vast majority of today's CEOs recognize the need for change, and are more prepared than ever to be bold and adopt measures that can drive rapid change through their organization.   So why is now different from that of 5 years' ago, or 25 years' ago?

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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