HfS Network

Monthly Archives: Aug 2008

HP/EDS: a reverse-takeover to create a services giant, but what's the game-plan?

August 31, 2008 | Phil Fersht

So HP’s $13.9Bn acquisition of EDS became official this week – the largest-ever merger between two IT and business services providers.  The merged services entity resembles a reverse-takeover of the combined services business, with all the management positions remaining in Plano, with the exception of application services.

EDS HP LogoOverall, there were few surprises in the deal-finalization announcement. However, the fact that there seems to be no initial definitive plans to integrate the businesses at a service/product level beyond the newly-outlined organization structure, gives me some cause for concern, especially considering the fact that HP/EDS has already had three months to draw up a merger-strategy.  We're operating in a market where crafting and developing a global delivery strategy quickly is critical.  We've seen far too many failures in recent years from services providers that have sat on their traditional revenue streams, while others have pushed aggressive services agendas to win over clients looking for vendors with new thinking and focus on driving innovation into engagements.

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



Why bundling apps and business processes with a single provider can make a lot of sense

August 25, 2008 | Phil Fersht

The software industry has - for decades - dealt with the whole "best of breed" versus "integrated application suite (ERP)" quagmire, the scenario centered on whether clients are better off trying to manage a whole variety of individual products themselves, via-à-vis having a ready-made integrated suite of applications.  These arguments are surprisingly similar to the debates raging in the outsourcing industry today.

Integration While a best-of-breed (b-o-b) approach can provide the client added quality (or functionality) and control over its suppliers, the prohibitive cost of managing multiple service providers (or applications), combined with the increased need for unique skillsets to integrate them into the business, favor the multisourcing (integrated-suite) route.  And, while many enterprises have persisted with a b-o-b software strategy, both Oracle and SAP have been vacuuming up many of the niche application products, whereby presenting the client with the integrated-suite strategy, whether they initially wanted it or not.  While outsourcing providers are generally not as acquisitive as software providers for a number of reasons, their need to add process depth, industry expertise, technology enablement and scale to their global services offerings naturally narrows down the playing field over time, as outsourcing engagements become more global and complex.

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



Weekend sourcing

August 23, 2008 | Phil Fersht

I spent the last week in this popular BPO-delivery location for such providers as ADP, Ceridian and Convergys... any guesses where?


(I'll give you a clue - it's not El Paso)

Posted in: Business Process Outsourcing (BPO)



I cannot be serious

August 21, 2008 | Phil Fersht

When I arrived on these Western shores a few years ago from the Old Country, I made it a personal mission to ensure (some) Yankees around me learned that special brand of humor termed as sarcasm. This habit of mine seems to have spilled over into my blogging... My recent post "The Calamity Clients Awards, 2008" enticed a couple of people to contact me - one person asking where she should submit her vote, the other kindly advising me to find a way to scrap the vote before I offended someone. 

For clarification, the purpose behind the Awful Outsourcing and Calamity Client awards was to

1) Make you laugh;

2) Have a subtle dig at some of the awards being banded around the outsourcing industry;

3) Raise some real issues concerning some struggling outsourcing engagements, and the fact it actually takes two-to-tango in this business (both vendors and clients).

Thanks for the many, many messages I did receive from those of you who did realize all three of the above points - very much appreciated, and makes me feel my original mission to induce sarcasm into the North American outsourcing industry is largely working :)

Anyway, I'll lurch back to more serious stuff next week... peace out

John McEnroe'



Definitely not serious...

Posted in: Absolutely Meaningless ComedyConfusing Outsourcing Information



The Calamity Clients Awards, 2008

August 20, 2008 | Phil Fersht

Calamity_Client2 Due to popular demand, we're adding an additional category to the 2008 Horses awards for Awful Outsourcing:  "The Calamity Clients".  Yes, it's not always vendors which are responsible for outsourcing calamity - it often takes two to tango, and this is the vendor's chance to counter-punch. 

As there are several well-trodden paths towards calamitous outsourcing, we will be distributing several awards across the following non-specialist areas:

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Posted in: Absolutely Meaningless Comedy



The 2008 Horses Awards for Awful Outsourcing

August 12, 2008 | Phil Fersht

In light of all the recent banter on the credibility of awards, I thought we'd serve up our own awards ceremony - and I reckon we can put all of the other lists/awards companies out of business in a heartbeat, because only one vendor will get upset with each award (genius 'eh?)... Here are the categories:

Horses-Awards Worst Outsourcing Provider of the year:

Vendors - are you just so plain awful you can't hold down a client?  Then, this could be for you! This is restricted to vendors which have had a minimum of three clients bail on them over the last 12 months, whether they "backsourced", or paid millions to switch to another provider. 

The "Awful Advisor" award:

Rarely is a sourcing advisor ejected from client-site, but it's happened - and a few times!  Buyers - please nominate that team of consultants that drained you of billable hours, before coming up with recommendations that you could have got from a taxi-driver.

The "Bait-and-Switch" special:

Buyers - did you sign up with a vendor, when the minute the ink was try, the entire team who worked their guts out to woo you simply vanished?  Those Six Sigma black-belts, LEAN luminaries and Kaizen karate kids never materialized?  They leave a zero off from the attrition-rate in their Hyderabad call center?  Then nominate your favorite bait-and-switcher today.

The Lousiest HRO provider:

We're spoiled for choice with this one - how many payroll runs did your supplier miss?  Do you blame it for all your dysfunctional HR processes?  Of course you do! Here's your chance to throw your HRO provider fully under the bus.

The Funkiest FAO supplier:

Still closing the books from Q4 2007?  Got 2,748,547 unpaid invoices?  You know what to do...

And finally.... Thought Laggard of the Year:

Sick of the same old bleating from past-it, out-of-touch old industry windbags?  Tired of reading their dreary old articles that they probably got some freelancer to write for them anyway?  Worn-out with ego-filled luminaries starting their own blogs then leaving them stranded after three posts?  Well, now it's time to recognize their anti-contribution to the outsourcing industry!


Posted in: Absolutely Meaningless Comedy



Some summer sourcing soundbites

August 11, 2008 | Phil Fersht

Outsourcers Hone European Savvy:  Niraj Sheth, of the WSJ, comes up with some compelling examples of how the leading Indian outsourcers are training their staff to understand European business etiquette.  With a weak dollar and tight economy, the offshore leaders are increasing their focus in the high-cost European countries, where expensive currencies, high wages and a challenging economic climate are driving outsourcing to the top of the agenda.  However, it's not quite as simple as adding americanisms to English...

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



Why is this blog called "Horses for Sources"?

August 10, 2008 | Phil Fersht

Horses for Sources I get asked this question from someone nearly everyday, so here is the reason:  It's a horse-racing term. Certain horses run better on certain courses.

HORSES FOR COURSES - "A mostly British expression urging someone to stick to the thing he knows best, 'horses for courses' comes from the horse racing world, where it is widely assumed that some horses race better on certain courses than on others. In 1898 a British writer noted in the first recorded use of the expression: 'A familiar phrase on the turf is 'horses for courses.'" From the "Encyclopedia of Word and Phrase Origins" by Robert Hendrickson (Facts on File, New York, 1997, Page 339); "A course of action or policy that has been modified slightly from the original to allow for altered circumstances. A horse that runs well on a dry course will run less well on a damp course and vice versa."

I always felt this phrase sums up the experiences of both vendors and buyers which have danced around with outsourcing relationships over the years. An outsourcing engagement that works well for one firm in its particular circumstances, may not be as successful for another; there is no one-size-fits-all solution, when you are dealing with a company's people, processes and technology.  It took me about 30 seconds to come up with this goofy name after a few glasses of vino when I decided it was high-time to get a blog going...

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



The Sheriff puts some fizz back into Cap

August 07, 2008 | Phil Fersht

Coke Capgemini is making some waves in the world of F&A BPO this year, winning some major global engagements, one of which is likely to be down in Tampa.   Not a bad return from new Sheriff David Poole (he claims he is no longer a deputy).  I have gone on the record to describe the current climate as crucial for Capgemini to break heavily in the global F&A BPO business - and they seem to be doing just that in a highly-competitive market.  CapgeminiThey will be pushing hard for the number 3 market share position in the F&A BPO market by year-end behind both Accenture and IBM, but leading the large pack of outsourcing vendors jostling for position.  

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



Ensuring your sub-processes fit with the MSA

August 07, 2008 | Phil Fersht


Remember these legends...But can you recall the name of the drummer (pictured in the center)?

Posted in: Absolutely Meaningless Comedy



Why I put the kibosh on the survey of list-makers

August 06, 2008 | Phil Fersht

Apologies to several of you who voted on a poll I ran on Sunday/Monday that was evaluating the credibility of the list-makers and award-givers in the outsourcing industry. Unfortunately, I received a very large number of suspicious survey responses from a host of "FORTUNE 500 buyers", whose IP addresses - for some reason - all seemed to emanate from the same couple of locations. I received a very large number of these survey submissions clustered within a short time-frame, and they had no names or email addresses attached. They also all had selected one particular list-maker as "highly credible", while simultaneously describing the same 2 others as having "poor credibility".

It saddens me that on-line surveys can seemingly be so easily manipulated by entities that seek to sabotage results, or skew them in favor of themselves. I have become a little more cynical (than usual) this week as a result. As an industry analyst, I try hard to be impartial and deliver information to clients to help them make informed, unbiased decisions. I run this blog to drive healthy discussion, promote ideas and share knowledge with others. It seems that not everyone shares my ideals.

There's my rant. Issue closed. Thanks for listening. I just hope that there are still many of us who want to drive out bias and impropriety from a challenging industry in these complex times.

Posted in: Confusing Outsourcing Information



The Future Of HRM Service Delivery

August 05, 2008 | Phil Fersht

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