HfS Network

Monthly Archives: Jul 2010

Herding primadonnas... Welcome to Wendy's world

July 29, 2010 | Phil Fersht

Wendy Shlensky, Analyst Relations at Infosys Technologies

Imagine a job where good work is rarely praised and people can only complain that you somehow messed up?

Imagine a job where you had to spend all your time ensuring industry analysts (whom are all, of course, very nice humble people) had their facts straight and you hoped liked your firm enough to say good things?

Imagine a job where you had to constantly be nice to your executives, to make sure they showed up on time to all these analyst meetings, and didn't say anything stupid?

Welcome to the world of vendor analyst relations (or simply known as "AR" in the biz).  If I do some really bad things in my life (which, of course, I haven't yet, but may do so in the future), I will be brought back to this planet as an "AR pro".  This is a no-win profession - you have to be nice to absolutely everyone and pray you won't get fired because your firm somehow didn't make it far enough onto the right hand-side of some analyst's chart.

So we asked one truly unsung hero from this much-beleaguered profession to share with us how they actually succeed (avoid messing up).  Bring forth Wendy Shlensky, one of Infosys' lead AR folks, who somehow found a few stolen moments away from her 120-hour a week job to share her secrets with us.  Normally, at this stage, I introduce some hobby or past-time to add some color to our guest, but I've never assumed the poor girl has time to do anything beyond staring aghast at her email inbox...

Wendy's World

I am an AR (Industry Analyst Relations) professional. I succeed and fail based on my ability to maintain and leverage relationships between many different parties –

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Posted in: Outsourcing AdvisorsOutsourcing Heros



New HfS Report - Desperately Seeking Innovation in BPO: Enterprises Speak Out

July 24, 2010 | Phil Fersht

Is that... is that what I think it is?

Innovation is now the critical ingredient for most buyers of Business Process Outsourcing (BPO) services –unequivocally proven by a new HfS Research study of 588 shared services and outsourcing executives, as  revealed in our new report  Desperately Seeking Innovation in Business Process Outsourcing: Enterprises Speak Out.

Most buyers of BPO services are initially delighted when they trim 30% of their costs on one process, and 50% on another, but once those costs disappear from the balance sheet, they are quickly looking at new  initiatives to help them attain new thresholds of productivity or revenue growth:  what HfS Research terms as “innovation”.

Moreover, while half of buyers are dissatisfied with the innovation they are currently achieving from their BPO endeavor, the majority are seeing significant potential to achieve it across certain processes within a two-year time-frame.

Essentially, once they have out-tasked as much of the feasible routine administrative work to service providers, they quickly discover that next tranche of productivity is not nearly as straightforward as documenting standard processes and training an offshore team to replicate them effectively (commonly termed in the BPO industry as “lift and shift”).  Those buyers realize they actually need to introduce new, creative methods to actually change the old way of managing processes to find improvement. This scenario continues to dominate the vast majority of large-scale BPO engagements today.

The answers lie with both BPO buyers and their service providers working together to achieve measurable business outcomes as part of organized and collaborative long-term partnerships.  However, too many enterprise buyers jump into a service provider relationship polarized on the initial cost take-out from the “lift and shift”, and gloss-over the future initiatives they will need to implement in a couple of years, when they seek to find new value through better processes, talent and technology.

We believe buyers need to put the innovation track-record of service providers high up the decision-making tree when they select make selection decisions. As earlier HfS Research has demonstrated, service provision is commoditizing and leveling the playing field, with several BPO service providers today pushing services within a similar price-band, and sufficient track record of successful “operational” delivery.

Most large enterprises have already experienced offshoring and outsourcing varying degrees of their operations for several years, and are smart enough to realize outsourcing provides an opportunity to deliver more than simply cost-savings through lower cost labor.  Consequently, the ability to provide outcome-based solutions that encompass helping BPO buyers achieve innovation, is fast becoming a crucial differentiator.

We'll be highlighing more snippets from our new report, entitled "Desperately Seeking Innovation in Business Process Outsourcing: Enterprises Speak Out" this week, but if you can't wait that long: [emember_protected]click here to download your very own freemium copy[/emember_protected] This report dives into the experiences and expectations of today’s enterprise BPO buyers when it comes to achieving innovation, and offers actionable recommendations for devising a strategy to improve their innovation agenda with their BPO endeavor.

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



HfS Research shows some analyst horsepower

July 19, 2010 | Phil Fersht

Check out who's at 15th in the latest analyst "power rankings" by ARInsights, a dynamic content rich database that contains comprehensive information on 5,511 analysts from 694 different firms.

While our aim is (ahem) to be number one, for an analyst firm that's been in existence barely 4 months and competes with billion-dollar competitors, we'll take it.  And Ray Wang of fellow analyst newbies Altimeter Group made the top-ten.  Maybe says something about the power of social media?  Hmmmm...

ARchitect™ Power 100 analysts, 19th June 2010

The top 100 analysts ranked according to their activity level among all ARchitect™ users. These are the analysts with the most sustained "buzz" in the industry right now:

1 Allie Young Gartner Inc.

2 Eric Goodness Gartner Inc.

3 Alex Soejarto Gartner Inc.

4 Pascal Matzke Forrester Research, Inc.

5 Dane S. Anderson Gartner Inc.

6 Kimberly Harris-Ferrante Gartner Inc.

7 Brian Partridge Yankee Group

8 Rona Shuchat IDC

9 R Wang Altimeter Group

10 Susan Tan Gartner Inc.

11 William Martorelli Forrester Research, Inc.

12 Ken L. Dulaney Gartner Inc.

13 Matthew Goldman Gartner Inc.

14 Mike Cansfield Forrester Research, Inc.

15 Philip Fersht Horses for Sources

16 Sudin Apte Forrester Research, Inc.

17 Khalid Kark Forrester Research, Inc.

18 Elisabeth Rainge IDC

19 Frank E. Gillett Forrester Research, Inc.

20 Norbert J. Scholz Gartner Inc.

21 Ronni J. Colville Gartner Inc.

22 Frank Ridder Gartner Inc.

23 Euan Davis Forrester Research, Inc.

24 Arindam Banerjee Heavy Reading

25 Richard T. Matlus Gartner Inc.

26 Milind Govekar Gartner Inc.

27 Karl Whitelock Stratecast Partners

28 Ellen Daley Forrester Research, Inc.

29 Michele Pelino Forrester Research, Inc.

30 Liz Herbert Forrester Research, Inc.

31 Daniel O'Connell Gartner Inc.

32 Lydia Leong Gartner Inc.

33 Phil Sayer Forrester Research, Inc.

34 Chris Wolf Burton Group

35 Jonathan Penn Forrester Research, Inc.

36 Benjamin Gray Forrester Research, Inc.

37 James Staten Forrester Research, Inc.

38 Bhavish Sood Gartner Inc.

39 Frances Karamouzis Gartner Inc.

40 Peter Jarich Current Analysis, Inc.

41 Christopher Andrews Forrester Research, Inc.

42 John Madden Ovum Summit

43 Michele Cantara Gartner Inc.

44 Roger L. Kay Endpoint Technologies Associates, Inc.

45 Neil Chandler Gartner Inc.

46 Camille Mendler Yankee Group

47 Bob Hafner Gartner Inc.

48 Shira Levine Infonetics Research

49 Michael von Uechtritz Gartner Inc.

50 Rachael Stormonth NelsonHall

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingIT Outsourcing / IT Services



A Cloudy Future for Microsoft?

July 18, 2010 | Phil Fersht

and there's a bit of a mixed bag here, folks...

You'd have thought, having an analyst in Australia, we'd get contributions such as "How to outsource all your work and spend all day on the beach", or "Precautions to avoid business failure now the local pub has WiFi". 

But no.  What do we get? Endless reams of insight on the Cloud - I didn't think they had Clouds over there?  All jesting aside, Andrew Milroy poses some profound challenges for software giant Microsoft, which may be set to miss out with Cloud computing in a similar vein to its struggles with internet search market and mobility... 

A Cloudy Future for Microsoft? 

Microsoft urgently needs to address its approach to Cloud Computing, together with the closely related tablet and smart phone markets, if it wants to avoid falling further behind the likes of Google and Apple in these interrelated markets.

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Posted in: Cloud ComputingIT Outsourcing / IT ServicesSaaS, PaaS, IaaS and BPaaS



A mad, rad day for HR technology and outsourcing

July 16, 2010 | Phil Fersht

Anyone in the HR industry knows the best show of the year - and always the most entertaining - is the HR Technology conference in Chicago each September.  And this year's effort promises to be the best so far.

And this year it's got the whole gamut:  big HR practitioners, big bloggers, big analysts, big technology vendors and big outsourcers.  And as most of my friends know - I'm being particularly choosy this year attending these types of events, now I'm chained to my desk actually doing some research, but the lure of the maddest, raddest HR shindig has proved too much this time.  Why not join us?  We've even got them to agree to a whopping $500 discount for HfS subscribers:  simply REGISTER HERE and use the code HORSES10 (case sensitive).

A mad, rad day for the HR industry...

Posted in: Uncategorized



The rumors are true - we're actually doing some research

July 15, 2010 | Phil Fersht

No more boondoggles for this fella...

As a few of you may have observed, we went through a minor identity transformation back in March, when we decided to start producing our own research and become a fully-fledged analyst advisory organization. Even industry observers believed us.

Contrary to rumor, analysts sometimes do more than get themselves inebriated at industry boondoggles (hmmm....).  And as much as we'd all like to spend our days being wined and dined at tennis tournaments and totting up our Starwoods points, we've had to knuckle-down and put pen to paper with our views and insights on where this market is heading.

We tried to explain to our sales chappy that clients don't care about research anymore, that they just wanted to hang out with us, but he wouldn't listen, signed up a bunch of them, and now we have to do some hard work.

So four months on, and we're beginning to sneak a few publications out to market.  We're developing a fully-fledged research agenda which we will be excited to announce in September, when we will also be announcing the arrival of some new analysts  (who also claim they will write some stuff).  So feel free to visit our sexy (ahem) new RESEARCH LIBRARY and check out what we're writing about.

Some stuff is freemium (I love that word), and some is premium for our subscribers, but there is plenty there for all to read, that is being regularly updated with new publications.  So spend a few minutes registering an ID and password with us, and enter our research world.  C'mon... do you have any better offers on a Thursday morning?

Posted in: Business Process Outsourcing (BPO)



Hewitt into AON: a sad, bad day for HR Outsourcing?

July 12, 2010 | Phil Fersht

AON - clearly recognizes a good invesment...

Waking up this morning to hear the news of Hewitt's acquisition by AON signalled a sad, bad day for HR Outsourcing.

The HRO industry is now consolidating faster than any of us imagined... forget ADP/Workscape, this is BIG - and leaves the global HRO market with three major global HRO enterprise-level providers - IBM, NGA and Xerox (ACS).  While there were some positive synergies with NGA / Convergys to create a global provider, Xerox / ACS was an odd match of two very different cultures and providers, and AON/Hewitt isn't far off in terms of a weird fit.

I am concerned with the impact on Hewitt's culture and brand, which is steeped in HR consulting culture over four decades.  While, on paper, we can see some minor synergies, in terms of scale, geographic presence and financial offerings, you have to question two very different cultures and the potential impact on Hewitt's consulting and managed services offerings, once the AON corporate machine gets its claws in. 

Hewitt needed to be acquired by a true enterprise global provider with real HR heritage, and global HR offerings (especially pan-Europe).  Moreover, a provider with deep technology integration expertise would have been hugely beneficial.  AON will not provide that, unless it hasn't finished its shopping excursion.  Let's hope AON's leadership has learned from it's earlier foray into multi-process HRO, which netted the firm a solitary client (AT&T) and an IT-integration partnership with CSC that achieved little, before beating a hasty retreat. 

This time, AON needs to figure out its HR technology services strategy - there are several willing partipants out there, with real HRIT acumen (for example Deloitte may be looking at new HRO partners since Convergys' HRO business was acquired), and there are several Indian providers with deepening HRIT capabilities (Infosys, TCS and Wipro all have developing practices).

Maybe this will provide the impetus for Accenture to make a renewed push into the market, with so much open space being created?  It's deep HR transformation experience, HRIT and HRO client engagement experience, put it in a strong position to up the ante - and we've see it winning some deals of late.  Let's hope so - the industry needs to be competitive and we are quickly reaching a situation where clients have limited choice.

Posted in: Business Process Outsourcing (BPO)HR Outsourcing



Service providers siloed by vertical industry are stifling innovation with clients

July 08, 2010 | Phil Fersht

When we recently spoke with close to 600 shared services and outsourcing executives across both the buy and sell side of BPO, the tough news for much of the industry is that most enterprises are unwilling to collaborate with other firms in their industry to foster innovation with their outsourced business processes. 

Our new research reveals clients’ desire to collaborate with non-competitive firms in other industries is much more powerful.  Simply-put, new service delivery models must emerge between collaborating partners that will help them innovate, share their ideas and experiences.   For example, over half of enterprise buyers are not prepared to collaborate with industry competitors:

I hear you gasp with shock and horror at this revelation.  But why, then, do so many service providers still persist in stove-piping their business into vertical groupings, when their clients don't want to talk to each other about their business processes?  While it's clear that clients like to be "sold to" by executives who clearly understand their business issues, once the engagement is "live", the vast majority of governance and process management issues are generic across all firms who outsource.  

To win more business, outsourcing service providers must innovate by creating and unleashing a multi-client collaborative model that isn’t restricting their clients to their industry vertical silos.  Our distinguished analyst (I love that title, but he is very distinguished...) for shared services and outsourcing governance, Lee Coulter, investigates further.  You can also read on this issue indepth in Lee's new report, available as a freemium pick on our research page for a limited time.

Innovation? With THEM?!

I am almost afraid to write yet another article lamenting the lack of innovation in the BPO industry, but this time, I have some thoughts on how to change the game and I am spreading the blame around a little more evenly. There is plenty of blame to spread around on this one. It’s not entirely your BPO provider’s fault. Innovation is a delicate thing. It is really hard to coax into life, and remarkably easy to kill. That means it takes everyone doing the right things to create it, and anyone doing the wrong thing can stop it.

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



BPO’s billion dollar best-kept secret: Part II

July 06, 2010 | Phil Fersht

David Andrews, CEO Xchanging plc

And now that it's the worst-kept secret, let's finish our discussion on "the interesting arm wrestle" with Xchanging CEO, David Andrews...

Phil Fersht: David, you asserted that providers today need to be really strong in both BPO and technology, rather than dabbling in one or the other. I’ve looked very closely at a lot of the Indian ITOs. They like BPO because it has a huge IT tail on it and they’ll even bid on small BPO deals because they see the IT opportunity. But the mindset required to lead a BPO engagement is very different than what is needed to lead an ITO engagement. Do you think we’re going to see a consolidation in the industry between the BPO and ITO sides? Or do you think it’s going to meander for a little while longer while everyone figures this thing out?

David Andrews: I think you’ll see a lot of meandering around, and denial, from either angle because we’re all prisoners of our heritage. But I think you’re going to see one or two get it. And those are the ones that realize BPO has got to be technology powered.

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Posted in: Business Process Outsourcing (BPO)Financial Services Sourcing StrategiesIT Outsourcing / IT Services



BPO's billion dollar best-kept secret: Part I

July 01, 2010 | Phil Fersht

David Andrews, CEO Xchanging plc

There are a lot of secrets in the BPO business (oh, if only you knew), however, one best-kept secret that is worth revealing, is the Xchanging story.  The UK-headquartered firm is the largest pureplay BPO today, with revenues over $1.1bn. 

BPO purists will recall some significant developments, back in the late '90s, when private equity investor General Atlantic pump-primed two BPO providers to enter enterprise markets:  Exult and Xchanging.  While the former went after the big "lift and shift" enterprise engagements, the latter quietly went about developing BPO services focused on partnering with enterprises, co-developing technology and processes, and developing industry-specific process skills that could be blended with horizontal administrative processes. 

Wall Street investors, industry analysts and business media loved the Exult model - it was focused on big-bang deals, exposed the shortcomings of enterprise HR operations, and brought the BPO business to the attention of the media and the industry.  Meanwhile, Xchanging, led by the pragmatic David Andrews, quietly went under the radar building a business that focused on servicing industry vertical processes, namely insurance and banking, and two fulcrum bridging processes:  payroll and accounts payable processing, in addition to other administrative functions.

In today's market, the message couldn't be clearer:  the old "lift and shift" model only works when there is tremendous discipline applied to process standardization tied to common technology workflows, while the partner-orientated approach, where buyer and provider work together towards common outcomes, is proving to be the model where both parties are vested in making the engagement successful - and within budget.

As part of our CEO series of interviews, we thought it about time to drag David away from one of his hazardous Dartmoor runs (the invisible cliff edges keep his shareholders constantly on edge) to share his story with us.

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Posted in: Business Process Outsourcing (BPO)Captives and Shared Services StrategiesFinance & Accounting BPO