HfS Network

Monthly Archives: Nov 2010

The Industry Speaks about Cloud, Part III: business and IT finally agree - IT must tool-up to enable cloud business services

November 29, 2010 | Phil Fersht

Savvy CIOs are developing themselves into Cloud-enablers by honing their sourcing and service integration skills. Our Cloud Business Services study, conducted in conjunction with the Outsourcing Unit at the London School of Economics, contrasts many differing views and expectations from business and IT executives about Cloud business services... however, both sides do agree on one thing — the crucial enablement role that IT executives must adopt  in order to provision Cloud business services.

While business execs are more gung-ho on Cloud than their risk-averse IT counterparts, both sides agree on who should enable this - it's going to be the IT function. The survey reveals that 42 per-cent of business respondents expect to rely extentively on their own in-house IT function to implement a move to the Cloud:

Click to enlarge

The bottom-line:  Cloud business services creates a massive opportunity for the IT department to realign itself to the business

HfS sees the future of the inhouse IT function as being the conduit between the business  and the providers delivering Cloud business services.  The successful IT executives will be those who develop governance expertise in sourcing and service integration to make Cloud a reality.

Business stakeholders want Cloud, and they know smart CIOs can mitigate its risks.  However, HfS believes IT professionals must tool-up to deliver cloud to their business stakeholders, otherwise they risk a gap growing between business demand and IT supply. Tooling-up for the Cloud calls on CIOs to develop new internal skills and embracing  third-party expertise to accelerate the sourcing of Cloud services.  Security, compliance and integration are huge issues that predicate success with Cloud, as our survey will reveal when released later this week. Running due diligence on service providers is critical to ensure any potential cracks in service delivery do not cataclysmically impact performance.  Stay tuned for more...

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



Everything you ever needed to know about today's Finance and Accounting Outsourcing industry... but were afraid to ask

November 26, 2010 | Phil Fersht

Have you ever wondered what would happen if you pulled together the views, intentions and experiences of over 1000 buy-side enterprises and the real deal industry view of all the FAO engagements to-date... AND THEN pulled this all together into a one hour festive feast of FAO that you can access for free on December 15th?

Have you ever wondered what would happen if you pulled together a motley crew of Americans, Brits, Italians and some French-sounding chap, who claim to be the world's foremost experts in FAO?

Well then - we have the show for you, featuring the following cream-of-the-crop from the HfS-EquaTerra Actionable Insight alliance:

  • Phil Fersht will reveal new HfS Research industry findings from its 2010 FAO deal review and present the views and intentions of several hundred HfS research subscribers
  • Stan Lepeak, Claudio Altini and Rick Bertheaud (see bios) will give you the low-down of best practices and insights from their client interactions, in addition to revealing some snippets from their brand new FAO service provider performance study.

If you are interested in attending the webcast on 15th December at 11.00am Eastern Time, email Allison Norman with the subject header FAO webcast, and she'll set you up.  Be quick to reserve your spot as places are limited.

We look forward to having you with us

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



Learn how to assemble an airplane in mid-air... and become a Shared Services Outsourcing Professional

November 25, 2010 | Phil Fersht

Learn to assemble a plane in mid-air like Coca-Cola's Bill Johnson (click for more info)

According to our buddy Bill Johnson, who runs global finance Finance Shared Services for Coca-Cola Refreshments:

"Launching a Shared Services organization more than a decade ago was a bit like assembling an airplane in mid-air."

And to add to the experience, try on-sourcing some of these processes to an F&A BPO provider...  Bill is very involved with our conference partner, SSON, and he adds, "We ultimately prevailed thanks to knowledge sharing on the part of our fellow practitioners, many of whom with which we connected at SSON events. Having now available a formal set of learning materials in a one-stop-shopping format will provide a great supplement to that traditional approach."

So it's time to learn-up and sign-on to the SSON Managed Certification® and Online Learning Program, which kicks off its second session next Monday 29th November.

And we've arranged for HfS subscribers to enjoy a 10% discount - just drop them an email by clicking here.

Posted in: Buyers' Sourcing Best PracticesCaptives and Shared Services StrategiesFinance & Accounting BPO



Tread Carefully Through Europe

November 24, 2010 | Phil Fersht

Tread Carefully Through EuropeNew data from the Central & Eastern European Outsourcing Association (CEEOA) points toward more sourcing dollars, pounds and euros being spent in the region. However, reaching the Promised Land isn't always the smooth ride you may have been anticipating when the train was leaving the station.  Here's our take...

Global Sourcing Buyers: Tread Carefully Through Europe

Buyers care where their providers are because stability, talent pool, infrastructure and the business and legal environment, determine how successful the relationship is going to be. Central and Eastern Europe is a fragmented region where cost, quality and scale varies.

However, firms that use a scorecard can identify different country clusters and start to make the right investment decision. As a rule of thumb, buyers find multilingual capability, stability and higher costs in the center of Europe while lower costs, IT engineering skills and higher risk toward the east. HfS Research recommends doing your due diligence with care: Score the various countries to ensure alignment with your requirements (ITO or BPO) and use site visits as an essential part of the investigative process.

Buyers Need support To Navigate the Region

Global sourcing buyers face a bewildering array of destinations to support their global delivery strategies but just because an economics minister says a country is a nearshore destination doesn’t mean it actually is.  Firms buy services from a vendor rather than a country. But the country’s geopolitical stability, business environment, human capital, rule of law and general infrastructure underpins how successful the relationship is going to be. HfS believes buyers have to navigate the Central and Eastern European region carefully because:

  • It’s not India: Central and Eastern Europe is vast. From Albania, Poland to the Ukraine what you will find varies just as much as the music, language and food. While India tends to operate as one entity in buyers’ minds, this region doesn’t and you won’t find an umbrella organization like India’s Nasscom supporting you as you investigate setting up or selecting a provider to work with. Proceed with care.
  • Service scope varies. Multilingual support or low cost software engineering? It’s not clear to buyers which locations they should look at for specific services (or where to encourage their service providers to invest) and no umbrella organization can really help. Poland is a well-established service delivery location for F&A BPO. Together with Romania, Poland, they offer strong language capability to support multilingual front/back office support for pan-European firms. Countries in the east of the region such as Ukraine or Belarus offer strong technical IT capability.
  • Cost, quality and scale differ. CEEOA data reveals rock bottom rates for custom software development in Albania—see Exhibit 1. Closer analysis reveals countries like Lithuania, Croatia, Moldova, Latvia, Slovenia or Albania are extremely immature markets for software engineering services and questions concerning scale are paramount. Future projections of IT graduates entering into the market really matter—your firm may well find staffing problems hit if a large service provider moves near your chosen city or if one of your larger competitors decides to do so. Quality varies with the local staffing pool: Ukraine has a huge number of CMMI and ISO benchmarks in play but has to be checked to ensure service delivery can scale?

Exhibit 1:  Software Development Rates Don’t Tell the Whole Story

Read More »

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



Cutting to the chase with Capgem's Chris Stancombe

November 19, 2010 | Phil Fersht

Did you hear that one about the British geophysicist who became an accountant, ran an African engineering business, has been a COO, CIO and CFO, before winding his way into the sourcing business with Accenture, and subsequently Capgemini, where he helped jump-start their BPO business?

Today, Chris Stancombe has worked in BPO for nearly a decade, and now heads Capgemini's Global Finance and Accounting Outsourcing practice.   And one of the first things you'll notice when you meet Chris is he doesn't mince words... he cuts right to the chase.  And that's exactly what we wanted him to do with the HfS crowd when we recently caught up to ask Chris how he sees sourcing in this economy shaping up, and get his views of what customers are looking for (or should be looking for) today...

Phil Fersht: Chris, thanks for joining us today. When you look at the market landscape today, how do you sum it up in terms of what clients are looking for, and how things have changed since the recession, in terms of the kinds of conversations you are having?

Chris Stancombe, Global Head of Finance and Accounting Outsourcing, Capgemini

Chris Stancombe, Global Head of Finance and Accounting Outsourcing, Capgemini

Chris Stancombe: I think it is quite interesting because it depends upon the maturity of the client and of the advisor. We are in an interesting time where there are renegotiations happening. There are some mature clients who have achieved the benefits from labor arbitrage. Now, they are looking for a partner who is going to help them with process expertise and driving realization of technology investments. I think that there has been a fair degree of wasted money invested in technology without really building and improving process. Consequently they believe that they lost the return on their investment. I think with some of the more mature clients and some of the more mature advisors the conversation is much more amicable. “You have got the capability. Yes, you have the global delivery centers. What we really want to talk to about now is your process expertise. How are you going to help us solve our challenges and how can we work together as a partner?”

Read More »

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



Meeting even those simple metrics can sometimes be a challenge...

November 18, 2010 | Phil Fersht

Posted in: Absolutely Meaningless Comedy



Outsourcing: no fun for the soon forgotten

November 18, 2010 | Phil Fersht

In today's sourcing business, many people just love to evangelize on the realities of the cut-throat global business climate to greedy executives, eager to hit profitability targets.

However, the one time I can truly tell you this is a highly sensitive and (often) harsh business, is when I have had to trawl the offices of organizations to spend time with staff whose jobs were clearly on the line.  I had to reassure them they had to "get on the train" and go through a detailed activity analysis of their day-to-day job, so we could document how to replicate some (or all) of their tasks for someone to conduct in some lower-wage location.  I can honestly tell you my experiences in the field will stay with me thoughout my career... and beyond.   It's one thing actually firing someone - that's a 15 minute cut-and-dried conversation -  however, convincing someone they have to help train their potential offshore replacement is another conversation entirely!

Our new contributing analyst, Deborah Kops (visit her website at www.sourcingchange.com), gives us some practical advice on how to tackle these change management issues with sensitivity and practicality.  Over to you, Debs:

Outsourcing Change Management: No fun for the soon forgotten

Most religions have a name for the deliberate avoidance of association with, and the habitual isolation of, an individual or group. Jehovah’s Witnesses call it disfellowshipping; Jews call it cherem; Wiccans call it reculement, and the Amish call it medung, or avoidance.  Whatever it’s called, the implicit ostracism that those who are politely called “affected staff” feel as a result of outsourcing is destructive—to them, to the retained staff, and ultimately to the success of the sourcing.

Deborah Kops, HfS Contributing Analyst

Deborah Kops, Contributing Analyst, HfS Research (click for bio)

Whether our jobs have been outsourced or not, many of us have experienced the workplace version of shunning. The scenarios look something like this: you’re on someone’s list for termination; or Sally got the promotion rather than you; or the organization’s being downsized and there is not an easily identifiable role for you. Sometimes we know intuitively because the boss and his henchmen become less cordial, or cannot look you in the eye, or omit to invite you to the weekly meeting; in other situations, you’ve been told you might be restructured but the jury’s still out. In any event, if you show any distress or your performance declines, management quickly uses your behavior to justify whatever decision they have made about your future. And that very same management writes you off their proverbial books, already moving on to the next business challenge.

Outsourcing is the only business change I know where employees are told their jobs are moving offshore, yet they are expected be good really sports and continue to process checks/answer calls/manage claims until the day they are escorted out the door, personal effects in arms. And our managers think their “restructuring” tasks are over, and it’s on to making sure the transition doesn’t go pear-shaped.

While we all sympathize with the pain of the affected staff, few organizations train their managers to deal with the fine art of making teams redundant and keeping productivity high in preparation for a change in business architecture like outsourcing.  And the task isn’t something we can toss over the transom to our HR partners, which is the common outsourcing change management technique. They are not walking the office each and every day, dealing with visible angst, dwindling morale, loads of coffee room chitchat and challenging knowledge transfer.

Without the right approach to redundancy, transformation leaders are drained of emotional energy, and respond inappropriately. The retained team closely watches  management’s behavior, and develops a lack of trust. The departing staff demoralizes those who are staying, and trash the corporate brand. And processes have the potential to break down, performance declines and knowledge transfer is subpar. But by following a few simple rules, the pressures on all parties can be reduced.

Want to do a better job? Click here to download your freemium copy of "Outsourcing Change Management - No fun for the soon forgotten"

Posted in: Buyers' Sourcing Best PracticesSourcing Change Management



The social sourcing train is leaving the station. Are you on it?

November 17, 2010 | Phil Fersht
Lisa Ross, HfS Research Senior Vice President, Market Development & Operations

Lisa Ross

Who has much time these days to read big clunky whitepapers, or (dare we admit it), long-winded esoteric research reports?

People are increasingly demanding their daily serving of content served up in more digestible and less headache-inducing chunks, as our latest industry-wide study reveals, where more than 1000 study participants across the sourcing industry have voiced the increasing importance of blogs and social media as one of their preferred learning tools for Cloud Business Services.

Lisa Ross, our Senior Vice President, Market Development & Operations, has done a lot of thinking about what we call "social sourcing." So we thought there was no better place than here on the blog to have her air her views about the importance of blogs and social media to the sourcing industry.  Lisa, take it away...

The Social Sourcing train is leaving the station. Are you on it?

The proof really is in the pudding for us all to see –just ask the professionals who recently took part in the Cloud Business Services study we ran jointly with The Outsourcing Unit at the London School of Economics. As this graphic shows, blogs, especially, are already mainstream social mediums for education to guide major strategic investments.  And analysts are the most sought-after information sources too.  (Good thing that we, at HfS Research, have both a media brand and a research powerhouse – lucky break!).

Analysts and providers currently providing most valuable education on Cloud

Click chart to enlarge

Read More »

Posted in: Cloud ComputingSocial Networking



"Honestly, history tells us the act of outsourcing doesn’t save money..." Gartner Group

November 15, 2010 | Phil Fersht

This morning I nearly choked on my cornflakes to the incredible revelation on CIO.com from analyst firm, Gartner Group, that outsourcing doesn't save money.  Everything I thought I'd learned over the last 15 years suddenly went up in smoke:

In Sydney for the Gartner Symposium, analyst Linda Cohen spoke to CIO Australia and said the idea that outsourcing is a problem solver is not always the case.

“We ask our CIO clients to consider outsourcing as an operating strategy rather than a problem solver,” she said. “Historically, outsourcing has been a bandaid and a way to fix the problem.”

Cohen said another misconception CIOs may have about outsourcing is that it will save the business money over a period of time.

“The number one reason they choose to outsource is this theory that they can lower their costs... honestly, history tells us the act of outsourcing doesn’t save money,” Cohen said. “The real problem is how do you sustain the lower cost to operate?”

So, let me get this straight, you do receive a lower cost to operate when you outsource, but face a challenge to sustain it?   That's a little strange, because when we spoke with 50 of the largest enterprises across the US, Europe and Australia recently, they all outsourced IT to save a lot of money, and the majority were looking aggressively at increasing their outsource scope to find further savings, while others were pretty content with the status quo.   Noone felt their firm hadn't benefited financially from the exercise, and those that had initial teething problems had largely got on top of them.  And most of them actually liked the value and the access to specific software expertise they received from some of their providers - and their only real complaint was that they wanted more.

Moreover, when we spoke to another 209 enterprises earlier this year, 52% were planning to increase their application outsourcing scope this year, which also jives with the stellar growth results of many of the leading IT services providers this year:

In all honesty, I know where Linda Cohen was going with this, but - c'mon -  most enterprises moved a good chunk of their operational ADM work to low-cost locations years and years ago, and are way beyond saving money on the operational stuff.  Their challenge is to align innovative IT with the business to drive productivity and revenue, to explore Cloud Computing and smarter governance / multi-sourcing models.  To advise CIOs that "the act of outsourcing doesn't save money" is simply WRONG.  Honestly, Linda...

Posted in: Confusing Outsourcing InformationIT Outsourcing / IT Services



The speculation over Genpact’s future spells crunch-time for the future of BPO

November 14, 2010 | Phil Fersht

Who's prepared to step up to the plate?

No one single provider can claim to have impacted the world of BPO with such verve and focus over the last five years, than that of Genpact.

During the “boom” years of Finance and Accounting BPO adoption, between 2005 and 2008, the Gurgaon-headquartered firm aggressively pursued nearly every large deal on the table, with a no-nonsense approach of lift-shift-transform BPO at aggressive pricing, bolstered by the GE Six-sigma and LEAN heritage and branding.  However, the mindset-shifts of the Recession, combined with a more knowledgeable buyer, more credible competitors, and the ability of several Indian-headquartered and Western providers to compete more aggressively on price, have conspired to create a much more challenging environment for any provider competing for BPO business.

Most importantly, serious questions are now being asked of the leading service providers jostling for marketshare and position in the BPO business.  Some providers are growing frustrated, and beginning to question whether they got their approach to BPO right. And the current speculation over Genpact ‘s future is forcing many of the BPO wannabes to gaze deeply into their navels to decide whether they want to get really serious about BPO.  There's been a lot of chest-beating, a lot of marketing, a lot of huff and puff right across the industry... now's the time to see who's really going to step it up.

Read More »

Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOFinancial Services Sourcing Strategies



Get your governance right in 15 minutes with Stan and Esteban

November 12, 2010 | Phil Fersht

Still struggling to find that right governance model?  Well you'll probably still be after listening to this, but they'll at least validate all the things that you should be doing, which you  know you should probably doing, and are probably not, for whatever reason, but would love to if you could just get your boss to listen to you.

Or maybe your didn't know what you were supposed to be doing, and will be guided down the path of enlightenment when you listen to HfS Research's  Esteban Herrera and Stan Lepeak from our research partner, EquaTerra, when they discuss "Outsourcing Governance Models: Which One Fits Your Needs?"

Click to hear Lepeak and Herrera's Podcast - "Outsourcing Governance Models: Which One Fits Your Needs?"

Click here to listen to the podcast:
Outsourcing Governance Models: Which One Fits Your Needs?

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



The Industry Speaks about Cloud, Part II: business execs fear its impact on work culture; IT execs doubt their ability to drive competitive advantage

November 11, 2010 | Phil Fersht

HfS Research and The Outsourcing Unit at the London School of Economics have surveyed 1053 organizations on the future of Cloud Business Service

The colossus Cloud Business Services study we just conducted, in conjunction with the Outsourcing Unit at the London School of Economics, has served up some contrasting concerns that business executives are having versus their IT counterparts:  Cloud's potential impact on work culture versus its impact on the value of the today's IT department.

Essentially, two-thirds of business executives have expressed concern over the impact Cloud business services could have on the speed by which they could be driven to operate in virtual environments.  Moreover, a similar number expressed concerns over Cloud impeding their ability to collaborate with other businesses.

Conversely, IT executives are hugely worried (80%) by the potential for Cloud providers to exploit customers, but contradict these fears by also worrying about competitors leveraging Cloud to steal competitive advantage from them:

The bottom-line: when the business execs look at Cloud, they sense a major cultural change in the way they work, while IT executives are terrified by the potential curtailment of their value  as the technology-enabler of core business processes.

The fact that the IT side of the house recognizes the competitive advantages Cloud can give business (see Part I), creates a massive challenge to the CIO today: how can their IT department become a vehicle for helping their organization find competitive value from Cloud. Because if the CIO fails to deliver this value, the business side will be forced to look at alternative avenues.  We'll talk about the business transformation implications of Cloud shortly.  Stay tuned for more...

Posted in: Buyers' Sourcing Best PracticesCloud ComputingHfS Surveys: All our Survey Posts



Mahindra Satyam eyes big comeback

November 10, 2010 | Phil Fersht

Mahindra Satyam... back in the game?

While the rest of the outsourcing world has been carrying on through challenging times, the most challenged of its citizens, Mahindra Satyam, has been quietly rebuilding a global business under the charismatic and candid leadership of Atul Kunwar.

A no-nonsense leader with a strong M&A background, he has charted a course to more than double the size of Mahindra Satyam and its sister company Tech Mahindra in three years. HfS would normally be skeptical of such a claim, but there is compelling evidence that this is a reachable stretch target.

In the unlikely event you have not heard of what caused the former Satyam’s challenges, here is the short version: In late 2008 and early 2009, it became known that the company’s chairman and founder and his brother had inflated profits and more as importantly, cash, for years, to the tune of almost $2 billion. At the time, the company was India’s fourth largest IT services provider and had an enviable portfolio of big-brand clients. After a brief period under government control, the Mahindra group stepped in to rescue it and turn it around, assuming its large and previously under-reported debt.

While investors suffered immensely as a result of the fraud, customers were relatively unharmed, as operations continued without interruption in most cases.

Today the company has completed a difficult stabilization period and is adding new logos, while pursuing growth in four key foundational segments:

  1. End to End Manufacturing
  2. Telecom
  3. Enterprise Services
  4. Vertical BPO

This Rapid Insight Report offers HfS Research’s take on Mahindra Satyam’s strategy and what it might mean to enterprise customers who consider working with the company.

Click here to visit our research page and download your freemium copy....

Posted in: IT Outsourcing / IT Services



HfS Research aligns with the stars with Ray Wang

November 09, 2010 | Phil Fersht

Shepherd Ray Wang... the star-herder

Folks - I've made no secret of my admiration for analyst-extraordinaire, Ray Wang, who is a true dynamo in the world of software.  You can read a great dialog we had with Ray earlier this year.

Ray (view bio here) has made his name as a superior analyst at Forrester Research, with spells at PeopleSoft, Oracle and E&Y, before co-founding advisory firm Altimeter Group.   He also has an industry-standard blog "A Software Insider's Point of View".  Plus, he doesn't have a single gray hair for a 38-year old workaholic insomniac...

Today, Ray announced the launch of a very exciting new research venture entitled Constellation Research, which comprises a collection of really smart and remarkable individuals and friends who are - quite literally - changing the way market research, commentary and insight is being served up to the technology buyer.

HfS  Research is delighted to be the alliance partner for IT sourcing and BPO research to Constellation's buy-side community, where we'll be cross-pollinating some research with each other and collaborating to help educate the sourcing buyer make smarter decisions.

I, personally, have really enjoyed my interactions with folks such as Vinnie Mirchandani and Dennis Howlett over several years (in fact, Dennis remembers me when I was still in my analyst nappies back in '95).  We're honored at HfS to get the chance to work with such a stellar collection of cosmic energy!

If you have any questions regarding the research alliance, please drop us a line at [email protected]

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHfS Research Company News



Benchmarker Beware!

November 08, 2010 | Phil Fersht

The "B" issue in outsourcing: always invited to the party, but rarely adds much value...

Anyone close to the world of outsourcing deal-brokering and performance measurement has been exposed to the infamous "B" issue.

I recall a debate with several experienced buyers, who had anything from 250 to 1500 benchmarked line-items in their respective service level agreements.  When I asked them how many  of these they actually cared about, no-one could think of more than a dozen... Over to our roving expert in sourcing best practice, Esteban Herrera to discuss the matter further...

Benchmarker Beware! How to use Benchmarking Successfully in Outsourcing

Benchmarking is a misused and misunderstood tool in outsourcing. Almost everybody’s contract has a provision for benchmarking, and in almost all cases it drives the wrong behavior for both parties. A good benchmark (and there aren’t many good ones out there) can be a valuable tool to start a conversation, yet our industry tends to use them as the end of a conversation. Benchmarking data is only useful in the context of a Market Intelligence Program. HfS Research defines a Market Intelligence Program as a coordinated set of insights, professional networks data sources, industry research, and processes that give outsourcing buyers a complete, accurate view of their deal relative to the industry.

Unfortunately, I’ve seen clients artfully leverage expensive benchmarks to unwittingly reduce the value proposition they are receiving from their providers. I’ve seen well-intentioned providers ruin large relationships over benchmarking result disputes. Most often, I see the clause that cost hundreds of hours and thousands of dollars to negotiate be ignored in full or in part. So clients and providers spend lots of time and money (and “relationship capital”) arguing over the minutiae of a provision that isn’t likely to ever be used, and is even less likely to be implemented if it ever is used, and if accepted could have the exact opposite result it was intended to have!

The obscure methods of the benchmarking industry and the motivation of some individuals or groups to debunk results do little to help. Credibility of benchmark results seems to be at an all time low, and nobody seems to be capable of accurate BPO benchmarking. For these and many other reasons, users must tread carefully to get value from their efforts.

HfS Research has spoken to hundreds of client and provider teams to determine the proper way to leverage benchmarking, and to help clients determine whether benchmarking is even appropriate for their situation. You can get some pragmatic benchmarking advice in our HfS Rapid Insight piece Benchmarker Beware: How to use Benchmarking Successfully in Outsourcing, or by contacting your local HfS Research analyst at 1-800-BENCHMARKS-NOW-PLEASE

Click here to download your copy of Benchmarker Beware: How to use Benchmarking Successfully in Outsourcing

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



Service Integration: Guy Fawkes fireworks or damp squib?

November 05, 2010 | Phil Fersht
Service Integration: Fireworks or Damp Squid?

Guy Fawkes ponders service integration strategy and blowing up the outsource model

Euan Davis, Managing Director of HfS Research's European Practice, lives in the UK, and has the pleasure of celebrating Guy Fawkes' Night ever year, where they burn an effigy of the man who tried to blow-up Parliament in true paganist style... accompanied by fireworks.

Curious, as I'm sure anyone who tries to blow-up Congress would likely be hero-worshiped stateside, or asked to join the Tea Party or something....  anyway, it's as close as the Brits ever get to Disney.

Today, as Euan readies for his annual trip to a bonfire, he muses on fireworks--municipal ones and the type he expected at a session about service integration last night, at PA Consulting Group’s SSON networking evening. Take it away, Euan...

Service Integration: Guy Fawkes Fireworks or Damp Squib?

Friday, November 5 is Bonfire Night over here in the UK. Like many others I will be heading down to our local municipal bonfire to watch a proxy “Guy” thrown on top of it followed by some great fireworks—some towns really go for it and burn effigies of our politicians or pond-life celebrities. Trying to explain the concept to my kids (especially the burning of the catholic at the stake thing) is always tricky but as they get older and learn more history at school they start to get it (I hope).  So I was expecting fireworks when I attended attend PA Consulting Group’s SSON networking evening to talk about how UK energy firm Centrica was tackling service integration, a topic close to my analyst heart…

Read More »

Posted in: Cloud ComputingIT Outsourcing / IT ServicesOutsourcing Advisors



Phil and Esteban---Desperately Seeking Innovation

November 05, 2010 | Phil Fersht
Desperately Seeking Innovation

Phil and Esteban: Desperately Seeking Innovation

What are you desperately seeking? Rosanna was Desperately Seeking Susan. Phil and Esteban? If you know them like we do, you know they're Desperately Seeking Innovation.

So, as  official provider of research and insight for SSON’s premium buy-side members, Phil and Esteban are teaming up to lead a session for the  entire HfS Research and SSON communities:

Desperately Seeking Innovation in BPO
Tuesday, 9th November 2010
3:00 PM GMT
10:00 AM ET
Register here.

The session, being made available to all HfS Research and SSON members this time only, will be based on the recent HfS Research study, Desperately Seeking Innovation in Business Process Outsourcing: Enterprises Speak Out. The report discovered most buyers of BPO services alike trimming 30% of their costs on one process--at the start--then 50% on another. But once those costs disappear from the balance sheet, they are quickly seeking new initiatives to attain new thresholds of productivity or revenue growth: what we terms “innovation.” In the call, we'll share the views of the nearly 600 shared services and outsourcing executives who we surveyed as part of the report.

Read More »

Posted in: Business Process Outsourcing (BPO)Captives and Shared Services StrategiesOutsourcing Events



A healthcare BPO summit... with Sumit

November 04, 2010 | Phil Fersht

Sumit Sachdeva, Head of Cognizant's Healthcare BPO Practice, atop Mount Pilatus in the Swiss Alps

Healthcare has been on everyone's minds in the US, in the wake of the acrimonious legislative fight and with the recent elections.

And when any industry gets the squeeze, us sourcing-folk immediately think "hmmm, will they now do some outsourcing...?".  (Read our earlier piece on the impact of healthcare reform on healthcare payors).

So we thought we'd turn to someone who has the lovely task of actually selling outsourcing to healthcare organizations.  Not an easy task - I can assure you, having once worked as an advisor on a healthcare BPO evaluation... and was nearly lynched and deported before being forced to watch an entire viewing of "Scrubs".

Step up Sumit Sachdeva, the Head of Cognizant's Healthcare BPO practice, to see if we can make some sense of it all.

Sumit has spent last 8 years of his career in the Healthcare BPO industry and has seen it evolve. He joined Cognizant BPO in 2006 as a part of the initial management team and has been  instrumental in its growth. Prior to Cognizant, Sumit worked with Hexaware and Xerox India in various roles, before relocating over to the States.

A dedicated globe-trotter, you'll always find Sumit sampling some local cuisine or culture... or even climbing a mountain, like Mount Pilatus, nearly 7,000 feet up in the Swiss Alps.  And a mountain's a pretty good metaphor for the healthcare sector. It's massive, hard to figure out, and riddled with uncertainty. So we turned to Sumit to brief us on why there's so much activity in the healthcare sector, and the impact of healthcare reform in the US...

Phil Fersht: Sumit - thanks for taking time to talk to HfS Research today.  So tell us about the healthcare business. Why is it so busy right now?

Sumit Sachdeva: Oh, there’s quite a bit of momentum that we have. So that’s keeping us busy. We’re all set for a significant growth this year and are expecting this trend to continue for the next year or two.

Phil: What sort of work are the clients demanding?

Read More »

Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOFinancial Services Sourcing Strategies



Deborah Kops, delightful doyenne and describer, joins the HfS research family

November 02, 2010 | Phil Fersht
Deborah Kops, HfS Contributing Analyst

Deborah Kops joins HfS Research as Contributing Analyst

There really is only one Deborah Kops.  Because if there were two, we'd be in serious trouble.  Not too many people can truly say they've "been there, seen it, done it" in our lovely sourcing business, but Debs (as only a few of us are allowed to call her) really does have the scars to really prove it.

She was instrumental in PwC's global business process outsourcing (GBPO) practice in the '90s before embarking of a tour of sourcing duty that culminated in a three-year experience with WNS, where she was instumental in helping elevate the Indian-headquartered BPO provider to become a serious candidate for major top-tier engagements. Check out her bio for the full rundown of her rumbustious career.

Name me many other woman who have successfully held a market-facing leadership role for such a length of time in the male-dominated world of an offshore outsourcing provider. Apologies if I just flouted all the rules of today's political-correctness with what I just said - but it's true.

Many of you know Deborah as a versatile straight shootin’ gal who’s seen the BPO industry’s growing pains through the lens of buyer, provider and consultant. Well, she’s now focusing her prodigious energies…and her pen…on sourcing change management through www.sourcingchange.com, which is the first resource devoted to the issues and challenges of getting stakeholders to adopt, embrace and expand outsourcing relationships.

At HfS Research, our clients are in desperate need of advice and knowledge from peer experiences when they undergo the difficult operational change that accompanies a global sourcing endeavor.  Sourcing Change, under Deborah’s leadership, delivers experienced, meaningful advice fill the knowledge gap in the market. Having worked with Deborah for many years, there is no one more qualified to deliver this insight. We look forward to expanding industry understanding through our collaboration with her.

Deborah’s diverse background gives her a unique take on the industry, and her inaugural contribution to HfS Research (click here for freemium access) focuses on a significant tradeoff the industry makes for cost arbitrage—a rapid generational shift to younger workers that we grumble about but don’t really acknowledge. “Imperfect Arbitrage,” starts the debate about the tradeoff we make when we source offshore.

Over the next year, you’ll be able to sample innovative thinking in sourcing change through Deborah’s frequent columns and commentary exclusively for HfS Research.  Look for surveys and analyses which, for the first time, portray the actual state of outsourcing change management, and a schedule of webinars and workshops that will help buyers and providers alike enjoy more success.  You can reach Deborah at deborah dot kops at sourcingchange dot com.

Click here to download Deborah's new HfS RAPIDInsight "Imperfect Arbitrage: The implications of generational shift resulting from the globalization of work"

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



The Industry Speaks about Cloud, Part I: Business execs are buying-in to Cloud even more than their IT counterparts

November 02, 2010 | Phil Fersht

HfS Research and the London School of Economics have surveyed 1053 organizations on the future of Cloud Business Services

This week, we're beginning to unravel the colossus study we just ran with the London School of Economics delving into the future potential of Cloud Business Services.

We managed to receive 1053 participants across business buyers, IT buyers, advisors, providers and industry influencers - if anyone else in the industry has performed such as exhaustive study of Cloud business services, please enlighten us!   Thank you to all our loyal readers who completed the study, and our friends at SSON who helped engage their network.  A complimentary report of the study findings will be winging its way to you all very soon.

One of the unique angles of our study has been to contrast the views and intentions of the non-IT business community, and solely IT executives.  And - as we suspected - the dynamics driving the future direction of Cloud adoption within the business functions is going to come from the business function leaders who "get it".

Cloud Business Services are no longer hype - both business and IT executives are buying-into the value Cloud can bring to their jobs and their organizations. Let's examine further:

*The ability to access business applications quicker, faster, cheaper and in a virtual business environment are the major drivers - and it's the business side of the house which is even more engaged by the potential value than the IT-side.

*Most notably, half the business respondents seriously value the focus Cloud brings to transforming their business, as opposed to their IT.  Barely a third of IT respondents were as enthralled by this.

Does this mean that the real impetus behind future adoption of Cloud Business Services is going to come from business function leaders with heavy influence over IT spending for their function?  And what role will Cloud Business Services play in altering the make-up of today's outsourcing and integrated services engagements?

Stay tuned for Part 2, and Part 3... and probably Parts 4 and 5 as well...

Posted in: Buyers' Sourcing Best PracticesCloud ComputingHfS Surveys: All our Survey Posts