HfS Network

Monthly Archives: Apr 2012

And then there were six... meet the sourcing savants on the seventeenth

April 30, 2012 | Phil Fersht

Ever wondered what would happen if you brought the six most prominent IT and business services savants together for a one-hour debate on the future of the sourcing and services world?  Well, wonder no more as this becomes a reality on 17th May at 12pm EST, 5pm BST:

 Join us on May 17th at 12pm ET | 5pm BST

Our six panelists are primed to debate the issues and take your questions:

  • Cliff Justice, Partner & U.S. Leader, Shared Services and Outsourcing Advisory - KPMG
  • Phil Fersht, Founder and CEO - HfS Research
  • Peter Bendor-Samuel, CEO - Everest Group
  • Charlie Aird, Global and US Shared Services and Outsourcing Leader - PricewaterhouseCoopers
  • Peter Lowes, Principal - Deloitte Consulting
  • Ben Trowbridge, CEO - Alsbridge

Where we will attempting to divert them from shameless sales pitches to discuss the following topics:

  • What does the enterprise IT and business process outsourcing and shared services industry really look like today? Is it a genuine "industry" or simply the globalization of business?
  • What is working for enterprise services clients – where (and why) are they struggling?
  • How are services buyers and providers defining "success" today - and does this need to change?
  • What impact is a “factory mentality” having on outsourcing? Is there anything we can do to change this, or are we already in a race to the bottom?
  • How can (and should) advisors help the industry - and what differentiates today's advisory firms in the market?
  • How has cloud computing impacted the enterprise – is it everything we thought it was going to be?
  • What measures can both enterprise clients and service providers take to improve sourcing relationships and achieve more business value?
  • What are everyone’s recommendations on next steps for the future of the services and sourcing industry?

Join us on May 17th at 12pm ET | 5pm BST

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

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Infosys is officially processing in America to give y'all some BPO

April 26, 2012 | Phil Fersht

We've been blessed today to be present at the official unveiling of InfosysBPO's first onshore US facility in Atlanta, primed to grow from an initial 200 seats to 1000 in the coming months. Initial clients to be serviced here largely comprise a mix of insurance and healthcare processes, however, Infosys is also keen to move horizontal services into the center as it expands.  We see this as a further milestone in the global BPO industry as service providers are expanding their US service delivery capabtility to cater for client processes which benefit significantly from onshore talent.  As we see increasing numbers of industry specific processes being sourced, we fully expect further expansion of onshore centers.  Yes, the US is fast-becoming a hot location for BPO services - who'd a thunk it?

The traditional Indian ceremony of "lighting the lamp" is conducted by India's Consul General Ajit Kumar (center), overseen by Infosys BPO's COO Ritesh Idnani (right)

Posted in: Business Process Outsourcing (BPO)

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"The best sourcing discussion that's ever taken place. Period"

April 26, 2012 | Phil Fersht

This was the ringing endorsement that came out of this week's "HfS 50 Sourcing Executive Council Blue Print Sessions" in New York City.  Two days, 40 buyers representing $5bn of outsourcing spend, collaborating together for a whole day and a half, then greeted by six providers to engage in one of the most revealing, pure and pivotal discussions ever on the direction the sourcing and services industry is heading.  Stay tuned for the Blue Print document.

And a very big personal thank you for all you people who are supporting this initiative (you know who you are)

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

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Providers: Stop giving Deb Kops a headache and sort out your websites

April 24, 2012 | Phil Fersht
Deborah Kops, HfS Research Fellow

Deborah Kops, Research Fellow, HfS Research (after a couple of aspirin)

Not many people have marketed for providers, bought from providers and negotiated with providers as much as Deb Kops over the last 50 years or so.  She has heard more vernacular, more puff and fluff than anyone... and now it's time to answer her plea:

I'm dreaming of a great provider website

When I’m trying to keep up with the latest sourcing trend, I take a look at provider websites. While I always learn a thing or two, and get a good sense for where the industry is going, I generally come away with a headache, not only trying to read what’s on the page, but more important,  grasping the message. I’d like to think I have at least an average intellect, but when some of these sites are written to try to impress someone with three PhDs in applied logic, I move onto the next search. And that’s not good.  

It bollixes me that the best thing to hit outsourcing marketing since offshore locations is the advent of the website — inexpensive, flexible, interactive, data-rich, with worldwide reach, and offering the potential for clear differentiation. Yet why are outsourcing providers’ websites such an abysmal lot when, for many, they are buyers’ first introduction to a provider?

After a casual perusal of a variety of websites, and a blinking headache, I’d thought I’d share the website sins against mankind that our industry regularly commits. They are such simple-to-fix transgressions that they are almost comical. But when a website is the front door for many buyers, it’s a serious matter. Read my list of most egregious transgressions:

Plain English. No, you don’t get extra credit for sentences that ramble on for ten lines, with a liberal sprinkling of every word ending in “tion” that’s currently found in the dictionary. And this is not just a diatribe against websites written in so-called Indian English. Many other sites — British, American, you name it — are equally guilty.

Speaking of plain English, if as a provider you have global aspirations, the lingua franca is American English spelling and syntax, just as it is for most global businesses. I know it’s hard to give up s for z, and use the term batch for class, or know more in place of learn more, but Americans are a parochial lot. If you are putting up only one website, it should be targeted to American readers. After all, rumor has it that we are the most aggressive outsourcers.

And since we’re on the topic of plain English, please don’t coin new words. I cannot find re-devising in the dictionary — or thoughtsharing, for that matter.

No jargon. If I were queen, I’d make it a criminal offense to use the following words:  enhance, enable, transform, partner, passion, and innovation. They are used so liberally, they either become

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Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT ServicesKnowledge Process Outsourcing & Analytics

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Why did iGATE erase the Patni name?

April 21, 2012 | Phil Fersht

Twenty-twelve has already seen three major outsourcing provider name-dumpings with Xerox phasing out ACS, in addition to procurement outsourcers Buying Team and ICG Commerce re-branding themselves Proxima and Procurian respectively.  

Brian Robinson is Research Director, HfS Research (click for bio)

However, a more surprising move has recently transpired with iGATE Patni deleting the last fives letters of its name to call itself simply "iGATE".  While you can understand Xerox preferring their more famous and recognized brand to ACS, and the procurement guys simply wanted to sound sexier, it's curious why iGATE would drop the famous Patni brand barely a year after its merger.  You would have thought the lesser-known iGATE leadership would prefer to maintain the legendary technology services brand founded by three brothers, Narendra Patni, Gajendra Patni and Ashok Patni, in 1978?

So we asked HfS' IT services guru, Brian Robinson to discuss why...

iGATE Patni to delist the Patni name from the Indian bourse

This month iGATE Corp announced that it had raised an additional $265 million to buy-out the remaining shareholders of Patni stock and to delist Patni from the Indian bourse. More importantly, the company will likely remove the Patni name from its future go-to-market and branding

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

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Poole's Patter, Part III: Why do so many companies get SO hung up on technology decisions?

April 18, 2012 | Phil Fersht

What happened to Deputy Poole, we heard many cry after his two recent HfS contributions reflecting on why the word of BPO just happens to be the way it is...

David Poole (pictured left) somewhere en route back to the UK

Well, we can confirm the wild rumors that he turned up at Shared Services & Outsourcing Week masquerading as an analyst as completely unfounded.

He was, in fact, being steadfastly pursued by $7.5 billion Business Services giant Serco to head up their UK and European services operations.  While we were secretly hoping he was going to become the next Sheriff of Nottingham, he clearly couldn't resist another chance to point his top-down shooter at the BPO business.  Or it may have been the salary, but let's give him the benefit of the doubt.

So... without further ado, here's the long-awaited third tranche, entitled...

Why do so many companies get SO hung up on technology decisions?

When it comes to technology, particularly when it comes to back office horizontal services like HR, Finance and Procurement, I’ve never understood why so many companies get SO hung up on technology decisions and so bought into spending huge sums of money paying consultants to reinvent the same wheel over and over again. Of course I can say that now that I’m not employed by a [Platinum] Partner of SAP, a [Diamond] Partner of Oracle or a [Titanium] Partner of Microsoft. Frankly it’s always been nuts to invest millions in bespoking the accounts payable screens or putting logo’s on the journal voucher entry screen so the accounts clerk remembers who he works for. Today, however, apart from core systems of record and arguably key master data systems it’s even more crazy. BPO providers can take care of practically all of the non-core system requirements using ‘one to many’ software as a service solutions that are significantly more functional (again due to much greater investment), efficient, connected, secure and most importantly at a fraction of the cost of providing those system internally. And CIO’s (hint: as long as they are credited with the decision) love to offload these complex sub systems to external knowledgeable providers allowing them to focus their overworked IT functions on keeping the core systems up and running.

The interesting development in this whole BPO technology arena is the increasing granularity that it allows. You see BPO providers know how to link and integrate their best practice process models to the supporting technologies. The smart ones can then only provide the technology actually needed to provide the processes. It’s a bit like a restaurant menu with a wine pairing. So not only do you get access to the best practice models, you only need to use (and pay for) the specific components of the technology that you need to deliver the specific sub processes that are being provided. This allows true fit for purpose service delivery delivered in the most efficient way possible.

David Poole is the recently anointed CEO UK & Europe, Global Services at Serco. You can read his full bio here

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

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Missed the recent Procurement BPO slug-fest?

April 15, 2012 | Phil Fersht

Missed last week's down-and-dirty Procurement BPO slug-fest between LA's Tony "Turbo-Charged" Filippone and Long Island's Bill "Bomber" Humber? Don't sweat it, as here's the replay of these two Industry heavy weights (and we're not just talking about their waistlines)...

 And if you want to request a copy of the slides, please drop a polite email to Tom Ivory.

Posted in: Business Process Outsourcing (BPO)Outsourcing EventsOutsourcing Heros

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Four reasons why HfS is busting up the traditional analyst model

April 12, 2012 | Phil Fersht

HfS Research is disrupting the traditional analyst model At HfS, we're breaking the traditional mould of the "industry analyst firm" by doing four "disruptive" things:

1) We don't only serve clients within the confines of the CIO's organization.  We believe  that business processes actually matter to organizations today, and while the likes of Gartner and Forrester invest all their analyst resources really just looking at IT, we get right into the weeds of business functions by developing analyst talent that covers industy processes, such as insurance, healthcare payor, utilities, energy and manufacturing, in addition to core horizontal markets, namely finance, procurement, supply chain and HR.  We believe IT enables process and we cover it through the eyes of the business function leader.

2) We're building a team with real hands-on sourcing experience.  We really don't believe you can only cover sourcing as an analyst sitting in an ivory tower, if you haven't spent some pain-time in the trenches.  While it's great talking about it, you've really got to have been there, to talk the language clients understand.

3) We're a pure research firm.  We've never got sucked into the world of ranking suppliers or writing puff pieces to make our money - we're focused on great analyst relationships where clients can have us as their partner all year round.  If a client is comparing vendor A with Vendor B, they call us up to learn the real deal.  Service relationships have many fine nuances that depend on culture, flexibility, consultative prowess - we don't believe you can put them in a box like a piece of software, and start ranking everyone.  If suppliers want some puffery for their PowerPoint, they can either find someone else who'll do that for them, or if they're brave, have us meet their clients and write about them!

4) We're not all about a "paywall". We hate the fact you can never get anything free from most research firms.  They have a duty to educate, in addition to make money, so why not expose some of their wares to the public to enhance their reputations?  At HfS, we make a point of making about half our research freemium, as we believe clients will want to invest in an analyst relationship when they frequently read our research.  We're now up to 20 people in shy over two years.  Maybe we're onto something?

As always, we truly appreciated the support and readership of all 75,000 of you and welcome your comments and suggestions.

Posted in: About UsBusiness Process Outsourcing (BPO)IT Outsourcing / IT Services

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April truths about outsourcing: Finance leaders are looking to providers' capabilities more than ever, but are they really prepared to change?

April 11, 2012 | Phil Fersht

While the world still known as "outsourcing" was quaking in fear at being renamed "augmentation" (hehe), we received some interesting notes from people with alternative suggestions for their beloved industry.

Unfortunately, some of these people had failed to read the full posting to figure out it was an April 1st wind-up, but, what the hell, it inspired some pretty good debate!

We liked this suggestion, from outsourcing evangelist, Bobby Varanasi:

Very interesting indeed. Wondering if the marketplace will accept the replacement term "augmentation". Personally I think the term "augmentation" indicates - restrictively - that service providers only do that, augment and nothing else. However the marketplace has grown significantly on the back of "new" capabilities providers have brought to the table of buyers, not by augmenting but by "installing" or "instituting" practices, solutions etc and made the buyer organizations look smarter!!!

Good point Bobby. Let's be realistic here:

a) "Augmentation of existing operations". When a provider is "augmenting" a process (or cluster of processes), they're improving it, they're removing some unnecessary sub-tasks, or even tweaking it to work with a new software application.  Whatever they're doing, they're trying to make it function more effectively in an externalized environment that likely involves staff on both client and provider teams.

b) "Instituting new practices and capabilities". The nirvana, to which most ambitious providers aspire, is to have their clients move onto "shared" solutions they bring to the table that have pre-configured quality process flows and technology underpinnings that they can implement across their multiple clients, resulting in more profitable engagements for them, increased price-competitiveness in the market and - hopefully - new capabilities and improvements to delight the end-customer and win even more customers.

The outsourcing industry is caught in a "chicken and egg" situation

Hence, we would class augmentation efforts as process improvement (i.e. labor arbitrage with a few tweaks), and what Bobby is suggesting - instituting new practices - as something akin to "innovation", as this involves new, and often unique, methods and capabilities to make buyers be more successful.  There's no doubt the industry wants to shift outsourcing engagements away from mere augmentation to the actual institution of new capabilities, however, the missing link is clearly whether the service providers can be incentivized to invest in their clients, with clients similarly being incentivized to make more radical overhauls of what they have.  Clearly, we have a "chicken and egg" situation going on in today's outsourcing business.

Whatever we call "outsourcing", one thing is clear: providers' capabilities are the key to the future success for finance

Enough of this theoretical buffoonery; let's go ask 436 senior finance leaders from organizations with current shared services and outsourcing (SSO) models about their current business objectives - and how those have changed since they originally embarked on their SSO adventure:

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

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Flashback kicks the myth of Apple invincibility squarely in the jewels

April 10, 2012 | Phil Fersht

One of the critical areas we believe is too-frequently neglected in today's business operations planning is security and risk.  

With the amount of data flitting between hundreds of global locations and millions of servers -to how much risk are your operations, today, being exposed?  How many local and regional regulations are you flouting?  How does the introduction of multiple service providers and SaaS applications exacerbate the issues?

And that's not all - what about your staff's personal devices (and those of your providers' staff) that get plugged into your corporate network on a daily basis?  And even that trusty Apple device you use to make your own IT experience that little but more pleasant?

Because that's where the money is...

At HfS, we have been quietly exploring what today's organizations are doing (or not doing) to protect themselves, which is why we brought in security and risk analyst veteran Jim Slaby last year (read some of his research here).  While he's been running the treadmill of the obvious security issues and threats, he's also been uncovering those in areas such as your Apple device - yes - YOUR APPLE DEVICE MAY NOT BE AS SAFE AS IT APPEARS.

Over to you Mr Slaby to reveal more...

Flashback kicks the myth of Apple invincibility squarely in the jewels

Reporter: “Why do you rob banks, Mr. Sutton?”

Willie Sutton: “Because that’s where the money is.” *

Apple has long enjoyed a reputation for making computers that were largely immune to the viruses and other malware that have long afflicted Microsoft systems. Indeed, Microsoft practically created a hundred-billion-dollar security aftermarket -- Symantec, McAfee, and countless other security vendors large and small owe their existence to the lousy job Microsoft did architecting its products to resist various security threats.

But good OS design was only one of Apple’s advantages; the other was that it only represented a tiny

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

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Finally... a new acronym for BPO!

April 07, 2012 | Phil Fersht

Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)

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Merriam-Webster to remove the term Outsourcing for IT and Business Services

March 31, 2012 | Phil Fersht

Pressure from buyers to create more accurate terminology for what we commonly, but incorrectly, term as "outsourcing" for IT and business processes has spurred dictionary publisher, Merriam-Webster, to remove the term from their next edition.

Instead, when firms purchase services from technology or business services providers, these engagements will be termed as "expertise augmentation" services.  The heritage dictionary publisher, which has provided language information since 1806, finally made the decision to remove the term, based on the latest survey conducted by HfS Research, where three-quarters of buyers emphatically declared their wish to drop the term:

HfS Research has been agitating to ditch the term since 2008, with our now-famous post "Is it time to dump the term 'outsourcing?'" which first caught the dictionary giant's attention.  However, it was our recent piece accusing the whole outsourcing industry of being a "sham" which finally forced the issue.

"When HfS first raised the issue back in 2008, we didn't feel it was the right time, but that last piece, coupled with their latest study, finally forced the issue", commented Ashley Webster, President and CEO for Merriam-Webster online. "The HfS team has been really helpful advising on these terminology changes with their research and insight into what people want to do with that awful word."

And the exciting news is that we can give you a sneak-preview of the following changes, to be published for common use in the English-speaking business world:

As you can see, the term "augmentation" has been widely adopted for most of the major business functions that have endured "outsourcing" in the past, with the exception of HR.  "When we looked at the data, we found that most companies didn't want to augment HR, they just wanted to get rid of it", added Webster.  "So we felt it more appropriate to stay with the term "HRO".

Ashley Webster is President and CEO, Merriam-Webster

We felt this move may be a bit of a political hot-potato, so we managed to catch some time with Republican presidential nominee-hopeful Rick Santorum, while we was canvassing voters in Yankton County, South Dakota.  "This is simply Obama painting over the cracks of his failed presidency as our jobs continue to flood out of our country.  Removing 'outsourcing' from the dictionary is not going to solve the problem; removing Obama will.  When I am President, I will make sure these outsourced jobs come back home and the only outsourcing we do will be the current residents of the White House."

Conversely, Democratic senator, Charles Schumer, whose political brilliance has been frequently lauded on HfS, welcomes the move.  "Removing outsourcing from the dictionary is proof that all my proposed policies have worked.  Now outsourcing ceases to exist, I can go back to campaigning for the 35-hour working week."

Just remember folks... you heard it here first!

Oh, and by the way....

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Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)IT Outsourcing / IT Services

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