HfS Network

Monthly Archives: Nov 2012

Becky Dennis' remarkable journey

November 29, 2012 | Phil Fersht

Click to buy Brain Wreck on Amazon

It's a nightmare that's hard to contemplate. My good friend Becky Dennis, who's worked in outsourcing for many years, was thousands of miles from home after delivering a pitch to a group of executives.

That success under her belt, she looked forward to the long trip home. Only thing is, a couple of hours later she forgot how to walk. It was too hard to talk. And she was struck by an odd series of neurological deficits that baffled her and a dozen doctors she'd eventually see over the course of 27 months.

But, as anyone who knows Becky would've predicted, she didn't give up. So, here we are a few years later, and Becky is telling her remarkable story in Brain Wreck. It's an honest, humorous account of her journey to restore her spirit and get to the bottom of her illness. I recommend it highly.

After marveling at the book, I was thrilled to have the chance to chat with Becky about her experiences.

Phil Fersht (HfS): Hi Becky - It's so refreshing to have a good friend and colleague write such a personal book about their own life and experiences. Can you tell our readers what inspired you to put pen to paper?

Becky Dennis, author of Brain Wreck

Becky Dennis (Author, Brain Wreck):  In fact, there were quite a few events that inspired me , but one in particular I'll mention here. After suffering a serious illness in 2008 that caused encephalitis (swelling of the brain), I went down a very long path of searching for a diagnosis that fit my symptoms --- 27 months to be exact. I'm hopeful that by telling my story, it might help others who suffer from similar neurological challenges to get a faster diagnosis. Encephalitis is often misdiagnosed as stroke, MS, flu or complex migraine. If I can raise awareness, along with the efforts of others, of the short- and long-term effects of the illness, doctors might consider this diagnosis earlier in the process. Very few forms of encephalitis are treatable with medication, but the encephalitis caused by the herpes virus, which most adults carry in their systems (most often causing cold sores and mouth sores) CAN be treated with Acyclovir. If those patients don't receive Acyclovir, 80 percent die within the first week of onset.

Most medical professionals have little insight into the patient's experience beyond the acute phase

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Posted in: HfSResearch.com HomepageOutsourcing Heros



Alsbridge digs deep into the guts of the Cloud with Telwares acquisition

November 27, 2012 | Phil Fersht

A subtle, but decisive, shift took place in the sourcing advisory landscape today, as Alsbridge's announced the acquisition of leading telecoms/networking sourcing advisor, Telwares.  

This move firmly places Alsbridge as the main contender to ISG at the helm of the independent boutique advisor market, and follows Alsbridge's acquisition of telecoms procurement outfit TAG, in early 2010, to place the Dallas-based firm as the lead advisor in telecoms and networking sourcing.

Ben Trowbridge is CEO, Alsbridge (click for bio)

This dovetails nicely with Albridge's strengths in IT infrastructure sourcing consultancy and its overall competency in price-benchmarking.  As CEO Ben Trowbridge told us yesterday, "Transforming the network is right at the guts of Cloud computing.  This is where we intend to develop our expertise with the addition of Telwares".

Why this matters

Loads of data.  Ben Trowbridge claims he now has 385,000 datapoints for networking procurement by adding Telwares to his existing data.

Decouples the RFP process from pricing  support.  If you ask a legacy advisor to run a telecom deal for you, their only likely solution would be to issue an RFP to the likes of AT&T and Verizon

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHfSResearch.com Homepage



So... who's got the bottle to buy HP's BPO services business?

November 23, 2012 | Phil Fersht

One of our great technology and business services firms is in real trouble 

If you want to read another diatribe of HP's woes, its second colossal multi-billion dollar acquisition write-down of the year, its revolving-door or leadership with very different ideas, then you've come to the wrong place, as we see little point dredging up the past to bemoan HP's current predicament.  And as a stark reminder of how quickly a great brand can disintegrate in the face of disruptive competition, just look at Sony, which was downgraded to junk status by Fitch.  HP could soon follow down Sony's depressing path, if  a radical overhaul of its businesses doesn't happen soon, as we have our own versions of Apple and Samsung turning the legacy enterprise services industry on its head.

It's time to stop dwelling on the past and look to the future.  In today's commodotizing market for IT and business services, HP's services business can only really look to defend what it still has against the encroaching competitive bite of the likes of Accenture, Cognizant, Genpact, IBM, TCS etc.  Defending what you have is no solution in today's market, or you'll end up in the junk pile of other once-great brands such as the Sonys, the Nokias, the Unisyses...

However, there is one option that could revitalize its legacy:  merge with one of the market

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



Captain Cliff of the Sourcing Enterprise Part IV… The Final Frontier

November 20, 2012 | Phil Fersht

Captain Cliff Justice and his cohorts, Lieutenant Lepeak and Wing-Commander Walker, aboard the Sourcing Enterprise (pictured left)

During Part III of our interview with KPMG's Cliff Justice, we talked about the demise of the "O" word from our vocabulary:

Outsourcing is a term that has been abused and politicized. It doesn't have the same meaning to the general population as it does to those who are close to it. So I would certainly propose the industry find a different term for the use of third parties to create partnerships to provide services.

Cliff Justice, Partner and U.S. Leader, Shared Services and Outsourcing Advisory, KPMG, November 2012

So, without further ado, let's boldly go to the final frontier of our discussion where Cliff talks about how the world of "outsourcing" has changed in today's economy...

Phil Fersht (HfS):  Cliff, looking back over the last 15 years, would you say we were really playing a short game with outsourcing? Wasn't it all about "how do we take out cost, make things happen quickly and minimize disruption"?  Isn't it a long game today, because the quick hits are no longer there. Aren't thinking about how to develop a 5, 10 or 15 year plan?

Cliff Justice (KPMG):  Phil, in the early part of the 2000s, there was a herd mentality around cost take out. There wasn’t a strategy around large-scale outsourcing. Some companies had a short-sighted

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



Tiger Tales Part III… Working with the 57%

November 18, 2012 | Phil Fersht

During Part II of our interview with Genpact’s CEO NV “Tiger” Tyagarajan, we talked about the shape and pace of change we expect to see in the sourcing industry:

It’s completely dependent upon leadership and the leadership’s ability to drive change. It’s about the confidence they have, the risk they want to take and what they have at stake.

NV “Tiger” Tyagarajan, President and CEO of Genpact, October 2012

In Part III, we ask Tiger his views of the "57%", the percentage of enterprise customers who feel their provider does not understand their business.  So back to the discussion...

NV “Tiger” Tyagarajan is President and CEO, Genpact (click for bio)

Phil Fersht (CEO, HfS Research):  Tiger, we recently published data that showed 57 percent of buyers today feel their provider and their staff don’t understand their business. What we really need to understand is what percentage of buyers actually care whether they provider understands their business or not.

How important is this? Do you look at a client and think, “They will be wildly profitable for us” or do you prefer to think, “We can grow with them - they have a real vision for their future and they want to take us on that journey.”

NV “Tiger” Tyagarajan (CEO, Genpact):  Phil, we've been debating this question over the last 24 months. This question becomes incredibly important as you grow bigger. In 2005 the BPO industry was nascent. When we came out of the blocks no one knew us. Then they looked at us and saw we were different, so they decided to try us. People took the risk; we had good success and we

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Posted in: Business Process Outsourcing (BPO)HfSResearch.com HomepageOutsourcing Heros



Are YOU ready for dreamSource?

November 15, 2012 | Phil Fersht

Folks - today we're proud to announce the unveiling of what promises to be the ultimate sourcing showdown of leading enterprise buyers and providers... in Westchester County, New York, next Spring:

Following the unprecedented success of the 2012 Blueprint Sessions, 60 senior enterprise buy-side executives are being invited to represent their organizations at dreamSource, where HfS and the Sourcing Executive Council will facilitate private "buyers-only" sessions over three days of discussions, debate and networking. In addition, we will include selected executive leadership from top tier service provider organizations who are brave enough to grapple the following topics head on:

  • Designing and implementing the future operating framework for the global enterprise;
  • Aligning the workforce for global business services by developing our talent to go beyond tactical performance;
  • Changing the corporate mindset from cost-savings myopia to value-creation and growth;
  • Accomplishing innovation by improving enterprise and provider collaboration to achieve realistic business outcomes;
  • Leveraging analytics and technology as an enabler for smarter governance.

Here is some feedback from a few of the great contributors from the recent Boston HfS Sourcing Executive Council meeting:

"The HfS Sourcing Executive Council experience has provided a tremendous opportunity to be a part of changing the dynamics of this industry and I have no doubt that HfS' efforts will go a long way to enhancing the value of global outsourcing. I look forward to our next session in New York".  Steven Jo, Head of Multisourcing, Silicon Valley Bank

"I have truly enjoyed the HfS Sourcing Executive Council sessions, and echo everyone else's comment that being with the group of like-minded peers HfS has assembled is truly special. I am eagerly anticipating the next summit in the Spring. William J. Pappas, Vice President, Strategic Services & Initiatives, State Street Bank

"The HfS Sourcing Executive Council is one of a kind. Like-minded outsourcing buyers get together to discuss the key issues facing the industry, meet each other and share experiences and wisdom. This is the only place where 300+ years of deep outsourcing experience have the opportunity to meet - and that is in a very young industry. Also, it is fun to attend ;-)" Madelein Smit, VP Outsourcing, Finance and IT, CEVA Logistics

Thanks to all of you who have so passionately supported the HfS Sourcing Executive Council - we hope to see many of you back in the Spring!

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



Losing the war for talent: Why offshore providers come up short onshore

November 13, 2012 | Phil Fersht

There is an exclusive club developing in the Western World... "onshore" people who have experienced working for an offshore-centric provider, where all roads lead to Mumbai, or Delhi, or Chennai, or Bangalore... These folks quickly realized that this execu-life is an acquired taste - and either adapted or quickly bailed... or got fired.  I personally know a multitude of executives now on their second, third, or even fourth (yes, fourth) offshore-centric firm.

What's abundantly clear is the need to hire and develop quality onshore account management and delivery personnel is becoming the crucial differentiator in today's ever-tightening outsourcing marketplace.  Those that can win this talent war will be the ones who can truly move beyond yesterday's flagging outsourcing model.

So who better than Deborah Kops, the doyenne of disruptive dialog herself, to expand on this topic in a way that, quite frankly, noone has dared put into print before...

Why offshore providers come up short onshore

Over the last few weeks, I must have had at least 10 calls from outsourcing talent currently looking –or being recruited for new positions--many of them by offshore providers. And that’s not counting the calls from search consultants, desperate to locate that buried diamond of a sales-accounts-or-solutions guy who can be persuaded to jump ship.

Deborah Kops, Research Fellow at HfS (click for bio)

Comparing their stories with my own recruitment experiences, it struck me that I’d been listening to a broken record. The tales were so very similar—even across a number of providers—that perhaps it’s time that someone called attention to the fact that in a war for onshore talent, offshore providers can unwittingly come up short. And that’s not good for the provider, for the talent, and certainly not for clients who increasingly demand that their providers become more globally and culturally adept.

Last week, yet another resume showed up in my email. Now, convinced that you can’t know too many smart people, I spent a few minutes with Mr. X, going over a very impressive list of qualifications: both buy-and-sell-side experience; a real track record in sales and operations;  good communication skills and a great educational pedigree. When the conversation got to the stage where I was convinced that any number of providers would love to have him as part of the team, I started my usual ‘what about x? Or y?’ And then I got an emphatic “I won’t work for an offshore-legacy firm.” “Why,” I asked. “You’ve never worked for one. How do you know you can’t have a great career?”  “Deborah,” he said, “Why would I work for a firm where the power structure is all overseas and doesn’t include me?  And every time I’ve been recruited by an offshore firm, it’s been a waste of my time. They don’t seem to know how to run a good process. I am underwhelmed, and since recruitment is seduction, I’m not falling into bed with a firm that doesn’t know how to sell me on working with them.”

Offshore providers, please take note. With fewer and fewer good onshore sales/account management/solutions/operations guys and gals willing to switch horses, putting your best foot forward in the recruiting cycle is no different than courting a client. In fact, without the ability to attract the right onshore talent, it’s arguably impossible to grow and prosper.

What parts of the plot are offshore providers seemingly missing when they attempt to recruit onshore talent? 

  • Onshore outsourcing talent is not fungible. Unlike talent pools in offshore locations, there may not be more than one or two really good candidates onshore, especially if that talent has

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Posted in: Business Process Outsourcing (BPO)HfSResearch.com HomepageIT Outsourcing / IT Services



Tiger Tales Part II... The pace of change

November 10, 2012 | Phil Fersht

During Part I of our interview with Genpact's CEO NV “Tiger” Tyagarajan, we compared the metamorphosis being experienced today's by today's business services industry with that of manufacuring 20 years ago:

Now most manufacturers don’t make all things that go in an automobile or an iPhone. Today, Apple does the intellectual capital of the what, the how and the design. They also do sales and marketing. But not much else. I think services are going in the same direction.

NV "Tiger" Tyagarajan, President and CEO of Genpact, October 2012

In Part II, we discuss the bifurcation occurring between the sourcing approaches of small and mid-sized organizations and today's large enterprises... and the pace of change we can expect in today's environment.  So without further ado, let's go back to Tiger's Tales...

NV "Tiger" Tyagarajan is President and CEO, Genpact (click for bio)

Phil Fersht (CEO, HfS Research): Tiger, do you see bifurcation happening in the sourcing industry? We have a lot of small-to-medium-sized businesses quickly evolving, where IT is in the cloud; everything is outsourced unless they actually want to keep it in house, and many are morphing into increasingly virtual environments  Then there are the larger enterprises which are moving at a snail’s pace - they don’t want to change, they seem to becoming more risk-averse, if anything. When we look ten years out, we'll clearly have have a lot of smaller, more nimble companies, but will the enterprises really have changed all that much? How does a business services company like Genpact evolve in this type of environment?

NV “Tiger” Tyagarajan (CEO, Genpact): Phil - it's a great question. Smaller companies are able to attack larger companies because they are structured differently.  We have worked with a large UK healthcare provider for seven years. Two years back they decided to come to India and set up an insurance business. They formed a JV and set up the business.

The insurance market in India was new, young and growing with very large competitors with client

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingFinance & Accounting BPO



Captain Cliff of the Sourcing Enterprise Part III… The Death of the "O" Word

November 06, 2012 | Phil Fersht

Captain Cliff Justice in action as Partner and U.S. Leader, Shared Services and Outsourcing Advisory at KPMG (pictured center)

Welcome back to the Captain Cliff chronicles.  And since Part II, we have actually witnessed Cliff speak for a whole hour at an outsourcing conference and manage not to mention the "O" word once.  That's quite a feat, so let's find out why...

Phil Fersht (HfS):  Cliff, we’ve had a lot of debate, and even conducted a survey, on whether the term "outsourcing" should be forcibly removed from business vernacular, because it doesn’t make sense anymore. Is that something you would support? Do you think it conveys the right message about the industry?

Cliff Justice (KPMG): Outsourcing is a term that has been abused and politicized. It doesn’t have

Read More »

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



Greetings from Robotistan, outsourcing’s cheapest new destination

November 01, 2012 | Phil Fersht

Outsourcing has always been about people, process and technology.  Scratch that.  It's about process and technology, with people an optional extra.  So without any further explanation of this amazing trend where people will no longer be needed, let's hand you over to our resident expert in robotics (among many other things), Jim Slaby....

“Listen and understand. Robots are out there. They can't be bargained with. They can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop, ever, until you have knocked another 50% off your outsourced labor costs.” (With apologies to James Cameron.)

Stop me if you’re heard this one before:

“Chief, I need to add ten FTEs to handle the additional order-entry and logistics workload we anticipate once our new product launches in six months.”

“Oy. You know we don’t have the budget for that. What about automating the process?”

“IT quoted it at 18 months and $1M to do under their standard SOA and BPM development approach. Even if we had the money, that wouldn’t come close to meeting our launch deadline.”

“So what are our sourcing options?”

“We can hire 10 FTEs for $800K in the States, or $300K India.”

“Right, India it is.”

“Actually, I have one other option. We can do it for $120K in Robotistan”

“Robotistan? Where the hell is that?”

“It’s right here. I’m going to have my own business process analysts create software robots to do the work. We can get the robots up and running in five months. The robots will do the work for less than half the cost of Indian FTEs. And nobody’s job gets shipped offshore.”

Oh, you hadn’t heard that one? Neither had HfS until recently, when we started researching a UK startup by the name of Blue Prism. It makes a software development toolkit and methodology that lets non-engineers quickly create software robots to automate rules-driven business processes.

Think about this for a moment. If you were a buyer, how fast would you jump at the option to hire FTEs at rates that undercut the Indian body shops by 50% -- without sending jobs offshore? (“Hire” isn’t the right word, of course: it’s “create”.)  If you were a BPO services provider, how would you like to build a software robot to automate a business process for one client, and then resell copies of that robot to a dozen other clients in the same vertical? If you were an Indian outsourcer, how great would it be to hand off your dullest, most rote outsourcing work to robots so your human workers could take on more engaging tasks, thereby reducing your horrific churn rate – and by the way, undercutting your competitors on price?

Naturally, there are caveats. Not every business process is going to be well-suited to robotic automation: the more rules-driven it is, the better. Think of any rote, repetitive back-office process that does not require human judgment or much exception handling: swivel-chair data entry into multiple systems, account review and maintenance, creation of online access credentials (user IDs and passwords), general ledger account maintenance.

Furthermore, you’re going to need some buy-in from IT, and they may find the project a little fishy: what are business process analysts doing developing software? You may have to build a modest pilot first to convince them it works, as you’ll need their help with necessities like putting together a virtual machine cluster to run the robots on. (Getting your executives on board should be considerably easier once you show them the eye-popping business case in which not only does nobody’s job get shipped to India, but you may save enough to protect some onshore jobs or reshore some higher-value work.)

There is a learning curve on the environment, typically two to four months to master the tools to model, automate, test and optimize your new robots. But after the initial ramp-up, development time drops dramatically for each new business process, in part because new robots may be able to reuse components created for earlier ones.

Naturally, HfS didn’t take Blue Prism’s word for it: we studied two of its early adopters, a large wireless carrier and a major BPO services provider. Having successfully built very cheap robots to automate a variety of business processes, these people are true believers, avidly looking for new processes to automate. We outline their experiences in the report “Robotic Automation Emerges as a Threat to Traditional Low-Cost Outsourcing”.

In it, we take a long look at the business cases that led these well-known companies to explore the technology, the obstacles they faced selling it to internal stakeholders, how they identified suitable processes for robots to do, what learning the Blue Prism tools and methodology was like for their business-unit staffers, and how the resulting robots now fit into their existing IT and security infrastructure and governance.

We also make some predictions about how this technology has the potential to dramatically shake up the outsourcing industry, especially those players whose value proposition largely rests on labor arbitrage. The workers of Robotistan have arrived, and they have the potential to thump their human counterparts at their own game. HfS urges BPO buyers, services providers and advisors alike to look at the jaw-dropping economics of robotic automation, and put together a strategy to accommodate and exploit it today.

Click here to download your free copy of “Robotic Automation Emerges as a Threat to Traditional Low-Cost Outsourcing”

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHfSResearch.com Homepage