HfS Network

Monthly Archives: Feb 2014

Four make Winner's Circle for Enterprise Mobility Services: Infosys, Tech Mahindra, IBM and Accenture

February 24, 2014 | Phil Fersht

You only need to face the simple fact that 50% of corporate office space (in the US alone) is now left unused to understand that the connected worker is becoming less and less tethered to her/his desk - they are mobile. While Marissa Meyer is making valiant efforts to reverse this trend, the unfortunate news for her is that more and more workers want to be mobile, so if you want to the best talent, you'd better be able to cater for their mobile needs.

Quite simply, the speed by which Mobility is dominating our personal and business lives is staggering, and the capability of providers to mobilify their services to keep enterprises functioning is becoming increasingly significant by the day as a services differentiator.  So let's take a peek at the results of the first Blueprint Report into Enterprise Mobility Services, where HfS analyst Ned May scoured over 10,000 datapoints across 270 Enterprise Mobility services contracts:

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 Ned, firstly, can you talk about some of the business-specific uses of Enterprise Mobility that you're seeing?

For some industries, Mobility is already table stakes, for example:

* Shipping: One of the earliest to adopt mobile solutions. Proprietary devices manage both the package status and the delivery fleet to provide real time information all the way back to the consumer.
* Market Research: In the field surveys now get entered immediately in a laptop – reducing costs and allowing for on the fly targeting of needed demographics.

For some it’s quickly getting there, for example:

* Healthcare Insurance: Membership apps for healthcare apps running on tablets allow sales reps to customize, quote, and close a new membership in the field and in a much more engaging way then possible via even a laptop.
* Travel: Flight attendants are being equipped with phablets tied into passenger data and entertainment systems that are also able to receive food and beverage requests all in an effort to better manage travelers and provide a personalized experience for everyone on the plane.

And some likely future uses:

* Car Insurance: Auto insurers will tailor car policies not based on actuarial tables and demographics but instead on real data gathered about each individuals driving habits gleaned from sensors in their smartphones.
* Retail: High-end retail shopping will become an augmented experience as laptops get handed out (or in store apps downloaded) that provides context around every item in the store, makes recommendations for complimentary purchases, directs buyers to the location of an item, allows for purchase of items sold out in one’s size, and even allows one to purchase items as they gather them rather than wait at the end to check out.

So what's been driving the Enterprise Mobility market?

The rapid proliferation of smartphones is fueling a broad range of mobile activity across most enterprises today. Firstly, there a need for the first wave of customer-facing mobile initiatives to be

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

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Are some "independent" analysts the worst offenders of pay-to-play?

February 22, 2014 | Phil Fersht

Having spent more than a decade in traditional analyst houses before starting a boutique research firm over four years ago, I've genuinely seen both sides of the coin when it comes to "pay-to-play" shenanigans with analysts.

We've heard all the accusations of vendors "buying" their positioning in quadrants, waves and marketscapes for years, and I'll leave it to your own judgement what actually transpires there.  In anycase, I think most knowledgeable people just use those things as guides when they make decisions.. and do not always take them as gospel.  Am sure we get the some sniping when we run our Blueprints, even though analyst opinion only accounts for 10% of the scoring.

However, one practice I seem to be exposed to every bloody day is the blatant opinionating from a host of "independent" analysts/bloggers/pundits/consultants /influencers/journalists who all make a living from the dirty vendor marketing dollar.

Essentially, these "independents" make money using three tactics:

Tactic 1) Pay for Praise:  

The oldest model for the dollar-eager "independent".  Simply go to vendor conferences, tweet sweet-nothings to noone in-particular (just so their marketing team notices) and write up some favorable pitch for their products/services. Then license it to them for ten grand and Bob's yer uncle. Do one of those a month and you can eke out a meager living for not using a helluva lot of

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Posted in: Buyers' Sourcing Best PracticesConfusing Outsourcing InformationHfSResearch.com Homepage

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BPO will continue to fail miserably... without a mindset to embrace change, develop talent and tech-enable processes

February 18, 2014 | Phil Fersht

Our new "Technology in BPO" study will soon reveal (stay tuned) that this industry is on the brink of a significant, radical overhaul to its very core value proposition.  Quite simply, when we look at the current performance of BPO engagements today, the results are more than depressing, but the encouraging news is that half of today's clients are not expecting to settle for this status quo:

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Where BPO is performing well (green). The positive news for the BPO industry is that providers are proving effective at delivering the principal two table-stakes of BPO:  (1) delivering the standard basic operations, and (2) meeting the pre-agreed contractual cost reduction targets for clients on more that six out of every ten engagements.

Where BPO performance is average (amber).  Encouragingly, half of BPO buyers are pleased with the efforts their providers' leaders are making collaborating well with their own leadership, a recent trend we have observed where senior provider executives are getting more hands-on with their clients, as opposed to disappearing from sight the moment the contract ink is dry.  This is positive news for buyers which need to discuss how evolve their BPO value beyond very basic service provision and gain senior buy-in.  In addition, it is reassuring that more than half of buyers are pleased with the specific industry process knowledge their providers are bringing to the table – an area that has proved much more disappointing in past studies.

Where BPO is struggling (red).  The areas in the red box give serious cause for concern regarding the potential of the vast majority of today’s BPO engagements.  When you consider that many of the leading BPO providers today are significant IT services firms, it is staggering that over half of buyers

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Three make Winner's Circle for Multi-tower HR Outsourcing: NGA, Aon Hewitt and ADP

February 15, 2014 | Phil Fersht

When God invented broad-scale multi-process outsourcing for the back office in the 1990's, a big chunk of the Global 2000 leapt up screaming "Please take our HR! Please fix it - Oh and save us 20% off the bottom-line while you're at it".

Lo and behold, by 2006, more than 300 major enterprises had already outsourced a proper bundle of core HR process to providers brave enough to take it all on - and try to make a profit in the process. Typically, these deals were payroll, benefits admin and a plethora of HR administrivia... all lumped together within an HR call center, with an employee portal veneer as a band-aid attempting to mask whatever assortment of manual non-standard processes, custom made spaghetti-code and dysfunctional on-premise technologies that came with the package.

In short, how can you outsource a people, process and technology nightmare and expect someone to replicate it and run it for less?  Not only that, when the function being outsourced screams for the hills to resist this corporate colonoscopy with a stubbornness not seen since Custer's Last Stand, it's gonna go south... and fast.

Hence, it was hardly a surprise when Hewitt (pre-Aon) got skewered by its purchase of Exult, while Convergys almost died of HR-poisoning before offloading its HRO beast business to NGA.  And we bet you've all long forgotten the aborted attempts of benefits specialists Fidelity and Mercer, which got the hell out of Dodge at the first sight of a "ring-fenced contract".  Meanwhile, the likes of perennial outsourcers HP (EDS), Accenture, IBM and Xerox (ACS) quickly got queasy with that they saw, opting to hang around on the off-chance something tasty came along, without sinking vast wads of cash into a function that was simply horrible to outsource.

So, what's happened to multi-process HRO in today's slightly-smarter BPO world?  Who survived the early HRO ordeal to develop solutions that are profitable and functioning?  And how have the Indian providers fared, with their own flavor of operational discipline?

So without further ado, let's ask HfS' lead analyst for HR and talent research and report author, Christa Degnan Manning, what in the world is happening in the HRO universe after conducting the most comprehensive study of multi-process HR providers and buyers to-date...

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Christa - before we even get into the details of this Blueprint Report, the first thing that jumps out is the fact that the provider performance is a tad "mediocre". What's going on here?

It's simple really - the employee experience still sucks! Given the significant dynamics of the changing global workforce and workplace, HfS has seen an opportunity to revisit this space and to

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

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Automation: it's about solving business problems, stupid!

February 08, 2014 | Phil Fersht

We're very shortly going to reveal the incredible findings (and they really are) of our new Technology in BPO study, and one of the key areas that jumps out at us is the rising importance of automation as a core value-driver for BPO clients.  

As organizations seek to "cross the chasm" from a legacy labor arbitrage / staff augmentation model of business service delivery to a technology-enabled service experience that isn't completely dependent on adding extra bodies to scale a service, the most immediate measure is to map out simple process workflows that humans are doing, and develop them in a software program using a process automation tool (and yes, I am trying to avoid using the term "robot" for now...).

Suddenly BPO clients discover, for example, that as sales of a particular product increase, they can scale their order management capability by replicating many of the human tasks processing those orders, as opposed to simply throwing more bodies at the problem.  Many service providers will not be happy as this may well hurt their model of earning money through the supply of additional labor, but smart clients are already wisening up to the fact they need to get out of the FTE game.  So, we asked HfS' Charles Sutherland to share his views on what is really happening with process automation and why is shouldn't be confused with technology automation theories of yesteryear...

We’ve seen it all before: IT suites, BPM Suites, customer service management tools etc. so how is this any different?

I came across a blog on automation by Somok Roy at ISG entitled "Lets Be Clear: Automation Is Not New Technology".   I couldn’t be more in agreement with the title, and its premise that the term "automation" is imprecise and a source of confusion.   In fact, the blog is a case study in how automation can be misunderstood when approached as a lesson in IT history and not as a means to solve a set of current business problems.

So in the spirit of collegiality, I thought it would be useful to share some perspectives on why process automation is more than a surge of breathless marketing and less than the arrival of an entirely new outsourcing paradigm, but still a solution to many business problems.   That’s why it is resonating with every enterprise client and every service provider we talk to today - and why two current market surveys we have in the field capture interest in automation as a solution to current business problems that is second only to analytics:

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My take is that all these other forms of automation have certainly played a role in how IT and business processes are delivered inside clients and in service providers, but in many cases those tools are too hard to implement, over-engineered, too costly and - more often than not - fail to live up to

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Five make Winner's Circle for Insurance BPO: Accenture, Genpact, EXL, IBM and TCS

February 05, 2014 | Phil Fersht

The insurance BPO market will hit $5 billion this year, growing at a 5% clip and has proven to be one of the select verticals truly embracing technology enabled BPO capability to support operations.  The insurance market has become incredibly competitive in recent years, with the differentiation across insurers moving to customer service and brand perception, once price points are relatively similar across the reputable firms.

In short, these insurance firms need to invest every cent they can in their advertising intensity and customer facing capability to keep ahead in this market.  And with advertising costs becoming so immense for the firms operating on wafer thin margins for many insurance products, they have no choice but to find cost efficiencies from elsewhere in the organization to pay for it all, if they are really going to save you 15% or more in a 15 minute phone call...

For the large insurers, many could go out of business if it wasn't for the savings and efficiencies generated by maturing BPO delivery models.  So let's take a look at the industry's first meaningful analysis of the innovation and execution capabilities of all the leading service providers:

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HfS has evaluated the innovation and execution capabilities of service providers catering to life and annuities (L&A) and property and casualty (P&C) insurers, brokers, reinsurers and others (excluding healthcare).  We asked Research Director leading the blueprint initiative, Reetika Joshi, to elaborate further on the results of the exhaustive study.

Reetika, what are the key challenges facing insurers today?

The key challenges global insurers in our study face are regulatory compliance, member retention, reducing total cost to service, integration efforts for aggressive acquisitions, multi-line agency management, profitable growth in new markets (esp. for L&A), pricing pressure (esp. for P&C) and most importantly, risk management. Our conversations with these insurers and their service

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesFinancial Services Sourcing Strategies

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