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Monthly Archives: Dec 2014

Here are our Autonabilized 2015 HfS predictions

December 31, 2014 | Phil Fersht

We predict... we predict... we predict

Ugh... What are we doing?  We hate predictions.  Predictions are lame, predictions are cheesie, predictions are either wrong, or just so generic that they could be automated every year with a "substitute this big trend for this one" script.

Hey - that's actually not a bad idea, so why not throw a bunch of trends from the HfS analyst team into a cognitive application, add some robotics technology to mix them up with some humanoid analyst mimicry, and see whether the outcome could quite feasibly have been the product of some big legacy analyst house.

So without further ado, here are 17 predictions that will all come true.  Just for you...

1. Old-school outsourcing becomes heroic as digitization of process becomes the new political enemy of the corporate masses

Suddenly, labor-arbitrage deals are good things for society. At least jobs are being created somewhere in the world, as opposed to being eliminated altogether by robots.  This shift from "Labor to Digital" takes center stage across the whole operations, consulting and professional services industry.  Outsourcing will no longer be a dirty word, as enterprises realize the digitization and robotization of business and IT processes is the only real lever to pull to provide them with future value and efficiency. However, this will create a level of fear and uncertainty much more intense than the old worries about having your job shipped off to India.  "I'll be back" becomes the watch-word of anti-robotics protestors, as those haunting words from Arnie's 1984 Orwellian classic come back to bite us.

2. "Autonabalism" becomes central to ambitious BPO service provider strategy

With Robotic Process Automation (RPA) becoming more central to the strategy of BPO service providers, we think 2015 will be the year that a few BPO service providers institutionalize their RPA capabilities and decide to cannibalize the revenues of their existing FTE contracts in order to encourage the end to end transformation of their own businesses. This strategic retrenchment using automation and cannibalizing revenues is what we refer to as "autonabalism", and a few bold and forward thinking service providers will be undertaking this next year.

3. The emergence of the As-a-Service Economy will see several niche As-a-Service providers smash the old model

Those traditional providers which fail to autonabilize their models, will come under increasing threat from the emerging wave of specialist As-a-Service providers, which can deliver standard processes enriched with value-added services at much lower cost, and easier "plug and play" capability.  Examples already include the likes of OneSource Virtual, Aasonn, Genfour, Bluewolf, Fruition, Symphony and CloudSherpas.  We also predict that we will see new BPaaS-driven firms spring up that have not even be formed yet.

4. Focused service providers will decide definitively where they want to play to survive

It's nearing crunch time for service providers and those which haven't figured out their game-plan are going to fade away pretty fast.  Heritage providers have to make brave divestments and investments to stay ahead of the curve.  2014 already saw IBM sell off its CRM BPO business, HP split up its broader business, Xerox sell its ITO business.  We've witnessed Cognizant double-down on healthcare and Infosys transform it's leadership.  We've seen Accenture merge operations, cloud and BPO and Wipro take-on Watson with his trusty sidekick. These are just forerunners on many more big things to happen in 2015.  We expect a lot of carving up, tuck-in buys right across the board.  It's going to be one helluva active year for restructuring activities.

5. Crowd-sourcing will play a role in the service delivery model for sourcing

In business functions like marketing and industry-specific health, where there are ad-hoc projects like product releases and surges of demand for processing such as enrollment periods, an enterprising buyer/service provider will experiment with a crowd-sourcing approach. It will allow

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingCRM and Marketing

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2015: Time to salvage yourself from your digital wreckage of a work-life

December 29, 2014 | Phil Fersht

10 years ago, you most likely checked your email once in the morning, once after lunch and once at the  end of the day.

You actually spent your day being productive, writing reports, presentations, attending meetings that actually had agendas, going to client meetings that had been organized weeks' ago. You might even have had time to read things and educate yourself... In short, you probably had some semblance of an organized work day, and there was a clear delineation between your work life and your own life.

And after work, you'd perhaps meet some colleagues for a drink and a bite to eat, then (heaven forbid) go to a karaoke bar or hit a dance floor. In those days we were physically social with each other. You interacted, you got stuff done, you had fun, you let your hair down occasionally.

Today, you probably wake up at 6.00am and wearily reach out to your mobile device to check your email, before you've had time to even think about anything else.  And you'll probably spend your entire day checking it at a minimum rate of once every 15 minutes, getting precious little work done, reacting to memos, getting added to meetings with no agendas (that you probably should never have been invited to in the first place) that have zero follow-through or real purpose.

That ppt deck you started at 6.45am has barely progressed, as you decide to check your LinkedIn updates for a third time that morning to see who else had viewed your profile, or join into electronic congress with someone who trusts you, even though you have no recollection of ever having met said person.  It's now 11.00am, and finally you're ready to write your name on the front cover of that ppt deck, but then - lordy lord - you just realized you'd (gasp) forgotten to check your twitter feed all morning.  A welling of fresh excitement bubbles up into your electronic life as you check out those three retweets from your late night tweeting bonanza, but this quickly extinguishes

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Posted in: Absolutely Meaningless ComedySocial NetworkingSourcing Change Management

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When Blood is Sikka than Water: Vishal's Infy Honeymoon has some Legs

December 25, 2014 | Phil Fersht

Vishal Sikka (pictured right) is CEO, Infosys Technologies

The most eye-opening personnel decision in the services industry this year has been the appointment of Vishal Sikka as Infosys CEO. I recently spent some time with Vishal and his executive team, along with some of the HfS crew, and we quickly noticed a marked uptick in their feverish enthusiasm for their business. Not only that - they seemed happy.

Was this really the same Infosys that was fighting to rediscover its mojo, or has it now got it back - in Vishal?  Indeed they seem to - and at the heart of it is the infectious passion, energy and insightful curiosity of their new CEO. The one who personally ensured the bar stayed open for a few extra hours so he could spend more time just relaxing with his staff.  But now we're almost 6 months in, surely the honeymoon is over?  It seems not, so let's hear more from Vishal himself...

Phil Fersht (CEO, HfS Research): Good afternoon Vishal – and delighted you’re happy to talk to our HfS readers… so what do you think of your new firm?

Vishal Sikka (CEO, Infosys): There’s an incredible amount of energy, and an incredible amount of passion. Yet in many ways, I get the sense that we lost some confidence along the way, and part of the job I see at hand is to restore that. To a certain degree, that loss of confidence is something

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

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Atos and Xerox exchange holiday gifts, but can they disrupt a market asleep at the wheel?

December 22, 2014 | Phil Fersht

So it turned out that there was a “Secret Santa” exchange going over the last few months, as Atos and Xerox worked out the terms of their exchange of Xerox’s IT Outsourcing business and an ongoing support contract for cash considerations of $1.05 Billion.

Yes indeed folks, two traditional incumbent service providers are getting active in a market that's been caught in somewhat of a holding pattern for some time, with many grimly clinging onto their labor-driven models in denial that big changes are already in the works to disrupt their cosy legacy worlds. So let's hear what the HfS analyst team thinks about it all...

The As-a-Service Economy beckons... and it's time for the contenders to step up and get focused

HfS believes that this was a good move for both service providers as it allows for each to concentrate on their core offerings, while leaning on the other for ancillary capabilities (IT from Atos to Xerox, HR and F&A from Xerox to Atos). Both service providers have had a relationship for some time, especially with Xerox's global BPO provision of services for Atos, and this will strengthen

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingCRM and Marketing

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TCS, Accenture and Tech Mahindra take the Top Spots for Telecom Operations Services

December 21, 2014 | Phil Fersht

And now for Blueprint XVIV... the first time we've peered into the telecoms operations space.

In fact, it's probably the first time anyone's peered seriously into the telecom's operations services space. And who better to do the peering that my perceptive peer Pareekh Jain...

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Pareekh, how do you see this market evolving and what are the key drivers for telecom services?

We see telecom operations services evolving to the As-a-Service economy, where business processes of wireline and wireless operators across network, fulfillment, assurance, and billing are being delivered as BPaaS on specialized technology stack. Social, mobility, analytics, cloud, and

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

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Gartner, HfS and Forrester top the Analyst Firm of the Year awards, voted by 1100 research consumers

December 19, 2014 | Phil Fersht

The Analyst Firm of the Year 2014 Awards combines the opinions of 1,100 worldwide users of analyst firms who voted in the Analyst Value Survey, led by the worldwide acclaimed analyst of the analystsDuncan Chapple.  It is the only credible study today conducted on the analyst firms, that incorporates the views of a very large, statistically-significant community of research consumers:

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Duncan and his colleagues deserve a lot of credit for their hard work reaching out into the industry of end users and vendors to get the real, unvarnished view of this world and educating the masses on who is really influencing and performing.

I also wanted to praise the hard work of the HfS analyst team for working so hard to get our voice and brand above the deluge of noise in today's industry and making such long term commitments with us to get us where we are today.

You can read Duncan's full post on the awards here.

Posted in: Absolutely Meaningless ComedyHfSResearch.com Homepage

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When you may get better outcomes using speech recognition software...

December 18, 2014 | Phil Fersht

Posted in: Absolutely Meaningless Comedy

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Finally... the great Alsbridge Europe mystery unravelled

December 13, 2014 | Phil Fersht

In the murky world of outsourcing advisory, there are many mysteries... such as why did TPI change its name to ISG, such as what do advisors need to do to top the IAOP advisor rankings, such as why Gartner never got in on the game..  and such as why big management consulting firms dabble in it, but desperately try not to use the term "outsourcing"...

But, perhaps, the biggest mystery of all has been the curious existence of a UK-based Alsbridge firm, which has long been widely-rumored not to be actually owned by its much larger US namesake.  However, all this mystery finally unravelled itself recently when the Alsbridge mothership announced it was building its own organic European empire, and the company formerly known as "Alsbridge Europe" was spinning off on its own direction - and attempting to move further up the alphabet - sporting the name "Aecus".

Still clear as mud?  Well fear no more, as we caught up with Alsbridge CEO Chip Wagner to explain more about what's been going on with all these name changes, spin-offs, takeovers and investments...

Phil Fersht (CEO, HfS Research): Chip - firstly, it's great to have you on HfS - I believe this is the first time since you were appointed CEO.

Chip Wagner (CEO, Alsbridge): It is, Phil, and thanks for the invitation. Glad to be on HfS!

Phil: Chip, can you give us a quick download on what's been happening with the firm since the investment made by LLR?

Chip Wagner is Chief Executive Officer, Alsbridge (Click for bio)

Chip: We have thoroughly enjoyed the two years since LLR invested in Alsbridge; they have been a fantastic owner and advisor.  Shortly after the LLR investment, Alsbridge’s founder, Ben Trowbridge, left his CEO position in July 2013 and then moved on from the Board in July 2014.

After assuming the CEO role and later a position on the Board, I’ve been working with the team to push a number of initiatives that include changing our corporate culture, restructuring the organization, establishing a delivery center in India, launching a new service line to deliver ongoing vendor management, opening new offices in Canada and Germany, and expanding our UK presence.  We’ve been busy and so far we’ve had great success experiencing 32% organic revenue growth, increasing EBITDA margin and hiring a group of all-stars to carry us forward into 2015.

Phil:  So what's different about Alsbridge these days?

Chip: As part of a rebranding initiative, we have embraced a new Alsbridge tagline of “Challenge the Future” for both our external clients and internal operations.  We believe that smart businesses challenge everything - especially conventional thought, existing behaviors and perceived best practices.

From an internal perspective, we have managed to unlock potential in our team, strengthen accountability, introduce a much more transparent culture, and empower the talented people we

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Posted in: HfSResearch.com HomepageOutsourcing AdvisorsSourcing Locations

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Time for outsourcing service providers to tone down the sales BS

December 12, 2014 | Phil Fersht

And back to the reality of a freezing cold buyers' discussion in Chicago last month...

Many enterprise service buyers have made it clear they're happy they outsourced and admit they should give up more high value work to their providers. So what is holding them back? Why don't they trust them enough?  Is it because they are simply too insecure to let go, or more because they worry their provider just spins them any old line to get more revenue out of them?  Let's take a closer look at what annoys them the most about their service provider...

Yes indeed, folks, clients are fed up with being treated like ATMs.  Many (39%) are clearly caught in relationships where the only conversation they can get from their provider is centered on how they can pony up more dough. Whats more, a similar number (35%) still rankle at not receiving the delights they were promised during the courtship phase. Simply put, far too many service buyers feel they have been sold down the river and are getting increasingly frustrated with the lack of focus from their service provider on delivering value and quality.

This is why so many service buyers are holding back from taking their outsourcing relationships to a more intimate level with their service providers - they simply do not trust the intentions of their

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

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Accenture, Cognizant, Wipro and Infosys are the marketing and digital customer experience services front runners

December 07, 2014 | Phil Fersht

When it comes managing and enhancing a customer's touchpoints with an organization, the impact of digital technologies is having a profound impact - not only on the customer experience, but also with the effectiveness of marketing to them.

BPO and operations these days is becoming a lot more focused around the consumer-led needs from enterprises, than merely managing back office processes effectively, which is why we've tasked HfS' Reetika Joshi with spending time in a Blueprint laboratory for consumer-led operational services, in order to come up with an HfS Blueprint Report XVIII, entitled "Marketing Operations and Digital Customer Experience Management":

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Reetika, How do you see this market evolving and what are the key drivers for marketing operations and digital customer experience management services?

In the emerging As-A-Service Economy, HfS Research sees an increased convergence of the consumer-oriented business functions of marketing, sales and customer care to serve the end customer. Organizations will do this through enabling technologies and innovative service frameworks that create new opportunities for collaboration and redefine the omni-channel

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

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The Twelve Tenets of Trust

December 07, 2014 | Phil Fersht

While we were all getting carried away with the As-a-Service Economy, where life and work will be completely digitized, robotized, on-demand, one-to-many, outcome-based - and all available on your mobile device - our Chicago Blueprint Sessions helped us dial back a bit to reality, where one core element is needed for enterprises to get through the next 12 months, let along the next 12 years:  Trust.

When we asked the service buyers to describe their service provider relationship, it immediately became clear that half of them are still "master/slave" in nature:

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So Barbra McGann decided to put pen to paper after the vigorous Chicago debates to encapsulate the key tenets both service buyers and providers need to think harder about, if they are all going to end up joining the elite 27% in the promised land of jointly-strategized and executed service behavior:

The Twelve Tenets of Trust

Tell the Trust

Stay Honest

Appoint an advocate

Organize appropriately

Get governance

Collaborate

Enable activism

Build a shared culture

Be responsive

Create transparency

Establish secondments

Consider audits

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

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The three dirtiest phrases in services

December 03, 2014 | Phil Fersht

Here are three phrases that are today's big no-nos:

1) Labor Costs.  These things are just the worst thing ever and have to be eliminated.  Who wants people anymore, when systems can talk to other systems, processes mimicked in drag-and-drop software apps and cognitive analytics can replicate those antiquated human brains. People cost money and need to be gone.

2) Transactional.  Oh my - all you do are transactional activities?  Can you please replace yourself right away with someone either lot cheaper or, even better, a piece of software?  How can you dare exist when you add no "value"?

3) Legacy.  Probably the worst insult anyone can use on any person, process or technology.  You're done. Dated. Over.  Yesterday's news.  Time to crawl away and cower somewhere on government handouts.

Posted in: Absolutely Meaningless ComedyAnalytics and Big DataBusiness Process Outsourcing (BPO)

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The raw truth about outsourcing: 83% of outsourcing customers would not go back, despite three-in-four failing to achieve value beyond cost

November 30, 2014 | Phil Fersht

There is good news - and challenging news - for outsourcing buyers, service providers and advisors:  most enterprises are pleased they moved into an outsourcing model, but have recognized they need to make significant changes to the way they manage their service provider relationships, if they are to realize real value in the future.

Some service providers are going to become legacy, some will step up to meet the demands of the As-a-Service Economy, and there will be new arrivals in the future to disrupt the market, which may not even have been formed yet.

What is clear, is that two things are going to happen with most outsourcing relationships in the short-medium term: many existing service providers will be switched out, and contractual terms will need to change to reflect the evolving needs of the maturing enterprise buyer.

During the recent Chicago HfS Blueprint sessions, we asked the enterprise buyers to express how they viewed outsourcing service providers and the nature of their relationships.  As we revealed last week, a good number of buyers (43%) admit they should give up more high value work and responsibility to their providers,  but are struggling to let go because of the change and trust issues at play. However, when probed further, over four-fifths of service buyers would choose not to reverse their outsourcing decisions, and, instead, would make changes to their current contractual terms (44%) or simply look to change provider (33%):

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What this signifies, is that outsourcing is the start of a new way of working for enterprises, but does not provide all the answers in the early days - it sets the agenda for how they intend to operate in the future, where third-parties provide lower operational costs, increased scale and - hopefully - added capability. However, what is clear, in the initial phases of outsourcing, is that achieving lower cost and added scalability of resources are the real outcomes three quarters of service buyers actually expect:

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The Bottom-Line: It's time to dial-back the rhetoric as most services buyers are still getting to grips with cost

We can bemoan for days the struggles so many outsourcing clients are going through trying to achieve value beyond cost, however, the happy reality of today's outsourcing business, is that most services buyers are only expecting their service providers to be agents of cost-reduction and efficiency.

These expectations change as processes become more efficient and governance skills develop, which is when service providers will be held to task to bring new capabilities to the table, namely automation, analytical prowess and process reinvention, which we will reveal shortly.  However, for now the industry is - by and large - a reasonably happy place to be.  It's the next phase of business transformation with will separate the wheat from the chaff... a phase we have already entered, even though many have not yet realized it.

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

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