HfS Network

Monthly Archives: Feb 2015

OneSource Virtual: Born in the RPA Cloud

February 25, 2015 | Phil Fersht

OneSource VirtualThese are really exciting times for the services industry, where little upstart "Born in the Cloud" As-a-Service providers can sneak up on the traditional service providers and deliver pure cloud-based services in a model that was designed to be in the cloud.

And when you design services for pure cloud delivery, they have to be seamlessly automated at their very core. The services ethos is about enterprises operating smarter, not cheaper... and as a result will likely save a ton of money because they end up simply running more effectively.

One such irritant to the traditional services model is OneSource Virtual (OSV), which has built up a compelling business delivering business process service offering for clients around Workday's HR and F&A SaaS platforms.  OneSource Virtual is an As-a-Service provider - there is no transition to becoming one, it was born as one with As-a-Service as it's intended delivery. And when you consider one of OneSource's clients is Uber, it just makes for one harmonious As-a-Service mash-up...

The exciting value OSV is bringing to the table is its services are focused on real business support areas, such as organizational design and workforce analytics, in addition to the transactional needs of clients in areas such as payroll fulfillment, or accounts payable. And this also creates exciting jobs for onshore staff who can apply more consultative, value-based capabilities to service their clients.  This is the As-a-Service Economy, where service jobs are becoming more challenging and interesting, where real business services are delivered on-tap and clients can access services designed to meet the needs of the modern business, not just some legacy back office designed on a mainframe cluster back in the late 1970s...

Anyways... while I've been getting obsessed with OneSource's delivery model, our resident RPA uberlord, Charles Sutherland, dragged himself away from his painful conversations with clients about how to blow up the legacy model, to spend two hours in a dark room on a Friday afternoon being treated to a genuine "Born in the RPA Cloud" experience... over to you, Charles.

OneSource Virtual’s service delivery was built with RPA at its core

We’ll admit it. We didn’t see the robots for the trees. We've been so focused on how Robotic Process Automation is being implemented across legacy application environments, we missed how it is also being rolled out in “Born in the Cloud” business environments.

Last Friday (as Phil mentions), I spent time with the As-a-Service provider OSV, which has built business process service offerings around the Workday SaaS platform for HR and F&A. While it is true that Workday itself has automated many processes that require more manual intervention in other applications, OSV has gone taken this one step further.

With the development of its proprietary service delivery environment Atmosphere, built on force.com, OSV has created a platform for the extraction - and then automation of - recurring processes across their base of hundreds of clients.   This is a critical development, because together, with consistency in the code base of Workday across clients, the automation in Atmosphere allows OSV to establish very high levels of productivity in tasks where human agents are still required.

Especially compelling is that fact that OSV has not developed its Atmosphere and this model of shared automation after years of running individual silos of client delivery, as several other service providers are now trying to do. Instead, OSV was founded on this principal of shared automation from its inception.

In essence, this means that OSV is already operating at the highest Level of the HfS Maturity Model for Robotic Process Automation that we released in November 2014. This Level, “Institutionalization” describes a common theme of broad strategic commitment by a service provider to the transformational potential of RPA on their clients’ business and operations. Any service provider characterized by this Level is making a sizeable investment in RPA, with a view to creating a fundamental change in the commercial and delivery operations of their clients’ business operations.

Other service providers are striving to move aggressively into the Institutionalization Level, however, they are doing it by retrofitting RPA into their established business, as opposed to develop new client delivery environments with RPA at the core.

Net-net, it's time to really get down and dirty with RPA as a core component of the service delivery platform - get ahead of this unstoppable trend as opposed always chasing it...

Posted in: Business Process Outsourcing (BPO)Cloud ComputingDigital Transformation

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Mike Sutcliff, Digitally Distinct

February 21, 2015 | Phil Fersht

Mike Sutcliff is Group Chief Executive, Accenture Digital (Click for bio)

Two buzzwords have re-ignited the world of global services since "offshoring" became so passé... Digital and Automation.

And the two are inextricably linked - you can't really digitize your business processes until you have effectively automated them.  And if your industry requires you to have that digital interface with your customers and suppliers to survive (and that pretty much includes all industries today), you're pretty much done for, if you haven't build that automated process layer as the foundation.  And if you need more evidence of this, please take some time to read our recent report on the impact of Digital on business services.

So surely this is the gravy train for ambitious service providers to jump to the needs of their clients to save the day?  Or is the business world changing so dramatically that this is simply going to be one insurmountable challenge too far for many enterprises, and they might as well give up now?

So let's hear from the one service provider that dusted off the "Digital" terminology from the dictionary and reapplied it to the world of services.  We managed to get some face-time recently with Accenture’s Mike Sutcliff at his firm's Global Shared Services Conference (GSSC) in Prague, to hear about how his group is developing its digital capabilities and applying them to the world of business operations and shared services...

Phil Fersht (CEO, HfS): Mike – Good to connect again! Tell us about your background. How did you come to lead the digital practice for Accenture?

Mike Sutcliff (Group Chief Executive, Accenture Digital): I’ve been at Accenture for 27 years. In the early 1990s, I founded the Finance Management Group which developed our shared services business. Then I got the opportunity to establish a new business. I became interested in analytics; I wanted to understand how analytics could bring more value to companies. I studied how enterprises created data as a mass that they then could leverage across the organization. I combined my

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

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NASSCOM 2015: More MBA, less ABAP is the recipe for India's Digital success

February 14, 2015 | Phil Fersht

There's nowhere better to test the temperature and mood of the global IT and Business Services industry than at India's NASSCOM Leadership Forum, where the bigshots from all the major India-heritage providers, and the leaders from the major Western-centric providers' India operations, get together for three main purposes:

1)  To be seen as a player at IT services’ premier networking fest;

2) To partake in presentations and panels that are all pretty much sung from the same hymn sheet;

3) To have great conversations that cut through the glossy digital lipstick veneer and elaborate entertainment, to debate the reality of whether this industry can truly evolve beyond its current “all about scale” predicament.

And this year, did we get just that – with a new energy that has been lacking in recent years since the recession.  What I love about this networking event is the sense of common purpose, community and belonging you get as part of the services industry, which you do not get at most other events (especially Stateside, where some conferences still seem to be stuck somewhere in 2004...).

At NASSCOM, you don't feel that outsourcing was that "accidental career" choice you just happened to fall into because you could never figure out what you wanted to do with your life.  You actually feel part of something - and part of history as well as the future.  Just bumping into the legendary (and very fit and energized) Pramod Bhasin (the founder of Genpact), who could (and probably should) be lying prostrate on some beach checking the number of zeroes on his bank balance - and hearing his passion for doing more for the Indian services industry - tells you something about the DNA that will keep brand India at the forefront of technology-driven business services for a very long time to come.

How India's services stars can shine with their Digital lipgloss

But let’s not get too carried away by the hype of the moment. India’s services economy has some big challenges, but it really does have the nuts and bolts to lead the way into this unraveling Digital future, and play a significant role in the emerging As-a-Service Economy.

There are three dimensions we need to consider when we evaluate India's ability to continue on its services growth-path:

1)    Leading with digital technology and an appetite to cannibalize short-term revenue for longer-term profitability and value.  HfS success probability =  90%

For example, the more I learn about Robotic Process Outsourcing (RPA), the more convinced I am that some of the ambitious Indian-heritage firms will be at the forefront of development and capability here.  I am already witnessing a strong appetite to cannibalize some shot term revenue with clients to develop beta solutions that can be re-used for the future, and scaled across multiple clients.  The common-sense to transform a $10m engagement that has 20% profit margin into a $7m engagement at 50% profit, is not just lip service from the service provider executives attempting to placate cynical analysts, we hear this from an increasing number of clients.

Meanwhile, too many of the traditional Western-centric providers have massive scale deals involving hundreds, and even thousands, of FTEs and have a real problem when it comes to changing the pricing model at the risk of taking a hit on short term income.  Sadly, most of the incumbent service

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

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Dallas, we have another problem: Too many Advisors are Buying the Service Provider Hype

February 11, 2015 | Phil Fersht

Just as we thought we'd negotiated a safe landing back to earth for our talent-challenged sourcing advisors, that we discover another mismatch between perception and reality - they just love service providers.

Yes indeed - probably the only time anyone has ever bothered to ask a seriously large number of enterprise service buyers (168) and advisors (154), during our recent industry study with KPMG, what they really think of service providers, yielded quite an alarming response:

Click to Enlarge

Are some advisors simply out of touch, or are too many buyers suffering from stagnating relationships?

One of the quirks of the services industry that has long-bothered me - and many others - are the cosy relationships some advisors clearly enjoy with some service providers.

Turn up at many of the service provider-hosted industry "analyst" events these days, and there is usually an assortment of advisors added to the occasion to partake in the PowerPoint orgy, the

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHfS Surveys: All our Survey Posts

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David Poole, Robo Conductor

February 07, 2015 | Phil Fersht

David Poole is Co-Founder and CEO, Symphony Ventures

One of the many nuances of the business process services world is that the same cast of characters just can't stay away from the action.

Many of the same mavericks who helped build this business from the early days of transformational consulting, CoEs and shared services, through to lift and shift BPO, virtual captives, and, more recently the hybrid services delivery model, are now hopping aboard the train that encompasses the As-a-Service ideals.

These ideals that are centered around the benefits of process delivery in the cloud, where unnecessary manual steps are automated, where systems can interact intelligently with each other, where staff think orthogonally about how things should be done, where enterprises can hive off crappy old back office operations and jump into the world of the new with limited pain.  Yes, it's time to retire ladies and gentlemen - or shall we call the legendary David Poole himself to figure out how to get ahead of this disruptive nightmare?

David will talk about his illustrious background shortly, but I would like to commend his bravery for setting up his own disruptive advisory shop "Symphony Ventures"  based in London, where he has picked up some exceptionally talented guys like David Brain and Ian Barkin, who've cemented solid reputations in the world of Robotic Process Automation (RPA) - and are already creating trouble for themselves with some big enterprise clients.

So, without further ado, let's hear what the Robo Conductor has been up to lately with his foray into the world of entrepreneurialism, and what he thinks about where this train of disruption is really heading....

Phil Fersht (CEO - HfS): David - good afternoon!  So how did you get into this business?

David Poole (Founder and CEO - Symphony Ventures): I started at Price Waterhouse as a consultant back when BPO was in its infancy. My first job was helping BP set up one of their first BPO centers in Caracas. I then worked in sales, transition and delivery and ultimately it was my job to help close down the BPO business because there was a conflict with the audit practice. We sold most of the assets to IBM & Exult. Cap Gemini purchased the Krakow delivery center. That’s how I first met Cap Gemini.

I went on to help set up Cap Gemini’s BPO practice in Europe and the U.S. Over a period of 10 years

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesDigital Transformation

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Europe: If you can't do Arbitrage, then Automate!

February 03, 2015 | Phil Fersht

We've been addressing the massive opportunity for the services industry as we move into times of unprecedented complexity.  However, while complexity brings with it the opportunity to solve recurring problems and design new solutions, it also brings new workforce challenges that could prove insurmountable for many enterprises, without a radical rethink with how they design their business operations to get ahead of their markets where technology is increasingly at the center of their business universe.

As we recently discussed, this is especially the case for many Continental European organizations, where rigid labor laws and a pervasive  “job for life” mentality makes it very challenging to find - and then fund - the new talent that can replace legacy staff struggling to meet the business-relevant needs of the modern workforce. We believe this inability to achieve greater workforce flexibility to gain access to new talent and skills is the main reason driving Continental European enterprises to evaluate alternative means to improve processes and drive more efficiency and effectiveness into their operations.  One of the emerging areas where we are seeing a remarkable level of interest is that of Robotic Process Automation (RPA), where enterprises can develop an automation layer upon which to cement its operations and create a true analytical and digital capability for the As-a-Service Economy into which we are venturing.

Enterprises need skills to help them understand their financial data to make better investment decisions in emerging markets, to redesign process flows that get their products to the right markets quicker, to align revenue opportunities with their global supply chain activities, to understand where to make talent investments, based on high-growth market needs. They need to understand the viability of maintaining legacy products at the opportunity cost of investing in emerging product areas and other innovations. This means they need an operations infrastructure that has the process standards to help extract this data, with the right people that have been trained how to use it effectively – and can develop these skills on a continual basis.

However, if you cannot make the swift changes you need to augment your overall base of operations talent, surely the advent of effective Robotic Process Automation (RPA) platforms is providing an increasingly appealing alternative path for many enterprises to take: when you cannot augment your process people, why not replace them with automated process platforms? And, as the following chart clearly shows from our new global study conducted with KPMG, emerging interest in

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

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