HfS Network

Monthly Archives: Apr 2015

Chris cracks the Cap-ability code

April 30, 2015 | Phil Fersht
Christopher Stancombe is Chief Executive Officer, BPO strategic business unit, Capgemini

Christopher Stancombe is Chief Executive Officer, BPO Division, Capgemini (Click for Bio)

On the week when Capgemini opened its wallet to make one of the largest services deals in history, with the $4 billion acquisition of IGATE, we thought it high time to focus on one business division that's really been on fire the last couple of years - Business Process Outsourcing.

With Capgemini's proven capabilities delivering global Finance & Accounting services (see our recent Progressive F&A Blueprint), one of the areas where the firm has needed to invest is in the industry sectors, so I, for one, am excited to see how Cap integrates IGATE's insurance BPO delivery.

But the one aspect of BPO that keeps us grounded, is the simple fact that's it still really about people and relationships - about talent and trust, which is why we went out and spoke to 540 business stakeholders on the topic - and you can read the report here.  So, without further ado, let's talk to geologist-cum-Capgemini's BPO CEO, Chris Stancombe, on how his division is faring under his leadership and how he views the emerging disruption in the market...

Phil Fersht (CEO, HfS): Good afternoon Chris. Great to have you back with HfS - I think it's been at least a year since you took the reigns as the CEO of Capgemini's BPO business. Maybe you could start by giving us a bit of an update on how that's really fared. In the last year, we have seen some really strong performance from your firm, from our analyst vantage point. Maybe you could share a little bit with our audience how it's evolved internally, how you have built out the team and where you feel you are today with the business.

Chris Stancombe (CEO Capgemini BPO): Thanks for that Phil. It's good to be back. I have been here now for ten years. And as you kindly said it's quite a success story really with the growth that we have experienced and the position that we have established for ourselves in the market. When I took over from Hubert Giraud, we had a plan that the two of us had worked on together. With Hubert moving on and also our CFO, Oliver Pfeil, taking on a new role there was quite a significant change at the top so the first thing I wanted to bring was stability.

When we moved into the three year plan, my most conscious thoughts were how do we build on our strengths and go broader and deeper within our portfolio to bring more value to our clients. So clearly we have a number of areas of strengths. F&A is one of those, analytics is another as well as

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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHfSResearch.com Homepage

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Never doubt an HfS merger prediction! Capgemini really is buying iGATE

April 27, 2015 | Phil Fersht

Capgamini iGATE

As we correctly predicted last week, Capgemini and iGATE have announced their nuptials after finding many areas of common interest to consummate a long-term flourishing relationship.

In short, this merger further builds on our weekend argument that service providers need to blend the best parts of each other to address better the journey to the As-a-Service Economy, and not solely the really disruptive stuff that could be 5-10 years out on the horizon.  OK.. there's more chance of me being the next Gartner CEO than IBM actually buying TCS, but we wanted to set out the argument why a bout of lovely big service provider marriages could provide an ideal distraction from the spate of depressing quarterly results, while allowing for them to co-develop their investments in areas of real value.

At HfS, we believe this acquisition makes a lot of sense for Capgemini to address several holes in its global service portfolio, shoring up its India presence and adding some serious pep to its US clientele (and brand), financial services capabilities and analytics depth.

What Capgemini Gets From iGATE

North American Clients

iGATE derives over 70% of its revenues from North America with anchor clients such as General Electric and RBC and particular strength in financial services and manufacturing. By contrast,

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

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#Crazymergerideas - Why IBM should acquire TCS

April 26, 2015 | Phil Fersht

As-a-Service Graphic

When IBM announces a 12th consecutive quarterly decline, when practically every other service provider is trying to mask layoffs and austerity plans as strategic moves to delink revenue from headcount, you have to hold your hands up and admit the services industry is going through a secular transition that is going to get considerably more painful, before it eventually reemerges in the As-a-Service Economy.

Service providers need to address the transition years we are currently in, to reach the As-a-Service promised land

With consolidation of the current environment clearly very much on the minds of senior leaders in the service providers (e.g. Capgemini and iGATE widely mooted to be close to tying the knot), it's pretty clear that we're distracting ourselves from entering the As-a-Service world anywhere as quickly as we should be. There are simply too many operations and IT careers tied to legacy ERP and business processes, and too many providers making too much money feeding off this legacy, for the change to happen at anything bar a snail's pace.  There simply is no burning platform for change - no Millennium Bug, no Dot.com bust, no Great Recession in the offing (perish the thought...).

It is my belief that we're at the start of a ten-year cycle of interim change as operational human labor is gradually replaced by automated platforms that are in turn augmented by analytical and creative talent and cognitive computing.  The smart service providers are those which are going to address this ten-year phase of transition head-on and not get distracted by maximizing their position in the old model.

So let's pick on the biggest service provider of all in the middle of this industry transition, IBM, to assess its options:

The cool stuff is all great, but the dollars are relatively small

While IBM is making many right moves investing for the long-term, it's this long drawn out medium-term period that's the real problem. Watson, Apple and Twitter alliances, its new $3bn IoT unit, Softlayer etc.  all create As-a-Service mojo, but it's going to take years to get to the revenue levels that can replace the traditional services dollars that are in gradual decline.

IBM needs to work with clients at the pace they are comfortable with, if it wants to maintain its wallet-share with them.  The problem with the current business is that prices are getting squeezed and second tier providers are getting desperate and practically buying deals with the hope of making them profitable down the road and keeping their investors happy.

The solution:  Buy TCS and create a dominant giant to crush its competitors

It's simple - make a move on the largest, most aggressive and dynamic of the Indian-heritage providers:  TCS.   Together, they would crush the market across all aspects of delivery, all verticals,

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Posted in: #CrazymergerideasAnalytics and Big DataBusiness Process Outsourcing (BPO)

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Accenture and Cognizant battle it out in Population Health's Winner's Circle... with EXL knocking

April 23, 2015 | Phil Fersht

With the HfS Blueprint season now in full swing, we can celebrate the coming-out party of one of our rising star analysts, Barbra McGann, who's put together one of our finest pieces of research (yet) looking at the rampant Population Health and Care Management business services industry:

Population_Health_SvS_2015_Axis

There's such a loud call for change in the U.S. healthcare industry these days, Barbra.  Please tell us a little bit about what you see going on...

Healthcare is just too complex. Through the Patient Protection and Affordable Care Act, we all have the right to access healthcare, but for a lot of people it’s still difficult and expensive to do so. Healthcare providers and payers are on a mission to take the “sting” out of healthcare. The goal is

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

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Tom Reuner rolls up to rev up our research

April 19, 2015 | Phil Fersht
HfS new Managing Director, Tom Reuner with wife Ayesha

Meet Tom Reuner, HfS new Managing Director for IT Outsourcing Research, with wife Ayesha

As you all undoubtedly know by now, at HfS we are relentlessly dragging the world of IT and business operations kicking and screaming into the As-a-Service Economy.  So what better than to convince the only other analyst with real chops in autonomics and cognitive computing (who wasn't at HfS) to come and become part of our bandwagon of belligerence?

Not only does the arrival of Tom Reuner corner the analyst market in autonomics and cognitive computing for us, he also brings real depth in IT services and adds to our growing European analyst presence.  He's also a terrific bloke with great taste in premier league football teams.

So, without further ado, let's hear a bit more about the latest excellent addition to the HfS analyst ranks...

Welcome to HfS, Tom.  What on earth went wrong in your life to have ended up doing this?  Tell us a bit about your background...

Cheers Phil, I am really excited to join HfS. And well, unlike my lovely wife I hadn’t learned anything proper. Back in the days I was expecting to become a lecturer in history and as part of that I planned to stay for half a year in London to do research for my PhD. But as so often in life things

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Posted in: Analytics and Big DataCloud ComputingDigital Transformation

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Why most advisors are just so Un-as-a-Service

April 16, 2015 | Phil Fersht

UaaS EconomyIf I told you that only 13% of sourcing advisors have plans to invest in cognitive computing and 15% in Robotic Process Automation skills, you wouldn't believe me, right?

We're just about to close off our new study that probes into the ideals of the As-a-Service Economy where 716 industry stakeholders reveal how they are faring with their As-a-Service readiness, intentions and aspirations.  And one major services market influencer, the local friendly sourcing advisor, is seriously missing the mark when it comes to sawing off some of the old, to embrace the new.  Simply put, at least half of today's advisors are pretty much, well... Un-as-a-Service.  Let's take a closer look:

Click to Enlarge

Click to Enlarge

Advisors have been schooled on driving out their clients' costs, as opposed to adding real expertise and value. Encouragingly, 49% of advisors are getting sucked into As-a-Service because their clients are demanding it, but the sad fact of life is that two-thirds of them still think it's still really all about driving out cost.  As-a-Service is all about providers delivering and buyers receiving

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Posted in: 2015 As-a-Service StudyAnalytics and Big DataBusiness Process Outsourcing (BPO)

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The 2015 Enterprise Mobility Services Blueprint: IBM, Cognizant, Accenture, TCS, Infosys and Capgemini in the Winner's Circle

April 11, 2015 | Phil Fersht

The world of enterprise mobility continues to unravel at a breathless clip, with a host of application, infrastructure and niche specialist service providers claiming to deliver (much) more than a bunch of Blackberries, mobile servers and basic help-desk support to enterprise clients.

Enterprise mobility has quickly propelled into the corporate mainstream, with almost every consumer-facing, employee-engaging, supply-chain-enabling process requiring critical mobility interfaces and integration points to avoid becoming obsolete. And with so many processes now going completely native to the mobile world, from membership programs for healthcare insurance schemes, through to governance productivity tools, through to tax management applications etc., the mobility prowess, from a business transformation aspect, is the Holy Grail the winning service providers are seeking to stay ahead of this fast-commoditizing digital marketplace.

So, without further ado, let's focus on how the 2015 enterprise mobility services environment is shaping up with HfS' digital research guru, Ned May's, new release of the 2015 Enterprise Mobility Blueprint:

Click to Enlarge

Click to Enlarge

Hi Ned, what has changed in the enterprise services mobility market over the last year?

I am pretty amazed at how fast the market has shifted. In the year that’s passed since my last Blueprint, we now see a majority of enterprises undertaking efforts to integrate their mobility portfolios deeper into legacy systems. Few enterprises were at that stage a year ago when it was the build out of point solutions that dominated the activity sourced from service providers in mobility. Even just a year ago, efforts to integrate these apps were largely aspirational but now it is

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

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HfS and NASSCOM sharing the love @ the 2015 BPM Strategy Summit

April 08, 2015 | Phil Fersht

HfS+NASSCOMWe're proud to announce our role as exclusive research and content development partner for NASSCOM’s Business Process Management Summit 2015, to be held in Bangalore, on September 24th-25th.

We've been closely working with NASSCOM in designing this year’s theme: “The Emerging Digital Economy: Thrive, Survive or Die”, developing session topics, identifying speakers, supporting content for key speeches and producing a definitive white paper on the Digital theme, in addition to supporting the marketing and promotion of the event. This year, I will be hauling myself back to India along with Charles Sutherland to deliver a keynote presentation on the Emerging Digital Economy and its impact on the BPM industry, along with helping organize the other sessions and content themes.

At the NASSCOM BPM summit, participants will debate the emergence of digitally empowered business process services in horizontal areas such as finance, procurement, supply chain and HR, in addition to industry domain specialties, such as financial services, healthcare, life sciences, retail and manufacturing.

Key Digital Themes being discussed at the 2015 NASSCOM BPM Strategy Summit 2015:

  • Embracing Design Thinking: Generating creative solutions by understanding the business context
  • Smartly Automating: Blending of automation, analytics, and talent
  • Intelligently Managing Data: Applying analytics models and techniques to achieve meaningful business insights
  • Writing-off Legacy: Use of platform-based services to make many tech investments redundant
  • Being Brokers of capability: Governance staff managing towards business-driven outcomes
  • Entrepreneurial Intelligent Engagements: Striving for relationships based on expertise, gain-sharing and outcomes

For members of the HfS global knowledge community interested in speaking at the summit, please email [email protected] .

We hope to see you in Bangalore!

Posted in: Business Process Outsourcing (BPO)Digital TransformationHfSResearch.com Homepage

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IBM, Accenture, Cognizant, Wipro, TCS and Infosys make the 2015 Enterprise Analytics Services Winners Circle

April 02, 2015 | Phil Fersht

I recall back in late 2010 when an eager young research firm practiced what it preached and scoured talented resources on the Indian subcontinent to support our research reports.  One such resource was a bright young woman called Reetika Joshi, who worked with us to produce the industry's first ever assessment on "Offshore Analytics Providers."

Fast-forward four years and said analyst has now survived her first Boston winter (she did nearly perish) to produce a fine assessment on where today's  far more sophisticated analytics services market is today headed:

Click to Enlarge

Click to Enlarge

Hi Reetika, how do you see the enterprise analytics services market evolving?

The 2015 HfS Enterprise Analytics Services Blueprint Report is a refresh on our initial assessment in November 2013. Compared to 2013, the market is seeing an overwhelming change - an increased focus on applying business context and doing more meaningful analysis, rather than the isolated procurement of analytics tools and technologies. This is impacting the stakeholder dynamic, the decision-making process and day-to-day relationships with service providers for services buyers. It also spells great news for service providers with analytics consulting backgrounds and/or domain

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

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HfS officially exits the sourcing advisor business (even though we were never in it in the first place)

April 01, 2015 | Phil Fersht
No, I am not an advisor...

No, I am not an advisor...

After our dramatic fake announcement that we had entered the sourcing advisory business on 1st April, our phones have been ringing off the hook from service providers desperate to get included in our deal pipeline (no joke).

While, in hindsight, HfS& would likely have been a roaring success disrupting the legacy sourcing advisory business, we fundamentally have no desire to be an advisor shop. Sorry. Back to the research grindstone...

And for all of you who sent congratulatory notes, please do read beyond the first paragraph next time we announce something. Especially on April 1st =)

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

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HfS announces its entry into the outsourcing advisory market

March 31, 2015 | Phil Fersht

HfS_Logo_2_OrangeHfS Research, the leading analyst firm covering outsourcing strategies, today launched HfS Advisory (abbreviated to "HfS&") and announced its exit from the research analyst business.  The firm, once lauded for disrupting the research industry by giving its research away for free, finally conceded there is actually no money to me made from a business model where there the core product does not have an associated price tag.

As part of its relaunch as HfS&, the firm announced the following new advisory service lines, designed to disrupt today's outsourcing advisory marketplace:

1) FTE-Lite .  HfS& will disrupt the traditional outsourcing transaction marketplace by offering a

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Posted in: Absolutely Meaningless ComedyDigital TransformationHfSResearch.com Homepage

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