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Category Archives: Finance & Accounting BPO

Meet the Dinamo driving TCS' business process services impressive growth

June 03, 2016 | Phil Fersht
Dinanath (Dina) Kholkar is Vice President and Global Head of BPS at Tata Consultancy Services

Dinanath (Dina) Kholkar is Global Head of Business Process Services at Tata Consultancy Services

As we endlessly debate the future of the global IT service delivery in the wake of advances in automation, digital disruption and the ability to maintain double digit growth rates, one area that has steadfastly kept to respectable growth and improved delivery confidence is our beloved business process outsourcing services.

In fact, we are about to reveal to all of you that the growth in Indian-heritage BPO has been consistently out-performing IT services over the last year.  Why?  Because BPO is several years behind IT in terms of widespread adoption, but is now coming to the forefront as processes can be better-enabled by cloud platforms and maturing global delivery models.

In this vein, I thought it timely to interview Dina Kholkar, TCS' global head of BPS, who has helped steer his division to $1.9 billion at a 6% growth clip... making BPS now represent 12% of the total TCS business...

Phil Fersht, CEO and Chief Analyst, HfS: Good evening, Dina. It's great to have you on HfS for the first time. You've been one of the best kept secrets behind the exciting growth in the Business Process Services (BPO) team at TCS. Maybe you can share a little bit about yourself, your own background and how you ended up leading the highest-growth division in TCS today.

Dinanath (Dina) Kholkar, Vice President and Global Head of BPS at Tata Consultancy Services:  Sure, Phil. I've been at TCS for a very long time. This is my 27th year in TCS! I started in 1990 as part of the IT business. I managed a few IT projects, went on to manage accounts across different geographies, different types of roles. The longest stint I had was in the capital markets area. I also spent a few years in TCS’ R&D unit, predominantly focusing on data warehousing and data mining. Those were the years when data had started becoming a focus in many organizations. I did have a stint in operations when I was managing customers, but I never really managed the business of running operations until I got the opportunity to manage e-Serve, which TCS had acquired from Citibank. After a few years, when it was integrated into TCS, I took on the role of the overall head of the TCS BPS business. So we’ve had quite an exciting and an interesting journey, a journey filled with lot of learning and a lot of customers we’ve been able to positively impact over the years. And I feel quite proud about the type of opportunities that I have gotten and the way I have delivered on the objectives that TCS has laid out for itself.

Phil: So what can you share with us then about the secret sauce at TCS? What is it that makes you guys really tick?

Dina: One thing which I have always seen probably over multiple generations—and all three CEO leaders of TCS—really strikes me is the customer centricity. We go the distance, which means we do whatever we need to do for the customer. We do the right things and ensure that we are taking care of the customer’s business, bringing all we have as an organization to solve problems that the customer has. I think that customer centricity is paramount in the organization. I think we also

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Design Thinking

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Accenture, Genpact, IBM, EXL, TCS, Capgemini and WNS lead the first As-a-Service lens of Finance and Accounting

April 24, 2016 | Phil Fersht

Growth in offshore-dominated services may be slowing for traditional IT support services, but for multi-process Finance and Accounting (F&A) services engagements, 2015 saw the market continue to grow at  a 10% clip.

Why? Because F&A outsourcing is about 10 years behind IT outsourcing - in terms of adoption - and is a market that can quickly take advantage of more experienced governance executives, capable service providers that have ironed out many of their past mistakes, and notable advances in analytics, robotic process automation (RPA) and digital technologies.

In short, the shift from enterprise clients approaching F&A engagements largely as a labor-obsessed cost-driven solutions towards outcomes-centric value-obsessed solutions, is now really happening. Yes, we're finally starting to talk about F&A being delivered "As-a-Service".  To this end, for 2016's F&A Blueprint, which covers over 1500 multi-process F&A relationships, we've reoriented the performance innovation and execution scores to reflect each service provider's alignment with the HfS As-a-Service Ideals:

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So, what's new about this year's F&A Blueprint?

We've gone deeper than ever before in really getting to the essence of buyer/provider F&A relationships.  In the past, we were as guilty as the rest of the industry of focusing too much on engagements being operationally effective, when we should have placed even greater emphasis on

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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHfS Blueprint Results

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Rescuing BPO from its trough of directionless boredom: Make jobs challenging and creative

April 17, 2016 | Phil Fersht

Bored BPO CatWhen your enterprise is increasingly dependent on hiring "Millennials" with digital skills and lower wage needs, you'd better figure out a plan for creating exciting, challenging career paths, or you're pretty much already doomed.

Sadly, our Talent in BPO study from last year tells a very depressing tale when you ask BPO delivery executives what they think of their BPO career:

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What's alarming is the failure of enterprises to create and communicate a viable BPO career path for seven-out-of-eight professionals with under two years' experience.  And - while 63% of newbies strongly agree their job is vital to business performance, a depressing one-in-eight are actually excited by their career choice.  When people get past the first couple of years, their experience clearly improves, but the concern here is how can we attract top (or even middling) talent into BPO careers, when there is such a negative perception of the potential of the job.  If we can't attract the talent, the industry will never progress beyond a cost/efficiency play.

What can we do to attract the "Digital Generation" into the BPO business?

Start new hires on activities that require creativity and critical thinking. Working in BPO has to be about delivering capabilities beyond rote, operational processes.  Today's college graduates are simply not coming out of school willing to perform mundane routine work.  Just look at the new WEF jobs report to see how skills requirements are quickly shifting, as business needs evolve - especially the need for creative skills, going from number ten to number three in merely five years:

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Click to Enlarge

In the past, for example, an accountant would often earn his/her chops processing accounts and doing routine GL work, before progressing to controllership activities, such as budgeting, quality audits, FP&A, forecasting and risk assessment work.  With much better technology and offshoring

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Posted in: 2015 Talent in BPO StudyAnalytics and Big DataBusiness Process Outsourcing (BPO)

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Let's get lean digital with Shantanu

April 15, 2016 | Phil Fersht
Shantanu Ghosh, SVP CFO Services and Consulting, Genpact

Shantanu Ghosh, SVP CFO Services and Consulting, Genpact (Click for bio)

Digital, digital everywhere, but what about the finance function? It took a decade for accountants to make the seismic shift from Lotus 1-2-3 to MS Excel... so how much focus is our favorite business function putting on today's advances in analytics tools, interactive and collaborative solutions, mobility and automation?

Can finance executives really embrace digital to break away from some of the legacy mindsets, processes and technologies that have plagued the function for decades?

Not too many people have been driving the digital agenda as aggressively with the CFO's office than Genpact's Shantanu Ghosh, with his firm's own methodology "lean digital," so we thought it high-time we caught up with him to get his viewpoint on the impact of digital o the finance function.

Phil Fersht, CEO and Industry Analyst, HfS: Shantanu, it's been a couple of years since we've had you on here. Can you tell us a bit about what you're up to in Genpact today?

Shantanu Ghosh, Senior VP & Business Leader - CFO Services and Consulting, Genpact:  Actually, my remit remains pretty similar to what it was two years back. I lead the financial accounting, sourcing and procurement service lines, globally. I also lead consulting across Genpact.

But I'll tell you, the complexities, the scale and the type of solutions involved in all three have changed pretty dramatically in the last two to three years. So it feels like I’m doing a new job every day, even though broadly the remit remains the same.

Phil: I've seen Genpact has been on a real tear, particularly over the last 12 to 18 months. I’ve seen a real uptick, especially in Europe, where you're winning a lot of deals. What's going on? What are you doing differently?

Shantanu: I think there are four things at play, Phil. One, I think it's a result of there or four years of sustained investment in our domain capability and our front-end capability. Obviously, in this business it takes a little bit of time for that to result in winnings in the marketplace, because you have to start engaging with clients at a different level. Then you get into a virtuous cycle, because

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Posted in: Business Process Outsourcing (BPO)Digital TransformationFinance & Accounting BPO

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How digital is transforming finance - Exclusive insights from our latest study

April 08, 2016 | Phil Fersht

75% of finance executives agree that the new wave of digital technologies is fundamentally changing the way that the finance function operates. So what will the finance function of the future really look like?

Join us on April 21st to be part of this exclusive webinar and find out!

Digital Finance Webinar Blog

Join these experts from HfS Research, Genpact, Mondelez and KPMG as they discuss the findings from recent research that shows how digital technologies are delivering competitive advantage. They will share their insight on the future of F&A and explore:

  • What are the key drivers for F&A leaders to embed digital technologies, such as SaaS platforms, analytics, mobility tools, RPA, and machine learning, into their operations?
  • Where are most F&A organizations in their digital journeys and what lessons have they learnt?
  • What are the talent requirements and skill sets that finance leaders need in their functions to take advantage of digital technologies?
  • Where are digital pioneers investing and what challenges are they experiencing?

REGISTER NOW!

Posted in: Analytics and Big DataCognitive ComputingDesign Thinking

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Accenture, Cognizant, EXL, Genpact, IBM, Infosys and TCS Top the Winners Circle for BFS Analytics

April 04, 2016 | Phil Fersht

The BFS industry is completely dependant on data and analytics and the services to provide these analytics are critical. These services enable analytics data preparation and management, routine business intelligence reporting and dashboarding, advanced analytics modeling and ongoing decision-making for industry-specific use cases, including customer and marketing analytics, fraud, risk and compliance, and portfolio analytics.

To this end, we're excited to announce the release of our latest Blueprint Report--this one on BFS Analytics Services, authored by HfS Research Director Reetika Joshi's exhaustive research to arrive at this comprehensive view of the market. So let's get an up-close view from Reetika on the Blueprint Report:

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Reetika, why have we undertaken an HfS Blueprint on analytics services specifically in banking and financial services?

The BFS industry is heavily reliant on the use of data, and yet the potential for embedding analytics-driven insights into operations is still far greater than adoption. The last few years have seen their focus on risk analytics intensify as regulatory changes and government scrutiny continue to mount. Along with balancing this growing compliance work, banks have also found a renewed interest in customer analytics to orient their growth initiatives. Most banks are not set up to meet digital consumer needs and are now embarking on digital transformation, powered by customer and marketing analytics.

Major banks and financial institutions are once again focusing on the next generation of analytics models, tools, and skillsets. We see demand from BFS clients across fraud, risk and compliance, AML/KYC, and customer and marketing analytics. Enterprise buyers in this industry are either unable to find the talent they need, for areas like specialized fraud, risk and compliance, or technology platform expertise, or are unable to afford it at the level of scale needed today—leading us to undertake this Blueprint to understand market direction. We see BFS clients trying to balance and complement their internal analytics teams with the global talent access that some service providers can bring them.

Report author Reetika Joshi, HfS Research Director (click for bio).

Report author Reetika Joshi, HfS Research Director (click for bio).

So how would you describe the current state of BFS analytics services?

For most service providers, big data and analytics services are the fastest-growing businesses in their portfolios, with significant revenues coming from BFS clients. This is due to the growing adoption of data-driven decision making within different parts of the enterprise for BFS buyers, and the need for more analytical support than internal staff can support.

Service providers have doubled down on BFS verticalization in their analytics portfolios, turning initial work with clients for analytics modeling and reporting into portfolios of pre-packaged industry-specific use cases and catalogues. As service buyers consistently stress the need for domain expertise from service providers, we see service providers strengthening industry training programs and hiring professionals from BFS industry backgrounds to increase contextual understanding and allowing for more meaningful analysis. We see the types of BFS analytics solutions changing today, with the next level of analytics use case development. BFS analytics services buyers seek the following:

  • The application of cross-vertical learnings to banking, especially from other consumer-facing industries that have progressed in customer experience analytics (e.g., from telecom to retail banking)
  • The incorporation of newer sources of data into existing analytical models to gain new insights into fraud, risk, and marketing (e.g., sensors, geolocation mobile data, and web and social data)
  • The exploration of modern business intelligence and reporting applications and tools, big data infrastructure, and advanced analytics platforms (e.g., cloud-based data warehousing, the mobile delivery of reports, and insights)

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

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Why it's time for Robotic-BPO to break the mold of legacy F&A engagements

March 18, 2016 | Phil Fersht

Robotic BPOAmidst the relentless robo-hype in our current era of robotic rhetoric, it’s fast-emerging that many buyers and service providers are really struggling to work together to create workable Robotic Process Automation initiatives – in many cases, neither are willing to make the necessary investments, trade-offs or sacrifices to make his work.

So let’s start with those selfish service providers unwilling to share the robotic rewards...

Some service providers want to implement RPA on themselves and avoid passing on the savings to their buyers. Having come off a great many buyer discussions about their developing Robotic Process Automation (RPA) capabilities to augment their BPO engagement productivity, I have been shocked to hear a common thread from several buyers: their service providers only want to implement RPA on themselves and insist on charging their buyers the same legacy FTE rates.  Some service providers simply cannot stomach sharing gains with their buyers - some have, but the general experience, from the buyers, has been they are not really interested. And one of those service providers even boasts its own "cannibalization fund", while refusing to do anything different with several of its biggest engagements.  It's quite mind blowing how contrary some of these service providers can be, when it comes to what they claim they are doing versus the reality of what they really up to.

Yes, amidst this talk of the leading service providers breaking away from the old model and openly exploring ways to invest in initiatives to delink headcount from revenue, it would appear that some are simply playing lip service to the industry while, in reality, they are just looking at RPA as a vehicle to drive down their own costs and improve their margins, while maintaining their legacy FTE-pricing.  One buyer even mentioned to me that their service provider had the nerve to ask them if they could reduce their own staff delivery headcount using RPA, but keep charging them the same FTE rates.... no joke.

However, this isn’t just the fault of the service providers, many buyers are equally to blame for robotic restraint...

Buyers need to entrust their providers with more intimate data access. Most enterprise buyers, for security and control reasons, keep the providers at bay and force them to connect to their systems only using Citrix. This limits the effectiveness of RPA overall and encourages an “us versus them” mindset between buyer and provider, so it’s no surprise service providers do what they can on the other side of the “Citrix” firewall. Both parties cannot enjoy the full benefits of RPA and Intelligent Automation, without genuine collaborative engagements and a holistic security model that aligns the capabilities more effectively.

Greedy buyers need to stop treating RPA like legacy offshore BPO, demanding all the savings up front. I would also argue that many costs of RPA –greater testing, maintaining a fall-back agent pool and the incremental manner that robots are typically actually rolled out (versus a one time overall reduction in costs, as often asked by buyers) diminish the “greedy” aspect of this from many service providers. In addition, many buyers want royalties for advancing the automation initiatives of the

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Posted in: Business Process Outsourcing (BPO)Cognitive ComputingDesign Thinking

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Would a Big Blue Prism create an Intelligent Automation monster? #Crazymergerideas

March 15, 2016 | Phil Fersht

Big Blue PrismA momentous event occurred in the world of Robotic Process Automation (RPA) today, when its pioneering vendor, Blue Prism, became the first pureplay RPA vendor to announce officially  its intention to IPO.

Naturally, this sparked some feverish debate among the RPA cognerati over whether we may see one of the established services firms make a play to own their very own RPA platform, as opposed the the currently practice of every service provider partnering with every RPA product on the market.

My personal viewpoint is that IBM should take a serious look at Blue Prism, especially now RPA is officially a market-worthy capital asset. IBM is a huge software company and could seriously benefit from having an RPA offering it can build out as an enterprise platform, provided it makes sufficient investment and has leadership attention to develop the solution.

So let's look at the pros and cons:

Why IBM should probably buy Blue Prism

Watson alone is not going to do it for IBM in the Intelligent Automation space. IBM needs an RPA offering as the first building block along the Intelligent Automation Continuum (see below). Pushing RPA onto more clients will also open up the Watson conversation as a logical next step for many clients.

A Blue Prism + Watson platform could create a whole new ecosystem of possibilities. Adding Watson's cognitive capabilities to Blue Prism would create a real differentiator in the Intelligent Automation domain - you would end up with a whole new ecosystem of services and capabilities for enterprises across automation, predictive analytics and cognitive computing.

IBM needs to focus on becoming the leader in industry-centric Automation/Cognitive services. This is where IBM can really make its future mark in 2020-and-beyond enterprise services.  There are limitless possibilities with the potential of artificial intelligence in industries such as healthcare,

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

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Confusion-as-a-Service: The massive disconnect between vision and reality

March 04, 2016 | Phil Fersht

"Our clients come back from conferences demanding they need an Automation and a Digital strategy, with no idea what they are", said a senior partner in a Big 4 consultancy yesterday.

I have never known a time in the world of business when there is no much hype, confusion and unsettlement. Sadly, we are now living in a world where snippets of soundbites are so intensely shared across the variety media we use (I nearly said "omnichannel") that our industry is completely dominated by hype, as opposed to reality.

Data from our recent As-a-Service study just shows how alarming this disconnect is... the C-Suite is just living on a different planet from the teams below them trying to keep their businesses functioning:

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"Cannibalization" is merely the C-Suite waking up to the realization they can spend less with their service providers

Let's stop beating around the bush on this one - services providers (in most cases) make nice profit margins on their outsourcing deals. What's happening is that supply is now outsripping demand - there are too many competitors vying for a pool of enterprise clients who want to decrease their external spend.  The "demand" is coming from the next layer down of clients (the proverbial "mid market") which just don't have the size and resources to warrant the attention of the top tier providers.  What's more, the top tier of service providers is simply not structured to go after the mid-market - they can't afford to - and are stuck circling the same legacy enterprises like vultures trying to find new ways to squeeze money out of them.

Terms like "Digital transformation" are being used as the new levers to encourage gullible C-Suite

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

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The discussion thread that defines us? Traumatic 2016... Survive the race to the bottom!

January 03, 2016 | Phil Fersht

It's on… 2016 is the year that will separate the service dinosaurs from the savvy cannibalizers, as revenue growth slides towards negative territory and the onus shifts from selling more buttocks on seats to maintaining sexy profit margins.

Cutting to the chase, the technology and business services industry is becoming a very different place, and those of us failing to adapt, should start considering alternative career plans.  I hear massage therapy is in high demand these days…

Indian heritage majors... rev growth 2010-present

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So what will really happen as we embark on our negative revenue growth journey?  Here are five scenarios detailing how this will play out...

1) Big sucks - especially for providers... so get smaller and smarter.  You're still huge, clunky, siloed and political, constantly looking at "new" ways to reduce the workforce, while only being allowed to bid on big legacy deals, where the advisor is (still) squeezing everyone for price and your marketing team is still pretending you're delivering nextgen solutions to clients (which you really aren't).  Under all the swirl of nonsense, you're strategy is still really all about carting in even cheaper, younger kids from even cheaper, more remote places, and quietly ushering your burned out middle-management the exit. Meanwhile, as the allure of big provider life fades, many of the stars you want to keep are getting enticed by the thriving start up scene. Yes, people, being big and clunky is an increasingly crappy place to be, and many people reading this will be nodding violently that this is where they, quite frankly, are.

2) The mid-tier BPOs and up-and-coming As-a-Service providers have a great opportunity to steal the show. You either need to find sole source clients prepared to co-invest with you in their futures, or start to cater for new-gen deals that force you to build out your multitenant delivery

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Cognitive Computing

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