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Category Archives: Healthcare and Outsourcing

How to Power Up and Re-think your Outsourcing Experience

June 27, 2016 | Barbra McGann

“They don’t bring us ideas.” 

“When we first outsourced, our service provider had the newest ideas, but now three years later, we have caught up to them and they’re treading water. So what’s next?”

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Posted in: Design ThinkingHealthcare and OutsourcingTalent in Sourcing

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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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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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Accenture, WNS, TCS and Cognizant make the first Pharma BPO Winner's Circle

February 03, 2016 | Phil Fersht

The pharma industry has been in a state of constant flux for a very long time. I can recall intense discussions at the turn of the Millennium, when we debated how the industry could survive the demise of the blockbuster drug model amidst the rise of generics... yes it still prevails.

The quirkiest issue I have observed with pharma, over the years, is that their leading firms like to outsource all the high-value work, such as contract manufacturing, drug discovery and R&D, while keeping the back office stuff inhouse, namely IT, HR and F&A. Pharma has been the weird stepchild of outsourcing - moving out the core, while retaining the non-core.

Fortunately, we have Barbra McGann, our Executive Vice President, Business Operations Research, to lead the charge in researching our first-ever Blueprint Report on Pharmaceuticals Industry-Specific BPO to delve into how our leading pharma are behaving, and how the service providers are performing to attend to their needs.

So let's ask Barbra to take few minutes to tell us about the report...

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Why produce this Blueprint report now, Barbra?

Barbra McGann is Executive Vice President, Business Operations Research (click for bio)

Barbra McGann is
Executive Vice President, Business Operations Research (click for bio)

There is some pretty spectacular and mind-boggling activity today in the pharmaceuticals industry, with the 3-D printing of pills, use of IBM Watson to cull through reams of data and help diagnose and personalize therapies, and edible devices that can transmit data and images. Behind the scenes, too, there are some significant changes underway that are also critical to helping this industry—enabling it to operate in a way that re-focuses on the patient, and helps pharmaceutical, biotechnology and medical technology companies shorten trial times and accelerate time to market, increase medical adherence, reduce risk, and manage compliance. This operations support, having taken shape over the past two decades as the Pharma BPO industry, is on its way now to the As-a-Service Economy—with service providers bringing together industry and operations experts, digital technology and new operating models to collaborate with willing service buyers.

Two of the significant ways that pharmaceuticals companies “touch” consumers are in the R&D process and through sales and marketing (aka commercial services). The pharma BPO market in this Blueprint covers clinical data management services, safety management services, regulatory affairs support, and related sales and marketing—all activities that we recognize are part of a highly regulated, complex market in the midst of global

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHealthcare and Outsourcing

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Three very handsome CEOs take on three advisors... only on HfS

January 20, 2016 | Phil Fersht

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

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The HfS 2016 Blueprint Research Agenda ...at your service

November 22, 2015 | Phil Fersht

2016 will mark our seventh year as an analyst firm and will be our most expansive as we tackle many emerging areas and industries.  Yes, we have come an awfully long way since the days people thought we "only covered BPO":

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The analyst industry's most ambitious 2016 research agenda tackles the continuum from legacy operations to the As-a-Service Enterprise across talent, technology and process

Earlier in 2014, we introduced to the world the concept of the As-a-Service Economy and how it is fundamentally impacting how business and IT services have to be fashioned, solutioned and delivered. Enterprise service buyers and providers have little choice but to evolve how they manage their services, or face extinction.

This means both parties need to make genuine investments in their underlying process architectures, reorient their talent capabilities and make some short-to-medium term sacrifices in their financial models to remain viable in the As-a-Service Economy. The same issues apply to sourcing advisors and analysts that face increasing irrelevance if they fail to adjust to the shifting demands of what it means to be an “As-a-Service Enterprise” in this new economy.

The legacy model of IT and business services sales and delivery that has dominated the industry for decades has rapidly become obsolete in our increasingly digital world, where speed, agility, flexibility and re-invention are no longer optional, but core characteristics for the success of any As-a-Service Enterprise.

For HfS, As-a-Service is about continuous progression, where enterprises do not pause at a status quo state. Instead they are continually exploring better ways to automate processes, access rapid meaningful data, and advance self-learning capabilities in a secure, trusted environment.

Our thinking about the Ideals of the As-a-Service Enterprise also has progressed this year. We now segment the ideals into Change Management Ideals and Solution Ideals that intermingle and build upon each other on the journey to the As-a-Service Enterprise. This journey will require significant change management, and through the course of 2015, we have seen encouraging examples of that throughout the industry, especially with efforts to simplify and automate increasingly unwieldy legacy operations and technology.

We could write and talk for hours about the unwillingness of enterprises to change the status quo to achieve better results. But ultimately it all boils down to the leadership of the enterprise having the appetite to go out and find a trusted partner that is motivated to share the risks of this transition within a financial model that works for all parties. Middle management will always resist anything that doesn’t pay them more, make them happier and more excited, or more motivated to perform. The only way forward to achieve genuine plug-and-play digital business solutions is for service providers and enterprises buyers to embrace real design thinking concepts and work together continuously in a much more collaborative and transparent fashion. This means they need to invest in talent, in training, in change fundamentals—and ultimately in solution fundamentals.

The Ideals of the As-a-Service Enterprise explained

In sharing our thinking on the Ideals of the As-a-Service Enterprise through countless client strategy sessions, industry-wide webinars and briefings this year, we have had the chance to test these Ideals with industry stakeholders to understand their relevance and practical applications.

What came out from these sessions was that the Ideals fell into two key themes: Change Management Ideals and Solution Ideals. In many cases enterprises approach these ideals sequentially.

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To move toward the As-a-Service Enterprise, it is beneficial to begin with a willingness to write off the legacy technology and operations and with that adopt Design Thinking as a way to look at business challenges and opportunities with a fresh perspective. Then an enterprise can orient governance and relationships toward building service solutions with the optimum capabilities,

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

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Cognizant, Accenture, EXL, Concentrix, HGS and HP are the top healthcare payer performers

September 10, 2015 | Phil Fersht

We made the conscious decision to invest in researching the healthcare and life sciences industries when we founded HfS, and one of those investments was to hire Barbra McGann to define the space, really sift through the core processes, issues and political dynamics to form a concise picture of who is genuinely innovating, who is effectively executing and aligning their capabilities to solving (and finding) problems for stressed healthcare clients.

To this end, we're proud to release our third healthcare-related flagship industry analysis: HfS Blueprint Report: Healthcare Payer Operations 2015, authored by Barbra McGann.

The Blueprint goes in-depth as the market transitions to As-a-Service, with a focus on the consumer/member/patient, and more flexible solutions. Barbra looks at the increasing use and integration of automation, analytics, and other digital technologies into offerings; examines the changes in demand for talent; and investigates the increasing need for more collaborative and value-based engagements.

So, we thought, who better than Barbra to tell us about it?

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Barbra, with all the market perspective published on healthcare today, what is unique about the HfS Healthcare Payer Operations Blueprint?

Phil, the only place that seems to be cutting back on reading material is the waiting room at the doctor’s office. (Am I the only one who misses Highlights?) Of course, that is just one change in the midst of many for waiting rooms, really, as technology and regulation are both expanding the opportunity for mobile health care. All that aside, healthcare organizations, service buyers and providers who are looking for a different perspective on trends and opportunities for increasing the value of sourcing in Health Care, here it is.

Many of the larger healthcare organizations have achieved the maximum potential benefits from legacy BPO by this point. In our recent “Ideals of the As-a-Service Economy” research, just about three out of four participants (72%) from this industry indicated that there was “no value left” in

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

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Glenn gives us Government-as-a-Service (GaaS)

September 08, 2015 | Phil Fersht
Glenn and Carol Davidson, the braintrusts of public sector operations

Glenn and Carol Davidson, the braintrust of public sector operations (Click to access our new Government-as-a-Service report)

Mention the words "outsourcing" and "public sector" in the same sentence and there is only one true lord and master of this realm. The one person who's genuinely devote his career to advising this industry... from British Telecom's ePeopleserve to Accenture, to founding and leading Equaterra Public Sector to its eventual acquisition by KPMG, and finally back to Accenture's Federal Services for one final hurrah to drag public sector operations out of the dark ages.  Meet Glenn Davidson, the man bringing a new type of GaaS to the services industry:  Government-as-a-Service.

The public sector – that oft overlooked and much-maligned part of our world that we can't live without – is squarely in our focus in the wake of our new research report "Government-As-a-Service: How the “Eight Ideals of As-a-Service” Help Federal Agencies Find New Value." The report sheds light on the impact of new technologies and operating models on business operations, and how this is impacting US Federal Agencies.  So we thought we'd catch up with Glenn to get the lowdown on why As-a-Service could get a real game-changer for public sector bodies seeking to escape from legacy technologies, obsolete processes and manually-intensive tasks that slow everything down and drive up our taxes...

Phil Fersht, CEO HfS Research: Glenn, I think we've known each other for, I don't know, about 12, 13 years now. I remember your career in services starting way before mine even in the early days of BPO … when Accenture created its e-peopleserve partnership with British Telecom in HRO. During your career, you’ve been a buyer of services, a provider, and, prior to re-joining Accenture, an advisor to those in the public sector thinking about their service delivery options. What strikes you as the most significant change in this industry today?

Glenn Davidson, Managing Director at Accenture Federal Services

Glenn Davidson, Managing Director at Accenture Federal Services

Glenn Davidson, Managing Director, Accenture Federal Services: The most significant industry change to me is the “As-a-Service” concept – the idea that we can provide the technology and the services to our clients on a transaction basis. Organizations no longer have to make massive upfront capital outlays for applications’ licenses, implementations, or ongoing operations and maintenance. They don’t have to hire more people to handle related transactions. They merely have to specify outcomes – what they want – and have providers deliver the services via the Cloud.

Phil: So when we look at what's going on in the public sector, to what extent is As-a-Service having an impact? Is it creating as significant a disruption as it is in the commercial sector?

Glenn: Phil, as you know, the US public sector is not a monolithic industry vertical. It’s made up of multiple sub-sectors – NGOs, multi-laterals, and governmental organizations at all levels.

Because many state governments have balanced budget requirements, they were among the first public sector entities to adopt alternative service delivery and sourcing models. Declining revenues bring a commensurate reduction in ongoing operating costs or increase in taxes or

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Posted in: 2015 As-a-Service StudyBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Implementing Portion Control at CSC

May 21, 2015 | Phil Fersht

gov-vs-entAfter all these years, CSC is finally separating out its public sector and commercial businesses.  So what does the HfS analyst team think of it all?

This week’s announcement that CSC would be dividing into two new entities, one for US Public Sector contracts and the other for Global Commercial contracts is a welcome and necessary step. CSC is a capable, trusted veteran of the services industry but it has been disappointing the market for some time now. Lacking the scale of IBM and HP, the brand of Accenture and the overhead structure of leading Indian heritage service providers it has been stuck in a poorly defined market position.

CEO Mike Lawrie has been pulling all the available operational levers since his arrival, by putting CSC back on a sounder financial footing, recruiting new executive talent, streamlining the offerings and building the partnerships required for success in the As-a-Service economy. However, those levers still are not enough and without access to new investment capital to build global sourcing and new technology resources as well as a further refinement of the strategy we wonder how CSC can compete in an increasingly globalized, industrialized and automated market.

csc-logoCSC’s large and challenging public sector contracts acted as a virtual “poison pill” limiting who could take a stake in the combined entity. Breaking this off will free the leadership to further shape the business than they have been able to do, so far.

CSC has carved itself up into a more manageable portion that will, in HfS’s view, make each entity an attractive investment target that, in turn, will maximize the return for current shareholders. The most likely candidate for the Global Commercial entity is a Japanese service provider and for the US Public Sector portion, we envision a PE firm.

If the goal of this action is to do more than just make it easier for each part to be acquired on its own, then we think CSC for the enterprise market needs to do the following:

  • Ignite the enterprise sales engine and refine operational processes to make it easier to contract with CSC for deals of all sizes
  • Invest in the brand so that it stands for something more in the As-a-Service Economy
  • Look at much larger acquisitions of their own if they want to create momentum and bring in new capabilities. Infochimps and ServiceMesh were strategically sound and brought new leadership into CSC but on their own they aren’t enough to move the entire organization.
  • Finally, HfS believes they should double down on emerging markets such as Digital and IOT in concert with the rebranding. There are no clear leaders yet in this space and there is still an opening for CSC but it needs rapid and decisive actions on the part of this slimmed down CSC Global Commercial to make this happen.

Posted in: Healthcare and OutsourcingHfSResearch.com HomepageIT Outsourcing / IT Services

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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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Cost is the New Black: The Overbearing Paradoxical C-Suite Imperative for 2015

January 18, 2015 | Phil Fersht

"C-Suite leaders want to drive out cost?  Tell us something new..."  OK, I will, because this time, this cost imperative is different, as the traditional means of driving out cost are reaching their limits.  60% of enterprise C-Suites are actively seeking to reduce their reliance on labor in their operations - but most are discovering they need to work smarter before they can work cheaper.

Enterprise leaders can't keep dipping into their operations functions to find more staff to shift into cheaper locations, or simply remove them - they are having to explore the emergence of As-a-Service solutions as that next lever to pull. The shift from labor to digital is happening, and this insatiable thirst to operate businesses as cost-effectively and flexibly as possible is the overwhelming driver behind this change.

Our new study, conducted with KPMG, shows an impetus on cost take-out coming from the C-Suite at an intensity never seen before:  90% now view cost reduction as an increasingly important-to-critical imperative for their operations.  In addition, a similar number are very focused on achieving cost-effective, flexible services to support their businesses.  And this desire to drive out cost is far more intense than other "value-based" imperatives for operations, such as addressing risk, analytics and talent:

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A paradoxial shift from human to digital has begun in earnest

This reemergence of cost as a key driver clearly indicates that executives believe significant inefficiencies remain in their current operations. It is, therefore, a priority for many executives to

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

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