As per usual, election year brings up the age-old argument about how to combat the “threat” of outsourcing. Isn’t now the time, in an election year, to stop the rhetoric and actually make commitments to growing local industries that have a direct impact?
The BPO industry has been going though an incredible evolution since the first major deals was cast, barely more than a decade ago, that it’s high time we took stock and take a good look at the phases – or generations – through which our industry has progressed. And there are few people who have lived and breathed these generational shifts more closely that Accenture’s BPO leader, Mike Salvino.
One of the highlights of 2011 was that great web-debate on the Future of BPO where 1,100 people across the globe dialed in to hear from our buy and sell families. Here were the highlights…
Some “horses” memories as a big chubby thank you for all of your support this year
Emptoris’ well-regarded user interface and strong brand recognition among the procurement crowd make it an idea mate for IBM’s technology-driven focus and market leading procurement BPO capability. While the integration of Sterling, DemandTec, and Emptoris will take some time to become “smarter commerce”, there will be some immediate upsides.
This is going to be a defining two-day working session for power-brokers of the outsourcing industry, where leading buyers of both ITO and BPO services will confront today’s critical issues impacting outsourcing, to establish a Blueprint for the industry in 2015. And this time, we will have a vendor/buyer face-off session where leaders from six of the major service providers will join the debate.
The outsourcing industry is a labor arbitrage bubble waiting to burst. And today’s smartest buyers and service providers are poised to fatally pop it and build a better future.
Our core mantra at HfS has always been to tackle the issues and complexities of global sourcing through the eyes of the buyer. One analyst who has spent nine years of his life doing just that, leading BPO governance for the $62 Billion healthcare payor, WellPoint, is our Governator himself, Tony Filippone. No single person in 2011 has written to – or talked with – more buyers about their governance challenges, and we are delighted to reveal to the world today his elevation to Executive Vice President of HfS’ research team.
TCS’ insurance services delivery subsidiary, Diligenta, has become wedded to in a 15-year, $2.2bn, 1900 employee life and pensions BPO engagement with the UK’s Friends Life. This represents the largest life and pensions BPO engagement by a considerable margin, eclipsing the $1.1bn Prudential contract awarded to Capita in 2007. We believe this move from TCS signals a sea-change in the industry with regards to the growth strategies and ambitions of the leading BPO providers.
In case you missed our “Kill the sales cheese” webcast, here’s the replay
With SAP’s move to “Cloudify” its software portfolio with the $3.4bn acquisition of the darling of HR software, SuccessFactors, we do not believe this is particularly good news for BPO service providers and services clients
InfosysBPO is now a major BPO contender in the global marketplace, having quietly gone about building its BPO business streams since its inception via the buyout of FAO provider Progeon, exactly five years’ ago and expects to reach the landmark of $500m in revenues this year. HfS has always been encouraged by the firm’s approach to developing both horizontal and vertical BPO services, and its focus on leveraging its IT heritage to augment its value proposition. Infy is by no means the biggest player in the BPO business nor does it want to be, but it has been able to establish itself as a smart and very respected player in the BPO business.
Capgemini has made a major move towards strengthening its position in the global F&A BPO market by today acquiring Vengroff Williams and Associates – and leaping to third in the market share spot for F&A globally
The ability to develop some best-in-class processes as “Business Platforms”, whether they focus on horizontal or vertical process clusters, is becoming a real differentiator in the market, as buyers seek more standardized solutions from their outsourcing engagements. The gauntlet being laid out to providers, with these Business Platforms, is their ability to support their clients’ transitions quickly and inexpensively. Simply selling “products” is not the concept of business platforms – it is the provider’s ability to work with their customers to facilitate and support the ultimate business outcomes of managing the processes associated with the Business Platform offering.
So how do you take shared services leaders and blend their expertise with the outsourcing governors? How do you go from fragmented service delivery with multiple points of contact, to a global governance model with a rationalized and centralized administration of third-party service providers?
CMOs have it tough today, whichever geography or market you look at. They’re stretching dollars for myriad activities in a function that’s undergoing major change. HfS Research’s Reetika Joshi discusses her new report “Marketing BPO Services: Solving the CMO’s Dilemma”
Governments are very capable of passing measures very quickly to restrict outsourcing if things get really bad – and they won’t have any choice if the 99% demand it. All outsourcing stakeholders – buyers, providers and advisors – need to focus, more than ever, on helping organizations approach outsourcing as one supporting component of a holistic solution.
The final installment of our recent discussion between HfS CEO Phil Fersht and Genpact’s new President and CEO, NV “Tiger” Tyagarajan, which delves into Tiger’s vision for the future of technology and BPO.
What is motivating buyers to outsource in this current climate? While eliminating cost is still is a huge fundamental, buyers are even more focused on achieving greater flexibility to scale their global operations as a prime motivating factor. Clearly, many executives are getting more experienced and skilled at driving an sourcing initiative, and are confident they can use the endeavor as a change agent to promote and implement much-needed change in their businesses.
Part II of Phil Fersht’s interview with Tiger Tyagarajan discussed the Genpact-specific opportunities and challenges that Tiger will be tackling in his new role as President and CEO
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