HfS Network

Category Archives: Buyers' Sourcing Best Practices

Can HPE + CSC dominate the digital underbelly, or has that ship sailed?

June 19, 2016 | Phil Fersht
Digital Underbelly

Just stare at that digital underbelly... there's a lot of work needed down there!

When the news broke last month about the second largest IT services merger of all time (after the 2008 HP-EDS whopper), the reaction among the services cognoscenti was - and has continued to be - one of confusion.  Big services mergers have just not done very well over the years. HP/EDS was a culture clash of immense proportions - and occurred right before the great recession, while other mergers, like Dell's acquisition of Perot, has resulted in the old Perot business being flipped over to NTT Data at a significant loss, and the Xerox/ACS merger has been shaken up and spun off and needs a major reinvention under new CEO Ashok Vemuri to get the company back on track.  Meanwhile, Capgemini and IGATE are still figuring out the best pieces of each other to mesh together, while not taking their eye off the ball, during the services industries' most cut-throat transition phase.

We heard HPE CEO, Meg Whitman, excitedly address the firm’s key clients and industry analysts at HP’s recent Discover event in Las Vegas, with an obsessive focus on “digital transformation” and the impending impact of “digital disruption”.  However, the real opportunity for HPE isn’t really in the design of digital business models for clients, it’s the enablement of them – it’s the provision of the agile “digital underbelly” to make digital change really happen for enterprises.

It's easy to be cynical about legacy IT services, but there's an awful lot of it to scrap over as enterprises are forced to fix their plumbing

Digesting the merger of these two struggling services giants has resulted in more rumination than most, considering the timing, sheer scale, transitional uncertain market and motivation. This is not a time when most traditional service providers are looking to add more global delivery scale to already large foundations – most are trying to slim down their delivery armies and sales forces,

Read More »

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

11

1 Comments

Robotic Process Automation has now penetrated a third of enterprises. Time to advance the conversation...

May 30, 2016 | Phil Fersht

RPA 1.0 is a done discussion. We know what it is, we know what it can do, we know how it can augment operations and help digitize broken processes.  To this end, our brand new study on Intelligent Operations, which canvassed the dynamics of 371 global enterprises, already shows a third of them are very active with RPA within their IT and finance and accounting processes:

Click to Enlarge

Click to Enlarge

RPA is here and being adopted at a fast clip

All the incessant RPA hype has done its job - it has literally dominated IT services and BPO conversations at every conference, provider strategy deck, advisor "new practice" press release and many buyer converations.  Indeed, we can even forgive those cheesy sales presentations from guys who suddenly claimed to have 20 years' experience as automation pioneers and talked about bot farms as if they were actually hand-raised on one...

The overwhelming conclusion is that a large chunk of enterprises are actively implementing it, and

Read More »

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

0 Comments

The back office is dead... long live OneOffice

May 13, 2016 | Phil Fersht

Intelligent OneOfficeIf someone called you "back office", I'd imagine you'd be a little bit offended.  It's probably not much worse than being called "useless", or "about to be automated out of existence"...

But I have good news for you back-office rebels - your time spent festering in the backend of yonder is finally coming to an end. Why?  Because the onset of digital and emerging automation solutions, coupled with the dire need to access meaningful data in real-time, is forcing the back and middle to support the customer experience needs of the front.

Our soon-to-be released study on achieving Intelligent Operations, which canvassed 371 major buyside enterprises, reveals two key dynamics that are unifying the front, middle and back offices:

  1. A "customer first mindset" is the leading business driver driving operations strategies.  Over half of upper management (51%) view their customers' experiences as impacting sourcing model change and strategy, which is placing the relevance and value of the back office in the spotlight.
  2. Three quarters of enterprises (75%) claim digital is having a radical impact. We can debate the meaning and relevance of digital forever, but the bottom line is that enterprise leaders need to (be seen) to have a digital strategy - and a support function which can facilitate these digital interactions and data needs. The old barriers where staff in the back office don't need to think and merely oversee operational process delivery, and those in the middle, which only venture a part of the way to aligning processes to customer needs, are fading away.

Consequently, we're evolving to an era where there is only "OneOffice" that matters anymore,

Read More »

Posted in: 2016 Intelligent Ops StudyAnalytics and Big DataBusiness Process Outsourcing (BPO)

11

1 Comments

Teleperformance, Concentrix and Sutherland lead the HfS Contact Center Operations Blueprint

May 03, 2016 | Phil Fersht

Our latest research into intelligent operations reveals a customer first strategy is the biggest driver for C-Suite leaders today, so where more important to focus than what's going on at the call center?  Has there ever been a more compelling time for call center service providers to step up and prove to their clients they can do a whole lot more than execute basic customer services?

Call center services have matured significantly in recent years, where you can find a plethora of providers doing a masterful job managing resources all over the world to deliver affordable voice services - but choosing between them has often never been so difficult.  However, with the need for so many enterprises to focus on the omnichannel customer experience to differentiate themselves, we're now in a critical bake-off between those call center providers delivering real customer value versus those still walking the treadmill of proving legacy voice services at ever-cheaper rates.  Plus, we still have many enterprise buyers who squeeze the life out of their providers on cost, and then expect the provider's A team to show up. Hence, there is a fine balance between the value clients need, the investments they are prepared to make to achieve this value, and the ability of smart providers to invest in As-a-Service models that take advantage of talent, digital technology and automation to deliver high value, without huge increases in headcount investments. Sounds easy, right?

In this vein, we're excited to announce the release of our first Contact Center Operations Blueprint, authored by HfS Research Director and contact center veteran, Melissa O’Brien, the only contact center analyst who's actually lived in the Philippines running a call center operation herself. Melissa's been exploring the cluttered competitive landscape, talking to a huge number of clients and leading providers, to help shed some light on the competitive landscape and where this market is truly heading:

Click to enlarge.

(Click to enlarge)

Melissa, please give us a flavor for the current state of the contact center operations market

This is a market undergoing a pretty dramatic transformation, in part due to increasing end-customer expectations - ambitious service providers are looking

Read More »

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies

0 Comments

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:

Click to Enlarge

Click to Enlarge

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:

Click to Enlarge

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

Read More »

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

8

1 Comments

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:

Click to Enlarge

Click to Enlarge

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)

Read More »

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

0 Comments

It's time we started Being As-a-Service

March 23, 2016 | Phil Fersht

Coming away from our Cambridge University buyers summit this week, I was pleasantly surprised by the increased level of sophistication and maturity many services buyers are now exhibiting.

Gone are the provider bitch-fests and endless ranting about failed promises and absent innovation (that they didn't pay for in the first place).  Instead, there was a desire to look at themselves, and really try to figure out how to broker change and run their outsourcing engagements as part of a broader business agenda, not some quirky siloed activity, forever tarnished by the word "outsourcing".

Adopting a mindset to change today (not tomorrow), is where everything must start

Yes, the conversation has turned to buyers accepting they need to change first, before heaping all the blame for their woes onto their service providers. This is why our Ideals of As-a-Service begin with a mandate for buyers and providers to change how they behave, how they can adopt a mindset to start writing off their legacy processes and technologies.  In short, it's time we focused on fixing our present - it's time we focused on Being As-a-Service:

Being-as-a-Service

Click to Enlarge

It's time we stopped talking about this scenario of "this was legacy and this is our future desired endstate"... we'll just remain stuck in this perpetual stranglehold of never getting anywhere. We'll always we a work-in-progress, a project that never finishes...

As someone joked during our Cambridge University summit this week "Cognitive computing is always going to be huge in the future"... so let's stop evangelizing about a nirvana we many never reach and, instead, start talking about what we need to do today. Let's stop panicking about the future, which is scaring so many people, and start focusing on what we can do today to be more effective.

Let's start talking about Being As-a-Service today... not tomorrow, or some far off point in the future, where we just hope this all becomes somebody else's nightmare...

Bottom-line: We have to narrow the chasm between hype and reality in order to be successful in the present

Our industry is beset by fear, like never before. People are scared - they know their skills and capabilities could quickly become obsolete in a world where the job openings increasingly demand creativity, analytical prowess and an ability to pivot across domains.  Suddenly, if you're not a Digital native who talks about endless disruption and the coming robo-geddon, you're a dinosaur... The gap between hype and reality has reached ridiculous proportions, and it's time we stopped thinking about the fantastical future and focus on what we can achieve today.

Successful sourcing executives have to become "brokers of capability" (which one buyer commented sounds like a rock band) where they can live in the present to drive a change mindset for the future. Most of the executives have been tasked with adopting Digital strategies (whatever those may be) and to come up with smart approaches to take advantage of automation technologies. But to get there, they need to change how their teams think, collaborate and operate.

It's a mindset change, it's a culture change. It's about bringing together the key stakeholders and delivery leads to address the As-a-Service Ideals today and stop looking at them as some far off nirvana someone else will take them to.  Simply put, most firms can't simply saw-off their legacy by disposing of some archaic ERP system and slamming in some SaaS product, or mimicking every defunct manual process into a piece of RPA software, or firing an entire department of ineffective process wonks. In fact, a lot of the legacy actually works and the ROI of binning it doesn't make financial sense.  Writing-off legacy is about starting the process of re-imagining a future without those legacy systems and processes that are holding back our businesses.

So the Ideals of As-a-Service can be initially addressed today by making the most of what we currently have, not simply waiting for the day budget magically appears from above to bring in teams of nose-ringed consultants to redesign our businesses.

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

4

1 Comments

Accenture, IBM, NGA and NTT Data lead in SuccessFactors services

March 12, 2016 | Phil Fersht

One of the most significant shifts towards As-a-Service delivery, in recent times, has been the investments in delivering comprehensive IT and business process services to support the enablement of leading SaaS platforms. With the gravy train of revenue the leading service providers have enjoyed from clunky on-premise ERP services, over the last 2+ decades, now slowing, the land-grab to manage the data, business transformation and integration elements of the leading SaaS platforms is hotter than ever.

To this end, we're very excited to unveil the industry's very first HfS Blueprint on SuccessFactors Services. With HfS Principal Analyst in SaaS services, Khalda De Souza, at the helm, this Blueprint builds on the direction we carved out in our Workday and Salesforce Blueprints in 2015.  So who better than Khalda to bring us up to date:

Click to Enlarge

Click to Enlarge

Khalda, why have we undertaken an HfS Blueprint on the SuccessFactors Services market?

Khalda-De-Souza_0

Blueprint author Khalda De Souza covers SaaS for HfS. (click for bio)

The SuccessFactors Blueprint continues our theme of looking at the markets for services around leading SaaS platforms, following on from our Workday and Salesforce Services Blueprints of the past 12 months. All of these markets are in high growth mode as enterprises seek flexible, user-friendly solutions to better manage their HR or CRM processes. The service providers included in our SuccessFactors Blueprint have experienced an average of 45% growth in SuccessFactors services last year and expect to see the same growth levels next year. Given that enterprises with SAP ERP in the back-office are more likely to select SuccessFactors for their cloud HR solution, the potential market is huge.

We also see snippets of the HfS Ideals of the As-a-Service Economy in the SuccessFactors service market. Clearly, enterprises are making the commitment to Write Off Legacy by moving to SuccessFactors and building new HR processes around the platform. Service providers are also driving Collaborative Engagements with flexible engagement methodologies and a key focus on desired business outcomes.

How does HfS define the SuccessFactors Services market?

HfS has defined a Value Chain of services that applies to all the SaaS platforms we cover. This includes the five components delivered by service providers to create value for enterprises: Plan, Implement, Manage, Operate and Optimize. For SuccessFactors services, Plan includes consulting services such as SuccessFactors business case development, compliance, security and governance services, as well as HR strategy and SuccessFactors-specific process and design services. Implement covers all the services and skills required for effective deployment, including but not limited to project management, testing, training and data migration services. Manage includes all ongoing integration and support services. Operate includes business processing outsourcing (BPO) services where they are delivered by the service provider around the enterprise's SuccessFactors environment. Finally, Optimize services are intended to improve the impact of SuccessFactors solutions and may include: the assessment of new SuccessFactors releases and solutions and on-going HR strategy alignment.  

Read More »

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

1

1 Comments

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:

Click to enlarge

Click to enlarge

"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

Read More »

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

13

1 Comments

Now for some proper #DesignThinking

March 03, 2016 | Phil Fersht

One of the cleverest (and most subtle) pieces of branding you will ever see... but just think of the Design Thinking the branding agency applied to come up with this:

George Nespresso

Posted in: Buyers' Sourcing Best PracticesContact Center and Omni-ChannelCRM and Marketing

0 Comments