Hewlett-Packard warms to bundled BPO/ITO

I spent some time at HP’s industry analyst event in Boston today, and was surprised to hear its leadership openly embracing BPO as one of the company’s strategic initiatives. Hp_4Having witnessed the firm quietly picking up several large – and complex – BPO deals over the last 3 years, I have been disappointed that CEO Mark Hurd has, until now, chosen to talk up other product lines of his company – i.e. its infrastructure and printer businesses, leaving its promising BPO service line to take a backseat.  Meanwhile, several of HP’s services competitors have been aggressively touting BPO as a major strategic arm for their businesses, despite the fact their BPO market presence is far inferior to that of HP’s.

I will be writing a lot more about bundled outsourcing solutions in the coming months, as I firmly believe the future of outsourcing lies in outsourcing vendors’ abilities to deliver hybrid business process and IT solutions in a managed services model – either under a single vendor, or under a well-governed combination of best-of-breed players.  Molson_2HP’s new outsourcing client, Molson Coors,is a bundled F&A, HR and IT engagement, which can make sense for many mid-size firms of a similar size, where having a single throat to choke, combined with the fact that their provider is transforming business processes in tandem with their corresponding business applications, can prove to be the right way to go.  However, I do emphasize the "can" here, as it’s really all about how effectively buyers govern their vendor relationships, and understanding what works best for them.  Again, it’s a question – in every instance – of Horses for Courses….

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2 Comments

  1. Alex Lyons
    Posted April 4, 2008 at 5:54 pm | Permalink

    Interesting post Phil. I agree the mid-market is where this “bundled” trend is going to be more prominent, where the levels of sophistication for IT management are lower. HP is a quality company, but I see their business as conflicted between a hardware supplier and a services firm. I guess their leadership is slowly recongnizing that their services capabilities are a now having a higher future growth potential,

    Alex Lyons

  2. John Robertson
    Posted April 5, 2008 at 9:56 am | Permalink

    Phil,

    Outsourcing engagements provide a platform to have the business needs drive the deployment of the technology – something which has failed in so many companies. These cross-tower outsourcing deals are helping to facilitate this more effectively,

    John

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