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The biggest threat to outsourcing’s future: Unfocused and unambitious Millennials

Social_CocaineI recently attended a graduation ceremony and was amazed at the number of students engrossed in their phones, occasionally looking up to applaud a graduate.

What’s happening here? Have we created a whole generation of socially-retarded morons preferring to network on Instagram and Snapchat than engage in physical dialog anymore?

Welcome to the entitled job market for the twenty-somethings where BPO doesn’t quite fit in…

What’s even more disturbing is the lackadaisical attitude displayed by so many of them when you ask them about their career plans and ambitions. Most seem pretty happy to sit around at home staring into their phones for a couple more years until their perfect job just happens to turn up on their doorstep.  If you haven’t gone down a specific career track such as medicine, law, finance or engineering, the future is an apparent wilderness of vagueness, deluded desires and uncertainty.  Doesn’t anyone have a plan to start somewhere and work their way up to a better place in the future?  Isn’t that what us mid-career folks did when we were starting out?

So let’s focus on our industry – the one of servicing enterprise IT and business operations effectively.  Whether we buy, sell or advise on business operations, if we don’t have succession plans to blood the next generation of talent, we’ll just become an industry of old farts with over-bloated salaries and a culture of preserving the past, not advancement into the future.

New data from our Talent and Trust in BPO study, where we spoke to 540 business stakeholders on the topic – and you can read the full report here – is pretty damning in this regard, with the vast majority of newbies in BPO seriously struggling to see a career path around BPO practices, despite being impressed with the potential of BPO as a real change agent within their businesses:

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In my view, failure to develop a Millennial Strategy will be the ultimate death-knell to a long fruitful future for business and IT services, and we may as well accept the reality that we will become mimicked into a piece of RPA software and erased into the ethernet of digital retirement Read More »

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The Four Foundations of the As-a-Service Economy, Part I: Getting your Outsourcing and Talent mix right

Moving at warp speed into the As-a-Service Economy

Moving at Warp Speed into the As-a-Service Economy?

Thanks to all of you who spent a fabulous day with us in Dallas for our first HfS Working Summit, dedicated purely to a joint unravelling of how we can find a way to the As-a-Service Economy.

What struck me was how quickly our industry has genuinely become focused on achieving business outcomes over the past few months – and this is being weaved into many of today’s new contracts and governance performance metrics.  The conversation has moved along quite markedly and I view this is a major leap forward for many industry stakeholders to change the way we manage service delivery that isn’t purely based on valueless metrics and squeezing out those last remnants of bloated labor cost.

However, it’s also clear that ambitious enterprise leadership teams are growing increasingly frustrated with their teams’ struggles to progress their capabilities, which will be the ultimate burning platform for many enterprises to make the shift and write off their legacy back office.  Here cometh the As-a-Service Economy, where stagnation and legacy will no longer be tolerated…

So what are we learning, at HfS, about the current readiness of enterprises to outsource and leverage As-a-Service delivery?

In short, we’re on a train hurtling towards something resembling “As-a-Service” and we need to make sure we stay on it:

Principles of As-a-Service5

 

At HfS, we are baking this unraveling of As-a-Service delivery into four distinct foundations: Read More »

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Implementing Portion Control at CSC

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.

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Less lipstick on the As-a-Service pig please…

Pig-lipstickThe data from our brand new “2015 As-a-Service Study“, where we canvassed the views and dynamics of 716 service buyers, providers and advisors, is fresh off the analytics tools, and we’re starting to unravel just how messed up our industry is, as we try and forge a path away from legacy outsourcing practices.

For starters, we asked 372 service provider executives to reveal what actions would significantly enhance their As-a-Service credentials.  Naturally, you would expect them to plump for some serious investments in new tools, platforms, talent etc.  But, sadly, that’s not quite the case…

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Most providers want the glitzy veneer more than the real deal

Yes, folks, most provider executives (45%) want the nice glossy magazine ads, website banners, white papers, airport billboards, webcasts etc., more than anything else.  Barely a quarter (24%) want to invest in a cognitive computing platform, a third in robotic process automation, with a similar number wanting to see their firms proactively cannibalizing their own legacy revenues to develop As-a-Service solutions for their clients.

However, providers do view upgrading their talent as a higher priority than investing in new technology, with 42% prioritzing the retraining of existing delivery teams with Design Thinking skills, and 40% bringing in consultative talent from outside to replace the long-outdated cheesy sales approach.  The services purists among us can appreciate that providers need to upscale their talent in order to take advantage of evolving technology solutions, analytics and automation offerings.

The Bottom-line:  Several providers are facing a slow death if they can’t make genuine changes to the old delivery model

In all honesty, I find this data both depressing and alarming. Most of our beloved providers want to talk a big game more than having the real chops to prove it.  It’s just like it was ten years ago when most providers were selling cheap offshore deals under the guise of helping clients with genuine “transformation”.  Now, it’s simply many providers selling a more mature offshore delivery scenario with much more sparkly and jingly bells and whistles to impress their clients.

My concern, today, is we’ve become so obsessed with thought-leadership and big ideas that we’re losing touch with reality. What’s more, it’s almost impossible to tell apart most of the service providers – they all have a digital story, an outcomes strategy and at least one guy wielding some form of RPA game plan.  We can’t continue in this vein for much longer – we’re all getting increasingly bored hearing the same old guff.  What we need is hearing from the clients who are actually investing with their providers.  We need to hear about the incremental steps and investments providers are making with their clients to start that long transition from legacy world to that far-off As-a-Service nirvana.  We need more reality and less fantasy.

So let’s all dial back the rhetoric and focus on the real investments in talent and technology that have to take place if we’re going to survive in tomorrow’s As-a-Service Economy

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Ready for the transition to As-a-Service?

Road-to-As-a-Service

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The industry’s first Workday services blueprint: A new breed of As-a-Service providers has disrupted HR delivery forever

Workday LogoJust a few short years after ADP introduced the basic fundamentals of Business-Process-as-a-Service to the corporate back office with its managed payroll offerings, Workday has rapidly introduced HR-as-a-Service to the corporate, world with its comprehensive HR platform suite, creating a whole new ecosystem of service providers eager to slake the Workday thirst of so many HR heads.

Mention the very words “Workday” to any HR executive today and their eyes light up – they need a Workday go-live on their resumé, just like CMOs need Salesforce experience and most CIOs, in the past, an SAP or Oracle roll-out. However, what’s truly disruptive about the new HR-as-a-Service environment that has sprung up practically overnight, is the emergence of a whole new breed of As-a-Service providers now feasting on the lunch of the traditional providers.  What once cost $50m for a complex technical implementation, can now be done for a fraction of the price, with the bulk of the investment being refocused on post-implementation support and HR transformation.

Being able to tap into consultative support that can help with organizational design, or workforce analytics, that is delivered via virtual on-tap models, in addition to the bread-and-butter fulfillment work, has changed the game forever – and for those only just waking up to this seachange, it is already too late.

So let’s take a look at how the Workday services environment is shaping up with the industry’s first ever Blueprint report into Workday services, with the help of HfS principal analyst and report co-author, Khalda de Souza:

Workday_Services_2015_Axis

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Khalda…. why do so  much research into Workday?

Enterprises are increasingly interested in SaaS applications, as they promise speed, cost effectiveness and simplicity. We’ve seen great and growing interest in SaaS for HR functionality over the last several years and momentum behind the Workday HCM product has been especially strong. Today there are medium and large global enterprises alike deploying Workday, mainly because of its functionality, attractive user interface and its common code instance. Customers are increasingly Read More »

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Robo-Britannia: Is Britain leading the As-a-Service revolution?

Robo-HRHThere are a lot of negative viewpoints on Britain’s capabilities to rebound as an economic superpower, after its heyday leading the world into the industrial revolution a very, very long time ago now. However, when it comes to driving out costs, privatisation and outsourcing of labor, and mercilessly adopting new tools and techniques to make themselves more efficient, their leading organizations are pretty damn good at jumping on the train.

And while the British government is the world’s biggest customer of offshore outsourcing (in fact its government has created a whole outsourcing economy of its own), Britain is also home to several of the upcoming automation software firms, such as Blue Prism, Thoughtonomy and IPSoft (a major presence there), the artificial intelligence firm Celaton, and several start-up robo boutiques, such as Genfour, Symphony and Virtual Operations.

Yes, people, when it comes to being first on the bandwagon for experimenting with solutions that can drive out cost and improve productivity, the UK – amazingly after all these years – still leads the way.  Our soon-to-be revealed As-a-Service study, which canvassed the viewpoints of 716 industry stakeholders, including 178 major enterprise service buyers, clearly shows how much more pervasive the adoption of both Robotic Process Automation (RPA) and analytics tools are among British enterprises, compared to enterprise service buyers in the other major global regions:

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The Bottom-line:  As-a-Service is changing the service industry dynamics forever, making it possible for smart businesses to get ahead of the disruption curve

As we delve into these unprecedented survey findings, it’s becoming abundantly clear that the evolution to As-a-Service will be a long and painful one for many buyers, providers and advisors, but the core fundamentals are about enterprises operating with more speed and predictability, a higher quality of processes and more value-based provider relationships, that can enable them to “plug-in” to the services experience.

Enterprises which have opened themselves up to a lot of global outsourcing relationships in recent years, for example many UK-led businesses, are clearly forging ahead more aggressively with the next wave of As-a-Service value, which is building the foundation for smarter automation, more realtime, meaningful analytics capabilities and a much more accessible, standardized cloud driven delivery infrastructure.  As-a-Service is a global phenomenon and the future Fortune 500 in 3-5 years’ time will be made of of many nimble As-a-Service driven firms, which are globally ubiquitous, where most services are sourced, and delivered via intelligent cloud models.  Yes, the Germans will probably still make great cars, and the American leading in life sciences, the Chinese in hardware manufacturing etc., but the true As-a-Service driven organization?  Now that can be anywhere…

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Chris cracks the Cap-ability code

Christopher Stancombe is Chief Executive Officer, BPO strategic business unit, Capgemini

Christopher Stancombe is Chief Executive Officer, BPO Division, Capgemini (Click for Bio)

On the week when Capgemini opened its wallet to make one of the largest services deals in history, with the $4 billion acquisition of IGATE, we thought it high time to focus on one business division that’s really been on fire the last couple of years – Business Process Outsourcing.

With Capgemini’s proven capabilities delivering global Finance & Accounting services (see our recent Progressive F&A Blueprint), one of the areas where the firm has needed to invest is in the industry sectors, so I, for one, am excited to see how Cap integrates IGATE’s insurance BPO delivery.

But the one aspect of BPO that keeps us grounded, is the simple fact that’s it still really about people and relationships – about talent and trust, which is why we went out and spoke to 540 business stakeholders on the topic – and you can read the report here.  So, without further ado, let’s talk to geologist-cum-Capgemini’s BPO CEO, Chris Stancombe, on how his division is faring under his leadership and how he views the emerging disruption in the market…

Phil Fersht (CEO, HfS): Good afternoon Chris. Great to have you back with HfS – I think it’s been at least a year since you took the reigns as the CEO of Capgemini’s BPO business. Maybe you could start by giving us a bit of an update on how that’s really fared. In the last year, we have seen some really strong performance from your firm, from our analyst vantage point. Maybe you could share a little bit with our audience how it’s evolved internally, how you have built out the team and where you feel you are today with the business.

Chris Stancombe (CEO Capgemini BPO): Thanks for that Phil. It’s good to be back. I have been here now for ten years. And as you kindly said it’s quite a success story really with the growth that we have experienced and the position that we have established for ourselves in the market. When I took over from Hubert Giraud, we had a plan that the two of us had worked on together. With Hubert moving on and also our CFO, Oliver Pfeil, taking on a new role there was quite a significant change at the top so the first thing I wanted to bring was stability.

When we moved into the three year plan, my most conscious thoughts were how do we build on our strengths and go broader and deeper within our portfolio to bring more value to our clients. So clearly we have a number of areas of strengths. F&A is one of those, analytics is another as well as Read More »

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Never doubt an HfS merger prediction! Capgemini really is buying iGATE

Capgamini iGATE

As we correctly predicted last week, Capgemini and iGATE have announced their nuptials after finding many areas of common interest to consummate a long-term flourishing relationship.

In short, this merger further builds on our weekend argument that service providers need to blend the best parts of each other to address better the journey to the As-a-Service Economy, and not solely the really disruptive stuff that could be 5-10 years out on the horizon.  OK.. there’s more chance of me being the next Gartner CEO than IBM actually buying TCS, but we wanted to set out the argument why a bout of lovely big service provider marriages could provide an ideal distraction from the spate of depressing quarterly results, while allowing for them to co-develop their investments in areas of real value.

At HfS, we believe this acquisition makes a lot of sense for Capgemini to address several holes in its global service portfolio, shoring up its India presence and adding some serious pep to its US clientele (and brand), financial services capabilities and analytics depth.

What Capgemini Gets From iGATE

North American Clients

iGATE derives over 70% of its revenues from North America with anchor clients such as General Electric and RBC and particular strength in financial services and manufacturing. By contrast, Read More »

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#Crazymergerideas – Why IBM should acquire TCS

As-a-Service Graphic

When IBM announces a 12th consecutive quarterly decline, when practically every other service provider is trying to mask layoffs and austerity plans as strategic moves to delink revenue from headcount, you have to hold your hands up and admit the services industry is going through a secular transition that is going to get considerably more painful, before it eventually reemerges in the As-a-Service Economy.

Service providers need to address the transition years we are currently in, to reach the As-a-Service promised land

With consolidation of the current environment clearly very much on the minds of senior leaders in the service providers (e.g. Capgemini and iGATE widely mooted to be close to tying the knot), it’s pretty clear that we’re distracting ourselves from entering the As-a-Service world anywhere as quickly as we should be. There are simply too many operations and IT careers tied to legacy ERP and business processes, and too many providers making too much money feeding off this legacy, for the change to happen at anything bar a snail’s pace.  There simply is no burning platform for change – no Millennium Bug, no Dot.com bust, no Great Recession in the offing (perish the thought…).

It is my belief that we’re at the start of a ten-year cycle of interim change as operational human labor is gradually replaced by automated platforms that are in turn augmented by analytical and creative talent and cognitive computing.  The smart service providers are those which are going to address this ten-year phase of transition head-on and not get distracted by maximizing their position in the old model.

So let’s pick on the biggest service provider of all in the middle of this industry transition, IBM, to assess its options:

The cool stuff is all great, but the dollars are relatively small

While IBM is making many right moves investing for the long-term, it’s this long drawn out medium-term period that’s the real problem. Watson, Apple and Twitter alliances, its new $3bn IoT unit, Softlayer etc.  all create As-a-Service mojo, but it’s going to take years to get to the revenue levels that can replace the traditional services dollars that are in gradual decline.

IBM needs to work with clients at the pace they are comfortable with, if it wants to maintain its wallet-share with them.  The problem with the current business is that prices are getting squeezed and second tier providers are getting desperate and practically buying deals with the hope of making them profitable down the road and keeping their investors happy.

The solution:  Buy TCS and create a dominant giant to crush its competitors

It’s simple – make a move on the largest, most aggressive and dynamic of the Indian-heritage providers:  TCS.   Together, they would crush the market across all aspects of delivery, all verticals, Read More »

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Accenture and Cognizant battle it out in Population Health’s Winner’s Circle… with EXL knocking

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 Read More »

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Tom Reuner rolls up to rev up our research

HfS new Managing Director, Tom Reuner with wife Ayesha

Meet Tom Reuner, HfS new Managing Director for IT Outsourcing Research, with wife Ayesha

As you all undoubtedly know by now, at HfS we are relentlessly dragging the world of IT and business operations kicking and screaming into the As-a-Service Economy.  So what better than to convince the only other analyst with real chops in autonomics and cognitive computing (who wasn’t at HfS) to come and become part of our bandwagon of belligerence?

Not only does the arrival of Tom Reuner corner the analyst market in autonomics and cognitive computing for us, he also brings real depth in IT services and adds to our growing European analyst presence.  He’s also a terrific bloke with great taste in premier league football teams.

So, without further ado, let’s hear a bit more about the latest excellent addition to the HfS analyst ranks…

Welcome to HfS, Tom.  What on earth went wrong in your life to have ended up doing this?  Tell us a bit about your background…

Cheers Phil, I am really excited to join HfS. And well, unlike my lovely wife I hadn’t learned anything proper. Back in the days I was expecting to become a lecturer in history and as part of that I planned to stay for half a year in London to do research for my PhD. But as so often in life things Read More »

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Why most advisors are just so Un-as-a-Service

UaaS EconomyIf I told you that only 13% of sourcing advisors have plans to invest in cognitive computing and 15% in Robotic Process Automation skills, you wouldn’t believe me, right?

We’re just about to close off our new study that probes into the ideals of the As-a-Service Economy where 716 industry stakeholders reveal how they are faring with their As-a-Service readiness, intentions and aspirations.  And one major services market influencer, the local friendly sourcing advisor, is seriously missing the mark when it comes to sawing off some of the old, to embrace the new.  Simply put, at least half of today’s advisors are pretty much, well… Un-as-a-Service.  Let’s take a closer look:

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Advisors have been schooled on driving out their clients’ costs, as opposed to adding real expertise and value. Encouragingly, 49% of advisors are getting sucked into As-a-Service because their clients are demanding it, but the sad fact of life is that two-thirds of them still think it’s still really all about driving out cost.  As-a-Service is all about providers delivering and buyers receiving Read More »

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The 2015 Enterprise Mobility Services Blueprint: IBM, Cognizant, Accenture, TCS, Infosys and Capgemini in the Winner’s Circle

The world of enterprise mobility continues to unravel at a breathless clip, with a host of application, infrastructure and niche specialist service providers claiming to deliver (much) more than a bunch of Blackberries, mobile servers and basic help-desk support to enterprise clients.

Enterprise mobility has quickly propelled into the corporate mainstream, with almost every consumer-facing, employee-engaging, supply-chain-enabling process requiring critical mobility interfaces and integration points to avoid becoming obsolete. And with so many processes now going completely native to the mobile world, from membership programs for healthcare insurance schemes, through to governance productivity tools, through to tax management applications etc., the mobility prowess, from a business transformation aspect, is the Holy Grail the winning service providers are seeking to stay ahead of this fast-commoditizing digital marketplace.

So, without further ado, let’s focus on how the 2015 enterprise mobility services environment is shaping up with HfS’ digital research guru, Ned May’s, new release of the 2015 Enterprise Mobility Blueprint:

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Hi Ned, what has changed in the enterprise services mobility market over the last year?

I am pretty amazed at how fast the market has shifted. In the year that’s passed since my last Blueprint, we now see a majority of enterprises undertaking efforts to integrate their mobility portfolios deeper into legacy systems. Few enterprises were at that stage a year ago when it was the build out of point solutions that dominated the activity sourced from service providers in mobility. Even just a year ago, efforts to integrate these apps were largely aspirational but now it is Read More »

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HfS and NASSCOM sharing the love @ the 2015 BPM Strategy Summit

HfS+NASSCOMWe’re proud to announce our role as exclusive research and content development partner for NASSCOM’s Business Process Management Summit 2015, to be held in Bangalore, on September 24th-25th.

We’ve been closely working with NASSCOM in designing this year’s theme: “The Emerging Digital Economy: Thrive, Survive or Die”, developing session topics, identifying speakers, supporting content for key speeches and producing a definitive white paper on the Digital theme, in addition to supporting the marketing and promotion of the event. This year, I will be hauling myself back to India along with Charles Sutherland to deliver a keynote presentation on the Emerging Digital Economy and its impact on the BPM industry, along with helping organize the other sessions and content themes.

At the NASSCOM BPM summit, participants will debate the emergence of digitally empowered business process services in horizontal areas such as finance, procurement, supply chain and HR, in addition to industry domain specialties, such as financial services, healthcare, life sciences, retail and manufacturing.

Key Digital Themes being discussed at the 2015 NASSCOM BPM Strategy Summit 2015:

  • Embracing Design Thinking: Generating creative solutions by understanding the business context
  • Smartly Automating: Blending of automation, analytics, and talent
  • Intelligently Managing Data: Applying analytics models and techniques to achieve meaningful business insights
  • Writing-off Legacy: Use of platform-based services to make many tech investments redundant
  • Being Brokers of capability: Governance staff managing towards business-driven outcomes
  • Entrepreneurial Intelligent Engagements: Striving for relationships based on expertise, gain-sharing and outcomes

For members of the HfS global knowledge community interested in speaking at the summit, please email bpmsummit@nasscom.in .

We hope to see you in Bangalore!

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IBM, Accenture, Cognizant, Wipro, TCS and Infosys make the 2015 Enterprise Analytics Services Winners Circle

I recall back in late 2010 when an eager young research firm practiced what it preached and scoured talented resources on the Indian subcontinent to support our research reports.  One such resource was a bright young woman called Reetika Joshi, who worked with us to produce the industry’s first ever assessment on “Offshore Analytics Providers.”

Fast-forward four years and said analyst has now survived her first Boston winter (she did nearly perish) to produce a fine assessment on where today’s  far more sophisticated analytics services market is today headed:

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Hi Reetika, how do you see the enterprise analytics services market evolving?

The 2015 HfS Enterprise Analytics Services Blueprint Report is a refresh on our initial assessment in November 2013. Compared to 2013, the market is seeing an overwhelming change – an increased focus on applying business context and doing more meaningful analysis, rather than the isolated procurement of analytics tools and technologies. This is impacting the stakeholder dynamic, the decision-making process and day-to-day relationships with service providers for services buyers. It also spells great news for service providers with analytics consulting backgrounds and/or domain Read More »

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HfS officially exits the sourcing advisor business (even though we were never in it in the first place)

No, I am not an advisor...

No, I am not an advisor…

After our dramatic fake announcement that we had entered the sourcing advisory business on 1st April, our phones have been ringing off the hook from service providers desperate to get included in our deal pipeline (no joke).

While, in hindsight, HfS& would likely have been a roaring success disrupting the legacy sourcing advisory business, we fundamentally have no desire to be an advisor shop. Sorry. Back to the research grindstone…

And for all of you who sent congratulatory notes, please do read beyond the first paragraph next time we announce something. Especially on April 1st =)

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HfS announces its entry into the outsourcing advisory market

HfS_Logo_2_OrangeHfS Research, the leading analyst firm covering outsourcing strategies, today launched HfS Advisory (abbreviated to “HfS&”) and announced its exit from the research analyst business.  The firm, once lauded for disrupting the research industry by giving its research away for free, finally conceded there is actually no money to me made from a business model where there the core product does not have an associated price tag.

As part of its relaunch as HfS&, the firm announced the following new advisory service lines, designed to disrupt today’s outsourcing advisory marketplace:

1) FTE-Lite .  HfS& will disrupt the traditional outsourcing transaction marketplace by offering a Read More »

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Service providers blame their clients, advisors and analysts for their As-a-Service failure

We couldn’t resist sharing a quick snippet from our new “Eight Ideas of the As-a-Service Economy” study that reveals some rather alarming news:  service providers are blaming everyone bar themselves for obstructing their progress towards As-a-Service.

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At fault number 1 – the Clients. Top of the lists are their clients themselves, with 78% of service provider executives (from a pool of 238) citing their unwillingness to venture into risk/gainshare models with them. Considering most enterprise clients we talk to complain that their provider refuses to budge from their predictable, profitable FTE delivery model, baffles me here.

At fault number 2 – the Advisors. Next up are sourcing advisors – those lovely folk who bring them to the table and horsetrade to get deals done.  Apparently, they are not selling the evolving model to enterprise clients and are just not very capable.  We are starting to see more As-a-Service traits in some mid-tier deals, where there is less wiggle-room to make huge profits on wage arbitrage, and these frequently are too small to warrant several hundred grand being spent on an advisor.  The advisor model is still built for the old world of big scale deals, not the new world where analytical and creative skills, technology enablement and automation are the watchwords.

At fault number 3 – the Analysts. And third on the list appears to be a pot shot at analysts, where providers claim a “Lack of quality research to educate the industry on the benefits of As-a-Service models”.  We apologise and promise to write more coherently… and this time make sure you read it, Mr and Mrs provider executive, because we know how much time you spend trawling your way through analyst reports these days….

Least at fault – the Providers themselves. And very last on the list (no sh*t) is the fact that they are struggling with their own inhouse talent to shift the model to As-a-Service.  Well that’s great news, as I thought it might be a bit of a struggle for providers to retrain their developers and project managers to think analytically, help clients with design thinking, laying out an automation roadmap etc.  Now we can all rest easy with the knowledge that the providers will save the day, while the rest of us clients, advisors and analysts can all go away and die somewhere on the scrap heap of legacy labor models, SLAs and dull irrelevant research.

Bottom-line:  We’re all pretty much at fault for perpetuating the old models.  This is a collective learning effort across all stakeholders to adopt the ideals of As-a-Service

As we reach the end of the runway with the legacy model (which still has a way to go for many enterprises) there needs to be a much better effort collectively to discuss the actual measures enterprises need to adopt to take better advantage of the technology enablers and hone our skills accordingly.  Many advisors are clearly still making a good living advising on the old model, otherwise many would cease to exist, while analysts clearly do a poor educating the market on real world examples of how to make the shift (and persist on an old world model themselves to engage with clients).  Meanwhile, if service providers are as good as they think they are, they need to find better ways to convince their clients to trust them more, to work with the on joint projects of discovery etc.  Lee rhetoric, more dialog among the key stakeholders and better real-world education is the only real formula for success here.

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How to avoid being a terrible virtual worker

One growing talent issue I have increasingly become concerned about, is observing people whose career development quickly nosedives when they isolate themselves in a work-at-home model.

I personally believe being able to work effectively within a virtual environment warrants a completely different skillset and attitude, if you want to advance your career and keep developing your potential.

So here’s my guide to being an effective virtual worker in six easy steps:

1. Use voice and video as much as you can.  Staring into a computer relentlessly typing emails for 16 hours a day with little voice contact with your clients/co-workers makes anyone miserable – and anti-social over time.  Make considerable effort to talk to people as much as you can.  Use video for conference calls too – it forces everyone to pay attention (and get dressed) and have a much more personal series of dialogs.

2. Sort out your voice technology.  There’s nothing worse than communicating with people who have a crappy wifi connection, with whom you can never get a clear skype/google conversation without the echos, constant disconnections etc.  If your wifi’s garbage, you can get great quality Skype (for example) over 4g LTE these days on your iPad or iPhone.  Oh, and while we’re at it, stop slurping coffee and eating into your microphone on calls, it’s disgusting…

3. Stop using email for every bloody communication.  Email is a tool for passing along information and instructions. Learn how to be cordial, get your message across and use voice as much as possible to communicate.  Never use email for heated conversations that have emotion (especially negative emotion).

4. Buy an exercise machine and work out everyday.  Without fail.  You’re sitting on your bum most the day burning zero calories and likely visiting the fridge on an hourly basis.  You have to exercise, or you will balloon and die.  Buy yourself an elliptical trainer, exercise bike or treadmill, use it everyday, and after a while you’ll get so fit you can even take calls while you get even fitter.  I would recommend going to a gym, but who has two hours to carve out when you’re an overworked virtual nutcase glued to your machine all day and night?

5. Invest more time getting out to see your clients, your peers and do more networking.  When you see noone bar your family, pets and the plumber on a daily basis, the only way to stay motivated and continue to develop yourself is to go to more conferences, make more effort to visit your clients / peers etc.  You learn the most from your collective discussions with others, from having discreet conversations.  Everyone’s fed up with social-media – meeting people and being social is back in vogue.  Really – get out of the house!

6. Stop complaining about how stressed and overworked you are.  Boohoo – just suck it up, we’re all over-bloody-worked.  It’s all in the mind – so get healthy, get social again, start enjoying your work and you’ll forget about stress and go with the flow.  Just go with the flow, it’s the only way to survive these days.

There endeth my lesson for the day.  Go back to your weekend…

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