HfS launches new unDigital magazine

First Issue Available on Newsstands Now!

Initial Printing of Groundbreaking New Magazine to be Mailed to 200,000 Subscribers

The firm that coined the As-a-Service Economy is now disrupting the analyst industry even further. HfS Research, The Services Research Company, today announced it has launched its most disruptive research offering so far: HfS unDigital Magazine.

This revolutionary publication will challenge the rhetoric and hype currently being stirred up in the IT and BPO services industry, building on the success of the radical blog “Horses for Sources,” which will soon be replaced by this cutting-edge print publication. HfS is now taking disruption to an entirely new level…by revitalizing the hallowed glossy magazine. The firm believes people are so tired of relentless social media that bringing back printed words and pictures will change the research game once more.

In announcing the latest development, Phil Fersht, HfS Founder and Industry Analyst, noted that this is not the first time the firm has shaken up the marketplace.

“In 2007, when I created the Horses for Sources blog, people thought I was crazy,” said Fersht. “Who would read that? Then, when I started HfS Research a few years later, people became truly concerned for my sanity. Soon after, we created the industry’s best summits. Now, with well over a million hits on our sites every year, we have decided to shake things up once again. How can people still doubt us now?”

HfS unDigital Magazine will be available on newsstands around the globe and via subscription to 200,000 existing clients and community members:

unDigital

The first issue of the magazine is printed by Heidelberger Druckmaschinen AG, in Heidelberg (Baden-Württemberg), Germany, on 80lb glossy paper stock, features the following stories:

  • Phil Fersht tells all with his Undisrupted Undigital Experience
  • Dumb and Bummer: Why Artificial Intelligence is all hype
  • Hot News from December 2015Outcome-based pricing is worth the paper it is written on
  • A Labor Arbitrage love-fest with Agony Uncle Charles
  • Design Stinking: HfS sifts through the cheese to get to the real deal
  • De-automating your Back Office the Reuner way

“This is a huge undertaking,” Fersht added. “But we know that a lot of our community has grown tired of staring at pixels and yearn for the feel of the printed page once again. Disruption has moved full circle and now we’re disrupting back in print. Our clients tell us they miss being able to sit on the loo and flick through pages of their favorite analysts waxing lyrical. Those days are now back… so take your seat and enjoy!”

And of course… this was an: Read More »

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Supply Chain Management clears the path to As-a-Service with Accenture, Havi, OnProcess, arvato and Brightstar leading

HfS supply chain process expert (among other things), Charles Sutherland has finally done what no other analyst has done before him… define and develop the first comprehensive view of Supply Chain Management As-a-Service….

Supply Chain Management BPO has, since its inception, been an enigma in the overall BPO industry. Combining both large-scale transactional order management contracts along with focused domain and analytic skill-enabled forecasting engagements, it has been both an outlier in the portfolio of many large service providers as well as a lucrative market for specialist pure play providers. Clients often considered these engagements as something more like prolonged consulting deals than actual outsourcing contracts, while service providers wondered where best to house the delivery teams inside the organization as a result.

Now, more than a decade into operations—and with total market ACV closing in on $2 billion—HfS is seeing that many of the characteristics of Supply Chain Management BPO that were once considered causes of its uniqueness (Design Thinking, Collaborative Engagement, Accessible and Actionable Data) are now traits sought for all BPO engagements as the market moves toward As-a-Service solutions.

Once ahead of its time, Supply Chain Management is now very much integral to the realization of As-a-Service and so it was time for HfS to look again at this market following our inaugural Blueprint in 2014 to describe how it is developing and which service providers are leading the way. So let’s get Charles’ thoughts on this market and its leaders…

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Charles, how would you describe the current state of Supply Chain Management As-a-Service?

We describe this market as one that is fast growing but still tiny against the backdrop of the entire BPO marketplace. But we believe the potential opportunity is massive—at potentially $300 billion-plus. So penetration today of this addressable market is less than 1% and we expect to see the current enthusiasm for participation by service providers to continue and only grow more in the next few years.

We covered 14 different service providers in this Blueprint (with 3 service providers covered for the first time) and what is striking, versus say the Finance & Accounting BPO marketplace, is how Read More »

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

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

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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.

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Why it’s time for Robotic-BPO to break the mold of legacy F&A engagements

Robotic BPOAmidst the relentless robo-hype in our current era of robotic rhetoric, it’s fast-emerging that many buyers and service providers are really struggling to work together to create workable Robotic Process Automation initiatives – in many cases, neither are willing to make the necessary investments, trade-offs or sacrifices to make his work.

So let’s start with those selfish service providers unwilling to share the robotic rewards…

Some service providers want to implement RPA on themselves and avoid passing on the savings to their buyers. Having come off a great many buyer discussions about their developing Robotic Process Automation (RPA) capabilities to augment their BPO engagement productivity, I have been shocked to hear a common thread from several buyers: their service providers only want to implement RPA on themselves and insist on charging their buyers the same legacy FTE rates.  Some service providers simply cannot stomach sharing gains with their buyers – some have, but the general experience, from the buyers, has been they are not really interested. And one of those service providers even boasts its own “cannibalization fund”, while refusing to do anything different with several of its biggest engagements.  It’s quite mind blowing how contrary some of these service providers can be, when it comes to what they claim they are doing versus the reality of what they really up to.

Yes, amidst this talk of the leading service providers breaking away from the old model and openly exploring ways to invest in initiatives to delink headcount from revenue, it would appear that some are simply playing lip service to the industry while, in reality, they are just looking at RPA as a vehicle to drive down their own costs and improve their margins, while maintaining their legacy FTE-pricing.  One buyer even mentioned to me that their service provider had the nerve to ask them if they could reduce their own staff delivery headcount using RPA, but keep charging them the same FTE rates…. no joke.

However, this isn’t just the fault of the service providers, many buyers are equally to blame for robotic restraint…

Buyers need to entrust their providers with more intimate data access. Most enterprise buyers, for security and control reasons, keep the providers at bay and force them to connect to their systems only using Citrix. This limits the effectiveness of RPA overall and encourages an “us versus them” mindset between buyer and provider, so it’s no surprise service providers do what they can on the other side of the “Citrix” firewall. Both parties cannot enjoy the full benefits of RPA and Intelligent Automation, without genuine collaborative engagements and a holistic security model that aligns the capabilities more effectively.

Greedy buyers need to stop treating RPA like legacy offshore BPO, demanding all the savings up front. I would also argue that many costs of RPA –greater testing, maintaining a fall-back agent pool and the incremental manner that robots are typically actually rolled out (versus a one time overall reduction in costs, as often asked by buyers) diminish the “greedy” aspect of this from many service providers. In addition, many buyers want royalties for advancing the automation initiatives of the Read More »

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Would a Big Blue Prism create an Intelligent Automation monster? #Crazymergerideas

Big Blue PrismA momentous event occurred in the world of Robotic Process Automation (RPA) today, when its pioneering vendor, Blue Prism, became the first pureplay RPA vendor to announce officially  its intention to IPO.

Naturally, this sparked some feverish debate among the RPA cognerati over whether we may see one of the established services firms make a play to own their very own RPA platform, as opposed the the currently practice of every service provider partnering with every RPA product on the market.

My personal viewpoint is that IBM should take a serious look at Blue Prism, especially now RPA is officially a market-worthy capital asset. IBM is a huge software company and could seriously benefit from having an RPA offering it can build out as an enterprise platform, provided it makes sufficient investment and has leadership attention to develop the solution.

So let’s look at the pros and cons:

Why IBM should probably buy Blue Prism

Watson alone is not going to do it for IBM in the Intelligent Automation space. IBM needs an RPA offering as the first building block along the Intelligent Automation Continuum (see below). Pushing RPA onto more clients will also open up the Watson conversation as a logical next step for many clients.

A Blue Prism + Watson platform could create a whole new ecosystem of possibilities. Adding Watson’s cognitive capabilities to Blue Prism would create a real differentiator in the Intelligent Automation domain – you would end up with a whole new ecosystem of services and capabilities for enterprises across automation, predictive analytics and cognitive computing.

IBM needs to focus on becoming the leader in industry-centric Automation/Cognitive services. This is where IBM can really make its future mark in 2020-and-beyond enterprise services.  There are limitless possibilities with the potential of artificial intelligence in industries such as healthcare, Read More »

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

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:

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

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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.  
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Confusion-as-a-Service: The massive disconnect between vision and reality

“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:

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“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 »

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Now for some proper #DesignThinking

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

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The mysterious HfS business model… revealed

SuperHfSMan

So how do you build a business where not a lot of people understand how you make money and many assume you’re a not-for-profit that provides the industry with free research?

The answer is simple: flood the market with a daily dose of insight and have everyone feel part of what you are doing.  Make your information company open, social and collaborative; make everyone feel like they are a “client”, even when they are not. Make people want to spend time reading your stuff and also invite them to weigh in with their views and opinions.

Do you feel like a member of Facebook, or LinkedIn, even though you probably never gave them a dime?  Of course you do – and you probably don’t think too much about their business models… However, because we do get asked about ours’ frequently, we thought is high time to reveal the secret source of our business model… in all its naked glory:

  1. We make money selling premium research.

In case you haven’t noticed, we are producing over 30 awesome flagship Blueprint reports this year, each encapsulating an entire market, profiling and rating all the key service providers and defining the process value chain, the key trends and dynamics. That’s the core 30 services markets Read More »

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There’s a whole generation with a new explanation… in San Francisco

Get ready! We’re Coming to San Francisco!

sf-email-headerYou may have heard we just announced our first-ever Working Summit for Buyers in San Francisco at the St. Regis Hotel May 26th – 27th. The summit’s theme—Vision 2020 for Intelligent Operations—brings together the IT and business process services industry’s brightest minds and stakeholders. Seats are limited and available at no cost to well-qualified senior buyers. So, if you are interested, pencil us in your calendar and apply for a seat now.

Unvarnished Discussion Sessions

  • The State of the As-a-Service Economy and Intelligent Operations: Is It Here?
  • Evolution or Revolution: What does the Future really Look Like?
  • The Current State of Intelligent Automation – what’s working and what’s not for buyers
  • Service Automation: Robots and the Future of Work
  • The Digitization of the Finance Function
  • Co-inventing for the As-a-Service Economy
  • Hiring for As-a-Service Skills and the Role HR must play in the As-a-Service Economy
  • The evolution of Omni-Channel for CRM: What is it really, and does is exist?
  • Analytics and Big Data in the As-a-Service Economy… what’s really coming next?
  • Getting ahead of Trust and Security in the As-a-Service Economy
  • The C-Suite Advisor – Buyer Face/Off
  • The C-Suite Service Provider Shootout

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Featured Discussion Leaders

  • Mary Lacity, Curators’ Professor, University of Missouri
  • Lee Coulter, CEO Shared Services, Ascension Health
  • Allison Sagraves, Chief Data Officer, M&T Bank
  • Phil Fersht, CEO HfS Research
  • Carol Britton, CPO, Bank of New York Mellon
  • Charlie Aird, Global Leader, PwC Shared Services and Outsourcing advisory
  • Chip Wagner, CEO Alsbridge
  • Dave Brown, Global Lead, Shared Service & Outsourcing Advisory at KPMG
  • Dennis Howlett, Co-Founder, Diginomica
  • Dilip Vellodi, Chairman and CEO, Sutherland Global Services
  • Jay Desai, Senior Director, Enterprise Outsourcing, AbbVie
  • Gajen Kandiah, Executive Vice President and General Manager Cognizant Digital Works and Business Process Services
  • Harry Wallaesa, CEO, The W Group
  • Jesus Mantas, Head of Global Business Services, IBM
  • Joe Frampus, Partner, Avasant
  • Kevin McDonald, VP of BPO Governance, The E.W. Scripps Company
  • Leslie Willcocks, Professor, Workforce and Globalization, London School of Economics
  • Mark Voytek, Partner, Ernst and Young
  • Michael Corcoran, Head of Strategy, Accenture Operations
  • Pradip Khemani, Head of Global Business Services, Blue Shield of California
  • Scott Furlong, Partner, ISG
  • Shantanu Ghosh, SVP & Global Head – CFO & Transformation Services, Genpact
  • Srinidhi Rao, Head – Service Management and Process Excellence, Juniper Networks
  • Tony Filippone, Senior Vice President, Outsourcing Management, AXIS Capital
  • Robin Rasmussen, Partner, HR SSOA KPMG
  • Vishal Sikka, CEO Infosys
  • Wesley Bryan, Co-Founder, OneSource Virtual

Apply-Now-Button-EmailHfS Analysts

As usual, we’ll have a full contingent of HfS analysts on site to present the latest data and stimulate discussions. In San Francisco, we’ll have Phil Fersht, Charles Sutherland, Barbra McGann, Fred McClimans, Melissa O’Brien and Reetika Joshi.

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The jobs aren’t “going away” – they’ve already pretty much gone

Robo factoryOh boy – the amount of fantastical claims we are being spoon-fed by some experts in the market today is just getting a bit absurd:

The beauty of all these wild predictions is that few will remember who made them in a couple of years – or the fact they were made at all.  That’s the beauty of being an analyst/visionary in today’s market – you can make up any old fantastical crap and never be held accountable for it in the future.  (Not that I have ever been guilty of said behaviour…)

Most of these claims are moot, as most of these “jobs” have already been automated away, or moved offshore

Let’s dissect this quickly:

Rote B2B sales and customer service jobs have already gone away.  Forrester’s jaw-dropping prediction is a simple case of analysts predicting things that have already happened to create some headline noise. Most B2B transactional customer service tasks have already been automated, or at least offshored.  I’m sorry, but I can barely think of a single instance where I have spoken to a customer service rep, except some instances when I needed to make a large purchase, or I had an inquiry so unique, there was no way to automate it. And even when I do need to talk to someone, I often get scripted responses from some rep in India or the Philippines – my recent complaint Read More »

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Mike Cook joins HfS to give HR a good roasting…

As many of you are no doubt aware, we’ve been on a rapid expansion at HfS these past few months, and one of our exciting new analyst additions is Mike Cook, who joins us from UK-based researcher NelsonHall, to cover the fastest-growing As-a-Service market… HR-as-a-Service (check out his recent work…).

So we managed to find some time to drag Mike away from his favorite pastime of skeet shooting to learn a little more about him, his research focus and why (on earth) he joined HfS…

Welcome, Mike! Can you share a little about your background and why you have chosen research as your career path?

Mike Cook is the Human Resource Services Research Director at HfS Research, shaping the firm’s research in a newly formed ”HR-as-a-Service” domain that helps enterprises re-imagine their HR and workforce management capabilities in the emerging As-a-Service Economy. (click for bio)

Hi Phil! Sure; in my younger days I was convinced a career in cycling was going to be my future, although after racing for a few smaller pro teams I soon realized my ambitions might outweigh my physical capabilities! So university called and I started off with a Bachelor of Commerce degree majoring in Economics and Econometrics at the University of Johannesburg, I then followed this up with a post grad degree in International Trade and Development Economics at the same institution. Following this I traveled extensively before starting as a junior analyst and working my way up to principal analyst at a BPO focused analyst firm. Following this I then moved into a buyer advisory role within this same company, assisting sourcing and procurement professionals in making key outsourcing decisions.

I think my inherent curiosity is what was the deciding factor in me pursuing a career in analysis. I can remember as a youngster, taking apart all of my toys to find out exactly how they work, (unfortunately not many of them got put back together!) and that’s exactly what I enjoy about this career. We get to pick apart an industry from a number of angles and really get to understand it, but then also relay these ideas and principles to our clients (Oh! Have I mentioned how much I enjoy talking??).

Welcome to HfS, Mike… so why did you choose to join HfS? And why now?

Well, Phil, HfS stands out from competing analyst firms in a number of ways, but primarily it is the company’s willingness to challenge the norm and stick its head above the parapet. This forward thinking approach is what really attracted me to join HfS. Also I believe that I am now at the right stage of my career to join HfS, in that I can now really contribute to the company’s vision and talent pool, given my prior experience on both the buyer and service provider side of the outsourcing equation. Read More »

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The Nasscom 2016 report: The era of unsettlement is upon us

Last week, the HfS Leadership team went all in on the 2016 NASSCOM Industry Leadership Forum (ILF) in Mumbai with 4 presentations and panels, dozens of meetings with industry leaders from providers and clients, multiple media interviews and local delivery center visits thrown in for good measure.  So myself and Charles Sutherland jotted down our thoughts as we fought off the lurking jet-lag demons on our way back to the States yesterday…

Troubled CatMost refreshing this time around, has been the toning down of the rhetoric and hype, as most of the providers tackle the winds of change threatening a worrying decline of growth in the global services industry.

From this year’s proceedings, we have taken to heart the near ubiquitous discussion of “Digital enablement and Disruption” to construct a sentiment analysis of where the stakeholders in ILF currently find themselves in their transition from a world of legacy operations to delivering what HfS has termed the “As-a-Service Economy”.

From enthused to unsettled, service providers sober up as reality sets in

In a word, we felt the sentiment of the ILF sessions in 2016 is best described as the global IT services industry being “unsettled”.   Last year, we saw the pervasive adoption of “Digital” as the driver of future growth for every service provider at ILF, with a different definition in every instance as to what it meant. The ILF sentiment in 2015 was “enthusiastic” in a word.   Over the the course of the past year, we believe most of the service providers are awakening to the degree of change necessary to move to a new model that delivers Digital value based on technical capable offerings, untethered to huge incremental headcount investments.

While seeing some early client successes, most smart service providers are also questioning whether each is as differentiated in their capability and messaging as they believed a year ago. It is becoming abundantly clear, as the industry wakes up to the reality of what is really needed to evolve to the As-a-Service economy, that the differentiation points between service providers has become blurred – and being able to demonstrate true distinctiveness and differentiation from each other has become a very difficult task.

If in 2015, every service provider at ILF wanted to brief HfS on the excellence of their Digital offerings, in 2016 the conversations were inquiries, seeking to test the efficacy of a service provider’s messaging against that of competitors and against buyer requirements and expectations.

Six Factors causing this “State of Unsettlement”

So what has caused this change to a State of Unsettlement, amongst the service provider community in just 12 months? In short, we believe it has been a mix of six factor factors, namely:

  1. A rise in global economic uncertainty, exacerbated by the instability of the Brazilian, Russian and Chinese economies, record oil price lows, a volatile and unpredictable stock market globally and the creeping threat of deflation;
  2. The rise of new “born in the cloud” competitors, such as: Aason, Bluewolf, Equiniti and OneSource Virtual which can offer significantly more cost effective solutions and different delivery models;
  3. The increasingly viral adoption of Intelligent Automation in service delivery;
  4. A recognition that Digital is not just a supplemental technology spend to the legacy business, but a fundamental change in how the underlying business model operates (for clients and for service providers);
  5. The increased relevance and disruptive competitiveness of nimble mid-sized service providers (IT and business process) that can scale up and down aggressively to win deals, based on client needs and their own intentions to invest in the future model, such as EXL, Genpact, Hexaware and Virtusa;
  6. Increasing engagement with mid-market clients, which frequently have requirements as complex as the high-end, but cannot spend anything like the same amounts. Many of these clients will form the FORTUNE 500 of the future and most traditional service providers are simply not equipped to take these clients on profitably with their current delivery models.

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And it’s all going to kick off at #Nasscom_ILF today!

We’re excited to speak at four sessions at Nasscom in Mumbai, culminating with our State of Industry session at 11.15 this morning. Come along and discuss what’s really going to hit us down the road…

No more legacy as HfS reels off the insights at the 2016 Nasscom India Leadership Forum

No more legacy as HfS reels off the insights at the 2016 Nasscom India Leadership Forum

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

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 Read More »

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What type of employee are you?

Go on – dare you to be honest =)

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Derk Erbé energizes our energy coverage at HfS

Derk Erbé is Research Managing Director covering Digital Business Transformation and Energy, Utilities and Resource Industries for HfS (click for bio)

Derk Erbé is Research Managing Director covering Digital Business Transformation and Energy, Utilities and Resource Industries for HfS (click for bio)

You may have noticed we’ve been doing a little expansion at HfS recently… And a big part of this was building out our European presence and adding more industries to our research coverage.

One industry we’ve always been passionate about is energy, and how that sector is dealing with huge regulatory impact post the Paris Climate Agreement – where both energy providers need to rip up their operating models to survive, and enterprise energy consumers can take advantage of new sources of renewable energy to gain a competitive edge.

So who better than to hire an Amsterdam-based energy expert with a penchant for technology and research? So without further ado, let’s introduce you to our new Managing Director for Research, Derk Erbé…

Welcome, Derk! Can you share a little about your background and why you have chosen research as your career path?  

Thanks for the warm welcome. I’m very excited about joining HfS. I feel research, and the role of the industry analyst brings everything I experienced in my career and found to be critical together. I have been in the trenches of technology implementations, business transformations and operating Read More »

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Why 77% of the C-Suite really want provider-replacement therapy

TherapyRevisiting our As-a-Service study from late last year (click here to download your copy if you somehow missed it), we realized 10% of the respondents were in C-level positions.  So we thought it worth comparing the C-Suite’s views on what would significantly impact their firm’s As-a-Service journey, when compared to their middle-management layer:

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Provider-replacement therapy popular among three-quarters of the C-Suite.  A staggering 77% of leadership want to see their legacy service providers replaced, compared with only 27% of their middle management. This is because corporate leaders have reaped the labor arbitrage fruits from legacy outsourcing, and know their middle layer is getting fat-and-happy meeting their SLAs and performance metrics. Nothing will change without forcing the issue – the incumbent provider has Read More »

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How Design Thinking could really help your brand strategy

This company may have its digital transformation strategy spot-on, but it could definitely benefit from some Design Thinking to maximize its brand opportunities and re-imagine its customer experience:

Digital Ham 

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IBM, Infosys, Accenture and Cognizant lead in the industry’s first Design Thinking Blueprint

Unprecedented pressure being applied to operations leaders to drive more value, without huge investment increases, is forging a dire need for the vast majority of service buyers and their providers to change how they work together.  The legacy model of “we pay, and you deliver for cheap and we don’t really want you getting involved with helping us do things better” has to change.  Otherwise, enterprise leadership will find new service partners and operations heads to take them forward.

The simple fact that 80% of services buyers simply aren’t engaging with their providers in a collaborative way, as revealed at last month’s buyers working summit in Harvard, emphasizes how critical it is to infuse the methods of Design Thinking into most of today’s flagging engagements:

only-four-fifths-collaborative

So we set out on a unique Blueprint research exercise, led by myself (Phil Fersht) and supported by HfS analyst Hema Santosh, where we interviewed a host of enterprise clients on their experiences with Design Thinking exercises with their service providers, using our new Blueprint Methodology to assess their innovation and execution performances.  Many of these clients were not the usual rose-tinted reference clients heavily wined and dined by the providers – they were from the HfS buyer community, who could give us an unvarnished, honest appraisal of their Design Thinking exploits.

We focused on those leading service providers, currently involved with Design Thinking as a key component of their As-a-Service delivery model.  While we acknowledge there are many design boutiques and consultancies out there, we specifically focused this Blueprint on the capabilities of the leading outsourcing service providers.

And this is how the emerging service provider landscape is taking shape:

Design Thinking Blueprint

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Phil, why is Design Thinking so relevant to the future of outsourcing?

Most of the outsourcing industry is still trying to figure out what’s possible beyond doing labor arbitrage really well – because that’s what we do. Sorry, but there I said it – we officially have an identity crisis.

We’re trying to forge a new identity for ourselves and re-imagine what our careers, our services and our platforms could be like if we only figured out how we can define, prioritize and realize business outcomes that are valuable, as opposed to merely keeping the same old factory ticking over at the lowest possible cost.

Digital technologies, robotics software, analytics tools, BPaaS platforms and artificial intelligence can only be effective and impactful once enterprises have re-designed their processes in a way that drives them towards their desired business outcomes. This has always been the case with (now legacy) ERP implementations, where thousands of clients have blown billions of dollars on enterprise software they simply never could mold effectively to their businesses. They weren’t finding problems to solve, they were creating new ones they didn’t need in the first place. 
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