The C-Suite sourcing elite gathers in Chicago this Fall… let’s meet the providers

Yes folks, we’ve unveiled our agenda for the Eighth Blueprint Summit this November, which includes C-Suite executives from all the major service providers and sourcing advisory firms, in addition to a host of speakers from leading buy-side enterprises.  So let’s take a peak at the providers putting themselves in the firing line…


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Shamelessly Shamus: Why Europe is positioned to leapfrog the United States

This man founded WNS, built up IBM's Middle East and African Practice and today leads KPMG's European shared services and outsourcing advisory. He also cycles a lot...

Did you hear the one about the Mamil (middle aged man in lycra), who got off his bike, donned a suit and tie and joined a Big 4 consulting firm to wax lyrical about sourcing strategy?  And not only that, he is called Shamus Rae, the shameless sourcing strategist from Islington…

Shamus has been in the sourcing business since 1993, where he started off working with British Airways and overseeing a lot of outsourcing of IT services to India. This is when he came up with the idea to build a company to act as an offshore BPO for the airline industry, which became WNS. In addition, Shamus built IBM’s BPO Service from zero to 17,000 people in MEA (Middle East and Africa). In total, he’s had 21 years in the industry working for suppliers, including 13 years working with clients on multi-functioned shared services and outsourcing around the world. And all this in addition to his 120 km a week cycling addiction.

So let’s hear from KPMG’s European Partner for Operational Transformation and Advisory Leadership, Shamus Rae.

Phil Fersht, CEO, HfS Research: Good afternoon, Shamus, and thank you very much for taking the time with us today. Let’s cut to the chase – are US enterprises ahead of the British/Europeans with sourcing?

Shamus Rae, Partner at KPMG, London: Categorizing “Europe” as one homogeneous region is too generic. The United Kingdom, plus Switzerland, are as sophisticated as the United States, and sometimes more cutting edge. However, other European countries are in catch-up mode. We’ve been doing some work recently for a large French bank helping them build a global sourcing strategy for their finance function. I asked the CFO whether he wanted to simply do a strategy or whether he was actually going to execute. We get many requests for sourcing strategies for organisations, of which a high number are never executed, but take up a significant amount of time for my team. To be fair to this client, he said that this time the bank is going ahead, and in fairness to him, he’s now built an offshore center of excellence on a global basis. In a nutshell, Europe is in catch-up mode but they’re positioned to leapfrog the United States.

Phil: At our recent UK Blueprint event at HfS, attendees were more open with their issues than many of the Americans that we regularly deal with…

Shamus: The fashionable trend is talking about robots in shared services. The way these concepts are branded is a bit too much sometimes. If you talk about operational efficiency and the future of robotics with French and German colleagues or clients, it can be too American. The best approach is to engage different countries in the right way for them and ensure there are relevant discussions on all of these topics and trends that are emerging

Phil: Is the industry vastly different from five years ago when we were going into the recession? Has there been a lot of shift, or is it more noise?

Shamus: There’s been a massive shift. I’ve been through a few recessions but none quite as significant as 2008. Previously companies were mostly focusing on straightforward labor arbitrage Read More »

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The 2014 HfS Blueprint for SAP Services: who’s leading this $156 Billion market?

We can debate for days the impact SAP has on the ability of corporations to evolve into cloud-based “As-a-service” models and break from dysfunctional operations practices of the past, but one thing is clear – it’s very big business today, and its ecosystem continues to grow. Last year, we (conservatively) calculated the entire spending corporates made to maintain their SAP ecosystems, including inhouse staff, totaled $156 Billion – and this continues to increase at a 5% clip this year.

Yes, the amount of money being spent to keep this SAP ecosystem ticking along is greater that the annual GDPs of Morocco and Tunisia combined, and still provides the gravy train for a host of leading incumbent service providers to employ armies of sales executives, consultants, developers and help desk staff.  I actually recall one global enterprise dedicating an entire 50 story building to house all the people required for a major SAP rollout.

So let’s take a look at how the 2014 SAP Services HfS Blueprint has evolved since we released the 2013 Blueprint. The capabilities of providers of SAP Services are assessed along the whole SAP Services value chain, ranging from SAP strategy consulting through planning and implementation of an SAP solution to managing and optimizing existing SAP environments. Providers are also assessed in terms of coverage of the SAP Solution Categories namely business apps, analytics and BI, mobile, database and cloud.

For this HfS Blueprint, more than 850 data points were collected in Q1 and Q2 of 2014, covering 740 buyers, providers, and advisors/influencers of SAP Services. 31 providers of SAP Services were evaluated.

We asked our SAP Services expert, Dr. Thomas Mendel, to explain the evaluation results and market dynamics:

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Thomas, now that you have done this for the second time, what are the key changes from a market perspective for 2014-15?

Clients seem to be gravitating towards four key themes:

  1. One global SAP system, SAP consolidation & SAP upgrades. Many clients told HfS in 2013 that they are investing in the traditional way of trying to contain SAP costs—through consolidation. This trend is becoming a wave in 2014, with three of the top five investment areas falling into Read More »

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Welcome to the era of churn, where 50% of outsourcing contracts are at risk

We’ve been calling it for seven years now, and finally the chickens are coming home to roost for the outsourcing business:  clients are genuinely walking away from outsourcing relationships which provide mediocre value.

And, while some savvy providers are sensing the defections with a few notable re-bid wins of late, many still have their heads in the sand and hoping that once they win a new client, they’ll never leave them… oh how wrong they could be, as revealed by 312 enterprise buyers during our new State of Outsourcing study with KPMG:

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So, why are so many outsourcing relationships hitting the skids?

While we’re at pains to point out that relationships fail to deliver innovation where buyers lack the skills and capabilities, it’s also blindingly obvious that many providers are not coming to the table with the goods either:

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As you can see, it’s the same old story – in fact, buyer satisfaction has actually got worse over the last three years (see our 2011 State of Outsourcing results).  At least, back then, the large majority of enterprise clients enjoyed some degree of value from their relationship, while today, barely a third of buyers are seeing positive impact in terms of having improved strategic talent, better operational analytics support, better technologies, process transformation, automation… the list goes on.

The three main issues driving this churn problem – and how providers can address them more effectively

1) Buyers’ expectations – and impatience levels – have markedly increased.  The world of business operations has evolved at an almost alarming clip over the last five years – it’s as if the recovery from the worst recession in living memory has driven an impatience from business leaders to advance their capabilities and cost efficiencies much faster than the snail’s pace of yesteryear, when ERP rollouts were calculated by the decade and outsourcing evaluations took three years just to get a meeting together. Suddenly, buyers want to talk about where they expect to be in a couple of years, they’re asking questions about robotic automation and developing meaningful analytics capabilities, they’re asking how their provider can help them improve the way they do things – not merely manage their legacy processes at cheaper rates.

How providers need to respond: Prepare more diligently to manage your clients over the longer-term.  You know many are going to start asking for the “what’s next?”  quicker than you expected, so be prepared with a plan to deliver it.  Otherwise, they may no longer be your client when the re-bid process kicks in….

2) Most providers are still obsessing with the next deal, as opposed to cementing their existing relationships.  The real “tangible” money on the table for providers today, is when they win a brand new deal that adds to their win-rate, their Wall Street scripts and feeds their PR machine.  However, the cost of losing a client is far, far worse – the lost income, the ignominy, the negative perception from the industry.  As more deals begin to churn, the focus will shift to protecting the base, and not just pursing the new.

How providers need to respond:  Start replacing the old-school sales guys with the fat expense accounts and standard issue BMWs or Jags (you know the type) with operationally-savvy account managers who understand how operations need to be run.  While they may be less fun on the golf course, they’ll be much better-placed to develop your clients down the road. 

3) Buyers still think that innovation should be free, despite the fact they bought labor arbitrage.  If you didn’t pay for it, why should you get any? The perennial problem with outsourcing is the fact that low-cost still wins the day, with most sourcing advisors strong-arming providers to respond to RFPs in three weeks and allowing very little (if any) interaction time for providers to interact with their clients in advance to develop the right solution and get a stronger balance between delivery capability and desired outcomes.  In most these cases, the buyer and provider teams brokering the deal hand them off to the operations teams on both sides to manage, with little room for investment on either side to do anything more than basic delivery with low-end resources.

How providers need to respond: Invest in more direct communications and sales cycles with clients, and be less reliant on the advisor channel for your future business.  You need to develop relationships where you can spend more time with your clients to get this right, not second guess their needs and rely on some fudged math to get a deal done.


Welcome to the being-disrupted IT Outsourcing provider landscape

During the recent 2014 State of Outsourcing mega-study, conducted with the support of KPMG, we polled 312 enterprise outsourcing buyers and 347 outsourcing advisors on how they perceived each of the major 19 IT outsourcing services providers across our Execution and Innovation categories (click here for the full definitions).  And the ultimate results might not be quite what you expect:

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HfS’ Charles Sutherland, takes a deeper dive into these results, to understand better the reasons why these IT Outsourcers are being perceived this way:

With 50% of IT outsourcing deals at risk, how are IT Outsourcing providers being perceived?

The fact that Amazon and Google were the highest perceived ITO service providers on Innovation doesn’t come as a huge surprise, after all they are continually lauded for innovation in the press and don’t carry the breadth of “legacy” service offerings that the other ITO service providers do. However, they were also perceived as being at the top for Execution; in fact just 4 of the other 18 ITO service providers were perceived as well or better than they were for Execution capabilities.

What we also see, when we look at these results, is that the best Executors of IT Outsourcing Read More »


The powerhouses of global sourcing are meeting in Chicago this Fall… can you really afford not to be there?

Yes, the HfS Blueprint Sessions are coming back to North America for an eighth installment this November, at Chicago’s famous Drake Hotel, for the biggest naval-gaze yet at our analog present and digital future of global services.

This will be the most intimate and significant gathering yet of enterprise buy-side operations leaders, who will come face-to-face with the prominent thinkers and operators from the service provider and advisory world. This will be the time when the global services and outsourcing industry takes a collective long-hard look at itself to develop a future roadmap that is sustainable and value-driven; where operations executives can progress their careers, and challenge themselves to stay ahead of the changing needs and skills demanded by today’s ambitious enterprises.

We are on a mission to legitimize the industry of services professionals and break from the bad-old habits that have been plaguing us for far too long. We need you to be part of this with us – and have some fun in the process.

We’ll be tackling two key themes throughout the two days:

1) Resetting the Analog table-stakes of today: Where are today’s global services relationships succeeding and failing – and how can both buyers and providers work towards collectively realistic and meaningful expectations. What needs to change with the way buyers operate, providers deliver, and advisors advise?  Click here and hereto cogitate some of the key takeaways from Cambridge.

2) Envisioning the Digital stakes of tomorrow: Recent HfS research (click here) shows that enterprise buyers are falling short with their own “digital talent” and need real help from providers and advisors to develop the analytical and creative skills they need to take full advantage of plug-and-play “as-a-service” models, process automation and other digital solutions. How can buyers break from legacy on-premise ERP models and tired, stagnant FTE-based outsourcing relationships to lay the framework for their digital operations of the future?

Roy Barden, who has taken on the role of Head of Next Generation Shared Services, Cabinet Office, Her Majesty’s Government, said of his recent experience at the European HfS Blueprint Sessions, “I found the summit as one of  - if not the – most valuable events of its type I have attended”.  So if we’re good enough for the Queen’s service delivery, we should be good enough for yours :)

On behalf of the HfS team, we sincerely hope to meet many of you in Chicago.

Email us at for more information 

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ISG, Enlighta and KPMG make the Winner’s Circle for Governance Solutions

The act of “outsourcing” is really only that initial phase of activity where an organization takes a technology/business process or function and transfers the management responsibility over to a third party to ensure the smooth running of said process or operation.

Once the outsourced processes are running functionally with the third party, the “outsourcing” is now complete and those activities on the buy-side become “service governance” activities, and the third party provider is delivering a “service” or an “operation” to its client.

The clients’ needs now fit into a set of governance functions that are centered on managing the provider relationship(s); communicating with – and reporting to – the internal business units and various stakeholders; aggregating, analyzing and reporting the appropriate performance and process metrics; managing risk, compliance and issue escalations.  The more sophisticated and experienced the governance unit becomes, the more of a high value consultative entity the team can become for their organization as it seeks to centralize more operations under the governance function and align them to the business goals.

Simply put, an increasing number of mature enterprises governance teams are doing a lot more than managing vendors and periodically bashing them up to lower their rates – they are using advanced software platforms that help drive real value, continuous improvement and insight from the operations under their oversight. Most clients need realtime support to help them do this, and a small handful of ambitious advisors are developing managed governance services functions to support this need.

So we tasked our resident governance guru, Mike Beals, to venture in into the post-outsourcing transaction services industry to develop an HfS Blueprint Report that evaluates the managed services and software solutions available today that support clients managing their global shared services and outsourcing operations.  And here is how they shook out:

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So, Mike, what exactly are these Governance Solutions providers?

HfS Research defines Governance Solutions as the set of software applications or managed services focused on the management and optimization of shared services and outsourcing service delivery environments for business service functions.

These software applications and/or services are one level of management removed from Read More »

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Time for the HfS summer chillax movie… go on, you know you want to see it

Time to crack open a cold one, turn up the volume… and relax!


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How can we re-humanize the enterprise with two-thirds of staff becoming irrelevant, a similar number sick of their employers

Our new research reveals the majority of enterprises are failing to develop the talent they need to be effective in the Digital Economy.

Working environments have become increasingly difficult to manage and too many staff are simply not motivated to drive value to their firms. Simply put, the old way of managing staff in today’s self-entitled employment world is just no longer working, and there needs to be a significant mindset change from both employers and their staff to re-humanize the enterprise.  Otherwise, the ROI of hiring people will really become unattractive.

When I penned the now-infamous post “Welcome to the age of Digital cruelty, where two-thirds of operational jobs are under threat“, I was thinking about how enterprises can develop change programs to reorient staff to add more “Digital Value” to their organizations, and how they can leverage their partner relationships to help plug the Digital gaps and improve their existing talent potential.

Then HfS’ workforce and talent analyst, Christa Degnan Manning, shared her insights with her new Talent Acquisition Services Blueprint, which brought forward many of the issues surrounding talent retention and creating a work environment where (motivated) staff can develop their careers with their employers with a long-term goal in mind.

So we revisited our recent workforce study which covered 5,000 enterprise employees globally, to understand how motivated today’s talent is to stick with its current employers:

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Barely 4 out of 10 staff intend to stick with their employer for more than a couple of years

Ouch. Yes, people, the day of the long term company job is truly dying on the vine, where close to half of today’s workers are already looking for a new employer, while another third are readying to move on in another year or two. At the same time, as our recent State of Outsourcing Study fleshed out, two-thirds of enterprises feel their existing operations talent is falling well short in “Digital” areas such as analytical capability, being creative with new ideas, driving better automation etc.  So what does all this mean?

Poor talent leadership and unmotivated staff is a recipe for corporate failure

It’s becoming abundantly clear that many staff that stay with a single employer for too long are losing relevancy, when it comes to delivering new value and insights.  This is because most Read More »


Not worried about robots taking your job? This may change your mind…


Welcome to the age of Digital cruelty, where two-thirds of operational jobs are under threat

Has anyone noticed a much harsher mentality towards “labor” these days?  I can recall presenting at an HR Outsourcing conference in 2004 where there was a large gathering of anti-globalization protestors outside the hotel bearing placards and shouting obscenities are us through the window.

“Outsourcing” was a truly dirty word, and shame on any callous corporate executives for instigating the use of low cost foreign labor to substitute their own. Even poor old Mitt Romney was associated with evil “outsourcing” practices during his corporate days at Bain Capital, which hurt his (unsuccessful) attempt to become elected US president.

But all of a sudden, noone really seems to care about protecting jobs anymore – if people are just performing “transactional” tasks, for chrissakes automate them quickly, or buy a SaaS platform to get rid of the unnecessary waste. Where are the demonstrators outside of SAP headquarters in Waldorf, or Oracle HQ in Redwood Shores as these firms desperately try to convince the world they are cloudifying their products so their clients can start to do away with some of those unnecessary jobs on-premise software provides.

And what about that evil Workday, which only provides cloud-based software and enables its clients to do away with HR admin people making a living cobbling together archaic hire-to-retire processes? And where are the tears shed for all those lovely marketing admins who used to earn a crust managing customer databases… their jobs literally obliterated by  Not to mention those jovial IT maintenance people no longer needed to support crappy old email systems now their companies have started using Google apps or Office365…

Why did companies get such terrible rep for using lower cost overseas labor, but get a completely free PR pass when it comes to eliminating positions altogether through better technology?  At least they were providing jobs somewhere…

Job protectionism really has left the building 

In all seriousness, organizations are already democratizing their decisions to do IT outsourcing and BPO and, instead, looking at ways simply to erase labor altogether (see earlier). If you only outsource your labor to a provider, you’re likely going to be stuck with it for some considerable time – just at a lower price point. You’ve simply passed on your labor costs to someone else to manage for you – more efficiently and cheaply. And once it’s been outsourced, it’s not as easy to eliminate those passed-on labor costs – you have to convince your provider to replace the labor with better Read More »


The 2014 Talent Acquisition Services Blueprint: Which providers are delivering in today’s Digitally-challenged marketplace?

The world of work has become a very, very different place in just a few short years. Today’s workers need to adapt, develop and promote their skills to make themselves attractive in today’s Digital economy – and savvy employers need to try harder than ever to ensure they are finding staff who can do more than simply transact – they increasingly want people who can think, create, analyze, collaborate and sell; people who are embracing today’s technology to create value to their organization. Ambitious employers want talented workers which can align themselves with where they want their businesses to go, not with the legacy environment from where they are trying to evolve.

So what better strategy to adopt than hire a service provider to take care of this talent headache for you?  Surely it’s time to explain to your HR department that fishing through resumes on LinkedIn is unlikely going to net you the best people?  Surely it’s time to partner with a recruiting expert that can quickly understand your business, the talent you need, and how to go out into today’s people marketplace to find it?

So we tasked our global workforce and talent expert, Christa Degnan Manning, to assess those services providers helping organizations fill their open positions. The Talent Acquisition Services Blueprint is the second in a series of HfS Workforce Support Services Blueprints reexamining and redefining how organizations are creating operating models and solution portfolios to support today’s workforces. And here is how the providers today shake out, after Christa had put them through the HfS Blueprint mincer:

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So Christa, what exactly are Talent Acquisition Service providers and how do they fit in with the overall research you are doing?

A key principle of my Workforce Support Services research approach is that the traditional HR “hire to retire” process-driven solution approach is completely obsolete in the modern workplace. We can see from the Power to the People research few people are actually planning to stay with their current firm until retirement, and they are struggling to focus on the right work to stay engaged and be productive.

So companies have to think differently about how they identify the right workers, support them in their collaboration and development on a day to day basis, and recognize and reward them in more meaningful ways. The first Blueprint we did was on Rewards, Remuneration and Recognition services, earlier in 2014 which took a new look at global payroll, benefits, and employee contact Read More »

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What’s the real impact of Digital Technologies on Outsourcing and Shared Services?

Digital, Digital everywhere and no time to stop and think?

The business world is fundamentally shifting, but do our organizations really need to reinvent their operating models to stay ahead of the curve? Well worry your brain no longer, as we roll out the definitive research study on said topic to understand how today’s enterprise buyers, advisors and providers are approaching Digital Transformation, the current and future expected impact, the technology and business skills that we all need to get the most out of these technologies  - and how this changes the game for outsourcing, shared services and global business services strategies.

Please take 15 minutes of your time to complete the study and we will send you an executive report of the findings – and you can enter our prize draw for a Nexus 10:

As always, we sincerely appreciate your time investment to contribute to our research,

Digitally Yours,

The HfS Research team

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Eugene eulogizes about managed governance services

Eugene Kublanov, Managing Director for KPMG's Managed Governance Services

Over the years, we’ve had the opportunity to interview many of the key characters who have helped develop and shape the global services industry as we know it today.

And one gentleman who has quietly spent many, many hours in executive boardrooms all over the world helping craft some extremely complex – and sometimes very simple – global services management strategies, is the great bald eagle of sourcing himself, Eugene Kublanov.

And when Eugene hasn’t managed to get his family lost somewhere in the wilds of his adopted Arkansas or coaching , he is busily growing and developing one of the industries’ first platform-based managed governance services solutions at KPMG.  So, in a long overdue interview, we a delighted to have Eugene with us today to give us his own story…

Phil Fersht, CEO, HfS Research: Good afternoon, Eugene, and thank you very much for taking the time with us today. I think we first met seven or eight years ago, and I seem to remember that you were running a lot of outsourcing engagements and offshoring localization work. Can you talk a bit about your background and how you got into this business?

Eugene Kublanov, Managing Director, Shared Services and Outsourcing Advisory, KPMG: Sure, Phil. Thank you; I appreciate the opportunity to catch up. I started in the outsourcing advisory business in 1999, and that was really through a combination of circumstance and accident. I had spent the early part of my career at a consulting firm advising clients on market entry strategies for the former Soviet Union, living and working in Russia for a good bit of the ’90s.

Then in 1998, when things sort of came crashing down in that part of the world, I went back to Read More »

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Cognizant, Sitel and TCS rock the retail operations Winner’s Circle

No industry has been, is currently – and will continue to be – so wholly and fundamentally disrupted by impact of Digital Technologies than retail. And how can retailers survive and prosper in this post-Amazonization world where good ol’ firms like Radioshack and Brookstone are on life-support? How can they constantly stay ahead in an environment where the channels to market are forever blurring, the places to market and advertise are increasingly complex to understand and target, and the supply chain strains to respond to increasingly unpredictable demand signals from ecommerce and social media, in addition to traditional retail channels.  Staying ahead of the retail curve is harder than ever, but the rewards are also potentially much greater for those which uncover new market channels and make sense of the proliferation of available data.  In order to extract some sense from this intricate market, HfS analyst Reetika Joshi set about developing a Blueprint analysis on the space…

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Reetika, how did this market evolve and what is driving buyer interest in Retail Operations today?

The retail operations marketplace has evolved over the last decade in an opportunistic manner. Buyer demand has primarily addressed traditional IT services and horizontal BPO needs (including customer service, finance & accounting and human resources outsourcing). In the last five years, buyers and service providers have also started to venture into outsourcing retail-unique processes to a limited extent. These include service support for areas such as storefront operations, merchandizing and replenishment, ecommerce channel support (content, web development and Read More »

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Great to see Gartner adopting our HfS Blueprints!

We woke up this morning to a wonderful endorsement from the mighty Gartner for all the hard work the HfS team has been putting into developing our HfS Blueprints over the last couple of years, when we proudly launched our revolutionary HfS Blueprint crowdsourced methodology for evaluating business and IT service providers.  Yes indeed folks – Gartner has announced it is doing its own “Blueprints research”!

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Since we released the first Blueprint Report almost 18 months’ ago, the HfS Blueprint has become one of the industry’s best known and most popular methodologies for assessing provider capability and competitive market landscapes, with fourteen Blueprint reports now published (you can view all the HfS Blueprint highlights here).  Enterprise buyers have used the Blueprint Reports exhaustively as an assessment guide for their provider portfolio management, and many advisors rely on it to sanitize their own provider selection processes with their clients.

So does this mean Gartner will take onboard the key tenets of the HfS methodology, in addition to leveraging the broad community data we gather from 1000′s of industry constituents, when it develops its own “Blueprints”?  Let’s recap how we develop and execute on the HfS Blueprint methodology – and you can make up your own mind whether you think Gartner will deviate away from its Magic Quadrant process for assessing tech suppliers:

The Tenets and Objectives of the HfS Blueprint:

  • To assess services providers without being reliant on the arbitrary viewpoint of a single analyst;
  • Provide a credible methodology (see here) to gauge the performance of service providers against “real” innovation and execution capabilities;
  • Deliver a performance assessment of providers that apportions importance weightings of each innovation and execution category based on data from our annual State of Outsourcing Survey, conducted with the support of KPMG, covering 1200 enterprise buyers, influencers, advisors and provider executives each year;
  • Evaluate performance assessments of providers where exhaustive inputs from buyers and influencers shape the scoring (not solely a handful of rose-tinted client references that the providers served up themselves);
  • Enable a customizable assessment tool where enterprise buyers re-calibrate the weightings to assess their provider-fit based on their own unique needs.

Good luck Gartner – we can’t wait to see these new Blueprints of yours’ hit the market!

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Yes, it’s true… one in three Apple engineers is really Indian

We have heard a lot about Apple’s manufacturing outsourcing, where the firm has ~500,000 people subcontracted via Foxconn in China to crank out its iPhones, but very little about its IT outsourcing habits.

So… does Apple also leverage large scale IT outsourcing? If answer is yes, then what kind of IT outsourcing is done by Apple, and how it has been changing with time?

With these questions in mind, our ever-curious India-based analyst (note: also keen novelist now seemingly developing a penchant for investigative journalism), Pareekh Jain, started studying Apple’s IT outsourcing initiatives, and the results surprised us: Apple doesn’t outsource its core software technologies that go into its products, but it does outsource Enterprise Applications, Business Intelligence, ADM and other software initiatives to a combination of TCS, Infosys, Wipro, TechMahindra and Exilant (which we know of). Quite simply, as Apple is growing, so is the scope of its Indian-centric IT outsourcing to support it’s ever-increasing needs.

Another related aspect that cropped up during Pareekh’s research, is the increasing use of global engineering talent by Apple. According to our estimates, Apple leverages Indian engineering talent heavily as indicated from its sizable H1B and GreenCard applications.

We shared our research findings with Times Of India (The World’s largest English daily newspaper), which went as far as a story on this interesting little topic on today’s front page.

We’ll be sharing our research report on Apple’s outsourcing  strategy with our readers shortly….


The Digital Transformation Services Blueprint Primer is unveiled: Accenture, Cognizant, IBM, Infosys and TCS are the front runners

2014 has shaped up to be the year Digital Transformation took root as a unifying theme for IT and business services. What’s been exciting about Digital is much of the technology is already available, and it’s the digitization of business processes to enable plug-and-play services, more meaningful data and more seamless business models designed for mobile and cloud business environments.

Digital is not really about digitizing the way we’ve always done things, it’s about digitizing the way things need to be done to be more competitive and effective in the future. Digital is also about progressing our talent to operate with digital mindsets, by adopting analytical, creative approaches to help their enterprises progress from creaking, legacy business practices.

Nearly every major IT and business services provider is now using the term Digital in its go-to-market messaging today. But that level of activity and interest means the phrase has taken on an extraordinary breadth of meaning. So much so, perhaps, that one might argue it is becoming increasingly meaningless as a descriptor of activity.

HfS’ Ned May recently set out to clarify our definition of Digital Transformation and to explore the positioning of the leading IT and business services providers in the today. Rather than narrowly define and coral the topic, he cast a wide net with the goal of highlighting the full range of activity currently underway. His rationale for this approach being that Digital Transformation does not merely represent a new external market opportunity for service providers, but it is also a major catalyst to reconfigure the very markets in which they are operating.

To this end, we have published what we are calling a Blueprint Primer Report that evaluates this emerging Digital Transformation services landscape, the significant participants and their early positioning and achievements as they vie to take many of their clients into this digital dimension of service delivery and capability.  So how did the early front runners shake out?

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Ned, let’s start with what you mean by Digital Transformation. Can you elaborate?

Thanks, Phil. As you are aware, it can mean many things but in its purest sense we see Digital Transformation as the changes that must occur when a business moves away from a physical task. For example, the shifts that occur in underlying processes and infrastructure when one sells goods Read More »


Accenture makes significant As-a-Service play by bringing together Operations, Cloud and Infrastructure

It’s time to wake up and smell the roses, people. The services industry is going through its most seismic challenge as increasingly sophisticated enterprise clients are looking to reduce their reliance on labor-based services and clunking archaic on-premise technology.  While some services and consulting firms have their heads buried in the sand, clearly in denial that the services model has already entered into a fundamental shift, others are recognizing that they need to get ahead of this – and fast.

The services industry is going through a secular change and it will never be like it was, where trillions of dollars were spent maintaining dysfunctional systems and funding huge armies of staff to fumble their way through managing non-standard and often obsolete processes. Those days are fading fast and that pie is shrinking for providers and consultants still feeding off the legacy enterprise operations beast.

We ran a study earlier this year that explored the role of technology when enterprises outsource their business operations, and the findings from almost 200 major enterprises couldn’t be clearer: half of today’s enterprises are expecting to take the leap to enable their business operations with new technology tools and platforms in barely a two-year time-frame.

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Operations leaders don’t have the luxury of ten-year improvement programs anymore – corporate leadership expects to see tangible results in much shorter timeframes. You only have to look at the growing number of unemployed CIOs to understand what happens when functions become overly-operational and limited value and innovation is achieved.

It’s the same for CFOs, CPOs, supply chain heads and other function leaders – most are under a renewed pressure to continue driving out costs, while delivering ongoing improvements to data quality and having greater alignment with front-office activities.  The old “we need to fix our ERP first” excuse just isn’t cutting it as much these days.

This is why 49% of today’s enterprise buyers expect to move to a “wide-scale transformation of Read More »


Apple goes all corporate on us

Ned May, SVP Enterprise Mobility and Digital Services Research, HfS

Remember the days when standard corporate issue to enterprise staff was the monster-sized Dell laptop that only seemed to be made for the mass-market corporate crowd and needed a huge ugly Targus case to lug it around…  and a low-end Blackberry, where the only redeeming feature was brickbreaker that could keep your brain amused for hours on those middle seats at the back of coach?

In fact, it was for these very reasons that executives slowly came around to realizing that the only cool technology they could get access to would come from their own personal investments, which is how Apple crept into the executive suite. Apple was just so anti-enterprise; YOU were in control and YOU could develop you whole digital persona using your iPad and iPhone.

There have been some insightful pieces penned on the landmark IBM/Apple alliance signed this week – notably from Larry Dignan and Peter Allen that go into the far-reaching potential consequences of this deal, notably the potential of providing iOS apps and embedded analytics tools to enterprises and disrupting traditional services models, potentially not too different from Workday’s impact on HR.

However, I wanted to draw your attention to HfS’ enterprise mobility analyst, Ned May, who focused on the simple fact that this alliance finally gets Apple into the enterprise through the front door…

“Apple has never understood the enterprise very well. While it has attempted to become ‘more friendly’ over the years and extended a few fig leafs in the terms of iOS updates that address enterprise grade concerns like security, Apple’s success in the enterprise has mostly been driven by its success as a consumer device. It has largely entered the enterprise through the front door in an executive’s purse or pocket not via a box on the loading dock that was backed up to IT. Further, Apple has been notoriously difficult to work with often to the frustration of a CIO. In short, while Apple’s support might be “legendary” it has not been the type of story that ends with someone riding off into the sunset. Which brings us back to the impetus behind this deal. At its core, it is about Apple realizing it will never understand the enterprise and that there is no better partner to get them over that challenge than IBM.

“In exchange, IBM gets to offer a message of safety to anxious IT departments who nervously watched iOS devices sweep into their formerly locked down playgrounds and ultimately opened them up to the chaos known as BYOD. As we pointed out in our Enterprise Mobility Services Blueprint (see link), the market is now reaching a stage of maturity where IT departments are being asked to rationalize the disparate mobile activities underway around the enterprise. As they do, many are looking to apply their traditional approaches to managing the challenges these new environments brings.”

Click here to access the full complimentary POV “The Day Apple’s Enterprise Strategy Came in from the Cold” 

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