Gianni Giacomelli… he lived in Delhi

Gianni Giacomelli is SVP, Product Innovation and CMO for Genpact (Click for Bio)

Did you hear the one about the Italian process wonk who gave up his E-Class Benz, his job-for-life at SAP and his Frankfurt home to uproot his family to spend a year in Delhi devising strategy for an India-heritage BPO provider which, at the time, was barely out of its start-up phase?  Yes, that actually happened.

I have known Gianni Giacomelli well for 10 years now, and have always described him as a misplaced analyst foraging a career on the sell-side – always one of the smartest guys to talk strategy, and great fun to bring to our HfS summits to face the fury of the buyers. Gianni today has found himself as product innovation and marketing lead for the largest business process services pureplay of all, Genpact, and moved his family from Delhi to the confines of Westchester County, New York.

So without further ado, let’s find out what’s going to happen in the world of business process operations..

Phil Fersht, CEO, HfS Research:  Good afternoon, Gianni – it’s great to get some time with you today.  I think we last featured you on HFS (see post) about maybe seven or eight years ago right at the beginning of the blog.  So it’s nice to circle back after all this time and hear from you again.  You have had a pretty colorful career in the services and software industries, so maybe you could just take us through some of the highlights.. and how you ended up doing what you’re doing today.

Gianni Giacomelli, SVP & Chief Marketing Officer, Genpact:  Yeah, thanks Phil, and it’s especially good to see how you guys have evolved as well.  I mean seven years ago, certainly a bunch of talented people – you never have thought that you would end up disrupting the analyst model so it’s good to have seen you growing like that.

I would actually like to make a parallel.  I mean, you guys have grown and I think it takes perseverance and a lot of work but then it also takes innovation and agility – this stuff takes you, careers take you to an unexpected place.  Frankly, I never would have expected starting 25 years ago working in consumer products marketing and analytics then in consulting for BCG and so forth and ending up in SAP, product innovation in a business services companies.  I guess it’s a little bit of a hallmark of our times, right?  You don’t quite know where you are going to end up being.  I think all that matters is the diversity and what you call colorfully diverse.  Because when you have diversity, you actually see things from different perspectives and you end up in places that you wouldn’t know but there is a logic, there is portability and I do think that is the crux of what I’ve Read More »

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Why we need to stop boring ourselves to death and focus on what really matters: building TRUST

Suddenly, everyone is a bloody analyst.  I must get at least five posts a day from a completely random selection of individuals attempting to educate me on how robotic automation, digital technology, IoT, big data and outcome-based pricing are going to be the biggest game changers to disrupt the business world since the invention of the desk.

Suddenly, there’s going to be minimal need for human labor anymore, so we’ll just sit at home all day running our lives from our mobiles devices sequencing our own genomes using some cool analytics app that we only need to pay for once we’ve added 10 years’ to our life expectancy. Somebody please shoot me now… let’s dial this dialog back to reality for a few minutes.

During our Blueprint Sessions in a very, very chilly Chicago this week, we started with the vintage discussion, “How can we re-set these stale services relationships to drive more value beyond labor arbitrage and standard operational delivery”. Yes, the old chestnut conversation has to take place, just incase there has been a dramatic, unexpected shift in these relationships in the last six months. But, alas, as per usual, most service buyers in the room were still pacing the treadmill of operational ordinariness with little clue how to move the needle.

So we asked them one very simple question:

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Oh my god.  After all the whining about things like, “All they do is sell to us”, and “All that cool stuff they promised us during the sales process and never delivered”… the real reason behind this stagnation is the simple fact that most buyers are just struggling to let go!

So there we have it, folks.  Rather than spend another minute reading the latest riveting diatribe about how “big data is about mining meaningful insights”, let’s focus on the real issue at hand here: TRUST.  Why do 43% of buyers today admit they need to give up more high value work to their service providers to drive value into their relationships?  Quite simply, this is an admission from buyers that they are scared of change – they worry that giving up control to a third party will minimize their own value, and their provider simply does not make them feel comfortable enough to take more of a risk.

The Bottom-line: The biggest disruptive trend on the horizon is TRUST

The solution, then, is simple:  service providers need to earn that trust – and prove they can enhance the value of their clients’ governance teams by taking on higher value work from them.  This means many need to change behaviour… the overselling needs to stop and the demonstration of real value needs to start.  Service providers need to take a long, hard look at the personalties of their account managers to make sure they are providing consultative value to their clients.  Service buyers do not “let go” until they know they have a safe pair of hands to trust with their beloved processes… so let’s refocus on the one real business value item that matters:  TRUST.


And what happens when you cram advisors and buyers on a stage?

Scenes from the HfS Blueprint Sessions in Chicago

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So what happens when you cram 9 service provider leaders together on a stage for an hour?

Scenes from the HfS Blueprint Sessions in Chicago

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Did you get with the As-A-Service program in Chicago?

For the last decade, and longer, we’ve been debating and bemoaning how we can encourage services relationship to drive better collaboration, better automation, better talent development, throw off better data… and shift us away from a labor-based model that will not survive the test of time.  Next week, in Chicago, we will stare at that wall we’ve hit, and collectively figure out how to jump over it.  So without further ado, pop in your headphones, turn up the volume and enjoy!


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The Evolving Maturity of Robotic Process Automation

Is it possible to make it through a single day with the word “robotic” being uttered somewhere?

Indeed it is not, ever since HfS Research first began covering the emergence of the new technologies in Robotic Process Automation (RPA) back in 2012.   Since then, we have seen RPA take off and become one of the dominant topics in the BPO and IT services market (read more here).  RPA is now on the strategic agenda of every service provider, third party advisor and increasingly on the minds of enterprise buyers as well.

But, until now, there wasn’t a way to contrast how different service providers in particular were both thinking about and acting on the opportunity created by the emergence of these new RPA tools.  Instead, every activity by a service provider seemed unique and it was hard to get a picture in anyone place as to how mature this capability was and how central it might be to the future operating model of the BPO service providers.

So, after dozens of interviews with service providers over the last several months, we have created the HfS RPA Maturity Model based around 10 Elements and 3 Levels that define what it means to have a mature strategy and delivery capability for RPA in today’s marketplace.    The HfS RPA Maturity Model is a useful way for enterprise buyers, third party advisors and service providers to guide conversations within the BPO and IT services ecosystem about RPA and to assess where an individual service provider sits with regards to the maturity of its RPA strategy and program.

The 10 Elements of the HfS RPA Maturity Model include:

  1. Primary Goal of RPA. What does the service provider want to achieve through their RPA program, is it skills augmentation or labor cost reduction for example?
  2. RPA Program Owner. Who owns the RPA program within the service provider’s organization?
  3. Vision of Deployed RPA. How sophisticated a vision does a service provider have for how the Read More »


Is your Service Provider genuinely investing in As-a-Service Capabilities?

Yes, we’ve bemoaned the stubbornness of some service providers, which are protecting the profitability and predictability of their labor arbitrage businesses, and laid out the key tenets of the emerging As-a-Service Economy.  So what steps can we now take to figure out who’s on the As-a-Service train, and who’s just pretending to be?

Click here to access the new POV "Does Your Service Provider Have A Winning Investment Strategy for the As-A-Service Economy?" by analysts Charles Sutherland, Barbra Sheridan McGann and Phil Fersht

In the As-a-Service Economy, the service provider will not be a stand-alone entity; the cost of doing business this way is simply too high. The partnership ecosystem of how technology vendors and service providers forge workable alliances over the long term, with effective investment practices and product management, will be a key factor in having a portfolio of As-a-Service options that are flexible, scalable, and in tune with these evolving times.

But how can buyers really see past the pretty PowerPoint and claims of future value?  

Simple: Here are nine key questions that can quickly clarity what’s really going on behind the scenes, when it comes to service providers making the financial commitments needed to be effective in the emerging As-a-Service Economy.  Find answers to these and you’ll have a much more realistic picture of where a service provider’s future direction is heading:

1) Is this As-a-Service platform, or new capability, funded year-to-year, or with a multi-year commitment, including CAPEX?

2) How is the first (or first few) client(s) of your As-a-Service platform being charged – and do they Read More »


Why some service providers are grimly clinging onto the labor-arbitrage model

As I was finalizing client interviews for our forthcoming Blueprint on “Progressive F&A Services”, my overwhelming conclusion is how unprogressive many of today’s BPO relationships still are.

To epitomize our findings, to quote one major enterprise client, “We worked really hard to move onto a transactional pricing model with our service provider – and they worked with us to achieve that outcome.  However, once the service provider started taking a drop in revenues from us they insisted on moving back to the FTE-based set up.”

Now re-read that quote one more time – what does that tell you?  Yes, people, some of today’s service providers depend on the legacy effort-based labor model to keep their revenue numbers up.  Having their clients shift to more fluid volume-based models is costing them money, and they don’t like it. What’s more disturbing here, is the fact that the profitability generated by the service provider is through the margins on selling the labor, not the margins on selling the services.  Changing the legacy model does not sit well with some service providers, as pricing by FTE Read More »


If anyone can, Barbra McGann can…

You may have seen, earlier today, we announced a couple of very exciting analyst additions to the HfS teams in the US and UK this week.  So let’s start with one very talented individual who plies her knowledge trade just outside of the city of Chicago… Barbra McGann Sheridan.

Barbra Sheridan McGann joins HfS as Senior Vice President, Research

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

As the saying goes, my parents wondered what I would do with my Bachelor’s Degree in English if I didn’t want to teach… it would have been so much more practical to stick with Engineering. And yet, what I’ve learned over the [many] years is that the skills I developed in earning that degree, and since, have helped move me into this direction… listening, researching, analyzing, distilling down issues, ideas, and problems, and finding ways to communicate messages to different audiences with different interests.

Why did you choose to join HfS… and why now?

There is a lot of energy and forward thinking at HfS, grounded in practical realism and surrounded by a depth of knowledge and experience. At the heart of HfS is the ability to communicate a point, challenge the status quo, generate a conversation, and collaborate with a client to dive into a challenge and drive a desired result. I’m looking forward to both participating in the BPO to business process ‘as a service’ Read More »

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Why Cloud-centric services are critical to the survival of service providers in today’s As-a-Service Economy

In today’s worlds of services and software, all roads these days are leading directly into the Cloud. Last month alone, SAP announced it was spending a jaw-dropping $8.3 billion on an aging SaaS platform and Larry Ellison used the majority of his opening keynote at Oracle’s annual end-user conference to lay out his own vision for the Cloud. The very next day, Microsoft’s CEO, Satya Nadella, focused on the opportunity in a public appearance as well.

“So tell us something new” We hear you cry

Indeed… why, suddenly, is all the attention on a technology trend that has been emerging for years (and remember that 2010 study)?  Because we have now reached the tipping point where Cloud-centric delivery is the only true direction providers can take, if they want to be around in another Read More »

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Murphy’s BPO Law

The more time I spend with some of the top services account leads for providers, the more impressed I become with how some of them manage incredibly complex client relationships, which only seem to be getting even more complex in today’s climes.

Carole Murphy is Capgemini's Head of BPO Business Transformation Services

The good account managers literally have to know everything about their clients, from their quirky custom built systems, their internal politics, their process flows, their changing directives from leadership, and so on. And when you get into BPO, it’s not like consulting where you can parachute into clients, devise impressive roadmaps for them to follow and make a hasty exit before the real work begins. Nope – in BPO you need to craft the game-plan and handhold your client through the quagmire for many years to come. As someone one told me, “you’ve got to eat what you kill”…

One person who lives and breathes these complex client transformations is Capgemini’s Carole Murphy, who today heads up the firm’s BPO transformation services. When we managed to drag her away from her reserved seat at the Tottenham Hotspur stadium  (a team which can certainly benefit from her transformation skills), we managed to pose some questions on where this BPO business is heading and what she’s experiencing with her clients…

Phil Fersht, HfS: Carole, it’s great to have you on our interview docket today. You’ve been in the BPO industry for quite some years now and are very hands-on with several clients I know. Would you give us a little more color on your background and how you’ve found yourself so involved int he BPO industry?

Carole Murphy, Capgemini: Like many of us in Capgemini BPO, I started off as an accountant. I worked for British Steel and for Kraft Foods, and in about 1996 I joined what was then Ernst & Young Consulting because I was really interested in finance and accounting and transformation. Finance transformation has been the core of my career since then. Five or six years ago I started exploring how we could use Capgemini BPO’s assets to best help our clients to transform, delving deeply into how transformation really works and how we could bring more impactful transformation to our clients. As time went on, I got increasingly interested in how BPO delivers the promise of transformation. I think there’s something quite exciting about the BPO industry in that you’re able to help clients not only make transformation happen, but also sustain that transformation because it’s part of what we do every day.

Phil: We’ve had countless discussions over the years about how clients can achieve operational results with BPO and meeting their core performance metrics. Suddenly, many buyers we speak with expect transformation, and if a provider can’t bring that to the table, it’s not going to last very long. Do you feel that client expectations are a lot higher than they were three or four years ago?

Carole: I’m finding it surprising that some clients’ expectations of what a BPO can deliver is still limited to the simple lift and shift, or just transactional activities, or the impression that ‘surely the Read More »


Deconstructing your manual BPO activities for the As-a-Service Economy

With the increasing momentum of Robotic Process Automation and comprehensive business platforms solutions in BPO, it seems like a good time to step back and take a look at what really occurs “under the covers” of most BPO delivery.  Let’s hear what HfS’ Charles Sutherland has to say about deconstructing those “human” elements of processing work – and how they will evolve with all the technology-enablement underway…

HfS' Charles Sutherland (pictured right) and Tom Ivory deconstruct BPO in a Dallas parking lot

When you get right down to it, BPO isn’t all that complex and, regardless of whether it is a horizontal or industry vertical based process solution, there are only a few basic components that are used to construct a solution.   Understanding this will be critical to making BPO work in the new “As-a-Service Economy”.

Architecting a BPO solution is not all that different from being a writer of a comedy movie, whether that writer happens to be based in Hollywood, London, Paris or Mumbai.  If you watch closely, most comedies are based on the interweaving of a few recurring plots involving the key cast members.   These might include:

  • Mistaken identity (in all forms)
  • Boyfriend/girlfriend that got away returns to town
  • A couple works together for the first time
  • Eccentric in-laws come for a visit
  • Friends feel that someone is hiding something and decide to investigate
  • A family vacation
  • Dad gives horrible advice to son/daughter about dating/relationships
  • A protagonist suffers accidental memory loss
  • Competition for a prize
  • Unexpected arrival of a windfall of $
  • A surprise party/birthday/pregnancy
  • Accidental ingestion of a mind-altering substance

The only difference, therefore, between most generic comedies, whether they involve Kate Hudson, Read More »


HfS leads analyst firms for value both in Europe and globally

We really didn’t want to over-toot our horn with regards to our performance with the recent excellent 2014 Analyst Value Survey, which canvassed the views of 1093 enterprises, analysts and vendor consumers of research. However, we were extremely excited (and proud) to see how effectively our research has penetrated European organizations:

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We’ve been trying very hard to increase our readership and client uptake in Europe and this really validates our open model for getting our research into the nooks and crannies of global enterprises.  It also goes to show how much noise you can make with a “Born in the Cloud” business model these days, when a small boutique like HfS can outperform a host of firms many times our size, because of our ease of access and quality of work. It’s also a great validation for the services industry when we have firms like ISG, Everest and NelsonHall also outperforming many of the mainstay traditional analyst firms.  This is also very apparent when we look at the rankings global for “Value for Money”:

Well, that’s the last of our horn-tooting for now, but a special shoutout to the team at Kea, especially Duncan Chapple, Bram Weerts and Derk Erbe, for doing such a tremendous job pulling off this innovative and unprecedented research.  Oh – and people can purchase a full copy of the data for a few shekels here.


How successful do you think you really are?

My word is this a frightening way to look at yourself… but how much of you is really more left than right here?

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More hope less fear, please – Digital is not only changing the way we work, it’s improving it

I don’t know about you, but I’ve been getting really tired of people lamenting that jobs are being robotized, our operations talent is too transactional and we’re all, basically, screwed.

I’ve also been guilty, in the past, of preaching the doom and gloom scenario for the workforce, as our enterprises find new ways and means to improve efficiencies and effectiveness, however, as business models evolve, so do our labor needs – and this often translates into an even greater need for talent.  I also have an increasing amount of faith in the capability of most workers to evolve and adapt, and our new research supports this theory.

In short, industry has been striving to minimize the reliance on manual labor to support processes for centuries, since the invention of the water wheel, the steam engine, the spinning jenny, the Read More »


1093 research influencers have spoken: HfS leads the analyst industry for growing influence

And finally, the results of the Analyst Value Survey, which canvassed the views of 1093 enterprises, analysts and vendor consumers of research, have been released. This is – by some margin – the largest study ever conducted to gauge the influence and value of the industry technology analyst firms, and even the most optimistic followers of HfS couldn’t have expected this result:

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And not only did we enjoy a huge uplift in influence of the last 12 months, this also also builds on our influence increase over buyers and providers the previous year (see last year’s results):

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I really don’t want to bore you with a sales pitch as to how we have been achieving this recognition (hopefully you have your own ideas, and if you were one of the nice people who voted for us, I thank you personally – and owe you a drink).

All I will say is “thank you” to the HfS team for working their socks off and making this all possible.  And also a thank you to YOU for reading our stuff, saying great things about us and believing in our approach and determination to change the face of the analyst industry forever.

I would also like to thank the hard-working people at Kea Company, which today has adopted the mantle of “analyst of the analysts” for pulling off such a terrific and comprehensive study.

If you would like to purchase a full copy of the results, you can access them here.  If you are a provider marketer who needs some conclusive data and a decent steer where to invest your analyst relationship time, you could to a lot worse than spend some time with these guys.


Cooking up NASSCOM’s $50 billion Bangalore biryani

Last week, HfS attended and presented at NASSCOM’s buzzing BPM Strategy Summit 2014 in Bangalore.

We asked our EVP of Research, Charles Sutherland, to share the team’s thoughts on the event and what were the key themes that came out during the various sessions and how those relate to NASSCOM’s ambition to grow Business Process Management (BPM) exports from $20 Billion in 2014 to $50 Billion by 2020.  The simple fact that Charles actually shaved for this conference tells you in was quite the big deal…

Charles Sutherland closes out this year's Nasscom BPM Summit in Bangalore

Phil, let me begin by first acknowledging strong attendance (~500 people) for this year’s Summit and the high level of engagement from across the NASSCOM membership during the day and a half of sessions.  The theme of the Summit was what NASSCOM member’s could be doing to drive hyper-growth to bring the exports of BPM services from India to $50 Billion by 2020 a CAGR of  ~16.5% which really is hyper-growth by anyone’s calculations especially for an industry with 25+ years of history in India.

To borrow a metaphor provided before to HfS by Anantha Radhakrishnan, SVP and Global Head of Enterprise Services at Infosys BPO, we liken the final goal that NASSCOM wants to create with this $50 Billion to the equivalent of an especially tasty meal of an Indian Biryani (a mixed rice dish comprised of many different ingredients that also has many different regional variants across India) made up of various existing ingredients that the BPM industry has at its disposal today, plus a few that are just now emerging. Based on the panel discussions and all of the hallway conversations during the Summit, we identified the following as being the key ingredients that most NASSCOM members believe will comprise the final dish.

The existing base ingredients in this Bangalore Biryani:

»    Analytics. Perhaps the most recurring topic through the Summit was whether analytics could be the driver for BPM growth through 2020 that Y2K was for the Indian IT industry in the late 90′s. We sat in on discussions around pricing models and operating models in analytics along with whether clients would be most interested in offerings based on descriptive or predictive analytics solutions. Some panelists stated that analytics could be the second biggest area in Indian BPM export mix by Read More »

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Have most analysts completely given up doing “research”?

Authors: Phil Fersht and Ray Wang:  Industry Analysts who still give a sh*t

(This is a collaboration and represents our individual points of view and not necessarily our employers. Oh wait, that’s us…. moving on…)

Is the analyst business stuck in its own trough of disillusionment?

We called it three years’ ago and we can now officially proclaim that the industry once known as “research” is close to meeting its maker.

Okay, the reality is it’s rare these days for analysts to comb for obscure facts, ask the hard questions, reach out to customers, dig deep with the system integrators, and circumvent corporate communication teams by going direct to employees for the inside scoop.

In fact, the alarming observation of analysts, especially in the large firms, is that most of them are spending all their time on evaluation matrices (e.g. MQs, Waves, Marketscapes, etc.).  There seems to be precious little (or any) research coming out of these places anymore.  Where are the big ideas? Where’s the insight? Where’s the thought leadership? What do these people stand for anymore?

When we sat down to talk to our client base, our analysts, and our clients, we determined that there were eight common reasons, namely:

1. Legacy business models are built on scare-to-play.  The only way the legacy firms are making money is through selling reprints of vendor positionings. Sales folks tell vendors that if they don’t pay for briefing hours and advisory time, analysts will ignore them.

2. Tele analyst approach reinforces an ivory tower image.  Today’s legacy analysts have no other means of getting data.  Sadly, most rarely ever talk to buyers of services  or users of technology.  The situation is so bad, that many vendors are forced to provide 15 to 50 customer references because the analyst has no means to reach out to real customers.

3. Stone soup research model reflects the laziness of analyst firm methodologies.  They are essentially having the vendors do their “research” for them.  Another way to look at this, legacy analyst firms are strong-arming vendors into providing references as their primary method of reaching out to customers.  Some analysts today are demanding three hour briefings with vendors to educate them – they are essentially making vendors pay to give them the knowledge they need to appear smart.

4. Egotistical narcissism drives power trips in evaluations.  Legacy analysts love the attention of vendors pandering to their demands.  In one case, a legacy analyst asked for 35 client references for Read More »


Cognizant’s CEO Frank D’Souza talks to us about his recent $2.7bn shopping trip

Francisco D'Souza, Cognizant CEO (Click for bio)

After SAP lashed out $8.3 billion on Concur, it’s making Cognizant’s flagship acquisition of TriZetto look like the bargain of the decade.  So we grabbed a few minutes with Cognizant’s CEO, Frank D’Souza, to talk about why the US-headquartered company made this move and what we can expect to see unravel as a result…

Phil Fersht, HfS: Frank, in a nutshell, why did you make this investment?

Frank D’Souza, Cognizant: Hi Phil – the acquisition of TriZetto is in response to some powerful trends that are fundamentally changing the U.S. healthcare industry today—including the Affordable Care Act, shifting responsibilities between payers and providers, and the desire for employers to contain risk and reduce cost. By combining technology and operations, we have a phenomenal opportunity to build ‘the winning business model of tomorrow’ and play a key role in keeping people healthy and well.

Today, approximately half of the U.S. insured population have their health benefits managed by TriZetto software, and we see tremendous synergy opportunities to join that with our $2.5 billion healthcare and life science practice. By marrying TriZetto’s world class products with Cognizant’s consulting, IT and business process services, we are confident that we can capitalize on opportunities that neither company could access individually.

This move is also consistent with our overall three-horizon strategy, and brings new markets, new technologies and new delivery models to our portfolio. It moves us very significantly in the direction of adding non-linear, IP based revenue.

Phil, HfS: How will this change Cognizant? Doesn’t this turn you into a software firm, in addition to services? How will this impact your culture and they way you work with clients? Will you need to bring in new skillsets of sales/marketing/engineers, etc.?

Frank, Cognizant: We are committed to offering services across a range of products and technologies.  We also believe that there is a growing demand for fully-integrated technology and operations using newer delivery models made possible by Cloud and digital technologies. These so called BPaaS or utility models are very powerful and this is what TriZetto represents for us in healthcare.

Our approach has always been to start with the market and focus on how best to satisfy our clients’ Read More »


Cognizant makes the biggest bet ever by an Indian services provider. This is a big bloody deal…

What ever happened to the days of the tiddly little sub-$10m “tuck-in” acquisitions that Indian providers used to make (and we all forgot about pretty quickly afterwards)?  Well, the game has changed forever as Cognizant shelled out a whopping $2.7 Billion on healthcare technology firm TriZetto (read our research POV here).

This wasn’t only Cog’s largest acquisition – it’s the largest one – by a country mile – from any Indian IT/BPO services major.  Ever:

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Four reasons why this changes the game for services:

1. Cognizant becomes a true BPaaS, software and services firm.  Most of the pureplay services firms buy little technology tucks-in to improve their services, and have technology tools and platforms that differentiate them with proprietary workflow and IP.  However, services firms have always sold services first and foremost, with software as the value differentiator that creates client stickiness and allows greater scalability of skills and standard processes.  By acquiring a platform the size and scale of TriZetto, suddenly Cognizant is adapting to selling software, and not just service provision. In my opinion, the only way true BPaaS will ultimately be successful is when the services firms elect to sell the software first and then figure out with the client how to implement it, redesign the processes, do the change management etc.  I call this the “Workday effect”.  Essentially, have the client fall in love with the software, slam it in, then figure out the rest afterwards. It’s like buying Google – they just force you to figure it all out after you’ve been bought into using their platform.

2. BPaaS will replace legacy outsourcing – it’s just a matter if time.  As our new State of Outsourcing data illustrates, close to one-in-three enterprises are already using (or about to use) BPaaS / cloud as an alternative to legacy outsourcing in areas such as HR, industry-specific operations (such as TriZetto), finance and accounting and procurement:

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Having a provider which understands – and can implement – a cloud platform, support the transformation and provide the necessary services that add real value to the front-office is the Holy Grail for many buyers.  With half of today’s outsourcing contracts potentially up for grabs, those providers with genuine platform plays are in pole position to pick off legacy outsourcing contracts that have hit the wall, in terms of finding future value.

3. Healthcare becomes the new “financial services” for IT/BPO.  In the past, most of the big bucks in industry-specific IT/BPO was in sorting out the quagmire of complexity, dysfunction and legacy in the banking and financial services space. Now, with the ACA hitting us in full-force, it’s plainly apparent that there’s a ton of opportunity taking healthcare payers and providers into BPaaS and sophisticated outsourcing models.  Watch this space for further acquisitive moves in this sector, where tech-centric healthcare suppliers, such as Emdeon and McKesson, are becoming increasingly attractive targets.

4. The BPaaS gauntlet in thrown down to Accenture, TCS, Infosys and Wipro to respond.  Cognizant’s main competitors are rocked by this one – and they need to figure out how to raise the ante with their own BPaaS plays. Infosys is enjoying a return of its mojo, with a software innovator Vishal Sikka now at the helm and figuring out its EdgeVerve strategy, Accenture has brought together Operations (including BPO) and Cloud Infrastructure to form a super group of BPaaS potential, Wipro has enjoyed a solid rebirth under TK Kurien and has been doing some cool things with Base))) and its mortgage platform play,  while TCS has long been a pioneer of “PlatformBPO” with a series of developing offerings, notably in the insurance and banking space.  Oh – and let’s not forget dear old IBM, who’s off trying to cure cancer with Watson

The Bottom-line:  Cognizant has upped the ante… Now it’s time for the ambitious providers to open their war-chests

You can just feel it in the air, can’t you?  The global economy’s buzzing again, ambitious enterprises are willing to spend again.  Meanwhile, the ITO labor arbitrage game is finally showing signs of drying up – and Cognizant, a major bell-weather for the health of offshore services, has responded with a massive, massive bet on the future of the industry – and few would dare to fault this move.

Now the winners need to place their bets on the solutions and industries where they can find new growth opportunities – they all have serious funds available, and can likely get access to even more capital if they need to.  There are clear yawning gaps in the market for (more) winning BPaaS offerings in areas such as finance and accounting, supply chain, retail and manufacturing… not to mention healthcare, life sciences and financial services.  The future path for BPaaS is really starting to unravel and we’ll likely know in the next 18 months who’s willing to make the investments and business model changes needed to evolve with it.