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 »

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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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Capgemini, Accenture, HAVI and Entercoms make up the first-ever Winner’s Circle for Supply Chain BPO

When we look at the future potential of BPO, one of the markets with the most untapped potential is that of supply chain services, which could be as large as $300 Billion in annual expenditure when today’s emerging offerings really begin to mature, and an increasing number of buyers have to tap into third party technology and services specialization.

When you think about the scope of this space, we’re talking about the management of orders, inventory, manufacturing and transport to get products to market, and then the whole additional services tied to after market needs, master data management and sustainability management:

The need for supply chain process, domain and analytics expertise, supported by the necessary technology tools platforms – at a global scale and depth – has never been as intense it today’s buoyant and globalized market place, where decisions needs to made faster than ever to keep many companies in business.  So HfS analysts Pareekh Jain and Charles Sutherland set about the analyst industry’s first-ever attempt to flesh out the leading providers in this market with the 2014 Blueprint Report in Supply Chain Management BPO Services:

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So, Charles and Pareekh, what is driving buyer interest in Supply Chain Management BPO today?

For most enterprises the costs of goods sold is the vast majority of their income statement and the with SG&A having in many cases being squeezed extensively over the last decade they are looking for new ways to both reduce COGS but also to improve performance of their supply chains as well. As the world continues to globalize and both suppliers and customers become more distributed and Read More »

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Sometimes the best strategies are the most obvious…

This was an actual bank robbery in Detroit…

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Isn’t it time individuals stopped pretending they’re companies?

Buy my stuff!

One of the trends we’ve been seeing with the proliferation of independent analysts, bloggers, consultants, journalists and other pundits, is for many of these characters to launch their own “firms”, when the product is, really, just them.  Or them and a few freelancers they could tack on to their website to make them look like an actual company of people.

Now, if an individual was actually planning to grow a company over time – and genuinely adding real staff which does more than organize their mailshots, calendar or spell-check their reports, they can be forgiven, however, there are far too many people out there masquerading as company CEOs Read More »

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Steps the outsourcing industry needs to take to survive

Outsourcing: Making the same mistakes over and over and expecting people to stop moaning

One of the the core issues we discussed at last week’s Blueprint Sessions was the frustrating and seemingly never-ending issue of providers over-promising delights to clients to win engagements and then failing to deliver on them.  However, the group of 45 industry stakeholders all agreed that all of the entities are at fault in setting up too many of these engagements to fail:

Buyers:  Thinking that they are going to get wads of free transformational consulting that will miraculously appear from the provider – even thought they haven’t actually paid for any;

Providers:  Promising wads of free transformation consulting to augment their operational obligations, even though they probably will not really give the client any (but who cares, as it’ll be too late for the client to back out in two years’ time and they aren’t contractually obliged to provide it);

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.

So what happens when you look at a culmination of many buyers’ first five years’ experiences after signing a contract?  Let’s take a look at some collective journeys:

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Four steps this industry needs to take to avoid engagement failure in the future

1) Less focus on the deal, more on the relationship. Providers are all-too-frequently being forced in the position of saying what they need to win the deal, as opposed to having a  structure to propose a realistic partnership that works for both sides, with specific milestones and balanced delivery expectations.

Possible Solutions: Advisors need to create a more collaborative RFP process that allows for more interaction between the buyer and interested providers. Advisors also need to set better expectations for their clients and potentially get their governance consultants involved earlier in the Read More »

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The new table-stakes: Fixing the Analog Present for a Digital Future

As we digest the incredible dialog from the HfS Cambridge University blueprint summit this week, the overwhelming mood from enterprises is one of frustration to get beyond this tactical status quo of legacy operations, in which so many find themselves wedged.

And most services providers aren’t going to come to the table with the technology and talent until their customers clearly dictate and demand what they need to cross this chasm. And those providers which simply do not have the Digital capabilities their clients demand to address these gaps, run the risk of being relegated to the class of legacy staff augmentation provider that performs only the low-value grunt work, or  ditched from many client provider rosters altogether.  And this is already happening with some ambitious determined clients.

When we surveyed 312 enterprise buyers on their two-year expectations from their current outsourcing relationships, it becomes abundantly clear that those desired business outcomes from yesterday’s outsourcing era have quickly become today’s table-stakes:

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Clients are rapidly losing patience with services providers that aren’t working proactively with them to provide more value than the basic terms of the original contract.  I feel like we’ve had this conversation before, but this time many clients are doing a lot more than having a quiet moan that they aren’t really getting value beyond very basic service provision. This time, many are actively Read More »

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HfS Cambridge University Blueprint Sessions: In Good Company!

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The HfS Cambridge University Blueprint sessions: Where “Rubber Chicken” and “Orlando” are foreign concepts…

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And the HfS roadshow hits Cambridge University

Looking forward to a phenomenal couple of days… a great opening buyers session was enjoyed by all!

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Outsourcing and shared services investment intentions at record high as the Integrated Global Services model takes center stage

It’s official:  outsourcing is not dying – it’s simply become a key part of a broader enterprise operations strategy: Integrated Global Services.  312 buyers recently shared their investment intentions over the next two years during our 2014 State of Outsourcing study, conducted with support from KPMG, and their operations strategy clear:  one in four are reinvesting heavily in their global shared services operations, while seven-out-of-ten are continuing to make (largely moderate) investments in their outsourcing delivery.

The long and short of this is that 93% of enterprises today have shared services and 96% are outsourcing some element of their back office IT and business operations, while 27% are actually reducing their investments in their own internal business units. What’s more, 56% are already increasing investments in their centralized hybrid governance function to manage their mix of service delivery models. To this end, the increasing majority of enterprise buyers today are investing in an integrated global services model that orchestrates their process delivery across all available vehicles of sourcing:

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Let’s delve a bit deeper here and view how these investment intentions have shifted over the last three years, comparing this with the 2011 and 2013 State of Outsourcing studies:

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Shared Services makes its strongest re-emergence as a delivery model for a decade.   While the broad number of firms increasing their focus on both the outsourcing and shared services models is relatively consistent over the past 3 years, the difference today is the intensity of investment.  Outsourcing has slowed to a more moderate pace, while a number of large-scale enterprises are focusing on moving more work into their internal shared services centers – the first time in a decade we are really seeing shared services making a reemergence of this magnitude.

Buyers are shifting more of their higher-value work into their offshore shared services operations.  It’s become abundantly clear that buyers are now aggressively globalizing their Read More »

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Parikh preaches, prophesizes and prognosticates… Part 2

As with the airline industry, consulting firms have become highly commoditized with little client service and the willingness to serve others

 -Kevin Parikh, Avasant, June 2014

In Part 1, Avasant’s CEO Kevin Parikh talked about his emerging advisory firm and how it intends to help its clients tackle digital transformation.  In Part II we warm up the talk to cogitate the impending talent crunch, the democratization of sourcing and the new levers enterprises can pull in their relentless quest to find new productivity…  so without further ado, here’s Part 2:

Avasant CEO Kevin Parikh addresses some big industry issues with an ambitious consulting approach

Phil Fersht, CEO, HfS Research: Kevin, traditionally outsourcing advisors were focused primarily on reducing labor cost more than anything else. But now it looks like the decisions of driving out labor costs are democratized within companies. Let’s say they came out to look at Cloud; they can look at crowd sourcing type solutions. They can look at robotics. They can look at a lot of things and not just outsourcing. In fact, in many cases outsourcing is like a band-aid. Do you feel today’s advisors are really equipped to help their clients think through all these variables?

Kevin Parikh, CEO and Senior Partner, Avasant: Phil, I love how you put it—the democratization of sourcing selection. We all have a vote. We can take what we want.

Phil: Exactly…

Kevin: And I think Cloud has enabled us to do that. Are the typical advisors prepared to enter this market? Absolutely not. The traditional outsourcing advisor is focused on towers of service, offering templates and financial models. This really requires a strategy-oriented Read More »

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Can Infovish disrupt the Indian services model and rediscover its mojo?

Wow.  When the rumors leaked out about Vishal Sikka being tapped up for the Infosys CEO job, we thought this idle speculation, but a possibility that Vishal could have some role where he could absorb the nuances of the services business to potentially take over in a couple of years.

But – lo and behold – the old guard have decided it’s time to make a dramatic change and a big bold statement to the world by placing the popular tech innovator, Vishal Sikka, in charge of rediscovering that elusive Infosys mojo that has been absent for some time now. So… is the Infosys monarchy behaving like a Premier League soccer club and making a panic play to stave off relegation to the second tier of providers, or is this the boldest move yet from one of the TWITCH* provider family to make a late run at the Champions League?

Infovish Pros

Vishal is a technologist and much admired by technology-driven executives.  His recent departure at SAP demonstrated how loved he was by the techno-purists and was seen by many as SAP Read More »

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The digital failure of today’s operations talent: two-thirds of enterprises are falling short

As we peruse the results of our soon-to-be-released State of Outsourcing 2014 study, one of the core elements that jumps out at us is the widespread dissatisfaction of enterprises in their own internal operations talent to change the processes, automate them, analyze them… or come up with creative thinking on how to improve things in general.  The talent dearth is so bad that barely a third of buyers from the 312 enterprises we surveyed has seen any positive impact on their own talent with their current outsourcing relationships using their own internal talent:

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Organizations clearly cannot reach their state of  Digital nirvana without professional help.  “Digital” capabilities, in this context, relate to the acumen of operational services talent to understand the interplay between their applications and processes to achieve better automation and more productive workflows that can ultimately lead to better analytics to base future business decisions.  In addition, these capabilities also relate to the creative flair of staff to align their services with the core business and come up with new ways of doing things to drive value, new ideas for business improvement and, in short, to behave more like a “front office” employee than transactional operator.

Bad IT can be even more culpable than bad BPO.  Let’s not throw all the blame for this talent failure at the doorstep of the business operations staff. In so many cases, enterprises would have much more effective process capability if corporate IT wasn’t so constipated with maintenance and infrastructure. In so many client cases, IT still can’t figure out how to code without error, and they’ve done it for decades… at least processes change, but IT continues to be stuck in the dark ages for so many organizations.

The Bottom-line:  A Digital talent crunch is coming and this could get ugly for some

At HfS, we predict a major talent crunch coming to the vast majority of ambitious organizations who are struggling to find or retrain their back office staff to be more front office staff and “Digitally savvy” with their approach to services.  Two thirds of outsourcing clients are happy with how their internal teams manage costs, keep the basics ticking over (“lights on”) and respond to compliance needs.  But, as these “light on” capabilities become increasingly commoditized through more sophisticated global delivery and standardized technology platforms, the need for these armies of back office operators is steadily decreasing.

What is clear is that technology has become a major component for future value of the enterprise (read our earlier study on this topic) and one avenue for operations staff to increase their future value is to train in areas like analytics and process automation where they can add whole new echelons of value to their organizations.  Sadly, many of the two-thirds we identify above are not going to make it, and others are simply not going to be needed – the relentless pursuit of increased value and decreased labor costs will see to that.  Less is more is the brutal rule for the future of the enterprise operations function.

For forward looking service providers and consultants, these clients are becoming rich hunting grounds for valuable partnerships in the future as the need for the Digital skills and new talent exacerbates.  Most clients will find their need to develop or acquire better talent a fruitless exercise and will look to their external partners to plug these operational gaps that will drive future value.

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Parikh preaches, prophesizes and prognosticates… Part 1

Kevin Parikh is Global CEO and Senior Partner at Avasant (click here for bio)

Isn’t is just so exciting to work in an industry where we are constantly seeing new competitors emerge, seemingly boundless innovation from enterprise clients pushing their capabilities to the limit… and all with such a refreshing lack of confusing verbiage.

OK – I was dreaming there for a moment, but one company we have seen emerge from the ground up in just a few short years to challenge the top advisory firms is Avasant. And most of this is credited to one man and the team he has built since he left Gartner, where he led the firm’s sourcing practice:  Kevin Parikh.

So we managed to catch Kevin at his Manhattan Beach home, where he resides with his wife and two daughters, to talk to us about what makes him tick, how his firm is disrupting the advisor space (in dire need of disruption) and how he is intends to tackle clients needs around Digital transformation that is so high on enterprise agendas today…

Phil Fersht, CEO, HfS Research: Good afternoon, Kevin – thank you very much for your time today.  You’ve been quietly empire-building in the advisory space for a few years now – I think I first met you about seven years ago when you’d just left Gartner to set up your own shop.  Please share with our readers a little bit about your background, how you got into this space and the journey you are on today.

Kevin Parikh, CEO and Senior Partner, Avasant: Yes, we have known each other for several years now.  I started my career as an attorney in Washington, D.C., during the Clinton years. I was in the Clinton administration with the United States Environmental Protection Agency.  This is pre-Y2K, pre-IT outsourcing transactions, and in many cases, it was just the beginning of when the advisory space really started.

After the EPA, I moved to KPMG to join their LLP assurance practice, continuing my focus on contractual and litigation work that I had performed while at the EPA.  During the 1990s, I became increasingly engaged in KPMG consulting activities, including reviews of some of the very first outsourcing transactions.  I found myself sitting on panels with John Halvey and Bob Zaylor debating Read More »

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Is a new breed of analyst finally arriving to disrupt the legacy model?

Firms like HfS Research, Constellation and GigaOm have built their brands very quickly, in just a few years, and are now more visible than more established firms.

–Duncan Chapple, Influencer Relations, June, 2014

As if by some freak of nature, the very next day after we stirred the pot questioning whether analysts needed regulating (or self-regulating), the industry’s leading analyst/influencer observer, the venerable Duncan Chapple of Influencer Relations and Kea Company fame, penned a blog that clearly demonstrates the sands are shifting in the analyst world when it comes to wielding influence over enterprise buying decisions:

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Several analyst boutiques are out-influencing their much larger competitors

As these results reveal from Analyst Equity and Kea’s recent Analyst Value Survey of several hundred research consumers, Chapple states that “Firms like HfS Research, Constellation and GigaOm have built their brands very quickly, in just a few years, and are now more visible than more established firms. A great example of this is shown by the Net Influence Score from our survey, shown above.”

The Net Influence Score shows, for each firm, the net percentage of the respondents mentioning a firm as having rising or falling influence. This chart shows the percentages for the firms about which the most respondents had an opinion. Chapple continues, “Newer firms like HfS and GigaOm are coming from a lower base of awareness: that makes it all the more remarkable that HfS was not Read More »

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Is it high time industry analysts are regulated?

One issue that is increasingly rearing its ugly head is the ridiculous – and often insane – demands industry analysts are placing on providers of technology and business services to pony up client references for their scatterplot charts. The situation has become so bad that the integrity of these research processes appear to be reaching a breaking point, and I would argue that some form of regulation is needed to protect the interests of the business consumer.

The leading analyst firms are demanding five client references per provider.. and one recently even requested TEN client references. The requests are made with the veiled threat that the analyst will “not have sufficient information on the provider’s performance” if these references aren’t made.  When I repeatedly have multiple providers complain about the situation to me, in addition to several of these overused buyers, surely it’s high to get this issue on the table?

Correct me if I am wrong here, but isn’t it these analysts jobs to have regular ongoing conversations with buyers of their covered markets, so added references are merely a rubber-stamp? In fact, why are references even needed if these analysts are so informed, connected to the buyers and have so much valuable data and research to call on?

So why is this a growing problem, I hear you cry?

Can you imagine what it must be like for a provider to ask a good chunk of its referenceable clients to partake in one hour reference calls with 3, 4 or even 5 analyst firms?  Not only that, these same clients are being asked to provide even more detailed references to sourcing advisors and management consultants for their procurement and vetting processes. Hence, some of Read More »

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Why offshoring is hotter than ever

While we’re all getting carried away with robots and sexy SaaS solutions replacing our rules-based transactional labor (and all the lovely buzzwords that come with it), something else is going on that is taking these dynamics in a different direction for thousands of Western enterprises’ operations: IT and business processes are increasing their extension offshore at a breathtaking pace.

Offshoring is an increasingly large component of business operations. Clearly, the offshore option offers immediate savings and firms are getting much more adept, confidant and experienced at managing their processes remotely – whether by an outsourcing provider or their own offshore shared service center.  And – as we’ve lamented on this site since the days when ACS was a market leader and people still used Yahoo! – enterprises are just obsessed with driving out cost – and then figuring our things like “transformation of processes” at some future point in time.

However, the difference today is that most of the perceived “risk” of moving offshore has gone and enterprises are simply doing it as part of their day to day operations.  The evidence from 312 major enterprises in our brand new State of Outsourcing Study, conducted with KPMG, is startling:

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The extension of process to offshore delivery is almost as prevalent in shared services as outsourcing.  While a small number of firms are pulling their application development and maintenance back (one-in-ten), close to a third are increasing the offshore component with their service providers, and a fifth with their shared services – a similar trend to IT infrastructure.  Moreover, where the new traction is clearly occurring is with business processes, which are clearly reaching a level of maturity with offshoring – almost three out of every ten enterprises are increasing their offshoring of finance processes with both their service providers and their own shared services operations.  We also seeing similar dynamics with industry specific processes, procurement, HR and customer services.

The Bottom-line:  The story today is about managing integrated services across global operations

1) The game has switched to integrated global operations management.  It was barely 2-3 years’ ago (click to view some older survey data) that the trend was very much moving towards outsourcing, with offshoring as a key component, for many enterprises looking at more radical measures to drive out cost.  What’s clearly transpiring is that many enterprises are clearly also investing in their own internal capabilities to run processes offshore (stay tuned for more hard evidence of this trend shortly).  They can hire offshore staff at wages rates frequently far cheaper than their own providers charge (i.e. not paying their margins), which is nothing new, but clearly they are far more determined and confident to govern their own offshore internal resources themselves.  What’s more, many organizations are clearly not very impressed with the quality of their providers’ resources (again, stay tuned for more hard evidence of this), and have made the decision to look at a more integrated services model to deliver their services to their organization. This is why we’re seeing a heavy push from several of the Big 4 consulting shops, such as Deloitte, KPMG and PwC, to push their own managed governance and Global Business Services options, while Accenture is marketing its own flavor of integrated services management called “Integrated Business Services”.  We are even seeing providers with deep offshore specialization, such as Genpact, eager to push their service models and capabilities to clients, often as separate engagements from their existing bread-and-butter outsourcing relationships.

2) Offshore delivery will impact the rollout of the disruptive technologies, such as robotic process automation and SaaS.  While it’s not rocket science to see how impactful these disruptive technologies will likely be to labor-based services (read earlier post), the more that gets extended offshore, the more challenging it may become for enterprises to shift the model away from these linear labor-based services that are so dominant today.  Quite simply, offshore outsourcers with predictable FTE-based annuity contracts are in no hurry to disrupt their own sources of recurring revenues, while enterprise operations leaders may not have genuine incentives from their leaderships to substitute their own offshore labor for technology driven alternatives.

Net-net, offshoring provides a very durable BandAid for many organizations, and we’re still yet to witness a slowdown in the amount of offshoring that is taking place – in fact, the data shows quite the opposite trend is happening. We actually predict it will be more those organizations which have yet to do a lot of offshoring, which will look to move straight to automation and SaaS models as the ROI to reduce high onshore costs, as opposed to much cheaper offshore costs, is going to be so much higher.  Eventually, competitive pressures will force all (surviving) leading providers to shift a much larger proportion of their labor-driven models onto technology-based platforms (where IBM has already placed its bets), however, the attractiveness of the high cost-savings benefits that locations such as India and the Philippines can provide is still on an upward trajectory and likely to remains this way for several years to come, despite the hype that screams otherwise.

3) Offshore capability has often moved in tandem with the globalization of the revenue for an enterprise.  Part of the offshoring movement over the last twenty+ years has been in support of the increasing globalization of enterprises in their pursuit of the next Dollar, Euro, Peso, Yen or Yuan.  Shared services delivery capability has often been co-located with manufacturing, distribution or sales facilities whether in Latin America, Asia, Central Europe or Africa.   As global revenues have risen and more complex operating models for tax management have emerged in the last several years, there is little incentive to pull back from offshored business process or IT delivery when the rest of the business is staying put.

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Time to stop the buzzword balderdash and become meaningful again

Am I smoking something illegal, or has our industry really started to lose the plot with the amount of buzz terms that – quite frankly – only mean something to the sellers and advisors trying to make their wares sound that little bit savvier than their competitors. And even then, I am not too sure whether many of them even fully understand what they are buzzing about either, more simply regurgitating what their competitors are saying.

I’m not trying to be a fuddy-duddy here, and I do empathize with the exuberance of so many sell-side individuals who are simply starry-eyed at all the disruptive technology and evolving business models that are on the horizon, but c’mon folks, can we find a sensible balance between vision and reality?  Why has it become so uncool to talk about where we are, as opposed to where we think things might evolve in 5 years’ time?

I mean, wasn’t it barely six months ago when we were still having (relatively) meaningful debates about things such as:

  • “What is innovation, and how can I get some of that?”
  • “How can I find a provider to do something more for me than provide cheap labor”
  • “I really would like some visibility over my order-to-cash process chain”
  • “Our provider still can’t figure out how to automate our accounts payable processes”
  • “Do we really get value from outsourcing all this stuff – are there other options to consider?”

Instead, suddenly it’s become terribly untrendy to have meaningful conversations about what we’re actually trying to achieve… like improving processes, trying to do a better job than merely maintain status quo operational performance, and accessing meaningful data to help us get more value from our day to day operations.

Yes, folks, if we aren’t creating Digital Services on SMAC platforms, we’re going to fail with Big Data and the Robots will come to replace us… so let’s see what 312 major buyers – in the brand new State of Outsourcing Study we conducted with KPMG – really understand about today’s latest slew of sexy savvy-sounding soliloquies:

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All joking aside, there is a serious message here: too many buyers are getting lost in the verbiage and the lack of relevance to their businesses and simply don’t understand exactly what is being sold to them. Let’s be honest here, SMAC doesn’t mean anything to 70% of buyers beyond being a concoction of new technologies lumped together… finance executives have been talking about “Big Data” for four decades and nothing is really new except the fact there is better technology to help them analyze it… I can go on.  Oh – and nearly a third of buyers don’t know what “transformation” means to their business? Seriously?

The Bottom-line:  Our industry is simply terrible at communicating to clients and needs a major reality check

There is an abject communication problem in our industry, when such vast numbers of operations executives are baffled by the BS their providers and advisors are lobbing at them via boring white papers, instantly-forgotten PPT decks and thousands of automated inane tweets.

It’s time for the industry side to start tying all this buzz to the reality of operations – where we can educate how enterprises can learn more about where the world is heading, how they can start to evaluate the pace of change that will impact them and develop change programs and new operations strategies that make sense to their businesses.

We have got to stop jumping on the bandwagon of spewing poorly communicated rubbish that has little meaningful relevance to businesses today, and instead explain in plain English how processes and interactions can be digitized, how robotics could one day enable our business systems to become more cognitive and less reliant on manual steps, how new analytics tools and expertise can help our staff become more relevant and valuable, as opposed to turning widgets and updating spreadsheets. Most of the stuff I read today is focused 95% on flashy terminology and only 5% on the actual substance on what businesses can do with all this stuff.

It’s time to get meaningful people and stop this feeding frenzy of confusing jargon…

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Accenture, Wipro, TCS and ISGN make the Winner’s Circle for Mortgage Services BPO

The residential mortgage services market is one of the most established and competitive segments of the global BPO industry. Most of the major service providers have been in this market for a considerable time providing services across the process chain of mortgage origination, mortgage servicing and the (sadly more significant these days) area of loan default and foreclosure management.

It used to be that most service providers were simply providing domestic or offshored labor to augment the capacity needs of the large lenders, but that old operating model is being changed as a result of the consequences of what happened to our global economies post 2008 – and especially in the US.  Whereas before the crash the entire mortgage industry was going through such a “gold rush” that volume took precedence above all else, now, as a result of increased regulations and reduced volumes that have driven up the cost of completing a loan origination, the focus is elsewhere.

Today, this is an industry looking closely at the processes and technologies that underlie the business and turning to industry savvy service providers which can provide cost effective, compliant delivery that increasingly includes a significant component of sourced technology solutions as well. This mature market is changing and, as a result, so too is the roster of BPO service providers who are meeting those evolving client needs. So let’s take a closer look at the innovation and execution capabilities of the leading service mortgage services BPO providers:

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HfS has evaluated the innovation and execution capabilities of service providers catering to the origination, servicing and default/foreclosure management processes of residential mortgage lenders.  We asked our EVP of Research, Charles Sutherland, who led this blueprint initiative, to share some of his insights arising from this Blueprint Report.

Charles, what are some of the key challenges facing lenders today?

This is a market segment undergoing a profound level of change.  First, of all there is a dramatic fall in customer demand for new loans as post-crash engine of refinanced loans is coming to an end.   Second, is the rise in the overall costs of originating a loan, which are now up several Read More »

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