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Monthly Archives: Jan 2017

Ramyam and Arvato – Raving Fans or Raving Mad?

January 16, 2017 | Reetika JoshiMelissa O'Brien

Arvato just announced its acquisition of Bangalore-based Ramyam Innovation Lab, whose stated mantra is to make customers “raving fans” by enabling contact center staff to have valuable customer information at their fingertips. Ramyam’s key asset is its omnichannel platform, Enliven CEM. The platform integrates various communication channels such as email, chat, voice and social media, and uses interaction information to generate individual customer profiles. This is layered with analytics and dashboards; the analytics model aspires to manage customer journeys with “context-based decisioning” in real time, helping agents more proactively solve customer problems.

Our research shows that in this race toward providing digital customer experience, most of the leading customer experience management companies are taking a stab at providing omnichannel customer services. Major CEM providers are starting to/have figured out their strategies for developing 360 customer views that would provide insights to improve contact center effectiveness. To provide progressive omnichannel service support, a CEM service provider needs a strong framework for the underlying data and technology, and that’s what this acquisition is about. Most are taking a third-party approach to enabling the technology, but Arvato’s move provides it an opportunity to have better integration and perhaps move towards providing CEM As-a-Service in the future.

Arvato’s approach is admirable, especially where it affords the company an inroad to one of its key growth markets in India. Ramyam’s highlighted consumer-facing verticals of telecom, retail, banking and travel are key industries for omnichannel customer communication. This also is some much-needed publicity for Arvato, which has fallen behind its customer experience management competitors in thought leadership and demonstrated investment in innovation.

However, all of these buzzwords around omnichannel are used so often and heavily (i.e. “next generation analytics-driven actionability, enabling service providers to deliver superior experience and engagement to their customers”) that they are becoming diluted, making it harder for service providers to carve out a real differentiator with these platforms. Arvato’s assertion that this capability creates “a distinct competitive advantage” is disillusioned. To create differentiation, it will need to use this acquisition to craft and articulate an As-a-Service on-demand, flexible strategy for providing customer experience management—one that provides a single contract with well-defined business outcomes by leveraging technology platforms, data and insights and omnichannel customer support functions.  

The bottom line: Kudos to Arvato for making an investment in a young, emerging tech startup with some solid customer experience thinking. But the messaging needs some maturing to really highlight the differentiation that Ramyam can bring to the table.

Whether the combination can help turn Arvato’s end customers into raving fans, we’ll wait and see.

Posted in: Contact Center and Omni-ChannelAnalytics, Big Data and BICustomer Experience Management



Trump Intel Story: A Stark Example Of A Predictive Security Management Dilemma

January 13, 2017 | Christine Ferrusi Ross

This week the Internet blew up based on news that Intel officials briefed President Obama and Donald Trump on the possibility that Russia had information on Donald Trump that was damaging to him personally and might even have implications for the entire US government. (And while one never expects a hashtag like #goldenshowers to trend on twitter, the feed was hilarious.) 

Politics aside, this story is a textbook case of problems with being proactive with threats. Notice: I wrote “threats” not “events” or “incidents” because the incident hasn’t happened yet, there’s just a high potential for it to be true and for it to happen.

You get lots of finger pointing in hindsight. The common question is “what did you know, and when did you know it?” Because, after something bad happens, anyone who knew of the potential for the event comes under fire for not saying something sooner, not being more forceful if in fact they HAD said something, and for not doing something to stop it from happening.  The fact is something happened and someone has to somehow get blamed.

And in the Trump intel story, you see the opposite of that, with everyone retreating to respective political corners, defending or dismissing the intel reports based on emotion and personal perspective. And since now that everyone’s already picking sides, it will be that much harder to make the right decision on how to treat the threat risk. So, how do you ask the right questions and take action in time to avoid the impending threat?

Here are the questions predictive security and risk management brings:

  • When do you flag a threat to executives? It’s important to have a policy in advance so there isn’t confusion later. It could be something like “a risk has been increasing steadily for the past 3 months” to “a risk increased very quickly in a short period” or similar idea. When you raise the flag may have a drastic impact on which actions you take to address the treat, since risks are often time sensitive.
  • How much do you tell them? Even if you’ve decided to tell executives, you must decide how much information to give. Too much detail and you may panic them unnecessarily, too little and they may not appreciate the implications of the threat. This question is usually harder to answer than the first one.
  • What do executives need to DO because of the rising risk? Another tricky area, what do you propose be done about the threat? Wait it out and seek more confirmation? Deal with it proactively, even if there’s potential for the threat to not happen? Take interim steps? This is the most important question to be answered when talking about predictive security management.

Focus Predictive Security On Remediation Not Reporting

We don’t know what advice the intel team gave to the government leaders, but we do know there are a few general ways you can deal with a threat or risk:

  • Accept the risk and go on with what you were doing. Sometimes there’s not much that can be done – or worth doing. For example, there could be a heightened risk of a terrorist attack, but you don’t want to be seen to be weak and encourage them further and choose to ignore it, safe in the knowledge airport security is already prepared for such a threat.
  • Try to remove or reduce the risk. In a political context, it might involve finding the people who are informants and stopping their ability to keep helping the other government. In a corporate setting, it might involve cutting a contract with a supplier you think has illegal dealings, for example.
  • Make a strategic bet to increase the risk. In a political context like yesterday’s story, increasing a risk strategically could involve cutting diplomatic ties, mobilizing troops or invoking sanctions, among others (these increase risk because they may cause the original threat actor to escalate further or move more quickly with the original threat.) In a corporate context, an example would be to work with a startup vendor even though you know it’s a highly risky supplier because that vendor has some amazing new technology that you want to use.

Unfortunately, if you didn’t have a remediation plan in place BEFORE the risk became likely, you’re facing much more confusion about what to do and even whether to do anything at all. This puts your company at risk and in fact, negates the value of having predictive security capabilities.

Bottom Line: Security professionals need predictive security management and prescriptive treatment plans to protect their firms from looming threats.

Security teams need clear treatment plans that address potential risks and how to mitigate them. As a simple example, if there is a threat of insiders giving information to third parties, then the remediation plan would involve something like “when someone downloads more than one file they don’t normally access, that person’s manager must ask why the person needed those files within 4 hours of the download.” Without this proactive treatment planning, companies likely do nothing and then get harmed even by risks they could have addressed.


Posted in: Security and Risk



Making Industry 4.0 Real For Manufacturers

January 12, 2017 | Pareekh Jain

Industry 4.0 has become a buzzword in the manufacturing industry today. There is a reason for it. There has not been a full-scale change in the way we manufacture goods since the days of Henry Ford. The PLC (programmable logic controller), MES (manufacturing execution system), first generation robots have all made incremental improvements to efficiency but not to the same extent. Now with Industry 4.0 the change is beginning to happen.

But what is Industry 4.0? The danger of the buzzwords is that many service providers are trying to label their legacy services and solutions as Industry 4.0 and confusing clients. We at HfS Research believe that Industry 4.0—or the fourth industrial revolution—is the confluence of many technologies coming together in manufacturing for the creation of smart factories with significantly high efficiency, productivity, quality and flexibility than the current state. It will enable mass customization in manufacturing. While it will take few decades to enable promises of mass customization at scale, the journey has started. 

While most engineering, consulting, technology, and business process services in manufacturing industry offered today (even legacy services!) can help enterprises in their Industry 4.0 journey in some way, we have identified 13 enabling technologies that we believe are critical for any enterprise to accelerate its Industry 4.0 journey.

To make Industry 4.0 real for our enterprise clients, we are launching our Industry 4.0 study, which will focus exclusively on R&D, plan, implement and operate services around the 13 enabling technologies shown in the chart. Most of these technologies are in the early stages of adoption, as we will discuss in the forthcoming Blueprint Guide.

Bottom Line: HfS Research Blueprint Guide: Industry 4.0 Service 2017 will cut the chase and make Industry 4.0 real for our enterprise clients.

This study will help enterprise clients understand the real case applications of different Industry 4.0 offerings along with capabilities and offerings of the service providers in the market today. We will work to understand the different ways that this functionality is delivered and how it may evolve. We will evaluate about 15 service providers on their innovation and execution capabilities in this emerging and exciting space. If you have any interesting Industry 4.0 services story to share, please contact [email protected]

Posted in: Engineering



The Digital Marketing Operations Blueprint is Out - Part 1: Key Market Dynamics

January 12, 2017 | Melissa O'Brien

Just before the holiday break we released our first HfS Blueprint focused solely on the Digital Marketing Operations market. In the past, we have covered customer experience management along with marketing in the same report, and this year decided to break out the front office processes and look at them in a narrower scope, including our Contact Center and Digitally Enabled Contact Center blueprints, and this most recent endeavor in digital marketing services. It quickly became obvious that while service providers have varied strengths and value propositions across each of these areas, the blurring lines between front office functions is creating confusion- and opportunity- in this quickly changing market.

Digital is all about realigning to the customer

Changing customer demands are driving companies to up their investment in digital marketing. The way customers prefer to communicate and consume information is forcing marketers to rethink their strategies, as well as collaborate with other business units for a greater holistic customer view. Whether it’s advertising on social platforms, understanding customer segments on the web or mobile apps, or putting out relevant content for greater personalization and sales conversion, the need for speed and efficiency is top-of-mind for marketers. Because these expectations and preferences are constantly changing, marketers are tasked with becoming nimbler and more efficient organizations in order to be increasingly competitive. Some of the buyer-service provider dynamics include:

  • Maturing digital marketing operations are driving investment: The maturity of digital marketing services buyers falls across a broad spectrum. We spoke with some buyers at the very beginning of their journeys, converting paper-based materials to digital formats. Others already have a solid digital marketing strategy in place, and are looking to further optimize and create efficiencies in their operations. As buyers mature, the burgeoning volume of digital assets becomes a greater challenge to manage—which often falls upon their service providers.
  • “Better, faster, cheaper” is table stakes: Not surprisingly, cost reduction still ranks as a top driver for digital marketing operations services. Buyers have ever-increasing expectations for speed and efficiency with reduced budgets. The need to reduce turnaround time and time-to-market for campaigns is common. Many clients view their service providers as an extension of their teams that they can often use in off hours when timelines are tight. On top of these increasing pressures, most buyers are also looking to their service providers to deliver market insight, thought leadership and innovation.
  • Customer experience is impacting governance models: While the front office traditionally operated in siloes, digital is driving a convergence of traditionally disparate departments. Often under the purview of an “engagement or experience officer,” leaders are learning to reach across functional siloes, between IT and lines of business, to deliver on a more holistic experience for their end customer. This, in turn, increases the complexity that service providers deal with when setting expectations and delivering on services to their client stakeholders.

What’s next?

It became very apparent while doing this research exercise that it’s getting harder and harder to draw a line between “marketing” and other front office functions like customer service and sales as we move to a more holistic customer experience viewpoint. As the edges of front office services continue to blur, the services that providers offer overlap and the competitive landscape will get more complex, with more niche/specialty service providers entering the mix. Many providers not included in this report were on the periphery of digital marketing operations because of their approach to customer experience; the coming year will see greater development of their value propositions and emergence into this competitive landscape in the coming year. 

Also, a shift in the way that buyers and providers work together: the need for higher value services from buyers is often easily expressed but not as easily adopted by various stakeholders within client organizations. The combination of embracing the ideals of design thinking and brokers of capability within client organizations will help to enable a better reception of new ideas and strategic thinking with digital marketing operations service providers. Buyers need to be willing to work with service providers on this type of end-to-end CX initiatives. This often involves using service providers as change agents to bring together multiple internal stakeholders across the front office in their siloed organizations. 

The bottom line: service providers have a big opportunity to continue moving into the realm of strategic and cause disruption in this market.

This is not only an opportunity for new entrants, but also really an opportunity for service providers which have a greater breadth of services to grow their existing relationships, evolving beyond isolated engagement to more comprehensive marketing operations services. Right now services in this market are often consumed in a more piecemeal fashion, but buyers are interested in adopting services from providers where they have trusted relationships. The majority of buyers interviewed for this report were interested in expanding the scope of the relationships with their current service providers and experiment on new platforms (i.e. social media platforms as they arise). Service providers which are focused on thought leadership will win these expansions. For some, digital marketing operations will mature into another commoditized, race-to-the bottom BPO service for cost takeout. But the smart service providers with a well-planned talent strategy and plans for intelligent automation have a real opportunity to disrupt the agency model and gain a greater chunk of marketing spend.

Posted in: Digital TransformationHfS Blueprint Results



No more denial for WNS as it makes its concerted procurement play

January 12, 2017 | Phil FershtDerk Erbé

This is era of the emerging BPO provider, as IT services stagnate and clients demand greater personalization and attention from business services firms that have the scale, resources, hunger and technology enablement skills to take on increasing complexity and make sense out of the dataswamps plaguing so many of today's businesses.  

One such stalwart of BPO, quietly going about its business over the years with steady growth and increasing reputation for solid delivery, is WNS (yes, the one that was spawned out of the British Airways captive back in the day).  WNS has performed well over the years, growing business streams in knowledge process domains, finance and accounting, insurance, travel, mid-size banks, contact center and some other areas.  It has oft-threatened to make a grander procurement BPO play, but mostly opted to partner with the likes of Denali when the need arised.

In my view, having solid procurement delivery capabilities goes hand in hand with F&A, so it's refreshing to see WNS snap up one of the best pureplay strategic sourcing providers left in the market, which should make the merged entity a Winner's Circle contender later this year when we rerun the Procurement-as-a-Service blueprint:

Click to view

So let's hear from our Procurement and Supply Chain analyst, Derk Erbé, who's recently emerged from a major analysis of the procurement services market:

WNS + Denali - The Details

To start the New Year with a bang, WNS announced the $40 million acquisition of Denali Sourcing Services. We have covered both WNS and Denali in our December 2016 Procurement As-a-Service Blueprint. WNS is ranked as an Execution Powerhouse, while Denali is a High Performer in the Procurement As-a-Service market.

The acquisition of Denali Sourcing Services is a good move from WNS, and effectively bolsters

Read More »

Posted in: Business Process Outsourcing (BPO)HfS Blueprint ResultsProcurement, Engineering & Supply Chain Outsourcing



Poach, diversify or upskill? What is the secret for sourcing security talent?

January 11, 2017 | Mike Cook

With the continued rise in cyber security threats, highlighted by the recent Tesco banking breach in the UK and the ongoing Russian hacking debacle in the US, organizations across industries are scrambling to get their cyber security measures in order. The General Data Protection Regulation (GDPR) and the Network Information and Security (NIS) directives in the EU have only increased the urgency for organizations in this region to bolster their cyber defenses.

This urgent need to address cyber security, coupled with challenging hurdles to overcome in building internal security practices, is driving more firms to partner and outsource this critical business function.

One of the key internal hurdles we have identified in this market is that clients are challenged to source the required talent to keep abreast of their security requirements. This is a well-documented problem within the cyber security community and is one of the top three drivers that is shaping and driving the outsourced cyber security market at present.

So, the solution seems simple enough, if you can’t find the talent, hand over the responsibility on to someone who already has it.

But this begs the question: if there is a lack of security talent in the market how are service providers finding it?

Well, not easily is the answer. The more successful service providers have branched out and are tackling this problem from several angles. These can be largely categorized under external sourcing and internal sourcing:

External Sourcing

  • Hire young: For most of the leading providers in the market, partnering with universities to hire graduates straight out of the gate has been a go-to method. EY, for example, has partnered with 12 of the leading universities that provide courses on cyber security and analytics in the US. EY has not stopped there however and is now building partnerships with six smaller regional universities to further plumb the graduate talent pool. Often within these university/service provider partnerships, the service provider is fundamental in helping to shape course work and the curriculum, this is a positive dynamic as it gives students the skills needed to hit the ground running in the workplace.
  • Increase diversity: For example, reach out at the grass roots level to mentor female students taking analytics, mathematics, and related courses into the cyber security field. Capgemini has made a huge push in this regard with 20% of its UK and 25% of its Indian security operations now female. Next is looking outside of the professional sphere and into the military, many operations specialists in the army possess the necessary skillset to thrive in the cyber security field. Finally, is an apprenticeship scheme whereby hiring is conducted on behavioral and cognitive characteristics rather than qualification.
  • Poach: Or in corporate terms “hire laterally”. With the cyber security talent market lacking the volume it currently requires, attracting talent from competitors, or in some cases startups, is typically going to be on the cards.

Internal Sourcing

  • Upskill: This is basically what it says on the box, taking junior staff and putting them through internal and external training qualifications such as the Certified Ethical Hacker (CEH) or GIAC Certified Penetration Tester (GPEN) certificates.
  • Creatively use the people you have: The service providers covered in the (upcoming) 2017 Trust as a Service Blueprint all have overall staff counts in the thousands (some in the hundreds of thousands). With such a wide and deep IT talent pool, it makes sense to laterally pull in staff from other divisions in the organization. The most common positions targeted for internal transfer to security teams include application developers, risk and compliance, people assessment and digital transaction professionals. These staff will then be trained in security courses complimentary to their previous experience and skillset.

Sourcing security talent, even for service providers, is a challenge. The one ace these service providers have up their sleeves is the large and diversified IT workforces they have to hand. Some service providers are sourcing up to 60% of their security personnel from inside. With this in mind, organizations need to carefully consider the cost and time involved in building an in-house security team over partnering with and integrating capability from ones that have already fought the battle.

Posted in: HR OutsourcingSecurity and RiskTalent in Sourcing



Change Management in HR Tech Deployments – Lessons from the Trenches

January 11, 2017 | Steve Goldberg


My preoccupation with change management can be traced back to when I realized that success on HR Technology initiatives was perhaps more a function of the organization being “ready, willing and able” to change (in the form of leveraging new technology) than anything else, including the virtues of any particular system. Now before some folks in the vendor community or others fascinated by shiny objects yell “blasphemy”, let’s remember that:

  • Any HCM system (aka HRMS) that‘s been successfully deployed in hundreds of similar organizations likely provides at least 80% of the major process-enablement capabilities a typical customer needs, plus many innovative people management features as well.
  • It’s unlikely that any HCM system will 100% match a buying organization’s business requirements, let alone their future vision around managing talent for competitive advantage.
  • Much of the gap between 80% and 100% can often be addressed through a combination of configuration tools, influencing the vendor to address in an upcoming release or product update (more frequent updates with cloud delivery) or inconsequential process workarounds.

Successful HRMS implementations are more linked to factors outside the chosen technology, and the #1 factor is (internal) customer-centric change management.

It took me some time to have the above epiphany partially because senior management and project sponsors at my first few employers generally assessed project success based on the system being delivered on-time, on-budget and stable. End-user adoption and business case realization were rarely on the project charter in those years. You could say this was fairly helpful to my HR Tech career at the time, but not so helpful to those particular organizations as a whole. 

As a result of inadequate attention to change management in the first few rollouts, very few folks outside the HR Department used the system at these companies, and worse, most line managers maintained their own spreadsheet with HR data and related update processes. They simply trusted their own, personally crafted low-tech data repositories more. These dynamics can cost companies millions annually. (Post a comment below if you’d like to see the math!) What was missing? All future end-users needed to be “ready, willing, and able” – a framework used by many change management experts.

"Ready” suggests the impacts of the change are understood, and sources of resistance and associated mitigation steps identified. “Willing” relates to the case for change being widely syndicated, tailored to stakeholders as needed, and reinforced through communications programs and executive support.  Finally, “able” suggests that relevant skills, competencies, performance measures and even corporate culture aspects are being put in place to execute and sustain the change.

Ready-Willing-Able: A Success Story

In one of my later HR Tech involvements, we went beyond understanding process automation requirements and spent considerable time with line managers discussing people management (not process management) issues that kept them up at night, how real-time access to high-value data would help them, etc. This time, we put “empathy for the customer experience” first. We also worked to overcome (beginning with acknowledging!) some long-standing disappointments with HR on the part of many consumers of HR solutions, services and programs. This was Design Thinking before the term was widely used, although empathy had been around for eons.

The team also figured out creative ways to give end-users (mostly line managers in this instance) a sense of control and ownership over the system and its data. One example involved hitting a “challenge button” about any data that line managers suspected of being incorrect. That opened a dialogue box for comments and auto-generated an email to an appropriate HR administrator requesting research and resolution. Quick turnaround was ensured through an associated SLA (service level agreement) process. 

The “black hole” of trying to resolve data issues with HR disappeared! 

That prestigious bank’s Chairman came into my office for the first time ever to congratulate our team on the crowning achievement for the HR Department, not just that year, but any year in his memory.  He heard that people outside HR were using the system, and regularly.

Combating Employee Disengagement from all the Change

Multiple generations at work with different personal drivers, automation changing the nature of work, achieving more with less, and the frequency with which businesses tweak their operating models or totally re-invent themselves are dynamics that won’t be changing anytime soon. These dynamics can lead to employee disengagement even without adding new “HR / People Systems” to have to learn and use. And disengagement can bring down even the best run companies. Investing in employees in ways that resonate certainly helps with the employee disengagement challenge; but empathetic change management is absolutely essential when the change is represented by something very tangible, like a new system.   

Bottom Line:  When end-users genuinely feel their work lives and perspectives are taken into full account, due to proactive change management, the prospects of broad HCM system adoption and even a stellar ROI are significantly higher.

Posted in: HR StrategyIT Outsourcing / IT ServicesSourcing Change Management



Which Service Providers will help our healthcare organizations survive, even thrive, post-ACA?

January 10, 2017 | Phil FershtBarbra McGann

Have we ever lived in such unpredictable political times?  An unpredictable president-elect, with unpredictable policies in areas where it's hard to predict what will work... or what won't, whatever we predict. But one prediction is certain... HfS has a healthcare analyst who'll keep pounding away at the issues and challenges, where this industry needs to plug capability gaps to be effective... so over to Barbra McGann to give her assessment of the current services market landscape of providers jostling to be in pole position to pivot to support healthcare clients, however things start to unravel...

Much as I’d like to, I can’t foresee the actual future of the U.S. Affordable Care Act (ACA) or healthcare policies under President-elect Donald Trump… anymore than anyone could predict the true outcome of the recent U.S. presidential election. What I do foresee, however, is the increased need for partnerships to focus on what the ACA is designed to accomplish (regardless of its existence) – affordable, accessible, quality health care.

Getting to the heart of the problem –the cost.

There are many people who are upset at having to pay for “other people’s” healthcare costs – which they believe is because of the ACA. And there are many people who are receiving care who didn’t before and wouldn’t otherwise, because of pre-existing conditions or age, for example. And these are often people who when they did get sick, would go straight to an emergency room – an expensive treatment which by the way somehow had its cost passed in some way at some time to, likely, people who today do “not want to pay for other people’s healthcare.” Any way you look at it, costs get spread around.

So let’s look at this issue – cost – from a different angle... how about the angle of reducing or eliminating some of these costs?  Reducing the cost of ER visits or readmissions because we can identify and intervene in someone’s pattern of such use or events before they happen because of triggers? Or, increasing the possibilities of people being healthy because of proactive education around nutrition, exercise, and lifestyle?

Partnerships are critical to truly changing the nature and outcome of health care

Just as it “takes a village to raise a child,” it takes a community of partners to create a high quality, lower cost environment for healthy consumers. Those partners include people on the front lines of care everyday—the obvious, like doctors, nurses, pharmacists, social workers – and also professionals who work behind the scenes but have an impact on care and cost – such as billing coordinators, claims processors, and coders. If everyone is thinking about their work, and how changes to the way they work, can impact the healthcare consumer, we have a

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Posted in: Business Process Outsourcing (BPO)Healthcare and Outsourcing



What ever happened to the Death of Offshoring through RPA?

January 06, 2017 | Tom Reuner

I remember vividly reading an article back in 2012 that a new set of software termed “robotic automation” could be a serious threat to offshoring if not outsourcing at large. Suffice it to say I sat up straight in my chair and wanted to find out more. And I am very glad that I not only read that article but started to research those topics. This research not only got me immersed in the small yet highly innovative Intelligent Automation community, but it led to HfS suggesting that we should join forces to push the envelope on how these tools might disrupt our industry. At the time, Phil titled the blog in his inimitable fashion: “Greetings from Robotistan, outsourcing’s cheapest destination.” And the key strategic questions the HfS team was asking included: If you were a buyer, how fast would you jump at the option to hire FTEs at rates that undercut the Indian body shops by 50% -- without sending jobs offshore? (“Hire” isn’t the right word, of course: it’s “create”.)  If you were a BPO services provider, how would you like to build a software robot to automate a business process for one client, and then resell copies of that robot to a dozen other clients in the same vertical?”

So, fast-forward 4 years, is the offshoring industry any closer to the abyss? Those questions raised by HfS can be condensed to the suggestion that RPA will lead to a surge in insourcing which in turn will cannibalize large parts of the offshoring industry. This was underpinned by the assumption that scaling those robots is a piece of cake.  Suffice it to say those suggestions need to be understood in the context of time, but equally that it were tool providers like Blue Prism and UiPath pushing that narrative in order to get the concept of RPA on the radar screens of the industry’s stakeholders. So where is the industry really at and what are the likely scenarios moving forward? Two recent industry events might help to shed more light at this. First, early in December Capita announced restructuring program. Crucially, the expected job losses are meant to be buffered by both moving services offshore as well as investing into a proprietary RPA solution. Capita is an important reference point as it has been used by the likes of Blue Prism and UiPath as a case study for the suggested trend of increased insourcing through RPA. What this tells us is that we have to stop ask binary questions, namely is one concept supplanting another. This is also demonstrated by the second event. HfS did spend a couple of intriguing days in Vietnam visiting Swiss Post Solutions (SPS) delivery centers in Ho Chi Minh City and Can Tho. SPS is a compelling example for scaling out RPA as part of its Global Sourcing strategy. The company is blending proprietary IP, RPA (UiPath) and Artificial Intelligence (Celaton) to accelerate toward higher value services. Thus, SPS is aiming to expand from its core in document management outsourcing toward BPO services. This journey is incremental, building on its historical strengths around document management and invoice processing but progressing to broader capabilities in F&A BPO and Insurance Claims processing. Unlike many other RPA deployments which tend to focus on client specific activities, often on a sub-process level, SPS is focusing on industrializing the core of its delivery capabilities through RPA and AI.

Before you raise your eyebrows, the point here is not to suggest that the market will necessarily follow SPS, but that we need a much more nuanced understanding of the implications of RPA and Intelligent Automation at large. HfS has been vocal, to put it mildly, on the impact of automation. First and foremost, this impact plays out differently in different scenarios. We see the most pronounced impact on service providers internally. It is here where RPA is being deployed aggressively and as financial earnings calls show, thousands of jobs are being “freed up”. Service providers are much coyer in deploying RPA in Managed Services contracts as top line revenues will be impacted. More recently we see a surge in transformational projects building out captive automation capabilities for clients. However, the boundaries between the last two scenarios are blurted. As part of the sourcing mix both might exist within one organization. But equally, we are seeing failed in-house projects that end up as BPO contracts and vice-versa.

However, to get a better sense for potential disruption, we have to continuously enhance our understanding of what automation really means. The more I think about automation, the more discussions I have with stakeholders, I keep increasingly coming back to one issue that helps me crystallizing my thoughts on the impact: How much of automation conceptually is actually a managed service and how much conceivably could be run as unsupervised learning. Take the example of SPS, business agents are being supported by elements of RPA and AI but their activities continue to require significant manual intervention. You can apply the same logic to the various tool providers and you get a sense when you visit their offices. Do you see hordes of developers doing manual tweaks and coding or do you see largely just R&D capabilities? Unsurprisingly the latter technologies offer higher value moving forward, even though at times it might require more effort to get the deployments up and running. Now combine the emerging notion of Virtual Agents underpinned by those forward-looking technologies and we really are staring at highly disruptive scenarios. On the danger of sounding like a broken record, we urgently need an honest and transparent debate on the various implications of Intelligent Automation.

Bottom-line: Intelligent Automation projects will only be successful with constructive change management

The White House released a report on the implications of automation and AI on the economy, the UK Government undertook an inquiry into robotics and artificial intelligence, yet our industry appears largely to remain in denial about those issues. Almost all service providers we try to engage with around this topic continue to suggest there will be no disruption. People “freed up” from projects will re-trained, re-badged – and you will have guessed it – all be happy. But I keep scratching my as we work in the sourcing industry. I am the last one proposing restructuring and job losses, but we finally have to get to a more honest and transparent debate on all of this. The implications will not only be felt in global sourcing locations but much closer to home in equal measure.

Posted in: Business Process Outsourcing (BPO)Robotic Process AutomationIntelligent Automation



Will WorkFusion’s “Free RPA” destroy the RPA market as we know it?

January 05, 2017 | Tom Reuner


When somebody offers me something that is allegedly free, I tend to get skeptical, if not outright cynical, about possible motives or hidden catches. This is especially the case in the emerging intelligent automation market, where the focus needs to be centered on making automation work effectively and driving value from digitizing legacy processes, not saving some money on software licenses.

I had the same reaction when I first heard about WorkFusion’s plan to offer core RPA capabilities for free. In a nascent market that is clouded by the reluctance of many stakeholders to share their views and more importantly playback experiences, leading to extremely blurred perceptions, the move to commoditize core RPA, before it even has become mainstream could open a Pandora’s Box. In mythology, Pandora’s Box contained all the evils of the world. So what is really in WorkFusion’s box? Is it rather an altruistic box helping clients to climb to the stairway not to heaven but to digital operations as the company did put it?  Before I let my cynical inner-self rip, I listened to WorkFusion’s webinar to find out more details. So, let’s first look at what WorkFusion is actually planning to launch. Dubbed RPA Express and planned to be launched in Q1 2017, the new product is said to offer the core RPA capabilities including:

  • Bot Recorder
  • Developer Studio
  • UI Automation Drivers
  • Bot Libraries
  • Scheduling
  • Control Tower
  • User/Role Management

While RPA is not defined across the industry, those suggested capabilities capture the value propositions of the leading RPA tool providers such as Blue Prism, UiPath, and AutomationAnywhere. Thus, WorkFusion’s strategic move to offer these for free could have profound implications for a market that has not yet reached maturity.

The two fundamental questions we have with WorkFusion’s aggressive move:

  1. Will it lead to commoditization before we have even reached market maturity and
  2. How this move could impact the leading RPA tool providers – and how will the respond (if at all)

WorkFusion’s move will accelerate the move toward transformation

WorkFusion suggests the motivation for offering RPA Express for free is to accelerate customer’s journey toward cognitive automation including crowdsourcing, chatbots and a broad integration of machine learning. As WorkFusion is not a shy organization, it reminded the audience in a recent webinar that it had launched several industry firsts including:

  • Train Machine Learning with Crowdsourcing
  • Virtualize data science
  • Combine RPA with broader cognitive capabilities
  • Build-in Tableau analytics
  • Automate conversations through chatbots and other means

Fundamentally, free RPA tool sets will lower the barrier to entry. Organizations can trial capabilities without having to worry about licensing costs. WorkFusion was at pains to stress that RPA Express is not a community version, requires costly upgrades to delivery enterprise-wide results or containing padlocks on higher value features. Provided these claims will get corroborated, the move could accelerate the move toward understanding RPA as part of transformation projects rather than a short-term focus on cost elimination, often on task rather than process level. Suffice it to say, at the same time it WorkFusion will strike at the heart of the RPA tool providers. On the service provider side, many will be chuffed by the elimination of licensing costs, but at the same time, many have established practices for Blue Prism, AutomationAnywhere or UiPath and will not easily jeopardize these relationships at least in the short term. However, the missing piece in the jigsaw is the talent that can integrate RPA capabilities – regardless whether they are free or not – into broader service delivery strategies. Therefore, partners will charge for training around RPA Express as well as helping to advance the journey toward higher value, cognitive automation capabilities. Nothing in life is really free.

Move could impact valuations of RPA tool providers

RPA Express is all about free tools for structured data. Yet, as we have stated repeatedly the industry needs to embrace the broad Continuum of Intelligent Automation (IA), with a strong focus on integrating unstructured data and building out cognitive automation capabilities. It is here where WorkFusion’s Smart Process Automation (SPA) is providing the value add and will thus provide the revenue streams. WorkFusion’s starting point in IA was Crowdsourcing and Machine Learning. Initially, it had used the RPA moniker to get a seat at the table for the decision-making on automation projects before building out broader RPA capabilities. The core RPA discussions continue to center on Blue Prism, AutomationAnywhere, and UiPath. It is these providers that could lose most from this move. Their licensing models will come invariably under scrutiny. The key question here is, how quickly can those providers accelerate their roadmaps in building out operational analytics and cognitive capabilities to buffer against potential losses in licensing revenues? Suffice it to say, I expect Harvey Ball graphics depicting the differences between RPA Express and the leading tool sets any time after the expected launch. And I can hear already voices claiming that WorkFusion has only limited capabilities in RPA to start with and can therefore easily suggest free offerings. However, in a market where very few understand the technical details of RPA tools and their impact on broader process flows, perceptions are likely to remain as blurred as they are now.

But there is possibly another subplot here. I believe that the leading RPA tool providers will be absorbed over the next 18 months by M&A. Thus, free RPA tools could weigh on valuations while management of RPA tool providers will be forced to focus on accelerating their roadmaps as the key value proposition is being forcibly commoditized. RPA Express could easily be seen as a spammer thrown into those M&A scenarios. Having said that, Blue Prism’s share price has not yet suffered, but then again, the broader market does not yet have seemed to digest the news of WorkFusion’s move.

Bottom-line: Disruption, but at what price?

We are seeing the move as a strong positive for WorkFusion as it will accelerate its customer acquisition but equally the progress toward higher value services. For the broader industry, however, the jury is still out. While WorkFusion might succeed in squeezing competitors boosted by a strong balance sheet, the market might lose important educators on the broader notion of IA. Obituaries on the demise of RPA might be premature, but the stakes have been raised significantly. It could hasten M&A in either direction.  However, it could be a case of forced commoditization that carries significant risks for the broader market. A “self-medication” with free RPA tools might throw the hard-fought progress in understanding RPA as part of transformation projects off track. Put in a nutshell, it could be a highly disruptive move. It will take more clarity from WorkFusion’s partners to understand how they are planning to balance their ecosystems and what the detailed strategies are. Therefore, be braced for disruptive counter moves.

Posted in: Robotic Process AutomationIntelligent Automation



2017: The year people are forced to learn new skills… or join the Lost Generation

January 03, 2017 | Phil Fersht

Let’s cut to the chase – there have never been times as uncertain as these in the world of business. There is no written rule-book to follow when it comes to career survival. The “Future of Work” is about making ourselves employable in a workforce where the priority of business leaders is to invest in automation and digital technology, more than training and developing their own workforces.

As our soon-to-be-released State of Operations and Outsourcing 2017 study, conducted in conjunction with KPMG across 454 major enterprise buyers globally, shows a dramatic shift in priorities from senior managers (SVPs and above), where 43% are earmarking significant investment in robotic automation of processes, compared with only 28% placing a similar emphasis on training and change management. In fact, the same number of senior managers are as focused on cognitive computing as their own people… yes, folks, this is the singularity of enterprise operations, where cognitive computing now equals employees’ brains when it comes to investment!

My deep-seated fear for today’s workforce is that we’re in danger of becoming this "Lost Generation" of workers if we persist in relying on what we already know, versus avoiding learning new skills that business leaders now need. We have to become students again, put our egos aside, and broaden our capabilities to avoid the quicksand of legacy executives no longer worth employing. We need to become hybrid corporate animals.

So let’s give some examples of these "new skills" we need to develop for ourselves:

Sales people: it’s no longer just about selling and relationship development, it’s about understanding evolving business models, understanding the impact of technology and the importance of smart marketing. You need to be a trusted consultant, not simply good with a 9-iron. Clients needs are increasingly complexifying and you need to be the arbiter of helping them simplify their requirements. Understanding business models is what will make you successful in the digital world.

Software people: it’s no longer about data management, security and making apps function, it’s also about understanding the desired business outcomes associated with these investments and helping your enterprise stakeholders articulate them better, so you can work with them to

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Posted in: Cognitive ComputingDigital TransformationHfS Surveys: All our Survey Posts



2017: The year of the “BandAid Economy” as the new digital world gets smarter and the old one just gets dumber

January 02, 2017 | Phil Fersht

Thank the Lord 2016 is over. It’s easy for any old big head to claim they “were not surprised with Brexit and Trump,” but they would be lying – this surprised even the most brilliant minds and political experts.

Noone saw this coming – but it’s opened the eyes of many business and political leaders that we are living in transitional times and we desperately need to focus on ensuring we transition our economies, businesses, health and educational establishments to a more stable, secure place, where we can all plan for the future, with a clearer vision of where the world is going. Many people voted for change, without much idea what that change was, besides turning back the clock and ejecting politicians they didn’t trust and didn't talk their language. It is my belief

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Posted in: Digital TransformationPolicy and Regulations



2016: Goodbye to the year of Ignorance (rant warning)

December 27, 2016 | Phil Fersht

I, for one, won’t be too sad to see the back of 2016… it just felt like the world kept becoming an increasingly ignorant place to exist. The Internet became the medium to block out information, not share facts and data points to foster intelligent discussion. It (almost) became acceptable to be racist; it (almost) became acceptable to talk about women as sex-objects, as long as it was playful “locker room talk”.

2016 became a time people complained about immigrants taking away their jobs – even though they’d never work those jobs in a million years. It became a time when we all finally realized so many of our politicians had lost touch with so many of the population that they got booted out… sadly only in favor of alternatives that didn’t make any sense, but it must have felt good for the disenfranchised to stick the middle finger up at the establishment.

It became a time when many of us decided we could no longer tolerate people as our Facebook friends, because they just refused to listen to rational arguments and get beyond their prejudices. Let’s be honest, it was a pretty ignorant year.

Hello to a year of, er, maybe a little common sense

So if we could have some good things happen next year…. 

Trump becomes a pragmatist. Like so many of you here, I am secretly wishing most the guff old Donald was spouting was just, well, guff. As Bernie Sanders told a private meeting of scientists recently, Trump is a very intelligent man. Plus, I believe the guy is not an idealist, he’s a businessman and a pragmatist. It’s my personal hope that he realizes globalization of business is an inevitable occurrence, but I do like his stance on China, and the fact we’ve

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Posted in: Absolutely Meaningless ComedyConfusing Outsourcing Information



My personal unfiltered truths about IT Infrastructure Services Providers

December 23, 2016 | Jamie Snowdon

One of my biggest gripes with some analysts is that they clearly develop preconceptions about service providers and struggle to deliver a balanced view in their research – they have their favourites and struggle to recognize when others are improving their capabilities.  And what’s bothersome here, is that they don’t realize they are doing it. 

So I’ve decided to do something different to make sure I don’t fall into that preconception trap and force myself to give everyone a blank sheet of paper before we embark on our groundbreaking 2017 Blueprint, which will be bolstered by 300 references from Global2000 clients… I’m just going to get all my preconceived opinions out there now, so providers know where they need to prove me wrong, or validate where I am right.

You may have already seen that HfS Research is expanding our focus on the IT services market in 2017 (see press release). An initiative lead by Phil Fersht, myself and Tom Reuner. I will be leading the infrastructure and cloud part of the story. As part of the preparation for the infrastructure management services blueprint, I wanted to write down my own personal bias – those traits that immediately jump into my cynical old brain, when I think of the various infra services providers. So I am clear where I stand and what I need to get past to do a good independent assessment.

So for those that are interested this is where I currently stand. My message to those that want to question any negative opinion is confound me. You know where I stand.


My Starting Point


The daddy of infrastructure services. Technically very solid, services still seem unevolved – even with the acquisitions of the likes of Softlayer and Gravitant seem not to have a coherent/consistent message around infrastructure services. The whole cloud story within IBM is disjointed – bluemix, cloud brokerage, hybrid – as a firm it has all the pieces but seems to have trouble bringing it all together – or at least explaining to me how it fits together. Great consulting and transformation capabilities particularly suited for the very largest of enterprises.


Ignoring the limbo state HP (or whatever it ends up being called) are going through thanks to the spin-off and merger with CSC. HPE had a good hybrid cloud story, I particularly liked the ambition for its cloud ecosystem. Like IBM it has a history of being very capable, particularly with the very largest of deals. Probably one of the few providers to be able to manage the very largest multi-billon dollar infrastructure deals with mass transformation. In some ways HP had the business messaging and cloud story that IBM lack, but a lack of cohesion and financial problems hindered progress.


CSC embodies what is wrong with traditional outsourcing, which is slightly unfair as the last pure outsourcer left standing. I can’t help myself I associate CSC with change orders, lift and shift, and first generation outsourcing. I think largely unevolved, in spite of some progress toward As-a-Service with the acquisition of ServiceMesh – but tired and now in limbo thanks to HPE deal.


Apart from the uninspiring name, I like the Accenture Cloud Platform, I like the agreements with AWS, Microsoft and Google. Accenture is playing to its strengths in infrastructure by looking to be the consultant and advisor leveraging best in class infrastructure provision to deliver customers a managed service experience. It has great long term experience with Microsoft through Avanade. But I’m left feeling that infrastructure is a means to an end with Accenture rather than a passion. Although for a provider like Accenture that is probably right.


Traditionally a strong infrastructure player, perhaps stronger on the desktop, solid investment in cloud, but not much penetration/mindshare outside of Asia. I suspect Fujitsu have something interesting to say, but I’m not sure if it is able to communicate coherently to customers.


I get the impression that infrastructure is not what Capgemini wants to sell. But infrastructure was a large part of its heritage and it ran some very big traditional outsourcing deals in the past – particularly in the UK. Not sure it has managed to find the right balance in hybrid world, some interesting stories around cloud, but I believe their destiny is elsewhere.


T-Systems has a great deal of technical no-how in development of high end hybrid cloud environments, however, it struggles to get the message to market outside of Germany. In some ways I think technically it is the best at genuine hybrid cloud infrastructure, particularly in situations where real performance or complexity is required, even if it is not the best it is at least in the top 2-3 in terms of the quality of the service delivered.


Atos have some great partnerships in this space around high end infrastructure management. They have a good roadmap for hybrid and software defined datacenters thanks to VMWare and investments in automation. Atos are in a position to take some big deals based on the quality of the infrastructure they are able to deliver. The issue is a lack of momentum, and ability to articulate a game changing proposition to the market.


I lazily lump TCS and HCL into the same group in terms of infrastructure. Great at taking on horrible legacy infrastructure and managing it more efficiently. TCS seem increasingly conservative in approach so I’m not sure how cutting-edge the infrastructure will be, but there is no doubting the technical strength and it has plenty of resources to throw at any issues. I always this TCS, with Cognizant, are the hungriest of the offshore players.


Second biggest, second best IaaS (certainly in terms of feature/function). Much more enterprise focused and enterprise ready than AWS, big in-house services team, ability to transform and add value in large partner led propositions. It lost much of it’s arrogance in the late nineties.


OK AWS is the biggest and probably the best public cloud, certainly in terms of scale, and feature/function. Very customer centric, always innovating and adding to the platform. Small internal service team, so reliant on partners. Great customer stories and case studies. Although it seems to be run for nerds by nerds. Seems to have inherited the arrogance of a late nineties Microsoft, but if you grew a >$10Bn revenue company in 10 years, you might be arrogant too.


A bit like Wipro (below), I was never 100% sure that Cognizant’s heart was in infrastructure. A growing part of the business, but not as much success as HCL and TCS at grabbing its share of the first generation outsourcing business from the old school incumbents. Yet to really communicate a strong message around future of infrastructure – which may reveal the firms loftier ambitions. Not an organization I would ever count out given its traditional hunger, but its infrastructure message got lost in translation. At least with me.


Impressed by Infosys cloud ecosystem hub, particularly in terms of ambition around infrastructure and roadmap, perhaps the best of the offshore providers. At least from what I have heard and absorbed. Although I question the success of this initiative to date.


I tend to think of Wipro as an also ran for Infrastructure services amongst the big offshore providers. Like Cognizant, haven’t been as successful at winning business as HCL and TCS in this space – hasn’t been as big a push to innovate as Infosys.


Similar to what I said for TCS. Strong at lift and shift. Strong at modernizing. Very capable at untying the Gordian Knot of old deals. Although I suspect they are all tactical strength and little strategic direction in infrastructure.


OK – this is where it gets hard. Unisys were traditionally a strong IT Outsourcing shop. But, much like CSC there is a whiff of decay about it as a business. Traditionally strong on the desktop – but who cares?


I am not as familiar with CGI, at least its global proposition as some of the other providers here. Very much an old school service provider. Strong business until the acquisition of Logica just seems to have had its energy sapped by this painful merger and lost its way.

So prove me wrong, or assure me I'm right… drop me a line when you get a chance at Jamie dot Snowdon at hfsresearch.com

Posted in: Cloud ComputingIT Outsourcing / IT Services



Making sense of Infrastructure Services

December 23, 2016 | Jamie Snowdon

In 2017, HfS is focusing heavily on IT services as a research topic and, thanks to my stint as a cloud and data center services analyst and hands-on experience in infrastructure services over the past 20 years, – I am looking after the cloud and infrastructure part of the market.

Given my recent blog on the infrastructure as a service market. HfS believes that making the right choice of infrastructure services partner is becoming increasingly critical for end-user clients, particularly given the amount of disruptive change the market is going through.

In preparation for this renewed focus, I’ve been looking more in-depth at the market for the main cloud and infrastructure service providers. This has inevitably led me to look through briefing information HfS has collected on the suppliers, talk to end user clients, look at many of the suppliers' websites, and at the various quadrants that are in circulation around this space. One of the most recent ones, which is on Amazon Web Services (AWS) website is Gartner’s Infrastructure as a Service quadrant – which has placed AWS as a leader for six years.

By the way, this is not a critique of this quadrant or an attack on AWS – far from it – the positioning is dictated by the information provided and the customer references, and, given its laser focus on IaaS, I can buy the positioning. It’s hard to argue with AWS’ huge strength in this space, and that it’s a leader…  by some margin. It acknowledges, by Microsoft’s position, that it’s closing the gap. As a slight side, note I do like the euphemistic “niche” player category particularly its use in this quadrant. What niche are these players filling? Do they provide services to organizations that want a crappy cloud? Is that a niche? Not that I want to start a semantic discussion, but I’m not sure IBM is a “niche” infrastructure services player even in IaaS, regardless of your view of the market. Particularly if you buy the IaaS as part of a larger infrastructure engagement, with any perceived shortcoming of the IaaS layer provided by another part of the service delivery.

This is what is missing, for me, the relevance of this research to an enterprise buyer. I see how the quadrant, as it stands, would be useful to a developer looking for the “best” IaaS to use, but for an enterprise looking to plan its cloud infrastructure strategy, I’m not so sure. Although IaaS can  -and is -  bought on its own, it is rarely bought without a context, at least in an enterprise organization. This means the services that wrap around the delivery of the IaaS are probably as important, if not more important than the actual IaaS – particularly in a hybrid environment. Of course, there are some 100% pure public cloud situations, but these are still fairly rare - most enterprise organizations, even in 2017, have a degree of complexity and require a mix of computing types.

My argument is that, in a complex environment, comparing one element is not enough and the excellence of that one component may be lost, as the whole infrastructure is built from interconnecting pieces, and some of the additional services that make the compute component great, are provided by another layer. The fact that there are a lot of additional services on top of the compute layer from AWS, for example, may not be useful to an enterprise looking for commodity compute delivered through a service provider that adds the additional functionality.

The Bottom Line – Who is this Quadrant benefitting?

So is the quadrant suitable only for companies that are looking to buy an IaaS engagement and don’t need to integrate it into any other environment? This would be the one way to make sense of the positioning. There are some uses that are 100% public cloud, and I can see situations where consideration of the overall enterprise architecture is not relevant, but this is quite a limited picture. Again for enterprise organizations.

So is this quadrant for a services firm suitable for an IaaS firm to choose a partner? It does help if the service provider is looking to pick the richest IaaS environment and leverage the brand of the IaaS provider. Which would work if infrastructure were more like a software eco-system, but in many cases, the service provider will want to add value on top of the IaaS. So this doesn’t help select a good basic IaaS service offering.

So what are we going to do about it? Next year we are going to look at the whole infrastructure management space with our own quadrant – an HfS Blueprint. One that takes advantage of our buy side contacts and uses over 200 interviews as the basis for our positioning and a guide to what is critical in the marketplace. The IT Infrastructure Management & Cloud Services Blueprint will take a more holistic view of the market and provide guidance on selecting the best provider for an enterprise organization. Focusing on end to end management of a client’s infrastructure services rather than just one aspect.



Posted in: IT Outsourcing / IT Services



Getting The “A” Team From Your Provider – Or, More Realistically, Getting The Team You Deserve

December 22, 2016 | Christine Ferrusi Ross

My colleague Mike Cook and I are in the middle of a blueprint on Managed Security Services, and as we talk to client references and review provider information, I’m reminded again about how difficult it is for clients to feel like they’ve really gotten the best possible team for their engagement, based on their investment outlay.

You might be disappointed with the quality of your team, and maybe you think it’s because it isn’t as good as you thought. Maybe they oversold their capabilities or flat-out lied about what they could do. While this is possible, in my experience, it’s more likely that clients confused the provider’s corporate image with the capabilities of the specific delivery and account team on their engagements. A provider’s capabilities are never evenly distributed across the entire company and the reality is that some delivery people are better than others.  Plus, providers can often be very crafty with how they allocate their best and brightest to their clients.

A while back, I was at an event, and chatting with several vendor executives. A vendor management person from a buyer client that we all knew came over and started chatting. He looked at the company names on everyone’s badges and mentioned that his company worked with every provider represented there. Then, company-by-company, he pointed at each one and said things like “Yup, we hate you guys. We’re suing you. Your team is terrible. You never give us good people.” That broke up the circle quickly as everyone made excuses to move to other conversations!

And afterwards, two things that stuck with me: the first was that buyer getting up as a speaker at the event to talk about creating shared value and better relationships with suppliers (I kid you not!) The second was one of the providers sharing with me privately his frustration with that particular buyer, saying “he wants the “A” team, but he’s paying for the “C” team. And even still, all he talks about is cutting our rates in the next negotiation. Why would I invest in a client like that?”

This story highlights several reasons that a company many not get the “A” team from a supplier that have nothing to do with the supplier at all:

1. You aren’t mature enough. Providers can tell what your internal team is capable of – both for execution and understanding. A supplier won’t give you “A” level resources if they think you can’t appreciate the value. Now, of course, the question is “if you can’t tell the difference, how do you know it’s not the ‘A’ team?” And the answer is, you probably can’t put your finger on it but you’re vaguely unhappy and realize things aren’t progressing the way you want even if you don’t know why. Smarter clients get smarter teams.

What to do about it: This one starts with increasing your own expertise first so you can ask better questions, understand the answers better, and make your own suggestions of how to remediate so you can have productive discussions with the provider. When the provider sees that you know what you’re doing, they’ll give you better resources. In the story above, you wonder why the company was suing a provider – that’s the kind of thing that happens when you didn’t scope properly or weren’t smart enough to ask for the right things.

2. You’re cheap. I hear this one a lot. As a client, you’re complaining that you got the “B” team. But when you look at your rate card, you’re getting “C” team pricing. You may even have gotten the “C” team instead of the “B” team. This is exactly what frustrated the provider executive in the story – he was delivering better resources than the client paid for and yet the client wasn’t grateful, instead the client only complained that the resources weren’t good enough!

What to do about it: If you pay for the “C” team and got the “B” team, be happy. You’re doing better than most others in your situation. If you’re paying for the “C” team and actually have the “C” team, then you need to have a discussion internally about what your goals are. Maybe you’re actually ok with the service you’re getting and the complaints are just water cooler venting. If you’re actually having a delivery problem, then you need to look at increasing what you’re paying or changing the delivery model. You can change a delivery model by seeking to automate some part of the engagement and paying a little more for the resources you’re keeping.

3. You’re a bad client. Maybe you complain about things that aren’t actually wrong. Maybe you blame the provider for problems that really resulted from your internal team. Maybe you constantly want things that aren’t in the contract and get mad when you don’t get them. There are lots of variations on this theme. Here’s the thing: no one wants get abused as work, and top talent doesn’t have to put up with bad behavior. They’ll get switched to better clients. Or, worse, you HAD the “A” team and you beat them down until they’ve devolved into “C” quality work. While I don’t know the inner workings of the buyer’s organization, I can tell you that in this conference setting where provider normally love the chance to socialize with their buyer clients, providers avoided this person at all costs. That speaks to the poor relationships this person built.

What to do about it: Of course, if there are legitimate problems with the provider’s work, address it. But if the problem is really your team, then fix your internal situation. You can train your team to address challenges differently, swap your internal provider liaison or even fire staff that are creating a bad environment. You definitely need to get realistic about your expectations of the engagement. Then let these internal changes get demonstrated to the provider staff to show them you’re no longer the client from hell.

4. You’re not important. Sometimes you can be a great client from all sides – you pay well, you’re a pleasure to work with, and you have interesting work. But maybe you aren’t a big client, or you’re not a brand name, or you in fact have a weak brand (the “loser in your industry?) The provider is likely putting top talent onto clients that spend a lot of money or that have brands that with star power or they use as client references. In the story above, the client was important in its industry but had a reputation as a bad place to work, so there wasn’t the “star power” that often comes from a well-known brand.

What to do about it: This one’s trickier than the rest, because the only way to really fix it with your existing provider is to spend more money until you’re a bigger and more important client. Sometimes you can fix it by being willing to be a reference client, tell your account team if they fix the talent situation, you’ll agree to be a reference for future prospect or analyst calls. However, if you’re willing to go through a transition, you can solve this one by switching providers. You can look for a smaller provider so you can become a “bigger fish in a smaller pond” or a player who specializes in your industry so your brand becomes more important to that provider.

The Bottom Line: You’ll only be satisfied with your service providers when you deal with your own responsibilities to the engagement.

Get more realistic with your expectations based on the factors above and decide what’s good enough for your needs. Hold the supplier’s feet to the fire, but do the same to your own team. Addressing these internal issues will give you more value from your existing deals and also position you better for future work with your key suppliers.

Posted in: IT Outsourcing / IT ServicesSecurity and Risk



From Day One: Design Thinking the Patient Experience with Lawrence General Hospital and Sutherland Global Services

December 22, 2016 | Barbra McGann

There’s no two ways about it. I’m excited to be on the cutting edge of a Design Thinking-led services engagement in healthcare to address patient experience. Thank you to Lawrence General Hospital (LGH) and Sutherland Global Services for inviting me through the door and into this initiative…. and especially for agreeing to let me blog about it! We are constantly looking for where companies are “taking a detour with design thinking” and finding results to share. This time, we’re bringing you along on the journey.

We’ll start with a workshop led by Sutherland Labs, and follow their version of this human-centered, iterative innovation methodology over the next few months. The goal is to re-think the patient experience at LGH, and I’ll be sharing the progress here in my blog as we go. After months of researching, interviewing, and writing about Design Thinking and the value it can bring to a services engagement, I will be able to give you an inside look as well. If you have done this before, you can compare it to your own experience and perhaps find some new ideas; and if you haven’t, here’s a way to get some further exposure to a work in progress 

Design Thinking can play a strategic role in helping healthcare organizations to better service the consumer as the patient, member, caregiver, clinician, etc… and rethink operating (and business!) models.

We believe design thinking can help bring about a more healthcare consumer focused type of engagement, which is so needed in health care today. With the latest news burning the wires that in the U.S., premiums are going up yet again, healthcare consumers are just going to get more discerning about how and what services they are receiving for their money. Value – always defined by the beholder – is changing for healthcare consumers. Being aware of that, and aligning the organization –front, middle, and back office – is simply becoming an imperative to the future health and success of healthcare providers, period. And service providers can play a role in doing so.

Despite the potential, and early success stories in and outside of the industry to date, the use of Design Thinking in healthcare for impacting business outcomes through operations is fairly nascent, as seen in Exhibit 1 from our recent Intelligent Operations Study, which included 45 Healthcare Operations Services Buyers. Only 23% of the respondents say they are using Design Thinking today, so we see LGH and Sutherland as pioneers here. For those of you who have not yet jumped into the waters, you can also find some ideas on how to get started in my recent interview with Charlotte Bui, Global Lead of Design Thinking at SAP… and stay with us here as this story with Lawrence General Hospital and Sutherland Global Services develops.

The LGH and Sutherland partnership to put patient experience at the center of reimagining the hospital business operations – the use of Design Thinking – exemplifies one of the 8 Ideals that HfS Research considers critical in the move to more “intelligent business operations.” As it is also one of the least mature of the Ideals in this services industry, they are breaking some new ground here.

Exhibit 1: The Maturity of Design Thinking in Helping Achieve “Intelligent Operations” in Healthcare Organizations

At the same time, fellow HfS analyst Hema Santosh, and I will be launching an update to the Design Thinking for the As-a-Service Economy Blueprint we published with Phil Fersht in early 2016. We expect to hear more about how service providers are using Design Thinking and incorporating innovation into their engagements, to be more forward thinking and investing in the long-term value of outsourcing services partnerships.

If you have a story to share, questions to ask, or challenges to pose, please fee free to post them here, or contact me at [email protected]. And, stay tuned…

Posted in: Design ThinkingHealthcare and Outsourcing



Cognitive Computing in HCM: Walking the Line between Cool and Creepy

December 20, 2016 | Steve Goldberg

Cognitive computing generally refers to having a system mimic the way people think, learn, solve problems or perform certain tasks. In HCM systems specifically, the system leverages what it knows about us -- including our job, social network, and interests – to yield solid benefits in areas such as social recruiting and social learning.

We are also seeing take-up of some newer entrants into using NLP (natural language processing) in the form of chatbots and intelligent agents. Examples highlighted in my recent POV “Intelligent Automation in HR Services and Solutions” included an employee having a conversation with the system about an error on their timesheet that the system had the wherewithal to resolve … or the HR technology platform proactively pre-filling a timesheet based on items in the person’s calendar and previous timesheets.

So far, generally no controversy surrounding these type of cognitive capabilities … efficiency gains and better customer service without any apparent downside. But what if a near-future incremental step in the cognitive HR tech journey goes something like this:

Employee: Hi there, kindly initiate a PTO time off request for me for this Thursday and Friday after confirming that I still have the 2 PTO days to use.

HR System: I can certainly do that sir, but are you sure you want to take 2 days off this week given you have a major project deadline next Monday, the project seems behind schedule, and as you know, you were late on your last major project deliverable?

Can we say C-R-E-E-P-Y?

The norms regarding leveraging these capabilities in the HR/HCM realm will likely not be established anytime soon. We probably need a few high-profile lawsuits to be the catalyst, followed by consultants developing practices as quickly as they did for Y2K. In the absence of this, it’s reasonable to assume companies will start to get feedback from employees and job candidates that they were put off by the intrusive nature of their HR system interaction.

Until such time, here are four cognitive capabilities in HCM that go beyond (or way beyond) intelligent HR agents and chatbots. Some may still become standard HR systems capabilities and practices in the months or years ahead. For the time being, this is arguably a matter of weighing business benefits (ranging from efficiency gains to improving employee satisfaction/engagement) against potential liabilities that could include a total distrust of using the HR system -- for anything!

  • Upon “clocking out” late one evening, the system notices that excessive hours have been worked by that employee in the last 2 weeks, and auto-emails the person’s supervisor a suggested communication advising the employee that … “the company values work-life balance, and they may want to consider getting back to a more normal schedule.”
  • The system recommends internal or external training courses to look into, or even a personal development coach, based on formal or informal feedback received (the latter from corporate social collaboration tools).
  • The system alerts a business unit head that a certain employee has initiated the processing of a leave of absence or early retirement, and identifies key “institutional knowledge” they possess (again based on formal or informal feedback) that should be transferred to other colleagues at the earliest.
  • A personalized, auto-generated on-boarding communication from soon-to-be team members who let the new employee know they have some things in common … e.g., school attended or outside interests or reside in same part of the city or birthday … and also expresses how excited they are to have them as a team member. (Of course, in this example, the “sender” would receive it first and have a chance to modify.)

Bottom Line: Cognitive capabilities within HCM systems will keep pushing the envelope, perhaps until lawsuits, governance issues or perceived creepiness get in the way.


Posted in: Cognitive ComputingHR Strategy



The real unfiltered truth behind the lack of RPA use cases

December 20, 2016 | Phil Fersht

My good pal, Steve Rudderham, formerly of Genpact, Capgemini and Accenture fame... and recently anointed the great GBS leader at Kelloggs, posed the irresistible question to me on our Robotic Premier League blog:

Phil, One thing we've struggled with is really where the rubber hits the road in terms of credentials. There are a lot of good innovation "stories" around RPA but several of the players on your list have really struggled to articulate savings and examples outside of their own in-house improvements using macros in excel. When do we expect more maturity in this space in terms of client stories that the rest of the industry can get behind? 

Fair enough, Steve, great question... so here's my answer:

@Steve Rudders -

It's early in the morning, the filters are off so I'll just answer your question as bluntly as possible: We live in ignorant times - people are blindly groping for that next vehicle to drive out cost, and RPA currently fits the bill.

I, personally, thought the hype would die down this quarter as companies struggled to figure out what not to automate. Don't get me wrong, the RPA value proposition is tremendous - taking high throughput, high-intensity processes that require large amounts of unnecessary

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Posted in: Robotic Process Automation



Is Account Management Location Holding your Client Back from a BPaaS Engagement?

December 19, 2016 | Mike Cook

For outsourcing to continue to grow contracts need to move beyond simply removing cost and in addition add true value to the client. In HfS’s PoV, Defining the Seismic Shift from Legacy BPO to BPaaS we uncovered what BPaaS really entails. In this study, we identified that BPaaS is not simply platform-enabled BPO as some would have you believe. BPaaS contracts are fundamentally defined to deliver business outcomes such as revenue growth, with KPIs and SLAs like average handling time being more about tracking and reporting on progress as opposed to being the only reason for payment.  This approach requires a significant level of trust between the service buyer and the service provider – trust that is based on experience, credibility, or the combination.

The focus and purpose of BPaaS are not on how results are achieved, but the fact of achieving them (or not). In some cases, the service provider is paid based on the outcome, such as incremental revenue that is recovered in a collections operation. In other cases, while there is a specific business outcome in the contract, such as increasing medical adherence, the payment is based on a transaction, such as number of patients managed, or number of payrolls processed. For example, Webhelp’s contact center contract with UK retailer ShopDirect, whereby Webhelp is paid through a combination of FTE pricing and an outcome based model that varies according to service line, examples of outcomes include revenue gained, first call resolution rates etc.

With the amount of control placed in the service provider’s hands, trust is the key building block in BPaaS contracts.

BPaaS contracts are very seldom undertaken by first generation outsourcers. The level of trust involved in handing over complete control of processes is not something buyers are willing to undertake lightly. More often than not these BPaaS contracts evolve from well-established and successful BPO deals.

Another aspect to consider and something I have recently witnessed firsthand as I’ve visited a few South African BPO service providers (jealous much?), is the location of account management teams. Almost without exception, traditional BPO contracts I have witnessed have a top-down directive account management team based onshore with the client. This creates a further barrier to communication between service delivery and service destination, which can potentially hinder the development of trust needed to move to a BPaaS contract. Conversely, all BPaaS contracts I’ve covered during my time here have a dual account management function with one onsite at the delivery location and the other onshore near the client’s head office.

Is this dual account management function a symptom of a BPaaS or is it a key enabler of making these BPaaS contracts happen? The answer, more than likely, lies somewhere in the middle. This dual account management function creates a more fluid communication channel between the delivery center and the client. This communication helps to dispel the fear of complete loss of control from the client side and lead to a greater degree of trust.

Bottom Line: The key takeaway, however, is that this dual account management function could be a key factor in facilitating the transition from traditional BPO contracts to BPaaS partnerships by increasing communication, trust, and onsite presence.

Posted in: Business Process Outsourcing (BPO)SaaS, PaaS, IaaS and BPaaS