Why HfS cancelled its 2013 predictions

For all of you waiting on tenterhooks for our 2013 predictions, I am afraid we have some bad news: today, we took the unprecedented step of canceling them.  But why?  Can’t analysts see into the future anymore?

We predict... there'll be a lot of rubbish predictions

1) Analysts who claim to see the future, without any real data to support their theories, are very, very likely to be talking gibberish.  They are either:

a) Talking out of their behinds;

b) In love with their own verbocity and have lost their grip on reality; or

c) Both of the above.

This time, HfS will base its outlook on the data gleaned from our 2013 State of Outsourcing study, which will include the views, experiences, dynamics and intentions of hundreds of enterprise buyers, providers and consultants.

2) Predictions from “experts” are nearly always wrong and many are just ill-informed rubbish. Not only that, nothing is more off-putting than reading someone’s predictions that are just plain wacky, for example, Jason Krieser of law firm K&L Gates views a bright future for the service integrator model. What?  We were talking about this a decade ago.  Moreover, the article is claiming the fact that the State of Texas is “one of the first IT organizations to give it a go”.  When did the State of Texas become a barometer for the future of IT Outsourcing and innovation?  And while we’re having a laugh at predictions based on very shaky evidence, Steve Martin of outsourcing consultancy Pace Harmon, claims we’re in for a major “backsourcing splash” next year simply because Randy Mott fancies stirring things up at GM (which is easy to do when your boss is Barack Obama).  How can you base an industry trend on the actions of an auto manufacturer which only recently survived on bail out money from the government?

3) Our economy is teetering over a precipice in 12 days’ time… won’t that have some impact on proceedings?  In case any of you have been in a coma all year, if Congress can’t figure out a way to even start paying off its $16 trillion debt over the next few days, we could be heading into a sharp recession.  Most likely, they’ll come up with come temporary band-aid measure, but our economy is in serious debt and we haven’t even come up with an initial plan to save it and reverse our horrible addiction to debt.  Now, the outcome of the end of year Fiscal Cliff deadline could create an incredible burning platform for outsourcing deals to be signed… or it could prolong the painful do nothing, change nothing holding-pattern much of industry has been persisting with since 2008.  It all depends on what kind of deal (if any) Congress can concoct.

So we, at HfS, predict absolutely nothing, except that we’ll all get probably get extremely drunk next Tuesday, Wednesday and maybe Thursday…

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11 Comments

  1. Posted December 20, 2012 at 2:53 pm | Permalink

    I say cancel all predictions because the world is ending tomorrow, doncha know?

  2. Posted December 20, 2012 at 6:40 pm | Permalink

    I am reassured, I thought it was because of the #mayapocalypse

  3. Sumer Shankardass
    Posted December 21, 2012 at 6:16 am | Permalink

    Phil and Team – this is has to be one of the better predictions I have read in the 20 years or so I’ve been in the sourcing (out-, in-, smart- and back- ‘sourcing’) industry…

    All the very best for next Tuesday, Wednesday, Thursday and beyond…and to a safe and Happy 2013!

  4. Stan
    Posted December 21, 2012 at 6:51 am | Permalink

    I predict with the non-end of the world it will be discovered that Frank Zappa is alive and well and has been living with Jim Morrison in Tikal and that in fact the Zappa character Gregory Pecory was the genetic genesis of the current market IT market analyst spawned in Stamford, CT in 1974 who hence for to this day have been looking, as Gregory said,

    “For a spectacular
    New (IT) trend,
    Thereby rejuvenating our limping
    Economy,
    And providing
    For bored & miserable people (end-users and vendors)
    Everywhere
    Some great new
    ‘thing’
    To identify with.!
    (without asking)
    Does it matter that this waste of time
    Is what makes a life for you?”

  5. Ross
    Posted December 21, 2012 at 11:08 am | Permalink

    Phil,

    I have, over the years, found most predictions about the future of the outsourcing industry to be shallow summaries of the recent past. Your discourse on the corrosive impact of our national debt is spot on. Were I to make a long term prediction based on our inability to manage debt, it would be that our grandchildren will be fortunate to be the low cost service providers doing routine, repeatable, rules-based, high volume work in support of successful businesses in located in countries that are fiscally sound. I won’t make that prediction because I’m an optimist — perhaps a fool, but an optimist. I continue to hope that, one day, the voters of this country and the prople they elect will wake to the perils of our growing debt and begin to change course.

  6. Posted December 21, 2012 at 12:15 pm | Permalink

    So irreverent! Love it. Have a great holiday everyone.

  7. Terry Hartmann
    Posted December 22, 2012 at 12:05 pm | Permalink

    “verbosity” is spelled with an “s”… in case you think I wasn’t reading your notes.
    And -as someone once said – “Forecasting is very difficult, especially when it concerns the future.” And — Happy Holidays!

  8. Phil Fersht
    Posted December 22, 2012 at 12:52 pm | Permalink

    @Terry – I customarily crowdsource my editing, so thanks for correction. Forecasting is great when applied properly across multiple datapoints. It’s those who make profound predictions, based purely on one or two isolated experiences, or are simply talking up any old crap to sound “clever” who get my goat :) Today’s executives are far more tuned in to market trends than they were a few years ago and are far less easily bulls*****d by experts than they used to be. People want common sense, real datapoints and intelligent dialog… not pontification and showboating…

    PF

  9. Posted December 30, 2012 at 2:48 pm | Permalink

    The Mayans say the world is about to end … The oreo cookie says dont worry.

    Outsourcing is justified by cost savings and need of expertise. Insourcing is justified by cost savings and need to control your IT.

    If we just keep swinging back and forth we can save enough money to buy the company.

    That’s my prediction.i

    Known as prognosticus, or just nzsvz9

  10. Mark Ruckman
    Posted January 3, 2013 at 8:50 am | Permalink

    A couple of interesting points

    In your story you link to an article on cio.com as an example of bad forecast, HFS staff is quoted in this same article with your own forecast / trends to watch

    In past years, HFS has also made forecast / trends to watch for cio.com

    Are you telling us your current and past forecast / trends to watch are bunk?

  11. Phil Fersht
    Posted January 5, 2013 at 1:06 pm | Permalink

    @Mark – as a golden rule, you should never look back at predictions to ascertain correctness. As one famous analyst once said “forecasts are only correct for that single point in time when they were made”. TBH, whether a prediction actually rang true is irrelevant, it’s the evidential basis why that prediction was made, which is what makes it a “prediction”.

    My take here is, simply, that people should not base “predictions” on one example (i.e. GM backsourcing some IT, or the State of Texas dabbling in Service Integration). In this instance, the HfS analyst (Tony Filippone) comments:

    “Companies will have little patience for teams filled with contract negotiators and [service level agreement] number crunchers that have strangled their organizations of value”
    “Expect to see governance upheavals as business-oriented leaders take the helm and meaty value-driven discussions with service providers dominate”
    “Low cost locations will remain important, especially to European companies in desperate need of recessionary salvation”
    “The ‘new global’ really means demonstrating the capability for operations to seamlessly flow across centers around the world”

    Now, if Tony was talking twaddle, I’d be the first to point this out, but he is basing these assessments off, literally, hundreds of live discussions, and thousands of quantitative data points. I would challenge you to dispute Tony’s common sense here (even if his first point is more hope than reality!).

    So, to sum up, predictions need to be based on real, substantive facts, not pure guesswork…

    Any “predictions” we put out under our own brand (in the future) will be in that vein,

    PF

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