Monthly Archives: Dec 2008

Emerging from the rubble of 2008: BPO has a breakthrough year

December 26, 2008 | Phil Fersht

Much more fascinating than trying to predict what, on earth, is going to happen in global sourcing in 2009, is trying to make some sense of 2008's non-stop chain of events. Rubble2However, emerging from the rubble has been the maturing of the BPO industry, as several global service providers have striven to consolidate their market positions, anticipating further growth in BPO services in 2009.  The premise being that buyers are quickly becoming more accepting of radical change to their global business models that not only drives down operating costs, but also enhances their competitive position.  

How has BPO emerged as a vehicle to achieve these goals?

BPO matured as buyers took on a bottom-up approach to adoption.  For the first time, we have started to see BPO engagements being adopted in the right way.

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Posted in: Business Process Outsourcing (BPO)Finance & Accounting BPOHR Outsourcing



Happy Holidays

December 24, 2008 | Phil Fersht

I've been so inundated with spammed e-cards this year, I'm putting out a generic "Happy Holidays" post that you can pretend I put together especially for you :)

Happy-holidays2 In all seriousness, it's been a lot of fun interacting with so many of you this year - let's do more of it in 2009.  

Seasons Greetings,

Posted in: Uncategorized




December 23, 2008 | Phil Fersht

I received a terrific comment during our debate on
scrapping the "O" word from Frank Feather, which I wanted to highlight:

"I agree that outsourcing should be scrapped, but for none of the reasons you cite.

Simply put, outsourcing is a futile term in a global economy. It would mean to send work outside this planet, to another planet.

On this planet, every economy is now interlinked, with one resource pool for human labor and all other inputs, from natural resources to capital."

...I wonder if we can outsource our economy?

Posted in: Confusing Outsourcing Information



Preparing for '09: It IS time to dump the term "Outsourcing"

December 21, 2008 | Phil Fersht

You may recall the discussion we had earlier this year regarding whether it is time to stop using the term "Outsourcing".  The general consensus among many of you (including myself) was that we are stuck with the phrase and we shouldn't go out our way to dress-up global sourcing with other, more relevant, terminology:

"However you want to spin it, your staff will view it as outsourcing, and the more you try and disguise the taboo term, the more suspicious your staff will be that you are simply trying to ship them out for lower-cost labor"

With the dramatic changes in our corporate climate and political attitudes in recent months, I believe it's now time to change our well-worn phrase.  The core issues being:

1) Poor comprehension of global sourcing. Too many people associate "outsourcing" with greedy corporate leaders only interested in slashing costs, with little regard for employee livelihood. They have pre-conceived notions that organizations have forgotten about their people, and only care about the bottom-line.  I can assure anyone that is not the case with the majority of companies with whom I speak with daily. 

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesConfusing Outsourcing Information



Horses outsourcing predictions for 2009

December 14, 2008 | Phil Fersht

Ingsoc Yes, it's that time again folks, when analysts and other industry wannabe needle-movers come up with some profound verbiage that they think gets everyone excited for a few days, and hope no-one re-reads in 6 months.  Well... I occasionally do some research in my spare time, so here are some thoughts on what we can probably expect to see happen (just don't bookmark this page and hold it against me):

Low-hanging fruit outsourcing with immediate cost-savings will be strong.  As we discussed and surveyed here, it's areas where enterprises can streamline initial costs over a contract and get an immediate impact on the bottom-line.  That's bread-and-butter application outsourcing, high-arbitrage BPO areas such as F&A and vertical-specific analytics (that KPO stuff).  I am also expecting increased adoption of procurement BPO models as increased procurement and supply management work is moved offshore, and buyers can benefit from labor arbitrage to underpin the transformation costs that have held back adoption in the past. 

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Posted in: Business Process Outsourcing (BPO)Captives and Shared Services StrategiesFinance & Accounting BPO



WSJ confuses itself about outsourcing

December 12, 2008 | Phil Fersht

I just read a piece in the Wall St Journal, which has me wondering whether many people actually think companies buy outsourcing like servers, or software licenses.  Companies outsource to reduce costs and access skills and technologies they need to be more competitive.  It's also a tough, long-term decision for many firms to take, and it's no wonder we're experiencing a slow quarter in deal activity as companies wait to see how the economy is going to shake out.  With IT budgets being reduced and pressure to take out more administrative costs, firms have little other choice than to explore outsourcing opportunities.  What the article fails to mention is the huge amount of evaluation activity we're seeing in the market right now.  How about asking TPI et al. how many consultants they have on the bench?  My sense is not many...

Posted in: Business Process Outsourcing (BPO)Confusing Outsourcing InformationIT Outsourcing / IT Services



HRO is out of rehab

December 11, 2008 | Phil Fersht

We've had many animated discussions in the past regarding the trials and tribulations of the HRO market. Britney SpearsTo cut to the chase, HRO has struggled to live up to expectations as clients struggled with poorly integrated service delivery, overly complex operational issues, the lack of common HR standards and common HR technology platforms. This often resulted in negligible cost savings and fractured service provider relationships.  Not to mention some significant write-downs by some of the providers who took on overly complex engagements.

However, new research I've been carrying out in recent weeks

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Posted in: Business Process Outsourcing (BPO)HR OutsourcingHR Strategy



Now the election is over... what about outsourcing?

December 08, 2008 | Phil Fersht

Not many people are better-placed to debate the thorny issues of outsourcing and government policy than my old friend Glenn Davidson.  Glenn is synonyous in the public sector world with issues relating to human resources strategy and broader outsourcing strategy, having been one of the founding members behind Equaterra's public sector practice that was launched in 2005 and now a major part of their business.  Among several commercial roles, Glenn DavidsonGlenn previously served as one of Accenture's key executives behind their early forays HRO post their e-Peopleserve acquisition, and prior to that as a chief of staff and communications director to a Virginia governor, as the Commonwealth’s chief federal lobbyist and as a legislative director to an Ohio congressman.  

With so much heated discussion regarding the policies President-Elect Obama is going to deliver regarding the USA's future stance on offshore outsourcing and public sector contracting (which we touched upon here), I asked Glenn to put together some of his thoughts on where this will lead... over to you Mr D:

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesCaptives and Shared Services Strategies



After the wake-up call: time to focus on our young talent

December 06, 2008 | Phil Fersht

Wake-up-call As painful as this current economic climate is, we really need to start looking ahead to the positive changes that times like these can bring in the long-term when we recover. Recessions normally occur when many years of bad habits culminate, where certain things were progressing down the wrong track and, finally, the bottom fell out of the market and woke us all up. And, this time, the wake up call is a very loud one.

To correct our future, we need to focus on where our future is going to be molded - our young talent.

So how could this play out?

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHR Outsourcing



Mumbai events test appetite for offshore

December 03, 2008 | Phil Fersht

Dana Stiffler My esteemed colleague at AMR Research, Dana Stiffler, who works with me in our Global Business and Outsourcing Services practice, has compiled some thoughts about the recent atrocities over in Mumbai, which we wanted to share with you, discussing the impact on the offshore sourcing industry... over to you Dana:

India's financial markets, including technology company stocks, bounced back admirably following last week's terror attacks in Mumbai.

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Posted in: Business Process Outsourcing (BPO)Captives and Shared Services StrategiesIT Outsourcing / IT Services



Looking to 2009: a chat with Peter Allen

December 01, 2008 | Phil Fersht

Peter Allen One of the most sought-after thinkers in the sourcing industry, fellow-blogger and TPI  veteran, is Peter Allen.  Peter started his own blog Consider the Source around the same time "Horses for Sources" got rolling, and we've pretty much been bouncing ideas, opinions, advice and outlooks off each other over the last couple of years. Peter spent some time at our offices recently and I wanted to share some highlights from our discussion as we move into this new era of global sourcing:

PF: Peter - You've witnessed the growth and development of the global outsourcing industry and probably have had more conversations with sourcing buyers and suppliers than most people over the years.  How critical is this current economic crisis to the outsourcing industry?  Do you see increased activity on 2009 as a result?

PA: Thanks, Phil. These are certainly times of considerable stress

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesFinance & Accounting BPO