Monthly Archives: Jul 2011

HfS welcomes Jyoti Banerjee to educate the services industry on why today's top businesses are also the top sustainability performers

July 31, 2011 | Phil Fersht

Click here for your free copy of "Six Reasons Why Sustainability Matters To Today's Businesses"

Nostalgic about that old "Green Issue", when people actually cared about the impending environmental apocalypse, before the banks crashed and attention dramatically turned to protecting our corporate income? Remember when we proceeded to bail ourselves out, and then stashed the debt with our next generation to figure out how to repay it? 

Well, the same is happening to our environment, if our businesses continue to fail to take measures to rollout effective sustainability strategies. While finding a way to repay the Chinese is one thing, repaying our environment, our wildlife and our atmosphere is not nearly as reversible.

To this end, we're seeing hard evidence that today's most successful business are also the better sustainability performers. So what can we do to encourage business leaders to be sustainably-smart as they redefine their global operations strategies? It's high-time for organizations to get smart about their sustainability performance and their overall carbon footprint - and some are already enjoying significant tax-breaks for complying with targets set by environment directives - however most, sadly, are not.

Meanwhile, some of today's top outsourcing providers are also sensing the opportunity to help their clients meet carbon targets.  Sustainability is quickly becoming one of those areas where organizations can benefit much more from a third-party with all the knowledge and compliance practices they need to improve sustainability performance. As with anything that involves regulations and compliance measures - what is the advantage of doing this yourself when someone else can help you do it faster, smarter and can ultimately save you more money?

Jyoti Banerjee is HfS Research Fellow covering sustainability and corporate responsibility strategies (click for bio)

We recognize the urgent need for businesses to source a sustainability plan, and are delighted to announce that Jyoti Banerjee has joined us as a Research Fellow to help educate our industry on the sustainability and corporate social responsibility (CSR) issues impacting us today.  I have personally known Jyoti for sixteen years, since was my boss at a UK-based accounting IT consultancy called Tate Bramald Consultancy.  My role was to help run their research practice, where we supported the British government with understanding the (then) impending Y2K crisis among other scintillating projects that scared the world into upgrading their creaking finance systems.

Since those heady days, when he has not been busy with his cricket and being a Dad, Jyoti has founded some of Europe's leading ERP magazines and consulted for a host of leading software providers, in addition to leading a number of IT initiatives for the European Commission. More recently, he has been busy working on a number of projects in the sustainability space, including the specification and creation of one of the world’s first CSR reporting products, and the ground-up conception and specification of a sustainability management software application. Today, he is partner for Fronesys, a just-launched new sustainability advisory boutique, where he will be imparting his wisdom with HfS on sustainability and corporate social responsibility topics as they relate to global sourcing.  Over to you Jyoti for a few words...

Read More »

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



Offshore outsourcing killing innovation? Time to change that record, please Professors...

July 27, 2011 | Phil Fersht

Top outsourcing correspondent, Stephanie Overby, last week ran a lively discussion over at with a couple of Harvard academics, Professors David Pisano and Willy Shih, on that fine vintage topic "How Offshoring Can Kill Innovation".  However, unlike that case of '86 Margaux in your cellar, we rather fear this argument is beginning to take on a tinge of vinegar.  Time to change that ol' record?  Let's ask HfS COO, Esteban Herrera...

Esteban Herrera (click for bio) may not have got into Harvard, but he sure knows more about outsourcing than them

Esteban Herrera's take on whether offshore outsourcing is really killing innovation

The provocative interview of two Harvard Business School intellectuals in CIO Magazine is making the rounds and generating some interesting discussion. It will undoubtedly stoke the already heated fires of the sensationalist anti-outsourcing crowd and provide fodder to those who say that offshore outsourcing detracts from the “client” companies’ and countries’ competitiveness.

The problem is that the argument being made, that outsourcing higher-end, higher value business processes will lead to erosion of the ability to innovate is at once obvious and flawed. Professors Pisano and Shih promote the concept of the “industrial commons”, the ecosystem of companies that

Read More »

Posted in: Business Process Outsourcing (BPO)IT Outsourcing / IT ServicesSourcing Change Management



HfS Live and Unfiltered, Part I - The new buyer-provider outsourcing debate series is right here!

July 26, 2011 | Phil Fersht

Join us for HfS Live and Unfiltered

Fed up with all the puff and fluff? Comatosed by the motherhood and apple pie? Ready to get the real deal? Well, your pain will be over on August 4th, as we bring you the ultimate unfiltered schmaltz-free one-hour debate on the future of the outsourcing industry.

Join us for a special web-event where four senior provider and four senior buyer executives will lock horns to debate the burning issues of today's outsourcing business.

Read More »

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



Meet The Don of BPO (Part 1)

July 24, 2011 | Phil Fersht

Donniel Schulman is GM for F&A and Supply Chain Global Process Services at IBM

One chap we've been trying to get on here for years is known simply as "The Don"... to anyone who knows him.

There aren't too many people who shun the media spotlight to discuss the intricacies of the ideal end-to-end expense management process.  Nor are there too many senior executives who will quantify exactly how many hours, minutes and seconds they shaved off the time it took to execute that process for a client - and demonstrate exactly how they did it.

However, as IBM's Donniel Schulman's reputation and influence in the BPO industry has grown in recent years, we've finally persuaded the chirpy New Yorker to share some of his story since IBM entered the BPO industry via its 2002 acquisition of PwC Consulting, which included a number of large-scale F&A contracts.  Today, Don leads all the finance and accounting, procurement and supply chain managed services, combined under his leadership as an integrated unit.

Phil Fersht (HfS): Don, I've described you as one of IBM’s "best-kept secrets". You’re not on every podium speaking, but instead you tend to be operating behind the scenes running a lot of the F&A and procurement work at IBM. Would you please tell our readers about your background, where you came from and how you got to where you are today?

Read More »

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



The undisputed facts about outsourcing, Part 7: Service-culture is the new differentiator

July 21, 2011 | Phil Fersht

Our new study of 1350 outsourcing industry stakeholders, conducted with our friends at the Outsourcing Unit at the London School of Economics, continues to reveal home-truths about what's really going on in the business.  Quite alarmingly, we can also reveal that many providers are not entirely in synch with what their customers actually want from them.

We asked  a cross-section of buyers with significant influence over outsourcing decisions, to reveal the critical attributes they seek in a provider. At the same time, we asked providers what attributes they believe their clients deem critical.  And  - guess what - their are significant gaps between what clients want and what providers think they want:

Providers are underestimating the importance buyers (34% compared to 49%) are placing on their ability to help address their change management and governance challenges.  This indicates a significant communication problem is going on in industry - buyers are clearly realizing they need a ton of help and are actually looking to providers to deliver it.  We believe some providers are simply unaware of the extent to which buyers are concerned about these issues, and are over-focused on being price-competitive, demonstrating operational delivery capability and risk mitigation.

Read More »

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesHfS Surveys: All our Survey Posts



The undisputed facts about outsourcing, Part 6: Europeans love money, but hate change

July 18, 2011 | Phil Fersht

The one thing that has always baffled me about the European Union, is how they try and unite a hodge-podge of countries which despise each other, when all they really want to do is carry on doing things their way and never take orders from anyone.  

They clearly have three goals within the EU:

1. To make pots of money from that expensive Euro (what a great excuse to raise the price of a coffee from 50 cents to $10);

2. To have a powerless European governance system and keep things exactly as they have always been at the local level;

3. To beat the Americans at golf  every two years (even though the Irish don't need any continental help in that regard).

And when you look at the individual outsourcing intentions of continental Europeans versus the other regions, from our new study that we just conducted with the Outsourcing Unit at the London School of Economics, exactly the same philosophy seems to apply:


So what's really driving outsourcing decision-making across the world?

Read More »

Posted in: Business Process Outsourcing (BPO)HfS Surveys: All our Survey PostsHfS Surveys: State of Outsourcing 2011



Listen to Cassandra when it comes to sourcing change management

July 11, 2011 | Phil Fersht

Remember Cassandra? She was that character in Greek mythology who was granted the gift of incredible insight by the gods, but in the same instance, the gods cursed her so that no one would ever believe her.  Welcome to the world of Deborah Kops, as she articulates the findings of our HfS Research / Sourcing Change study.   Over to you, Debs...


Ever wonder why you have that sinking feeling that your outsourcing program isn’t quite delivering on its promise, despite the fact that your provider is hitting every SLA out of the ballpark? Why most benefits expected in the business case are within reach, yet the business lines’ grumbling continues unabated? Why the retained team just doesn’t “get it,” engaging in guerilla warfare when it’s time to start the next phase of transition? Why the leadership team rejects the concept before you even launch the PowerPoint presentation?

Deborah Kops is taken away before convincing the world of the perils of ignoring change management

Very likely, you’ve been shortchanged. Whenever an organization outsources, it triggers a myriad of changes—organization, process, workflow, technology, and service levels, among others.  Change management  often gets short shrift because it has to cope with often irrational reactions, may require a  “touchy feely” response model, and ultimately forces sourcing sponsorship to confront an uncomfortable truth— compelling business cases alone will not persuade stakeholders to give up control or adjust the way they work. So praying that the noise will just abate over time becomes the default approach.

HfS Research and Sourcing Change have uncovered, for the first time, how buyers really attack outsourcing change management in the groundbreaking study, “Change Management—Not an Imperative for Sourcing Success?”  Study results confirm that the secret sauce that makes outsourcing deliver—a structured approach to the adoption of changes resulting from

Read More »

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



The biggest political threat (yet) to the outsourcing industry

July 09, 2011 | Phil Fersht

Wouldya believe it, the Swiss, in their typically punctilious fashion, now have an "Anti-PowerPoint Party" with the self-stated goal of having the number of boring PowerPoint presentations on the planet to decrease and the average presentation to become more exciting and more interesting.

The party aspires to become the fourth-largest political party in the country, as you don't need to be Swiss to join a Swiss-based political party. Clever, eh?

So as I was busily enrolling myself in such a worthwhile cause, I quickly realized that if such a political goal was achieved, the whole outsourcing business would be in serious trouble.  For example:

  • How else could sourcing advisors justify their millions of dollars of fees to develop a 250-strong slide deck, designed to pummel everyone into submission by slide 23?
  • How else would providers be able to pilfer each others' decks and claim to be the first to have coined their branded transformation methodology?
  • How else could management consultants charge clients for change management workshops? Seriously, you think people want to change, as opposed to having hundreds of polished slides describing change processes that executives can discuss for hours?
  • How else can lawyers send everyone to sleep while that $750/hour clock ticks along?
  • How else can buyers convince everyone into submission that their procure-to-pay processes are just so un-outsourceable?
  • How else could analysts bombard everyone with reams of data telling you what you already knew, but at least make you feel better about paying for their services?

So please, please, please do not encourage our Swiss friends to destroy everything we have strived so hard to achieve. Long live PowerPoint and the incredible business benefits it provides!

Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices



What does the Future of Work look like?

July 07, 2011 | Phil Fersht

We are in the midst of exciting times in the world of work.  Never before has the world’s economy seen such dynamic changes occurring at a rapid pace.   These changes are being driven by growth in emerging economies, new enabling technologies, talent gaps, mobile workforce, and perhaps even new motivations in the global workforce.  HfS Research, in conjunction with Human Resource Executive Online, is conducting a study to help gain a better understanding of how the future of work is impacting organizations.  You can help by participating in a short survey and providing your thoughts on how the future of work is impacting your business or your client’s businesses.  The survey can be found here: Future of Work Survey.

Read More »

Posted in: Business Process Outsourcing (BPO)Cloud ComputingHR Outsourcing



Get your free Finance & Accounting BPO landscape report here. Yay!

July 06, 2011 | Phil Fersht

Folks - we constantly get accused of  not "blowing our own trumpet" enough and showcasing our research, so today, we'll have a go!

Back in April, we published our landmark report, The  F&A  BPO  Market  Landscape  in  2011: Re-emerging from  the  Recession,  re-focusing  on Business Outcomes. In that report, we made some predictions on the market, for example:

"Louis, have we got some bed-time reading in store tonight..." (Click to download)

 * OPI:  "Needs  to  look  at  M&A   opportunities  if  it  wants  to   compete effectively  for  larger   engagements";

 * Intelenet Global:  "Could  be  effective  at  winning   small-­scale  engagements with   some  smart  investment  in  a  go-­to-­market  strategy.  However,  a small   client  base,  limited  brand  and  its   late  arrival  into  the  US  market   makes this  a  hard  task.  Merging with  a  larger  entity  may  be  a   better  move."

Since we published, OPI was acquired by EXL and Intelenet by Serco.  Read between the lines and you can start predicting other likely things to happen in the not-so-distant future.  It's as it HfS is your very own self-perpetuating crystal ball (gulp)...

Anyway, in response to the multiple requests for more trumpet-blowing, you can download our blockbuster report absolutely FREE, right here!  No forms to fill, no signing your life away to a torrent of daily spam - just plain, free, no-holds-barred research!  Yay!

Click here to download "The  F&A  BPO  Market  Landscape  in  2011: Re-emerging from  the  Recession,  re-focusing  on Business Outcomes"

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



So... on which side of the fence sits Gideon Gartner?

July 05, 2011 | Phil Fersht

Gideon Gartner blogs HfS' views about the analyst business (click to read)

So the Grandaddy of great big research, and (arguably) the founding father of today's IT industry analyst business, Gideon Gartner, picked up on our recent post "Will the industry analyst business be dead in five years?" (Check out his post here).

Gideon's opinion must be the most sought-after on this topic, and he does a great job being non-committal with his blog on HfS' piece. However, you do get the distinct impression we struck a chord with him:

"Perhaps his conclusions were overstated, but perhaps not;  some version of today’s Advisories will undoubtedly survive. But the comments seem to support his views"

And while the "analyst" industry is unlikely to be buried in a coffin in five years, the amount of attention this discussion has invoked clearly signifies one thing:  the traditional analyst business desperately needs to change. We'll let Mr Gartner have the last word on the topic... for a while anyway.

And if you still haven't had enough on this topic…

Our friends at the International Institute of Analyst Relations (IIAR) are going to feature a live debate on 13th July at 11.00am ET, where I will be discussing this “crisis” live and taking questions. Click here  for more details, or email info at

Posted in: Confusing Outsourcing InformationOutsourcing Heros



Meet the sultan of strategic sourcing

July 05, 2011 | Phil Fersht

One of those rare discoveries one makes in life, is that procurement people are (by and large) pretty cool individuals. When you think about it, when you spend your days negotiating deals, scouring for bargains and trade-offs, bonuses and discounts - and proving to your colleagues that you're better at it than they are - having a bit of style about you can go a long way.

Alpar Kamber, Managing Partner, Denali Group

Alpar Kamber, Managing Partner, Denali Group

However, we did not know all this until we came across one absolute procurement-esque freak-of-nature, who loves to get very deep on sourcing execution issues while having a glass of Absolut Mandarin in one had and spinning some vinyl with the other.  Yes, while Turkish-born Alpar Kamber is not shaking it on the dance floor, or doing a few backflips on his snowboard, or mixing Beyoncé with Lady Gaga, his prime love in life is discussing procurement process.  (OK, we just made up the bit about Beyoncé and Lady Gaga - Alpar's far too classy for those two...)

While we were having some in-depth discussions with Microsoft's CPO, Tim McBride (don't forget to read our paper "The CPO in 2011: The Toughest Job in the Global 1000"), it became apparent how important niche specialist BPOs, such as Alpar's firm Denali, are to the global sourcing mix for many organizations.  So we thought we'd take a few minutes to have a discussion with Alpar about the future of the procurement function and the role of the CPO...

Phil Fersht: Tell me a little about yourself, Alpar, your background, where you’ve lived and worked, and how you’ve winded up in the sourcing business?

Read More »

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



The undisputed facts about outsourcing, Part 5: Decision-makers increasingly reliant on peer-networking and research than traditional channels

July 03, 2011 | Phil Fersht

As outsourcing becomes increasingly commonplace, buyers are relying more and more on their own means by which to make tough decisions.

In the past, outsourcing was still a unique, foreign and scary activity, and it was always easier for buy-side executives to bring in consultants to make their decisions for them - especially as there were so few trusted data-points and information sources widely available in the industry to support decision-making.  Executives didn't want to get fired for making bad decisions.  However, today they know they'll get fired for the wrong decision regardless of who made it - whether it was theirs' or McKinsey's.  Mess up outsourcing and your head will be on the block in no time - it's not like an ERP implementation that can take years for everyone to figure out what was going on, by which time the original selection team had already left, in any case.

Read More »

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