For the very first time in my 16-year career, the major driver behind outsourcing is no longer immediate cost reduction. Hallelujah. Praise the Lord.

In the vast majority of cases, sourcing buyers have already enjoyed a fair amount of cost-reduction in recent years with their outsourcing initiatives, so they already expect the basic financials to work for many of the new endeavors they are exploring... hence, attention moves to other business benefits that outsourcing can deliver.

Moreover, most enterprises today that are experienced with outsourcing have already offloaded many of the conspicuous costs with predominantly labor-based engagements, in areas such as software maintenance support, development and testing, and transactional accounting.  Their attention is now moving to other (and often more complex) processes and technology areas where they need to dig out real improvements, and outsourcing can potentially provide that trigger.

In days gone by, the old adage about outsourcing that many executives would often declare (off-the-record) has been "let's take 30%+ off the bottom-line and if we can make some other business improvements with the exercise that's a bonus, but let's get the costs out."  Today, they're saying, "OK, we know where the cost-savings are with outsourcing, now let's use the experience to get better process and technology for our business".

The impetus has changed - and while many outsourcing engagements, in the past, have largely fallen flat with delivering business benefits beyond cost-elimination, clearly many executives are getting more experienced and skilled at driving sourcing initiatives, and are confident they can use the endeavor as a change agent to promote and implement much-needed improvements to their business operations.

Our new study that covered the intentions and observations of 534 buyers, advisors and providers with their sourcing strategies, in the event of a “Double-Dip” Recession, reveals what is motivating buyers to outsource in this current climate, and while eliminating cost is still is a core fundamental, buyers are even more focused on achieving greater flexibility to scale their global operations as a prime motivating factor:

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

Health plans, PCs... who cares?

Did HP recruit the right Republican? With the 180-degree strategy flip over the "sale" of its PC division, shouldn't HP have hired the master of the 180 himself? And is there a difference between "keep" and "couldn't sell"?

One can ask many questions as to why HP's new CEO made such a dramatic reversal of Léo Apotheker's decision barely two months' ago. There's nothing wrong with making "180's" with product and strategy decisions - the very best businesses in the world have been quick to admit bad decisions and correct them. Even the great Steve Jobs made some 180's in his career... but none of them in barely 2 months.

However, I believe the answer is very simple:  HP's board has had a deep look into its very soul, and had a very scary premonition of where it was headed. It saw its future existence without its heritage hardware businesses, becoming predominantly an enterprise IT services organization with a curious software acquisition.  Yes, it was running the risk of morphing into a me-too to IBM. IBM has just appointed a laser-focused services leader in Ginny Rommety to take them forward as a services mammoth. Enterprise services is IBM's DNA. HP has hired a politician and Internet auctioneer entrepreneur. Hmm...

Did Meg make the right call to keep PCs?  Yes - she probably did for three reasons:

1) No-one wanted to buy the division;

2) HP's board never really wanted to sell it;

3) HP's board was feeling naked and exposed at the prospect of rebuilding the firm without it.

The jury's out over whether Meg will turn around a famous company which is now struggling to save its tarnished brand.  It's an immense challenge and will take several months to see any real progress, but reclaiming part of its very soul - making personal computers - will help it rebuild its identity.

Posted in: IT Outsourcing / IT Services

Innovation? Value? Hmmm... I'll stick to chestnuts

While outsourcing clearly provides a vehicle to help under-pressure business leaders coerce some of the change they need to embrace in today's uncertain economy, most do not view it as the only lever to pull to achieve their goals. The majority of today's buyers are still trying to figure out what sourcing levers they have at their disposal, uncertain as to the right approach for their organizations.

Our new study that covered the intentions and observations of 534 buyers, advisors and providers with their sourcing strategies, in the event of a "Double-Dip" Recession, reveals one major shift in the industry:  most buyers now recognize what their businesses need to improve to drive productivity, they simply are struggling to figure out how to marshall their internal and external resources to help them get there.  And a rocky economy isn't helping drive definitive behavior, with seven-out-of-ten buyers expecting either little change in focus when it comes to outsourcing, or they simply do not know what they are going to do:

* Unlike the 2008 crash, which drove shock and awe into the boardrooms of every business, shouldn't 2011's threat of economic adversity be precipitating a calmer, more organized approach to business planning?

* While experiences of 2008 have provided an expectation that further catastrophe is just around around the corner, shouldn't buyers be far more assertive with planning new measures to contain costs and find new areas for productivity and growth?

The Bottom-line: Buyers are looking more broadly than simply outsourcing to drive productivity improvements in today's climate

Indeed, today's harsh business realities are driving more focus on organizations aligning both their outsourcing and shared services frameworks (click here to download a copy of our Global Business Services paper), however, are companies panicking and screaming: "Help! We must hurl as many of our fixed administrative costs out of the window asap and deploy as much low-cost service delivery as we can, regardless of the consequences"?  Of course they aren't - they're also looking at measures such as their ability to have more flexible global operations, to standardize processes across geographies and ERP instances and to align their internal stakeholders more effectively. Cost-control is a measure that is always a constant focus, however outsourcing doesn't always provide that answer, especially with experienced businesses that have already moved out a lot of tangible cost in areas such as transactional accounting and application support.  Outsourcing only provides part of the answer.

As we recently discussed, business leaders are beset by multiple business pressures in today's climate, and outsourcing provides just one lever among many that they can choose to pull. Only 13% of buyers are concerned about the disruption caused by outsourcing, hence if they currently only view outsourcing as a cost-reduction lever, they are going to place it in a pecking order of other cost-reduction measures… and it’s not always going to the most effective short-term measure in a tough economy. It’s the job of advisors and providers to educate and demonstrate to buyers the benefits beyond cost-reduction and help clients embed outsourcing among their internal governance practices to align its benefits with those provided by internal process improvement and shared services.

We'll reveal all in Part II coming shortly to an HfS website near you...

Posted in: Business Process Outsourcing (BPO),  HfS Surveys: 2011 "Double Dip" Recession Study,  HfS Surveys: All our Survey Posts

HfS Research is the Analyst Firm of the Year for Outsourcing, while Phil Fersht scoops Analyst of the Year

For some reason, people keep insisting on giving us accolades for being cranky, irritable and disruptive influences on the services industry.  

However, the awards we received today (see link here) are an unbelievable validation of our team's hard work from the International Institute of Analyst Relations (IIAR) - and proof that we're not just a "flash in the pan" in the industry analyst business.  IIAR's awards are widely recognized as the foremost accolades in the analyst profession, with such a large number of analyst-facing professionals providing the votes.

Today, HfS Research won the individual award for "Analyst of the Year" for a second year in succession (some individual called Phil Fersht now sporting an ego so insufferable, it's rumored he can't even stand his own company).

In addition to the individual analyst award, HfS Research topped the charts for "Outsourcing, BPO and Maintenance Analyst Firm of the Year".

And this time, HfS Research was a runner-up for the overall "Analyst Firm of the Year", behind the formidable Gartner.  Over 260 analyst and influencer relations specialists took part in this year’s survey - by far the greatest number to date, who voted on all the major research analyst organizations, such as IDC, Forrester, Ovum and so forth.  According to some of the participants' entries, success factors included, “intelligent people with common sense”, “Research that is always compelling to read – and our clients like it” said another. One participant went further saying of HfS, “They are the heartbeat in the world of outsourcing and shared services”.  My word - has the world gone mad?  We're just a poky 14-analyst set-up where we still re-use our teabags in the morning and have to share two Men's Wearhouse suits for client meetings (we got the second one free...).

When we won the prestigious IIAR "Analyst of the Year" award last year, it was great to get some recognition for our hard work, but many people sniggered behind our backs that we would fade away pretty quickly.  However, to retain that award this year, and also win the runner-up for "Analyst firm of the Year" is a validation that HfS Research is about to enter its third year in operation, with a strong mandate from industry that people are getting some value from our research, love our accessible model and the fact we can provide real data on industry dynamics practically as the happen.

Anyhow, we would like to offer anyone who voted for us a cocktail on us when you see us at some upcoming conference, which we will be able to pay for out of the 20% price hike we're gonna add to our services.

Thanks again - we really appreciate all the wonderful support, accolades and banter as we rumble into a third year of operations.

Posted in: Business Process Outsourcing (BPO),  IT Outsourcing / IT Services,  Outsourcing Advisors

In Part I we gave you a little background into Tiger's rise to prominence and how he's going to behave a little differently from Pramod.  Now let's delve into the Genpact-specific opportunities and challenges that Tiger will be tackling in his new role as President and CEO. So, without further ado, here's Part II...

Phil Fersht (HfS Research):  Tiger, there's been a lot of talk lately about the value that Indian companies can bring to U.S. and European firms. People are saying, “These Indian companies are great at training people, have good talent development and succession planning programs and so forth - they bring a lot to the table.” What's your view? What do you think that Indian firms can bring to U.S. and European companies, and maybe vice versa?

NV “Tiger” Tyagarajan (Genpact): Firms, including us, Cognizant, Infosys and TCS, have all grown at 20 percent plus for many years now. And one of the things that’s gotten us there is a pretty significant hiring, training and culturalization engine that allows us to have one culture across the company in most cases. But we’ve clearly realized that many of our global clients don’t have one culture. It's actually very fragmented, and the different countries don't really work well together.

NV "Tiger" Tyagarajan is the new President and CEO, Genpact (click for bio)

So actually, when people talk about innovation in the industry and wonder where it is, I push back and say that the HR and training practices and models in provider companies is truly innovative. In fact, many of our clients turn to us and ask, “Can we take this practice and that practice of yours, and embed them in our organization? Can you teach us how to do it? Can you give us the same tools, methodologies?”

In Genpact’s case, our singular, enterprise-wide culture is very similar to that of GE. Irrespective of what GE office in the world you walk into – whether it’s Canton, Ohio, New York, India, Shanghai or Tokyo –within five minutes you realize you're in a GE office. The language used is the same. And while each country of course has its own culture, there’s the overarching, action-oriented, boundary-less, performance-driven culture. And global corporations need a culture that cuts across all nations and to some extent supersedes national culture.

I think one of the other things U.S. and European companies can learn from Indian firms is the concept of jugaad, which is an improvisational style of innovation that's driven by scarce resources and attention to a customer's immediate needs. In India, nothing is big enough to dedicate a single person, so people get involved in many things and end up being kind of a mixture of many things with knowledge that cuts across a broad spectrum. And because of the environment in India, people have simply learned to find a way to solve a problem, find an answer, in spite of multiple obstacles.

Phil:  One of characteristics that makes Genpact stand apart from many of its competitors, is the passion and motivation that's to apparent in its staff. How do you keep people passionate? Is there a secret to that, or do you think it's just something very cultural within an organization?

Tiger:   Phil, I'm so glad you asked me that, because it's my one “keeps me awake at night” thing. I do wonder about how to maintain the company’s culture as we keep growing and spreading your wings.

And we are becoming very global. Our growth rate outside of India is faster than in India by a factor of 50 percent, so very quickly we'll reach a 50/50 split of staff. So, as that happens, and as I continue to shift my leadership team to the markets, which is another big statement I've made and I'm making my shift myself, how do you maintain the culture?

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

NV "Tiger" Tyagarajan is the new President and CEO, Genpact (click for bio)

One company has done more than most (some argue any) to change the very face of Business Process Outsourcing over the last few years.

Its origins can be found in a world-class finance and accounting captive that commercialized its operations with an army of enthusiastic process geeks, schooled in the arts of LEAN and Six Sigma... and  at competitive prices. "Isn't that the GE company" asked one CFO of me, when I ran him through a potential list of F&A BPO providers candidates, "Get them in, I want to hear what they have to say".

Indeed, the rise to prominence of Genpact has been nothing short of remarkable, as the firm has reemerged in 2011 hungrier and more acquisitive than ever. Having survived a tough recession for the BPO industry, successfully fending off larger competitors baying for its blood, Genpact has recently taken a new direction: appointing NV "Tiger" Tyagarajan to take the helm from the irrepressible Pramod Bhasin, who preached process so poetically with us last year.

Anyone close to the business has always talked about the "Pramod-Tiger" double-act for several years, with Tiger initially being the US face of the firm, and Pramod coordinating activities from India.  More recently, Tiger returned to his native India, not only to reconnect with his first love, cricket, but also to take on the role of COO and ready himself to succeed Pramod, who had inexhaustibly led this firm, since its 1997 inception, to surpass $1 billion in revenue.

Tiger is now settling back into New York - a short train ride from his son's university in Georgetown, Washington D.C., where he is now in the process of adding his personal leadership style to the Genpact machine.  So the $2 billion questions today are:  what will Tiger do differently?  How will Genpact fare with its leadership team Stateside? How will Genpact continue to evolve its business to move beyond its mainstay finance and accounting service line?

Well, you needn't wait any longer, as Tiger recently spent some time bringing us up to speed:

Phil Fersht (HfS Research):  Good morning Tiger. Before we delve into the current business issues, let’s talk a little bit about your earlier career and about you as an individual.

NV "Tiger" Tyagarajan (Genpact):   I did my undergrad in mechanical engineering at the Indian Institute of Technology in Bombay. And while I loved the problem-solving, logic-driven approach that engineering teaches you – and I use that in many situations today – I realized I didn’t want to spend my time with machines. I want to spend my time with people.

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

Well, this is where the boys were...

Before we talk about today's sizzling blog, many of you have probably been wondering where sourcing's lone change management warrior, Deb Kops, has been hiding.  Was her war against change management avoidance becoming too much?  What was she doing when she criss-crossed the world between India, Singapore, Germany, Spain, UK, Netherlands, China, Austria, Japan and the Republic of Texas over recent months?  Had she contracted an incurable gastric ailment when she was force-fed a deep fried Texan pickle?

Well, I'm glad to inform you all that nothing has changed as she embarked on another why does no one give a stuff about change management tirade to me last week, but she occasionally does find other wars to wage, while she's waiting for one of her other wars to come full-circle.  And this war is one she first alerted us to over a year back, when she bemoaned the dominance of the male species on most service providers' management teams.  So over you, Ms K to give us your inside view on...

Where the boys are

Looking at any outsourcing provider or advisor’s website brings to mind the title of a 1950s song by Connie Francis. Click on “About Us,” then “Management Team,” and a bevy of good looking thirty- and forty-something guys in sharp suits will peer back at you. Occasionally, you’ll see the anomalous face of someone of the female persuasion managing human resources, marketing or the odd business unit. Is this lack of diversity an issue for the global sourcing industry?

Over the past few years, I’ve met growing numbers of women on the client side at levels ranging from program director to vendor to process manager, from executive sponsor to global sourcing leader to business unit head. Empirically, I’d estimate that in meetings with client side management personnel, at least a third of the team had two x chromosomes.

Under the thesis that people prefer to do business with people who are like them, I profiled the management teams and boards of eight major outsourcing providers generally considered the usual suspects---both based onshore and off, some truly global, some, some pure play and some with a technology/consulting heritage. I then took a gander at the websites of three sourcing advisors to see whether many girls have made it into their management big leagues—defined as having a mug shot on the Web.

While I don’t pretend that a look at 11 websites constitutes rigorous research, the results empirically supported my hunch.

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Posted in: Business Process Outsourcing (BPO),  IT Outsourcing / IT Services,  Sourcing Change Management

Dear BPO industry,

Today, we have launched  The BPO Resource Center that's geared to become THE one-stop shop for anyone seeking to learn more about Business Process Outsourcing - without having to pay thousands of dollars for the privilege.  

In fact, you won't have to pay anything. This is intended to be the site where buyers, providers, investors, advisors, analysts, academics and politicians can swing by to peruse content, download reports, get engaged in dialog or even contribute their own research.

The BPO Resource Center is geared to become a genuine industry resource that encompasses best-practices, next-practices, worst-practices, news, industry data, views and research insight. However, what makes this sight really unique is that we're opening up the content to the best minds in the business to share their learnings, and this includes other research analyst firms and academia. We've kick-started the site with a selection of recent BPO-related research reports, blogs and

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Posted in: Business Process Outsourcing (BPO),  Buyers' Sourcing Best Practices,  Finance & Accounting BPO

"Go ahead... just one more slide". HfS' Esteban Herrera saves you a fortune with some free advice

My word, if I get one more spam from someone claiming to help outsourcing providers "get outsourcing leads" through delivering dodgy webcasts (which are probably only attended by other equally desperate outsourcing providers, with similarly deficient sales capabilities), or get invited to take part in a workshop to improve the "velocity of my sales pipeline", where a paltry $10,000 investment can help my firm meet its $1,000,000,000 target, I think I may throw my Mac out the window and join the Occupy Wall Street demonstration rumbling on down the road.

So let's save you nice outsourcing providers the time, trouble and expense of getting advice on how not to sell yourself, and give you all the advice you need, right here, right now - and for absolutely nothing.  Plus, you can re-invest that time you just saved by filling a bag with foam pies and hurling them at unsuspecting investment bankers.

Esteban Herrera, along with most of the team at HfS, has gone way further than "Death by PowerPoint" on so many occasions that we can now prescribe your very own Exhumation after PowerPoint... over you, Mr H:-

An open letter to Outsourcing Providers: It's time for your exhumation after PowerPoint

Dear Providers,

We love you. Without you there would be no outsourcing industry and we would not have jobs. More than anything, we want to see you succeed. Why, oh why, must you insist in compromising your own success by practicing death by PowerPoint on your prospects?

I’ve come to believe that business, and our business in particular, really wants audiences to tune out. Through thousands of “orals” and analyst “briefings” I’ve concluded we actually want to put each other to sleep. We don’t care if the audience retains anything we’ve said, and thus bombard them with a slide per minute. Of course, almost none of us talk that fast, and almost all of us leave the good stuff until the end so we rush to it when nobody is paying attention and everyone is bleary-eyed and exhausted.

In my view, providers are the worst offenders, especially when attempting to woo new clients in competitive situations. The presentations and styles often do exactly the opposite of what is intended: they frustrate and alienate potential clients. In the last fifteen years, I’ve seen lots of sales pitches, some very good, most not so. In an effort to help our industry and keep my sanity during my next round of orals with a buyer client, I’ve put together a few tips, which I am sure most of you will ignore.

1. Ditch the PowerPoint. Clients are so used to “slides” that what will stick out in their mind the most is someone who came to have a conversation with them, not talk at them. In a recent set of orals, one provider had three of six speakers not use slides at all. They finished an hour early of their allotted time, to everyone’s delight, and communicated just as much as anyone else. Engagement, discussion, and relationship-building banter ensued. To say they won the day would be the understatement of the year. More importantly, everyone in the room, including this jaded advisor, remembers them and their story. If you know what you are talking about, you don’t need the damn slide. Plus, you know all your competitors are going to attempt PowerPoint murder, so why not stand out in the crowd?
2. Ditch that innovation funnel slide. You know which one I’m talking about. Everybody has it. Everybody claims it as their own. And nobody believes it. Kill it.
3. Start with the “answer.” How about this simple message to start the session: We are going to save you $X million per year, starting in June, while maintaining or increasing all your existing

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Posted in: Absolutely Meaningless Comedy,  Business Process Outsourcing (BPO),  IT Outsourcing / IT Services

ADP makes its move into the lucrative RPO market

ADP, the HR and payroll services giant, is a staple analogy in the BPO business. It has such a dominant command of the payroll market, there's no room for new entrants (many have tried and limped away); it commands the archetypal "one-to-many" delivery model with regional service hubs in all major geographic regions; it servers for small, mid-sized and large organizations with a sales and delivery infrastructure that can cater for all types of clients; it also has a rightful claim to be the first true "Business-Process-as-a-Service" offering - years ahead of its time - but doesn't get a lot of plaudits, because there isn't a lot of sexiness about payroll.

However, don't tell HfS' Keith Strodtman that payroll isn't sexy... he lives and breathes the stuff, however, today he's going to talk about how ADP is moving "beyond payroll" with its forays into broader talent management and HR technology segments- and - most notably - it's move into the Recruitment Process Outsourcing (RPO) market with the acquisition of the popular "The RightThing".   Over to you Keith...

ADP  has added another tool to its HR BPO toolbox with the acquisition of RPO provider The RightThing.  The acquisition of the twenty-year old privately held firm is ADP’s first foray into the RPO market.  Terms of the deal were not disclosed but it is clear that ADP is sticking to its “beyond payroll” message to support its growth strategy.  Its “beyond payroll” business are already growing about three-times faster than its traditional payroll business, with acquired businesses playing a big role in that growth.

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

TK Kurien is Chief Executive Officer, Wipro

It's been quite the year for Wipro, as Chairman Premji has sought to refocus his organization and try to keep pace with the (seemingly) relentless growth of both TCS and Cognizant.  

As we have discussed, Wipro is a company which has some tough decisions to make to find the right avenues for future growth and investment.  The old days of being "all things to all people" is not a strategy that is going to work - and Premji knows it.

Curiously, Premji decided to look internally for his new Chief Executive, when many observers felt it time to recruit some fresh blood from outside.  Step up TK Kurien, a deep-thinking type and  someone who I have known well during his leadership role in establishing Wipro's BPO business between 2004 and 2008.  TK's also had great experience in healthcare and life sciences, boasting a former career with General Electric before his Wipro days, also being instrumental helping Wipro develop its footprint in the sector.

So where are TK's thoughts, as he consider's Wipro's options in today's market?  We grabbed a few minutes with him recently to share them with you all.

HfS Research: TK, firstly, congratulations on your promotion to CEO, Wipro.  You have now been at the helm for 9 months and we have seen many changes. I’m sure all our clients would be eager to understand your vision for Wipro. How do you respond to those who claim Wipro's best days are behind them? What is top priority for you over the short term?

TK Kurien: Thanks. Over the past nine months, Wipro has undergone significant transformation with the intent to become more agile, innovative and to provide better value to our customers. Our blueprint of change is in line with the new business reality, where speed, agility and information

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Posted in: Business Process Outsourcing (BPO),  Cloud Computing,  Healthcare and Outsourcing

Several leading service providers have been taking a long hard look at themselves in recent months as they come to terms with a new breed of competitors, increasing demands and pricing requirements  from clients.  These include the likes of CSC, HP and, more recently, leading Indian HQ-ed provider Wipro.

To further exacerbate their situations, we are teetering on the brink of a renewed recession, hence rapid restructuring and renewed strategic focus is critical, if several of these providers are to avoid breaking up and beiing auctioned off.  And not everyone can hire the President of eBay to do that for them, as we hear she's just taken a new job (ahem).  HfS analyst Robert McNeill takes a further look at Wipro's current predicament and poses the question:

Is it Time for Wipro to sell Infocrossing?

As industry tongues continue to wag over whether Wipro is about to divest its Infocrossing data center and infrastructure assets, we believe this is a step in the right direction as the firm refocuses under TK Kurien, and seeks to regain its status as a “Top 3” Indian headquartered services provider.

The quarter ending June 2011 marked the point where Wipro was relegated, for the first time, from the top three Indian outsourcers, in terms of revenue, as Cognizant has continued its breathless growth surge to forge ahead:

The Offshore Big Five: Wipro and Cognizant Change Positions 

Source: Company Financials

In August 2007, Wipro acquired Infocrossing for $600 million, a firm which then had revenues of around $200 million. Wipro had plans to use Infocrossing as a means to get into the infrastructure

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Posted in: Cloud Computing,  IT Outsourcing / IT Services

Anyone want to talk about the future of strategic human capital management?

Isn't it refreshing when you read someone's unbridled rant and you just have to say out loud, "Thank god someone finally called it".

Anyone who's been exposed to HR conferences will immediately empathize with this raw post  by HR and social media blogger Laurie Ruettimann, who I will be avidly reading from now on!   Here are a few quotes that just cracked me up:

"I just feel like I’m choking on the ashes of my enemy every time I meet an analyst or a vendor who wants to talk about the future of strategic human capital management".

"The HR conference circuit operates in the craziest bubble. A bunch of people talking, thinking, and writing about work but no one actually does real work. I know, I know. We’re all knowledge workers and strategists and futurists. But much of the language we use — on stage, in panels, on the expo floor — comes awfully close to denigrating the labor market and creating a pageant out of mediocre technology and solutions."

"We are wasting time. I’ve spent years with self-aggrandizing fools who couldn’t create jobs in a xxxxxxxxxxxx job factory."

Tell us what you really feel, Laurie!  While a tad cynical (ahem), you've reminded me what blogging's all about - cutting through the fluff  and puff and letting out your true feelings about something.

Posted in: Absolutely Meaningless Comedy,  HR Strategy,  Outsourcing Events

James R Slaby is Research Director, Sourcing Security and Risk Strategies, HfS Research (click for bio)

How many different ways can you spin the wonders of accounts payable outsourcing... or the delights of application testing services?  Yes, folks, the outsourcing talk-track can get a little wearing these days. With 97% of enterprises today outsourcing varying degrees of IT and business support operations, the discussion about effective global sourcing needs to move to areas that have a broader business impact, such as how sourcing environments can help or hinder greater finance effectiveness, or more innovative technology, or better talent development... and especially a more secure, risk-effective global environment.

It's this last area we've been intensively focused on bringing to the global sourcing discussion table - with the onset of Cloud, the additions of new sourcing locations, the political and economic instability in today' world, the quagmire or new regulations and compliance standards.

I'm personally delighted to unveil a very special talent to the sourcing industry - a respected veteran of the infrastructure security world and now seeking to ply his knowledge and experience to supporting global sourcing environments:  Jim Slaby.  Jim can frequently be found chitchatting with the finest cocktail bar staff in Boston, both before and after (and these days during) a miserable experience enduring the Boston Red Sox.  Anyhow, without any further introduction, let's hand over to Jim himself to explain why he's joined HfS and what we can expect to see in the coming months...

“The game done changed.”
“Game's the same, just got more fierce.”
The Wire, Season 3, “Amsterdam”

As a newly-minted member of the fast-growing HfS Research team, I’ve been asked to share a few thoughts about my coverage area, Sourcing Security & Risk Strategies. I’m thrilled to have a chance to delve into the area of security and risk as it relates to sourcing, which HfS CEO Phil Fersht has been urging me to investigate since we worked together some years ago. In a sentence, I aim to help buyers and providers to better understand, quantify, and mitigate the security threats in sourcing engagements, and find ways to size and share appropriately the concomitant risks among buyers and providers.

In my Giga and Forrester days, I was stubbornly focused on security in the traditional enterprise data center and network environment. But in my most recent stint prior to HfS, running the security and networking practices at tech research firm TheInfoPro, I spent a lot of time interviewing senior IT budget-holders at Fortune 500 companies. One of the most resonant themes that emerged from those conversations was how their enthusiasm for cloud services was muted by their uncertainty about measuring and managing the associated risk. Time and again, security came up as the number one obstacle by a wide margin among large enterprises to moving to the cloud.

So when Phil called me this summer about joining HfS, the timing seemed right. The research community has not paid enough attention to the intersection of sourcing and risk, which suggests an ugly, multi-car pileup is in the offing there. It’s a hotspot that HfS feels uniquely positioned to explicate. Not to pander like a stadium rocker here (“Thank you, Kansas City, you really know how to party!”), but I’m also excited about gaining access to HfS’s subscriber base, the 60,000 highly-engaged business and IT professionals working at the front lines of this issue. Throw in the talent on the HfS Research team (like IT outsourcing maven Robert McNeill, whom I worked with in our salad days at Giga Information Group and Forrester Research), and I feel like I’m not spelunking this particular cave without some very solid backup.

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Posted in: Business Process Outsourcing (BPO),  Buyers' Sourcing Best Practices,  Cloud Computing

For those of you who enjoyed Part I of our Charlie Aird interview and our webcast with Charlie and Nick Atkin last week, let's move on to the second tranche, where we talk about the future of the sourcing industry, the Global Business Services framework he's spearheading, and a little insight into how he views the changing environment for Big 4 consultants and boutique advisors.

Oh... and click here to catch a recording of last week's webcast, here to download the slides and here to download our recent research paper on Global Business Services.

Charlie Aird speaking at a recent conference in Nanjing, Jiansu Province, China

Phil Fersht (HfS): So in terms of "Global Business Services" — which we discussed in our recent paper[i]—  can you discuss the concepts and principles behind this? Why this is something you are driving so heavily at PwC?

Charlie Aird (PwC): In the past, organizations sourced ad hoc; by business unit, by country, or region. And they suddenly found they have 40 sourcing arrangements around the world, all with different standards, different governance, and  different management and so on. Now they’re saying, why can’t our back office be as efficient as our manufacturing organization? When they are developing a product they usually have some sort of global standard and they have R&D prepared and they link marketing into it; so why should IT, finance and accounting, or HR be any different?

Many organizations have seen other companies successfully implement a global model and, and want to see if they can do the same.  They find they have different processes all across the world, with different IT infrastructures and applications, and different cultures even in the same corporate environment.

Some clients keep tons of spreadsheets to track this; and you ask them, OK, who is company XYZ? Are they your clients in Brazil, or China? And they don’t know. How many staff do you have doing a particular function around the world? They don’t know. They don’t have visibility into this kind of thing. Then this becomes another special project.

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