Monthly Archives: Mar 2013

Marketing’s Holy Grail in the modern age: Getting actionable insights from an integrated marketing optimization platform

March 29, 2013 | Phil Fersht

I hear there's a vacancy opening in HR...

How many times have you heard sales people complain "our marketing needs to be better"?  The role of the CMO is probably the most thankless job in the modern organization:  the executives expect great branding and messaging to be propelled through all the optimal channels to market to maximize awareness and, ultimately, increase sales.  And the marketing department rarely gets credit when things go well (that goes to sales), but always bears the brunt of the blame when revenue goals are missed.  What's more, it's always really tough for marketers to get budget approved to support the campaigns their organizations need to create awareness, educate their market and drive new sales activity.  Justifying the marketing ROI is probably the hardest calculation to produce in any organization.

When I was a young business studies student, the great Philip Kotler defined marketing simply as "Satisfying customers' needs and wants profitably".  I'd go even further - it's about "Satisfying customers' needs profitably while successfully managing the expectations of the sales function".  To this end, HfS analyst Reetika Joshi has been taking a deep look at how leading service providers are trying to help CMOs today...

Getting actionable insights from an integrated marketing optimization platform

In 2013, our research shows three secular changes challenges challenging the success of the modern CMO:

»      Analytics and the big data movement is gaining momentum with the need to now look beyond traditional web analytics and siloed projects, towards comprehensive marketing analytics that optimize all marketing activities, be it inbound or outbound.

»      Mobile and the real estate value of the second screen: While addressing mobile in the past meant optimizing websites and emails to suit mobile formats, marketeers now need to rethink seriously the best ways to integrate mobile devices as important marketing channels as part of overall strategy.

»      Social marketing and the fall of paid traditional media: Beyond simply increasing social

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingCRM and Marketing



F&A BPO in 2013: Step aside Magic Quadrant, hello Blueprint

March 24, 2013 | Phil Fersht

After three years of hard labor, we, at HfS, are proud to launch our first "HfS Blueprint" that we believe is the revolutionary crowdsourced methodology for evaluating business and IT service providers.  

The industry has been literally screaming at us to change the way analyst firms portray their assessments of service provider performance, and we've dug deep to leverage our massive community, our extensive buyer relationships and demand data, to facilitate what we truly believe is a major game-changer in the research analyst industry:  The HfS Blueprint.

Finally:  A genuine way to assess services providers that isn't reliant on the arbitrary viewpoint of a single analyst;

Finally: A credible methodology to gauge the performance of service providers against "real" innovation and execution capabilities;

Finally: A performance assessment of providers that apportions importance weightings of each innovation and execution category based on data from our State of Outsourcing survey, conducted with the support of KPMG, covering 1355 enterprise buyers, influencers, advisors and provider executives;

Finally: A performance assessment of providers where exhaustive inputs from buyers and influencers shape the scoring (not solely a handful of rose-tinted client references from the providers themselves);

Finally: A customizable assessment tool where enterprise buyers can re-calibrate the weightings to assess their provider-fit based on their own unique needs.

Yes indeed - we threatened these Blueprints five months ago, and we're now ready to launch the first one... in  the much vaunted, but still immature, market of Finance and Accounting BPO, which is currently growing at a double-digit clip.  Click here to access our first Blueprint in Finance & Accounting BPO:

Click to Enlarge

We are happy to discuss the Blueprint methodology in greater detail (drop us a note here) but essentially, in this example for F&A BPO, we assessed data from 745 live multi-process F&A BPO engagements to ascertain provider market shares, depth of client base, breath of execution and geographic scope of delivery.  We then conducted exhaustive interviews with multiple buyers and market advisors to help score providers against each other across all the sub-categories of the Blueprint using ExpertChoice, an advanced statistical analytics platform. We also received a tremendous amount of cooperation from (almost) all of the providers above, as we went through this exhaustive process to understand their concrete plans for the future, get really deep with their current client relationships, their overall vision and their appetite to evolve into higher-value areas of F&A BPO.

Congratulations to the Winners Circle and the chasing pack of High Performers... we'll see how the picture has shifted in 2014!

Thanks to all who took part - you've helped create a little bit if research history.

You can download the full HfS Blueprint methodology by clicking here.

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



Cheap and cheerful: Is this really as good as it gets for IT Outsourcing?

March 17, 2013 | Phil Fersht

Newsflash... Enterprises reduce costs by outsourcing, but struggle to achieve little else of value.  Well, on the surface, this would still appear to be largely true, but when you rummage even deeper under the covers, you'll soon discover it's more the legacy IT outsourcing deals which are still all about low-cost bums on seats, while we are actually seeing a few chinks of light with BPO that could resemble what we've been searching for since we started this damn blog... value beyond cost (gasp!).

So industry has spoken:  399 enterprises, (two-thirds of which have revenues over $3bn) recently took part in our 2013 State of Outsourcing Study, conducted with the support of KPMG.  And one chart, above all others, again illustrates the familiar frustrations outsourcing brings, better than any others:

Click to Enlarge

So what do we read into this data?

Outsourcing achieves its table-stakes goals and makes some progress providing value. On the strong positives, enterprises are achieving success when it comes to meeting their cost targets, globalizing their operations and even standardizing processes.  In fact, barely one-in-seven can claim to be actually dissatisfied with their meeting these goals to-date.  Also quite encouraging, is the fact that the majority of enterprises are achieving positive outcomes with higher-value areas, namely accessing capable talent and transforming processes, even though these are largely modest results for most enterprises.  Considering most buyers venture into outsourcing seeking these initial "table-stakes" goals of cost-reduction, global scalability and process standardization, you have to give a healthy thumbs up to those providers and buyers for achieving these initial objectives.  However, can today's ambitious enterprises really turn around and claim they are happy with basic, operational success in today's economy, or do they want to seek to move beyond ordinary?

Outsourcing is falling short when it comes to innovation and analytical value.  With all the puff

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



No Payne no Gain for a Chief Customer Officer… Part II

March 13, 2013 | Phil Fersht

"Someone is needed alongside the CEO that understands the total changes in technology that are changing  customer behavior."

           -- Bill Payne, IBM, March 2013

In case you missed IBM's CRM Chief Bill Payne's return to blog-stardom during Part I, he discussed his vision for the creation of a "Chief Customer Officer" position within companies, who would report directly to the CEO.  In Part II, Bill discusses shifting mindsets, the impact of analytics and evolution of outcome-centric engagements impacting the marketing function...

Phil Fersht (HfS Research): Bill, with our next client summit dreamSource coming up in two months, the number one topic on the agenda that enterprise buyers have voted to talk about is "how to shift the corporate leadership mindset away from merely cost control to one of value creation". Someone once said the definition of insanity is talking about the same problem in many different ways and always arriving at the same conclusion. How can we break this cycle, and is this something that you have seen with any of your clients?

Bill Payne is IBM's CRM Services lead

Bill Payne (IBM Global Services): This change in mindset can often involve a change of thinking at the top, and in some ways, I use that as evidence of why we do not have a chief customer officer. If you have everyone on the board of directors owning the customer, no one truly owns the customer. No one is truly driving the customer/consumer strategy. The CEO has a huge role in that, but in my view, you need someone with a different point of view, someone who really understands the change in generational behavior, change in technology, change in social, and actually injecting the organization with controversy and the reality around how the world is changing. I am not sure I see that in a lot of companies that they get it.  We have recently seen a major UK retailer go bust, Comet Group.  It had been doing well for many years, but one of the biggest drags to their development is that once they had ecommerce, it was not integrated with their bricks and mortar. Their customers rejected it because of the confusion between the costing and pricing on the website vs. stores, and their staff was not trained across the different platforms. It is a sharp reminder of the pitfalls of not integrating across all channels quickly.

What I see from an IBM perspective and from my space is that we are increasingly having sessions with customers about end to end.  No longer are they thinking contact center, no longer are they thinking CRM system, no longer are they thinking speech to text analytics. There are senior people saying: can you paint me a picture, show me a vision of the consumer end to end, and tell me how that can be deployed? Now, where we are seeing that? I have to say in emerging markets, such as

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Posted in: Business Process Outsourcing (BPO)CRM and Homepage



Why the mid-market is the mother-in-law of outsourcing

March 09, 2013 | Phil Fersht

I want the best SaaS platform, some great BPO and a bunch of data scientists...

When it comes to outsourcing, dealing with the middle-market has been somewhat akin to dealing with the mother-in-law:  can be awkward to deal with, very hard to please, and always has complex demands on your patience and resources.  However hard you try, defining and delivering a solution that can deliver the outcomes you both want seems like the impossible nirvana.

However, as the wise ones among us have now discovered, winning over the mother-in-law goes a whole long way to achieving future happiness.  What's more, those of you who have avoided addressing the mother-in-law's demands will soon regret it...

However which was you look at it, many of today's middle-market firms are going to be the F1000 of the future.  What's more, most are seeking technology and sourcing solutions that can drive nimbleness and cost-effectiveness, as they simply do not have the prodigious people and technology resources within their IT, finance, HR, marketing and supply chain operations to manage their evolving needs. In fact, many of them can't afford the top talent to run their operations, and those providers which can deliver it are already in high-demand.

Let's examine what 399 enterprises had to say about their mission-critical objectives driving both ITO/BPO decisions in today's market.  It's already becoming abundantly clear that high-end businesses today, unlike their mid-market counterparts, are focused primarily on cost-reduction when outsourcing, as opposed to investing in new solutions and capabilities that providers could (and really should) bring to the table:

Click to Enlarge

Why aren't today's providers winning over their mothers-in-law to grease the wheels for their future success?

So... if most the providers are promoting their wondrous capabilities in terms of talent, technology and analytical capability, why aren't they targeting those clients who actually want those capabilities:  the middle-market firms?

Providers are set up for high-end enterprise deals, not the mid-market. Sadly, most of today's

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



If SAP is like "pouring concrete into a company", isn't it time to reinvent business processes?

March 07, 2013 | Phil Fersht

Having been an analyst for the best part of nearly two decades, the big ERPs have always maintained a stranglehold over the majority of the global 2000.  Any service or technology enhancement has to connect / integrate / work-around the existing ERP template.  Entire operations departments essentially become structured around the ERP platform and dependent on their capabilities and relationships with their ERP vendor.

And the ERP premise has always been pretty good - accomplish standard, automated ways of doing things and you can employ less people to achieve the outcomes you want.  However, we all know how that has failed to transpire for so many...

Susan Scrupski is Research Fellow, Business Process Reinvention (Click for bio)

However, the world of business process solutions is finally changing.  Most mid-market companies looking at their first "ERP suites", whether it's in HR, or finance, or procurement etc, are going straight into the Cloud, with the likes of Workday, Netsuite, Ariba and so on.  It's these companies evaluating business process solutions from scratch, or are simply at the end of their tethers beating the crap out of their legacy ERP systems, which are taking the leap and reinventing their whole approach to process management.  I firmly believe it's many of today's mid-market companies today that will make up the majority of the Global 2000 in 5 years' time.

But let's not get overly carried away...there isn't a dramatic switch happening from the legacy ERP-driven firms to the new generation organization, where everything is run under a beautifully centralized global operating model, process flows are accessed in the cloud and all non-differentiating processes are outsourced.  It's simply those firms ready for the new are growing in stature and scale, while those clinging to the old are trying to get smaller and leaner.  It's about reinvention, not replacement; it's about taking a completely new path, not simply papering over the cracks of the old one.

So without further ado, I wanted to introduce a spectacular new personality into the HfS family, Susan Scrupski, a legendary figure in the worlds of disruptive technology and social business - and Fast Company’s “Most Influential Women in Technology” in 2010 - who's embarked on a pivotal new project with us entitled "Business Process Reinvention"...

Business Process 21C: The Jackhammer Tales

Over the past few months I've begun to reflect upon how I arrived here at the intersection of process and innovation in the Enterprise. It occurred to me that everything I learned as a researcher, a writer, and an industry observer in the services provider space (my pre-Internet career) now had great bearing on what I was seeing in the Enterprise as a result of the pace of disruptive technologies impacting the market. The question that kept re-emerging for me was: how are rigidly defined business processes that were hammered out in the 90s reconfiguring to adapt to better, faster, more efficient ways of meeting customer needs? Even more puzzling is, if my friend Josh's old joke is correct, "SAP is like pouring concrete into a company,” how are large enterprises dismantling foundational ERP systems to include disruptive technologies? After all, no 21st Century business can stand to stay frozen in the past. Even SAP itself is retooling to provide greater flexibility and real-time actions and insights with its HANA in-memory database and its JAM social platform.

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Posted in: Business Process Outsourcing (BPO) HomepageOutsourcing Heros



A fiesta of financial services and analytics hits mid-town next week

March 06, 2013 | Phil Fersht

Wow, wow and wow.  There’s an Analytics for Banking, Finance & Insurance event in New York next week, and HfS Research is strolling down the I-95 to study the cerebral-ness.

We hope to see you when yours truly (Phil Fersht) moderates the “Leveraging 3rd Party Analytics Players : From a Transactional Support Partner to Turbo-Charging your Core Competencies” session taking place on Wednesday, March 13th at 11:30am along with Allstate's Ferdinand Dungca and Wells Fargo's Eric Legrand.

Yes! Its time to head to NYC on March 11-13th at the Sentry Center for a whirl-wind event. And not only have we negotiated our readers a discount, this time we’ve arranged an elephantine 50% off for your attendance:

To register, please email [email protected] to take advantage of the discounted rate.

We look forward to seeing you in New York City next week!

Posted in: Business Process Outsourcing (BPO) HomepageOutsourcing Events