Monthly Archives: Dec 2021

Who’s going to buy cut-price Kyndryl?

December 02, 2021 | Phil FershtTom Reuner

Kyndryl:  A $19bn business smack-dab in the critical legacy cloud market, with a remarkably puny market cap of $3.5bn

The financial markets have fired warning shots across the bows of Kyndryl’s management. To be more precise, it's more a barrage of artillery fire, as investors obsess with bashing tech firms that sustain the old, as opposed to their hugely inflating the valuations of the shiny new tech stuff. What they tend to forget is that much of the old can't be ripped and replaced overnight as the majority of the Global 2000 is in a desperate rush to hurl their legacy into the cloud:

Our Pulse study of 800 Global 2000 enterprises clearly illustrates two factors that dominate the focus of leaders:  moving operations into the cloud at speed and training staff to understand how to balance digital business needs in a virtual environment.  Surely there is still some value left in the likes of a Kyndryl as firms demand immediacy of cloudification and a desperate need to plug talent gaps fast?

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In short, Kyndryl has started life as a separate entity with still-colossal revenues of $19 billion. After a lackluster first earnings report the market cap was a mere $4 billion, which has now slipped even lower. However, these warning shots are not just a worrying sign for Kyndryl’s new management, but also for service providers weighed down by legacy infrastructure services such as Atos, DXC, and the like.  With tech infrastructure commoditizing faster than knock-off AirPods on Amazon , the need to support rapid complex enterprise change is where the focus is firmly shifting, and where these traditional infrastructure providers can help.

Kyndryl is guiding the markets on the larger addressable market and operational efficiencies

Executives at Kyndryl were suggesting that the separation from IBM would more than double their addressable market from $240 billion pre-spin to $510 billion by 2024. Intelligent Automation, data services, cloud services, security and resiliency are said to be the segments that would drive an expansion of 7% CAGR growth in those segments. The key levers for this expansion are meant to be upskilling of talent around cloud capabilities, a more energy-efficient operation of data centers, and a strong increase in the application of Intelligent Automation. However, in its first earnings statement, perhaps not surprisingly, the big picture is still that of decline, with revenues in Q3 decreasing YoY to $4.6 billion.

While the launch of Kyndryl was underwhelming both in terms of communication as well as conveying a compelling investment thesis, executives were pointing to the new partnership with Microsoft as a reference point for new strategic options after the separation. Furthermore, the company announced a tuck-in acquisition of Samlink, a Finnish service provider focused on financial services (very familiar to Cognizant). Yet, despite this progress, the (ridiculously) low market capitalization is hanging like a millstone around Kyndryl’s neck as there are several IT services firms that can easily digest an acquisition with this price tag, confident of quickly upping that $3.5b valuation to at least $10b. First off, opportunistic M&A moves.

Possible Scenarios. Which firm has the cojones to aggregate legacy infrastructure?

The purists will argue that Kyndryl is a dead asset unless someone revives its mojo, is prepared to cannibalize it’s own assets, and move legacy workloads to the cloud.  But surely there are some juicy clients to be won over and profitability to be eeked out if Kyndryl is handled with surgical gloves.  Moreover, let's not forget about the awesome talent that came across from the IBM divestment including the leadership of the respected Martin Schroeter who knows this business inside and out, and will now have the chance to make some incisive changes outside of the IBM shackles..  

So let’s examine the suitors which would have little problem raising $3-5bn to seal the deal:

  • HCL: Hindustan Computers Limited has a long history of gobbling up commodity IBM service and product lines with the purchases of the Lotus and Domino and previously the Tivoli support business from IBM. Furthermore, it is infrastructure-centric and has long ruled the roost for low cost efficient offshore-centric infrastructure support. With Lotus, for example, it has demonstrated it can extract value from even outdated technologies that have a long shelf life and could take more than a decade to sunset. Yet, the level of integration of an acquisition like Kyndryl is on a vastly different level from anything HCL has experienced, but the firm is gaining confidence with leading complexity at a global scale with massive engagements with the likes of Xerox, Chevon and Exxon.

HFS verdict: We consider them the favorites to make this acquisition with its IBM history and strong heritage and appetite for infrastructure services. It's hard to see them not fancying their chances to make this a super-lucrative venture for themselves and become one of the largest service providers around.

  • Atos: Atos already got its fingers burned with the DXC takeover proposal, which was three times the price, but the same revenue base as Kyndryl. But probably more importantly, it has a power vacuum as the new CEO will only take the helm in January and this purchase is seismic in all dimensions. But there are lessons for Atos to be learned as it is seeking strategic partners for its infrastructure business. However, the most significant appeal for Atos would be the immediate US shop window Kyndryl gives the firm, and an excellent array of client-facing talent to nurture the business. It is indeed a less risky bet that DXC was earlier this year. 

HFS verdict: The new CEO transition will likely derail this for Atos.  However, they could move fast seeing Kyndryl as a bargain replacement for the DXC-sized hole in its aspirations.  A definite possibility.

  • Capgemini: Kyndryl pushes a lot of the right buttons for Cap.  Firstly it would give its infra business a much-needed injection of scale.  And secondly, it finally puts to bed its difficulties getting a strong IT services brand in the US, which has plagued the firm for almost two decades.  A third reason is that Capgemini has grown through many acquisitions and has gotten good at them in recent years, with IGATE and Altran standing out. 

HFS verdict: Cap has made its OT+IT bed and this deal seems a bit too left-field for their new direction. A distinct possibility, but it's likely Cap will shy away from a major infra play in this market.

  • Infosys: Infy has a war chest that could easy cover the price tag, and a pandemic-induced thirst for cloud deals that could easily take the firm down this path.  What’s more, the firm has developed a strong US presence in recent times and can realistically look at absorbing the culture of a Kydryl as it explores where it next directs its focus after three very successful growth years.  On the flip side, Infosys has perennially struggled with acquisitions in the past. Still, Nandan, Salil and Ravi could find themselves needing to roll the dice here while the opportunity is there.

HFS verdict: Makes a lot of strategic sense, but previous acquisition horrors will likely hold Infy back here.  However, a bold move is on the cards after such a strong growth surge, and recent successes with its Cobalt cloud launch and mega Daimler cloud engagement might just tip the balance in their decision-making.

  • Cognizant: The Hudson Yards-led firm may fancy adding some serious infra to its armory as it continues its impressive 2021 rebound and absorbs several smaller acquisitions from the last couple of years.  Brian Humphries is a strong M&A guy and will surely be feverishly running the numbers over this Kyndryl beast, but you have to question whether it has the appetite for dishing out several billion just as the firm is back on a healthy growth trajectory. However, IT infrastructure is an area where  Cognizant could make serious inroads with a power-play like this.  Don’t rule them out.

HFS Verdict:  A definite dark horse in the race, but you have to doubt whether Humphries wants to take such a huge gamble just as the firm has found a strong growth-groove and new leaders settling in to the firm.

  • Google Cloud Platform:  GCP needs access to enterprise clients - plus could support its expanding Google docs/collaboration platform.  It's well-known in industry circles that GCP came close to acquiring DXC a couple of years ago for this very reason.  With the gap between AWS and Microsoft Azure still widening in the enterprise space, you could certainly see Goog making a renewed play.

HFS Verdict:  GCP is an outlier possibility, but you have to question why it hasn't made any moves into infra cloud services since its dabble with DXC.  The price tag is certainly digestible for Google, but you have to think it has shifted focus away from making a major services acquisition - and Thomas Kurian taking the helm definitely shifts the onus to software and not services.

  • NTT or any of the Japanese juggernauts: While any of the large Japanese conglomerates like NTT or Hitachi are pushing strongly on innovation, the attraction could lie in getting access to clients in North America and Europe whilst tapping into an international talent pool. This would be more akin to Lenovo buying the PC business of IBM.
  • Other tier 1 Indian heritage service providers:  Wipro could be tempted, especially with the bold moves taken by Thierry Delaporte.  However, this is likely too much to swallow after Capco, and memories of Infocrossing probably still give Azim Premji heartburn.  TCS doesn't buy anything, but probably should one of these days.  LTI could be a wild card with its recent cloud success and ambitions to break into the top tier.
  • Private Equity: Scenarios could be manifold from asset stripping to creating synergies for a set of portfolio assets. Fundamentally, it would be opportunistic but not strategic.
  • Other Hyperscalers: Probably more of a wild card. The logic could be getting access to clients, transforming them, and consequently upselling to them. If anything, Chinese hyperscalers like Alibaba or Baidu. But even that needs a lot of fantasy.  There were some Google rumors, but we just don't see it

Kyndryl must strike back with clearer communication and more strategic moves

The more likely scenario is that Kyndryl will seek to calm investors' nerves with a much more compelling investment thesis. That would require a more imaginative strategy, beyond an expanded addressable market and improved operational efficiencies to improve its flagging profit margins (see below). For instance, outlining bold investments in innovation or strategic partnerships with Chinese hyperscalers are the messages and actions investors want to see being made. Thus far, communication has focused on infrastructure being the core for innovation. Yet, this is ignoring the elephant in the room: it is a margin-sucking core. The following chart provides the context of the operating margin of IBM’s two services business lines, with Global Technology Services being the core of the spun out entity:

 The Bottom-line:  It's likely we'll see some acquisitive moves on Kyndryl in a market short on talent and great at adding sugar frosting to commodity work

Infrastructure services provide us with a classic example of the Innovators Dilemma - should firms prioritize meeting clients' immediate needs versus focusing on future innovations that could create opportunities in the future?  IBM has made the difficult and (probably) correct decision to spin out its legacy infrastructure assets. Yet, the communication behind the launch of the new company Kyndryl has been underwhelming, lacking a fresh vision for its assets. Therefore, unsurprisingly the financial markets have not been remotely excited by the new company, with a revenue to market cap disparity that is even worse than Conduent and Unisys. Atos and other providers, held back by legacy, can glean valuable lessons from those experiences. It's been many years since we've seen a firm the sheer size of Kyndryl is finding itself in such a position where so many suitors will think they can find some gold in it.

Posted in: Cloud ComputingDigital TransformationIT Outsourcing / IT Services



Accenture, Cognizant and Virtusa peg the top spots in the HFS Pega Service Providers Top 10

November 28, 2021 | Phil FershtTom ReunerKhalda De SouzaKrupa Ks

The convergence of SaaS and services has re-focused the ROI of software towards achieving defined business outcomes. With so many sophisticated SaaS platforms on the market - many of which offer far greater functionality than most enterprise customers need - the onus is shifting rapidly towards the business value these solutions bring to customers and how they support alignment with a OneOffice mindset. This is a major pivot away from customers simply purchasing what they are led to believe are the best features and functions and expecting miracles. Our new SaaS XXV research initiative is geared towards defining these business outcomes and measuring the leading - and upcoming - SaaS platforms against their customers achieving these outcomes.

So where better to start than looking at the leading services being built around low-code leader Pega....

“The power to simplify: What you need to crush complexity” – This was Alan Trefler’s ( Pega Founder and CEO ) key-note at the PegaWorld iNspire 2021. What stood out for me in Alan’s ~13-minute key-note was how to crush complexity. Simply put, it is about getting the business architecture right! This means an architecture that is organized around the heart of the business, customer and outcomes across the customer journey.

Putting the customer at the center is critical to the success of a transformation to drive meaningful and measurable outcomes. This was also a key insight from our latest HFS Pega Service Providers Top 10 2021:

To learn more about how the Pega market is evolving, what service provides are leading the way and how clients are leveraging Pega, I sat down with analysts Krupa K S and Khalda De Souza to learn about their experiences and insights from working on this report.

Phil Fersht, CEO and Chief Analyst, HFS Research: So, Khalda – My first question to you is around understanding the Pega services market. Please can you share the highlights and significant developments?

Khalda De Souza, Research Fellow, HFS Research: Pega offers integrated back-office and front-office solutions along with automation offerings and a low-code application development

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Posted in: Robotic Process AutomationSaaS, PaaS, IaaS and BPaaSIntelligent Automation



Job-hopping is only a temporary fix. Remote workers have to emerge from their comfortable cocoons as the Pandemic fades

November 24, 2021 | Phil FershtElena Christopher

We have to stop focusing on the "right now" and prepare for what's happening in the next six months (and beyond).  The Pandemic has created this immediate mentality from people that the situation we're in now is the only thing we should care about, and it'll be the same unto perpetuity. We need to break out of this mindset and accept we're in a temporary bubble... and the real world will quickly emerge in the coming months.  Let's prepare for that world, not the current one, folks.

With all the current panic about job-hopping and attrition, we need to consider we're in a temporary situation, where people have become burned out, and sometimes groping for the shiny and new is just so much easier than fixing the old.  Let's consider why...

It's become abundantly clear that many businesses simply cannot function in a remote model.  It can work for a short period, but ultimately creativity comes from a collective group of people being together physically.  Operations can keep cranking remotely, but for people to learn from each other, develop their relationships and lock heads to come up with ideas. They need to be together physically.

Swapping one cocoon for another is immediate gratification. I believe the current "Great Resignation" is a direct result of people stuck at home staring at a PC screen, desperate for some attention, fed up after 20 months of incarceration in their comfy cocoons.  Sure, they can always claim a pay rise and a new challenge excited them, but I believe the reason for most is the ease of hopping jobs in a talent-starved economy, where a Zoom call or two is all you need to make the switch.  It's just so easy in this bubble... merely swap one cocoon for what seems like an even nicer one.

It’s an attrition bubble. Attrition in knowledge jobs – those requiring IT or business process domain knowledge - has been spiky, but it's temporary and over-blown. Attrition levels in IT and business process services (for example) are now remarkably similar to pre-pandemic levels. The current exodus is more a result of 20 months of a temporary economic boom, pandemic, and employee fatigue than any permanent trend. As the Pandemic recedes in the spring of 2022 we will see people-centric industries quickly stabilize.

In-person work will come roaring back. Regardless of your new normal model – remote-first, hybrid, or in-person – every enterprise must respect and support the value of physicality. People still need physical interaction, education, and collaboration to learn and develop. Whatever your model, it must include a physical element and it must be thoughtfully constructed to ensure desired results. The physicality must be purposeful.  For example, most call centers across the globe are already back up to capacity, all the Indian-heritage IT service providers will have their facilities back to capacity at the beginning of next year, and many financial services institutions are always back to in-office work - as this is the only way they know how to function.  Talent at scale is still a brilliant thing to drive a business forward.

There are notable variations by industry and region. Industries that depend on people collaborating en-masse are already bouncing back to physical environments, or have imminent plans do to so. Work cultures that were very people-driven will bounce back almost 100% and are already on that track (China, India, others). Geos experiencing very / unrealistic high wage inflation will go through a correction when the economy stabilizes / levels off as the Pandemic recedes (i.e. US, India)

Bottom-Line: The pursuit of being perpetually remote is unrealistic

While there is a current huge focus on creating work environments to sustain remote working, it’s unrealistic to think in-person work is eradicated. The new normal may be more hybrid in terms of physical location, but enterprises and employees have to focus on motivating, educating, and helping create employees that are great to work with Jumping jobs is not a long-term solution to burnout and boredom. Neither is the red herring of “remote work” as some new productivity miracle.

Posted in: Digital OneOfficeTalent in SourcingGlobal Workforce and Talent



Data and Decisions services 2021 - Accenture, IBM, TCS, Infosys and EXL lead the way in HFS Top 10 Rankings

November 16, 2021 | Phil FershtReetika FlemingNischala Murthy KaushikDavid Cushman


Everyone we talk to these days has become a data governance obsessive, regardless of their role.  Whether it's ensuring data flows are effective across front to back office to align customer engagement with employee effectiveness, or accessing external data up and down our supply chains to stay ahead of our competitors and cement strategic partnerships.

In short, we need to make our data ubiquitously available, accessible, and mineable - embedding a mindset into our leadership to inspire our people to work together to create an organization that can flip our business models to exploit these seismic market changes. But we can't get the data we need if our critical data is not in the cloud and we don't have the people, partners, processes, technology - and desire to change - to make this possible.

At HFS, we describe data and decisions services as an array of services designed to help customers create a culture of data that drives new opportunities through interactions, insights, and predictive capabilities, giving clients the ability to access data at a speed that drives critical decisions for their business.

This month, we unveiled the 2021 rankings on Data and Decisions (download report here) which clearly show which providers have been able to maximize the value of their data investments during the pandemic:


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To learn more, I sat down with Reetika Fleming, Research Leader and David Cushman, Practice Leader at HFS to talk about their reflections and perspectives in working on one of our most exciting and topically relevant research publications,  2021 HFS Top 10 Rankings on Data and Decisions.

Phil Fersht, CEO and Chief Analyst, HFS Research: So Reetika, What did you learn from doing this interesting and topically relevant Top 10?

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)IT Outsourcing / IT Services



Four mindset shifts to operate as OneOffice

November 14, 2021 | Phil Fersht

OneOffice is a mindset where we break down all the silos and barriers that connect customers, employees, and partners. OneOffice is where we have processes that deliver front-to-back dataflows where we can unify our desired outcomes, how we measure success, employee effectiveness, and engage our external partners most effectively. It is how our organizations can function most effectively in today's virtual environment across borders, business ecosystems and complex supply chains. 

To get there is as much a mindset transformation as it is a technological one:

How to approach the mindset changes to operate as OneOffice 

Over the past year-and-a-half, we've gradually let go of the many shackles of the past and realized we're in a new reality, a wholly new environment, where we're all trying to focus on achieving real business outcomes, on values that are important to us, and a new work reality that is intense, high-touch and very real.  The change in the enterprise mindset towards technology has gone through a genuinely pragmatic revolution over the pandemic.

Mindset Shift I. We must align our data needs to deliver on business strategy.  This is where we clarify our vision and purpose. We need to make our data ubiquitously available, accessible, and mineable - embedding a mindset into our leadership to inspire our people to work together to create an organization that can flip our business models to exploit these seismic market changes. But we can't get the data we need if our critical data is not in the cloud and we don't have the people, partners, processes, technology - and desire to change - to make this possible.

Mindset Shift II. There is simply no option but to plan to design our processes in the cloud using scaleable web-architected applications.  If there’s one thing the pandemic taught us, it’s been the necessity to re-think processes to get the data; what should be added, eliminated, and simplified across our workflows to source this critical data. In this virtual economy, our global talent has to come together to create our borderless, completely digital organization. This is the true environment for real “digital transformation” in action. 

Mindset Shift III.  We must ingrain a critical discipline to automate our processes and data so we can function and survive in a virtual environment.  Automation is not our “strategy”, it is the necessary discipline to ensure our processes provide the data - at speed - to achieve our business outcomes. We have to approach all future automation in the cloud if we want our processes to run effectively end-to-end, which means we need effective, scalable technology to make this all possible.

Mindset Shift IV. Once we are automating successfully in the cloud, we can apply AI to data flows to anticipate at speed in self-improving feedback loops.  This is where we apply digital assistants, conversational AI and NLP, computer vision, machine learning, and other techniques to refine the efficacy of our data.  AI is how we engage with our data to refine ourselves as digital organizations where we only want a single office to operate with agility to do things faster, cheaper, and more streamlined than we ever thought possible.  AI helps us predict and anticipate how to beat our competitors and delight our customers, reaching both outside and inside of our organizations to pull the data we need to make critical decisions at speed.

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Bottom-line: You can't get the data you need if you don't have the people, partners, processes, technology - and desire to change - to make this possible

Over the past year-and-a-half, we've gradually let go of the many shackles of the past and realized we're in a new reality, a wholly new environment, where we're all trying to focus on achieving real business outcomes, on values that are important to us, and a new work reality that is intense, high-touch and very real.  The change in the enterprise mindset towards technology has gone through a genuinely pragmatic revolution over the pandemic. You can lead a horse to water, but can you get it to drink? OneOffice is about understanding and discovering the data you must have to win in your market - right now in real-time - and in the future - as the market environment keeps evolving. 

Posted in: Digital TransformationDigital OneOfficeRobotic Process Automation



10 Reasons why we launched HFS Research-based Sourcing Advisory Services

November 13, 2021 | Phil FershtSaurabh Gupta

Almost every business has evolved its business model over the pandemic era as their customers' needs are changing to remain effective and competitive in this virtual environment.  And it's been no different for analyst firms like HFS, where enterprises demand immediate help and advice to be delivered remotely and rapidly in an intimate, personal environment.  Analysts must cut through the 3000-foot view and present practical, hype-free advice to customers is they want to be credible.

When it comes to figuring out rapid changes to business operating models, smart enterprises have been demanding immediate insights, data and advice to make fast decisions on partner selection, which services to insource or outsource, how to stay ahead of their data governance needs, how to re-think their processes to get the data they need in a virtual model, and consider how to approach automation and AI to help their operations function effectively and autonomously.

To address this, we've successfully launched our Research-based Sourcing Advisory Services (see link) under the guidance of our President of Research and Advisory, Saurabh Gupta, where we're helping a number of enterprises with our unique approach to helping enterprise customers in this virtual environment.  So what makes us unique and why does our approach to enterprise sourcing support dovetail so effectively with our global analyst business?  Here are 10 reasons why...

10 Reasons why we launched HFS Research-based Sourcing Advisory

  1. The role of analysts and advisors is converging and HFS provides the perfect balance.Our recent research covering the Global 2000 reveals that only 5%* of enterprises are leveraging the Big 4 or Sourcing advisors to handle the entire sourcing process from screening through to implementation and governance. (*Based on HFS Research of 150 C-level executives across G2000 enterprises, 2021).  HFS manages the most highly engaged community of enterprise leaders and applies great research and advisory to help them.  Sourcing advisory needs a fresh, trusted face, and that is HFS!
  2. Mature outsourcing enterprise customers do not need babysitters. Second-generation enterprise clients know how to run the sourcing process. They don’t need a team of full-time onsite consultants to rack up the billings. They mainly need data, expertise, and insights in specific areas where they have gaps.
  3. Welcome to the Virtual Economy, where HFS wins. Covid-19 has proven that sourcing advisory can be done remotely and virtually.  HFS has grown 30% during the pandemic and added multiple new research practices in new areas such as banking, healthcare, cloud/SaaS, and cybersecurity. We have many proof points here at HFS that 'virtual' works!  
  4. Advisors must deliver outcomes, not simply charge for time. Our sourcing advisory is based on fixed fees for definite milestones and results, not T&M, where the consultants are not incented to speed up the process. 
  5. Real research gets to outcomes much fasterYou don’t need an RFI for everything if you already know the market, have exhaustive data on decision dynamics and the supplier landscape. Our existing repository of Top 10 research reports, case studies, Industry Pulse of 800 Global 2000 enterprises, and IP allows enterprise clients to speed up the sourcing advisory process significantly.
  6. The sourcing advisory market is crying out for some innovation. The incumbents are still running sourcing advisory the same way as 15 years ago… as a procurement process designed to beat down the service providers on price. This cultural mismatch is the #1 issue why outsourcing engagements fail, yet no advisor conducts a psychometric fitment between the client and supplier.
  7. Where is the real transformationIs sourcing advisory designed to create outcomes for clients that are slightly better, slightly cheaper, and slightly faster? Is that transformation? HFS Research-based sourcing advisory is driven by the OneOffice mindset of an integrated approach across the front, middle, and back-office to drive employee and customer experience.
  8. The over-templatized process kills creativity. Yes, sourcing advisory needs a methodology, but it can’t be so rigid that it stymies creativity and out-of-the-box ideas. But few sourcing advisory engagements allow creativity and out-of-the-box thinking.
  9. Supplier shopping must go beyond cost-gouging. It’s a common (mal)practice to launch RFPs just to find a lower price point without any real intention to change the incumbent. Again research-based and IP-backed advisory services can prevent such wastage of time and effort across all stakeholders. We don’t encourage competitive bidding just for the sake of it!
  10. We must learn from each other. There is no template for success in today’s world. The best chance of success is to learn from each other and share experiences. Our research deliverables, roundtables, videocasts and events provide an open forum for our enterprise clients to share frustrations and best practices, and we all learn from each other.

Bottom line. The traditional sourcing advisory space is ripe for disruption and HFS is challenging the status quo.

HFS provides the perfect balance between the best research in the industry and experienced practical advice. Our comprehensive repository of Top 10 research reports enables clients to develop supplier shortlists. Each Top 10 report ranks leading service providers across a series of pre-defined criteria across execution, innovation, and voice of the customer. “HFS OneOffice Pulse,” a bi-annual study of 800 global enterprises, is designed to focus on anticipated demand changes for technology and business services. Our diverse suite of data-driven offerings (price benchmarking, contracts database, emerge tech. case study compendiums) give you the tools to predict, respond to, and benefit from changes in the service industry.

Working with us, enterprise leaders will be better-informed, more enabled, and in a much-improved position to anticipate economic, technological, and market challenges.

See how our sourcing advisors can help you. Drop us a line at [email protected]

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



COP26: We’ll make it - but too late for so many

November 08, 2021 | Josh MatthewsPhil Fersht

HFS Sustainability Practice Leader Josh Matthews on stage at COP26 with executives from BMW and Accenture (Click to Enlarge)

 Anyone familiar with our analyst team knows how passionately analyst Josh Matthews has beaten the sustainability drum since he joined us three years ago (when no one cared about sustainability).  So we sent him along to the COP26 world climate change global political summit, not only to wake up Joe Biden,  but also to share some unfiltered and uncomfortable truths among all the corporate fluff... so over to Josh for his takeaways...

I left Glasgow and COP26 to the surreal experience of Fridays for Futures demonstrators, pioneers of the school climate strikes we’ve become familiar with, claiming the streets. All generations were represented. It drove home the magnitude of the most pivotal UN climate summit. Having been immersed in business and policymaking circles for a week, I found myself explaining reserved but real optimism (combined with cautious relief and pleasant surprise) to two local activists from Keeping Our Cool, a team aiming to support constructive conversations around COP.

The G20 which preceded COP26 (and honestly the last 6 months or so of sustainability-based research) gave me little optimism on the policymaking front. And for those of you who know my political background, you’ll know I don’t immediately jump to support the current UK government. But (for now) it’s optimism.

We have reason for optimism on two fronts

1. Tangibility emerges. First, the world’s largest and most influential businesses are becoming more serious (and more believably so) about moving from goal setting and ambitious rhetoric to planning their transitions and creating tangible roadmaps;

2. Big businesses will (likely) have to disclose their efforts. Secondly, the UK’s announcement that in 2023, most big businesses must disclose transition plans (it remains to be seen how rigorous or enforced this will be) will hopefully mean all organizations align themselves to sustainability goals - decarbonization to net-zero and beyond, alongside all 17 UN Sustainable Development Goals - and that this standard becomes a worldwide norm.

However, tempering that optimism are two severe problems

1. The most progressive organizations are those who’ve grasped basic concepts. The first problem is that we’re attributing gold standards of sustainability to organizations (and governments) that have grasped simple road-mapping concepts: set a goal, understand your starting point, and plan your journey. We need to quickly reach a point where detailed transition roadmaps are the norm, rather than the top 20% (a generous number). To push us in this direction, organizations like the CDP, a respected environmental disclosure and ratings charity, are moving the bar upwards in their assessments of an organization’s sustainability - and focusing on transition plans, not only commitments, even if those commitments are validated by the Science-Based Targets Initiative (SBTi), a leading voice on net-zero target setting.

Perhaps the biggest advantage we have across sustainability is that we have goals. We have the endpoints of the roadmaps we need to move along. And while we need to reach these goals as soon as we can—and these roadmaps must include rapid action in the next 5-10 years, not just targets set for 2050—this is a massive difference compared to the last decade or more chasing a horribly vague concept of digital transformation. We need to measure and understand our starting points to make these roadmaps. And we need to work together throughout organizations, and ecosystems to both figure out our starting points, and to make these roadmaps happen. I’ll be publishing a more detailed take on what COP26 means for business leaders soon, following the conclusions to the summit.

2. Humanity can be amazing in a crisis—but sadly never fast enough to save everyone. The second problem isn’t one we can fix — we can only limit. I wrote this piece filled with optimism at Glasgow Central station that there’s enough innovation and determination out there between businesses, policymakers, and people to decarbonize and meet net-zero by 2050. If we do so and fall on the right side of the 50:50 chance that gives us to limit global warming to 1.5-degrees, we can avert the very worst scenarios of climate change. But this optimism then came with a bitter aftertaste. Even if we meet these targets, and make massive strides on all 17 UN Goals, so many across the world are currently experiencing what the opposite of sustainability looks like. As time goes by means we become too late to save another person, another ecosystem, or avert another of the damning effects of climate change. What that doesn’t mean, is that that the efforts we all need to make rapidly, each in our own individual and organizational ways, aren’t worth it. We ran out of time to compromise and delay decades ago. I hope and I am optimistic that this really can be the “decade to deliver,” as so many put it—I can’t afford not to be.

Bottom-line: We ran out of time to compromise and delay decades ago 

I hope and I am optimistic that this really can be the “decade to deliver,” as so many put it.  We can’t afford not to be.

Posted in: Governance Practices and ToolsSustainability



Wipro catches a growth mindset with Stephanie Trautman

November 06, 2021 | Phil Fersht

One of the most notable turnarounds in recent IT services history has been the remarkable increase in revenue and profit performance of Wipro since Thierry Delaporte took the helm 18 months ago just as the Pandemic was in full throttle.  Over the past few quarters, the firm has posted close to double-digital revenue growth and will surpass the $10 billion revenue level.  Thierry moved swiftly to make restructure the firm around geographic regions while simplifying its management structure, and he also brought in some new faces from the outside to add fresh ideas, energy and focus to implement his plans.

One of Thierry's recent recruits has been Cincinnati's own Stephanie Trautman, who joined the firm last February from Accenture, to take on the new role of Chief Growth Officer for the firm.  So we coaxed her off the golf course to tell  us a bit about herself, what she's doing for Wipro and why the firm has been making such a strong bounceback in the market...

Phil Fersht, CEO and Chief Analyst, HFS Research: Well, it’s great to get some time again with you, Stephanie, up close and personal. So I guess my first question is going to be, you know, have you always been in the tech business? Can you share a little bit about maybe how your career evolved since you left college? Was this what you always wanted to do?

Stephanie Trautman, Chief Growth Officer, Wipro: Sure, Phil. I’ve spent my entire career in either financial services, technology, or both. I really did not anticipate this career, when I graduated from college. I went back to school to get my MBA, and then started a career at Ernst & Young, and that’s where I kind of got introduced to technology, and really had a passion for it, so have stayed in this industry since then. So I did move around a lot, in my career, but when I did, you know, it was often to either learn something new, or grow my responsibilities, or use my experience for the organization I was joining. So I’m really lucky to have worked with some fantastic organizations, and learned a lot, learned this business, and happy now to be able to help others do the same.

Phil: You’ve got this fancy job title, you’re the Chief Growth Officer, so you head up, what, sales, and marketing, and partnerships, large deals, etc. Can you tell me a bit about what a day in your life is looking like, Stephanie, in this new role of yours?

Stephanie: You know, I’m really fortunate to really love what I do, and I was particularly excited about this role. On a typical day, I’m either meeting with my chief growth office leadership team, talking about how we increase our large deal pipeline, and win large deals, or I’m meeting with Laura and Gurvinder to talk about what we need to do to increase brand awareness, either in the marketplace, or with our advisors and our partners. I spend a lot of time with our ecosystem partners, understanding their strategies, and Wipro, and how we could come together in more impactful ways. And then, you know, in the first, probably, four or five months, I spent a lot of time hiring, which was also a lot of fun, and met some fantastic talent. On the

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Posted in: IT Outsourcing / IT ServicesOutsourcing HerosCloud and Business Platforms



Cognizant is over the Hump... thanks to the Humph

November 02, 2021 | Phil Fersht

One of the most over-criticized service providers of the past couple of years has been Cognizant. The company which rocketed from $1bn-$15bn in 15 years took full advantage of the pre and post-Great Recession offshore boom, the directionless years of Wipro and Infosys, and a lovable arrogance... which even scared the hell out of Accenture.  And all this was achieved with very few changes to its leadership team and an entrepreneurial spirit which was the envy of the IT services industry.

However, with the pressure of the activist investor Elliott Management's buy-back in 2018 shortly after its president and operational architect Gordon Coburn fell on his sword for greasing the palms of Tamil Nadu government officials to obtain building permits, the Cognizant halo quickly faded, and CEO Francisco DeSouza departed with revenue growth slumping to 5% and operating margins heading down to the low-teens.

Brian Humphries' patient approach to change has proven the smarter approach considering the complex structure of the firm 

Enter Brian Humphries in early 2019 (see blog) to take on his first IT services leadership position having spent most his career in telecoms with Vodafone and hardware with Dell and HP prior.  While many people thought Brian would cut deep, he took his time evaluating the firm's long-time leadership - it took the best part of two years for most the old-guard SVPs (known internally as "one-zeros") to take themselves out or require a gentle nudge.  Compare this to Thierry Delaporte who joined Wipro in 2020 and quietly cut 155 VP (and above) level executives after a few short months.  While many onlookers criticized Humphries for moving too slowly, he was trying to develop a renewed spirit, professionalism and culture without a traumatic break from its very impressive past.  Wipro had stagnated for years because of a very stodgy and bureaucratic structure which needed a quick, rapid fix, while Cognizant is more than twice the size and needed a more gradual pivot, especially as several former one-zeros had built huge fiefdoms that were not broken, but in dire need of discipline, direction and realignment with the broader business planning across its global business units which were too skewed to the US market.

Just when things were moving in the right direction, enter a pandemic, a ransomware attack, and the write-down of a disastrous legacy client

When you examine the challenges of incoming CEOs into very large businesses, there are not many which rival the series of events that Humphries has had to endure.  After righting the ship in 2019, along came the deep panic of the global pandemic with the seismic adjustments needed just to keep the wheels on keeping their clients' delivery functioning.  And to rub salt into an already gaping wound, the firm was hit with the Maze ransomware attack, just as its employees were being rapidly transitioned into their work-from-home environments.  And, despite these unprecedented disruptions to its business, Cognizant plowed through the worst of these impacts only to be forced to write off around $150m in Q4 2020 from a disastrous acquisition of Finnish developer Samlink, struck shortly before Humphries took the helm, which was geared at building a shared core banking infrastructure for three Finnish financial institutions. 

Yet, despite these three significant setbacks, Cognizant has risen again, posting three successive high-growth quarters with a strong outlook for Q4 which should see the firm comfortably blow past the $18.5 bn level.  This will see the firm likely finish 2021 as the fourth-largest IT services firm in the world, only being surpassed by Accenture, TCS, and (marginally) Capgemini.  IBM's spin-out of its infrastructure services business (Kyndryl) and DXC's decline will likely make this eventuality happen: 

(Click to enlarge)

The reason for real optimism is that growth in revenue comes with positive movement in operating margins and EBITDA.  With the current issues impacting staff wages and attrition (especially in India), it's critical for providers to maintain strong margin performance to provide that ability to reinvest in staff recruitment, training and salaries:

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Reasons for this robust post-pandemic bounceback

Ongoing acquisitions adding specific expertise across geographic and solution areas.  In 2019 and 2020 Cognizant took specific strides to increase its cloud migration and modernization capabilities with a series of targeted acquisitions across core domains such as AWS, Pega, ServiceNow, Workday, Microsoft Azure and Salesforce.  Examples include Collaborative Solutions, 10th Magnitude, Bright Wolf, and Inawisdom There have also been specific acquisitions in engineering services areas, notably in the product and automotive realms, such as TQS Integration and ESG mobility

Flexible pricing models for apps modernization.  Our multiple discussions reveal that Cognizant’s customers are happy with the pricing models that Cognizant is offering for applications modernization, and are generally happy with the talent.  The growth of digital deals is resulting in Cognizant being able to price “land and expand” pricing models that include gain share, outcome, and risk-based pricing components.

Clients see Cognizant as an "engineering-first" firm.  Focusing on its software engineering DNA and not trying to sound like a low-cost alternative to Accenture, is perhaps a less obvious aspect of Cognizant's pivot over the past couple of years. Several Cognizant clients we recently interviewed mentioned they prefer its focus on staff training and depth/scale of resources and care much less about how much it influences the C-Suite with grandiose ideas.  The new attitude, after the past 18 months of pandemic-induced volatility, has definitely seen enterprises prefer service providers with a roll-up-sleeves approach to drive rapid transitions.

Strong growth outside of US mainstay.  While Cognizant's US business grew 10% over the past year, there has been a significant 17% increase in Europe and 22% across the rest of world. Some key wins in the UK (HMRC and a major UK publisher) and Sanofi (France) contributed to the notable increase in European presence.  The recruitment of Rob Walker to lead UK and Ireland has been a notable addition, who was recently invited to brief the British Prime Minister, and Rajesh Nambiar is proving to be a stabilizing figure in India, amidst all the turbulence and staff attrition currently plaguing the whole Indian tech scene.

Continues to strengthen their capabilities across both the Life Sciences and Healthcare value chains. In Life Sciences, Cognizant's Industry 4.0 push to enhance its manufacturing capabilities is impressive and has a lot of potential. The acquisition of Zenith allows it to combine its IT expertise with Zenith's OT expertise to be able to deliver a full-stack tech integration for all LS manufacturing integration. In addition to this acquisition, it has also partnered with Phillips to be able to use data to connect medical devices, health systems and health plans on AWS using Philips HealthSuite (PaaS). This type of ecosystem connectivity will give Cognizant significant leverage to support clinical trials better, reduce fraud waste and abuse and generally optimze the use of data. 

Challenges Cognizant needs to address

Attrition and wage inflation.  The "Great Resignation" is hurting all service providers with significant reliance on Indian talent and Cognizant is among the worst of the Tier 1's affected with current rates estimated in the high 30 percentile.  While enterprise customers have expressed concern over the current high rates across all service providers, we have yet to see any major delivery issues as a result and impact is being felt more with rising costs due to rising wage rates.  Cognizant has a healthy operating margin and added 17,200 staff over the last quarter, bettered only by TCS (19,690) and Accenture (55,541).  With this aggressive focus on hiring and attention from the C-Suite on combatting attrition, Cognizant should not find itself at any significant disadvantage vis-à-vis its competitors, especially in software engineering areas where its scale and depth are so important in the current environment.

Banking and Financial Services needs an injection of energy.  The sector only grew 5% year-on-year compared to 10% in healthcare and 20% in comms, media and tech.  Cognizant has recently revamped its BFS capabilities with new leadership, new offerings, and a new approach that better emphasizes transformation rather than IT partnership. We applaud the direction but Cognizant has been outpaced in many categories by its competitors. We’d like to see continued progress with consulting-led capabilities helping Cognizant make good on being more than a tech partner. We’d also like to see continued progress with Cognizant's European footprint and nearshore delivery, which is a strategic priority for BFS clients.

Create a compelling narrative for its digital business operations.  Cognizant's $2bn of revenues in the business operations arena (growing at a health high-teens clip) are two-thirds of the entire revenues of pure-play Genpact and double the likes of EXL, WNS and InfosysBPM.  However, few people outside of Cognizant recognize this capability and are surprised to learn the deep plethora of industry process, content expertise, digital business acumen and process automation experience that exists within the firm.  While Cognizant has always done a very good job of marketing its bread and butter tech capabilities, it has perennially struggled for many years to create and articulate a compelling narrative for its operations and process capabilities... which are a well-kept secret.  Key client executives need to know that Cognizant's business operations are a strong alternative to Accenture interactive operations, TCS' banking and insurance process services, or Genpact's CORA AI platform, and so on. In today's virtual environment, the ability to deliver business services in the cloud has never been so critical and having that capability to bridge process and technology services is critical.  Cognizant is well placed to capitalize here, provided it creates an identity for its business operations capabilities and aligns its practice leaders to bring the pieces together for clients across cloud, apps and process.

The Bottom-line:  The negativity is leaving the building and the new Cognizant is quietly emerging

The strong rally over the past year proves there is a lot of life and energy fizzing as the new Cognizant emerges from a slow transition and a very unlucky series of events that threatened the very essence of the organization last year.  Now we need to see the leadership team drive the company forward as we stumble (somewhat) out of the pandemic into a 2022 that could be as volatile and unpredictable as the past 18 months.  One thing is for certain - Cognizant has proved to be a highly resilient animal that has quietly found new energy and footing in this most testing of times.

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



Accenture, TCS, Infosys, IBM and Capgemini leading the way with Native Automation services

October 25, 2021 | Phil FershtElena ChristopherDavid Cushman

We're excited to unveil our eagerly-awaited Top Ten report covering Native Automation Services (click here for your copy).  In short, Native Automation services leverage a range of emerging technologies to create intelligent and automated workflows in the cloud enabling new "native" standards for consistent cross-functional enterprise operations.  Let's remind ourselves that automation is not your strategy.  It is the necessary native discipline to ensure your processes provide the data - at speed - to achieve your business outcomes. Hence you have to approach all future automation in the cloud if you want your processes to run effectively end-to-end.

The report examines the capabilities of 12 service providers. We assessed and rated their native automation service capabilities across a defined series of execution, innovation, OneOffice alignment, and voice of the customer criteria. So let's see how the leading service providers fared:

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Key criteria for rating Native Automation service providers

Native Automation Excellence.  Native automation is one of three enabling capabilities supporting the journey to OneOffice. It covers services that leverage a range of emerging technologies to create intelligent and automated workflows in the cloud, enabling new "native" standards for consistent cross-functional enterprise operations. The top five leaders in our study, Accenture, TCS, Infosys, IBM, and Capgemini, showcased exemplary capabilities across the assessment criteria, demonstrating the inclusion of automation as a standard “native” element of transformed enterprise operations. 

Execution.  Native automation is scaling, but most engagements are still at the front end of the value chain in the planning and implementation stages. Native automation is an essential element of enterprise operations transformation. But remember, the value is from working smarter and solving problems, not from successfully implementing a single-thread technology. The increase in outsourcing and managed services deals points to automation truly becoming a native element of enterprise operations. TCS shone in this category, closely followed bt Infosys and Accenture.

Innovation.  Native automation engagements are becoming more tech-diversified, but robotic process automation (RPA) is still the dominant technology. RPA and process intelligence have become the power couple of automation engagements, packing a powerful combo punch of understanding and automating processes then measuring the impact of the automated processes. Study participants tell us RPA and hyperscalers dominate their partner landscape, with Automation Anywhere (AAI) and UiPath as co-leaders; almost 70% of respondents named them as a top automation partner, followed closely by MS Azure and AWS, reminding us that ecosystems are changing and on-prem was so pre-pandemic.  Accenture dominated the innovation categories, followed by impressive showings by Cognizant and HCL.

OneOffice Alignment.  Service providers say they are delivering OneOffice digital transformation in an average of just 65% of their native automation engagements. This suggests the need to work harder to forge the link between native automation and its essential role in delivering OneOffice transformation. It’s time to walk the walk: Take the OneOffice message beyond the thought leadership and into the deal.  TCS was able to win this category, clearly helped by its merging together of data, process delivery in recent years to deliver a front-to-back experience for many of its automation clients.

Voice of the Customer.  Native automation customers speak, and they want proactive recommendations! One hundred percent (100%) of the customers we interviewed indicated they regard their native automation service provider as a strategic partner. Enterprises largely recognize and appreciate services providers’ proven expertise, skills, innovation, and scale that help make their businesses better. But they want their service provider partners to challenge them and provide more proactive ideas for improvement. Business process and data management services provider EXL was the surprise winner of this category, proving that a deep understanding of clients' institutional processes is so critical when is comes to redesigning workflows.  It is no coincidence its business process management rival WNS also surpassed expectations here, while Genpact was also a high performer.

Bottom line: Automation is the native disciple that sets up the platform to drive AI capabilities to refine your data

Once you have successfully automated processes in the cloud, it is easy to administer AI solutions to deliver at speed in self-improving feedback loops.  This is where you apply digital assistants, computer vision, machine learning, and other techniques to refine the efficacy of your data.  AI is how we engage with our data to refine ourselves as digital organizations where we only want a single office to operate with agility to do things faster, cheaper, and more streamlined than we ever thought possible.  AI helps us predict and anticipate how to beat our competitors and delight our customers, reaching both outside and inside of our organizations to pull the data we need to make critical decisions at speed.

As enterprises grapple with the enablement of their post-pandemic, work-from-anywhere future, native automation is going mainstream. It is rapidly becoming an essential element of enterprise operations transformation—enabling the modernization of work through thoughtful process reinvention and eradication of soul-crushing manual work. Service providers play a critical role in driving transformative solutions and mindset change about how and where work gets done.

HFS subscribers can click here to access their copy of HFS OneOffice Services Top Ten: Native Automation Services 2021

Posted in: Robotic Process AutomationIntelligent AutomationArtificial Intelligence



IBM rebrands its GBS division to emphasize what it actually does: Consulting

October 18, 2021 | Phil FershtSaurabh GuptaElena ChristopherSarah LittleJoel Martin

Almost two decades after its landmark acquisition of PwC Consulting, IBM Global Business Services (GBS) is now IBM Consulting. Just another industry rebrand, you say? Botox for GBS? Not so fast. .

Here are five reasons why this rebrand matters...

1) Clarity is king and consulting dominates what IBM’s services organization does. There have been a lot of misconceptions around IBM’s GBS (Global Business Services) and what the organization does, so part of the positioning with IBM Consulting is to clarify this across the board while pitting itself more aggressively against competitors with deep consulting chops like Accenture, EY, PwC, and Deloitte. With roughly 70% of its $16 billion revenues in the group coming from technology and business transformation projects, this rebranding is aligning the identity of IBM services with the lion’s share of its business activity. Moreover, the term “GBS” is most often associated with centralized internal shared services governance organizations, which is vastly different from the IT and business services where IBM specializes.

2) Simplified organization structure. Behind the rebranding, IBM Consulting also restructured its organization structure to shift from an input/capability-led structure to a more client-centric model. There are now four transformation services blocks that IBM consulting is organized around – customer transformation, employee transformation, finance & supply chain transformation, and industry transformation with cross-cutting cloud services and emerging technology capabilities. All the emerging technology capabilities (automation, AI, analytics, blockchain) are now housed under the same group to try and maximize the value creation opportunity for clients. One of the biggest gripes of IBM clients has been painful navigation across capabilities. This simplification should help.

3) Talent acquisition. There are two roads to travel here for the talent discussion: organic and inorganic talent growth.

a) Organic acquisition. “IBM Consulting” certainly brings more cache than a consulting title within GBS when compared to Accenture and the Big 4. This is an opportunity to strengthen the employer brand at all levels so long as IBM supports it internally with clear consulting career pathways and progression towards a master class of client-facing managing client partner roles. The shift from GBS to IBM Consulting and the strength of its growth should be a boon for IBMs ability to pull talent from top firms during the Great Resignation and straight out of the university gates.

b) Substantive skills and talent growth through M&A. IBM acquired eight firms in since 2019: 7Summits, Expertus, Instana, NordCloud, TruQua, WDG Automation, Accanto #, and Red Hat. Consider this a catalyst for skills-building that accompanies world-class training and assets. IBM ranked #4 in the HFS Employee Experience Services Top 10 report, with notable takeaways on their skills ecosystem. IBM places skills at the center of its people strategy and has a fully scaled internal experience to back it up: half of the revenue IBM earned from 2015 – 2020 is from new areas of the business (e.g., cloud computing, AI, data science, cybersecurity).

4) IBM Consulting leadership has a consulting pedigree and a leader who pioneered the modern-day Accenture consulting model. So many of the leaders within the group came across as part of the 2002 PwC acquisition and have long-since built consulting and managed services practices under the IBM banner.  In recent years, the revenue model has shifted more and more towards consulting and away from commodity managed services offerings where it is increasingly challenging to compete on cost-driven engagements against the likes of the heritage Indian providers and Accenture (with 250,000 of its staff based in India).  Moreover, Mark Foster, the SVP leading the IBM Consulting division, is widely credited as the leader behind the significant growth of Accenture consulting until he left the firm in 2011. He was the pioneer behind the Accenture “diamond client” model, where a laser focus on 150-200 major enterprises has formed the bedrock behind the force that is Accenture today.

5) Divorced from Hardware, finally. With the spinoff of Kyndryl days away, IBM Consulting has clear mandate to focus on business and technology process re-engineering. The Consulting group is free to partner more broadly with hyperscalers, accelerate innovation labs with its Garage services, and be more software first around AI, automation, and emerging technologies like blockchain, IoT, and 5G.  Garage services will become innovation labs for industry-centric consulting services to align technology consulting and software platforms (Cloud Pacs) with industry-centric business transformation for large enterprise customers. Expect a big consulting push around “the cognitive enterprise powered by IBM Consulting” as they meld together Watson, multi-vendor hybrid cloud, Red Hat OpenShift and Enterprise Linux, and Cloud Paks to modernize technology and push with industry-specific software and services offerings.

The Bottom Line:  IBM Consulting now has the structure to take on Accenture and Deloitte, but optics have to be complemented by real talent investment, C-level commitment, technology agnosticism, and client results.

IBM’s shift to emphasizing consulting couldn’t be better timed with a huge talent dearth for outsourcing delivery talent, especially in India.  Our research shows that 54% of the FORTUNE 1000 are racing to stay relevant in the virtual economy, and they need immediate transformational and IT support to make fast decisions.  This lends much more to partnerships with providers with deep onshore talent and a deep consulting pedigree.  If IBM can continue to beef up its consulting presence with organic talent – and perhaps an acquisition or two – there is no reason why IBM Consulting cannot challenge Accenture and Deloitte at the help of the IT transformation market. 

IBM consulting should also make it very clear to its existing and prospective clients that it is not getting out of the “outsourcing” market with this rebranding to “consulting.” The Kyndryl divestiture earlier this year and the contact center divestiture to Concentrix in 2014 provides ample ammunition to its competitors to raise concerns about IBM’s commitment to the BPO and ITO markets which it needs to proactively address,  

Another area where we – at HFS – believe IBM Consulting needs to clarify its position, is with regards to its technology partnerships.  While the firm has been successfully teaming with software firms such as Celonis, Blue Prism and UiPath, it has also had to work with IBM Software which has acquired produces such as myInvenio and WDG, which compete in the market with these firms.  If IBM Consulting can clarify its technology agnosticism in a similar way to the ethos Foster applied at Accenture, there is every chance of success as we venture into unchartered waters.

Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services



Corporations and individuals must combine forces on this last mile to defeat COVID-19... let us protect each other to return to the lives we cherish

October 14, 2021 | Rohan KulkarniPhil Fersht

“Freedom” appears to be the current central theme of individuals who refuse to be vaccinated against COVID-19m as one of many reasons for refusing to be protected against the deadliest pandemic in over a hundred years. It is essential to recognize that many reasons for not getting vaccinated can be overcome by the enormous data we now have, with over 45% of the world’s population vaccinated with over 6 billion doses.

The data shows that the vaccine effectively prevents deaths and serious illness, the side effects are marginal compared to the effects of COVID-19, and it is the only way to get back to the normal we are desperately seeking to experience again. That translates into supporting all those on the front lines as well as evangelizing vaccinations.

Healthcare workers and teachers are not the villains here

Healthcare workers have gone from being heroes that we cheered at the Pandemic's peak to being threatened, ridiculed, and harassed in recent months. A school association (NSBA), representing locally-elected school board officials that oversee more than 50 million US public school students, has requested the FBI and President Biden to provide them with protection due to the increased threat levels to officials and teachers.

These threats are in response to healthcare workers and teachers encouraging vaccination or enforcing mask mandates, both intended to help protect individuals from contracting COVID-19. In a civil society, threats are a non-starter in any facet. To harass those who protect and cure us of diseases, to threaten those that educate our young minds is unacceptable and unfathomable.

Such behaviors could have profound implications when there is already a high turnover of healthcare workers, sometimes 100% attrition in a typical year, which could very quickly translate into a critical shortage. Our kids are performing below average compared to other OECD countries, and lacking teachers will make the US even less competitive than we are already headed.

We must balance vaccine mandates: If those who are providing services are vaccinated, then those receiving those services must also be vaccinated

The federal government has mandated vaccines to all its employees, as have many states and cities. Corporate America has taken its cue from that mandate to issue its corporate mandates for vaccinations. Many enterprises, including hospitals systems, are issuing ultimatums to their employees to be vaccinated or lose their employment.

The holistic effort to vaccinate vast populations either through free access or mandates appears to be effective with about 66% of the US population over the age of 12 being fully vaccinated and the delta variant on the retreat.

Freedom is a fair concept and must be equally dispensed. If those who are providing services are vaccinated, then those getting those services must also be vaccinated. That would be reasonable to ensure that everybody has a level of protection.

Protect our people to return to business as usual

The airline business has been returning to a level of normality given the strict protocols in place for testing and vaccination. Restaurants in certain cities are experiencing some “normal” due to protocols in place for vaccine evidence. Such examples are beginning to expand across the US and globally.

A critical driver of that return to normal has been the vaccine, which has been highly effective and will likely continue to improve on its efficacy with the boosters. This data is important to support the need for a wider proliferation of vaccines.  For example, recent data from the US shows that 50,000 “breakthrough” cases from the delta variant with vaccinated citizens only resulted in 59 actual hospitalizations. 

Consequently, corporations and small businesses must have the freedom to do what they need to protect their people. Keeping their employees safe is paramount, and if that means mandating vaccines or refusing services to those who are not vaccinated, so be it. This is the path to going back to being in business as usual and enjoying the fruits of freedom.

The bottom line: Freedom must be an equal opportunity right; if individuals choose not to get vaccinated or refuse to mask up because they do not want to surrender their freedom to a mandate, then they must accept not getting healthcare or education, or other services from establishments that have a vaccine or mask policy.

Nurses and teachers are two of our most trusted professions. If we vilify and threaten them how will the rest of the society fair? So, we are calling upon corporations, small businesses, and individuals to help enable healthcare workers and teachers to refuse services to individuals who are not vaccinated and refuse to do so. Healthcare workers must be allowed to refuse treatment in non-emergency conditions as should teachers be allowed to refuse to teach kids who will not be vaccinated or wear a mask in a public setting. In these unparalleled times, we must protect each other to return to the lives we cherish. That is the only way forward.

Posted in: Governance Practices and ToolsHealthcarePolicy and Regulations



Infosys, TCS, Accenture, Wipro, and HCL helped BFS firms go from digital façade to OneOffice during the pandemic

October 12, 2021 | Elena ChristopherPhil Fersht

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The banking and financial services sector remains the largest market for IT and business process services and is generally regarded as one of the most aggressive in terms of emerging tech adoption. However, do not confuse the spend and the adoption with digital transformation. So much of what gets done in established banks and capital markets firms is all about care and feeding of some of the largest and most complex tech stacks and business processes in the world. As with the rest of the planet, the pandemic exposed the lack of digital

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Posted in: Digital TransformationDigital OneOfficeBFSI



ServiceNow and Celonis just threw down the Workflow Platform gauntlet. The darlings of IT and process workflow execution make their joint move...

October 06, 2021 | Tom ReunerReetika FlemingPhil Fersht

The new Celonis–ServiceNow partnership blends operationalizing data science with the capability to design workflows in the cloud.  We are witnessing a determined partnership between the leading IT Service Management vendor and the leading process execution platform. This is a true first in combining an IT-centric workflow mindset with an operations one.  This is where we combine IT orchestration with process modeling, mining, discovery and execution.  And even RPA.  The likes of SAP, Pega, Appian and UiPath will be feeling very nervous right now and surely have to make massive investments to keep pace with what we’ve just witnessed.

This is the boldest move yet to automate complex data with process intelligence

Against this background, Celonis’ strategic partnership with ServiceNow is a bold step that could reshape many IT and business operations discussions across major enterprises. The announcement spans initially a reseller agreement, a deeper integration of both platforms as well as a joint go-to-market.

Notably, ServiceNow is making a strategic investment into Celonis, and partners are expected to launch joint products as early as the first half of 2022. The strategic intent is to link Celonis’ data platform with ServiceNow’s workflow ecosystem to advance toward the broad execution

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Posted in: Robotic Process AutomationIntelligent AutomationService Management



Pounding though a Pandemic... LTI and Mphasis show why enteprise customers want the personal touch

October 05, 2021 | Phil Fersht

While most folks are obsessing with the performance of the IT mainstays over the past 18 months, spare a thought for two IT services businesses that not only entered Covid on a long growth cycle, they also readjusted quickly and carried on their growth stories even during the worst of 2020.  Just check out the quarterly revenue growth paths of LTI and Mphasis respectively:

Click graphs to Enlarge

Why have LTI and Mphasis carried on their growth unphased?

Big enough to get to the table, small enough to keep client intimacy.  It's the oldest quote on the book for the mid-tier service providers, but couldn't be more true in today's market.  Enterprise clients want to feel they have the personal attention of the CEO and the leadership team when it comes to signing over their technology control.  Rewind 10-15 years, most enterprise CxOs had a direct line to Chandra (TCS), Shibu (Infosys), Jeya (Patni), Pramod (Genpact) or Frank (Cognizant).  Client leaders wanted to feel the personal touch from their services partner leaders, and they were usually personally involved in the scope and negotiations.  Today those same executives are most likely stuck with a client partner, who is literally horsetrading the rate card with them.  Enter the likes of Sanjay and Nitin, who spend most their time talking to their clients, reassuring them, convincing them, but most importantly are available to them.  

Flatter structures and visibility to leadership motivate staff.  Staff want more from their companies these days than a good stock plan and competitive salary - they want to know what their leadership stands for, and want to learn from them. With less bureaucracy and promotion cycles based on merit, not purely tenure, it motivates staff to see how to get ahead, and and having more access to their leadership. Nothing demotivates staff more than seeing weak managers stay in their positions year in, year out, while the rockstars leave, or are sacrificed.  I have even seen hierarchies in some services providers so rigid, you are instructed not to interact with people in the level beneath you.  Yes really...

Sustained profitability helps high performers to be financially rewarded and retained.  In a market where attrition is running at an all-time high, the smart players are identifying their talent engaging with clients and helping them execute and making salary increases to keep them.  Providers like LTI and MPhasis have kept their profit margins in the high-teens consistently over the Pandemic and are in good stead to reinvest in retaining key talent and attracting new blood from start-ups and larger service providers suffering from low morale.

Savvy tuck-in investments and market moves. Mphasis continued to bolster its depth in largest industry, banking and financial services, with its Front2Back transformation methodology and NextOPs framework really bearing fruit during the Pandemic, while also venturing effectively into other industries, such as logistics.  The firm also added delivery depth in the UK, notably acquired Seattle-based digital design house Blink and significantly de-emphasized its reliance on DXC as a client.  LTI merged most of its cloud transformation under its Infinity umbrella mimicking Accenture’s Cloud First  and Infosys' Cobalt offerings, but at a lower price with a focus on outcome or risk-based pricing models. This bought their customer an extra ~20% of possible savings while the downturn driven by the Pandemic was underway. LTI also ramped up its CSP/Hyperscaler partnerships (mainly with AWS) at the right time and added some customers to their book through acquisition.

CEOs who can inspire and motivate their people. Simply-put, making themselves highly accessible to customers and staff has been huge in driving their respective businesses.  Moreover, showing longevity and loyalty to their brands has been a key factor with Nitin recently signing on for a further 5 years at the helm with majority investor Blackstone.

Bottom-line: Big is no longer brand-beautiful

The days where you never got fired for hiring IBM, or ensuring high performance being delivered with Accenture, are not as vogue as they used to be as service delivery levels off across providers and speed/execution take center stage.  Moreover, the top tier of service providers simply cannot afford to focus their A teams on smaller-scale deals that will not fit their high-pressured revenue models. The amount of new business becoming available to the likes of the LTI, Mphasis, Virtusa, Hexaware, Zensar et al is larger than ever and most of the Global 2000 opt for one to two primary global service providers and a couple of these nimble, energized mid-tier firms to keep everyone honest.

Posted in: IT Outsourcing / IT ServicesOutsourcing HerosBFSI



RPA's true value is helping enterprises function commercially in the virtual economy, connecting legacy with the cloud

September 26, 2021 | Phil FershtTom Reuner

New insights by HFS Research from FORTUNE 1000 leaders provide the context of how we have to reimagine the automation narrative. It is not about the myopic view of one bot for every employee or bold claims of progressing toward the autonomous enterprise. It's about delivering immediate outcomes by designing workflows that take the RPA value out of the back office, where most RPA has been buried, and aligns its capabilities with helping the immediate commercial needs for the enterprise.  The need to create immediate solutions with the digital hyperscaler platforms is now far greater than ERP suites, as that is where the hyperconnected business environment operates, as opposed to the traditional back office.

RPA impacts when it helps enterprises function effectively in new virtual customer and supplier environments

Over half of organizations are realizing that it requires rapid investments in process innovation to be effective in virtual environments. Before and during the pandemic, organizations that deployed RPA as a band-aid on badly designed or even broken processes were found badly wanting.  Firstly, scaling fragile processes with RPA fixes is a huge challenge - they are brittle, and usually results in perpetuating a legacy environment.  Secondly, RPA can have much more impact when it is deployed to bridge existing commercial systems with digital platforms that are essential for survival.

The RPA fraternity has reacted to this by accelerating tie ups with the Hyperscalers. The most recent example is Blue Prism (see news) who significantly expanded capabilities across the AWS ecosystem. However, what is urgently needed are proof points of how we are managing the new complexity of cloud native deployments. If applications or processes are running on containers, the interdependencies and consequently the reasons for failure increase exponentially.

As our current in-progress study of the automation focus of the FORTUNE 1000 is already revealing, the majority of automation investments enterprises are making are with the digital platform giants (75%).  Only half of them still keep faith in ERP, while even less are focused on workflow suites and the RPA platforms themselves.  Hence, hooking up with AWS is a masterstroke as it dominates so much of the commercial supply chain in the virtual economy:

The onus shifts from fluffy "strategy" to immediate need fulfillment 

Addressing immediate critical needs at the business and supply chain end is happening... when you get into the whole commerce space the needs are immediate.  Like how does a consumer products firm take data from legacy supply chain systems into an AWS environment... not the sort of thing you can solve overnight.  You literally can't operate seamlessly in the virtual economy if you don't have the tools to link the old with the new, and RPA must be part of the toolbox to make immediate impact with the suppliers and customers which are the lifeblood for survival in a world where supply chains are falling apart at the seams, customer needs are immediate and stitching together processes from the front to the back office is the only way to function in today's hyperconnected markets.  As this new data shows us, more than half of today's F1000 organizations are under intense pressure to implement new capabilities to take them into the future, as opposed to clinging on to the past:

Bottom-line:  Automation is not a strategy it's the native discipline to keep the wheels on as you rush to the future

Organizations are gearing up to drive fundamental operational change. To stay relevant in the virtual world, application and processes must be designed in and run on the cloud. This requires not only a broader ecosystem of cloud native capabilities but a new mindset and culture of running operations. It is literally about operationalizing the OneOffice by driving change that finally delivers on overcoming the organizational silos and experience-led outcomes. Yet, we can only get there by converging IT and business operations and by leveraging IT and business automation

Posted in: Digital OneOfficeRobotic Process AutomationIntelligent Automation



We’ve now got to get our sh*t in the cloud, but our data’s still crap...

September 07, 2021 | Phil Fersht

So what's our new cloud guru Joel Martin, saying about the frantic rush to the cloud these past few months?  Let's just hear it from the horse's mouth...

Phil Fersht, CEO and Chief Analyst, HFS Research: Hey, Joel. So how should we be thinking about cloud today? What do you think has changed in the last couple of years, and how should we think about the market as it starts to evolve?

Joel Martin, Research Leader, Cloud Strategies, HFS Research: The cloud is the architecture people are building their businesses on. As we move to these virtualized economies, virtualized businesses, and virtualized experiences, inside and outside the organization, the cloud is the only way companies can scale up and scale down their ability to reach those customers and deliver services. They can’t do that within their private data centers. And that’s the biggest differentiation of using hybrid or public cloud, is that scale versus continuing to invest in in-house IT talent, resources, and tools.

The thing that has changed Phil, is the speed of the network. With fiber, 5G, and gigabit speeds working in the cloud feels like you are working on a device on a local network. The pure speed at which we can create, collaborate, and innovate with others, with systems, and with a growing number of AI solutions is truly mind-blowing. And it’s become so simple to use. People don’t have to be technology literate to create solutions others can benefit from ease-of-use at scale is really what we are benefiting from these days.

Phil: Okay. So tell me about the flow of workloads in the cloud. We hear about private cloud, we hear about public cloud, and then we hear about hybrid cloud. What do you think is going to be the ultimate outcome with these workflows, and how are people going to engage with the cloud in the future?

Joel: There are two things I’ll focus on. First, looking at HFS’s recent Pulse survey data, and which workloads are moving to those different cloud models paints a very interesting picture. As you look at that data, and it looks like a black hole. There’s no clear direction of how firms are preferring to deploy, develop, or adopt workloads. Instead, companies are moving their workloads to the Cloud because they have to move; remaining complacent is not an option

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Posted in: Cloud ComputingDigital TransformationIT Outsourcing / IT Services



Offshore has become Walmart... as Outsourcing becomes more like Amazon

September 05, 2021 | Phil Fersht

We're operating in a short-term period between the "world that was and the one we're emerging into"... there's some feel-good that we survived a pandemic, but the hard change, the very survival of companies' business models and peoples' careers starts now

And we can't get there without the help of partners to plug the skills and resource gaps that will help out businesses make this pivotal shift to survive in this Virtual Economy...

Services are increasingly about accessing skills that are not ubiquitous in a traditional offshore model

In the Virtual Economy, no one cares much about “offshore” as a strategy - it has become part of the fabric of managing a global operating model, where operations leaders just tap into whatever global resource they need to achieve their desired outcomes. This doesn’t mean that traditional “offshore” global delivery locations, such as India and the Philippines, are going bust overnight. But it does mean the playing field is leveling out as the need for emerging skills trumps the desire simply to reduce labor costs.

Our recent HFS Pulse Data of more than 800 major global enterprises is showing the focus on offshoring has sipped behind onshore, nearshore - and even most profoundly - agnostic-shore as enterprises look to realign their operating models:

Click to Enlarge

The Virtual Economy has shifted the operational emphasis to outsourcing partnerships

In fact, we've never seen a boom like this in demand for tech and business process services since the dot-com days.  What’s more, we believe the services market for the Virtual Economy

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Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services



Don’t let digital burn-out kill your career

August 31, 2021 | Phil Fersht

The days of everyone talking about the “new” culture of working from home are so over

This isn’t new, it’s the way we do business today across all industries and job functions where physical office visits are non-essential.  If it gets done over Zoom it stays on Zoom.  Most people travel for vacations and personal needs, not business anymore.  18 months in, and we’re not going back – we’re efficient, we’re intense, we get things done in a much faster, cheaper, and family-friendly manner. 

A recent study of service provider staff in India showed that 90% do not want to go back to an in-office culture, with staff getting 10-20 hours a week back from their nightmare commutes; in the UK staff are furious about being forced to commute to work and in the US conferences are being canceled en masse and most offices are virtually empty, despite staff having the option to go to work.  Of course, when the pandemic eventually fades there will be more conferences and physical meet-ups, but the days of many people traveling and commuting regularly for their jobs are over.

As our Pulse Data of 800 major organizations shows, 40% of workers are going to be home-based for the foreseeable future:

Click to Enlarge

People just don’t want to put their career before their lifestyle anymore... and we have to adapt

We are in serious danger of our careers becoming subdued and de-emphasized in the current climate.  While I am one of the first people to laud the increased focus on family commitments and having a pragmatic approach to the highs and lows of our professional lives, I am seeing clouds of demotivation gathering and sapping much of the passion and excitement out of our industry.  You only need to see the pathetic levels of enthusiasm for digital conferences, webinars, thought leadership right across the industry to realize that many people are just not as engaged with their jobs as they used to be.

I love the fact that so many employers are giving their staff “mental health breaks” (such as Nike recently following similar initiatives from the likes of LinkedIn, Bumble, Mozilla, and Hootsuite).  We’ve even been giving a few Fridays off for staff at HFS to allow them to take long weekend breaks.  However, we won’t be very effective businesses if we grant our staff 6+ weeks of PTO each year! 

In short, mental health at work is a massive issue, and something employees need to tackle head-on.  Employers can offer as much support as they can, with time off, counseling, good management, and good resources, however, there comes a point where staff have to figure out how to keep themselves motivated.  Let's be honest, we're living in a world where your work experience runs the risk of becoming yet another digital channel to fit alongside Facebook, Netflix, Instagram, and whatever else consumes your digital time these days.

The Bottom-line: 10 ways we can re-motivate our careers

  1. Prioritize non-Zoom time to focus yourself.  At HFS we have “no meetings Wednesdays” where we insist staff use the time to get their written / cerebral work done without the constant distraction of video meetings.  It’s impossible to execute well on your work when you don’t have chunks of time to focus your thoughts.  We used to use plane time/hotel time a lot for this type of work… not we need to carve it out.  If your employer won’t sanction a no-meeting day, then create one for yourself and block off you calendar.  If there is push-back, you should seriously question the mentality of your leaders and whether this is a company adapting to the virtual economy.
  2. Embrace change and explore new roles with your leadership.  Many people are discovering/developing new skills in the virtual economy – things they thought they were bad at, they are improving dramatically at.  The fear of change is dissipating from so many, and the ideas of trying new things are so important today.   Careers can go stale and this environment may have accelerated your sell-by date for doing a certain activity, and it’s time to freshen it up.  So talk to your bosses and your mentors… have a look at jobs going in other firms.  It’s time to embrace change and put yourself in a position to do new things that could energize you and refocus your skills.
  3. Meet fellow workers and clients local to you.  Nothing is more energizing than merely seeing faces familiar to you from 18 months ago… just do it.  And don’t sit in an offering staring at PowerPoint, go to lunch or dinner.  Start enjoying meeting folks local to you where there is little stress, and the time investment is minimal.
  4. Orient your work effectively around your family commitments.  It’s been a hard time for so many Moms (and Dads) taking care of our families, and some have been amazing at finding the time to become more focused, efficient, and flexible to get work done.  The nice-to-five is over folks and we need to find times like late evenings / early mornings where we can deliver.  The key is to make sure your employer gets this and judges you on outcomes… not simply that you were online during “office hours” every day.
  5. Spread meetings out over longer periods.  The lockdown intensity of packing your calendar with 10 back-to-back Zoom meetings all day have to end.  You will burn-out and become a jabbering idiot.  It’s OK to book meetings 3-4 weeks out, and you must create mental breaks for yourself during the day.  We aren’t robots and if we don’t manage our time better we will start to become them.
  6. Keep learning new things.  There probably hasn’t been a more critical time to stay ahead of market developments, new business models, new technologies etc.  You must find time to read and network.., the only two ways you will keep learning.
  7. Keep networking and stop making virtual excuses.  The excuses of “I can’t develop relationships over video calls” are done.  If you can’t, then you’re toast.  Find time to keep in touch with key people and also to get to know new folks who can help you. 
  8. Get a decent webcam.  If your laptop camera sucks then buy a webcam.  You can get one for $25 on Amazon for chrissakes.  And get rid of the up-nostril view… please.
  9. Keep exercising and keep healthy.  Sit on a yoga-ball all day… buy a Peloton.  The days of lockdown are over and you don’t have excuses for the expanded girth, the excessive booze consumption, or whatever bad things you do to keep yourself amused.  Poor physical health eventually means poor mental health and your employer giving you mental health breaks won’t cut it forever.
  10. Reevaluate your own goals and stop living off past glories. I know so many people clinging onto their past work glories, which may never return in this very different work culture.  Trying to cling on to an inflated salary is not a strategy - it's potentially asking for trouble down the road if you're failing to innovate your capabilities and value to your organization. The cost of living has changed for many of us - we don't need two cars in the family, we save a lot on commuting and eating out... on all sorts of things.  So why not evaluate what you want to do with your career, the type of organization you want to work for, and whether you can afford to rationalize short-term earnings to chase future opportunities for yourself?  

Posted in: HR StrategyDigital OneOfficeGlobal Workforce and Talent



Cyber Ralph serving up some sparkle for HFS

August 29, 2021 | Phil Fersht


We're thrilled to let you all know that HFS is blessed with the presence of Ralph Aboujaoude Diaz (see bio) as Practice Leader for Cybersecurity strategies with a keen eye on Horizon 3 technologies.

Ralph has expensive experience as a risk management consultant for PwC and EY before leading Core Tech for Life Sciences giant GSK.  Many of you will know Ralph from his extensive LinkedIn humor and his flirtation/obsession/hatred of RPA.  He is based in London and spends time when he can with family in Lebanon... and now he's an analyst!  So let's find out a bit more about what makes Ralph tick...

Welcome to HFS, Ralph!  So what gets you up in the morning? 

Hi Phil! Personal life: my 2 kids (a 6-year-old boy that is driving me crazy these days and a 3-year-old girl that only loves her daddy). I love my wife by the way!

Professionally: Believing in the work I do but more importantly enjoying what I'm doing. You need to work with “Meraki” (a Greek word to describe doing something with passion and creativity).

You've been a Big-4 consultant and an enterprise tech leader... why become an analyst now?  And why with HFS?

I have been lucky and grateful to work with brilliant minds and I never stopped learning along the way. Without all these great leaders and mentors, I will not be where I am today! However, the only thing that I always missed is the inability to speak my mind. I am a proud non-conformist and not a big fan of political correctness. But always pragmatic and respectful.Transitioning to the analyst world is for me the natural evolution of my professional career. I will finally be able to utilize all the hard/soft skills that I have acquired during the past 15+ years but saying things my way. I want to provide direct, unfiltered, and actionable insights. But in a funny way too as I firmly believe that conveying a serious and honest message in a humorous way is much more impactful.

Why and I joining HFS Research? Because HFS is just like me, and I love that. Working with the iconic Phil and a diverse team of talented, bold, and friendly people is what gets me up in the morning.

And why do you think you'll bring something a little different to the analyst industry?  What will you be writing about?  What is it you care about?

The little different thing that I will bring to the analyst industry is quite simple: no previous analyst experience! I have spent more than 10+ years running large-scale tech-enabled security transformation projects. My last 5+ years on the buyer side have been focused on embedding and sustaining processes post-transformation, which in all honesty, is the most difficult part of the journey. So, the little different thing that I will hopefully bring is that mixed experience from the seller/buyer side, allowing me to understand what really matters for enterprises and position the right products/ services. My research agenda will be focused on Cybersecurity and Horizon 3 technologies (with an initial focus on 5G and Quantum Computing).

I am not pretentious enough to say that I will be covering the entire cybersecurity spectrum. My research agenda will concentrate on 6 topics that matter, on real problems that cybersecurity professionals and enterprises, in general, are currently facing. I will be talking about the role and challenges of the CISO, how to reduce the cybersecurity skill gap, how to secure the cloud environment, how to govern identity and access management, how to augment the capabilities of cybersecurity professionals with intelligent automation, and last but not least how to respond to security incidents in this Hyperconnected world.

I will not disclose more for now…

I love Tech and I will be also writing about Horizon 3 Technologies. Exploring and understanding how potentially disruptive technologies could transform existing business models in the next 5/10/15 years. I am very excited about that!

You got a huge following in social media when you dabbled in RPA before you made a hasty exit from the space... can you share what you were doing, what you learned, and where you see that market going in this environment?

Back in 2018, RPA was one of the hot topics that the Office of CEO at my previous employer was keen to explore. I was initially tasked to build the business case and drive the vendor selection process. I then led the design and deployment of a global RPA program across all Business Units (including the implementation of a global Automation Centre of Excellence and enablement of regional scalable Automation Deliver Hubs).

I have learned one very important thing: RPA is just a great tool in the wider automation toolbox that serves very well a specific business case (UI integration). However, RPA is, by nature, a brittle technology. In order to truly scale and operationalize RPA, enterprises need to invest a significant amount of time and resources. Without any doubt, RPA can help organizations rejuvenate their substantial legacy landscape by injecting much-needed automation. But rejuvenating does not mean modernizing. Rejuvenating does not mean transforming. Putting RPA at the center of the digital transformation is like trying to win a gunfight using a knife.

The RPA market is here to stay. As we can see now, ISVs have started to enter the RPA space by acquiring niche RPA vendors. The objective is straightforward: extend their integration capabilities and ultimately offer a holistic framework to customers. The big 3 RPA players are actively transforming their existing offering to include more integration, analytics and AI capabilities. But will this be sustainable and affordable in the long run?

So, finally, what do you think we'll be talking about in a year?  Can many of today's enterprises survive if they don't change their legacy habits?

We will be talking much more about “Enterprise Process Orchestration”. There is an urgent to unify and manage the increasing number of individual tasks, managed by humans and non-human identities, into an end-to-end process that can be easily visualized, monitored and recalibrated. The concept has been floating around in the last few years, but I feel that organizations are now ready to embark on ambitious projects and not just targeted pilots. And I use the word “enterprise” because the platforms that will support such macro-orchestration will be robust, secured and scalable.

Welcome to HFS Ralph - I can see you are already pushing our some insights =)

Posted in: Security and Risk Mgmt.Cyber-security