Monthly Archives: Jan 2016

Situational awareness, good manners and the ability to communicate are the keys to success

January 24, 2016 | Phil Fersht

Following on from our recent discussion on Social Intelligence, I drew some real inspiration from this recent speech from Bollywood actor R. Madhavan, who touches on three critical elements for success (combined with your sheer determination to succeed and to seize opportunities):

  1. Situational Awareness: Being completely aware of everything that is going on around you at all times;
  2. Good Manners: Being courteous and pleasant at all times really helps makes the most out of opportunities when they come along;
  3. Strong Communication: Being able to express your desires, capabilities and determination to be successful will help you maximize opportunities when they come knocking.

Posted in: Buyers' Sourcing Best PracticesHfSResearch.com HomepageTalent in Sourcing

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Download the industry's updated Robotic Process Automation maturity model

January 21, 2016 | Phil Fersht

In November 2014, we released the industry's Maturity Model for Robotic Process Automation deployments. The model provided a guide for what service providers and enterprise clients must do to become proficient and scaled in achieving the efficiency and cost benefits that this technology can provide in business processes and IT delivery.

Author of the RPA Maturity Model, Charles Sutherland, is Chief Research Officer at HfS (Click for bio)

Author of the RPA Maturity Model, Charles Sutherland, is Chief Research Officer at HfS (Click for bio)

Now Charles Sutherland has updated the RPA Maturity Model and has created a service provider-specific version. Soon he'll publish a version specific to the enterprise environment as to highlight the differences but also to recognize some of the commonalities in strategy and operations between the two as well.

Download and read the new RPA Maturity Model. Now

The RPA Maturity Model is designed around two different components.  The first component is comprised of 17 elements, each of which covers different aspects of RPA strategy or RPA operations that have come out of the dozens and dozens of discussions, briefings and site visits over the last 3 years.  The second component is the levels of RPA Maturity that can be used to assess comparative states of RPA maturity across the Elements.

There are now four Levels of RPA Maturity, three of which are uniquely defined based on the requirements of each of service providers and enterprises and one of which is a shared Level for the integration of RPA between service providers and enterprises across the same business and IT processes.

So, have at it. And let us know what you think.

rpa-mat-model-cta

Posted in: Business Process Outsourcing (BPO)HfSResearch.com HomepageRobotic Process Automation

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Three very handsome CEOs take on three advisors... only on HfS

January 20, 2016 | Phil Fersht

Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Genpact makes a stealthy move up the procurement-as-a-service value chain with integration of SSE

January 19, 2016 | Phil Fersht
Charles Sutherland is Chief Research Officer for HfS. (click for bio)

Charles Sutherland is Chief Research Officer for HfS. (click for bio)

Amidst all the feverish talk of acquisitions and divestitures in the services industry of late, spare a thought for one dynamic service provider focusing its growth the organic way:  Genpact.  The business process service giant has been stealthily hiring talent left right and center in recent times - mainly from its competitors - as it sharpens its focus on operations services in the finance, procurement and supply chain business services markets.

And we're impressed with its latest deal - the absorption of respected procurement consulting firm Strategic Sourcing Excellence (SSE), which propels Genpact's procurement-as-a-service capability to the forefront of the market - at a time when procurement BPO decisions are increasingly being made by the CFO, which is where Genpact rules the roost.  Hence a timely move and a smart play to really get to grips on this market.  So who better than our own procurement guru, Charles Sutherland, to take a closer look at this integrative move and its impact on the global procurement-as-a-service market space...

Movin’ On Up In Procurement Outsourcing

In June of 2015, we published our HfS Blueprint on Procurement As-a-Service which the continued evolution of this market around end to end and modular solutions enabled by cloud technologies and supported by ever deeper category management expertise.   At that time, we placed Genpact as one of our “High Performers” with strengths in transactional procurement, process automation, geographic reach and a focus on continuous improvement. But we also felt that by comparison to the market leader Accenture, Genpact still had to further develop capabilities in category management, market intelligence and transformational procurement consulting to challenge for a leading position across the entire market.

Click to Enlarge

We thought that Genpact would likely combine an inorganic acquisition strategy with organic activities such as the aggressive recruitment of category managers and rolling out new technology investment to make a push to move into our Procurement “Winner’s Circle” in 2016. And while we

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Posted in: Business Process Outsourcing (BPO)Procurement, Engineering & Supply Chain OutsourcingTalent in Sourcing

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HfS announces expansion plans for 2016 across our analyst and commercial operations

January 14, 2016 | Phil Fersht
Click to access press release

Click to access press release

Posted in: About UsBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Data is eating the services industry!

January 10, 2016 | Phil Fersht

I was intrigued by Drupal's creator (the open source content platform upon which HfS is built), Dries Buytaert's, claim that "Data is Eating the World", a contrarian viewpoint to Marc Andreessen's famous 2011 quote that "Software is Eating the World".

In short, Dries is correct in his view that the value is no longer really in owning the software, it's in owning and orchestrating data powered by huge internet-enabled communities. And it's also very appropriate to take this viewpoint when we look at the future of operations and service delivery, which I'll get to soon. But first, let's peruse several real-world examples where data is king and the orchestrators are not from the world of traditional businesses, including one that is very close to home:

Data eating the world

Yes, HfS makes the list because we extract data from thousands of enterprises and create a service to empower them to make decisions and stay informed - in real-time.  We do not need to invest fortunes in collecting that data. We merely are the orchestrator of the world's largest community of service buyers and use digital tools and smart analysts to empower and inform our clients.  We do not need physical offices in every major country, or armies of sales people to drive business. We let the community come to us and we facilitate the research data collection to reach our global participants.

And it's the same in all of these other markets - the legacy (former) incumbents can see exactly what is going on. But sadly - for many - it is already too late to disrupt their revenues and survive. The sad truth here is that if you already know you've been disrupted, it's probably too late.

The Bottom-line:  The services winners are shifting the model from proprietary software and people scale to qualitydata  creation and capability... as they make the true leap to true As-a-Service

A similar disruptive trend is occurring with regards to service delivery. Gone are the days when owning proprietary technology - and global capacity - was king. Yes, there are certain discrete segments in which owning software tools provides real competitive advantage (such as procurement and supply chain), so some providers can still steal a march on their competitors. But as more and more software apps become increasingly accessible and industry-standard, the value shifts to the quality of data and business services providers can offer to optimize the software platform, as opposed to providing the software itself.

Today, software is the commodity - any service provider can slam in a Salesforce, a Workday, a Sage, a Blackline, a SmartStream, etc. The value the service provider needs to build is in the data model templates that can be standardized across multiple clients, tweaked when needed and delivered by service talent that understands the data to really empower their clients.

Owning vast software and infrastructure resources is becoming secondary to being the orchestrator of core enterprise systems-of-record data.  Today, we are seeing several exciting niche as-a-service providers spring up where automation is already native to their environment, where they do not need the massive people scale of yesteryear to deliver processes which should be standardized and much better automated today.  The more ambitious clients focus on outcomes with their partners, the more the onus will turn to the quality of data being managed and analyzed, and the winning providers will be those who can do this using much smarter technology and people capability - at much lower cost to the customer.

And being able to orchestrate the delivery across multiple clients creates powerful process data templates that are much more "plug and play" for clients than in the past. This isn't new, but it's really evolving, and the availability of better tools and robotic automation, coupled with the advent of cognitive computing and advanced analytics, are the accelerants for providers to become true orchestrators of their clients' collective experiences and best practices, as opposed to owners of proprietary applications and legacy lock-in systems.

I'm personally excited by the advent of these As-a-Service providers. Facilitating and empowering the core data of the enterprise is where the real value is. This is the "lock-in" of the future: not holding clients hostage to software licenses, but instead holding them ransom to the value of the data you are enriching for them.

Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Cognitive Computing

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50% of Buyers are change imposters, so avoid them if you can!

January 06, 2016 | Phil Fersht

There is an imposter in our midstIf you haven't been bored silly listening to all the rampant change we are about to endure from literally every information outlet (and we are also complicit), then this data point from our recent Harvard Buyers Summit will open your eyes. Simply put, when we anonymously polled the service provider leaders in the room on what they really thought about buyers, half of them view them as only pretending they welcome change, and don't really want to:

Click to Enlarge

Click to Enlarge


On the positive side, 50% do want to change, but most struggle, but the fact that so many are only paying lip service to their peers, colleagues and service partners is a real issue.  How can you effectively target clients you can grow with as a provider, if you can't really trust the intentions of half your clients?  And how can you drive initiatives as a buyer, when most your colleagues really do not have any interest?

The Bottom-line: You must weed out the change imposters if you don't want to go down with them, or find another employer who promotes change

Smart consultants and practitioners are those who can quickly read their colleagues to find out if they genuinely are prepared to do things differently - and make real efforts to learn new methods and create new ideas.  And this is really done through the legacy old school techniques of developing close relationships.  You'll learn more about someone's attitude and approach over a few drinks or a nice dinner than sharing big words and corporate pleasantries in a boardroom.

Your skills to collaborate and engage with people is critical in identifying where people need to change, and how we can all improve as a team.  This is where methods like Design Thinking are so important - there is little hiding from initiatives where the outcomes are clearly defined, prioritized and an execution plan is put in place.  If people really do not want to embrace change, then they can't hide forever, and clearly many are in this camp.  However, if you surround yourself with unambitious people, they will eventually throw you off their sinking ship to save themselves...

Alternatively, if your company is fully laden with change-imposters and there's no simple way to avoid them, despite your best efforts, then get out of there now.  You owe nothing to an employer unwilling to foster change and encourage innovation, and there is such a talent shortage in industry these days, you'll find plenty of firms willing to take you on with your attitude...

Posted in: 2015 HfS Buyers SummitBusiness Process Outsourcing (BPO)Design Thinking

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Accenture, EXL and TCS enter Winner’s Circle in HfS Utilities BPO Blueprint

January 04, 2016 | Phil Fersht

Utilities organizations are under real pressure on many fronts to improve their operational performances, with many are facing competition for the first time as a result of deregulation and feisty competitors offering genuinely disruptive solutions.

We asked HfS Research Director, Reetika Joshi, to take a deep look at the marketplace, with the resulting HfS Blueprint Report: Utilities BPO 2015 looking at traditional BPO services, in addition to emerging As-a-Service platforms and evolving commercial models. Plus, Reetika uncovers robotic process automation (RPA) and analytics in service delivery.

So let's get an up-close view from Reetika:

RS_1512_HfS-Blueprint-Utilities-BPO-2015--BLOG-AXIS

Click to enlarge.

What’s on the minds of utilities services buyers, Reetika?

Our Blueprint research shows that utilities face a harsh reality in dealing with a burning platform for change today. They need to address three sets of sweeping industry forces:

  • Rapid innovation to grow top lines, with new energy sources, distributed power systems, changing business models, more smart grid and meter rollouts, more deregulation and a new breed of competitors ranging from internet companies to cable providers.
  • Customer centricity to differentiate, with consumerization that has driven customer interactions onto digital channels, changing preferences with rising environmentalism and technology advances and customers’ need for more control in energy types, sources and efficiencies.
  • Operational efficiency to manage bottom lines, with the global decline in power demand due to greater energy efficiency, constant debate in regulations over environmental and market policy measures, aging assets that need to be maintained and retired while acquiring new ones, and the resulting outdated legacy systems, internal structures and operational environments.

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Posted in: Business Process Outsourcing (BPO)HfS Blueprint ResultsHfSResearch.com Homepage

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The discussion thread that defines us? Traumatic 2016... Survive the race to the bottom!

January 03, 2016 | Phil Fersht

It's on… 2016 is the year that will separate the service dinosaurs from the savvy cannibalizers, as revenue growth slides towards negative territory and the onus shifts from selling more buttocks on seats to maintaining sexy profit margins.

Cutting to the chase, the technology and business services industry is becoming a very different place, and those of us failing to adapt, should start considering alternative career plans.  I hear massage therapy is in high demand these days…

Indian heritage majors... rev growth 2010-present

Click to Enlarge

So what will really happen as we embark on our negative revenue growth journey?  Here are five scenarios detailing how this will play out...

1) Big sucks - especially for providers... so get smaller and smarter.  You're still huge, clunky, siloed and political, constantly looking at "new" ways to reduce the workforce, while only being allowed to bid on big legacy deals, where the advisor is (still) squeezing everyone for price and your marketing team is still pretending you're delivering nextgen solutions to clients (which you really aren't).  Under all the swirl of nonsense, you're strategy is still really all about carting in even cheaper, younger kids from even cheaper, more remote places, and quietly ushering your burned out middle-management the exit. Meanwhile, as the allure of big provider life fades, many of the stars you want to keep are getting enticed by the thriving start up scene. Yes, people, being big and clunky is an increasingly crappy place to be, and many people reading this will be nodding violently that this is where they, quite frankly, are.

2) The mid-tier BPOs and up-and-coming As-a-Service providers have a great opportunity to steal the show. You either need to find sole source clients prepared to co-invest with you in their futures, or start to cater for new-gen deals that force you to build out your multitenant delivery

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Cognitive Computing

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10 issues defining the services industry in 2016

December 31, 2015 | Phil Fersht

We've pooled all the big discussion topics from our recent service buyers summit in Harvard and let our analysts loose to demand 10 big things the industry needs to address if we are going to drag ourselves away from legacy land and avoid becoming massage therapists... and venture into the promised land of the As-a-Service Economy:

Click to Enlarge

Click to Enlarge

1. Outsourcing is now part of a broader management capability; it is not a standalone profession. Outsourcing is a competency that is learned on the job and through real experience as opposed to a qualification or certification. It is an ongoing, amorphous capability that has no end-state or stamp of perfection, it is the ability to partner to improve constantly processes, outcomes and performance. Outsourcing is a means to improvement, access to resources and better capability, usually not the means to a specific end.

2. Intelligent Automation has emerged as a core competency for operations staff. Like outsourcing,Robotic Process Automation (RPA) is a means to improve processes and applications, but rarely the ideal end-state - it typically is retrofitted to make legacy applications and processes function more automatically and efficiently. Legacy operations delivery and BPO can only achieve a certain level of efficiency, without a well-planned Intelligent Automation roadmap. RPA is one of the leading technologies to provide efficiency improvement in rules based tasks and processes, but Intelligent Automation (see link)  is also now including the adoption of real time self-learning techniques, predictive analytics and cognitive computing.

3. Ambitious providers will cannibalize their revenues when their buyers give them more to work with. Moving forward, buyers will need to make some new investments in Intelligent Automation (especially RPA) technology and expertise, while the service providers will ultimately have to concede they may need to reduce the FTE provision on their side, as automation takes effect. A service provider must prove it can redeploy "freed-up FTEs" on their clients’ higher value

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Posted in: 2015 HfS Buyers SummitAnalytics and Big DataBusiness Process Outsourcing (BPO)

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HfS is back in Cambridge University for another no-cheese bake off of services leaders

December 20, 2015 | Phil Fersht

The Event: The European HfS Service Leaders Summit

The Date: 21-22nd March 2016 (click for details)

The Venue: Gonville & Caius College Cambridge

The Theme:  Avoiding the Race to Irrelevance

To Apply for a Seat / lead a session (buyers only):  Email us here

This promises to be another UK style "throw the kitchen sink at everything crappy about our service industry"

We're back at Gonville & Caius College, Cambridge this Spring (Click to learn more)

We're back at Gonville & Caius College, Cambridge this Spring (Click to learn more)

Join these core discussions where we'll finally address these issues:

The Race to Irrelevance: Are we on a race to the bottom, or are we genuinely in the midst of change: Are service providers really selling what service buyers actually need?
Europeans v Americans: Who’s outsourcing smarter and where can we improve to get to the As-a-Service Enterprise?
Demystifying all that Robo Hype: What is the realistic place for a Robotic Process Automation strategy inside the enterprise - and what should Service providers be doing to support it?
Digital Transformation: It's really all about the business, stupid!
Beyond the Transition: How can service buyers and providers really share their risks to achieve longer-term gains?
Ending the Master/Slave Model: Can service buyers and providers leverage "Design Thinking" to fashion a collaborative relationship with a common purpose, common values and jointly desired outcomes?
Getting beyond the Paperwork: What does it really take, in today's environment, to execute and manage a meaningful, effective and lasting contract?
Getting past that "outsourcing career track" discussion: Is the outsourcing "profession" now part of a broader management capability?
The Message we have to Send Back to the Industry: How can we fix this industry to deliver the As-a-Service Enterprise?

Service buyers email us here to apply for your seat...

None of that famous Cambridge cheese, honest!

None of that famous Cambridge cheese, honest!

Posted in: Buyers' Sourcing Best PracticesCaptives and Shared Services StrategiesDesign Thinking

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HCL, Cognizant, HARMAN, TCS and EPAM make the Software Engineering Winner's Circle

December 18, 2015 | Phil Fersht

While the benefits of the cloud and the pervasiveness of new digital technology impact our professional and personal lives - more than at any point in history - the need for the tech skills to make this all work has never been under so much intense pressure.

Not every firm can drop $200K a year on whizkid programmers who can actually handle this stuff, so the focus moves to those firms which can do this effectively and affordably. The industry's only dedicated engineering services analyst, Pareekh Jain, has been micro-focused on the emerging engineering service industry over the past couple of years and today unveils the industry's first unvarnished view of software product engineering capability of the leading service providers.

This is our second engineering services Blueprint. In the first one, we focused on the provision of engineering services for physical products. In this Blueprint, we look at Software Product Engineering (SPE) services in detail. So let's turn to Pareekh to learn more about his Blueprint experience in this emerging space:

HfS Blueprint, ISV Engineering Services

Click to Enlarge

Pareekh, how do you see this market evolving and what are the key drivers for software product engineering services?

This market is very dynamic today. A few years ago there were only a few specialized and small service providers who strategically focused on this market. Large service providers generally treated this market and clients more opportunistically. Their product engineering service capability was relatively small and often sat inside a larger ADM practice. Overall the attractiveness of ISV market was not high enough for large service providers to make investments to serve this market in detail. Now the market attractiveness has increased because of two reasons. First, as ISVs (Independent Software Vendor) are moving to As-a-Service, they need help. Second, as more and more products are software driven in IoT world, enterprises need help too. Traditional software product engineering outsourcers were ISVs. Later internet companies who faced similar challenges of scalability, reliability as ISVs also became a major customer segment. What we are now witnessing is an emerging trend with the rise of IoT that all products and industries are becoming smart and will need software solutions for scalability, reliability and connectivity. The traditional ISV market had limited potential and was driven by the R&D spend of ISVs but this much greater market for software products beyond ISVs has huge potential. Consequently, service providers both large and specialized are increasing their attention on and capabilities to serve this market. We have observed new specialized service providers have also emerged in this space in the last few years.

And how did the Blueprint analysis turn out?

Pareekh Jain is Research Director, HfS (Click for Bio)

Pareekh Jain is Research Director, HfS (Click for Bio)

This Blueprint analysis was interesting. First we researched how service providers are making investments in helping ISVs transition to As-a-Service economy and used these criteria also in evaluating service provider capabilities.

The scope of this Blueprint was software product engineering services for ISVs and internet companies. We excluded software product engineering work for enterprises because it is still an emerging area and there is a lack of a common understanding among service providers of what enterprise work will qualify as ADM versus SPE.

We evaluated 13 service providers for this study. These service providers include providers which are China centric, Eastern Europe centric, Latin America centric, and 100% domestic US sourcing centric in addition to India centric service providers. This is much geographically dispersed than most other outsourcing markets we research.

There are five service providers in our Winner's Circle - Cognizant, HARMAN, HCL, EPAM, and TCS (in

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Posted in: Buyers' Sourcing Best PracticesCloud ComputingDigital Transformation

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More bite than bark? Warner Bros transformation head, Jason Barkham, talks about his HfS Summit experience

December 17, 2015 | Phil Fersht

Posted in: 2015 HfS Buyers SummitBusiness Process Outsourcing (BPO)Outsourcing Heros

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The legend that is Bruce Richardson ...at the HfS Harvard summit

December 16, 2015 | Phil Fersht

Anyone who's been in and around the tech industry for the last couple of decades, will have come across the legend that is Bruce Richardson. The first of the true blogging analysts with his famous "First Thing Monday" newsletter, having had the misfortune of bringing me back to the analyst industry with AMR (Gartner) and being my (last) boss, has today survived that experience to lead strategy for Salesforce.

We were priveleged to dust off Bruce's old analyst hat and bring him along to our recent Buyers Working Summit at Harvard Square where he immediatetly declared, "If anyone here doesn't have a Cloud-first strategy, I am walking out of hrre right now"... He did also start to worry he was starting to sound like the Donald Trump of cloud computing... So  over to you Brucey!

Posted in: 2015 HfS Buyers SummitCloud ComputingIT Outsourcing / IT Services

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80% of outsourcing relationships fail to deliver collaborative value... so what can we do?

December 13, 2015 | Phil Fersht

Our theme for 2016 is all about us "getting back to basics" as a services industry, and nothing exemplifies this more than what the buyers and providers privately said about each other at the recent HfS Working Summit in Harvard Square.  Once we get past all the talk of disruption and change, the real issue holding back progress is the simple fact that too many of today's services relationships are just not set up to be collaborative ventures.

What's more, in spite of all the chest-pumping from providers on their revolutionary capabilities to turn their clients' business models on their heads, over half their clients still perceive them as brokers of cost-efficiency... not capability:

Click to Enlarge

Click to Enlarge

I am sure many of you are muttering to yourself, "This is very consistent with previous studies HfS has run" - and you are correct. Little is changing. However, it's worse than just the buyers' having negative perceptions of service providers... 80% of buyers simply aren't engaging with their providers in a collaborative way:

Click to Enlarge

Click to Enlarge

Until we can break this legacy master/slave culture, this industry will continue to stagnate

Here are three measure that could break the cycle:

1) Buyers need to entrust more higher-value work to their providers, with their leadership incentivizing their middle-managers to "let go".  Many buyers consistently admit they need to entrust their provider with higher value work to improve the quality of their engagement. But this isn't really about trust, it's more about the buyer letting go and having the confidence to give their service provider more responsibility, which would make them more effective at their own jobs.  Sadly, most middle-managers have absolutely no motivation to entrust more to their service provider -and, frankly, why should they? What motivation would you have to make yourself less dispensable to your firm?  So it's up to their leadership to force the issue, either by demanding more work is outsourced, or by incentivizing their managers by giving them more motivating work to do... with real financial and career benefits to do so.

2) Automation is the "new offshoring", so leverage RPA to create renewed opportunities to collaborate.  The next wave of value is blending global sourcing with the mimicking of manual processes in RPA software that are predominantly high throughout, high intensity tasks.  All enterprises have varying potentials for real automation value to be created by robotizing rote manual tasks. And most of the respectable service providers have invested in capabilities to develop an RPA strategy for their clients. Buyers must learn from mistakes of the past to look beyond short term cost savings and create a broader intelligent automation strategy, which also creates significant opportunities to establish more collaborative, value-added relationships with their service partners. Moreover, it is in the interests of buyside managers to put automation capabilities on their resumés as CEOs increasingly demand a cohesive plan to create a more automated operating platform to support non-linear future growth for their firms.

3) Weave Design Thinking into engagements to shift the impetus towards mutually beneficial outcomes. The less hyped, but nevertheless creeping uptake of Design Thinking is helping several relationships inject lateral thinking and renewed motivation to work together, not only in the customer-facing front office, but also in the back office operational functions. Design Thinking in services is based, primarily, on both service buyer and provider coming together to create business outcomes that are mutually beneficial - and motivational - for both parties. However, this must be established as ongoing collaboration across all key relationship stakeholders, and not simply two days of senior management putting sticky notes on each others' foreheads. There must be senior pressure and buy in to adopt Design Thinking as a means to move away from Six Sigma-obsessed old world models, and really change the way the service buyer and provider teams work together. We're seeing encouraging signs from several providers aggressively promoting Design Thinking techniques, such as Infosys, IBM and Cognizant, into their engagements, but this is still restricted to far too few a number of buyers at this stage.  But Design Thinking, and new creations of Design Thinking-eque collaborative methods are increasingly important ways to bring together new concepts and ideas, better teamwork, and ways to design outcomes jointly that can incporporate investments from both sides.

Posted in: 2015 HfS Buyers SummitBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Why we mustn't make the same mistakes with RPA that we made with BPO

December 10, 2015 | Phil Fersht

Forget the Trump, 2015 has been one helluva year for pontification on big disruptive, and occasionally ridiculous topics.

Anything robotics, artificial intelligence, the end of work, the end of sanity... the end of pretty much anything has been bandied around. Hence, it was refreshing to bring together a host of service buyers and providers in Harvard last week, to dial back into planet earth and really get to the point of where we need to take things.

Glaring into a future, where there is no written rule book, no set curriculum to follow, can be a little daunting.  So it can't hurt to take a look at some of the mistakes of our past to create a more long-term, focused strategy to set us in better stead as we embark on this new wave of change and disruption to our cosy little world:  the Continuum that begins with establishing a rudimentary, trigger-based Robotic Process Automation underbelly, that forms the building blocks for incremental investments in more predictive autonomics and - ultimately - cognitive self-learning capabilities, before reaching a haven of true artificial intelligence (which doesn't actually exist yet, but we can all dream, right?):

Click to Enlarge

Click to Enlarge

I've been reading some interesting arguments that discuss separating RPA out from the more intelligent developments further along the Continuum.  And they're half right, but I also argue they're half short-sighted too.  The best comparable is BPO, where we are going to see most RPA deployments, as many service buyers seek to eke out more productivity from their messy processes, which they didn't quite get right the first time around.

And why - pray tell - did so many BPO buyers not do enough that first time around?  Why is our industry literally littered with hundreds pf underperforming BPO contracts that are caught in a purgatory of status quo, where the provider has no desire to change anything and simply keep pumping home their predictable profit margins from a pre-set provision of offshore FTEs, while their buyers have long-lost the attention of their CFOs to get renewed investments to make their processes run better.

Why is it that so many BPO buyers only enjoyed some "transformation" during their brief 18-24 month transition towards a BPO steady-state, before their service provider packed up the Visio charts and redeployed their process wonks to work on that next deal coming down the pipe?

The Bottom-line:  Only focusing on RPA is a fast-track to short-term disappointment.  A broader Continuum focus is where the smart buyers are headed

The answer is simple - most BPO buyers only focused on getting that initial 30-40% of cost out the door.  They were not thinking beyond that.  They did not budget or create a real plan for achieving ongoing process improvements and innovations, once they reached that steady state of lower cost. And it's the same with RPA and cognitive - focusing only on the short-term cost is only going to get you so far.

Do you think your CFO is really going to release significant funds to embark on a cognitive strategy once you have reached a happy state of RPA, where you have a few bots cranking through processes more effectively and more headcount freed up to do other things?  Did that same CFO open up the coffers to invest in significant process transformation once BPO steady state was reached?  Of course he/she didn't...

So learn from that experience to make a broader business case for an intelligent automation journey right from the onset. RPA is only the first step on a journey of self-learning, self-healing, dynamic process creation and really smart decision making support for your business.  Don't ring-fence it... embed it in a broader program of Intelligent Automation.

Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Save the dates for our 2016 HfS Buyers Summits

December 06, 2015 | Phil Fersht

After the brilliant "back to reality" conversations at our Harvard Summit last week, where we crammed 53 senior enterprise buyers into a fantastic room with the HfS team and some very "game" sponsors, we are thrilled to unveil our 2016 Summit Agenda, starting with a return to Cambridge University in March, a debut Summit in San Francisco in the Spring, and a major industry gathering in September.  We'll be rolling out themes, speakers, crazy new ideas and lots of associated buzz in the coming days and weeks...  click here to learn more and apply for your places.

Next stop in the HfS quest for operational perfection... Gonville and Caius College, Cambridge

Next stop in the HfS quest for operational perfection... Gonville and Caius College, Cambridge

Click here to learn more and apply for your places.

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

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The 2016 HfS Autonomics Premier League Table

December 03, 2015 | Phil Fersht

And finally... the eagerly-awaited industry bellwether 2016 HfS Autonomics Premier League table is unveiled...

autonomics-PL-trophy-blog

Tom, firstly, what is autonomics and why is it different from RPA?

Thanks Phil, before we dive into the details, let’s level set where we believe the industry is at. We have seen the market and the discussion on Intelligent Automation change significantly, both in terms of maturity as well as in terms of scale especially in 2015. The large service providers are accelerating investments in and build out broad capabilities around the comprehensive notion of Intelligent Automation. Yet the mainstream narrative on Intelligent Automation remains largely

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Posted in: Business Process Outsourcing (BPO)Cognitive ComputingDigital Transformation

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Automation: Flavor of the month or disease of the decade?

December 02, 2015 | Phil Fersht

The reality of Robotic Process Automation is hitting us at the HfS Summit for services buyers at Harvard Square this week.  We anonymously polled 53 senior outsourcing relationship leads with the question "what measures would improve the outcomes and quality of their outsourcing relationship":

Click to Enlarge

Click to Enlarge

Last year's buyer's summit saw 48% polling they needed to let go and entrust their service provider in higher value processes... now that number is dropping to 28%, with the preferred partnering focus shifting to working jointly on an automation strategy.  Nearly half of today's buyers (45%) now see that as the main area to get renewed value.

What does this tell us?

As mature outsourcing deals get stuck in holding patterns, automation is providing the new flavor to find that next increment of value. The industry hype and marketing is clearly reaching the buyer - and many want their service providers to work with them to help figure out an automation strategy.

So the real conversation now shifts to how buyers and providers can find common commercial models to make automation work for both parties.  However which way we look at this, buyers will need to make some new investments in Robotic Process Automation technology and expertise, while the service providers will ultimately have to concede they may need to reduce the FTE provision on their side, as automation takes effect.

Now, the real challenge here is for the service provider to redeploy the freed-up FTEs on their clients' higher value processes.  So these two motivations should go hand-in-hand:  decreasing labor effort on automatable tasks and increasing it on the higher value work the clients would like to outsource in the future.  So if buyers and their providers can get this right, automation will be a long term play for both parties, where higher value work gets done and delivery staff are kept busy because of the closer collaborative relationship and greater volume of work being parsed out.

Posted in: 2015 HfS Buyers SummitBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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Finance talent: automation skills now trumping analytics skills

November 29, 2015 | Phil Fersht

Our current in-the-field study looking at Re-architecting the Finance Function for the Digital Age (click here if you are yet to complete it) is confirming some major changes in the capabilities organizations need from their finance staff:

Need for Automation skills in F&A increasing

Click to Enlarge

What's eye-opening, here, is the softening focus on analytics skills and the huge increase in the need to understand automation and better define business outcomes.  I've long preached that you can't really get the data your organization needs real-time, if you don't have well automated processes to generate it in the first place.

Enterprises are settling for what they have, and are now focused on making it function more productively

It's becoming clear that staff have to be less focused on creating data, overseeing operational processes and performing routine tasks, and much more adept at figuring out how to make better sense out of what they are doing to achieve more measurable, value-add results (outcomes) for their organizations.

In many cases, enterprise operations leaders are realizing they can't create armies of world class

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices

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