During the recent 2014 State of Outsourcing mega-study, conducted with the support of KPMG, we polled 312 enterprise outsourcing buyers and 347 outsourcing advisors on how they perceived each of the major 19 IT outsourcing services providers across our Execution and Innovation categories (click here for the full definitions).  And the ultimate results might not be quite what you expect:

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HfS' Charles Sutherland, takes a deeper dive into these results, to understand better the reasons why these IT Outsourcers are being perceived this way:

With 50% of IT outsourcing deals at risk, how are IT Outsourcing providers being perceived?

The fact that Amazon and Google were the highest perceived ITO service providers on Innovation doesn’t come as a huge surprise, after all they are continually lauded for innovation in the press and don’t carry the breadth of “legacy” service offerings that the other ITO service providers do. However, they were also perceived as being at the top for Execution; in fact just 4 of the other 18 ITO service providers were perceived as well or better than they were for Execution capabilities.

What we also see, when we look at these results, is that the best Executors of IT Outsourcing

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Posted in: Buyers' Sourcing Best Practices,  Cloud Computing,  HfS Surveys: State of Outsourcing 2014

Yes, the HfS Blueprint Sessions are coming back to North America for an eighth installment this November, at Chicago's famous Drake Hotel, for the biggest naval-gaze yet at our analog present and digital future of global services.

This will be the most intimate and significant gathering yet of enterprise buy-side operations leaders, who will come face-to-face with the prominent thinkers and operators from the service provider and advisory world. This will be the time when the global services and outsourcing industry takes a collective long-hard look at itself to develop a future roadmap that is sustainable and value-driven; where operations executives can progress their careers, and challenge themselves to stay ahead of the changing needs and skills demanded by today's ambitious enterprises.

We are on a mission to legitimize the industry of services professionals and break from the bad-old habits that have been plaguing us for far too long. We need you to be part of this with us - and have some fun in the process.

We'll be tackling two key themes throughout the two days:

Posted in: Business Process Outsourcing (BPO),  Buyers' Sourcing Best Practices,  Digital Transformation

The act of "outsourcing" is really only that initial phase of activity where an organization takes a technology/business process or function and transfers the management responsibility over to a third party to ensure the smooth running of said process or operation.

Once the outsourced processes are running functionally with the third party, the "outsourcing" is now complete and those activities on the buy-side become "service governance" activities, and the third party provider is delivering a "service" or an "operation" to its client.

The clients' needs now fit into a set of governance functions that are centered on managing the provider relationship(s); communicating with - and reporting to - the internal business units and various stakeholders; aggregating, analyzing and reporting the appropriate performance and process metrics; managing risk, compliance and issue escalations.  The more sophisticated and experienced the governance unit becomes, the more of a high value consultative entity the team can become for their organization as it seeks to centralize more operations under the governance function and align them to the business goals.

Simply put, an increasing number of mature enterprises governance teams are doing a lot more than managing vendors and periodically bashing them up to lower their rates - they are using advanced software platforms that help drive real value, continuous improvement and insight from the operations under their oversight. Most clients need realtime support to help them do this, and a small handful of ambitious advisors are developing managed governance services functions to support this need.

So we tasked our resident governance guru, Mike Beals, to venture in into the post-outsourcing transaction services industry to develop an HfS Blueprint Report that evaluates the managed services and software solutions available today that support clients managing their global shared services and outsourcing operations.  And here is how they shook out:

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So, Mike, what exactly are these Governance Solutions providers?

HfS Research defines Governance Solutions as the set of software applications or managed services focused on the management and optimization of shared services and outsourcing service delivery environments for business service functions.

These software applications and/or services are one level of management removed from

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

Time to crack open a cold one, turn up the volume... and relax!

Posted in: Buyers' Sourcing Best Practices,  HfSResearch.com Homepage

Our new research reveals the majority of enterprises are failing to develop the talent they need to be effective in the Digital Economy.

Working environments have become increasingly difficult to manage and too many staff are simply not motivated to drive value to their firms. Simply put, the old way of managing staff in today's self-entitled employment world is just no longer working, and there needs to be a significant mindset change from both employers and their staff to re-humanize the enterprise.  Otherwise, the ROI of hiring people will really become unattractive.

When I penned the now-infamous post "Welcome to the age of Digital cruelty, where two-thirds of operational jobs are under threat", I was thinking about how enterprises can develop change programs to reorient staff to add more "Digital Value" to their organizations, and how they can leverage their partner relationships to help plug the Digital gaps and improve their existing talent potential.

Then HfS' workforce and talent analyst, Christa Degnan Manning, shared her insights with her new Talent Acquisition Services Blueprint, which brought forward many of the issues surrounding talent retention and creating a work environment where (motivated) staff can develop their careers with their employers with a long-term goal in mind.

So we revisited our recent workforce study which covered 5,000 enterprise employees globally, to understand how motivated today's talent is to stick with its current employers:

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Barely 4 out of 10 staff intend to stick with their employer for more than a couple of years

Ouch. Yes, people, the day of the long term company job is truly dying on the vine, where close to half of today's workers are already looking for a new employer, while another third are readying to move on in another year or two. At the same time, as our recent State of Outsourcing Study fleshed out, two-thirds of enterprises feel their existing operations talent is falling well short in "Digital" areas such as analytical capability, being creative with new ideas, driving better automation etc.  So what does all this mean?

Poor talent leadership and unmotivated staff is a recipe for corporate failure

It's becoming abundantly clear that many staff that stay with a single employer for too long are losing relevancy, when it comes to delivering new value and insights.  This is because most

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Posted in: Analytics and Big Data,  Buyers' Sourcing Best Practices,  Digital Transformation

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Posted in: Cloud Computing,  Digital Transformation,  HR Strategy

Has anyone noticed a much harsher mentality towards "labor" these days?  I can recall presenting at an HR Outsourcing conference in 2004 where there was a large gathering of anti-globalization protestors outside the hotel bearing placards and shouting obscenities are us through the window.

"Outsourcing" was a truly dirty word, and shame on any callous corporate executives for instigating the use of low cost foreign labor to substitute their own. Even poor old Mitt Romney was associated with evil "outsourcing" practices during his corporate days at Bain Capital, which hurt his (unsuccessful) attempt to become elected US president.

But all of a sudden, noone really seems to care about protecting jobs anymore - if people are just performing "transactional" tasks, for chrissakes automate them quickly, or buy a SaaS platform to get rid of the unnecessary waste. Where are the demonstrators outside of SAP headquarters in Waldorf, or Oracle HQ in Redwood Shores as these firms desperately try to convince the world they are cloudifying their products so their clients can start to do away with some of those unnecessary jobs on-premise software provides.

And what about that evil Workday, which only provides cloud-based software and enables its clients to do away with HR admin people making a living cobbling together archaic hire-to-retire processes? And where are the tears shed for all those lovely marketing admins who used to earn a crust managing customer databases... their jobs literally obliterated by Salesforce.com?  Not to mention those jovial IT maintenance people no longer needed to support crappy old email systems now their companies have started using Google apps or Office365...

Why did companies get such terrible rep for using lower cost overseas labor, but get a completely free PR pass when it comes to eliminating positions altogether through better technology?  At least they were providing jobs somewhere...

Job protectionism really has left the building 

In all seriousness, organizations are already democratizing their decisions to do IT outsourcing and BPO and, instead, looking at ways simply to erase labor altogether (see earlier). If you only outsource your labor to a provider, you're likely going to be stuck with it for some considerable time - just at a lower price point. You've simply passed on your labor costs to someone else to manage for you - more efficiently and cheaply. And once it's been outsourced, it's not as easy to eliminate those passed-on labor costs - you have to convince your provider to replace the labor with better

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

The world of work has become a very, very different place in just a few short years. Today's workers need to adapt, develop and promote their skills to make themselves attractive in today's Digital economy - and savvy employers need to try harder than ever to ensure they are finding staff who can do more than simply transact - they increasingly want people who can think, create, analyze, collaborate and sell; people who are embracing today's technology to create value to their organization. Ambitious employers want talented workers which can align themselves with where they want their businesses to go, not with the legacy environment from where they are trying to evolve.

So what better strategy to adopt than hire a service provider to take care of this talent headache for you?  Surely it's time to explain to your HR department that fishing through resumes on LinkedIn is unlikely going to net you the best people?  Surely it's time to partner with a recruiting expert that can quickly understand your business, the talent you need, and how to go out into today's people marketplace to find it?

So we tasked our global workforce and talent expert, Christa Degnan Manning, to assess those services providers helping organizations fill their open positions. The Talent Acquisition Services Blueprint is the second in a series of HfS Workforce Support Services Blueprints reexamining and redefining how organizations are creating operating models and solution portfolios to support today’s workforces. And here is how the providers today shake out, after Christa had put them through the HfS Blueprint mincer:

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So Christa, what exactly are Talent Acquisition Service providers and how do they fit in with the overall research you are doing?

A key principle of my Workforce Support Services research approach is that the traditional HR “hire to retire” process-driven solution approach is completely obsolete in the modern workplace. We can see from the Power to the People research few people are actually planning to stay with their current firm until retirement, and they are struggling to focus on the right work to stay engaged and be productive.

So companies have to think differently about how they identify the right workers, support them in their collaboration and development on a day to day basis, and recognize and reward them in more meaningful ways. The first Blueprint we did was on Rewards, Remuneration and Recognition services, earlier in 2014 which took a new look at global payroll, benefits, and employee contact

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Posted in: Business Process Outsourcing (BPO),  Buyers' Sourcing Best Practices,  HfS Blueprint Results

Digital, Digital everywhere and no time to stop and think?

The business world is fundamentally shifting, but do our organizations really need to reinvent their operating models to stay ahead of the curve? Well worry your brain no longer, as we roll out the definitive research study on said topic to understand how today's enterprise buyers, advisors and providers are approaching Digital Transformation, the current and future expected impact, the technology and business skills that we all need to get the most out of these technologies  - and how this changes the game for outsourcing, shared services and global business services strategies.

Please take 15 minutes of your time to complete the study and we will send you an executive report of the findings - and you can enter our prize draw for a Nexus 10:

As always, we sincerely appreciate your time investment to contribute to our research,

Digitally Yours,

The HfS Research team
@hfsresearch

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

Eugene Kublanov, Managing Director for KPMG's Managed Governance Services

Over the years, we've had the opportunity to interview many of the key characters who have helped develop and shape the global services industry as we know it today.

And one gentleman who has quietly spent many, many hours in executive boardrooms all over the world helping craft some extremely complex - and sometimes very simple - global services management strategies, is the great bald eagle of sourcing himself, Eugene Kublanov.

And when Eugene hasn't managed to get his family lost somewhere in the wilds of his adopted Arkansas or coaching , he is busily growing and developing one of the industries' first platform-based managed governance services solutions at KPMG.  So, in a long overdue interview, we a delighted to have Eugene with us today to give us his own story...

Phil Fersht, CEO, HfS Research: Good afternoon, Eugene, and thank you very much for taking the time with us today. I think we first met seven or eight years ago, and I seem to remember that you were running a lot of outsourcing engagements and offshoring localization work. Can you talk a bit about your background and how you got into this business?

Eugene Kublanov, Managing Director, Shared Services and Outsourcing Advisory, KPMG: Sure, Phil. Thank you; I appreciate the opportunity to catch up. I started in the outsourcing advisory business in 1999, and that was really through a combination of circumstance and accident. I had spent the early part of my career at a consulting firm advising clients on market entry strategies for the former Soviet Union, living and working in Russia for a good bit of the ’90s.

Then in 1998, when things sort of came crashing down in that part of the world, I went back to

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Posted in: Buyers' Sourcing Best Practices,  Global Business Services,  HfSResearch.com Homepage

No industry has been, is currently - and will continue to be - so wholly and fundamentally disrupted by impact of Digital Technologies than retail. And how can retailers survive and prosper in this post-Amazonization world where good ol' firms like Radioshack and Brookstone are on life-support? How can they constantly stay ahead in an environment where the channels to market are forever blurring, the places to market and advertise are increasingly complex to understand and target, and the supply chain strains to respond to increasingly unpredictable demand signals from ecommerce and social media, in addition to traditional retail channels.  Staying ahead of the retail curve is harder than ever, but the rewards are also potentially much greater for those which uncover new market channels and make sense of the proliferation of available data.  In order to extract some sense from this intricate market, HfS analyst Reetika Joshi set about developing a Blueprint analysis on the space...

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Reetika, how did this market evolve and what is driving buyer interest in Retail Operations today?

The retail operations marketplace has evolved over the last decade in an opportunistic manner. Buyer demand has primarily addressed traditional IT services and horizontal BPO needs (including customer service, finance & accounting and human resources outsourcing). In the last five years, buyers and service providers have also started to venture into outsourcing retail-unique processes to a limited extent. These include service support for areas such as storefront operations, merchandizing and replenishment, ecommerce channel support (content, web development and

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Posted in: Analytics and Big Data,  Business Process Outsourcing (BPO),  Cloud Computing

We woke up this morning to a wonderful endorsement from the mighty Gartner for all the hard work the HfS team has been putting into developing our HfS Blueprints over the last couple of years, when we proudly launched our revolutionary HfS Blueprint crowdsourced methodology for evaluating business and IT service providers.  Yes indeed folks - Gartner has announced it is doing its own "Blueprints research"!

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Since we released the first Blueprint Report almost 18 months' ago, the HfS Blueprint has become one of the industry's best known and most popular methodologies for assessing provider capability and competitive market landscapes, with fourteen Blueprint reports now published (you can view all the HfS Blueprint highlights here).  Enterprise buyers have used the Blueprint Reports exhaustively as an assessment guide for their provider portfolio management, and many advisors rely on it to sanitize their own provider selection processes with their clients.

So does this mean Gartner will take onboard the key tenets of the HfS methodology, in addition to leveraging the broad community data we gather from 1000's of industry constituents, when it develops its own "Blueprints"?  Let's recap how we develop and execute on the HfS Blueprint methodology - and you can make up your own mind whether you think Gartner will deviate away from its Magic Quadrant process for assessing tech suppliers:

The Tenets and Objectives of the HfS Blueprint:

• To assess services providers without being reliant on the arbitrary viewpoint of a single analyst;
• Provide a credible methodology (see here) to gauge the performance of service providers against “real” innovation and execution capabilities;
• Deliver a performance assessment of providers that apportions importance weightings of each innovation and execution category based on data from our annual State of Outsourcing Survey, conducted with the support of KPMG, covering 1200 enterprise buyers, influencers, advisors and provider executives each year;
• Evaluate performance assessments of providers where exhaustive inputs from buyers and influencers shape the scoring (not solely a handful of rose-tinted client references that the providers served up themselves);
• Enable a customizable assessment tool where enterprise buyers re-calibrate the weightings to assess their provider-fit based on their own unique needs.

Good luck Gartner - we can't wait to see these new Blueprints of yours' hit the market!

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