HfS Network

Monthly Archives: Jan 2016

Why 77% of the C-Suite really want provider-replacement therapy

January 31, 2016 | Phil Fersht

TherapyRevisiting our As-a-Service study from late last year (click here to download your copy if you somehow missed it), we realized 10% of the respondents were in C-level positions.  So we thought it worth comparing the C-Suite's views on what would significantly impact their firm's As-a-Service journey, when compared to their middle-management layer:

Click to Enlarge

Click to Enlarge

Provider-replacement therapy popular among three-quarters of the C-Suite.  A staggering 77% of leadership want to see their legacy service providers replaced, compared with only 27% of their middle management. This is because corporate leaders have reaped the labor arbitrage fruits from legacy outsourcing, and know their middle layer is getting fat-and-happy meeting their SLAs and performance metrics. Nothing will change without forcing the issue - the incumbent provider has

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Posted in: 2015 As-a-Service StudyAnalytics and Big DataBusiness Process Outsourcing (BPO)



How Design Thinking could really help your brand strategy

January 31, 2016 | Phil Fersht

This company may have its digital transformation strategy spot-on, but it could definitely benefit from some Design Thinking to maximize its brand opportunities and re-imagine its customer experience:

Digital Ham 

Posted in: Absolutely Meaningless ComedyDesign ThinkingHfSResearch.com Homepage



IBM, Infosys, Accenture and Cognizant lead in the industry's first Design Thinking Blueprint

January 24, 2016 | Phil Fersht

Unprecedented pressure being applied to operations leaders to drive more value, without huge investment increases, is forging a dire need for the vast majority of service buyers and their providers to change how they work together.  The legacy model of "we pay, and you deliver for cheap and we don't really want you getting involved with helping us do things better" has to change.  Otherwise, enterprise leadership will find new service partners and operations heads to take them forward.

The simple fact that 80% of services buyers simply aren’t engaging with their providers in a collaborative way, as revealed at last month's buyers working summit in Harvard, emphasizes how critical it is to infuse the methods of Design Thinking into most of today's flagging engagements:


So we set out on a unique Blueprint research exercise, led by myself (Phil Fersht) and supported by HfS analyst Hema Santosh, where we interviewed a host of enterprise clients on their experiences with Design Thinking exercises with their service providers, using our new Blueprint Methodology to assess their innovation and execution performances.  Many of these clients were not the usual rose-tinted reference clients heavily wined and dined by the providers - they were from the HfS buyer community, who could give us an unvarnished, honest appraisal of their Design Thinking exploits.

We focused on those leading service providers, currently involved with Design Thinking as a key component of their As-a-Service delivery model.  While we acknowledge there are many design boutiques and consultancies out there, we specifically focused this Blueprint on the capabilities of the leading outsourcing service providers.

And this is how the emerging service provider landscape is taking shape:

Design Thinking Blueprint

Click to Enlarge

Phil, why is Design Thinking so relevant to the future of outsourcing?

Most of the outsourcing industry is still trying to figure out what's possible beyond doing labor arbitrage really well - because that's what we do. Sorry, but there I said it - we officially have an identity crisis.

We're trying to forge a new identity for ourselves and re-imagine what our careers, our services and our platforms could be like if we only figured out how we can define, prioritize and realize business outcomes that are valuable, as opposed to merely keeping the same old factory ticking over at the lowest possible cost.

Digital technologies, robotics software, analytics tools, BPaaS platforms and artificial intelligence can only be effective and impactful once enterprises have re-designed their processes in a way that drives them towards their desired business outcomes. This has always been the case with (now legacy) ERP implementations, where thousands of clients have blown billions of dollars on enterprise software they simply never could mold effectively to their businesses. They weren't finding problems to solve, they were creating new ones they didn't need in the first place. 

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



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



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.


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



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



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



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



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



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



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:


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



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