One of the astutest CEO appointments in recent times was Abid Ali Neemuchwala (or simply "Abid" as most of us call him) being elevated to the hotseat at Wipro.  I, personally, have known Abid since his TCS days, when the firm acquired Citigroup's Indian banking operations in 2008, where Abid was instrumental in building a stellar BPO capability for the firm... and first interviewed him right here in 2010.  

Cutting to the chase, Abid was the perfect hire at the perfect time for Wipro. With the Indian-heritage service providers scratching their heads trying to figure out how to keep growing, as those legacy $500m IT infrastructure deals and $200m SAP roll-outs dry up, the only true way forward is to build out an As-a-Service delivery model that caters for the modern enterprise needing to access talent, technology, analytics and automation capability as part of an integrated solution, tied much more to outcomes and efforts, than headcount numbers. Being able to manage the traditional enterprise's needs, while investing in the emerging enterprise of the future, is the Holy Grail for the Indian-heritage majors seeking to get ahead of a market in transition. 

In my view, today's services providers need to be led by process people that understand technology and how to bring the two together effectively.  If you're just selling tech, you'll end up with a commodity service, and if you're just selling process, you'll end up with something completely unscalable and unprofitable.  So you need a CEO who gets right into the weeds of the operations and figures out how to technology-enable business services. You need someone who built a billion-dollar BPO business out of a tech-dominated service provider (TCS), where you had to train IT people to manage processes, and process people to understand how to enable them effectively with technology underpinnings. You need someone who's going to mastermind one of the potentially shrewdest acquisitions yet by an India-heritage major in Appirio.

You need someone who prefers to play chess than golf... you need Abid.  

Phil Fersht, Chief Analyst and CEO, HfS Research: Good afternoon Abid... it's been quite a journey for you to make it to the CEO role at Wipro. Maybe you can share a little bit about your background and career path just for our readers, so that they can learn a bit more about you...

Abid Ali Neemuchwala, CEO and Member of the Board, Wipro: Certainly. Phil. So I’ve been part of this industry since I came out of university at IIT, Mumbai, in 1992, and now, my goodness, that makes me feel old! I’ve spent 24 years in this industry, the last two at Wipro—as Chief Operating Officer, at first, and then as the CEO since the beginning of this year. The fun part of being in this industry was to be able to wear many different hats. I started as a developer, quickly moved into project management and then I got an opportunity to do some very strategic projects, especially as part of the financial services industry in India as it was just growing.

I also had the opportunity to live in multiple places around the world and experience various cultures. I went to work in South Africa immediately after Nelson Mandela was sworn in. At the time, the South Africa market was just beginning to emerge for Indian IT, and I was lucky to be one of the first IT people there. 

I lived in Japan as well which taught me a lot about program management and sales as we expanded our business. The Japanese market teaches you a lot. It is, in a way, the perfect training ground for sales guys because it not just teaches you perseverance, but also helps you learn the value of relationships and cultural diversities. Thereafter, I moved to the US and as a general manager in the US Midwest Operations I ran some key large accounts, before I moved back to India in a general management role. In my last stint at my previous employer, I was running the BPS business. There, I got a great opportunity to integrate a large acquisition, which exposed me to the need for being bold about acquisitions, all of which worked out well. And then, surprisingly, I got an opportunity to move to Wipro, which brought me in as the Chief Operating Officer. 

So, all along it has been a great ride and a journey of many opportunities. And throughout, I continued my passion and hobby for traveling to places. The industry helped me do that. I love walking on the streets of new cities that I visit because I think conference rooms, all around the world, are exactly the same. I ask my teams to do that as well. You’ve got to experience the culture, the people and the places. I have always been like that, meeting people, absorbing cultures and the world around us. 

My love for travel has taken me to cover about 100-plus executives amongst our top 100 customers, which helps me talk about Wipro’s strategy and understand what is most relevant to them. This also helps me get their feedback on the organization as I steer Wipro through this wonderful transformation.

Phil: So you acquired Appirio. That’s a company we know very well and what a very quick transaction that was! Can you talk about the core factors in this decision?

Abid: As I said, we're going to take bold strides as we rev up the engines for digital transformation. The future, which is going to be quite different, is already here in terms of Cloud, As-a-Service business models, Automation and Artificial Intelligence— not only Robotic Automation but also Cognitive, Machine Learning and Analytics. These, and also design thinking, of course, and user experience. 

We, at Wipro, believe in acquiring the right capabilities at the right time and, as part of that move, had been looking at assets that would be a strategic fit. Appirio is one such capability we've been very fortunate to get. The capability is essentially, as you know, around Cloud ERP

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

We can obsess about losing our jobs to robots, our traditional industries being wiped out by digital transformation, our politicians losing the plot... but it'll all count for nothing if we abuse our valuable natural resources and pollute the air we breathe.  So without further ado, let's hear the real deal about on what's going on in the energy sector these days - and how it impacts our world of operations and technology.  And who better to talk to than HfS analyst Derk Erbé, who likes to take a long hard look at things...

So Derk...what do we need to know about the energy sector these days, with climate change, crazy oil prices etc?  What are the key issues we need to care about?

First off, it really is a perfect storm at the moment. We’ve seen the world coming together to curb global warming in Paris, only a year ago. Rising social and political pressure in conjunction with technology advances and economic shifts are combining to create a positive atmosphere to address one of the biggest challenges of the coming decades.

We’ve also seen the sharp fall of oil prices from above $100 per barrel to $27 per barrel in February 2016, currently stabilizing around $45. The reaction from Oil & Gas companies to the crazy oil prices has been focused on survival for much of the last 18 months. Cost cutting was the primary reaction, resulting in the loss of 250,000 oil workers’ jobs. Two out of three oil rigs has been decommissioned and many capital projects postponed and canceled. This was not enough to save many oil and gas companies from bankruptcy. The initial hope of short-term

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Posted in: Energy,  Policy and Regulations

This is the age of the mid-size, aggressive, feisty service provider that can scrap for the traditional business but also has the flexible cost-base and freedom from legacy to go after the new stuff.  There are so many exciting opportunities with clients that are simply too small, or too cannibalistic for the traditional services providers... many of whom are still waiting - in denial - for those $200m SAP rollouts that no one wants to do anymore, or those $500m infrastructure deals that will never, ever happen again.  Where better to be that at a service provider which can lead with automation-led offerings, where being disruptive is the business model - where all new opportunities are greenfield... and causing many of the traditional service providers to squirm in their boots, pretending their world isn't falling apart all around them.

So welcome to HfS to Chinmoy Banerjee (see bio) who heads business process services for Hexaware - whose entire go-to-market strategy is based on disrupting the legacy outsourcing model...

Phil Fersht, Chief Analyst and CEO, HfS Research: So, good morning, Chinmoy. It's great to get some time with you today. Perhaps you could start by telling us a bit about yourself?

Chinmoy Banerjee, Global Head of Business Process Services, Hexaware Technologies: Sure, Phil. So, I grew up in India and after finishing my MBA in Finance I joined a bank. I spent a few years there and the last job I did was as a Forex trader. I then moved to PwC Consulting for a few years, and in 2004 moved to the US in the BPO sector. Along the way in the US, I completed an Executive MBA from TRIUM as well—which is a combination of NYU Stern, London School of Economics and HEC Paris. I've been disrupting the industry for the last three years with Hexaware, running their BPO business.

Chinmoy Banerjee surrounded by members of his Hexaware team

Phil: For those of our readers who might not be that familiar with Hexaware, could you give us a very quick snapshot of the company and what it's doing today? What are the core areas where you feel that you win against the competition?

Chinmoy: Sure. Hexaware has been around for a while. This is our 26th year of existence, but in 2013 Baring Private Equity acquired about 70% of the company and Keech, our CEO (R Srikrishna or Sri, aka Keech), came in soon after that. Since then we have been going to market in two areas: Shrink IT and Grow Digital. Our view is that the industry is disrupting in a big way, and Shrink IT which is our major go to market as its name suggests, involves shrinking technology and the operations footprint.

It's largely applicable to full-service lines, including application managed services, which is support, infrastructure management services, testing and, of course, BPO. Essentially, we have

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Posted in: Business Process Outsourcing (BPO),  Outsourcing Heros,  Intelligent Automation

Remember all that wide-eyed excitement when we first started using the “Information Superhighway” known as the Internet? Remember how we were all going to use this amazing new media to share information, to learn from millions of new information sources, and – even more importantly – to learn from each other?

So what’s gone wrong? Why has the Internet also become a mechanism to block out information and promote factless discussion and news, often based on misinformation, lies, propaganda and emotion?

How have we managed to survive a year and a half of election campaigning, where we endured two sides obsessed with battering each other with insults, almost completely devoid of any smart new policies, practical debate and absolutely no ability to listen to each other. Our whole world of politics has become driven by emotions and personalities, not facts, ideas and policies.

I am sure I am among many of you who have fallen out with friends, unfriended people (or been unfriended) on Facebook, received abuse on Twitter and been sucked into nasty arguments with others who just refuse to listen. And if I had to dig deep into my conscience, I have to admit I may not have always listened to the rationale of the other side also.

But can we all get past this experience and learn to listen to each other again? Can we learn to have rational debate and conversation, where we can express our views, back them up with real facts and ideas – as opposed to this closed, angry style of discourse, that is threatening to divide entire nations?

I like the steps I am seeing from Facebook’s CEO Mark Zuckerberg to clamp down on “fake media”, especially when you consider that more Americans admitted to relying on Twitter and Facebook for their news sources, than any other media source. And can you blame them when the likes of Fox, CNN, the New York Times and many other outlets – all have their biases and did little to bring together real discourse and debate. All they did was whip up more hatred, panic and emotion to divide us further.

So... we all ended up take to social media to get our news and views away from the blurred lines…. and instead of sharing facts, all we are doing is winding ourselves up, blinding ourselves from finding compromise and hiving off social contacts we once considered “friends” (both the physical and electronic varieties).

The Bottom-line: It’s time for all the stakeholders in society to get meaningful and respectful again  

Whether we like it or not, we now have four years of President Trump – he got himself elected. He won – seemingly against all the odds. Now let’s sincerely hope he can work to bring together a divided nation and bring together people across this divide of hate which he helped create. If he is to be successful as a President, it’s healing this awful culture of factless, meaningless squabbling. The US doesn’t need it’s own half-Brexit, where the country can’t decide what it wants anymore and people have to move forward clouded in uncertainty and confusion.

In the last week, President Trump has made appointments to his cabinet that are concerning for many. But sensationalist reporting devoid of actual facts has also skewed the true merit for concern and the weight of the issue. We need our media to provide information so we as citizens can express our voice based on facts and not fear that may or may not be warranted. The last thing we need are our already-fractured social networks being further eroded by all this emotion, paranoia and hype.

We need decisive policies, politicians working together and (at least try) to develop some mutual respect with people, whose views may not be entirely aligned with us. I don’t like the way the world has become, and I think most of you here will agree that it’s time for our media, our politicians – and ourselves – to get meaningful and respectful again.

Posted in: Social Networking,  Policy and Regulations,  Social Media

Fed up with the same old "digital transformation trends" about to turn our world upside down... based purely on those crusty old Uber and AirBnb examples?  Getting jaded by the tired old commentary about 20-year-old automation technology suddenly replacing labor... without any practical advice how to manage it all?  

And that annoying old yarn about IoT turning the whole world into some massive interconnected computer without aligning it to real business solutions, beyond making your coffee maker more intelligent? Oh... and the hype about Blockchain disrupting the whole world of money and commerce, without any sort of sensible roadmap on how the technology is evolving, and how enterprise-ready this stuff is (or ever will) become.

Are you just simply comatosed by analysts talking in riddles about generic, bland mush you've heard a zillion times already?  

The 2017 HfS Research Agenda:  "Making it Real"

Well, people, your agony is over as the analyst team at HfS is charged with "making it real"... where we're talking with hundreds of enterprises about how they are addressing all these changes to their world.  Technology is moving at warp speed and people, simply, are not. Our 2017 plan is to address this gap between innovation and reality and help our clients really feel this stuff... really kick those tyres to sample how it can be done and how it shouldn't be done.  

We won’t be hyping up automation and digital technology as the critical ‘disruptors’ of business operations - because they are already are past being disruptive - they are already here. Intelligent automation and digital technologies have become the fabric of operations for modern enterprises, immersed in new generation services and platforms. Instead, we are already talking about OneOffice, where integrated business operations have the digital prowess to enable the enterprise to meet customer demands - as and when those demands occur.

Our 2017 Blueprint Reports address all aspects of achieving the OneOffice endgame:

Why is the 2017 HfS Research Agenda Unique?

Since the introduction of the HfS Blueprint in 2013, HfS has published 44 of these highly influential reference guides (see link) for enterprise buyers—to assist in selecting the best service provider for their needs. In that time, HfS has expanded from Blueprints covering core BPO markets such as F&A, Contact Centers, Procurement and Healthcare Payer to a broad range of markets, including IT and Digital Services, IoT, SaaS Implementation, Security and Engineering Services. In 2016, HfS introduced our first ever Blueprints on Design Thinking, Energy Operations, Block Chain, Pharma BPO, ServiceNow services, SuccessFactors services and Mortgage-as-a-Service.

For 2017, HfS is focused on researching the experiences, dynamics, intentions, challenges and opportunities of thousands of enterprises in their quest to align their operations with the rapidly changing needs of their clients. This will include interviewing 300 of the Global 2000 enterprises and several thousand quantitative interviews on a rolling basis through the year with the HfS global community.  

Our Blueprint Reports focus on all key aspects of IT services and strategy, business operations and BPO, cognitive automation and the core industry-specific dynamics, namely banking, insurance, energy, utilities, manufacturing, healthcare, life sciences, travel and retail industries. HfS isn’t only focusing on the service provider performances within each industry. We are also helping clients take an “outside-in” approach to reaching a OneOffice^TM endgame, with a second annual Blueprint report on Design Thinking capabilities and a unique analysis of the deployment and enablement of cognitive virtual agents in the workplace.

This is an ambitious research agenda but something that we believe will provide real, unique, and substantial value for the industry in our effort to help enable more collaborative engagements for delivering business outcomes.

HfS subscribers can download their copy of the 2017 HfS Blueprint Agenda here.

If you have any questions on the HfS Blueprint Methodology or our 2017 Research Agenda, please reach out via email to [email protected].

Posted in: Business Process Outsourcing (BPO),  IT Outsourcing / IT Services,  Service Provider Analysis

Addendum note:

Since I penned this blog, Senator Chuck Schumer has been made Senate Minority Leader.  Schumer has been the biggest opponent of offshore outsourcing for several years - we even wrote about his failed H1B bill back in 2010 after his infamous branding of Infosys as a "chop shop".  Net-net - with Trump's aggressive stance on protecting US jobs, massively raising the H1B minimum wage, combined with the determination of Schumer leading the Democratic faction, this does not bode well for the future of the offshore business for at least the next four years.

President Trump is the death-knell for traditional offshore outsourcing... as we know it

The traditional Indian-dominated offshore IT services market was already in the throes of desperation to find a new path for itself. Much of the global 2000 has already been pulling back on the traditional “mega deal”, amidst intense competition between a surplus of IT services providers and an increasingly desire to parse out smaller contracts to multiple suppliers.

The election of Mr Trump to the Oval pretty much just hammered in the final nail in the coffin for the traditional IT outsourcing market as we know it. The Republicans control the House, the Senate and Trump has a huge mandate to impose his will, not dissimilar from Obama and his healthcare reforms.  Change is going to happen and it will likely have a very significant impact on global IT and BPO service delivery.

Why is this bad news for offshore services industry? 

Temporary IT workers will likely be massively hit. Trump’s campaign has already outwardly promoted raising the H1B minimum salary to $100,000 per year (from $60K). This makes managing complex IT projects a lot more expensive and negate much of the cost advantage for complex engagement requiring “landed” IT staff. For the IT community of several hundred thousand H1Bs, L1s and B1 holders currently residing in the US, many of them will come under scrutiny if Trump holds true to his number one campaign promise – curbing immigration and protecting American jobs. So this doesn’t just spell bad news for the competitive of new IT services deals, it also threatens the viability of existing long-term engagements. 

Enterprises will increasingly look to cloud-based solutions. With the cost of maintaining legacy ERP systems likely to spiral, many enterprises will be forced to write off legacy sooner than they may have wished and invest in cloud-based enterprise solutions that require less offshore labor components. Much of the Indian IT services industry, for example, grew up on supporting and maintaining now-legacy IT environments, such as on-premise SAP systems. While many long-term engagements will have already be well past the "labor arbitrage stage" and hard for the Trump administration to police, all US businesses engaging with large numbers of offshore services will become under increasing scrutiny.  If there was ever a time to make investments in standardized IT solutions that do not have a heavy offshore dependence, this is it.

Automation is now the new labor arbitrage - and Donald just made it happen. Forget Brexit, Trump is now the new true friend of the fledgling automation industry (and he probably doesn't even realize it). One of his last speeches was centered on his berating of IBM for offshoring a bunch of jobs from Minneapolis.  Offshoring is often a prerequisite to automation... just look at the manufacturing industry where the work is initially moved to overseas factories, before being automated within those factories (or brought back on shore to factories employing a much smaller workforce).  Just look at many car plants today which may have employed thousands of workers just 20 years ago, which now only need to employ barely a hundred.  IT is no different and the tools are now in place to accelerate automation of IT and business processes faster than most people realize.  With the use of IT labor now under so much more scrutiny, the service providers can no longer ignore the fact they need to pivot their delivery models away from labor scale even faster than they had feared.  As we analyzed earlier this year, 9% of outsourcing jobs are likely to be displaced by automation over the next 5 years, but that number could be reached in two or three in this new climate.  

What can the offshore industry do to survive this?

Invest in US companies employing skilled US IT and consulting staff.  Wipro must be tickled pink it acquired US cloud services firm Appirio the other week.  The best way to protect - and upskill - Indian based IT workers is by making investments up the value chain to front end new generation IT projects.  Wipro can support many new engagements from this investment, where the client facing staff are all US natives, without the scrutiny of the offshore police.  Other Indian-heritage IT services majors need to follow suit with US investments, especially in

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Posted in: IT Outsourcing / IT Services,  Policy and Regulations

Thank the lord the worst election in living memory is only hours away from being done – whether a legacy politician or a dinosaur businessman wins, three outcomes are clear:

• You need a couple of billion dollars in the bank before you can even contemplate a run (so much for “democracy”);
• Neither candidate has any innovative policies to find a way forward for the country;
• The system is “rigged” everywhere, but unrigging it requires a very difference approach.

So we can quickly avoid the first two issues – not much we can do about those right now, barring revolutions and assassinations. However, the third issue is something that we can associate within our very own industry of business operations.

 The "system" is all about maximizing margins without too much disruption

I recall working an outsourcing deal, about 5 years’ back, and I was informed by the client “all roles we are keeping are to be created in India, unless there is a clear business case to keep them onshore”. I was recently consulted to talk to the same client about the “next phase” of their “value journey”, which was simply “all processes are to be automated, unless there is a clear business case to have a person involved”.

Great – so we’ve moved from shifting work overseas simply to eliminating it altogether.   That is the “system”, where only money talks anymore – the same system that presented this poor US electorate with two awful candidates who have only been focused on outspending each other on negative commercials, rather than proposing anything sensible for the country to create jobs and drive new growth and innovation. Is this really the best “democracy” could come up with, in the richest country in the world posing as the “land of the free”.

It’s time for a big reset 

Most people have got lazier in the last 5+ years.  Virtual working, digital burnout, Millennials with a warped idea of what work actually is, new forms of adult ADD... whatever... something negative happened in the workplace and it's getting harder and harder to find people with that "go the extra mile" attitude these days.  So many people have a sense of entitlement we've never seen before.  It scares the sh*t out of me. Forget “new normal”… we need a whole new reality.

We're going to need a great big reset, driven by government, to get people relevant for this changing workplace.  At some future stage, we are going to have another downturn and these issues of worker apathy and irrelevance will magnify exponentially. People will actually have to take shitty jobs again... my god.  

The Bottom-line: It’s all about resetting, retraining and reeducating ourselves

Investments at a huge level must be made in training and education, not handouts to people who've just lost interest in working anymore and like to complain the system is rigged against them. This would also stimulate a much larger and more flourishing education sector that creates more jobs and innovation. We need less of the angry politicians playing on the increasingly disenfranchised population. We need leaders focused on inspiring people to reinvent themselves, re-educate themselves and find that zest for working again. And not only do we need people who can understand data, digital apps, robotics and artificial intelligence… we need people who can cook great cuisine, compose decent music, write great books, teach our kids, police our cities… we need to unrig this system that has lost itself somewhere between a balance sheet, social media soundbites and bad news coverage.

Posted in: Policy and Regulations

I love blockchain - all the hypesters think its the biggest thing since the Internet, primed to blow up the stranglehold banks and corporates have over the world and how we deal with money, while others are dismissive, viewing the tribalism of governments and their paranoia of loosening up cross-border regulations, as the ultimate impediment behind blockchain ever fulfilling its true potential.  And there are the techno gloomers who struggle to see how we can really make this thing enterprise ready and feasible in real world business situations.  

So why not read the first ever analyst view of how emerging blockchain capabilities are evolving with today's fleet of service providers:

Click to Enlarge

I wanted to share briefly some nuggets from report author Christine Ferrusi-Ross' great blog on the core recommendations:

Clients and their service providers are learning blockchain together. This is bad if you want someone to hold your hand and tell you everything is going to be ok, that they have the answer for you (by the way, no judgment from me on this – if there’s a well understood solution and you can hand it over to someone to get it done, go for it.) BUT it’s fantastic if you really want to take control of your own business destiny, be strategic and really work collaboratively with a partner to find the right opportunities and create solutions together. It’s a rare chance to be an equal intellectual partner with your services firm and in fact potentially for the provider to learn from you as your team researches opportunities and bring in the provider to help test some of those opportunities.

Find great storytellers. It’s really important to understand the technical aspects of blockchain, of course. You’ll have an easier time finding technical skills than you will finding people who can really dream with you and tell you stories of how blockchain can change the world. This isn’t just about looking for strategists, it’s about looking for providers who can clearly communicate a vision for what’s possible, so you in turn have an easier time digesting the different scenarios and selecting the right ones to move forward on to the proof-of-concept stage. 

Put more emphasis on service providers’ partnerships than usual. Spend more time understanding what criteria the providers are using to evaluate the technology vendors than you would normally, since this deep dive is going to be more important for you than in other more mature areas. 

Focus on service providers'  abilities to work in agile development environments. Yes, I know, you’re likely not even close to building anything right now. But keep in mind that you’re looking to find someone to co-create with you and that requires the ability to be iterative and flexible while still not losing sight of the original goals. Providers who have more rigid engagement methodologies will put more pressure on you to define your requirements probably even before you really know what those requirements are. So look for a player that has strong agile skills since those skills will transfer well to your blockchain exploration.

In the meantime, here’s a link to the full HfS Research Emerging Blockchain Services Blueprint Guide, with definitions and descriptions of the current activity (particularly in BFSI) and how service providers are approaching this inevitably integral part of the future fabric of any industry. 

Posted in: Financial Services Sourcing Strategies,  Security and Risk