HfS Network

Who's ready to change the industry this week in Chicago?

September 18, 2017 | Phil Fersht

Posted in: IT Outsourcing / IT Services

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HfS has hired Johnny Robo Brien!

September 13, 2017 | Phil Fersht

Fed up with all the helicopter-view prophesizing of the emerging robo world that just leaves you with a headache?  Irritated by those matrices of suppliers which all look the same and tell you nothing meaningful?  Sickened by the bizarre rose-tinted claims of how easy this all is?  

Well... ee're changing all that at HfS, by issuing proper user experience reports of RPA and intelligent automation solutions, based on the real experiences of users, that aren't coming from the same old tired list of wined and dined RPA customers sent straight from the suppliers.  So we've just hired a terrific analyst who not only understands the rules of robo, but can apply them to specific business processes and industry operations.  So without further ado, let's learn a little more about our newest analyst brain, John Robo Brien... whom you may know better using his birth name of John O'Brien (see bio).  

John - it's just terrific to be working with you at HfS!  Can you share a little about your background and why you have chosen research and strategy as your career path? 

Hi Phil, and thanks, it’s fantastic to be here working with you and the HfS team. I’ve been an IT analyst since joining ComputerWire in 2000 where I started out covering European IT services. I’ve since worked in senior positions at Ovum and Datamonitor/Informa covering the global IT, BPO and Public Sector markets. For the past seven years, I’ve worked at TechMarketView, as

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Posted in: Robotic Process Automation

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HfS data products get a Suvradeep-dive

September 11, 2017 | Phil Fersht

As you may have seen last week, we officially unveiled our data products at HfS, where we bring together the full gamet of demand and supply side data to share everything you ever needed to know about the big change agents impacting business operations.  So who better to help support our new range of offerings that a veteran analyst with a broad knowledge across all services markets, who's developed a solid reputation with the likes of Ovum and NelsonHall: Suvradeep Bhattacharjee.  

In addition to being a true gent and an eloquent observer of the market, what also appeals is the fact he moved himself to our new HfS headquarters in Cambridge England (where his wife teaches HR practice at one of the local colleges), but he also comes from the great city of Calcutta, where you can actually visit man-eating tigers.  My 8-year-old boy is begging me to take him, so I will need some local expertise to give me the lowdown.... 

Welcome, Suvradeep - it's just terrific to be working with you at HfS!  Can you share a little about your background and why you have chosen research and strategy as your career path? 

I think, I am curious by nature. I am usually stimulated by new knowledge which is mostly

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

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It's Design Thinking heaven with TandemSeven as Genpact makes its OneOffice move

September 08, 2017 | Phil FershtBarbra McGann

"You guys really should evolve your lean capabilities into Design Thinking with your clients" was my conversation with Genpact's innovation lead, Gianni Giacomelli (pictured), a year ago.  "You should also do that with your research clients" was Gianni's response.  Exactly a year later, we open our  Research ThinkTank in Cambridge England to perform said exercises with our clients, and Genpact announces the acquisition of Design Thinking specialist TandemSeven in Cambridge Massachussets. 

Why is Design Thinking becoming so relevant to the middle-back office operations?

We see the emergence of Design Thinking as critical to help enterprises collapse these barriers between their front, middle and back offices - one of the core fundaments of achieving a true OneOffice framework.  You really can't be a digital organization if your operations are not supporting the front office in realtime, being able to respond to customer needs as and when they happen:

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Design Thinking offers an approach for a diverse group of people to work together to identify

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Posted in: Design Thinking

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HfS Data Products are here!

September 07, 2017 | Phil FershtJamie Snowdon

We just love data at HfS - we built this company by surveying our terrific community over the last 10 years to keep on top of all the curious things enterprises do to stay competitive and profitable.  And this year, we are literally surveying 3,000 billion dollar plus enterprises on their intentions and dynamics across the 5 critical change agents of our industry: automation, AI, analytics, blockchain, emerging digital business models, and global sourcing strategies.  

While everything we do is based on data, we've not really packaged it all up in a way for our clients to digest it and use it most effectively for themselves.  Until today.

We’ve set out our research agenda to bring reality to the research analyst world, dynamic engagement with our clients and our vision for the industry: our Analyst 2.0 model. Over the next 6 months, we will be adding more data products and enriching the existing ones, based on the wealth of information we have collected over the years:


1: Contracts Database

Launching in September 2017. As part of its ongoing research HfS has always collected and collated contract data across the different service lines it tracked. HfS Contracts Database gives subscribers access to this data, which provides up-to-date analysis of IT Services and Business Process Outsourcing contracts. This interactive tool allows users to search for specific contracts, view contract progression annually and by quarter, and view heat maps of specific deal categories by region.

2: HfS PriceIndicator™

HfS PriceIndicator™ has been part of HfS Research data tools for over 4 years now. The next 6 months we will start to include RPA and automation pricing.

HfS PriceIndicator™ is a real-time, research based price benchmarking service that provides clients an insight into current ITO and BPO pricing. Currently, PriceIndicator™ provides a biannual set of hourly FTE rate cards for ADM, F&A BPO, Insurance BPO and Healthcare Payor BPO.

3: Buyers’ Guides

HfS buyers' guides provide an independent view of individual service providers across different service capabilities. Giving a summary of the organization's strengths and weaknesses in addition to details in specific service categories.

The long-term plan will be to integrate these guides into the HfS Data website updating them whenever new financial data is available and when we publish new blueprints/vendor analysis – so they always deliver the most up-to-date content on each provider.

4: Quarterly Market Indices

HfS provides market size and forecast for the IT and business services market updated on a quarterly basis. This view of the industry provides a top-level view of service provider performance and uses this to predict market growth and performance within the main IT and business services markets.

5: Supplier Revenue Data

For the past 5 years, HfS has been tracking the IT and Business service supplier landscape collecting key financial data from the industry – creating models which are used to create our Top 25 IT services and our Top 50 BPO provider list. HfS is expanding these models to create revenue maps across key service lines, industry, and geography.

6: Direct Buyer Viewpoints

HfS regularly interviews buyers throughout the Global 2000 organizations, conducting 3,500 interviews over the course of the year. The Buyer Viewpoints opens up this data for additional analysis by industry, and across regions. So our subscribers can create their own views of the information for presentations and infographics, in addition to HfS own drive to make our data more accessible.

The bottom-line

The Analyst 2.0 model means making data more accessible, easier to digest and self-service – the analyst should not be a barrier to insight. HfS wants to enable our community with the right data to drive their own insights and their decision making – revolutionizing the way market data is used and consumed. At the same time letting our analysts do what they do best - drive thought leadership within the operations and IT services community.

 

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Posted in: Analytics and Big DataHfS Research Company News

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Socially-paranoid media: where did it all go wrong? (Weekend rant)

September 02, 2017 | Phil Fersht

What’s really happened to social media these days? What used to be a fun place to share untethered banter, humor, intellectual conversation and debate, perhaps be a little risqué, has degenerated into a stuffy medium for puffing up corporate brand mush, and regurgitating the same old bland insight we’re having pushed at us daily. Every corporate suit is now on there, lauding how amazing their company is… praising their clients and uttering meaningless, hollow words of adulation. In fact, many of the "senior" people on there have their marketing people even do their social for them... it's not even them.

All of you know I do like to dabble a bit with Twitter, Facebook and LinkedIn to engage with people - both with people I like socially (Facebook) and industry contacts with whom I consider valuable to stay in regular touch (LinkedIn). I also have the luxury of being the boss, so no one can fire me ;)

Over the years, social has been terrific for communicating with people, sharing insights, opinions, research, news… it’s been fun, and it’s been personal. It keeps you connected with so many people that when you bump into folks at conferences etc., it feels like you spoke just the other day, rather than five years' ago.

But, in recent months, it’s just become so polarized and stuffy. There are people using social only to promote themselves and their companies… the personality has drained from it. I find myself spending more time removing connections than adding new ones.

Case-in-point, I dared to post some (slightly dubious) research on LinkedIn the other day with a joke about how much analysts need to be wined and dined to get the best scatterplot grid placements. I didn’t even criticize the research, I just popped up the grid with a joke on the axes about boondoggles and posh dinners. Within about three hours of posting, I received some really snotty comments from the analyst firm in question berating me for daring to poke a little fun at one of its lovely magic grids. They were pretty nasty about it too. And then I got an aggressive note from a marketing guy in one of the suppliers (which was nicely positioned in said grid), complaining about my "unprofessionalism" for poking fun at a competitor. 

So I took the offending post down – my intent was to generate some banter about the techniques suppliers use to get positioned well in these grids, not a bunch of nastiness from people who just seem so bloody paranoid these days.

To cap this all off, I then get a phone call from the boss of the marketing guy (who complained about my post) requesting me to put it back up as they were getting so much free publicity from it (20K+ eyeballs).  You just can’t win at this, can you?

So where do we go with this?

  • Hone your network to people you get value from. If you find people offensive or not adding value to you, then just remove them, rather than create a nasty discussion thread
  • Get a sense of humor: arguments can be fun. If you disagree with someone, but the conversation is useful, then voice your disagreement about the topic and have a proper discussion… don’t just criticise and disappear. Use the forum to exchange views and ideas – you never know, some good may come of it.  If we all just agreed with each other all the time, we’d never learn anything…
  • Drop the ego. These are networks where you agreed to exchange information with people, so be prepared to see things you have an opinion about. And be prepared to be criticized – that’s the whole purpose of this stuff. If you can’t handle a little professional debate, then stick to Facebook and the pictures of dogs and babies…
  • Be open to the fact that the opinions or research you put out may be flawed. We should be willing to learn from each other and accept some input, flattering or not. If you think I am smoking something, just tell me… and I’ll do the same with you. Challenging each other is the only way we learn and get better at what we do.

Posted in: Confusing Outsourcing InformationSocial Networking

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Automation to displace 750,000 low skilled Indian jobs, but create 300,000 mid-high skilled jobs by 2022

August 30, 2017 | Phil FershtJamie Snowdon

HfS subscribers can access the full report by clicking here

A lot has changed in the last year... especially when it comes to automation: it has now become the broadly-accepted efficiency tool for cost leverage with operations.

Every customer has RPA project managers and automation leads hungry for data, advice, and ideas. Every service provider has RPA embedded into their service delivery models, and every credible advisor has a practice that is working with multiple clients to make this happen. The Armageddon days of talking about robots taking our jobs are over - these are now the reality days where we can see exactly what's going on with automation and AI, and accurately estimate how it's going to impact the services industry in the next few years.

There will be impact, but it's manageable provided we focus on new skills and value.  

In short, the global IT and BPO services industry employs 16 million workers today.  By 2022, our industry will employ 14.8 million - a likely decrease of 7.5%* in total workers (see our research methodology below).  This isn't devastating news - we'll lose this many people through natural attrition, but what this data signifies is this industry is now delivering more for less because of advantages in automation and artificial intelligence.  The new data also shows how job roles are evolving from low skilled workers conducting simple entry level, process driven tasks that require little abstract thinking or autonomy, to medium and high skilled workers undertaking more complicated tasks that require experience, expertise, abstract thinking, ability to manage machine-learning tools and autonomy.

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The low skill routine jobs are getting increasingly impacted, and our new demand data shows an acceleration in RPA tools (a 60% increase over the next year) where service providers are the largest adopters into their own service delivery organizations.  We expect to see a more rapid impact on routine job roles which is most notable in 2022 as companies take time to build the impact of RPA into service contracts and figure out how to turn work elimination into hard savings than merely soft efficiency savings.  With barely a 50% satisfaction level, this will take 4-5 years to see the real cost benefits in terms of job elimination.  Most of the short-medium term benefits are being seen in increased efficiencies and more digital process workflows.  All major service delivery locations are expected to be impacted at the low-end, but the higher the wage costs, the higher the expected role elimination (750,000 roles in India and a similar number in the US):

Click here to Enlarge

Medium skilled roles are picking up across the board, especially in roles that are customer/employee facing with the need for more customized support, the ability to handle

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Posted in: Cognitive ComputingRobotic Process Automation

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Unveiling the HfS 1-2-3-4 Research Agenda

August 26, 2017 | Phil FershtJamie SnowdonBram WeertsSaurabh Gupta

 

Last week, we launched the Analyst 2.0 Model along with the HfS ThinkTank to revolutionize our industry. And today we unveil the new HfS 1-2-3-4 Research Agenda. The updated agenda serves the real needs of our clients. The tired legacy analyst model continues to only look at the past and lacks out-of-the-box, stimulating, and forward-looking thinking. We aim to turn this legacy Analyst 1.0 Model on its head, by delivering impactful knowledge and insights that will help our clients survive and succeed in the VUCA (Volatile, Uncertain, Complex, and Ambiguous) world that we all live in.

1: Research coverage across each element of the OneOffice

HfS launched the OneOffice Framework in January 2017. Our industry is evolving to an era where there is only "OneOffice" that matters anymore, one that is focused on creating an impactful customer experience and intelligent operations to enable and support it. At HfS, we like to practice what we preach. We have aligned our research practices with the OneOffice with designated research leaders.

  • The Digital Front Office research explores customer engagement, design thinking, contact center, marketing and sales, as well as social, mobile, and interactive solutions.
  • The Digital Underbelly research focuses on desktop automation, robotic automation, and security.
  • Our coverage for Intelligent Digital Support Functions spans across IT services, Finance, Procurement, Supply Chain, Payroll, and Engineering services.
  • The Intelligent Digital Processes research explores advancements in artificial intelligence, smart analytics, blockchain, and IoT.

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2: Voice of the Customer embedded in the Analyst 2.0 Model

In-sync with the Analyst 2.0 Model, we designed the new research agenda to help us become the leading Voice of the Customer. Our team of global analysts speaks to over 3000 stakeholders across the Global 2000, our industry summits provide us with an unmatched platform to interact with senior stakeholders, and our analysts publish real client stories. We’ve always mandated customer reference calls for every Blueprint report that we publish and with the new research agenda, we are taking this customer focus a notch higher. Some key initiatives:

  • Our recently published and upcoming IT-services research, based on a Global 2000 client-only survey that helps us get beyond the supplier marketing and sales spiel.
  • Similar survey(s) for mature horizontal business process areas as well as industry-specific offerings.
  • Our major Blueprint reports will now be accompanied by a summary of client conversations in the space to present aggregated patterns of how clients view market execution and innovation.
  • A unique buyer experience guide for the top RPA products, based solely on interviews with RPA clients. 

3: Forward-looking research across three-time horizons

A key reason for clients to engage with us is the provocative nature of our research.  We’re future looking, and unafraid to call a spade a spade. The new research agenda aims to arm our clients with the knowledge and insights across three-time horizons they need to navigate the future of operations:

  • Horizon 1 - Act-now: Mainstream topics in the market, such as Robotic Process Automation (RPA). Horizon 1 research is aimed to deliver practical insights into current market trends, supplier capabilities, as well as current client experience that will help institutionalize the concepts.
  • Horizon 2 - Watch-out: Emerging themes and topics that are likely to become mainstream in the next 1-2 years, such as Artificial Intelligence (AI). The objective is to help clients test value propositions and understand potential benefits and challenges in their industry.
  • Horizon 3 - Investigate: Areas that show tremendous potential but are still too nascent to predict adoption, such as blockchain. The purpose of covering such topics is to ensure a healthy dialog with key industry stakeholders to define these spaces, articulate challenges and support awareness.

4: Four-dimensional view of business operations

The future of business operations is not one-dimensional. To provide our clients with a completely holistic view of the market, we have a team of four-dimensional analysts who understand the market across four lenses in their area of specialty:

  • Dimension 1 - Change agents: Major change agents driving the industry including automation, artificial intelligence, blockchain, digital business models and smart analytics.
  • Dimension 2 - Business functions: Detailed coverage across Business Process Services (both back office and front office), IT Services, and engineering services.
  • Dimension 3 - Industry orientation: Business operations impact across 10+ industries including Banking & Insurance, Healthcare, Energy, Utilities, Manufacturing, Telecom, Retail, Travel & Hospitality, and Public Sector.
  • Dimension 4 - ThinkTank: Bringing together our collective knowledge and insights across change agents, business functions, and industries to think out-of-the-box and collaboratively solve real business issues.

 

Bottom-line: We are raising the bar, and we are revolutionizing the industry with our new HfS 1-2-3-4 Research Agenda.

Check out the details of the Analyst 2.0 Model, ThinkTank, and our 1-2-3-4 Research Agenda.

Posted in: Digital OneOffice

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Why Donald Trump should take the Infosys CEO gig

August 25, 2017 | Phil Fersht

There's only one thing in our world that keeps Donald Trump off the headlines... of course... it's good ol' Infosys!  Yes, folks, we actually seem to care more about who is attending these board meetings and squabbling about the cost of refueling the company jet, than the nuclear warheads currently pointed at Pyongyang.  

Yes, people, the $10bn Bangalore-headquartered outfit is trumping Trump in the media... an exclusive on what Murthy had for breakfast is far more interesting these days than the handbag Ivanka just purchased.  And the eighty-seventh article analyzing just why poor ol' Vishal wasn't quite leaping for joy every morning during his tenure, is clearly more impactful to our lives than the US government potentially shutting down, because Donald wants his wall built...

But there is a solution:  Donald Trump can avoid impeachment, quit the Prez job and take the reigns at Infosys. Where better to make something great again, where he will hog the headlines more than anyone has... ever!  Just think:  Trump + Infosys... we will never need to read about anything else again. Ever.  

Why this would be Donald's dream job:

1) Build a wall around Electronic City to keep out the TCS and Wipro headhunters.  Then rename it Trump City.

2) Repeal Murthycare without the need for any new ideas.  Just get rid of it and think of something later.

3) Tweet incessantly about how much he hates Abid, Frank, Premji, Vishal, Meg, Ginni, Murthy... 

4) Ban the Times of India and Livemint from all press briefings - only allowing in the new Trumposys Monthly magazine

5) Invest the whole $6bn warchest in Infosys Russia.  Including a state-of-the-art Kremlin Lab that Putin can open personally

6) Put Sean Spicer in charge of the Artificial Intelligence strategy

7) Impose a travel ban on all robots to keep the FTE model intact

There you have it folks... bring on the Trumposys!

Posted in: Absolutely Meaningless Comedy

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Hyping the hyperledger with blockchain boffin Brian Behlendorf

August 24, 2017 | Phil FershtSaurabh Gupta

HfS' Saurabh Gupta recently caught up with Brian Behlendorf (see bio), the Executive Director of Hyperledger at the Linux Foundation. Brian was a primary developer of the Apache Web Server – the most popular web server on the internet. He was a founding member of the Apache Software Foundation, the founding CTO of CollabNet, the CTO of the World Economic Forum, and the managing director at Mithril Capital Management LLC before heading Hyperledger. He is also a board member of the Mozilla Foundation since 2003 and the Electronic Frontier Foundation since 2013.

Two decades after developing the Apache HTTP server that played a key role in giving us the internet and the web, Brian is reimagining our world again with blockchain. We discussed a range of topics around the reality and practicality of blockchain for enterprises along with the one wish that he wants to come true. 

Saurabh Gupta, Chief Strategy Officer, HfS Research: Brian, one of the stated goals for Hyperledger is to create enterprise grade frameworks and solutions. Why do you think enterprises should adopt blockchain?

Brian Behlendorf, the Executive Director of Hyperledger at the Linux Foundation: We have lots of transaction networks that, Saurabh, because of historical network choices, have resulted in many central actors who facilitate digital transactions like a hub in a hub-and-spoke network. And we have to proxy our trust to them - sometimes they do a noble job and charge a nominal rate, but there are times when these central actors charge unreasonable double-digit rates. Blockchain allows business models to become more equitable and agile by behaving more like

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Posted in: Outsourcing HerosBlockchain

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Infosys gives up its American Dream

August 18, 2017 | Phil FershtTom ReunerOllie O’Donoghue

Once dubbed the “Indian Accenture”, being the Indian heritage outsourcer with the high-end reputation, the firm now finds itself enduring, perhaps, the most difficult period of its history – and it could be poised to get a hell of a lot worse. 

Vishal Sikka brought energy, fresh ideas, hope… and a Silicon Valley mindset to its leadership when he came aboard amidst his Design Thinking and jeans-to-work attitude just three years ago.  However, all Sikka’s energetic ideas and innovations have been largely forgotten over the past year, as the public spat with Founder Narayana Murthy gathered irritating momentum and completely slammed the brakes on the momentum Sikka had sparked.  Sikka had woken Infosys up to its potential and the Founders were more obsessed with his use of the corporate jet than making the acquisitions the firm needs to be competitive.

From the poster boys for innovative offshoring, epitomized in Thomas Friedman’s seminal “The World is Flat” through to the constant public interventions in corporate affairs by Murthy, Infosys has had a bumpy ride over the last decade of its short history. And to magnify its issues, all of Murthy’s interventions have been played out in public, with the Indian press the grateful recipient of endless reams of news fodder being provided by this corporate soap opera.  

Vishal Sikka’s resignation grinds to a halt this public transition from the Founders' generation to becoming a “normal” corporate company. Without a doubt, this episode will find its way into economics textbooks for future students to learn the lessons in strategy, corporate governance and beyond. However, at least decisive action has been taken, and Murthy and his founders can try and restore a stability that ends this public drama. This is just a bad time to go through such a strategic leadership nightmare, when competition is at its most severe, with too many suppliers chasing too few contracts and margins under extreme pressure. This is especially troubling when you consider Sikka has kept the revenue and profitability ship progressing well, maintaining profit margins close to 25% and revenue growth over 5%, even at a time when the industry growth is flat and political stances towards offshoring are heated, with several US deals being awarded to "Western" suppliers:

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So what are the lessons that can be learned from all this?

Murthy is the dominant father figure of Infosys and he has made that very clear with his actions. As founding CEO, he is synonymous with the early success, the culture, but more crucially, with the decision-making at Infosys. When SD Shibulal, another of the founders, took over it was difficult for him to step out of Murthy’s shadow. Shibulal’s “Infosys 3.0” strategy was designed to address the over-dependence on the US market (see interview) and rebalance the

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Posted in: IT Outsourcing / IT Services

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The future is about services, not software

August 13, 2017 | Phil Fersht

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I was recently given the lowdown on how amazing ServiceNow is becoming with the "integration of Watson and Chatbots into its core platform".  Sounds terrific, but does this added functionality really deliver huge value to customers when we examine the realities of their current business models? I would argue our industry has become so carried away with the promise of technologies we barely comprehend, we have taken our eyes off the real prize: working with customers to help them be more effective. We've got to stop selling the Ferrari, when their Volkswagen will comfortably get them where they need to be with the help of a routine service inspection.

I increasingly believe today's "post-digital" market is much, much more about aligning services to customer business models than selling software with lots of bells and whistles - there are so many tools on the market that have 10-50x the functionality customers today really need with their current business models. Whether Ignio has more bells than Holmes or Nia, or whether anyone truly understands Watson's capabilities, the key here is which suppliers can work with their customers' business models to drive better automated processes, introduce more self-learning capabilities and smart analytics that can truly improve their businesses.

Net-net - we must look at everything through the customer lens:

1) Why should I care about ServiceNow?
2) What can I truly do with ServiceNow that can improve my speed to market, my customer engagement, my OneOffice experience?
3) Can ServiceNow really make me a smarter, more analytical operation, based on the people I have on staff and within my service partners?

Just adding software isn't the answer, it's about really understanding your desired business model and crafting the operations to sustain and support it. The service providers who invest in staff, that can really align business models to new tech, will win; software firms that can train those winning services firms to do that will win.

This is why Watson is failing to meet IBM's lofty expectations - they're selling solutions to clients that simply do not have the skills or experience to understand how to improve their current biz models with cognitive.

This is why 50% of firms are already admitting they invested in RPA products they aren't getting anywhere with. They just don't have the internal structure, capability or know-how how to really adopt this stuff.

The Bottom-line: It's time to invest in real consultative talent... or go home

Net-net - the biggest issue today is that these are solutions trying to find business problems, as opposed to clients having business problems who are looking to find tech solutions to get smarter. This should be about SOLVING existing problems first... Sadly, most of the problems today are too focused on people elimination that may not be feasible or financially viable.

The services industry needs to evolve to higher value consulting.... educating clients on the true business value of investing in solutions. But unless suppliers invest in themselves first to understand their clients' real business needs, the ROI of investments like ServiceNow will never be realized.  It's time to invest in real consultative talent... or go home.

Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesIT Outsourcing / IT Services

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Worried you're being automated? Think again...

August 12, 2017 | Phil Fersht

Posted in: Absolutely Meaningless ComedyRobotic Process Automation

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HfS hammers the final nail in the legacy analyst coffin with the HfS ThinkTank

August 11, 2017 | Phil FershtJamie SnowdonBram WeertsSaurabh Gupta

It’s time to close the chapter on the legacy analyst industry that has lost its energy, its identity, its independence and sense of purpose.  HfS was founded seven years ago to shake this up, and what’s astounded us is the stubborn refusal of the rest of the industry to change, preferring to milk the remnants of a stale model.  So we’ve worked very hard behind the scenes to develop a knowledge platform that impacts, with an engagement style that shakes our clients from their slumbers.  Welcome to our ThinkTank…

Why is the legacy analyst industry stuck in a depressing holding pattern?

The analyst industry never made it out of 1.0.  Despite all the guff about analysts using twitter and blogs, the sporadic number of boutiques and one-man/woman bands that slipped in (and out) of the analyst market over the last decade. Despite the “freemium model”, where there was a pretence of free research “disrupting” the market, but most of it being regurgitated supplier press releases. We are still trapped in the old analyst model:

Let’s face it, this current model has steadily deteriorated over the last decade, with most analysts firms selling their praise to willing vendor marketeers only too happy to fund the propaganda, adding increasingly damp fuel in vein attempts to heat up their sodden sales decks and watery marketing brochures.  Even firms like NelsonHall, Everest, Zinnov and others have got in on the act of putting out endless scatterplot quadrants of supplier positions in all sorts of markets – as if customers really take this stuff seriously anymore? Is this the only way these firms can forge a living these days? How can you “influence” a market when your only impact is a few thousand quasi-human twitter followers, you don’t run customer summits, you don’t provide your clients with research labs, you don’t provide relevant data products and the only people you ever talk to are suppliers?

I would even go as far as declaring some of these “analyst” firms should be more correctly reclassified as supplier marketing support firms.  How can you be an “analyst” when all you do is take money from marketing people to reinforce their products?

The current model is increasingly desperate, we now see tech suppliers buying up advance licences of Quadrants, Waves and Marketscapes at the beginning of their budget cycles, before they are even written, so they can pick and choose which scatterplots to buy licenses when they like the outcome.  Yes, people, this really happens

How did it get this bad?  Simple – most analyst firms are just not very good. They are jaded, they are too stingy to invest in real talent with real experience, and just reel out the same old dinosaurs whose only value to industry is to market the wares of their paying customers.

Fortunately, we have started to see light at the end of this rather dingy tunnel. Which is about time, as  there’s nothing more depressing than bemoaning a stagnant industry encircling the drain before its eventual plummet into the plug hole of irrelevance. 

Don’t lose hope. Analyst 2.0 is finally here!

The industry is reaching its first major Come-to-Jesus moment, where growth is flat, there is mass confusion surrounding the real impact of “disruptive digital business models”, with the potential creative destruction of automation, the lack of clarity of the business benefits of cognitive and AI, and the blurry potential of blockchain in its nascent pre-industrial form.  It’s well past time for enterprise customers, suppliers and other key stakeholders to come together and really collaborate and think about what their true options are moving forward.

But, all is not lost, folks, because HfS is kick-starting a new era in the analyst biz with the HfS Impact model.  Let’s be honest, the analyst 1-800 hotline market, where you have to wait 3 weeks to talk to some clueless kid, and those strategy days when you got subjected to an endless deluge of dull slides explaining the basics of your industry that you were reading about in 2003, are fizzling out.  No one cares anymore.  No one bloody cares.

We’ve made it our mission  to drag this business kicking and screaming out of these dark ages of obsolescence. So, welcome to  Analyst 2.0, a model based entirely on Knowledge and Influence, centred around our revolutionary ThinkTank:

The ThinkTank approach is all about getting the industry collaborating again, where we use Design Thinking techniques to drive joint problem-solving.  Our mantra is that the analyst role is shifting from passive observer to facilitator. To make this happen, we have dedicated an entire floor of our new offices in Cambridge England, in addition to facilities in Chicago and Boston, to hosting day long ThinkTank sessions with our clients. ThinkTanks are where we invite customers, suppliers and even advisors to spend entire days with us Design Thinking their desired goals, and solving the problems that are preventing their achieving these outcomes.  This is where we challenge you, you challenge us, and we work together, supported by our research, to drive genuine achievement, defining where you need to go and clearing the path to get there. And yes, we lock all our phones away in a safe, while we drive this whole ThinkTank process. Learn more about the ThinkTank.

The Bottom-line:  The HfS Mission is to Revolutionize the Industry and lay the Analyst 1.0 model to rest.  For good

HfS’ mission is to provide visionary insight into the major innovations impacting business operations: automation, artificial intelligence, blockchain, digital business models and smart analytics. We focus on the future of operations across key industries. We influence the strategies of enterprise customers to develop operational backbones to stay competitive and partner with capable services providers, technology suppliers, and third party advisors.

HfS is the changing face of the analyst industry combining knowledge with impact:

  • ThinkTank model to collaborate with enterprise customers and other industry stakeholders.
  • 3000 enterprise customer interviews annually across the Global 2000.
  • A highly experienced analyst team.
  • Unrivalled industry summits. 
  • Comprehensive data products on the future of operations and IT services across industries.
  • A growing readership of over one million annually.

The "As-a-Service Economy" and "OneOffice™“ are revolutionizing the industry!

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

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RPA satisfaction: lowest for finance and call center, highest for IT and marketing

August 05, 2017 | Phil Fersht

So we've determined that 58% of enterprises which have adopted RPA are satisfied with both cost and business impact (see recent post).  But how does this differ by business processes?

Let's consider this data:

IT processes and apps are clearly the biggest beneficiaries of RPA. There's nothing like music to the ears of cash-strapped CIOs and CFOs than prolonging the life of those once-expensive IT systems that just don't integrate with each other. Plus, isn't it great to make band-aid patches over those spaghetti codes to keep those cobol monstrosities functioning for a few more years yet? Suddenly that "technical debt" doesn't feel quite so bad.  The thing about writing off legacy, means you really only write off the stuff that just doesn't work anymore... RPA is highly effective at prolonging the life of legacy systems by recording actions and workflows to give these things a new lease of life, allowing for technology investments to be made elsewhere (read our recent example of NPower).

Marketing functions have a lot of unnecessary manual fat that can be trimmed.  There is one function that perennially suffers from excessive manual work and real issues integrating systems and processes, and that is marketing.  Simple tasks (or tasks that should be simple), such as linking together databases of customers, subscribers, and prospects to align with campaigns, collateral, automated emails etc., are the bane of every CMO's existence. So... rather than spending millions on consultants to recreate new processes, CRM capabilities and training people to use them, why not get what you have working better, while you figure out where to make those really valuable marketing investments in the future?

Procurement can really benefit from process automation.  One function that has been cut to the bone - and still uses the fax machine as a mission critical tool -  is procurement. RPA has the most positive impact on functions beset by poorly integrated processes, where the goal is to get things functioning better, than those functions where the goal of automation is really just to drive out cost. Being able to link together procurement systems, analytics tools and cognitive applications with the manual work that still creates major breakdowns in speed of execution and quality of data, is a major benefit for those customers which map out an RPA plan and execute against it.  The more you can use procurement to support the business and speed up the cash cycle, the more effective the function becomes.  HR is somewhat similar to procurement, in the sense that the fat has already been long-trimmed from most companies, and RPA adds value to processes in similar ways, such as supporting better analytics and linkages between legacy systems and processes.  Payroll, in particular, is emerging as a major area where RPA can have a huge value impact, where all the critical employee data is housed and can be integrated with other knowledge systems to support better decision making.  Another area is recruiting, where the whole process can be massively transformed simply by linking together actions, databases, social media, OCR etc.  RPA can provide a great temporary fix while companies figure out where they really need to invest in the future - and "temporary" could mean a very long time indeed...

Finance and Accounting disappoints from a cost take-out standpoint. With only 40% of enterprises satisfied with the direct cost impact of F&A, we can conclude that many of them have their expectations set too high that RPA will drive short-term headcount elimination. On a more positive note, half of them are happy with the business value impact of RPA on F&A, so clearly there are process improvements, just not enough to remove the human cost of administering them immediately. Considering F&A is the number one process being used for F&A today (it dominates 50% of installs) it's clear that the suppliers are playing the cost take-out game too aggressively and leaving many customers disappointed.  As with outsourcing, it's one thing separating tasks and removing workload elements from staff, it's another being able to remove headcount simply my improving or digitizing processes. Customers must take a more transformative view that if they can free up 50% of an employee's time, they need to focus on refocusing her/him on alternative activities. That is where the value is to be found.

RPA satisfaction in Customer Service functions is mixed.  For a function that can truly benefit from intelligent data and digitized processes, it's surprising that barely 50% of customers are experiencing either cost or business value benefits from RPA. The reason for this is two-fold: firstly, customer service functions are too mired in the legacy practice of managing shifts of low cost agents, whether they are inhouse or outsourced - and have little time or funds to investigate the value of RPA, which may require upfront investment and longer term planning. Consequently, with this short-term mindset to cater for, most the call center BPO suppliers have little pressure to change how their sell their services, if their clients are not clamoring for RPA solutions.  While we are seeing significant interest in chatbots and virtual agent solutions, and established automation vendors in the call center space, such as Nice, have established relationships with many customers, the whole call center space seems to be lagging behind other functions when it comes to embracing how to leverage the benefits of RPA effectively - which could be significant when you take into account the dysfunctions across customer interaction channels

The Bottom-line: RPA satisfaction is a lot higher when the motivation and mentality is one of process improvement, not cost-elimination

The main issue with RPA, in today's market, is this misconception that customers will make significant headcount reductions in the short-term.  With outsourcing, the cost savings are staged carefully over a 5 year engagement as work is moved to cheaper locations, better technology and processes are introduced, in addition to automation, and the processes are re-mapped over time to allow for work to get done, ultimately, with less people.  Simply plumbing in RPA and not having a broader plan to transform the work, pulling several other value levers, in addition to the patching of processes and digitization of manual work, will likely result in a mismatch between expectations and reality.  RPA needs to form part of a broader strategy to automate and streamline work, where people, processes, analytics tools, SaaS platforms, outsourcing models and carefully developed governance procedures, are taken into account as part of the broader transformation plan.

Posted in: HfS Surveys: All our Survey Posts

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Steve Rudderham... making GBS gr-r-reat again!

July 31, 2017 | Phil Fersht

There is only one Steve Rudderham (thank the Lord).  One of the most traveled and fun guys in the world of operations and services over the last 15 years, who's managed to somehow lead major BPO operations for leading service providers in both India and Latin America, run service delivery centers across the southern parts of the United States, before winding his way to the lovely Kalamazoo Michigan, where he today is devising the next phase of global business services for the Kellogg Company.  And all this having grown up in the small cathedral town of Lincoln in the English East Midlands. So let's pin Steve down for a little while to find out what he's up to and where the world of global business services is taking us...

Phil Fersht, CEO, Chief Analyst, HfS Research: Good morning Steve, it’s great to have you on HfS for the first time. You’ve had a colorful career in and around the process and operations world, can you give us a very quick run-down of where you came from and how you got to where you are with Kelloggs today?

Steve Rudderham, VP Global Business Services: Absolutely, I grew up in GE Lighting in the UK, 17 years ago I moved over to Kansas, US, to work in their Insurance business. Started off within process excellence, I was a black belt there, then went over to India to run their back office operations for what is now Genpact. I moved over to Genpact to run Latin America. I’ve also had terms with CapGemini running the Americas then more recently within Accenture doing Finance and Accounting globally for them as their product lead. I now run the global business services for Kelloggs.

Phil: How do you feel about being client side, having spent so long on the other side?

Steve: It’s been very interesting coming over to the buyer side. I think the advantage I have is that I come with a lot of knowledge of what’s available and the best practices. I also have insight into what the providers have been doing for other companies, not just within the food industry, but outside as well. If you think about Accenture, they are very strong within oil and gas, you can bring a lot of best practices over and into Kelloggs. It is slightly different in that

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Posted in: Global Business ServicesOutsourcing Heros

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Robo's best-kept secret? Not any more... meet Redwood

July 25, 2017 | Phil Fersht

 

There's nothing worse than being the "best-kept secret" in an industry... sure, it sounds cute at first, but after a while it gets frustrating as people aren't learning about you.  And there's nothing worse than being a best-kept robo secret in a market obsessed with propaganda, ignorance and bad analysts, many of whom have no clue what they are talking about.

So let's change this for one solution vendor, Redwood Software, which has quietly gone about helping enterprises automate processes around SAP workflows. When we bemoan rigid, poorly integrated processes, it's often borne out of legacy systems and ERP that have the effect of pouring concrete into a firm's operations. So what better than to develop both robotic and digital automation capabilities around SAP's R3 finance platform, helping financial leaders renovate more of that they have, without the costly and disruptive need to invest millions in expensive system upgrades that often only succeed in delivering a whole new suite of integration problems. Sounds like a simple way to make money? Well, it actually takes decades of practice and experience, so let's hear a bit more from the firm's CEO and Founder, Tijl Vuyk. and his Chief of Staff, Neil Kinson, about how they got here and where they are taking this very well-kept, soon-not-to-be so secret Redwood product...

Phil Fersht, CEO and Chief Analyst, HfS Research: Good morning Tijl and Neil - it's great to have both of you talking to us today. Perhaps we can start with a little background on Redwood, where you have come from and what you do?

Tijl Vuyk, CEO and Founder, Redwood (pictured left): Thanks Phil. Well it’s been about 25 years since we were founded and we started in the application space where we were building Oracle applications. We saw the need for automating these applications because there were a considerable amount of manual activities running all kinds of processes within Oracle, and later on with SAP. When we started, we created a tool that would help customers build their own automated processes. In the last five to eight years we discovered that building these automations were a challenge for many of our customers. So we tried to productize the whole idea of automating these business processes and now we call this robotics - where we use the application's functions to automate the processes normally undertaken by humans. I think that's where we are. We came from a technology background where we built enterprise strength applications to automate primary business processes, and now we are trying to make this as easy and slick as possible to implement those processes without having customers spend too much money on services and maintenance. There is more to say about what we do, but these are the highlights.

Phil: Sure, so you've been around for 25 years, how did you end up in this automation space? Was it a deliberate move or was it something that evolved over time?

Tijl: I wouldn't say a deliberate move but I love automation. If I do something twice, I ask myself, “can I do this easier and faster or not do it at all?”  And that is the attitude we have

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Posted in: Cognitive ComputingRobotic Process Automation

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When automation becomes your only option...

July 22, 2017 | Phil Fersht

Posted in: Absolutely Meaningless ComedyRobotic Process Automation

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Ian Maher... Sourcing Star

July 18, 2017 | Phil Fersht

As the fog slowly lifts from our beleaguered world of operations, we can start to put the pieces together regarding where we truly are, when it comes to building the backbone for successful businesses of the present and the future:

No - not all our firms have been wiped out overnight by disruptive digital competitors (sorry all you hypesters who've been beating that drum, but most our 'legacy' firms are doing just fine).  

No - not all of us have been replaced by robotic software that can mimic our rote behavior and render us useless (if only more customers will actually admit they are finding RPA a lot more challenging than they thought).

No - outsourcing isn't dead, it's just under pressure from commoditizing services, too many competitive service providers, greater global location choice and the emergence of specialist niche firms, which can do complex work at a much smaller scale than our juggernaut firms can afford to deliver. 

In short, our enterprises are caught between innovation and renovation, where they need to make the most out of what they have, while making the shrewd investments in the innovation the need to stay relevant in their markets. So with whom better to chew the fat than a very old friend and great supporter of HfS over the years, Ian Maher, who's been the dynamic busybody behind Hanover Insurance's sourcing and operations activies over the last decade. You won't meet many customer executives who deal with technology firms, automation vendors, outsourcing providers, procurement executives, HR, IT - you name it - and still always has a smile on his face. Maybe it's his stubborn devotion to his under-achieving soccer team, Everton, which keeps the chap so positive and focused....

Phil Fersht, CEO and Chief Analyst, HfS Research: Good morning Ian. It's great to catch up with you again. Could you tell HfS readers a little more about you and your background in the industry, where you've come from, and what you're doing today?

Ian Maher, VP, Head of Sourcing, The Hanover Insurance Group: Phil, good morning, it's great to catch up again. As you know, my background is on both sides of this interesting equation, from both a sales  and a buy-side perspective. When I was originally in the UK, I spent the first decade of my career working for what is now Fujitsu. As the development of consulting services, on the back of technology solutions, I was fascinated by how firms created new revenue streams on the back of product sales. In the late ‘90s, I moved over to the States and joined Gartner. With roles, in account management support and financial services in the North East of the US, I then started to work more closely with the research leaders in Sourcing and especially BPO, spending a lot of time working with CIOs and similar leaders, helping them understand what was going on from the BPO point of view as it started to seep away from a technology space, into the realm of mainstream business decision makers.

One of my previous clients is the company I'm with today. I've been at Hanover for nearly 10 years. We are a growing P&C business, largely in the US but with a UK operation via our Lloyds of London syndicate. In this role, I look after a variety of functions, including, traditional procurement, contract risk and governance. But more interestingly, perhaps to me at least, is the role of trying to fix together how the ideas from the outside world can be brought to benefit, what is pretty much, a traditional insurance business. I've led a couple of major

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesOutsourcing Heros

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Time to get worried about being automated... very worried

July 15, 2017 | Phil Fersht

With Natural Language Processing, Interactive Voice Response, cognitive virtual agents, Robotic Process Automation, the very essence of our corporate existence, the conference call itself, is in grave danger of going robo.  I think we're done folks... 

Posted in: Absolutely Meaningless ComedyCognitive ComputingRobotic Process Automation

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