HfS Network
Jamie Snowdon
Chief Data Officer 
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Don’t let our crazy orthogonal ideas be pecked to death by negativity
May 08, 2017 | Jamie Snowdon

A few weeks ago, I was fortunate enough to spend some time talking with the head of IT of a large transportation company – and we talked about the future of his job and the most important things impacting his role. When I asked him what was the main issue getting in the way of him adding value to his business, he said it was a cloying inertia brought about by a thick soup of negative thinking.

The number of people in his organization that focus on the way things have been done in the past and the reasons why things can’t change, were a source of incredible frustration to him. Incremental change was possible, colleagues understand how processes evolve, so innovation could be staged, but it was very hard to implement anything totally new. We joked that original thinking was being pecked to death by negativity, like a flock of miserable seagulls.

As an analyst, this is something really close to my heart – if we are to produce anything that approaches original thinking, we need an environment where ideas are cherished and even the craziest thought is welcome – although it will ultimately need to stand up to scrutiny, the original thought can’t be wrong. It’s only when you make cerebral room to nurture some crazy, orthogonal thinking do you create inspirational work like the Digital OneOffice.

So what needs to happen, how can this change? How can we get people to take leaps of thought rather than increments?

Phil’s recent blog “Is your current job the end of the line?” delivered seven action points directly to the chief “peckers” of the world. Distilling that, the most important thing organizations can do to encourage this behaviour and become more open is to move away from traditional hierarchical relationships, look at the idea itself and any data that supports the idea. It is the addition of data and more evidence that helps to shift thinking from more traditional decision making.

It’s interesting that the message, at least in terms of its overall importance, seems to be getting out at last. In a recent survey of 300 major Global 2000 enterprises, we asked IT leaders about the importance of some c-suite directives to their IT strategy.

This graphic shows that IT decision makers realise the best way that they can increase the relevance of IT within the organization is by supporting more predictive decision making. This is a crucial change in mindset, taking IT away from its most recent manifestation which has almost been as a custodian of IT, or a gatekeeper, focused on reigning IT in and keeping the costs down.

Bottom Line – data gives crazy thoughts wings

We suspect that part of the embracing of data by IT departments goes back to my friend and his battle with the naysayers. Data levels the playing field and gives more people a voice. It gives more power to the elbow of anyone seeking to make a change. An IT department that delivers insight will be listened to, as opposed to being largely ignored as a legacy function tasked with keeping the lights on. Let’s stopped being pecked to death.

IT’s relationships with the business functions – get better at supporting them, or risk getting bumped
May 03, 2017 | Jamie Snowdon

And here’s another core finding from our “State of IT Services Survey 2017”, where we spoke to 302 IT service decision makers from the Global 2000 to find out what they think of their IT services and digital consulting providers.

We asked IT decision makers to rate how successful different business units were at engaging with IT. The chart shows the top level results for all the business units.


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The good thing is that the majority of business units have a broadly successful relationship with IT, with 66% of responses being successful or very successful – which is encouraging. Although that means 34% of business units don’t have successful relationships with their IT departments – which for Global 2000 organizations in such an increasingly digital age is worrying. Although we are likely seeing the tension of business units’ desire to use IT to operate more dynamically being tempered by their IT departments’ conservative nature to act in a safe operating environment. 

HR departments have the worst relationships on average, with 40% of IT managers questioning whether the engagement is successful. This is concerning as IT departments need to demonstrate how technology can be applied in an HR setting – it is not just about buying the latest SaaS product like Workday. Looking at how data can help fuel better decision making for HR leaders, use predictive analytics to identify employee needs and use IT tools to assess potential employees more objectively. HR also has a key role to play in data protection and instilling the right culture of data protection within the organization. Given that employees pose one of the biggest data protection threats, IT should get HR onside.

Bottom Line – good IT fosters good relationships, poor IT fosters poor relationships

What has not detected in our surveys is an inflection point in IT and business unit relationships – whether the reliance from one to the other is increasing or decreasing as when we compare with similar survey work the change is only small on average. However, it does appear that the better relationships seem to be getting better and the worse relationships seem to be getting worse. Given that the choice to use external IT is easier (if not necessarily cheaper) than it has been – the fact that the worse relationships are getting worse is a worrying sign for IT departments. With the growing increase in the functionality and the breadth of SaaS and cloud services, it is not mad to envision a time when a large organization could move beyond the internal IT department toward a matrix of cloud procured products and services. So it is vital that IT continues to foster these relationships – get better or get bumped.

Digital, Cloud, SaaS and Automation Becoming Table Stakes When Choosing an IT Service Provider
April 18, 2017 | Jamie Snowdon

We just wanted share another finding from our “State of IT Services Survey 2017” – this survey has been conducted largely to support our IT Services blueprint process. We have interviewed 302 IT service decision makers to find out what they think of the IT services providers infrastructure management services, digital-focused consulting and their application management services.

We asked IT decision makers to pick their most important selection criteria for choosing an external service provider for IT Services generally, and specifically when choosing an infrastructure management, application management and consulting/IT strategy provider. The chart shows the difference between these main groups - displaying the proportion of buyers selecting each option for each type of provider.


Bottom Line – results count more than the method

Overall buyers are looking for Innovation, financial stability, quality of service. Consulting buyers care more about quality and skills (as well as innovation) - prior engagements are much less important. Buyers are starting to care less about the technology that drives the innovation - at least as dominant factors driving selection. Digital/SaaS/Cloud and automation are increasingly table stakes.

Familiarity breeds respect – for IT services firms…
April 14, 2017 | Jamie Snowdon

We are just analysing our “State of IT Services Survey 2017” at the moment – this survey is being conducted largely to support our IT Services blueprint process. We have interviewed 302 IT service decision makers to find out what they think of the IT services providers infrastructure management services, digital-focused consulting and their application management services.

We are hoping this will add an additional buyer perspective when we rate and review the global IT services companies – getting away from the usual marketing blurb and focus on what is important for the organizations buying external services.

As part of this work, we asked these business leaders to rate their familiarity with infrastructure management service providers and then rate them on, amongst other things, service quality. This gave us the opportunity to see whether familiarity with the providers has an impact on the ratings -the infographic chart shows the findings.

The Bottom Line – buyer respect is earned through good service delivery

The good news for the industry is that, except for a couple of notable exceptions, as buyers start to use a providers infrastructure services the rating for quality of service delivery increases. With a big leap from merely heard of a provider to extensive knowledge.

We are analysing and publishing more of this survey over the next few weeks.

DXC’s challenges represent a microcosm of a services industry in perilous transition
April 09, 2017 | Phil FershtJamie SnowdonTom Reuner

April 3rd saw the long-anticipated creation of a new IT and BPO powerhouse service provider – DXC.technology. However, DXC’s challenges represent a microcosm of a services industry in perilous transition.

This is a crucial event in the services industry, not only because it isn’t often a “new” $25 Billion services firm is created, but because of what it signifies about the uncertain state of the current market and the huge challenges facing service providers in the near future.

Read our complimentary analysis of the merger on the HfS Research website by clicking here.

Digital Means Customers Don’t Need to Like You….
March 28, 2017 | Jamie Snowdon


I've been to a couple of events and listened to a number of presentations recently from IT and business service providers talking about digital strategies -  and how they can help their clients engage better with “digital customers”.

Part of this strategy has included building greater empathy and emotion with customers – superficially this sounds fantastic, but when I think of digital, it’s not about being nice or building an emotional attachment to customers – it’s about speed, efficacy, and awareness – these things trump everything else.

Understanding customer needs and behavior is important – as it helps to build an efficient and speedy process, but they don’t need to like you they just need to believe that they will get the goods or service when they are told and it is what they asked/paid for. If you think about successful retail organizations Tesco, Amazon, Walmart – I’m not sure too many people like them, they like the convenience of them (Fanboys - I am generalizing so please don’t troll me, of course, some people love them.) People will buy from you and like you if you are cheap, if you deliver when you say you do and will stop when you mess up (for a bit.)

Digital businesses historically had awful customer service and many still do. Amazon in the U.K. when it first started was terrible at dealing with problems -  in 2003 when I ordered a book (remember when they just did books/CDs) which didn't turn up and they basically said that it was the couriers fault and after trying for a while I just gave up - they more or less told me to sod off. Incidentally, by 2010 they had gone the other way - if you said it didn't turn up they'd send 3 replacements (I exaggerate). I suspect the balance has now been struck.

However, customer service is still bad with many digital firms -  or digital services to consumers. Particularly when the app business is an intermediary an affiliate based - I have had checkered service from JustEat, Deliveroo, Hungryhouse and Burger King food delivery - don't judge me I am a hungry early adopter and have a teenage daughter with friends... Usually, something missing from the order and I haven’t had refunds – but I tend to return because the convenience (and my laziness) never goes away. Even poor service won’t kill a digital company if the core proposition is sound and the number of exceptions is low.

Bottom Line – Sell speed and efficiency – people don’t need to feel special and cared for unless you mess up.

So when I hear a service provider try to portray digital experience in terms of empathy or emotion I lose interest. Speed, efficiency, and real-time information make a service digital – this doesn’t need to deliver an emotional response, – the core proposition needs to be good and it needs to work most of the time.

Deconstructing Q4 2016 – Growth in the Traditional Services Model close to Flatlining
March 10, 2017 | Phil FershtJamie Snowdon

The traumatic Q4 results season has finally ended and our Chief Data Officer, Jamie Snowdon, is able to report on the final Q4 standings...

We’ve visualised the latest set of results for Q4 in the diagram, the top chart shows our usual margin v growth view (excluding AWS). With a chart showing the quarterly growth for Q4, an estimation of the annual (calendar) growth and the Q4 operating margin.

Click to enlarge

For each of the providers the results look like this:


Growth Q4 (%)

Growth 2016 Calendar Year (%)

Margin Q4 (%)






Good quarter for Accenture with plenty of success stories around digital, cloud and security. Constant currency growth around a percentage point above the actual growth for the quarter. Annual services growth is 7.1%.





Coming down from the highs of its recent acquisition-fuelled growth of the last couple years - Atos remains solid with organic growth at 1.8% for the year and 1.9% for the quarter. Benefiting from strong execution and its investments in analytics, security and automation.

Read More »

Location, location, location
February 24, 2017 | Jamie Snowdon

HfS is about to publish our quarterly analysis of the service provider and shared service center location announcements by Hema Santosh. As a taster, we would like to post the highlights and the infographic from this work.

Highlights for the quarter:

  • We see expansion of jobs in both the US and India – of the estimated 9,000 jobs that these new locations will house, 4,350 will be in the US and 4,300 will be in India.
  • Industry specific BPO drives expansion with 3 new BPO sites in the US in Q4 2016.
  • Downsizing – we saw some down sizing of in-house centers with eBay, Standard Chartered and Verizon all shrinking some centers.

Bottom Line:

Check out the full document here in the growing market analysis section of the HfS Research site.


Click to enlarge

The offshore shift left part 3 - Q4 wasn’t that good…
February 13, 2017 | Jamie Snowdon

Back in August 2016, we wrote about the shift left with offshore providers – we were recently updated in January. Below is the new chart that updates to include Q4 revenues – we always include a full year of data it is the trailing twelve months - now it represents the full calendar year view for all of the years.


Click here to enlarge the image

Hopefully, the new charts show the shift even more clearly. With the top chart zooming out to show the whole of the y-axis – giving the full margin picture and demonstrates quite how close together the firms really are and highlights the convergence even more. As you can see Q4 hasn’t halted the shift and we see these companies cluster around the high single digit growth mark.

The Bottom Line – we’ll have the full roundup at the end of the month

This is just a taster of the results, once all of the quarterly results have been published we will collate them and produce our full quarterly roundup. We can then see the offshore shift left in the context of the other providers.

BPO Market Primer – Watch This Space For the Update in April
February 03, 2017 | Jamie Snowdon

As we mentioned in our recent blog on the IT Services Market we are looking to make our content more visually appealing. So we have below the companion primer cover the BPO market for 2015 to 2021. We will be doing a full update of the forecast at the end of Q1. When we have a chance to analyze all the vendor results for 2016.

Click Here to Enlarge

This chart gives our top level view of the BPO market in numbers – this provides a top level look at the market as a whole. We will be looking at producing a number of cuts of this data over the next few months, especially as we roll out our BPO Top 50 report and our updates to our market forecast.

The Bottom Line - Watch this Space

We are publishing a point of view on market conditions over the next few days, which presents these charts again with some additional commentary. Please find the piece at www.hfsresearch.com.