Phil Fersht
 
CEO and Chief Analyst 
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HFS goes bigly... with Tom Quigley
August 13, 2019 | Phil Fersht

At HFS, we're approaching ten years' in existence - yes 10 bloody years' of this stuff - and we're still the "new analyst kid on the block".  As we approach this new phase in our journey, we're focusing heavily on the massive impact our research has across all corners of the services and tech industry.  The traditional channels of slapping stuffy reports behind a firewall and blackmailing suppliers with scatterplot grids are still the predominant way the analyst industry persists in operating (or simply regurgitating supplier press releases dressed up as "insight"), which has helped HFS expand our operations across three continents and bulldoze our way into a small elite group of analysts firms. 

However, we're not stopping there... we want to engage even more digitally and effortlessly with our global community, using video, blogs, podcasts, webcasts, summits, roundtables and various other forms of social media.  So were gone and added some serious firepower to our digital prowess with our recent acquisition of Quigley Media, where the founder, Tom Quigley, joins us as Chief Marketing Officer.  So let's hear a bit more from the unassuming Scotsman and his plans for HFS, while he's not practicing his blackbelt in karate on his three wee lads...

Tom - you've been a pretty active figure in the world of global sourcing for some time now - can you share a bit of background about yourself?
 
Sure. For this first half of my career I worked in mostly operational roles for two large insurers, Commercial Union (now Aviva) and Prudential UK & Europe. During that time I designed and delivered a 3 year programme of events for the CEO whereby he and the executive directors would travel around the country meeting hundreds of policyholders and doing impromptu Q&A sessions with them, which was pretty disruptive back then. I also delivered conferences in Mumbai and Dubai.
I joined BPO provider Capita in 2009 and headed up the marketing function in one of their nine divisions. When I left in March 2016 I was Head of Marketing, Design and Events for a consolidated number of divisions, overseeing a team of 2 Business Partners, 5 marketers and 8 graphic designers.
 
I joined the National Outsourcing Association as Marketing Director and we rebranded to the Global Sourcing Association (GSA), which we launched in Sofia in October 2016. It was at the time I recognised the emerging talent from central and eastern Europe, and so I set up my own marketing agency providing services to CEE businesses looking for market entry or engagement with the UK and Western European countries. During the last two years I also co-founded and was the CEO of the Alliance for Business Services, Innovation and Technology, with members including Pwc, Cushman & Wakefield, Convergys, Stefanini as well as institutions like IAOP, Nordic IT Association, Bulgarian Outsourcing Association etc. I also met with and successfully persuaded the Bulgarian President to be our honorary Chairman!
 
I stepped away from that role at the beginning of the year to focus purely on the agency and we've enjoyed working with clients from Poland, Romania, Bulgaria, the UK and US during that time. 
 
So you recently sold your firm and its digital assets to HFS... what was behind this move and what can we expect to see from you in the next few months in your new role?
 
Well its quite ironic because I'd been spending the last 2 years telling anyone who would listen that I would never work inside another company again as I was having too much fun being my own boss, so it did take me by surprise at how quickly I said yes when the offer to acquire QM came about. We were just completing brand perception study for HFS Research when I got a Skype message from you late on a Friday night. We met on the Monday, signed contracts on the Wednesday and I was in the Cambridge HQ at my desk on the Thursday - it really did happen that fast!
 
But I've known HFS Research for a number of years and was very well aware of its unique stand in the market. I am a big admirer of the quality of insight and unfettered views it provides - and when the offer came I genuinely had goosebumps, that told me it was the right move to make.
 
As for the months ahead we will launch a new website with improved functionality and integrated multi-platform analytics that gives us a more unified view of our customers, we've just set up a digital studio in the Cambridge HQ giving to open up some new channels and give us more control over our digital content, and we're currently building a number of great marketing campaigns to land some important messages in the coming months. We're also mapping out customer journeys to see how we can improve client experiences as well as establishing a more structured, tier-based relationship with our supplier partnerships to improve speed and innovation. In addition to that we have our New York Summit in October as well as events going on in Paris and Stockholm, so there's lots to come. Our clients will definitely notice a new, more emboldened brand overall with a clear focus on building closer, more meaningful relationships with our communities - not only through our research, thank tanks and other market activations, but also through more targeted communications. 
 
How is the industry different these days?  You've been very involved with emerging locations for several years now - where do you see this headed next?  Is the game changing? 
 
We're in a market of perpetual change now. Technology has overtaken consumer needs as the main driver of innovation, and the lines between BPO and ITO are dissipating. It really is about the provision of integrated digital services and one office. Contracts are increasingly focused on partnership agreements delivering outcomes, providing access to innovation and sandbox environments that will enable businesses to deliver more personalised services to their customers at scale. Central and Eastern Europe has been producing STEM resources for years but they are becoming more even more prevalent because they are forming better and more active networks and alliances, backed by their governments and funded by the European Commission in some instances - they are becoming more adept at integrating themselves into the connected ecosystem. Going forwards location will be come completely irrelevant as technology will enable the proliferation of agile - scaleable - teams that will form virtually to work on multiple projects, before disbanding and reforming on other assignments. I believe we'll eventually see the end of the permanent employee contracts as more millennials become a part of our economy.
 
And how about the research industry - you've been on the outside looking in for your entire career... how do you see it evolving?  Is it looking any different from the inside? 
 
Well I've only been on the inside for a couple of weeks now, but I'm not sure the analyst industry IS actually evolving at the same pace. Sure the analysts are reporting on technology and how businesses are thriving or otherwise in industry 4.0, and the means of capturing research and analysing data has advanced but for the most part I don't believe the research industry has become transformative enough. Some companies appear to have become machine monoliths, churning data and reports that seem pretty vanilla and without much of a voice; if you laid out reports and magic quadrants from a number of them and then covered up the logos I doubt many people would be able to distinguish who is who. Let me be clear, the analysts themselves are highly credible, very clever people regardless of what organisation they work for, but I think the 'corporate machine' sterilises a lot of what they actually produce.
 
This is where HFS Research stands apart, and the reason I'm so excited to be here. I know how different it is observing from the outside but I can see how different it is operating from the inside. Our purpose, our culture and how we operate has completely different DNA from other analyst firms. Last week I listened to Mark Hillary's first ever podcast talking to you about why you progressed from writing a blog to starting your own analyst firm, and I can see that the values that drove that decision are still very much alive in everyone involved with HFS today - and that podcast was recorded 10 years ago. My job is to make sure our clients and the market at large are aware of that, and recognise the value in choosing HFS Research as their partner going into the hyperconnected future-state!
 
And finally, there's a rumor going around that HFS is going to be ten years old soon... any plans to celebrate?
 
Next March marks the 10th birthday of HFS Research, and yes we will definitely be celebrating with our people, partnerships and communities. But you'll have to wait a little bit longer to discover exactly how..!
 
Welcome, Tom - and we're hopeful that many of our clients can meet you in New York this October 1 and 2 for our next major HFS Summit!

With 44% dissatisfaction, it's time to get real about the struggles of RPA 1.0
July 31, 2019 | Phil Fersht

Who remembers this classic "statistic" from a couple of years' ago, where we caught some friends declaring RPA fantasies that are simply miles from reality:

We've been keen to share with the world that RPA satisfaction has been in positive territory for more than half of the adopting enterprises, which is OK for a relatively complex new type of solution that takes a while to get right, and we revealed a 58% a satisfaction rating a few weeks later.

Sadly, two years on, satisfaction ratings have not improved

Our brand new study of 355 operations leaders, conducted with the support of KPMG, has revealed that only 56% of the Global 2000 express a positive experience from process automation and robotics:

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What's alarming about this is we asked operation leaders to assess the satisfaction levels of all key C-Suite directives, such as the adoption of AI/ML, enabling hyper-personalization, ever the old faithful of "driving down operating costs" ...and process automation finishes dead last.  I would argue this isn't because process automation and robotics initiatives have been a disaster, but more likely, expectations from the sell-side have been vastly over-inflated.  While this may sell more licenses and consulting days in the short-term, it will stunt longer-term growth for the industry.  Let's delve deeper here...

Why are process automation and robotics lagging in terms of satisfaction?

The over-hyping of how "easy" this is. The problem we have in this industry right now is an obsession with glittering outcomes and not enough real-world guidance on how to achieve them. The majority of robotic adopters have never ventured into double-figures of bots deployed, and many simply have little idea how to progress their adoption beyond a handful of pilot projects. The focus of the narrative needs to be directed to helping clients develop broader robotics strategies across organizational areas. We're also hearing about some enterprises aborting some major RPA projects because they just didn't expect the cost and scale of the effort to be so large. So we need to be realistic and balance the great benefits of robotic software with the challenges of training people on it, scaling the technology and gaining buy-in across business units.

Lack of real experiences being shared publicly.  Enterprises RPA adopters are fed up with the constant deluge of "motherhood and apple pie" being served up by the industry when they know full well these deployments are among the biggest challenges their customers have ever faced.  The RPA vendors - and several of the leading services firms - will be far more appreciated if they started sharing the real customer experiences with the world. For enterprise operations and IT executives, being successful at automation and AI is career critical - they want to learn how to be effective and how to invest their time wisely.  If this stuff was easy, they'd be out of a job pretty quickly, but fortunately for them, it is not, and they can embrace these experiences to increase their value to their firms and their careers.

Huge translation issues between business and IT.  Simply put, most IT folks have little understanding of RPA and think all their world problems can be solved with an API.  RPA - for most operations executives - is the first time they have had to work with actual software development and get involved in some low-code activities.  And they approach it with a "process first" context - how can I use these tool to integrate these apps / screen views / objects / documents etc?  I can honestly say I have been to two major software developer conferences where RPA is on display and the developers are simply clueless with regards to how RPA fits into their world of platform modules and APIs. If we can't bridge this divide, we run the risk of RPA being relegated to the scrap heap of failed technologies.

Obsession with "numbers of bots deployed" versus quality of outcomes.  If I hear another executive claim he/she has deployed over 100 bots, and that is their prime measurement of success, I will start naming and shaming =)  In all seriousness, there is no race the finish-line with this, and can see many enterprises still grappling with automation projects for many years to come.  The ones whom I have met who have expressed the most dissatisfaction are those who have bought far more licenses than they know what do to with, and have real issues trying to explain this their over-investment to their bosses. I've even seen some fired because of it.

Failure of the "Big iron" ERP vendors and the digital juggernauts to embrace RPA.  Let's be honest, with the exception of SAP's small acquisition of Contextor, which didn't even warrant a mention at the recent Sapphire event, the IT bellwethers haven't fallen in love with RPA.  It's just not sexy and scaleable enough for their suites, and if you read some of the guff on social media from IT "thought leaders", they have no bloody clue what RPA really is - and does. IT people just struggle with a technology that starts with a business process headache - they prefer to work with code-intensive products that can be shoe-horned into businesses, which they can make really complicated to install and manage.  Only Pega, from the world of large enterprise software, has made greater efforts to embrace process automation with its 2016 acquisition of OpenSpan, and I was quite impressed with the prominence it gave digital process automation at the recent PegaWorld event, but, even at Pega, it's clearly a challenge to communicate the true benefits of RPA to the Pega traditionalists, whose entire world revolves around its shiny CRM orchestration platform.  While we can point to all the lovely partner announcements we hear from the big three RPAs about their Google, Microsoft, Oracle, Workday, IBM etc partnerships, the truth of the matter is excitement and investment levels from the IT glitterati have been nothing close to what we were hoping/expecting just a couple of years ago.

Bottom-line: Over-setting expectations is putting the automation industry at risk of failure, not setting it up for the success it should be

The lesson here is that the sell-side is pushing too hard to sell too much too quickly and is setting up too many clients for disappointment.  We just need to set expectations better and get the balance right.... Rome wasn't built in a day.  We need to hear the RPA big daddies talking about how enterprises are grappling with real issues of internal change management, training and education.  We need to hear our IT leaders finally reach their "aha!" moment when they finally understand how robotic software is pulling in their frustrated business operations leaders into their world of embracing technology to help achieve real business outcomes.  Because one adage has rang true for 30 years now - design your processes the way your business needs them to achieve the business outcomes you crave... then invest in the right technology to make this happen.  RPA has the potential to be the first true catalyst to make this a reality, and we mustn't waste this opportunity.  Let's create an industry that can flourish for the next 30 years, not one that we'll break in the next couple with our greed to get rich and close that next contract...

Wow... the UK really is becoming an attractive nearshore sourcing location
July 28, 2019 | Phil Fersht

While the UK government is busily doing a tremendous job destroying the country's position as one of the world's great financial centers and multi-cultured commercial environments, one unlikely scenario is unraveling: the steadily devaluing currency, availability of labor (especially in its former manufacturing cities), and adequate education system is placing the country up the league as, now, the third-most attractive location to source business operations and IT support.  This is according to the brand new data from the HFS 2019 State of Operations and Outsourcing study, conducted with the support of KPMG, where we interviewed 355 operations leaders from 355 of the Global 2000:

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Bottom-line: As value from low-cost labor levels out, the focus shifts to increased complexity and talent closer to the business

As we reveal more of the new survey data, you'll see a prominent shift away from enterprise intentions to invest in traditional outsourcing pivot towards a strong desire to find partners which can support technical complexity in AI, hyper-personalization, and automation.  Net-net, enterprises need support staff close to the business with the ability to understand process and technical complexity that they have never before needed.  This doesn't mean that popular locations like India and Philippines will see their service industries plummet, it just means outsourcers and GBS leaders need a healthier balance of onshore/nearshore/offshore to bring it all together.  It also signifies a shift from "outsourcing" to "expertise partnering" that changes the location playing field significantly.  While the USA and China are no surprise as their host the world's largest economies and businesses, the UK is the surprise mover, as political conditions have created a more competitive market to invest in support services. 

Watch this space for more as we drip-feed you this incredible data over the next few weeks...

Accenture, KPMG, Cognizant, Atos and TCS lead service delivery on Microsoft AI and Google AI Platforms
July 22, 2019 | Phil FershtReetika Fleming

We've reached a stage where we can start to assess the capability of leading service providers to deliver comprehensive services across key AI platforms, especially Microsoft's Azure AI platform and Google's emerging AI platform suite.  So without further ado, let's ask HFS' Research Vice President, Reetika Fleming, how she fared leading the two major Top 10 efforts this year...

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Reetika - how are services around AI platforms progressing?  And specifically, what have you learned with regards to Google and Microsoft platforms?

We’re continuing to see AI ecosystems evolve around the big cloud vendors – Microsoft, IBM, AWS, and Google. From our recent deep-dives into the AI services alliances developing around Microsoft and Google, I can tell you that there are different strategies at play here. Google and Microsoft themselves have their own strengths and priorities, and the SI and consulting alliance partners are collaborating with them in different ways.

  • Google’s portfolio of AI components, such as text-to-speech and computer vision, is a great starting point for a fundamental development layer. Google’s AI R&D leadership is

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Want to survive the AI era? YOU have a simple choice to make...
July 07, 2019 | Phil Fersht

When it comes to staying relevant in today's workforce, let’s get to the heart of the matter – YOU have a simple choice to make:

  • Do nothing and be part of the “Frozen Middle”. Decide you can’t be bothered to learn anything new, so make sure your firm has the same attitude (or has a thin veneer of innovation masking a cesspool of lethargy and love of perpetuating legacy processes and business practices). And ride this next wave of hype out for a few years before you can quietly ride off into a comfortable sunset, or…
  • Become a change-driver. Decide you have to get ahead of emerging technologies and their massive impact on business ecosystems and make sure your firm has what it takes to sponsor your burning ambition to drive cultural changes, new learning and ability to rethink how business processes and practices are wired.

Once you decide which of these two categories which you wish to belong, then make sure you’re in the right company to execute your survival plan… otherwise, leave and find one that is.

Because the data from the recent World Economic Forum jobs study shows half of enterprises are being held back because their staff fails to understand the disruptive changes in their industry, and an alarming 37% of enterprise leaders do not feel their current

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Is your Robotic Software really supporting business transformation at scale beyond piecemeal projects? Time to have your say...
July 06, 2019 | Phil FershtSaurabh GuptaElena Christopher

Are you as confused are we are with some of the recent analyst matrices floating around the industry this year?  Some products are performing completely differently depending on the analyst and how they "define" the market and whatever methodology they used to score each product.

However, one thing is clear:  at HFS we ensure we rely on a lot more than a briefing and a handful of rose-tinted clients served up by the suppliers themselves.  We reach out across our global network of power users (enterprise clients, advisors, and service providers) to get the true unvarnished experiences of robotic software. 

This is why we scrapped the 2x2 matrix last year and went for a direct ranking of suppliers, based across three critical variables:  execution, innovation and the voice of the customer.  HFS subscribers can click here to access the full 2018 RPA Top Ten report. 

On 2018, we introduced the "Voice of the Customer" to rank the leading RPA products across the experiences of 352 power users

In short, there are growing questions about whether "RPA" can deliver transformation on the promised ROI and outcomes, especially as most RPA initiatives continue to be small and piecemeal, with truly scaled RPA deployments are rare (only 13% of client boast any true scale to date). The industry is still struggling to solve challenges around the process, change, talent, training, infrastructure, security, and governance - hence our shift to re-categorizing and

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The present and the future is... Robotic Business Outsourcing
June 24, 2019 | Phil Fersht

BPO (Business Process Outsourcing) grew up because of all the exceptions enterprises have to process that were not able to be absorbed into the standard ERP software.  Yes, we found people equipped to do this work at lower wages housed by efficiently run service providers.  And that work we couldn’t initially send to the BPO providers we just found manual workarounds to get it done until we eventually found an outsourcer who would find a model to take on that work for you.

However, just as many enterprises were running out of places to find (yet) more and more hidden costs they could quickly remedy through (yet) more outsourcing, along came their perfect new toy to unearth costs they had never thought possible to eliminate: RPA.  

Yes, folks, this stuff is just the thing to keep you occupied for the next few years to keep your greedy CFOs at bay - and even includes the word "robot" to conjure up images of human work

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Blue Prism buys Thoughtonomy. Clearly a great deal for…Thoughtonomy
June 20, 2019 | Miriam DeasySaurabh GuptaElena ChristopherPhil Fersht

Blue Prism yesterday announced the acquisition of Thoughtonomy, a SaaS-based integrated automation platform with Blue Prism RPA baked into its core. After six years and much flirting with potential suitors, Terry Walby’s Thoughtonomy successfully exits into the welcoming arms of Blue Prism. This was always the logical end-game for Terry's business, which he bootstrapped from day 1 and tirelessly pushed at the automation world. HFS was particularly inspired with the firm's work at the UK's National Health Service (NHS) (which you can read here). 

Essentially Thoughtonomy is RPA + cognitive capabilities + cloud. Net-net, Blue Prism is buying a cloud (SaaS) wrapper for its own product; arguably, it could have (and should have) built that itself, but decided instead to pay a tidy sum. However, this cloud wrapper puts Blue Prism in the ring with Automation Anywhere's V12 cloud product, which is drawing a lot of plaudits from enterprise users (our forthcoming Robotic Transformation Software Top Ten will reveal its performance across several hundred enterprises). More importantly, it increases Blue Prism’s attractiveness as an acquisition target itself by upgrading its cloud-readiness from “available cloud reference architecture” to a legitimate SaaS-based offering.  We touted Blue Prism as a potential target for IBM three years ago, and with a scalable cloud story and IBM/s major pivot around Cloud with its RedHat acquisition, surely this Cloud-ifying of Blue Prism makes the firm even more attractive to them.

Finding the synergies to justify the price tag – cloud with a potential side of cognitive capabilities, but the focus is too UK centric

Now, Blue Prism can contend with Automation Anywhere’s claim that “BotFarm is the first and only enterprise-grade platform for scaling bots on demand”. The midmarket can benefit from Blue Prism’s RPA technology, with very little setup cost or initial investment.  Mid size companies that considered automation out of their reach can enjoy the democratizing effects of cloud, avoiding the hassle of on prem infrastructure.

The shopping basket also contains Thoughtonomy’s gross assets, reported at 31 May 2018 as £5.6m and established relationships with Thoughtonomy’s big-name clients including NHS, AEGON, and Sony. Partner implementation and reseller arrangements are in place across many of the usual suspects in SI and consultancy such as Computacenter (from where Terry Walby moved to IPsoft before setting up Thoughtonomy).

Like Blue Prism, Thoughtonomy is UK based so there’s not much by way of additional footprint synergies to be realized. Blue Prism, therefore, will only be adding a limited new channel and will have to rely on its existing sales and delivery channel to make this acquisition pay off. The US market is where the bulk of new demand for automation solutions is surfacing, and Thoughtonomy isn't adding to Blue Prism's US team, which is under huge

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She's bright and breezy... HFS hires Miriam Deasy!
June 18, 2019 | Phil Fersht

Miriam Deasy (see bio) joins HFS as Research Director, Integrated Automation 

Just when you thought this little analyst firm wouldn't dare add another rock star brain into our "Triple A" coverage (analytics, automation and AI) we've gone and done it again, adding Miriam Deasy to our global analyst team (based in UK) to cover integrated automation and AI platforms, alongside the likes of Elena Christopher, Reetika Fleming, Tapati Bandopadhyay, Melissa O'Brien, Saurabh Gupta, Ollie O'Donoghue and myself.  Miriam has develop a career across the world of technology and services with roles at EDS (HP) and Amdocs back in the day, before taking out time to raise two boys and a girl William (12), Kayleigh (10) and Darragh (9) before making her move to the analyst world with IT and telecoms firm Ovum three years' ago.

Miriam adds to our growing Irish contingent (from one to two), brings deep sense of wit and

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Wipro needs a bold and differentiated strategy to elevate its middling market position post-Premji
June 12, 2019 | Phil FershtJamie SnowdonSaurabh GuptaTapati Bandopadhyay

We all remember when Jack Nicklaus played his last Masters, and when Sir Alex Ferguson managed his last game for Manchester United. These guys were godfathers of their trades, not unlike Azim Premji has been for IT services, the man who oversaw a firm which diversified from diapers and vegetable oil into one of the largest IT services firms in the world. However, when they retired, they left a legacy that enabled many to follow in their footsteps (albeit noone has come close yet). Premji's legacy, which forever is written into the annals of IT services folklore, is still unfinished, which may be a good thing for his successors... there is still a lot of work to do to get Wipro to the place Premji always envisaged. 

The current market situation facing Wipro's leadership

To recap, Wipro’s Executive Chairman, Managing Director and philanthropic champion Azim Premji is retiring by end July. His son and Wipro’s Chief Strategy Officer, Rishad Premji will

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