Monthly Archives: Jan 2012

After 24 years, it's adios ACS (er... except in Asia/Pac)

January 27, 2012 | Phil Fersht

Any BPO veteran will recall Affiliated Computer Services (ACS) as one of the early darlings of BPO, which existed right at the top of the competitive tree in the early 2000's, whenever a large Finance & Accounting, HR or call center deal was up for grabs.  They were also a pretty handy domestic IT services shop before the Indian offshore pureplays arrived on the scene. It would always give Accenture and IBM a run for their money in BPO pursuits, and had a compelling client-focused culture and engagement methodology for many of the old world BPO engagements (i.e. a lot of lift and shift and staff re-badging).

Two years into its $6.4 billion acquisition by Xerox, management has finally decided to phase out this famous old brand... HfS Research's Tony Filippone and Phil Fersht take a closer look into why Xerox brass has now decided to do this, what it means to this heritage business, and where it needs to focus in the future to strengthen its market position.

ACS finally gets its re-brand as Xerox zeros in on integrating the businesses and cultures

Corporate-naming consultants must have pitched ACS a dozen better names, but none better than the one it interred today. The fact is, straight-talking ACS has never spent the billions its competitors have on branding. In fact, even their unremarkable logo remained nearly identical for the company’s 24-year history. All this makes us believe that today’s announcement that ACS will now market itself as Xerox, rather than “ACS, a Xerox company” is a sign of opportunity and synergy.

As its branding has reflected and its customers know, ACS’ success is not because it is smarter than everyone else.  Rather, ACS simply outhustles its competitors. Its Midwest American values make the company the likeable, down-to-earth service provider that gobbles up government deals one after the other. Moreover, it is focused on technology-based outsourcing solutions, not headcount. Its vertical experience is a marvel, with strong positions in government, healthcare and financial services.

The acquisition announcement had analysts everywhere wondering exactly what the offspring of a toner cartridge mother and a call center father would be like. Mixing this capability with Xerox’s traditional business has clearly not been easy. Our discussions with buyers suggest that Xerox’s aggressiveness has put off clients who don’t want to hear sales pitches, while Xerox’s recent acquisition of the Breakaway Group indicates that Xerox is supporting ACS’s industry-focused approach. However, we've also heard that Xerox’s rigid financial management process at times conflicts with clients’ needs for flexibility.

When the acquisition was announced, it was obvious that Xerox saw Dell’s Perot acquisition and HP’s EDS acquisition as examples of technology manufacturers entering the services business.

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Posted in: Business Process Outsourcing (BPO)Cloud ComputingFinance & Accounting BPO



Make sure your business outcomes have well-defined metrics

January 26, 2012 | Phil Fersht

Posted in: Absolutely Meaningless Comedy



Are you ready for Generation 6 BPO?

January 23, 2012 | Phil Fersht

If you enjoyed our recent interview with Mike Salvino, you better get that Twitter following cranked up asap...

Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices



What the passing of SOPA could mean for your business

January 22, 2012 | Phil Fersht

Click here to listen to Friday's excellent web-discussion involving HfS Research's own (and definitely not SOPA-rific) Jim Slaby and Terametric's tera-fic Chris Selland.

And for those of you who can't be bothered, here were the main points of note:

* SOPA/PIPA have worthy anti-piracy goals, but are highly problematic in technological, political, legal, and commercial terms. They would shift considerable cost and liability for policing copyright-infringing websites and links onto businesses that aren’t engaged in piracy.

* SOPA/PIPA reflect the media & entertainment industry’s latest effort to assert control over the Internet as a content distribution channel. This is fundamentally at odds with how consumers and businesses now use it, and would crimp many valuable, legitimate commercial uses of the Internet, not just piracy.

* The many objections to SOPA/PIPA demand a smarter, more technologically-savvy, less one-sided approach to fighting piracy than this onerous legislative one. Better enforcement of existing copyright laws and pursuit of new entertainment-industry revenue models were among the panel’s suggestions.

Posted in: Security and Risk



SOPA-thetic: Using an elephant gun to hunt for butterflies

January 19, 2012 | Phil Fersht

So if the lovely SOPA legislation gets passed, here's what would happen to HfS:

  • YOU (the taxpayer) would help foot the cost of policing our blogs (they'd have to hire an army of administrators), and if we got a complaint, we could be shut down while we fought it out in court;
  • HfS would have to monitor closely every comment on every blog post to make sure it didn't link to anything infringing, or we could be blacked out... we can already sense our competitors rubbing their hands with anticipation. 

So, without further ado, here's our security analyst, Jim Slaby, explaining why this legislation is akin to cracking a walnut with a sledgehammer...

If you were surprised to find Wikipedia offline yesterday, you weren’t alone: many Internet users were unaware of the widespread one-day online protest against SOPA and PIPA, two bills before the US Congress designed to fight online media piracy.  Participation ranged from outright shutdown to the display of prominent protest messages or symbols. High-profile players included Wikipedia, Craigslist, Google, and many media sites, but thousands of other less-trafficked sites also participated.

What got them up in arms? The Stop Online Piracy Act (SOPA, the US House of Representatives'

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



Sal's six stages of sourcing: BPO's Generations

January 14, 2012 | Phil Fersht

"We did our BPO deal in 2005 and now we're reaching our 7 year-itch", confided a client governance executive last week. "Essentially, it's operational - it works - but we're now trying to focus on the what next. How can we find new value and new ways to tie our BPO operation to our company's growth and renew the enthusiasm and passion of our staff?".  No single sentence has reinforced how far the BPO has come - from tales of woe and messy delivery in the mid 2000's - to clients today complaining they're getting bored?

The BPO industry has been going through such a remarkable evolution since the first major deals were cast barely more than a decade ago, that it's high time we took stock and considered the phases - or generations - through which our industry has progressed.

Mike Salvino is Group Chief Executive, Business Process Outsourcing, Accenture

And there are few people who have lived and breathed these generational shifts more closely that Accenture's BPO leader, Mike Salvino (or "Sal" to those who know him).  Having begun his career with Accenture's ITO business in the late 80's and 90's, Mike spent time on the BPO front lines with one of the industry's first pureplay BPO providers, Exult, before leading the HRO sales organization post their merger with HR services giant Hewitt.  Mike rejoined Accenture in 2006 where he led their F&A business before taking full responsibility for the company's entire BPO function.

We managed to grab a few moments with Sal to discuss these generational shifts in the BPO industry before he had to run off to coach his kid's basketball team...

PHIL FERSHT: Mike, when we spoke two years ago, our discussion focused on what you termed third generation BPO, which is a vernacular many others in the industry are now using. But I know your thinking and Accenture’s delivery model, has evolved quite a bit since then and you’re now talking about fourth, fifth and even a sixth generation. Please talk us through this evolution and these new and upcoming generations of BPO.

MIKE SALVINO: Third generation BPO, where some of the providers and their clients are a bit stuck,

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Posted in: Business Process Outsourcing (BPO)Buyers' Sourcing Best PracticesFinance & Accounting BPO



Time to fine-tune your multi-vendor strategy

January 11, 2012 | Phil Fersht

Thanks to our friend Matt Heffron of Sourcing Sage for sending us another classic

Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)IT Outsourcing / IT Services



The Sourcing Raj Part II: “You don’t have to be Indian to be a global outsourcing provider!”

January 09, 2012 | Phil Fersht

Would you kindly stay on the line to complete a brief customer satisfaction survey?

The main feature of 2011 was all about the demise of quick cost reduction as prime driver behind global sourcing, and the focus on enterprises establishing a flexible global operational framework that can be effective in today's environment.  

Yes, cost prudence is always an ongoing concern, but it's no longer the differentiator; today it's embedded in all forms of operation strategy and planning. Hence, this means enterprises' prime focus is fast becoming global and not solely about being low-cost.  This also means providers need to service their clients as global partners with global delivery capability.

To this end, HfS Research Fellow and Sourcing Change protagonist Deborah Kops completes her investigation into the dominance of India in the world of outsourcing, and whether or not the game's up for non-Indian providers to come back into the picture.  Over to you, Debs...

You don’t have to be Indian to be a global outsourcing provider!

In The Sourcing Raj Part I, I ticked off the reasons why non-Indian providers have had a hard time cracking the offshore outsourcing market. Indian players not only have a good 10 years’ head start penetrating the market, a brand that makes India and outsourcing virtually synonymous, and an unparalleled onshore network of buyers and influencers that all know the secret handshake. But the good news for non-Indian providers is that the global economic map will continue to evolve, making it imperative to implement a portfolio approach in response to changes in markets, availability of talent, cost and other considerations. Those players with the stomach to check nationalism at their borders and follow a few simple rules can nip at the feet of the Sourcing Raj.

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



Whoever said outsourcing was becoming a commodity?

January 06, 2012 | Phil Fersht

A special thanks to Sutherland's Matthew Heffron for sending us this little ditty.  Check out his excellent BPO video blog Sourcing Sage.

Posted in: Absolutely Meaningless ComedyBusiness Process Outsourcing (BPO)Buyers' Sourcing Best Practices



Smackdown: Where is BPO going?

January 05, 2012 | Phil Fersht

One of the highlights of 2011 was that great web-debate on the Future of BPO where 1,100 people across the globe dialed in to hear from our buy and sell families.  Like any typical extended family at Thanksgiving, they cussed and discussed about the trends and challenges buffeting BPO. They passed the peas and offered some pretty unbridled opinion and insight. Visit the BPO Resource Center to download the highlights...

Click to download the highlights

Posted in: Buyers' Sourcing Best PracticesFinance & Accounting BPOHR Outsourcing